C-42/92

THIJSSEN v C O N T R O L E D I E N S T V O O R DE VERZEKERINGEN

OPINION OF ADVOCATE GENERAL LENZ delivered on 24 March 1993 *

Mr President, form of a commercial company or associa- Members of the Court, tion one (at least) of these auditors (hereinaf- ter 'approved commissioners') must be a member of the Belgian Institute of Auditors A — Introduction who has been approved by the Insurance Inspectorate. 3 Foreign insurance undertak- 1. The present reference for a preliminary ings must also appoint an approved commis- ruling from the Belgian Raad van State con- sioner for the particular purpose of manag- cerns the interpretation of Article 55 of the ing their operations in Belgium. EEC Treaty. It relates to the question whether it is permissible under Community 4. This approved commissioner {'erkende law for admission to the office of approved commissaris' or 'commissaire agréé') per- commissioner to be reserved to Belgian forms his duties under the supervision of the nationals. Insurance Inspectorate. First, he must fulfil the duties of an ordinary auditor, that is, he 2. The supervision of the activities of insur- must examine the financial situation and ance undertakings in Belgium is governed by annual accounts of the undertaking. In addi- the Law of 9 July 1975 on the regulation of tion, he has the task of immediately bringing insurance undertakings ' (hereinafter 'the to the notice of the undertaking and of the Law'). According to Article 29 et seq. of the Insurance Inspectorate any infringement of Law, the supervision is carried out by a the Law on the regulation of insurance supervisory authority, the Controledienst undertakings and of its implementing regula- voor de Verzekeringen (hereinafter the tions, and anything which in his opinion 'Insurance Inspectorate'). The Insurance could jeopardize the financial position of the Inspectorate has the task of supervising the undertaking (Article 40(2) of the Law). application of the Law and its implementing Moreover, Article 40(4) of the same Law regulations. provides that:

5. Mr Thijssen, a Netherlands national, 8. However, because of the fundamental applied in 1986 for admission to the office of importance of the principle of freedom of approved commissioner. His application 'was establishment within the framework of the rejected by the Insurance Inspectorate on the Treaty, 5 this provision is to be interpreted basis of Article 2(1 )(1) of Regulation N o 6 of restrictively. The derogations which it per- 15 January 1986 4 (implementing the Law on mits cannot extend beyond 'the objective for the regulation of insurance undertakings), which this exemption clause was inserted'. 6 according to which only Belgian nationals The provision is therefore to be restricted to may be admitted as approved commissioners. activities which in themselves 'involve a direct and specific connection with the exer- cise of official authority'. 7 If a profession entails activities which are connected with 6. Mr Thijssen brought an action for annul- the exercise of official authority, an extension ment of that decision before the Raad van of the derogation provided for in Article State, which referred the following question 55 to the profession as a whole is possible to the Court of Justice for a preliminary rul- only if those activities are linked with the ing: profession in such a way that they cannot be regarded as separable from it. 8

Does the derogation from the principle of 9. The first question to be examined, there- freedom of establishment provided for in the fore, is whether an approved commissioner is first paragraph of Article 55 of the EEC entrusted with the exercise of official auth- Treaty apply to the office of approved com- ority. missioner introduced by Articles 38 to 40 of the Belgian Law of 9 July 1975 on the regu- lation of insurance undertakings? The exercise of official authority

ings have acknowledged, are undoubtedly the regulation of insurance undertakings, the connected with the exercise of official auth- duty to report to the Insurance Inspectorate ority. The function of supervising insurance either regularly or upon request and to undertakings which has been conferred by notify any particular circumstances should statute on the Insurance Inspectorate is be considered first. The United Kingdom intended to protect insured parties and the regards this as an intrusion into the private general interest. For the purpose of perform- commercial sphere of the undertaking con- ing this task, the authority can, in its regula- cerned, and concludes from this that an tory capacity, intervene directly in the busi- approved commissioner does exercise official ness activities of insurance undertakings by authority. Against this it may be argued that means of preventive and positive measures. the performance of these duties cannot be regarded as an exercise of official authority because there is no act of public power which would affect the rights of the under- 11. In my opinion the activities of an taking or impose obligations upon it. Admit- approved commissioner, too, are connected tedly, the approved commissioner's fulfil- with the exercise of official authority. ment of his duty to report and inform also serves the public interest. This alone, how- ever, does not suffice to invest his activities with the character of an exercise of official 12. In examining this question, however, it is authority. Thus, for example, Council Direc- necessary to distinguish between the activi- tive 91/308/EEC 10 of 10 June 1991 on the ties of an Ordinary' auditor and the special prevention of the use of the financial system duties and powers which the Law on the for the purpose of money laundering, to regulation of insurance undertakings confers which Mr Thijssen's lawyer referred (in upon approved commissioners. another connection) during the hearing, pro- vides in Article 6 that credit and financial institutions are to report any suspicious facts to the responsible authorities on their own 13. An auditor has the task of auditing a initiative. It could hardly be maintained that company's finances and annual accounts and this represents the exercise of official auth- of presenting to the general meeting a report ority on the part of the banks. on the audits which he has carried out. In order to carry out these audits, he is empow- ered to inspect the company's records at any time and to obtain all necessary information from the persons responsible. 9 These activi- ties, as the Belgian Government has con- 15. The same holds true, of course — a for- firmed in its submissions, are not connected tiori — for the approved commissioner's with the exercise of official authority. duty to indicate to the insurance undertaking itself any infringement of the Law or cir- cumstances which might jeopardize the 14. Of the special tasks entrusted to the financial position of the undertaking. Under- approved commissioner under the Law on takings are not obliged to act on any such indication.

17. The fact that the approved commission- ers must swear on oath faithfully to fulfil the duties conferred upon them likewise does not strike me as decisive. The act of swearing an oath sheds no light on the question 19. In this respect the activities of an whether the activities whose performance the approved commissioner differ from those, oath is intended to secure are such as to say, of a legal practitioner {avocat) ,2 or of a involve the exercise of official authority. traffic accident expert, ' 3 both of which the Court had to examine in previous cases. In those cases it was central to the reasoning of the Court that the exercise of the (typical) tasks of an avocat and experts' reports regarding traffic accidents are not binding on 18. What is crucial in my view is rather the the courts but 'leave the discretion of judicial fact that an approved commissioner has the authority and the free exercise of judicial power — and the duty — to veto the imple- power intact'. 14 Likewise, the measures mentation of certain measures. The Commis- taken by an approved commissioner do not sion is justified, it is true, in arguing that the pre-empt the decision of the Insurance term 'veto' is not wholly appropriate here, as Inspectorate. However, that does not alter it concerns not the prevention of a measure the fact that those measures can have practi- but its (temporary) suspension. Nonetheless, cal consequences which even the Insurance the fact remains that the insurance undertak- Inspectorate cannot reverse. The United ing may not put the intended measure into Kingdom has rightly argued in this connec- effect for a maximum period of eight days. tion that such a measure on the part of an In commercial life, however, even a post- approved commissioner resembles, in terms ponement as short as this can have serious or of its effect, an interim measure of a court.

20. Solely for the sake of completeness I Inspectorate to intervene, then it may be would like to add that the fact that an asked whether this activity is indeed so approved commissioner is remunerated by closely bound up with the profession of the undertaking concerned and not by the approved commissioner as such that it can- Insurance Inspectorate (or directly by the not be separated from it. In the modern age State) does not alter anything in the nature of telecommunications, it is entirely conceiv- of his activities. It is equally immaterial that able that the purpose of this provision could the approved commissioner must decide just as readily be achieved by the approved independently on the basis of the law commissioner simply informing the Insur- whether, and if so when, he should enter his ance Inspectorate, and the latter itself then veto, without being bound by instructions ordering the temporary suspension of the from the Insurance Inspectorate. A judge, transaction concerned. too, is independent and subject only to the law, and still exercises official authority.

I - 4063

O P I N I O N O F MR LENZ — CASE C-42/92

certain specific additional tasks. It should be 27. The condition of Belgian nationality was recalled that, in the (Eighth) Council Direc- introduced only in 1986. It is significant that tive of 10 April 1984 on the approval of per- Article 3(1)(1) of Regulation N o 2 of sons responsible for carrying out the statu- 20 November 1978 2 ' still provided that citi- tory audits of accounting documents, 19 zens of other Member States, and even of minimum requirements were established non-EC States, could be admitted subject to with regard to the qualifications to be certain conditions. 22 The regulation was demanded of an auditor. The Commission repealed in 1986 by the afore-mentioned rightly points out in this regard that Article Regulation N o 6, 23 which specified, how- 2(1) Nos 2 to 9 20 of Regulation N o 6 make ever, that persons who had previously admission to the office of approved commis- obtained admission under the provisions of sioner dependent on the fulfilment of strin- Regulation N o 2 could retain their status as gent conditions, particularly in respect of the approved commissioner. 24 This means that requisite professional experience. It is in fact citizens of other Member States who were not clear on what grounds a particular admitted between 1978 and 1986 can still nationality should also be deemed necessary pursue their activities without restriction for the office. today.

I - 4064

THIJSSEN v CONTROLEDIENST VOOR DE VERZEKERINGEN

C — Conclusion

I therefore p r o p o s e that the question submitted to the C o u r t be answered as fol- lows:

T h e exception to the principle of the freedom of establishment p r o v i d e d for in A r t i - cle 55 of the E E C Treaty is not applicable to the office of approved commissioner introduced by Articles 38 to 40 of the Belgian L a w of 9 July 1975 on the regulation of insurance undertakings.

I - 4065