C-115/78

JUDGMENT OF 7. 2. 1979 — CASE 115/78

industries falling within ISIC Major directive, and no differentiation of Groups 23-40 (Industry and small treatment on the basis of their craft industries) is based on a broad residence or nationality is permitted. definition of the "beneficiaries" of its Thus the provisions of the directive provisions, in the sense that the nationals of all Member States must may be relied upon by the nationals be able to avail themselves of the of all the Member States who are in the situations which the directive liberalizing measures which it lays down, provided that they come defines for its application, even in objectively within one of the respect of the State whose nationality situations provided for by the they possess.

In Case 115/78

REFERENCE to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven (administrative court of last instance in matters of trade and industry) for a preliminary ruling in the proceedings pending before that court between

J. KNOORS, a central heating contractor, residing at Dilsen/Stokkem (Belgium),

and

gives the following

KNOORS v SECRETARY OF STATE FOR ECONOMIC AFFAIRS

JUDGMENT

Facts and Issues

The facts, the procedure and the obser- Article 15 (1) of the 1954 Law on vations submitted under Article 20 of the establishment provides that the Minister Protocol on the Statute of the Court of for Economic Affairs may grant Justice of the EEC may be summarized exemption from a prohibition on the as follows: practice of a trade referred to in a decree relating to establishment "if the provisions of a directive of the Council I — Facts and written procedure of the European Communities with regard to the establishment of natural In the Netherlands the activities of self- persons and companies in the territory of one of the Member States of the employed persons in manufacturing and processing industries, in particular those European Economic Community or with of central heating contractor, plumber regard to the provision of services by and water fitter, are governed by the natural persons and companies in that Vestigingswet Bedrijven (Law on the territory require such exemption". establishment of undertakings) 1954. In pursuance of that provision, J. Knoors, a Netherlands national, Article 4 (1) of that law provides that the residing at Dilsen/Stokkem (Belgium), practice, without an authorization from where since 13 March 1970 he has been the relevant Chamber of Commerce and carrying on trade as a central heating Industry, of certain trades in the sphere contractor and sanitary contractor and of self-employment in the processing plumber as the head of an independent industries may be forbidden by general undertaking, applied to the Kamer van provisions of public administration in the Koophandel en Fabrieken voor de form of decrees relating to establishment. Mijnstreek (Chamber of Commerce and As regards operations as a contractor in Industry for the Mining Region), whose central heating, plumbing and water office is at Heerlen, for an exemption fitting, prohibitions on the practice of from the prohibition on practising in the those trades without an authorization Netherlands, as head and administrator from the relevant Chamber of Commerce

of a business, the trades of central That court, by decision of 9 May 1978, heating contractor, plumber and water stayed the proceedings and in pursuance fitter. of Article 177 of the EEC Treaty put the following question to the Court of The Secretary of State for Economic Justice for a preliminary ruling: Affairs on 31 January 1977 sent Mr "Must Directive No 64/427/EEC of the Knoors a decision rejecting his application on the ground that, as a Council of the European Economic Netherlands national, he could not be Community of 7 July 1964 be interpreted as meaning that the expression considered in the Netherlands as being a 'beneficiaries' as referred to and as “beneficiary” within' the meaning of defined in Article 1 (1) of the directive Article 4 (1) (a) of Council Directive No also includes persons who possess and 64/429/EEC of 7 July 1964 concerning have always possessed solely the nation- the attainment of freedom of ality of the host Member State?" establishment and freedom to provide services in respect of activities of self- The decision of the College referring the employed persons in manufacturing and matter to the Court was lodged at the processing industries falling within ISIC Court Registry on 12 May 1978. Major Groups 23-40 (Industry and small In pursuance of Article 20 of the craft industries) (Official Journal, Protocol on the Statute of the Court of

KNOORS SECRETARY OF STATE FOR ECONOMIC AFFAIRS

Titles V and VI of the General refers to Title I of the general Programmes of 18 December 1961 for programmes. This term must therefore the abolition of restrictions on freedom necessarily have the same meaning in of establishment and for the abolition of each of the two directives. Article 4 (1) restrictions on freedom to provide and Article 5 of Directive No 64/429

services respectively (Official Journal, make a clear distinction between

English Special Edition, Second Series, beneficiaries and nationals.

IX, pp. 7 and 3). These programmes These findings make it clear that related only to the restrictions imposed Directive No 64/427 does not consider by a Member State on the nationals of nationals of the host State as other Member States and not to beneficiaries. restrictions applied to nationals of the host State; the transitional measures for (b) The question arises, however, which they provided thus also concerned whether, since the end of the transitional only persons other than nationals. period, a difference in treatment by a host Member State between its own The general programmes provided that nationals and the nationals of other the duration and details of the

Both directives contain an Article 1 (1) which, for the concept of "beneficiaries",

JUDGMENT OF 7. 2. 1979 — CASE 115/78

transitional provisions involves a of services by nationals operating from difference of treatment between a State's other Member States must not be nationals and the nationals of other affected by discriminatory measures Member States. A definitive set of rules based on place of residence; but in this case too the rule is that the condition for in the form of mutual recognition of diplomas, certificates and other nationals established in the host country determines that of the nationals of qualifications, perhaps accompanied by measures of co-ordination, would be Member States supplying services in that bound to put an end to this distortion; in country within the meaning of the the meanwhile it is not possible to state Treaty (third paragraph of Article 60). that there is an incompatibility with Article 7 of the Treaty based on discrim- (c) Only the effective realization of ination against a State's own nationals. mutual recognition of diplomas, certi- Article 7 is applicable without prejudice ficates and other qualifications will to the special provisions of the Treaty; as supply the objective nature of such regards the right of establishment and recognition and also permit the nationals of a Member State to avail themselves of the freedom to provide services, its application is limited to cases of discrim- it within their own country.

evading national requirements relating to establishment does not appear desirable. A person who has carried out a number of years' practice in a Member State in which no proof of qualification is required cannot claim to possess without further ado a degree of skill in his trade corresponding to the level which,

restrictions by the words "nationals of nationality. Member States". The general nature of this expression makes impossible any (c) One of the conditions necessary for the realization of freedom of movement interpretation according to which the text of Title I of the general programmes is that persons who wish to establish themselves in a Member State other than has the effect of excluding from the whole class of beneficiaries nationals of that whose nationality they possess must Member States who wish to establish have, for themselves and their children, themselves or provide services in a the certainty that they may resume, if Member State of the Community whose they desire, a trade in their country of nationality they possess. According to origin. If that were not the case the those provisions, freedom of position would be absurd — the greater establishment and freedom to provide use was made of a right conferred by the services apply equally to persons who Treaty to go to another Member State to come from another Member State and carry on a trade there, the greater would desire to pursue their activity in the be the number of people whose mobility country whose nationality they possess. was restricted by the fact that their return was made impossible. (b) The broad scope of Directive No (d) It should also be recognized that 64/427, determined by reference to Title I of the general programmes, is in the value of a qualification depends only on the requirements applied by the accordance with the principles of Articles authority which confers it and not on the 52 and 59 of the Treaty and with the nationality of the person on whom it is general objectives of the Treaty. The conferred. Treaty was intended to make as complete as possible the free movement (e) The Council also recognizes that of persons and made of this principle one of the foundations of the Common the principle of freedom of establishment has a general scope. Thus in the minutes Market. Free movement of persons has of the meeting during which the the object of creating a single large market in which all the nationals of each directives relating to doctors were of the Member States would have the adopted, the Council made a declaration in which it "reaffirms that it is to be opportunity to carry on their livelihoods understood that freedom of by establishing themselves or providing establishment, particularly for the services in any place within the Community.

1 By an order of 9 May 1978 which reached the Court on 12 May, the College van Beroep voor het Bedrijfsleven (administrative court of last instance in matters of trade and industry) referred to the Court for a pre- liminary ruling in pursuance of Article 177 of the EEC Treaty a question on the interpretation of Council Directive No 64/427 of 7 July 1964 laying down detailed provisions concerning transitional measures in respect of activities of self-employed persons in manufacturing and processing industries falling within ISIC [United Nations' International Standard Industrial Classification of all Economic Activities] Major Groups 23-40 (Industry and small craft industries) (Official Journal, English Special Edition, 1963-1964, p. 148).

2 The order referring the matter to the Court shows that the plaintiff in the main action, a Netherlands national residing in Belgium, was engaged, during lengthy residence in that Member State, as an employed person in a plumbing business and that since 1970 he has worked as a plumbing contractor as the head of an independent business.

3 The plaintiff applied to the competent Netherlands authorities for an authori- zation to carry on the same trade in his country of origin. However, his application was refused because he did not possess the qualifications required for that trade by Netherlands legislation.

KNOORS SECRETARY OF STATE FOR ECONOMIC AFFAIRS

4 On that occasion the Netherlands authorities informed the plaintiff that he could not take advantage of the provisions of Article 15 (1) (c) of the Vestigingswet Bedrijven (Law on establishment 1954) under which an auth- orization to practise certain trades may be granted when the provisions of a directive of the Council of the European Communities relating to establishment require the grant of such an authorization.

JUDGMENT OF 7. 2. 1979 — CASE 115/78

9 Directive No 64/427 is intended to facilitate the realization of freedom of

establishment and of freedom to provide services in a large group of trade activities relating to industry and small craft industries, pending the harmo- nization of the conditions for access to the trades in question in the various Member States, which is an indispensable precondition for complete freedom in this sphere.

10 More particularly that directive takes account of the difficulties resulting from the fact that, in certain Member States, certain of the activities in question may be freely taken up and pursued, whilst other Member States apply more or less strict conditions involving the possession of specialized training for admission to certain trades.

11 With a view to resolving the problems created by this disparity, Article 3 of the directive provides that, where, in a Member State, the taking up or pursuit of any activity referred to in the directive is dependent on the possession of certain qualifications, "that Member State shall accept as sufficient evidence of such knowledge and ability the fact that the activity in question has been pursued in another Member State”.

12 That article further states what is to be understood by "pursuing" an activity, in particular by fixing minimum periods during which it must have been practised.

liberalizing measures which it lays down, provided that they come objectively within one of the situations provided for by the directive, and no differen- tiation of treatment on the basis of their residence or nationality is permitted.

18 Thus the provisions of the directive may be relied upon by the nationals of all the Member States who are in the situations which the directive defines

for its application, even in respect of the State whose nationality they possess.

19 This interpretation is justified by the requirements flowing from freedom of movement for persons, freedom of establishment and freedom to provide services, which are guaranteed by Articles 3 (c), 48, 52 and 59 of the Treaty.

20 In fact, these liberties, which are fundamental in the Community system, could not be fully realized if the Member States were in a position to refuse to grant the benefit of the provisions of Community law to those of their nationals who have taken advantage of the facilities existing in the matter of freedom of movement and establishment and who have acquired, by virtue of such facilities, the trade qualifications referred to by the directive in a Member State other than that whose nationality they possess.

21 In contesting this solution the Netherlands Government states, first, that the first paragraph of Article 52 provides for the abolition of "restrictions on the

25 However, it is not possible to disregard the legitimate interest which a Member State may have in preventing certain of its nationals, by means of facilities created under the Treaty, from attempting wrongly to evade the application of their national legislation as regards training for a trade.

26 In this case, however, it should be borne in mind that, having regard to the nature of the trades in question, the precise conditions set out in Article 3 of Directive No 64/427, as regards the length of periods during which the

KNOORS SECRETARY OF STATE FOR ECONOMIC AFFAIRS

activity in question must have been pursued, have the effect of excluding, in the fields in question, the risk of abuse referred to by the Netherlands Government.

27 Moreover, it should be emphasized that it is always possible for the Council, by virtue of the powers conferred upon it by Article 57 of the Treaty, to remove the causes of any abuses of the law by arranging for the harmo- nization of the conditions of training for a trade in the various Member States.

28 The answer to be given to the question referred to the Court should therefore be that Council Directive No 64/427 of 7 July 1964 laying down detailed provisions concerning transitional measures in respect of activities of self-employed persons in manufacturing and processing industries falling within ISIC Major Groups 23-40 (Industry and small craft industries) must be understood to mean that persons who possess the nationality of the host Member State are also "beneficiaries" within the meaning of Article 1 (1) of the directive.

in answer to the questions referred to it by the College van Beroep voor het Bedrijfsleven by order of 9 May 1978, hereby rules:

Council Directive No 64/427 of 7 July 1964 laying down detailed provisions concerning transitional measures in respect of activities of self- employed persons in manufacturing and processing industries falling within ISIC Major Groups 23-40 (Industry and small craft industries) must be understood to mean that persons who possess the nationality of the host Member State are also “beneficiaries” within the meaning of Article 1 (1) of the directive.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait

Delivered in open court in Luxembourg on 7 February 1979.

A. Van Houtte H. Kutscher