C-21/78

Anklagemyndigheden (Danish Public Prosecutor), representing the Land­ snaevnet for Omnibuskørsel (National Motorbus Transport Board)

on the interpretation and validity of Article 2 (1) (a) of Council Directive No 74/562/EEC of 12 November 1974 on admission to the occupation of road passenger transport operator in national and international transport operations (Official Journal 1974, L 308, p. 23), in particular the concept of "good repute" contained in that article,

THE COURT

composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

"(1) Natural persons or undertakings Article 6 (1) provides that: "Member wishing to engage in the occupation States shall, after consulting the of road passenger transport Commission and before 1 January 1977, operator shall: adopt the measures necessary for the (a) be of good repute; implementation of this directive ..." (In spite of this provision, none of the nine Member States has so far adopted all the (2) Pending co-ordination at a later national provisions necessary to ensure date, each Member State shall the implementation of the directive.) determine the provisions relating to good repute which must be satisfied B — The national legislation applicable by the applicant and, where appro­ priate, the natural persons referred Under Danish law (Article 78 of the to in paragraph (1). Danish Penal Code (Straffelov)), criminal conduct does not automatically ...".

lead to the forfeiture of civil rights. Article 4 (1) provides that: "Natural When a person is found guilty of persons and undertakings furnishing criminal conduct, such forfeiture occurs proof that before 1 January 1978 they only as a result of a judicial decision, were authorized under national regu­ either in the sentence itself or in sub­ lations in a Member State to engage in sequent review by the court when an the occupation of road passenger administrative authority refuses to issue a

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2. Does the Council Directive of 12 ization. Thus the general rule in Article November 1974 cover a legal 78 (2) of the Penal Code applies. situation such as the present case? Moreover, a procedure to check the 3. If Question 2 is answered in the affir criminal record of applicants was introduced in Denmark in 1976 in order mative an answer to the following preliminary question is requested, to ensure compliance with Article 2 (1) namely must it be considered that the (a) of the Council directive on the Council Directive of 12 November requirements relating to good repute. 1974 has amended Article 78 (2) and (3) of the Penal Code in that the stipu C — The facts lation in that provision that criminal conduct may only entail loss of civil A road passenger transport licence rights if such conduct provides ("tourist" category) valid for the whole of Denmark was issued to Knud Oluf grounds for considering that there is imminent danger of misuse of the Delkvist for the period from 11 position of the person concerned has

DELKVIST v ANKLAGEMYNDIGHEDEN

the right to engage in an Advocate General, the Court decided to occupation which requires special open the oral procedure without any public authorization or approval preparatory inquiry. only if his conduct provides grounds for considering that there is imminent danger of misuse of II — Summary of the obser­ his position or occupation, satisfy vations submitted pursuant the requirements relating to good to Article 20 of the repute which, according to the Protocol on the Statute of Council directive, the Member the Court of Justice of the States must lay down for persons EEC in this situation since the Member States, pending co-ordination at a A — Observations submitted by the later date, remain free themselves Danish Government to lay down a more detailed The Danish Government takes the view definition of the requirement that the Council did not intend to give a relating to good repute? Community meaning to the term "good (b) Is the present case covered by the repute": the Council imposed an express transitional provisions in Article 4 duty on the Member States to take (1) so that, because the applicant account of the character of the applicant was authorized before 1 January (which is an innovation for Danish law, 1978 under the Danish provisions under which the requirements relating to to engage in the occupation of good repute took the form of a power, road passenger transport operator not a duty, on the part of the authorities within Denmark, he is exempt to refuse a licence, but the Council did from the requirement to furnish not consider it necessary to define the proof that he fulfils inter alia the content of the requirements relating to requirement relating to good good repute. repute contained in Article 2 (1) If the Council had gone any further, as (a)? the Commission proposed it should, the 5. If the answer to Question 4 (b) is in directive by requiring automatic action in the affirmative, does this imply that every case would have been contrary to a the case can be decided by fundamental principle of Danish criminal Københavns Byret without regard to law.

"Article 2 of Directive No 74/562 having the legal effect of repealing (or in imposes a duty on the Member States to any case of abolishing or substituting) ensure that applicants wishing to engage "incompatible" national statutory in the occupation of transport operator provisions; they could have such an are of good repute. It is for the Member effect only in relation to rules of the States to define the content of that same nature and of equal scope; concept. The directive therefore contains directives merely constitute a duty on the no factor of such a kind as to affect the pan of the Member States to achieve a criterion of good character laid down in certain result, that is to say, they give Articles 78 and 79 of the Danish Penal rise to "mandatory effects".

the directive. As to its direct good repute are not fulfilled, even in the applicability, it is unacceptable for absence of a court decision ordering the reasons of legal certainty, which are forfeiture of civil rights. In itself the decisive in this case, for a directive to directive does not establish any be able to give rise directly to duties connexion between good repute and the on the part of citizens or to restrict possession of civil rights, but in principle their rights. there appears to be no reason why such a (b) As regards Questions 2 and 4 (b), it connexion should not be explicitly follows from the combined provided for by the internal legal order provisions of Article 6 (1) of a Member State, it being understood (implementation of the directive) and however that the Community rules of Article 4 (1) (transitional would be infringed if an internal legal provisions) that the directive does order were to extend the concept of not apply to a decision granting or good repute so as to stultify the refusing authorization which was provisions of Article 2 (1) (a) of the notified before 1 January 1977, and directive. also does not concern the legal The question whether even vis-à-vis all effects flowing from such a decision administrative authorities the Danish

DELKVIST v ANKLAGEMYNDIGHEDEN

(a) Anicle 2 (1) (a) of Directive No administrative conditions for admission 74/562 is valid and binding on to and pursuit of an occupation or trade: individuals in so far as it is held that they do not concern national provisions they may rely upon it, but it cannot of criminal law whereby cenain offences directly repeal or take the place of a are punishable by a prohibition on national provision which is engaging in the occupation or trade in incompatible with it. the context of which the offence was committed. (b) Article 2 (1) (a) must be interpreted as meaning that as a general rule the requirements relating to good repute D — Observations submitted by the are unconnected with the general Commission status of an applicant for admission to the occupation of road passenger According to the Commission, there can be no doubt that the Council directive is transport operator, and cannot be stultified by internal provisions of a lawful and was validly adopted in Member State. accordance with the provisions of Article 75 of the EEC Treaty. As to whether the (c) Anicle 4 (1) cannot apply in favour directive is directly applicable and of a person not formally authorized whether it must in consequence count before 1 January 1978 to engage in among the factors which the national the occupation at issue. coun must take into account in order to reach a decision in the case before it, C — Observations submitted by the each of its provisions must be assessed in Netherlands Government relation to actual facts.

JUDGMENT OF 29. 11. 1978 — CASE 21/78

According to the wording of the margin of the discretion left by the Article 4 (1), it is enough for him to rely directive. on the fact that he has already been auth orized, albeit only once, to engage in the Even though the scope of Article 78 (2) occupation of road passenger transport of the Danish Penal Code is extremely operator in national or international limited, the Commission none the less transport operations. It follows that the considers that in concrete terms it transitional provision in Article 4 (1) of correctly implements the provisions of the directive applies to all persons the directive relating to good repute. The engaging or having engaged in the Danish provision imposes (very limited) occupation of road passenger transport requirements relating to good repute, but operator (tourist category) before the margin of discretion left to the 1 January 1978. Member States by Article 2 (2) of the As to Question 5, the Commission takes directive does not appear to have been the view that Article 5 (2) of the exceeded. directive, read together with Article 4 If, on the other hand, Article 78 were to thereof, requires the national authorities to verify inter alia whether the be regarded as not satisfying the requirements relating to good repute are requirements of the directive relating to fulfilled. This verification must be carried good repute, it could nevertheless be out as from the time when the directive inferred therefrom that the Danish Penal is implemented in national law, that is to Code has been amended or repealed by

individuals. On the other hand, there do fulfil the aforesaid requirement. not appear to have been any judgments Therefore it follows that under Article 5 in which the Court has given an un (2) of the directive the authorities are equivocal ruling to the same effect as obliged to verify whether the regards the direct applicability of requirements imposed by the directive, in directives and decisions to individuals. particular the requirement relating to

good repute, are fulfilled, but that when (b) Article 4 (1) of the aforesaid transport operators coming within Article Council directive must be 4 (1) of the directive are the subject of interpreted as meaning that such verification, they cannot be obliged persons who had been authorized to furnish special proof. before 1 January 1978 to engage in the occupation of road In view of the foregoing, the passenger transport operator are Commission proposes that the questions exempt from the requirement to raised should be answered as follows: furnish proof that they satisfy the I. Council Directive No 74/562/EEC of requirements relating to good 12 November 1974 on admission to repute laid down in Article 2 (1) the occupation of road passenger (a) of the directive. transport operator in national and 5. Article 5 (2) of the Council directive international transport operations is must be interpreted as meaning that lawful and valid. The answer to the the Member States are under a duty question whether the various to ensure that the requirements laid provisions of the directive can apply down in Article 2 (1) (a), (b) and (c) directly to relations between the are fulfilled as from the time when the Member States and their nationals directive is implemented in national depends on a specific interpretation law. However, when road passenger and assessment of the nature, transport operators (tourist category) structure and wording of each of coming within Article 4 (1) of the them. directive are the subject of veri­ fication, they cannot be obliged to 2. An application for the renewal of a furnish proof that they satisfy inter road passenger transport licence alia the requirements relating to good (tourist category) falls within the repute. scope of the Council directive mentioned in the preceding answer. 3. Article 2 (1) (a) and (2) of the III — Oral procedure aforesaid Council directive cannot be regarded as having amended or The Danish Government, represented by repealed Article 78 (2) and (3) of the P. Lachmann, acting as Agent, and the Danish Penal Code which provide Commission of the European that criminal conduct may entail Communities, represented by B. Hoff- forfeiture of certain rights only if such Nielsen, acting as Agent, submitted oral conduct provides grounds for argument at the hearing on 5 October considering that there is imminent 1978.

2 These questions were raised in the context of an action concerning the rejection by the competent Danish authority on 29 December 1976 of an application by a road passenger transport operator (tourist category) for the renewal of his transport licence.

3 The grounds for that rejection were that the applicant's previous record showed that he had several convictions for theft and burglary and that his criminal conduct provided grounds for considering that there was imminent danger of misuse of his position as a passenger transport operator.

4 The competent Danish authority applied the provisions of Article 78 (2) of the Danish Penal Code (Straffelov), according to which a person may be prohibited on grounds of criminal conduct from engaging in an occupation which requires special public authorization or approval only if the criminal conduct provides grounds for considering that there is imminent danger of misuse of the position or occupation which he wishes to keep or take up.

5 For the purpose of harmonizing the legislation of the Member States in the matter of transport, on 12 November 1974 the Council adopted Directive No 74/562/EEC on admission to the occupation of road passenger transport operator in national and international transport operations.

DELKVIST v ANKLAGEMYNDIGHEDEN

6 Article 2 of that directive provides that:

3. If Question 2 is answered in the affirmative an answer to the following preliminary question is requested, namely must it be considered that the Council directive of 12 November 1974 has amended Article 78 (2) and (3) of the Penal Code in that the stipulation in that provision that criminal conduct may only entail loss of civil rights if such conduct provides grounds for considering that there is imminent danger of misuse of the position of the person concerned has been superseded wholly or in part so that the provision relating to good repute in the Council directive has been substituted for the provision in Article 78 (2) and (3) of the Penal Code?

4. (a) Does Article 78 (2) and (3) of the Danish Penal Code, which is worded in negative terms, namely that a person can be deprived of the right to engage in an occupation wich requires specific public author­ ization or approval only if his conduct provides grounds for considering that there is imminent danger of misuse of his position or occupation, satisfy the requirements relating to good repute which,

JUDGMENT OF 29. 11. 1978 — CASE 21/78

according to the Council directive, the Member States must lay down for persons in this situation since the Member States, pending co-ordi­ nation at a later date, remain free themselves to lay down a more detailed definition of the requirement relating to good repute?

(b) Is the present case covered by the transitional provisions in Article 4 (1) so that, because the applicant was authorized before 1 January 1978 under the Danish provisions to engage in the occupation of road passenger transport operator within Denmark, he is exempt from the requirement to furnish proof that he fulfils inter alia the requirement relating to good repute contained in Article 2 (1) (a)?

12 It will be convenient to deal with Questions 3 and 4 (a) before the others.

DELKVIST v ANKLAGEMYNDIGHEDEN

13 Article 2 (2) of the directive provides that pending co-ordination at a later date, each Member State shall determine the provisions relating to good repute which must be satisfied by the applicant.

14 That provision leaves the Member States a wide margin of discretion as to the requirements relating to good repute imposed on applicants wishing to engage in the occupation of road passenger transport operator.

15 A provision of national law whereby an applicant who has a criminal conviction may be regarded as not being of good repute if the criminal conduct provides grounds for considering that there is imminent danger of misuse of his occupation cannot be regarded as exceeding the margin of discretion left to a Member State.

16 Therefore the answer to Questions 3 and 4 (a) should be that a statutory provision such as Article 78 of the Danish Penal Code is to be regarded as a provision validly enacted by the State within the limits of the directive.

21 In particular, where the Community authorities have, by directive, imposed on Member States the obligation to pursue a particular course of conduct, the effectiveness of such an act would be weakened if individuals were prevented from relying on it before their national courts and if the latter were prevented from taking it into consideration as an element of Community law.

22 Therefore it is to be inferred that even if national law does not contain any provision analogous to Article 4 of the directive, a national authority cannot, subject to application of Article 5 of the directive, require an applicant wishing to engage in the occupation of road passenger transport operator to furnish proof that he satisfies the requirements relating to good repute, if he furnishes proof that he was authorized to engage in that occupation before 1 January 1978.

Question 5

23 However, Article 5 (2) of the directive provides that Member States shall ensure that the competent authorities withdraw the authorization to pursue the occupation of passenger transport operator if they establish that the provisions of Article 2(1) (a), (b) or (c) are no longer satisfied. In that case however, they are to allow sufficient time for a substitute to be appointed.

24 If the authorities consider that applicants do not fulfil the requirements relating to good repute, they must therefore refuse them renewal of their transport licence, but when transport operators coming within Article 4 (1) of the directive are the subject of verification, they cannot be obliged to furnish special proof.

On those grounds,

THE COURT,

in answer to the questions referred to it by Københavns Byret by an order of 10 February 1978, hereby rules:

1. Consideration of Council Directive No 74/562/EEC of 12 November 1974 has disclosed no factor of such a kind as to affect its validity.

2. A statutory provision such as Article 78 of the Danish Penal Code is to be regarded as a provision validly enacted by the State within the limits of the directive.

3. Although persons who before 1 January 1978 had obtained authori­ zation to engage in the occupation of road passenger transport operator are exempt from the requirement themselves to furnish proof that they satisfy the requirement relating to good repute laid down in Article 2 (1) (a) of the directive, the national authorities remain competent to verify in each case that the said requirement is fulfilled.