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5. On 18 December 1961, the Council (a) six consecutive years either in an inde- adopted, on the basis of Articles 54(1) pendent capacity or as a person respon- and 63(1) of the EC Treaty (now, after sible for managing an undertaking; or amendment, Article 44(1) EC and Article 52(1) EC), two General Pro- grammes for the abolition of restrictions on freedom of establishment and freedom to provide services. 3 In order to facilitate implementation of those programmes, the Council adopted inter alia Directive (b) three consecutive years either in an 64/427. That directive provides essentially independent capacity or as a person for a system of mutual recognition of responsible for managing an undertak- occupational experience acquired in the ing, where the beneficiary can prove Member State of origin and is applicable to that for the occupation in question he both establishment and provision of ser- has received at least three years' pre- vices in another Member State. vious training, attested by a certificate recognised by the State, or regarded by the competent professional body as fully satisfying its requirements; or

6. Article 3 of Directive 64/427 provides: (c) three consecutive years in an indepen- dent capacity, where the beneficiary can prove that he has pursued the occupation in question for at least five years in a non-independent capacity; or

'Where, in a Member State, the taking up or pursuit of any activity referred to in Article 1(2) is dependent on the possession (d) five consecutive years in a managerial of general, commercial or professional capacity, not less than three years of knowledge and ability, that Member State which were in technical posts with shall accept as sufficient evidence of such responsibility for one or more depart- knowledge and ability the fact that the ments of the undertaking, where the activity in question has been pursued in beneficiary can prove that for the another Member State for any of the occupation in question he has received following periods: at least three years' previous training, attested by a certificate recognised by the State or regarded by the competent 3 — OJ, English Special Edition, Second Series IX, p. 7 and p. 3 professional body as fully satisfying its respectively. requirements.

'For the purpose of applying Article 3: 8. Directive 64/427, which was in force at the material time in the main proceedings, was repealed by Directive 1999/42/EC of the European Parliament and of the Coun- cil of 7 June 1999 establishing a mechanism for the recognition of qualifications in 1. Member States in which the taking up respect of the professional activities and pursuit of any occupation referred covered by the directives on liberalisation to in Article 1(2) is subject to the and transitional measures and supplement- possession of general, commercial or ing the general systems for the recognition professional knowledge or ability shall, of qualifications. 4The wording of Article 4 with the assistance of the Commission, of that directive, read together with Annex inform the other Member States of the A, Part One, List I thereof (which makes main characteristics of that occupation express reference to Directive 64/427), is (description of the activities covered by the same as that of Article 3 of Directive the occupation). 64/427.

2. The competent authority designated for this purpose by the country whence the beneficiary comes shall certify what B — National law professional activities were actually pursued by the beneficiary and the duration of those activities. Certificates shall be drawn up having regard to the official description of the occupation in 9. In Germany, skilled trade activities are question supplied by the Member State governed by the Handwerksordnung (Skil- in which the beneficiary wishes to pursue such occupation, whether per- manently or temporarily. 4 —OJ 1999 L 201, p. 77.

11. The first sentence of Paragraph 8(1) of 13. By decision of 28 August 2000, the city the Handwerksordnung provides that '[i]n of Augsburg imposed an administrative exceptional cases, authorisation for entry penalty on Mr Schnitzer for infringement on the Skilled Trades Register shall be of Paragraph 1(1 )(3) and Paragraph 2 of granted if the applicant to be entered is able the Gesetz zur Bekämpfung der Schwarz- to show the knowledge and skill required arbeit (Law to combat black market work). to pursue in an independent capacity the That law provides for the imposition of an skilled trade to be carried on by him'. administrative penalty not only on all persons who to a significant extent provide services or carry out work themselves without being entered on the Skilled Trades Register, but also on all persons who to a significant extent have such services pro- 12. Paragraph 9 of the Handwerksordnung vided or such work carried out by entrust- authorises the Federal Minister for the ing them to persons who are not entered on Economy to determine the conditions that register. It was under the latter heading under which nationals of other Member that Mr Schnitzer was the subject of the States may obtain such exceptional auth- aforementioned decision.

5 — BGBl. 1998 I, p. 3074. 6 — BGBl. 1966 I, p. 469.

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SCHNITZER

would then be no doubt about the obli- that he is to pursue his activity there on a gation of entry on the Skilled Trades temporary basis' (paragraph 26). It added Register. 8 that 'the temporary nature of the activ- ities... has to be determined in the light, not only of the duration of the provision of the service, but also of its regularity, period- icity or continuity. The fact that the provision of services is temporary does not mean that the provider of services within the meaning of the Treaty may not Establishment equip himself with some form of infra- structure in the host Member State (includ- ing an office, chambers or consulting rooms) in so far as such infrastructure is 18. It is not always easy to distinguish necessary for the purposes of performing between establishment and freedom to the services in question' (paragraph 27). provide services. That much is clear just from reading the case-law of the Court.

21. It certainly will not be easy to deter- mine in a particular case whether what is 19. In its judgment in Gebhard, 9the Court involved is an office serving as infrastruc- held that a person may be established in ture for the provision of services or an more than one Member State (paragraph established professional base that consti- 24) and that establishment exists where tutes a second establishment. that person pursues a professional activity on a stable and continuous basis in another Member State where he holds himself out from an established professional base to, amongst others, nationals of that State (paragraph 28). 22. Professor Mota Campos, 10 who is cited by the Portuguese Government in its observations on this case, drew the follow- ing distinction, which I consider to be sensible:

being permanent), and which forms the Portuguese undertaking remain in Ger- centre of the professional activity pursued many from November 1996, or even from in the State of establishment in connection November 1994, returning to Portugal only with unspecific customers. on leave? These are some of the factors that the national court will have to examine in order to determine the status of the Por- tuguese undertaking with regard to the Treaty. The mere provision of services, on the other hand, presupposes the performance of one or more services or professional acts of a sporadic nature, the recipients of which are specific customers attracted from a stable installation situated in the State where the 25. It is also important to point out in this provider of services is established.' context that the Court has consistently held that '...a Member State cannot be denied the right to take measures to prevent the exercise by a person providing services whose activity is entirely or principally directed towards its territory of the free- 23. In the view of the Portuguese Govern- dom guaranteed by Article 59 for the ment, the undertaking in question provided purpose of avoiding the professional rules a service for a certain period for one of conduct which would be applicable to customer undertaking situated in another him if he were established within that Member State, but from a stable instal- State...'. 11 lation in its State of origin, which is the State where the provider of services is established and where the centre of its activities is located.

27. However, were the Amtsgericht Augs- burg to conclude that the Portuguese firm 30. As is already clear from Articles 43 EC cannot be regarded as having established and 50 EC, persons or undertakings pro- itself in Germany, it would have to examine viding services or establishing themselves in the matter from the point of view of another Member State must therefore, in freedom to provide services. principle, fulfil the conditions imposed by that Member State on its own nationals.

Freedom to provide services 31. However, the Court takes the view, which it reiterated in the Corsten judgment, cited above, that a Member State cannot make the provision of services in its terri- 28. It should be pointed out that Directive tory subject to compliance with all the 64/427 applies to both establishment and conditions required for establishment and freedom to provide services. thereby deprive of all practical effectiveness the provisions of the Treaty whose object is, precisely, to guarantee the freedom to provide services. 14

29. Article 4(3) of that directive reads as follows:

32. In Corsten, cited above, the Court 'The host Member State shall grant auth- accepted that the objective of guaranteeing orisation to pursue the activity in question the quality of skilled trade work and of on application by the person concerned, 13 — Emphasis added. 14 — See, inter alia, the judgment in Case C-76/90 Säger [1991] 12 —Judgment in Case 205/84 Commission v Germany [19861 ECR I-4221, paragraph 13, and the judgment in Commis- ECR 3755, paragraph 21. Emphasis added. sion v Germany, cited above, paragraph 26.

34. The Court then ruled as follows: 35. In the operative part of that judgment, however, the Court made no further refer- ence to services provided only once, or even on an occasional basis, but held generally that 'Article 59 of the EC Treaty (now, '45 Even if the requirement of entry on that after amendment, Article 49 EC) and Register, entailing compulsory mem- Article 4 of Directive 64/427... preclude bership of the Chamber of Skilled rules of a Member State which make the Trades for the undertakings concerned carrying out on its territory of skilled trade and therefore payment of the related work by providers of services established in subscription, could be justified in the other Member States subject to an auth- case of establishment in the host orisation procedure which is likely to delay Member State, which is not the situ- or complicate exercise of the right to ation in the main proceedings, the same freedom to provide services, if examination is not true for undertakings which of the conditions governing access to the intend to provide services in the host activities concerned has been carried out in accordance with the directive and it has been established that those conditions are 15 — In its judgment in Case C-264/99 Commission v Italy [2000] ECR I-4417, concerning haulage activities, the Court was unable to establish the existence of such an overriding requirement. 16 — Emphasis added.

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satisfied. Furthermore, any requirement of applying different rules of law, since this entry on the trades register of the host would infringe the stand-still clause con- Member State, assuming it was justified, tained in Article 49 itself'. should neither give rise to additional... expense nor entail compulsory payment of subscriptions to the chamber of trades'.

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State. That alternative would certainly be 42. Moreover, potential users of the ser- practicable. The Member State in question vices in question could also benefit from could thus issue the undertaking with a being able to consult a single well-known certificate showing that it fulfils the con- register in order to check whether an ditions laid down by Directive 64/427 for undertaking with which they intend to the provision of services. That document conclude a contract has the necessary could be used as proof in the event of qualifications. subsequent checks on other building sites. That Member State could at the same time enter the undertaking on a special list of all the undertakings having received such a certificate, and thus have an overview of all the foreign undertakings authorised to provide services. 43. Finally, the Community legislature even seems to consider the entry of foreign undertakings on the Skilled Trades Register to be in the interests of those undertakings. After all, Council Directive 64/429/EEC of 7 July 1964 concerning the attainment of freedom of establishment and freedom to provide services in respect of activities of self-employed persons in manufacturing and processing industries falling within 40. As against that, a Member State such as ISIC Major Groups 23-40 (Industry and the Federal Republic of Germany could, small craft industries), 17 adopted the same however, raise the objection that, for day as Directive 64/427, and to which reasons of tradition, transparency and the reference is made in the Corsten judgment, uniformity of its system, it considers it cited above, provides as follows: essential to keep a single register of all the undertakings — whether national or foreign — authorised to pursue a given profession in its national territory.

same rights and obligations as their own trative costs of entry and the payment of a nationals.' subscription to the chamber of trades, but it adopts a very elaborate position. In its view, it is necessary to take as a starting point the criteria established by the Court in paragraph 46 of the grounds of the Corsten judgment, cited above. According to the Commission, 'this case shows that 44. It follows from the rest of that article the analysis required under paragraph 46 that chambers of trades constitute such cannot readily be conducted ex ante. After professional organisations. all, it is not inconceivable that an under- taking exercising its freedom to provide services within the common market may initially have taken up an activity in the host country with a view in fact to pursuing it only occasionally or on a one-off basis. What is now perceived, ex post, to be an 45. In my opinion, the Court should there- on-going activity may, ex ante, or at least fore abandon the hesitation it again for a certain time at the outset, never have expressed in the Corsten judgment, cited been intended as such and may very well above, with regard to whether entry on the have developed into one as a result of Skilled Trades Register is justified per se. If follow-up commissions based on the good entry on such a register gives rise neither to reputation earned by the activity originally extra delay in comparison with the moni- pursued only occasionally or on a one-off toring procedure laid down by the direc- basis. The court hearing the substance of tive, nor to additional administrative the case must therefore determine, on an expense, the requirement of entry should analysis of the objectively-established facts, be permissible regardless of the foreseeable from what point an undertaking that pro- duration of the work. vided services for a certain period of time could no longer assume that the Corsten judgment gave grounds for doubts as to the compatibility of the requirement of entry on the Skilled Trades Register with the EC Treaty. The longer the activity is pursued and the more clearly foreseeable it is ex 46. It remains to be seen whether, in the ante that the activity will continue to be case of multiple services provided over a pursued by the provider of services, the long period, it is possible at a certain point sooner the requirement of entry on the in time to require payment of a subscrip- Skilled Trades Register will have to be tion to the chamber of trades. regarded as compatible with primary Com- munity law'.

person who provides services more than hardly therefore be regarded as having the occasionally and that it falls to the national effect of '... depriving] of all practical court, on the basis of the very subtle effectiveness the provisions of the Treaty psychological evaluation which the Com- whose object is, precisely, to guarantee the mission outlines, to determine the point at freedom to provide services...'. 18 which that can be considered to be the case. If I have understood the Commission cor- rectly, entry on that register under those circumstances may then trigger the pay- ment of administrative costs and the obli- gation to pay a subscription to the chamber of trades. 52. In that time the undertaking will in any event have had to familiarise itself with the host country's arrangements for collecting value added tax and will have had to contact the income tax authorities. In other 49. The Commission's approach may seem words, the idea that the cross-border attractive. After all, where a foreign under- provision of services can be effected with- taking carries out a whole series of com- out the slightest administrative inconven- missions spread over a year or more, an ience is unrealistic. exception to the principle under the third paragraph of Article 50 EC to the effect that a person providing a service must likewise be subject to the rules in force in the host country ceases to be justified. Thus, where the contested formalities are completed long after the work has begun, 53. It should, however, be pointed out that they can obviously no longer have the effect the Commission's approach would lead to of delaying that work. the creation, in addition to undertakings considered to be established and undertak- ings providing services on an occasional basis, of a third category of undertakings, namely those providing multiple services over a long period of time, for which there 50. The undertaking may even have is no basis under the Treaty. derived some form of indirect benefit from the services which the chamber of trades procures for the sector as a whole. If the subscriptions to the chamber of trades are calculated as a percentage of turnover, they will not have a deterrent effect.

58. The third subparagraph of Article 22(1) of that directive provides that 'Member 55. I consider, therefore, that it would be States may, so as to permit the implemen- preferable to adopt the following prin- tation of the provisions relating to pro- ciples: fessional conduct in force in their territory, require automatic temporary registration or pro forma registration with a profes- sional organisation or body or in a register, provided that this registration does not delay or in any way complicate the provi- sion of services or impose any additional costs on the person providing the services'. 56. Firstly, any undertaking wishing to pursue activities in another Member State for the first time may be subject to the requirement of entry on the Skilled Trades Register provided that such entry follows automatically from the procedure for ver- 59. Secondly, if it subsequently transpires ifying qualifications laid down by Directive that the activity pursued by the undertak- 64/427 and entails neither additional costs ing, because of its duration, continuity and nor the payment of a subscription to the the multiplicity of contracts performed, has chamber of trades. ultimately taken on the characteristics of an establishment, the undertaking may be subject to the payment of subscriptions to the chamber of trades.

57. That follows, by converse implication, not only from the Corsten judgment, cited 60. Under Article 2 of Directive 64/427, above, but also from the approach adopted Member States are to ensure that any by the C o m m u n i t y legislature in beneficiary of the directive 'be provided, Article 22(1) of Council Directive 85/384/EEC of 10 June 1985 on the mutual 19 — OJ 1985 L 223, p. 15. recognition of diplomas, certificates and 20 — Case C-298/99 Commission v Italy [2002] ECR 1-3129, other evidence of formal qualifications in concerning access to the profession of architect.

62. The manager of an undertaking will therefore know by then that, as soon as his activity fulfils the essential criteria for establishment, he will be obliged to pay 65. However, before drawing a definitive subscriptions. conclusion, the national court must also determine, 'having regard to the duration, regularity, periodicity and continuity of [the Portuguese undertaking's] activities, whether the activity which it pursues in Germany is of a temporary nature for the purposes of the Treaty'. 2 1If it became 63. What conclusions can be drawn from apparent that that activity had at some the foregoing for the purposes of the point ceased to be temporary or that it was dispute in the main proceedings? entirely or principally directed towards Germany, the requirement of entry on the Skilled Trades Register (including the requirement to pay subscriptions to the chamber of trades) would apply without restriction and Mr Schnitzer could be penalised. 64. If the national court concludes that the authorisation procedure which the Por- 21 — See the judgment in Case C-3/95 Reisebüro Broede [1996] tuguese undertaking is accused of having ECR 1-6511, paragraph 22.

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V — Conclusion

66. In the light of the foregoing considerations, I propose that the following answer be given to the question referred by the Amtsgericht Augsburg:

(1) Articles 49 EC, 50 EC, 54 EC and 55 EC, and Article 4 of Council Directive 64/427/EEC of 7 July 1964 laying down detailed provisions concerning transitional measures in respect of activities of self-employed persons in manufacturing and processing industries falling within ISIC Major Groups 23-40 (Industry and small craft industries) do not preclude rules of a Member State which make the carrying out on its territory of skilled trade work by providers of services established in other Member States subject not only to examination of the conditions governing access to the activities concerned but also to a requirement of entry on the Skilled Trades Register where such entry is not such as to delay or complicate exercise of the right to freedom to provide services and entails neither additional administrative costs nor the compulsory payment of subscriptions to the chamber of trades.