C-451/99
ECLI:EU:C:2001:484
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OPINION OF MR JACOBS — CASE C-451/99
OPINION OF ADVOCATE GENERAL JACOBS delivered on 25 September 2001 1
1. The present request for a preliminary received technical approval and where ruling from the Handelsgericht Wien taxes have been paid in connection with (Vienna Commercial Court) in Austria putting it on the road, is leased by a concerns the compatibility of certain German company to an Austrian company national rules on the registration of motor for a period of three years. Under the vehicles with the Treaty provisions on leasing contract, the German company freedom to provide services or free move- remains the owner of the vehicle and the ment of goods. Austrian company may not re-register it in its own name. The issue before the national court is whether the contract is unenforce- able because it does not comply with the requirements of Austrian law or whether those requirements are themselves unen- forceable because they do not comply with Community law. 2. Under Austrian law, any Austrian resi- dent bringing a motor vehicle registered elsewhere into the country in order to use it there must surrender the licence plates to the authorities within three days and may not thereafter use the vehicle without re- registering it in Austria. The applicant for registration must be resident or at least The relevant Austrian legislation have a principal place of business in Aus- tria, the vehicle must be insured by an approved insurer, it must pass certain technical tests, and a fuel consumption tax of up to 16% of its value must be paid. 4. The main Austrian laws referred to in this case are the Kraftfahrgesetz (Law on Motor Vehicles, 'the KFG') and the Norm- verbrauchsabgabegesetz (Law imposing a Standard Fuel Consumption Tax, 'the NoVAG').
3. The lawfulness of those provisions is questioned in a case in which a vehicle registered in Germany, where it has 5. In accordance with Paragraph 79 of the KFG, vehicles registered in another country 1 — Original language: English. may in general be used in Austria for up to
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one year, provided that they are not •— the vehicle must be covered, in accord- permanently based there. ance with Paragraphs 59(1) and 61(1), by a compulsory insurance certificate issued by an insurer entitled to provide such insurance in Austria;
6. However, under Paragraph 82(8), unless there is proof to the contrary a foreign- — the vehicle must also be covered by an registered vehicle is deemed to be perma- inspection certificate issued (in Austria) nently based in Austria if it is brought into in accordance with Paragraph 57a of the country by a person whose principal the KFG establishing that it meets the residence or registered office is in Austria relevant safety and pollution require- and who uses it there. In that case, it may ments; be used in Austria for only the three days immediately following its entry into the country. After that, the registration docu- ments and plates must be surrendered to the authorities and any further use of the vehicle is conditional upon registration in — in the case of the first registration of a accordance with Paragraph 37 of the KFG. vehicle acquired from another Member State of the European Union, a certifi- cate must be produced to show that all applicable taxes, including the Stan- dard Fuel Consumption Tax, have been paid.
7. Paragraph 37(2) lays down a number of conditions, proof of compliance with which is necessary for a vehicle to be registered. In particular: 8. The NoVAG requires Standard Fuel Consumption Tax to be paid on all vehicles supplied for consideration, leased by way of trade or registered for the first time in Austria (Paragraphs 1 and 2, with excep- tions in Paragraph 3).
— the vehicle must be in the lawful pos- session of the applicant for registration, who must have his principal residence or registered office (or, in the case of 9. Under Paragraph 5, the amount of the firms registered abroad, a principal tax is calculated essentially on the basis of place of business) in Austria; the consideration paid for the vehicle if
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supplied new or its normal value, exclusive 11. Article 28, which falls within the title of VAT, in other cases. The rate applied relating to free movement of goods within under Paragraph 6 is in general: the Community, prohibits quantitative restrictions on imports and all measures having equivalent effect between Member States. Article 49 et seq. form part of the chapter concerning services in the title relating to free movement of persons, services and capital. — for motorcycles with an engine capac- ity of over 125 cc, 0.02% of the taxable value for each cc of capacity over 100 cc;
12. Article 49 provides, in particular: — for vehicles other than motorcycles, 2% of the taxable value for each litre of fuel consumption per 100 km over 3 litres per 100 km for petrol engines or 2 litres per 100 km for diesel engines.
'restrictions on freedom to provide services That amount is calculated to the nearest within the Community shall be prohibited full percentage point and may not exceed in respect of nationals of Member States 16% of the basis of assessment. who are established in a State of the Community other than that of the person for whom the service is intended'.
The relevant Treaty provisions
13. Under Article 50, 'services' are those normally provided for remuneration, in so 10. The Treaty provisions referred to in the far as they are not covered by the provi- order for reference are Article 28 EC and sions relating to freedom of movement for Article 49 et seq. EC. goods, capital and persons.
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The main proceedings and the request for a pay the environmental tax of EUR 2 460 preliminary ruling thereon, or else annulment of the contract on the ground that the vehicle could not lawfully be used in Austria.
14. ASL Auto Service-Leasing GmbH ('ASL') is a vehicle-leasing company estab- lished at Pullach, on the outskirts of Munich, in Germany. It apparently owns 17. Some further details may be gleaned a fleet of some 50 000 vehicles which it from Cura Anlagen's application to the leases to clients. Cura Anlagen Gesellschaft Handelsgericht. According to that docu- mbH ('Cura Anlagen') is a company regis- ment, the parties entered into the contract tered in Salzburg, Austria. on the assumption that Cura Anlagen could lawfully use the car in Austria for the whole three-year period despite the fact that it was registered in Germany in ASL's name. However, shortly after bringing the car into Austria, Cura Anlagen learned that it could not use the car there with German regis- 15. In February 1999, the two companies tration plates but must register it in Austria entered into a contract under which ASL and pay the Standard Fuel Consumption leased a motor car to Cura Anlagen for a Tax. Cura Anlagen asserts that if the period of 36 months, for a fixed monthly parties had known of the relevant provi- sum (part of which was for the compulsory sions and taken them into account, they insurance cover included in the lease) plus would have provided for the car to be an additional rate per 1 000 km over a registered in Austria either in Cura certain distance travelled. The contract Anlagen's name or — although this would included special conditions for Austria, have required ASL to set up a place of stipulating in particular that the vehicle business in Austria — in ASL's name. would be registered in ASL's name, that However, since that was not the case, the Cura Anlagen was not entitled to register it contract should be either modified so that it in its own name in Germany or elsewhere can be performed or annulled on the and that it was to be used in principle only ground that its economic basis was absent within Austria. ab initio. Cura Anlagen agrees with ASL that the Austrian legislation limits freedom to provide cross-border services within the Community but considers the limitations justified on public-interest grounds.
16. In May 1999, Cura Anlagen brought proceedings against ASL before the Han- delsgericht, seeking either an order requi- ring ASL to register the vehicle in Austria in its own name or consent to registration in 18. ASL's defence before the national court Cura Anlagen's name and in any event to is essentially that Cura Anlagen is fully
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entitled to use the car in Austria in Austrian, Belgian, Danish and Finnish accordance with the terms of the leasing Governments and by the Commission. At contract as it stands, since the Austrian the hearing, only ASL, the Belgian Govern- provisions alleged to prevent it from doing ment and the Commission were repre- so cannot be applied. As restrictions on the sented. freedom to provide services they are incom- patible with Article 49 et seq. EC. They are not justified on public-interest grounds and thus cannot be applied. ASL therefore asked the Handelsgericht to seek confirma- tion of its arguments by requesting a preliminary ruling from the Court of Jus- tice. Admissibility
21. The Austrian Government submits that 19. On 10 November 1999, the Handels- the reference for a preliminary ruling is gericht stayed the proceedings and sought a inadmissible, arguing that the question ruling by the Court on the following referred — in particular in so far as it question: relates to Article 28 EC — is not relevant to the determination of the dispute before the Handelsgericht and that the national proceedings are moreover of a similarly contrived nature to those in Foglia v Novello. 2 'Are Article 49 et seq. EC (or alternatively Article 28 EC) to be interpreted as preclud- ing the application of provisions of Member State A which prohibit an under- taking established in Member State A from using for more than three days, or for more 22. As regards the first point, it will be than a year as the case may be, in Member more appropriate to consider the relevance State A a motor vehicle which is leased of Article 28 EC when examining the from a leasing undertaking established in nature of the alleged restrictions. Suffice it Member State B and registered in Member to say that the question does not refer State B in the name of the leasing under- solely to that article. However, the Aus- taking established there, without obtaining trian Government also submits that the a (second) registration for that motor dispute in the main proceedings concerns vehicle in Member State A?' the interpretation and enforcement of a private-law contract, and not the appli-
2 — Case 104/79 [1980] ECR 745 and Case 244/80 [1981] ECR 3045; see also, for example, Joined Cases C-297/88 and C-197/89 Dzodzi [1990] ECR I-3763, paragraph 40 of the 20. Written observations have been sub- judgment, Case C-118/94 Associazione Italiana per il WWF and Others [1996] ECR I-1223, paragraph 15, and Case mitted to the Court by ASL, by the C-129/94 Ruiz Bernaldez [1996] ECR I-1829, paragraph 7.
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cation of any provision of the KFG. There compared to, for example, Leclerc-Siplec, 3 is thus in its view no relationship between in which the Court accepted jurisdiction to the question raised and the specific nature answer the question raised, in so far as it of the main proceedings. was relevant to the subject-matter of the national proceedings, despite the fact that both plaintiff and defendants were in full agreement as to the desired solution.
23. That argument does not seem convinc- ing. It is true that the Handelsgericht is not strictly being asked to apply or disapply the 26. Moreover, unlike the situation in Fog- disputed provisions of the KFG or the lia v Novello, the issue is raised in a court No VAG. However, it is clearly important of the Member State in question. It is for a court which is asked to order the perhaps unfortunate that the Austrian enforcement or annulment of a contract to Government is not a party to the main know whether the national provisions proceedings, but that drawback may be which appear to hinder its performance outweighed by its right to submit full are valid or not. observations to this Court. The fact that it did not attend the hearing may indicate that it has been afforded sufficient oppor- tunity to assert its position.
24. On the second point, the Austrian Government adduces no specific grounds for its contention that the dispute is con- 27. I thus see no reason for the Court to trived. decline jurisdiction in this case.
25. Whilst there may be elements in the Nature of the alleged restrictions case-file which hint at the possibility that the situation underlying the main proceed- ings was engineered with a view to obtain- ing a ruling on a question of Community law which is of general interest, there seems 28. The national court wishes to know no doubt that a real contract exists and whether the Austrian provisions in issue are must be either enforced or annulled, with precluded either by the Treaty provisions consequences for the parties. The decision to be taken by the national court is at least in part dependent on a real issue of 3 — Case C-412/93 Leclerc-Siplec v TFl Publicité aud M 6 Publicité |1995| ECR I-179, paragraphs 8 to 16 of the Community law. The case might thus be judgment.
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(Article 49 et seq.) governing freedom to leasing of vehicles constituted a supply of provide services or by those (Article 28 et services within the meaning of the Sixth seq.) governing free movement of goods. VAT Directive 5 and that those services consisted principally in 'negotiating, draw- ing up, signing and administering the relevant agreements and in making the vehicles concerned, which remain the prop- erty of the leasing company, physically available to customers'. 29. Most of the parties submitting obser- vations take the view that the facts of the case concern freedom to provide services and not free movement of goods, and I agree.
32. The Commission further takes the view that the concept of the provision or supply of 'services' must have a uniform definition 30. The leasing or hiring-out of motor in Community law. Again, I agree; there is vehicles can clearly fall within the defini- no discernible reason for differing defini- tion in Article 50 EC in that it is a tions, which would serve only to confuse commercial activity normally provided for the legal position of possibly borderline r e m u n e r a t i o n . And, a l t h o u g h it activities. Moreover, as the Austrian Gov- undoubtedly involves goods — the ernment points out, the Court held in vehicles concerned — those goods are not Eurowings 6that leasing of aircraft was a themselves supplied by the lessor to the service within the meaning of Article 50 lessee; what is supplied is rather the use of EC. the goods, which remain the property of the lessor, and supply of the use of goods is logically a service. Moreover, at the hearing ASL pointed out that a 'full-package' lease may provide a good deal more than the car itself; in the present case it included insur- ance. 33. In any event, the question of classifi- cation as between goods and services is of limited importance, since the main ques- tions to be considered are whether there are any actual restrictions on trade (be it in 31. As the Commission points out, the goods or in services) and whether such Court considered in Aro Lease4 that the 5 — Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to 4 — Case C-190/95 Aro Lease v Inspecteur der Belastingdienst turnover taxes — Common system of value added tax: [1997] ECR I-4383, paragraphs 11 and 18 of the judgment; uniform basis of assessment, OJ 1977 L 145, p. 1. see also Case C-390/96 Lease Plan Luxembourg v Belgian 6 — Case C-294/97 Eurowings Luftverkehr [1999] ECR I-7447, State [1998] ECR I-2553, paragraph 25. paragraph 33 of the judgment.
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restrictions as there may be can be justified. tion, the Court has consistently held that The existence of restrictions is not depend- restrictions which apply without distinction ent on the nature of the trade and the as regards nationality or Member State of permissible grounds of justification are establishment may also escape the prohib- largely identical. ition if they are objectively justified by overriding reasons relating to the public interest. Such restrictions must comply with the principle of proportionality: they must be appropriate for securing the attainment of the objective which they pursue and must not go beyond what is necessary in order to attain it. 7 The alleged restrictions
34. Although the national court's question concerns, as it is worded, the legality of only the registration requirement itself and the time-limits to which it is subject, the other conditions attendant upon regis- tration are also relevant to an examination The registration requirement of that legality.
35. The observations submitted to the — Existence of a restriction Court focus largely on whether the Aus- trian provisions in issue can be justified. However, it may be helpful first to verify in each case whether they do actually restrict the cross-border provision of vehicle leas- ing services.
37. Does the requirement that a vehicle brought into Austria by a person based in the country in order to be used there must 36. With regard to possible justification of be (re-)registered in Austria in itself restrict any restrictions, it will be recalled that the freedom of vehicle-leasing businesses Articles 55 and 46(1) EC, read together, outside Austria to provide their services in permit only restrictions on freedom to that Member State? provide services consisting of 'national provisions for special treatment of foreign nationals on grounds of public policy, 7 — See, for a recent example, the judgment of 15 March 2001 in Case C-165/98 Mazzulem v ISA LCR I-2189, para- public security or public health'. In addi- graphs 25 and 26.
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38. The Finnish Government submits that most cases affect only leases where the the registration requirement cannot be said lessee is based outside the country but uses to hinder trade in services between Member the vehicle for a prolonged period within it. States unless more severe conditions are It seems to me that in such circumstances imposed on imported vehicles. there is no inherent cross-border element in the service provided by the lessor to the lessee.
39. I cannot agree. The requirement that a vehicle must be (re-)registered in Austria — Justification makes it more cumbersome for a German vehicle-leasing business to provide its ser- vices in Austria than to do so in Germany, or than it is for its Austrian counterparts to do so in Austria. The Court has consistently held that Article 49 EC prohibits 'any restriction, even if it applies to national providers of services and to those of other 41. When considering whether the regis- Member States alike, which is liable to tration requirement may be justified, it is prohibit, impede or render less advantage- none the less necessary to examine both ous the activities of a provider of services whether it may be justified in principle, and established in another Member State where whether the time-limit laid down is justifi- he lawfully provides similar services'. 8 able.
42. With regard to justification of the 40. That being so, the question whether the requirement in principle, the Commission particular time-limits in issue are restrictive and the Member States emphasise consider- of freedom to provide services need not be ations of public order and road safety, considered separately. However, it may be which I too consider to be relevant. It is pointed out that the one-year limit laid essential for many purposes that vehicles down in Paragraph 79 of the KFG will not used on the public highway should be normally affect the cross-border provision readily identifiable by means of individual of services. Applying as it does to vehicles registration plates. From records kept by not permanently based in Austria, it will in the Member State of registration details such as the identity of the owner and/or lawful possessor of the vehicle can be 8 — See, most recently, Case C-58/98 Carsten [2000] ECR I-7919, paragraph 33 of the judgment, together with the ascertained where necessary in cases of case-law cited there. road traffic offences or suspected crime,
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and legal obligations such as compulsory trative cooperation, in the foreseeable insurance and roadworthiness testing or the future it will be as easy for the Austrian payment of relevant taxes can be enforced. authorities to obtain information — Such measures combat fraud and other including, for example, the identity of the crime and above all help to enforce stan- lessee where applicable — about a vehicle dards of road safety and penalise failures to registered in Finland or Portugal, in Greece meet those standards. or Ireland, as it is now about a vehicle registered in Austria. However, that state of affairs does not yet seem to have been achieved. And even if it could be assumed to exist between Austria and Germany, no consequences could be drawn in Commu- nity law which would in effect discriminate between vehicle-leasing businesses oper- ating in Austria depending on whether they 43. ASL argues that registration in the were established in Germany or in another Member State of origin is sufficient. It Member State. points out that any vehicle registered in a State which is a party to the Paris Con- vention on Motor Traffic of 1926, the Geneva Convention on Road Traffic of 1949 or the Vienna Convention on Road Traffic of 1968 may be used freely in Austria (provided that it has not been brought into the country by an Austrian resident in order to be used there). In addition to those with more exotic number plates, tens of thousands of vehicles regis- 45. Moreover, as the Commission and the tered in Hungary, Turkey, Yugoslavia, Member States point out, the Member Croatia, Germany and Italy are thus driven State of registration is not merely a custod- in Austria every day by tourists, frontier ian of information about the vehicle but is workers and foreign business people. For also responsible for monitoring its road- German-registered vehicles, an agreement worthiness and entitled to levy various on judicial cooperation on police and taxes on it. The taxation of motor vehicles administrative matters between Germany has not been harmonised and differs enor- and Austria ensures that any necessary mously from one Member State to information is immediately available. another. 9As the Commission pointed out in its interpretative communication on procedures for the type-approval and regis- tration of vehicles previously registered in another Member State, 10 an individual cannot be allowed to register his vehicle in the Member State of his choice, or all
44. That argument has some force. With 9 — Figures produced by the Commission show that the taxation level may vary from 15% to 218% of the net price of the expanding resources of information tech- car, depending on the Member State. nology and increased police and adminis- 10 — OJ 1996 C 143, p. 4, at p .12.
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vehicles would be registered where the tax measures made necessary by vehicle use. To rates are lowest. Although that concerned highlight the point, we may imagine the the private ownership of vehicles, similar practical difficulties and distortion of tax considerations apply to leasing arrange- revenue which would ensue if all vehicles ments — all vehicle-leasing businesses leased in Denmark (where vehicle taxes would establish themselves in the State appear to be the highest in the Community) where taxation is lowest. were registered in Italy (where they seem to be lowest). The registration requirement itself thus appears fully justified in order to promote road safety and combat tax evasion.
46. In the same communication, the Com- mission considered that a person must register his vehicle in the Member State in which he has his normal residence within the meaning of Directive 83/182/EEC, 11 that is to say essentially where he usually lives because of personal and/or occupa- 48. However, if it is justifiable for such tional ties. The Austrian rules appear to be overriding reasons of public interest that a based on a similar principle, although they leased vehicle brought into Austria by an concentrate on the user rather than the Austrian resident for use there should also owner and on the fact of use within the be registered there, it seems to me that a country. requirement of re-registration within three days goes far beyond what is necessary for that purpose and is therefore dispropor- tionate.
47. That approach seems to me to be perfectly justified. Where a vehicle is used preponderantly in a Member State by a person or entity based there, the only reasonable rule is that records should be 49. Even on the rather implausible assump- kept in that Member State, which should tion that the relevant authorities are able to also be responsible for monitoring road- ensure completion of the necessary formal- worthiness and levying such taxes as are ities almost instantaneously, it still does not deemed necessary to fund the road infra- appear reasonable to refuse the vehicle user structures and environmental protection a longer period of grace in which to make the application. As ASL has pointed out, many foreign-registered cars may be used in 11 — Council Directive 83/182/EEC of 28 March 1983 on tax Austria for longer periods, and there does exemptions within the Community for certain means of transport temporarily imported into one Member State not seem to be any reason for insisting on from another, OJ 1983 L 105, p. 59; the definition of normal residence is given in Article 7(1). See also Case re-registration practically on crossing the C-297/89 Ryborg [1991] ECR I-1943 and the recent border simply because the user is resident judgment of 12 July 2001 in Case C-262/99 Louloudakis ECR I-5547. in the country. However, it might well be
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acceptable to require an application for limits in issue (three days and one year) are registration to be made within a relatively compatible with freedom to provide ser- short period provided that the lessee could vices. In that regard, the three-day limit continue to use the vehicle under the does not appear to lie anywhere near the original registration until the formalities borderline of justifiability. In contrast, the are completed, ensuring that there is no one-year time-limit, although, as I have unnecessary interruption of his enjoyment said, unlikely in practice to have any of it. The additional burden imposed when repercussion on the cross-border leasing vehicles are leased from another Member of vehicles, seems far from unreasonably State must be kept to the essential mini- short. mum.
50. There is also the question of the duration of the leasing contract. In the present case, it is for three years and that 52. For general guidance, the approach may be a usual period for this type of taken in Directive 83/182 12 might serve arrangement. However, vehicles are also as a point of comparison, although that hired, perhaps on different terms, for directive specifically does not cover the case shorter periods. From the documents sub- where the importer of the vehicle is resident mitted to the Court, it is not clear whether in the country of importation. The tax the short duration of a lease would suffice exemptions provided for there apply in as proof for the purposes of Paragraph principle for a period, whether continuous 82(8) of the KFG that the vehicle was not or not, of six months in any 12. 13 Thus, for permanently based in Austria or, if so, how the registration of vehicles leased from short it would have to be to do so. The another Member State, a six-month time- shorter the duration, the more unjustifiably limit might not be considered unreasonably restrictive it would appear to require a short. However, this is an area in which vehicle to be re-registered in Austria in Member States must, in the absence of order to be used there — with a sub- Community legislation directly in point, be sequent need to go through the reverse allowed a degree of discretion. For pur- procedure at the end of the lease. poses of efficient control, they may reason- ably wish to impose a shorter time-limit where the user of the vehicle is resident in the country, but that time-limit must not be so short as to render compliance imprac- ticable or unduly burdensome, having regard to all the formalities which must be completed. 51. The Court is not asked to specify what would be a justifiable time-limit for regis- tration and need not give a specific ruling. 12 — Cited above in note 11. It is however asked whether the two time- 13 — See Articles 3 and 4.
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The residence or place of business require- interest of all that the name should be that ment of the person responsible for the vehicle, ensuring the closest degree of control for both that person and the authorities. How- ever, when a vehicle is leased for a — Existence of a restriction relatively long period, responsibility is shared between the lessor and the lessee on a lasting basis. From information sub- mitted by the Commission in response to a request by the Court, it appears that different solutions are adopted by different 53. It does not appear to be contested that Member States. Registration in both names a requirement that a vehicle used in Austria would appear to serve best the interests of by a person based there must also be all, but it might well be an encroachment registered in the name of a person based on the rights of the owner of the vehicle if in Austria renders it more difficult or less registration in his name were completely attractive for vehicle-leasing businesses excluded. outside Austria to provide their services in that country.
54. Such a requirement means either that the lessor must have an establishment in Austria or that he must allow the lessee (or another person based in Austria) to register the vehicle in his own name. The first alternative is a recognised restriction on 56. The Austrian provisions do not appear freedom to provide services, involving as it to preclude registration in the lessor's name does both inconvenience and expense, but they require him in that case to have an while the second involves giving up some establishment in Austria. The Austrian of the prerogatives that the lessor, as owner Government points out that it may often of the vehicle, would normally expect to be necessary, when road traffic offences are retain. committed, to require the person in whose name a vehicle is registered to provide information as to the identity of the driver at a particular moment. That information would be difficult to obtain if the person in question were based in another Member — Justification State. The Commission considers that it would be sufficient, and would not hinder the lessor's freedom to provide services, for the vehicle to be registered in his name with an indication of the lessee's particulars and a (joint) obligation on the latter to comply 55. Registration presupposes a name in with all requirements arising out of the which the vehicle is registered. It is in the registration and use of the vehicle.
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57. The Austrian Government's submission The insurance requirements is reasonable. If a vehicle based in Austria and used by a person established there were registered only in the name of a leasing company established hundreds or even thousands of kilometres away, proper con- — Existence of a restriction trol might be extremely difficult. On the other hand, the Commission's concern for the owner's rights is also justified. If the only way in which the lessor may safeguard those rights is to have the vehicle registered in his own name, then clearly the require- 59. If a vehicle leased to a person based in ment of a residence or establishment in Austria who uses it there must be insured Austria goes further than is necessary to with an insurer entitled to operate in achieve the aim pursued. Austria, does that restrict the freedom of vehicle-leasing businesses established else- where to provide their services in Austria?
60. It seems clear that such a rule interferes at least potentially with the freedom of vehicle-leasing businesses, which may have preferential arrangements with insurers 58. It may be, however, that the Court has based outside Austria, to lease vehicles to not been fully informed of the details of the clients based in that country, since it may Austrian rules, and the final decision as to require them to enter into less favourable their proportionality should be left to the contracts and in any event restricts their national court, which will be better placed freedom to choose their insurer. However, to carry out the assessment. If joint regis- the issue turns also on what is meant by an tration is possible in the name of both a insurer entitled to operate in Austria, a party resident in Austria (the lessee) and matter which I shall examine when con- one not so resident (the lessor), if there are sidering the possibility that the requirement separate registers for ownership and pos- may be justified. session, or if some other adequate means of recording and safeguarding the lessor's rights as owner is available, then the residence requirement would not appear disproportionate — indeed, it would not even seem to hinder freedom to provide 61. Whether the requirement is restrictive services. But if there is no such possibility, in any individual case will also depend on the requirement does in my view go further the terms of the leasing contract — is than is necessary and thus constitutes a insurance the responsibility of the lessor prohibited restriction on freedom to pro- or the lessee? In the present case, it appears vide services. that the car was insured by ASL with a
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German insurer, a specific monthly charge provide that class of insurance in Austria' being included in the rental invoiced to ('mit einem zum Betrieb dieses Versiche- Cura Anlagen, and that this is common in rungszweiges in Österreich berechtigten 'full-package' leasing. That may not be the Versicherer'). 14 case for all long-term leases (it is likely to be so for any short-term hire) but the fact that in some cases there might be no actual effect on the lessor's business would not alter the restrictive nature of the require- ment in principle. If nothing else, it will always restrict, his freedom to choose the insurance arrangements for his vehicles. 64. If it means that the insurer must have its head office in Austria and 'official authorisation' ('behördlichen Zulassung') there as its home Member State within the meaning of the non-life insurance direc- tives, 15 that is clearly an unjustifiable restriction. However, if the requirement is merely that the insurer must be entitled under those directives to provide services in — Justification Austria the restriction, though still present in fact, would seem to be justifiable.
62. The possible justification for a restric- tion of the kind envisaged above must be 65. Article 7(1) of Directive 73/239, as examined in the light of the Community amended, provides: 'Authorisation shall directives which regulate, in considerable be valid for the entire Community. It shall detail, the provision of insurance, and in permit an undertaking to carry on business particular of motor vehicle insurance, bear- there, under either the right of establish- ing in mind that compliance with the ment or the freedom to provide services.' obligation to insure any vehicle used on the road falls to be monitored and enforced by the authorities of the Member State in 14 — Paragraph 59(1) of the KFG. which it is registered. 15 — First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance, OJ 1973 L 228 p. 3; Second Council Directive 88/357/EEC of 22 June 1988 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC, OJ 1988 L 172, p. 1; and Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC 63. As the Commission points out, the and 88/357/EEC (third non-life insurance Directive), OJ 1992 L 228, p. 1. See in particular Articles 4 and 5 answer depends largely on the meaning of of Directive 92/49 amending Articles 6 and 7 of Directive the expression 'with an insurer entitled to 73/239.
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66. Pursuant in particular to Article 3(1) of bureau and national guarantee fund of the Council Directive 72/166, 16 Article 1(1) of Member State in which he wishes to Directive 84/5, 17 and Articles 2 and 5(1) of provide such services and must 'appoint a Directive 90/232, 18 compulsory motor representative resident or established in its vehicle insurance for any vehicle based in territory who shall collect all necessary any Member State must be valid for the information in relation to claims, and shall entire Community and guarantee the cover possess sufficient powers to represent the required by the law of each Member State, undertaking in relation to persons suffering and it must be possible for persons involved damage who could pursue claims, including in any road traffic accident to ascertain the payment of such claims, and to repre- promptly the identity of the insurance sent it or, where necessary, to have it undertakings concerned. represented before the courts and auth- orities of that Member State in relation to these claims', without that representative constituting a branch, agency or establish- ment of the insurer.
67. However, although it must thus be possible in principle for any insurer estab- lished and having official authorisation in any Member State to provide motor vehicle insurance in any other Member State with- out having an establishment there, an important proviso is laid down in Article 12a of Directive 88/357. 19 Under that provision, such an insurer must in particular become a member of and par- 68. ASL has produced what it claims to be ticipate in the financing of the national a complete official list of insurers entitled to provide the relevant insurance in Aus- tria, all but two of which, it asserted at the 16 — Council Directive 72/166/EEC of 24 April 1972 on the hearing, are firms with their head offices in approximation of the laws of the Member States relating Austria. Whether that latter point is correct to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to or not, the Court does not have sufficient insure against such liability, OJ, English Special Edition 1972(II), p. 360. information to ascertain whether the list is 17 — Second Council Directive 84/5/EEC of 30 December 1983 drawn up in compliance with the Commu- on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the nity provisions outlined above. That issue use of motor vehicles, OJ 1984 L 8, p. 17. must be decided by the national court. 18 — Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States Non-compliance with those rules would of relating to insurance against civil liability in respect of the course constitute primarily an unjustified use of motor vehicles, OJ 1990 L 129, p. 33. 19 — As amended by Council Directive 90/618/EEC of 8 No- restriction on freedom to provide insurance vember 1990 amending, particularly as regards motor services but in the circumstances of the vehicle liability insurance, Directive 73/239/EEC and Directive 88/357/EEC which concern the coordination of present case it would also restrict freedom laws, regulations and administrative provisions relating to direct insurance other than life assurance, OJ 1990 L 330, to provide cross-border vehicle-leasing ser- p. 44. vices.
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OPINION OF MR JACOBS — CASE C-451/99
The technical inspection requirements — Justification
— Existence of a restriction
71. There can be no doubt that it is a matter of overriding public interest to ensure that vehicles used on the public highway are as technically and environ- mentally safe as possible. Moreover, there 69. If a vehicle which is to be leased for use is a specific obligation on Member States to in Austria has already satisfied compulsory carry out periodic roadworthiness tests on roadworthiness and environmental tests in all vehicles registered in them, under Germany, does a requirement that it also Article 1 of Directive 96/96 22 (although satisfy further tests in Austria constitute a the issue in the present case concerns not restriction on freedom to provide cross- the periodic tests carried out after regis- border vehicle-leasing services? tration in Austria but the imposition of an initial test for the purposes of that regis- tration).
70. The answer seems clear. There is a restriction because an additional burden is imposed by virtue of the fact that the vehicle is to be used in a Member State 72. The minimum content of those com- other than that of origin. In the comparable pulsory tests is specified in considerable field of free movement of goods, the Court detail in Annex II to that Directive. took the view in Schloh 20 that roadwor- Article 3(1) provides: 'Member States shall thiness testing made the registration of take such measures as they deem necessary imported vehicles more difficult and more to make it possible to prove that a vehicle onerous and thus had an effect equivalent has passed a roadworthiness test complying to a quantitative restriction on trade. None with at least the provisions of this Direc- the less, such testing could be justified on tive'; and Article 3(2) specifies: 'Each grounds of the protection of human health Member State shall, on the same basis as and life if it was necessary for the attain- if it had itself issued the proof, recognise ment of that objective and did not con- the proof issued in another Member State stitute arbitrary discrimination or a dis- guised restriction on trade. 21 22 — Council Directive 96/96/EC of 20 December 1996 on the approximation of the laws of the Member States relating to roadworthiness tests for motor vehicles and their 20 — Case 50/85 Schloh v Auto Contrôle Technique [1986] ECR trailers, OJ 1997 L 46, p. 1; the deadline for its imple- 1855, paragraph 12 of the judgment. mentation was 9 March 1998, although similar require- 21 — See paragraph 13 of the judgment. ments had existed under previous legislation.
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CURA ANLAGEN
showing that a motor vehicle registered on 76. Applying those considerations to the the territory of that other State, together present case, it follows that when a vehicle with its trailer or semi-trailer, have passed a leased from a German firm is registered in roadworthiness test complying with at least Austria because the lessee is resident there, the provisions of this Directive'. and when that vehicle has passed roadwor- thiness tests in Germany, the Austrian authorities may none the less be justified in imposing further testing (i) in order to verify compliance with any requirements on Austrian-registered vehicles which are not covered by Annex II to Directive 96/96 73. However, Article 5 authorises Member or by the German tests and/or (ii) in order States to impose more extensive, more to check that the state of the vehicle has not frequent or more stringent tests than those deteriorated since it was tested in Germany laid down as a minimum by the directive. if it has been used on the road in the intervening period and provided that a similar test is imposed when a vehicle previously tested in Austria is re-registered there.
74. Thus, where a vehicle has passed a roadworthiness test in one Member State, any other Member State must recognise the certificate issued in that regard but may none the less require further tests, not covered by that certificate, for the purpose of registration in its territory. The Standard Fuel Consumption Tax
75. Although it predates the adoption of Directive 96/96, the judgment in Schloh is — Existence of a restriction also relevant here. In that case, 23 the Court held that the fact that a vehicle had been used on the road since its previous testing could justify checking, on registration in another Member State, that it had not been damaged and was in a good state of repair, provided that similar testing was required for vehicles of national origin presented for 77. At first sight, the levying of this tax registration in the same circumstances. might seem to be non-discriminatory, since it apparently applies to vehicle-leasing ser- vices provided within Austria in exactly the 23 — Cited in note 20; sec in particular paragraphs 14 to 16 of same way as to cross-border vehicle-leasing the judgment. services.
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OPINION OF MR JACOBS — CASE C-451/99
78. However, that does not in itself mean tered or put on the road and/or periodically that the tax does not discourage cross- by virtue of its remaining registered or on border trade; a measure need not be the road; such taxes are not the subject of discriminatory in order to fall foul of Community harmonisation but must in all Article 49 EC. 24 Furthermore, as ASL and events be non-discriminatory. 25 the Commission point out, the fact that the tax is levied on a once-and-for-all basis means that an Austrian leasing firm will be able to lease vehicles repeatedly or sell them in Austria without further payment, whereas a German competitor, who may not intend to use or dispose of his vehicles in that way, will have had to pay the same 80. ASL argues that the Standard Fuel amount of tax — up to 16% of the value Consumption Tax is a disguised increased of the vehicle — possibly in respect of a rate of VAT, contrary to Article 12(3)(a) of very short leasing period. The tax thus the Sixth VAT Directive which permits constitutes a burden likely to discourage only a standard rate and two reduced rates. those who do not wish to lease and/or sell The standard rate of VAT in Austria is their vehicles solely in Austria from offer- 20% and ASL claims that the Standard ing their leasing services across the Austrian Fuel Consumption Tax was introduced to border. compensate for the abolition of the pre- vious increased rate of 32%> which applied in particular to the sale or hire of motor vehicles. The tax is, moreover, a percentage of the value of the vehicle.
— Justification
81. However, the national court's question relates to the compatibility of the Austrian requirements with the Community rules on freedom to provide services. The fact that a 79. Taxes levied on motor vehicles may be tax may not comply with the provisions of divided into different categories. Value the VAT directives is not in itself relevant added tax ('VAT') is levied on the sale of to that question. Nor does the VAT issue a vehicle, or on the supply of a leasing appear even to have been raised before the service, according to the place where the national court. It would not in my view be operative event occurs and subject to the proper for the Court to rule on the Community rules contained in the Sixth compatibility with the VAT directives of VAT Directive. Other taxes may be levied an ostensibly environmental tax having an on the occasion of a vehicle's being regis- 25 — See, for example, Case C-47/88 Commission v Denmark [1990] ECR I-4509 or Case C-421/97 Tarantik [1999] 24 — See paragraph 39 and note 8 above. ECR I-3633.
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ad valorem component in its calculation quality of the environment' and indeed when that question has not been raised in respond to widespread public and inter- the main proceedings and is not relevant to national concern in that regard. In prin- the question referred for a preliminary ciple, such a tax is justified by overriding ruling, and when Member States have not reasons relating to the public interest and been given a full opportunity to submit seems moreover appropriate to achieve the observations on that issue. aims it pursues, since a relatively heavy tax, which increases with the advertised fuel consumption of the vehicle, is likely to encourage the acquisition of those which are most fuel-efficient.
82. In any event, although the amount of the tax does vary according to the value of the vehicle it also varies very significantly according to standard fuel consumption. It can thus serve to discourage the acquisition of vehicles which damage the environment 84. However, both ASL and the Commis- to an excessive degree, the purpose for sion have drawn attention to the fact that which the Austrian Government asserts it the Standard Fuel Consumption Tax is was introduced. Moreover, with regard to levied at the same rate regardless of the leased vehicles, the ad valorem component duration of the use or registration of the in the calculation relates to the value of the vehicle in Austria. Yet for a vehicle-leasing vehicle and not to the amount charged for business the amortisation of the tax will the supply of the service.26 It cannot vary greatly depending on that duration. therefore be regarded as a turnover tax on Thus, where it is known that a vehicle will that supply for the purposes of the VAT be registered and based in Austria for only directives. a limited period, provision should be made for the tax to be levied on a pro rata basis.
83. The Austrian Government states that the aim of the Standard Fuel Consumption Tax is to promote ecologically sound prac- tices in the acquisition of private motor 85. I agree in principle with that view, vehicles by purchase or lease. There is as although it should not be taken as implying yet no Community harmonisation of such necessarily a direct or precise link between taxes, but there can be no question that the Standard Fuel Consumption Tax and they contribute to the Community aim, set the duration or extent of the vehicle's out in Article 2 EC, of promoting 'a high environmentally-unfriendly activities in level of protection and improvement of the Austria. What is required is that the measure should not restrict freedom to provide services by going further than what 26 — Sec Paragraphs 1(2) and 5(2) of the NoVAG. is necessary to achieve a legitimate aim.
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OPINION OF MR JACOBS — CASE C-451/99
Here the aim of the tax appears to be to respect of the continuing registration of the discourage the acquisition or possession of vehicle. Whether by that means or by vehicles with high fuel consumption rather another, for the tax to be justifiable provi- than their use (which might be more effec- sion must be made for it to be levied in such tively discouraged through a tax on fuel a way that it does not burden vehicles itself). However, such an aim could be leased from other Member States more achieved without discriminating against than vehicles leased from within Austria, foreign vehicle leasing businesses by impos- having regard to the duration of the use of ing it, for example, as a periodic tax in each vehicle in Austria.
Conclusion
86. Having regard to all the above considerations, I am of the opinion that the Court should give the following answer to the Handelsgericht Wien in the present case:
A national requirement whereby a vehicle leased for use in the territory of Member State A by a person based there from a lessor based in Member State B must be registered in Member State A in the name of a person based there is, although restrictive of the freedom to provide services guaranteed by Article 49 EC, in principle justified by overriding reasons relating to the public interest. However, such a requirement may not be accompanied by other conditions which
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further restrict that freedom unless they too are justified by similar reasons and do not go beyond what is necessary in order to attain the objective which they pursue. Conditions which are not permissible on those grounds include:
— a time-limit for registration which is so short as to render compliance impracticable or unduly burdensome, having regard to all the formalities which must be completed;
— a prohibition on registration in the lessor's name where the lessor has no residence or place of business in Member State A, unless the lessor's rights as owner are adequately safeguarded in some other way;
— a requirement as to the insurance of the vehicle which does not comply with the provisions governing freedom to provide insurance services within the Community;
— a requirement as to roadworthiness testing which merely replicates tests already effected in Member State B, unless such testing relates to vehicles used on the road since the previous tests and applies equally when the lessor is established in Member State A;
— payment of a tax of up to 16% of the value of the vehicle, unless provision is made for that tax to be levied in such a way that it does not burden vehicles leased from Member State B more than vehicles leased from within Member State A, having regard to the duration of the use of each vehicle within Member State A. I-3217