C-358/98

COMMISSION V ITALY

OPINION OF ADVOCATE GENERAL LÉGER delivered on 18 November 1999 *

1. In the present action, the Commission of 3. Article 1(1) of that Law provides as the European Communities asks the Court follows: to declare that, by making the provision of cleansing, disinfection, disinfestation, rodent-control and sanitation services (hereinafter 'cleansing services') by opera- tors established in Member States other than Italy subject to registration in the registers referred to in Article 1 of Italian Law No 82 of 25 January 1994 1 (herein- after 'Law No 82'), in accordance with Articles 1 and 6 of that Law, the Italian Republic has failed to fulfil its obligations under Article 59 of the EC Treaty (now, after amendment, Article 49 EC). 'Registration of cleansing undertakings in the commercial register or the provincial register of small businesses

I — The provisions of national law in issue

1. Undertakings engaged in cleansing, dis- infection, disinfestation, rodent-control and sanitation activities, hereinafter refer- red to as "cleansing undertakings", shall be registered in the commercial register pro- vided for under the single text approved by 2. Law No 82 is intended to govern the Royal Decree No 2011 of 20 September exercise of cleansing activities. 1934, as subsequently amended, or in the provincial register of small businesses pro- vided for under Article 5 of Law No 443 of * Original language: French. 8 August 1985 if they satisfy the conditions 1 — GURI No 27 of 3 February 1994, p. 4. laid down in the present Law.'

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4. Any person concluding contracts relat- ing to the performance of the activities covered by this Law with cleansing under- 2. In the case where the cleansing under- takings which are not registered in the taking carries out the activities covered by commercial register or the provincial regis- this Law without being registered in the ter of small businesses, which have been commercial register or the provincial regis- struck off those registers or whose registra- ter of small businesses, or if it carries out tion has been suspended, or who, in any those activities despite suspension of its event, pays for the services of such under- registration or after its registration has been takings, shall be liable to an administrative annulled, the owner of the individual fine of between ITL 1 million and ITL 2 undertaking, the agent with control over million. In the case where such contracts the undertaking, one of its branches or one are concluded by public undertakings or of its seats, all of the partners in the case of public bodies, the latter shall be liable to an a partnership, the partners in the case of a administrative fine of between ITL 10 limited partnership or a limited partnership million and ITL 50 million. with share capital, or the board members in all other types of company, including cooperatives, shall be liable to a prison term of up to six months or to a fine of between ITL 200 000 and ITL 1 million.

5. Contracts concluded with cleansing undertakings which are not registered in the commercial register or the provincial 3. If the cleansing undertaking entrusts the register of small businesses, or which have performance of the activities covered by been struck off those registers or whose this Law to undertakings which are in a registration has been suspended, shall be situation which could give rise to the null and void.'

6. Receiving no reply, the Commission instituted the pre-litigation procedure pro- 9. The Commission adds that Law No 82 vided for under the first paragraph of also introduces covert discrimination Article 169 of the EC Treaty (now the first against undertakings established in the paragraph of Article 226 EC) and, on other Member States. This condition of 12 March 1996, delivered a reasoned opi- registration has the practical effect of nion to the Italian Government calling on it dissuading traders established in other to adopt the necessary measures of com- Member States from performing in Italy pliance within two months of notification. the cleansing activities covered by that Law. According to the Commission, it is hardly likely that a trader from another Member State would be prepared to incur the administrative obligations involved in registration in the registers of undertakings in order to provide services on a more or 7. In the absence of any measures by the less occasional and ad hoc basis, and in any Italian Government to comply with that event in a temporary and non-regular opinion, the Commission brought the pre- manner. sent action on 2 October 1998.

8. In its application, the Commission sub- mits that the obligation to register in the 10. The Commission also notes that regis- register of undertakings and the severe tration in the register of undertakings penalties provided for in the event of non- involves payment of a 'duty' known as an compliance with that obligation are in clear 'annual charge', which is governed by

Article 18 of Law No 580 of 29 December necessary in order to ensure compliance 1993 establishing a register of undertak- with professional rules and to guarantee the ings. 2 protection of the recipient of [cleansing] services'. In other words, the Italian Law results in a pointless, and therefore imper- missible, accumulation of the guarantees of professional integrity required by the Mem- ber State in which the services are provided 11. The Commission concludes by pointing (Italy) and by the Member State in which out that the requirements imposed by the the service provider is established. 5 Court in regard to justification for restric- tions on the free provision of services have not been satisfied. While the Court accepts that such restrictions may be justified by 'imperative reasons relating to the public interest', it will accept such justification only if 'that interest is not protected by the 13. The Commission concludes that Law rules to which the person providing the No 82 infringes the principle of propor- services is subject in the Member State in tionality inasmuch as the measures taken to which he is established'. 3Since the Italian attain the objective of guaranteeing protec- Government failed to reply to either the tion for the recipient of the cleansing formal letter of notice or the reasoned services are inappropriate. It points out opinion, that verification has proved that less restrictive but equally effective impossible. control measures could have been adopted, such as production by the cleansing under- taking established in another Member State of certificates evidencing registration in registers corresponding to the Italian regis- ter of undertakings. 12. Even if one were to assume that the obligation laid down by Article 1 of Law No 82 was envisaged as a means of carry- ing out preventive checks on the trustwor- thiness, in particular from a criminal point of view, of those responsible for the cleans- 14. In its statement of defence, the Italian ing undertakings, the Commission notes Government states that provisions are in that this justification would not satisfy the the process of being drafted for inclusion in requirements laid down in the Court's case- a regulation at present being adopted. This law because conditions of integrity equiva- regulation is designed to simplify the pro- lent to those laid down in Law No 82 are cedures governing registration, amend- required for carrying out those activities in ments to and removal from the register of the other Member States. As the Court held undertakings and commercial companies. in Säger, cited above, 4 such a requirement These provisions should make it clear that cannot be regarded as being 'objectively cleansing undertakings established in the other Member States are to be exempted from the obligation to register in the 2 — GURI No 7 of 11 January 1994, ordinary supplement No 6. 3 — Judgment in Case C-76/90 Säger [1991] ECR I-4221, paragraph 15. 5 — See, inter alia, the judgment in Case 279/80 Webb [1981] 4 — Ibid., paragraph 15. ECR 3305, paragraph 20.

18. The obligation to eliminate such restrictions has been interpreted by the 15. In its reply, the Commission points out Court as prohibiting all discrimination that the fact that the formalities required by against the person providing the service Law No 82 are not, in practice, imposed in by reason of his nationality or the fact that regard to cleansing undertakings estab- he is established in a Member State other lished in other Member States is not such than that in which the service is to be as to render pointless the proceedings provided. 6According to the Court, the brought against the Italian Government principle of equal treatment, of which for failure to fulfil obligations. It accord- Article 59 is only a specific instance, pro- ingly calls on the Court to confirm that hibits not only overt discrimination by there has been an infringement of Arti- reason of nationality but also all covert cle 59 of the Treaty and to declare that the forms of discrimination which, by the Italian Republic has failed to fulfil its application of other criteria of differentia- obligations under that provision of the tion, lead in fact to the same result. 7 Treaty and order it to pay the costs.

19. The Court has also ruled that, in the absence of harmonisation of the rules

16. In its rejoinder, the Italian Government confirms that it has completed drafting the 6 — See, inter alia, the judgments in Case 33/74 Van Binsbergen [19741 ECR 1299, paragraph 25; Joined Cases 110/78 and national provisions which will be inserted 111/78 Van Wesemael and Others [1979] ECR 35, para- in the regulation referred to in its reply and graph 27; Webb, cited above, paragraph 14; and in Case C-114/97 Commission v Spain [1998] ECR I-6717, para- that it will inform the Commission and the graph 48. Court once that text has been definitively 7—Judgments in Case C-3/88 Commission v Italy [1989] ECR 4035, paragraph 8, and in Case C-360/89 Commission adopted. v Italy [19921 ECR I-3401, paragraph 11.

applicable to services, or a system of beyond what is strictly necessary to achieve equivalence, restrictions on the freedom that objective. 9 provided for by Article 59 of the Treaty may arise as a result of national rules which make the exercise of service-related activ- ities subject to compliance with or comple- tion of certain statutory formalities, even if they apply without distinction to providers of services established in the territory within which the service is provided or in a Member State other than that in which 22. The Court has thus ruled that, while the service is to be provided, when they are the principal aim of Article 59 and Arti- liable to prohibit or impede the activities of cle 60 of the EC Treaty (now Arti- a provider of services established in another cle 50 EC) is to enable the service provider Member State where he lawfully provides to pursue his activities in the Member State similar services. 8 where the service is provided without suffering discrimination in favour of the nationals of that State, that does not mean that all national legislation applicable to nationals of that State and usually applied to the permanent activities of undertakings established therein may be similarly applied 20. The Court has also held that, as a in its entirety to the temporary activities of fundamental principle of the Treaty, the undertakings which are established in other freedom to provide services may be Member States. 10 restricted only by rules which are justified in the general interest and are applied to all persons and undertakings pursuing those activities in the territory of the State in question, in so far as that interest is not already safeguarded by the rules to which the supplier of the services is subject in the Member State in which he is established. 23. The Court has likewise ruled that the conditions imposed by the Member State in which the service is provided may not duplicate equivalent statutory conditions which have already been satisfied in the State in which the undertaking is estab- 2 1 . Finally, those restrictions must be lished and that the supervisory authority of objectively necessary to ensure attainment the Member State in which the service is of their objective and in any case cannot go

provided must take into account controls 26. It is clear, and has not been disputed by and checks which have already been carried the Italian Government, that, by reason of out in the Member State of establish­ the general tenor of its provisions, Law ment. 11 No 82 applies to every provider of services, whether or not established in Italy, and irrespective of whether or not the provider offers its services in Italy on an occasional or regular basis. In addition, it must be pointed out that this legislation does not exclude from its scope a provider of services established in a Member State 24. Further, in its judgment in Bellonę, 12 other than Italy which, under the domestic the Court was called on to determine legislation of its State of establishment, whether the provisions of a Community already satisfies the formal requirements directive on the coordination of the laws of imposed by the Italian Law. The necessary the Member States relating to self- conclusion is therefore that Law No 82 employed commercial agents constituted a does not satisfy the requirements of Arti­ bar to Italian legislation which made the cle 59 of the Treaty. rights of such agents subject to an obliga­ tion of entry in the register intended for that purpose. The Court ruled in this regard that 'Although Italian practice appears not to apply the condition of entry in the register to foreign agents, the national provisions at issue in the main proceedings, which are drafted in general terms, never­ theless also encompass agency relationships between parties established in different Member States. They are still capable of significantly hindering the conclusion and operation of agency contracts between parties in different Member States and therefore from that point of view also are 27. The fact that this Law is, in practice, contrary to the aims of the Directive'. not applied to persons or undertakings providing cleansing services which are established in Member States other than Italy cannot affect that conclusion. The Court has consistently held that 'the incom­ patibility of national legislation with Com­ munity provisions, even provisions which are directly applicable, can be finally reme­ 25. It seems to me that the same solution died only by means of national provisions should, by analogy, be applied to the of a binding nature which have the same present dispute. legal force as those which must be amen­ ded. Mere administrative practices, which by their nature are alterable at will by the 11 — Commission v Germany, cited above, paragraph 47. 12 —Judgment in Case C-215/97 Bellone v Yokohama [1998] authorities and are not given the appro­ ECR I-2191, paragraph 17. priate publicity, cannot be regarded as

29. It is clear that, when the period which the Commission had prescribed in its reasoned opinion had expired, the Italian provisions intended to establish compliance had still not been adopted. 32. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been 13 — See, inter alia, the judgment in Case C-197/96 Commission applied for in the successful party's plead- v France [1997] ECR I-1489, paragtaph 14. ings. Since the Commission has applied for 14 — See, for example, the judgment in Case C-362/98 Com- mission v Italy [1999] ECR I-6299, paragraph 7. costs and the Italian Republic has been 15 —Judgmentsin Case C-61/94 Commission v Germany unsuccessful, the Italian Republic must be [1996] ECR I-3989, paragraph 42, and in Case C-365/97 Commission v Italy [1999] ECR I-7773, paragraph 32. ordered to pay the costs.

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COMMISSION V ITALY

Conclusion

33. In light of the foregoing, I propose that the Court should:

(1) declare that, by making the provision of cleansing, disinfection, disinfesta- tion, rodent-control and sanitation services by operators established in Member States other than Italy subject to registration in the registers referred to in Article 1 of Law No 82 of 25 January 1994, in accordance with Articles 1 and 6 of that Law, the Italian Republic has failed to fulfil its obligations under Article 59 of the EC Treaty (now, after amendment, Article 49 EC);