C-410/96

AMBRY

OPINION OF ADVOCATE GENERAL MISCHO delivered on 14 May 1998 *

1. Proceedings have been brought by the Min­ a travel agent, may engage in the organisation istère Public against André Ambry, in his or sale of individual or group travel or holi­ capacity as manager of 'A Tours SARU, before days on a profit-making basis, and specifies the Criminal Chamber of the Tribunal de the conditions for the issue of such a licence, Grande Instance, Metz. He is charged with which include, under (c), the following: having assisted or engaged in an activity relating to the organisation and sale of travel or holidays without having the licence required under French legislation in order to pursue that activity. It is not disputed that 'providing, in regard to their customers, suf­ Mr Ambry applied to the Prefecture of the ficient evidence of a financial security, specifi­ Department of Moselle for a licence and that cally designated for the refund of money the Préfecture refused to issue one to him on received in respect of the services listed in the ground that the financial security which Article 1 and for the provision of substitute he possessed, and which had been granted to services, provided under a bond entered into him by an Italian finance company, by a collective guarantee body, a credit insti­ 'Compagnia cauzioni SpA', whose registered tution or an insurance company, such secu­ office is in Rome, did not meet the conditions rity to cover the costs of any repatriation and, laid down in Article 14 of Decree No 94.490 in such a case, to be available for immediate of 15 June 1994, 1adopted in implementation payment in France.' of Article 31 of Law No 92.645 of 13 2 July 1992 laying down the conditions for the pursuit of activities relating to the organi­ sation and sale of travel or holidays.

2. or by a credit institution or insurance com­ Article 16 below. If the credit institution or pany authorised to give a financial security. insurance company is situated in a Member State of the European Community other than France, an agreement to that effect must be concluded between that body and a credit institution or insurance company situated in France. A certificate attesting to the agree­ ment and drawn up by the French credit The financial security must be specifically institution or insurance company shall be sent designated for the refund of capital sums to the Préfet [chief administrative officer of received by the travel agent under the con­ the département] by the travel agent con­ tracts he has entered into on behalf of his cli­ cerned. ents for present or future services and must cover the repatriation of travellers, in par­ ticular in the case of default on payments resulting in the commencement of bankruptcy proceedings.

The Préfet must be informed, without delay and subject to the same conditions, of any amendments to that agreement and, where applicable, of the signature of any new agree­ ment concerning the same subject-matter. The financial security bond must comply with all the provisions of this chapter.'

...'

4. Article 14, on which the Préfecture based its refusal to issue a licence to Mr Ambry, provides:

5. The detailed rules governing the manner in which the financial security may be called on are laid down in Article 16 of the Decree, which provides:

'A financial security may be provided by a credit institution or insurance company only if that institution or company has its regis­ tered office in the territory of a Member State of the European Community or a branch in 'The security shall be payable automatically France. In all cases, the financial security must on presentation of evidence by the creditor to be available for immediate payment in order the guarantee body that the claim is conclu­ to ensure the repatriation of customers in sively established and due and that the agency accordance with the conditions laid down in backed by the security is in default, and the

If the guarantor disputes either the existence of conditions giving rise to the right to pay­ ment or the amount of the claim, the creditor may bring proceedings directly in the court 7. Considering that the legality or otherwise having jurisdiction. of the provisions of Article 14 of the Decree under Community law determines whether the charges brought against Mr Ambry are well founded, the Tribunal de Grande Instance, Metz, refers the following question to the Court: By way of derogation from the foregoing provisions, a decision to call on the security, as a matter of urgency, in order to repatriate the clients of a travel agency may be taken by the Préfet who shall require the guarantor to release, immediately and as a matter of pri­ 'Are the provisions of Article 14 of Decree ority, the funds necessary to cover the expenses No 94.490 of 15 June 1994, adopted pursuant involved in repatriation. However, if the secu­ to Article 31 of Law No 92.645 of 13 July rity is provided by a collective guarantee body 1992, to be regarded as not in conformity as referred to in Article 13 above, that body with Directive 73/183, the Coordination shall use every possible means to make the Directive of 15 December 1989, Article 59 of

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OPINION OF MR MISCHO — CASE C-410/96

9. Moreover, an analysis of the particulars of the issue, raised by Mr Ambry, whether the requirements laid down in the French legisla­ tion are compatible with Community law shows that the question should be slightly 10. On the other hand, I do not see, and here reformulated in order to provide a helpful I am in agreement with the position expressly response to the concerns of the national court. adopted by the French Government and the If Article 14 of the Decree were incompatible position taken, by implication, by the Spanish with Community law, it would be because it Government, how Article 14 of the Decree refuses to accord to a provision of services, the arrangement of a security by a financial institution or an insurance company estab­ 3 — OJ 1989 L 386, p. 1. lished in another Member State, the same 4 — OJ 1992 L 228, p. 1.

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AMBRY

13. The provisions of Directive 90/314 which are relevant for determining whether Article 11. For these various reasons I think that the 14 is compatible with Community law are question to which the Court must address Article 7 and Article 8. Under Article 7, itself is whether — and I will use in substance the formulation of the question suggested by the French Government — the principle of freedom to provide services, as contained in Article 59 of the Treaty and, in the case of banking or insurance, in the directives adopted in this field, in particular Directives 89/646 and 92/49, cited above, precludes the provi­ sions of Article 14 of Decree No 94.490, which requires, where a financial security is 'The organiser and/or retailer party to the arranged by a credit institution or an insur­ contract shall provide sufficient evidence of ance company established in a Member State security for the refund of money paid over other than France, an agreement to be con­ and for the repatriation of the consumer in cluded between the guarantor and a credit the event of insolvency.' institution or an insurance company estab­ lished in France in order to repatriate travel­ lers. 5 — OJ 1990 L 158, p. 59.

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OPINION OF MR MISCHO — CASE C-410/96

14. Article 8 provides: he will have to find an establishment situated in France that is prepared to conclude the agreement with him without which the secu­ rity he is offering will not be recognised, which will not necessarily be easy since he will have to enlist the cooperation of a poten­ 'Member States may adopt or retain more tial competitor, and, secondly, he will have to stringent provisions in the field governed by bear the costs involved in concluding such an this Directive to protect the consumer.' agreement, because it is hard to imagine the French institution giving its help free of charge, and therefore to cut his prices in order to remain competitive vis-à-vis a French institu­ tion. The restriction is therefore undeniable.

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AMBRY

level of effectiveness and a certain degree of 20. This is why we should now examine automatism in the implementation of the whether the indisputable restriction on the arrangements concerning a security. freedom to provide services introduced by Article 14 of Decree No 94.490 may be justi­ fied, given that the obligation to conclude an agreement with an institution situated in France has no basis either in Directive 89/646 (credit institutions) or in Directive 92/49 (insurance). The Court has consistently held, as the Commission points out, that such a restriction may be justified by overriding rea­ 18. Although I can only agree that Member sons relating to the public interest, provided States are under a genuine obligation of result that it can be regarded as a non-discriminatory, regarding the security which must be avail­ proportionate measure which is objectively able to customers of a travel agency, I must necessary and that the interest to be protected at the same time observe that the French is not already safeguarded by the rules to Government acknowledges that Member which the person providing the service is States are free to choose the means to be subject in the Member State in which he is 7 employed for that purpose, and it by no established, and provided there has been no 8 means claims that the Community legislature harmonisation at Community level. requires them to resort to means which would cause them to be in breach of other obliga­ tions which they have under the Treaty or any instrument of secondary legislation.

situated within France, which means that there might also consider, as does the Commission, is indeed a public-interest objective which is that there is no discrimination — which con­ being pursued. sists, let it be recalled, in treating identical situations differently or different situations identically — since, as regards the possibility of immediately calling on the security, which is something required of all guarantors under Article 14, an institution situated outside 22. It is equally plain that the French legisla­ France is not in the same position as an insti­ tion is not inconsistent with harmonisation at tution situated in France. The Commission Community level, at least so far as the rules points out in this connection that a French applying to travel agencies are concerned, bank is in fact in a position to provide funds since, as the Commission points out, on the immediately to another institution situated in one hand, Article 7 of Directive 90/314 does France and as a result participates in the same not define the detailed rules for arranging the compensation system, whereas a foreign insti­ security for which it provides and, on the tution, which is unable to take advantage of a other hand, Article 8 of that directive autho­ reciprocal agreement with a French bank, rises the adoption, for the protection of con­ would not necessarily be able to do so. Simi­ sumers, of national measures which are more larly, the French Government points out, with stringent than those laid down in the direc­ reference to various studies and basing its tive. Nor does the condition that the interest argument on the fact that the Community to be protected should not already be pro­ legislature found it necessary to intervene by tected by rules to which the service provider means of Directive 97/5/EC of the European is subject in the Member State in which he is Parliament and the Council of 27 January 10 established create any difficulties, since it is 1997 on cross-border credit transfers, that not the solvency of the guarantor that is at the transfer of funds from one Member State issue but his capacity to intervene effectively to another has hitherto operated under condi­ in order to take the place of a defaulting tions which are not always satisfactory. French travel agent. The issue therefore comes down to whether the French measure is or is not discriminatory, objectively necessary and proportionate.

Member State on its own account things work 27. Before I set out those reasons, I should better. like to make it clear that I am sensitive to the arguments put forward by the French Gov­ ernment. I am in full agreement with it in considering that the security which a travel agent takes out must be capable of being called on immediately in the national terri­ tory if it is necessary to repatriate clients. We are all aware of the grotesque situation of the 25. They do not however appear to me to be customers of an Austrian travel agency who totally convincing. One might ask oneself the were taken hostage by a Greek hotel owner, question, to which I confess I do not know and whose adventures provided the back­ the answer, whether, in the event of a security ground to the dispute which came before the being issued to a travel agency established in Court in Case C-364/96 via a question referred the North-East of France, as in the present to it by the Bezirksgericht für Handelssachen, case, by a bank situated in the Saarland, the Vienna, for a preliminary ruling. funds which that bank would send via a cou­ rier to meet its commitments would take very much longer to arrive than funds sent by a French guarantor bank established in Per­ pignan or Bayonne. One might also ask one­ self how, if cross-border credit transfers encounter so many difficulties, the assistance- provision organisations, which for years have been acting effectively to bring help to cus­ tomers who have met with mishaps in distant lands, proceed. 28. However, quite apart from the obvious interest which a tourist awaiting repatriation has in the security being called on immedi­ ately, the speed with which the guarantor acts has another advantage. It makes it possible to limit the amount of the security required by the travel agency and therefore to encourage competition in the travel sector. If it takes 26. Let us accept, however, since we cannot time for the security to become operative, the be certain, that the fact that there is a differ­ tourist's stay will be extended, entailing addi­ ence between the position of a institution tional costs for the guarantor over and above situated in France and one situated in another those which he should in any event have to Member State precludes one from considering bear in order to ensure the return of the that the requirements laid down in Article 14 people concerned. If they are returned very constitute discrimination, and let us turn to quickly the guarantor's part in the repatria­ the other conditions they must satisfy in order tion will normally involve it only in paying to be permissible under Community law. Are for the travel tickets in place of the defaulting they both objectively necessary and propor­ travel agency. Immediate repatriation of cus­ tionate? Sharing the view expressed by the tomers is therefore in the evident interest of Commission at the hearing, I am of the both those operating in the tourism business opinion that they are not, and for various and the institutions which provide security reasons. for them.

32. Alongside these positive aspects of the French legislation, there are, however, other aspects, of a negative nature, that condemn it. 30. It is likewise indisputable that the French The first is that it is quite apparent that the legislation did not opt, as it could have done agreement that the foreign provider of ser­ under Directive 90/314, for the solution which, vices must conclude with an institution situ­ by adopting as the sole permissible arrange­ ated in France must not be limited merely to ment for the provision of a security the cooperation, with that institution lending the requirement that the travel agency should be guarantor its assistance so that funds can a member of a collective organisation for that immediately be made available to the Préfec­ purpose, encompassing all French travel agen­ ture making the arrangements to repatriate cies, would have excluded de facto the pos­ the tourists and possibly advancing funds if it sibility of credit institutions and insurance seems impossible for the cross-border credit companies established in other Member States transfer to be made rapidly. From the expla­ offering their services to the customers of nations provided by the French Government French travel agencies. it would appear that what is required is that the Préfet must be able to bring summary proceedings before a French court against the institution situated in France if he considers that the guarantor is taking too long to act. This means that what is concerned is not merely a commitment of the institution con­ cerned vis-à-vis the guarantor but a real com­ 31. Finally, it may be observed that, in the mitment to assume, vis-à-vis the French matter of insurance, the Community legisla­ authorities, all the commitments incumbent ture itself considered that the presence in the upon the guarantor himself. The requirement Member State in which the consumer resides to assume an obligation of that nature is tan­ of a representative of the service provider tamount in practice to requiring that the secu­ established in another Member State may cer­ rity issued by a credit institution or an insur­ tainly prove valuable in a number of cases. ance company established in another Member This is why Member States have been expressly State should be supplemented by an identical authorised to require such representation by Article 12a of Directive 88/357/EEC, intro­ duced by Article 6 of Council Directive 90/618/EEC of 8 November 1990, amending, 11 — OJ 1990 L 330, p. 44.

35. As I have already pointed out above, a 33. The second is the argument, put forward guarantor may be established in another by the French Government, that without the Member State but be situated in immediate required agreement it is impossible to ensure geographical proximity to the Préfecture that the Préfet will be able to bring summary which is required to take action, which would proceedings against a guarantor who fails to certainly offer him numerous advantages, act quickly. I can, of course, accept that the whereas a guarantor established in France French Government would want a Préfet, could in fact be a long distance away and when he is forced to take proceedings, to be might take some time in order actually to able to bring the matter before a French court deliver the necessary funds. and not, in the emergency situation in which he has to act, to have to face the difficulties and delays which might accompany proceed­ ings initiated in a foreign court. I think, how­ ever, that this concern is not one that can jus­ tify, with respect to the principle of 36. I admit, of course that a guarantor estab­ proportionality, the requirement laid down in lished in another Member State will in most Article 14. In order for the same power to be cases encounter greater difficulties than one made available to the Préfet, it would have established in France, but the French legisla­ been sufficient to require that where the secu­ tion should have taken into account, in accor­ rity is provided by an economic operator dance with procedures which it is not for me established in another Member State that to specify, the fact that there may be cases in operator should accept a clause in the con­ which there can be no doubt about the effec­ tract conferring jurisdiction on the French tiveness of action by a foreign guarantor. It courts with regard to any disputes which would certainly have been less restrictive of might arise as a result of the implementation the freedom to provide services to have of the security, bearing in mind that the judg­ adopted legislation which enabled the national ment delivered by a French court would enjoy authority to refuse to accept securities which all the facilities offered under the Brussels did not meet certain objectively denned cri­ Convention for its enforcement. teria of effectiveness, or to require the guar-

The principle of freedom to provide services, as laid down in Article 59 of the EC Treaty and the Second Council Directive No 89/646/EEC of 15 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the taking up and pursuit of the activity of credit institutions and insurance com­ panies, and amending Directive 77/780/EEC, and in Council Directive 92/49/EEC of 18 June 1992 on the coordination of the laws, regulations and administrative provisions relating to direct insurance other than life insurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance Directive), pre­ cludes national rules, which like those resulting in France from Article 14 of Decree No 94.490, require, as regards the security which travel agencies must hold, where a financial security is arranged with a credit institution or an insurance company established in another Member State, the conclusion of an agreement between the guarantor and a credit institution or an insurance company established in national territory in order to ensure the repatriation of travellers.

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