C-252/01

1. In these infringement proceedings, the Commission is claiming that the Kingdom of Belgium has failed to fulfil its obligations under Council Directive 92/50/EEC of 'This Directive shall not apply to services 18 June 1992 relating to the coordination which are declared secret or the execution of procedures for the award of public of which must be accompanied by special service contracts 2(hereinafter: 'Directive security measures in accordance with the 92/50' or 'the Directive' — articles cited laws, regulations or administrative provi- without further definition are articles of the sions in force in the Member State con- Directive). In particular, Belgium has cerned or when the protection of the basic infringed Article 11(3) and Article 15(2) interests of that State's security so requires.' by unfairly awarding a contract to perform services involving coastal surveillance by means of aerial photography by negotiated procedure (without prior publication of a notice) and failing to give prior notice of its Article 8: intention to select that procedure. Belgium considers that the Directive is inapplicable because the contract involves security inter- ests. 'Contracts which have as their object ser- vices listed in Annex I A shall be awarded 1 — Original language: German. in accordance with the provisions of Titles 2 — OJ 1992 L 209, p. 1. III to VI.'

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Article 9: (b) when, for technical or artistic reasons, or for reasons connected with the protec- tion of exclusive rights, the services may be provided only by a particular service pro- vider; 'Contracts which have as their object ser- vices listed in Annex I B shall be awarded in accordance with Articles 14 and 16.' 3

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Under Annex I A, Category 12:

Category No Subject CPC Reference No

12 Architectural services; engineering 867 services and integrated engineering services; urban planning and land- scape architectural services; related scientific and technical consulting services; technical testing and analysis services

Under Annex I B, Category 27:

Category No Subject CPC Reference No 27 Other services —

(b) Possession of a licence from the avi- ation authorities to engage in aviation activity;

7. Following an appeal, the Commission sent the Belgian authorities a letter of formal notice, on 27 December 1995, claiming that the addendum to the contract of 13 April 1995 fell within the scope of (c) Possession of the necessary know-how, Directive 92/50 and that, according to the technology and the requisite equip- Article 15(1) and (2), an 'indicative notice' ment; and a notice of intention to award should have been published in the Official Journal 5 — Article 15(1) concerns the indicative notice of the antici- of the European Communities. The failure pated total procurement for the budgetary year.

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(d) The above three elements to be in the to fulfil an obligation. The Commission is possession of a single undertaking; seeking a ruling that:

— pursuant to the first paragraph of Article 226 EC, the Kingdom of Bel- (e) Sufficient financial capacity to be able gium has failed to fulfil its obligations to provide services annually to the under Council Directive 92/50/EEC of value of some BEF 80 million. 18 June 1992 relating to the coor- dination of procedures for the award of p u b l i c service c o n t r a c t s , and Articles 11(3) and 15(2) thereof in particular,

IV — Submissions of the parties security certificate after undergoing secur- ity checks. Only authorised undertakings receive a list of the classified items, allow- ing them to operate in accordance with the 12. The arguments of the parties revolve original objective and to conceal the clas- around the statements of defence already sified objects in any publications or reports, submitted by the defendant Member State that is to say make them unidentifiable. in the pre-litigation procedure. The follow- Those undertakings which do not possess ing account of the submissions of the security clearance have, before processing parties focuses on the three issues raised. the data, to transmit them to the general intelligence services,6 which check to see whether they contain classified items and, if necessary, make the latter unidentifiable. That process is unworkable because it results in delays incompatible with emerg- ency measures, in the event of storms for example, and also because relevant infor- A — Directive 92/50 is inapplicable on the mation is lost, where the negatives had basis of Article 4(2) thereof (special secur- been rendered unidentifiable. ity measures)

13. The Commission contends that the derogation under Article 4(2), which has to be strictly interpreted, is not applicable to this case. The fact that the undertaking commissioned to provide and process aerial photography has to have military security B — Directive 92/50 is inapplicable pur- clearance cannot be considered to be a suant to Annex I B thereof 'special security measure' within the mean- ing of that provision, but must in fact be deemed to be a licence or 'particular auth- orisation' which candidates within the meaning of Article 30(1) have to possess.

embraces several subcategories, such as, for Annex I A of the Directive, but under example No 8675 (Engineering related Category 27 (Other services) of Annex I B scientific and technical consulting services), of the Directive. None of the 27 categories which are also broken down into subcat- listed in Annexes I A and I B of the egories. The services under the contract in Directive include the item 'services for the question fall under Category No 86753 provision of aerial photography'. In addi- (Surface surveying services) and Category tion to the categories listed, the Directive No 86754 (Map making services). refers to the United Nations CPC Classifi- cation. That Classification lists aerial photography under No 87504.1. But that number is not to be found in the annexes to the Directive. However, Category 27 of Annex I B covers 'Other services', and is thus an open category containing no refer- ence to CPC numbers. Aerial photography 16. Although the contract covers services must therefore be assigned to that category. for the provision of aerial photography, which could of themselves fall within subcategory 87404 CPC, the contract has a far wider remit, being closely connected with the coastal surveillance programme drawn up by the authorities with the aim of guaranteeing the security of the coastal area and its inhabitants.

21. Furthermore, the Belgian Government has neither claimed nor demonstrated that Eurosense Belfotop is the only undertaking 23. It is also conceivable that the results of to possess the requisite know-how, tech- the filming have become the property of the nology and equipment. Since the rules on Region of Flanders and that, consequently, the publication of public tenders were not Eurosense Belfotop has no exclusive rights applied, other candidates were prevented within the meaning of Article 11(3)(b). from proving that they met the conditions Finally, given that derogations have to be laid down. It has also to be pointed out that strictly interpreted, it is highly questionable the contract requires the undertaking in whether intellectual property rights can be question to develop a new technology, considered to be exclusive rights within the called aerial laser hypsometry. 7But that meaning of Article 11(3)(b). technology has already been used abroad, confirming that the technical specifications were drawn up with a view to the under- taking in question and not vice versa. Nor can it be ruled out that, given a certain period of time, several undertakings would 24. The Belgian Government contends, have been in a position to develop com- solely in the event that the contract at issue puter programs identical or comparable to is covered by Annex I A of the Directive — which it specifically rejects — that the award of the contract by negotiated pro- 7 — Measuring attitude. cedure without prior notification is justified

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26. Furthermore, the results of the photo- graphy, that is to say the films containing the aerial and the multispectral scanner images, in execution of the contract, required very special treatment and had to 28. In addition, the flight staff had to be be converted into numerical data, tables, available within two flying hours, and the graphs and maps, requiring the use of Dutch language had to be used in order to special techniques and specially developed be able to communicate with the Region of computer programs. It was possible to Flanders in this particularly complex area. record data using aerial filming, and to The candidate had also to possess adequate

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financial guarantees to ensure that it was have been in a position to reproduce the able to continue to provide its services changes to the Belgian coastline. during the lifetime of a contract of such long duration. Both the experience of Eurosense Belfotop and that of the Belgian Administration for Waterways and Mari- time Affairs had led to the conclusion that no other company was in a position to execute the contract and ensure programme continuity. V — Analysis

A — Directive 92/50 is inapplicable pur- suant to Article 4(2) thereof

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indicate that this automatic duty to conduct secret. In the oral proceedings, the repre- checks can be replaced by military security sentative of the Belgian Government cited clearance. Even though the Belgian Gov- the example of the military base at Kok- ernment does not cite specific provisions, sijde, on the Belgian coast. I therefore have there is no reason to doubt their existence. no doubt that the adoption of certain At any event, the Commission has security measures in relation to aerial expressed no doubts as to the existence of photography and the classification of those that requirement or its legal basis, but has measures as 'special security measures' merely queried its classification as a 'special within the meaning of Article 4(2) of the security measure' within the meaning of Directive, is justified. Article 4(2).

34. What is questionable, however, is whether it is possible to consider that special security measures are required for 32. The first question which arises is in fact the 'execution' 8 of the contract, if the how far the general requirement that the undertaking awarded the contract has mili- intelligence services check aerial photo- tary security clearance, and the intelligence graphy can be cited for the purpose of services therefore no longer have to carry classifying the contract at issue, since that out automatic checks on the aerial photo- requirement lapses immediately an under- graphy in the context of that contract. taking has a security certificate, which was made a condition for the award of the contract in this case.

36. In my view, that argument does not 38. Complete documentation of the Bel- take account of the fact that the issue or gian coast, including the port of Zeebrugge, possession of a military security certificate using aerial photographs — taken over a does not obviate the need for any further long period of time — therefore seems to security measures. Only the automatic me entirely likely to impinge on the security checks by the intelligence services are no interests of the Belgian State. I therefore longer required. During the procedure consider it also plausible that execution of before the Court, it was explained that an the contract requires special security meas- undertaking which holds a military security ures, as the Belgian Government maintains. certificate is provided with lists of objects classified by the national authorities or NATO. It is the responsibility of the undertaking to take account of security requirements and, if appropriate, itself conceal militarily significant objects when aerial photographs are published. In my view, this amounts to transferring respon- sibility for the special security measures to the undertaking holding a military security certificate. That transfer of responsibility is 39. I also consider that it is largely for the probably also the reason why obtaining the government of a Member State to evaluate military security certificate is such a time- and define that State's security interests. If, consuming process. The security certificate then, the Belgian Government maintains does not just reflect the security status of an that execution of the contract requires undertaking at a given point in time, it has special security measures, and that asser- also to provide a certain guarantee that tion is not patently questionable, the Court security requirements will be met in should consider this sufficient for relation to further activities. Article 4(2) of the Directive to be relied upon. I therefore consider that the King- dom of Belgium can properly invoke Article 4(2) of the Directive, with the result that the Directive is inapplicable. In those circumstances, the Belgian Government cannot be deemed to have infringed the Treaty.

43. Under Article 8 of the Directive, 41. If we assume that Directive 92/50 is in contracts which have as their object ser- principle applicable to the contract for the vices listed in Annex I A are to be awarded provision of services at issue, the next in accordance with the provisions of Titles question to arise is whether the services in III to VI. Under Article 9 of the Directive, question should be assigned to Annex I A contracts which have as their object ser- or to Annex I B. The Directive provides for vices listed in Annex I B are to be awarded 'two-tier application.' 9According to the in accordance with Articles 14 and 16. 21st recital of the Directive: 'full appli- Only the common rules in the technical cation of this Directive must be limited, for field under Article 14 and the obligation to a transitional period, to contracts for those publish the result of the tendering pro- services where its provisions will enable the cedure under Article 16 then apply. It is full potential for cross-frontier trade to be therefore essential to determine to which realised;... contracts for other services need category of Annex I the services under- to be monitored for a certain period before pinning the contract belong in order to a decision is taken on the full application of meet the requirement under Community this Directive...'. law to comply with the rules on awarding contracts.

'Contracts which have as their object ser- 45. The Belgian Government has pointed vices listed in both Annexes I A and I B out that the CPC nomenclature specifically shall be awarded in accordance with the contains the item 'aerial photography', in provisions of Titles III to VI where the subcategory 87504. The Community value of the services listed in Annex I A is nomenclature, the C P A , n in Regulation greater than the value of the services listed No 3696/93, contains a category 74.81.2 in Annex I B. Where this is not the case, 'photographic services' corresponding to they shall be awarded in accordance with CPC Reference No 875. Subcategory Articles 14 and 16.' 74.81.25, designated 'aerial photography', c o r r e s p o n d s t o CPC s u b c a t e g o r y 87504.1. 12 Since it does not fit into any of the other categories in Annex I of the Directive, it is covered by category 27 'Other services'. This is a kind of catch-all category. It is the only category to which no CPC reference numbers are attached. Con- 47. In its judgment in Swoboda, 14 the sequently, there can be no serious doubt Court ruled that Article 10 'provides an that aerial photography falls into category unequivocal test for the determination of 27. The Court also ruled in its judgment in the regime applicable to a contract Tögel 13 that the reference to the CPC composed of several services, which is nomenclature in Annexes I A and I B of based on the comparison of the value of Directive 92/50 is binding. the services referred to in Annex I B.' 15

46. The sole question which arises concerns 48. In that judgment, the Court specifically the rules according to which the contract rejected the view that the main object of a contract determines the regime applicable 11 — Article 2(1) of RegulationNo 3696/93 (cited in footnote 10 above). 12 — See Regulation No 3696/93 (cited in footnote 10 above), 14 — Case C-411/00 Felix Swoboda [2002] ECR I-10567. p. 113 et seq. 15 — Case C-411/00 (cited in footnote 14 above), paragraph 52. 13 — Case C-76/97 Tögel [1998] ECR I-5357, paragraph 37. My emphasis.

49. It is therefore essential to determine the value of the individual services. In its judgment in Swoboda, which it delivered in the context of a reference for a pre- liminary ruling, the Court held that 'the classification of services in Annexes IA and I B to Directive 92/50 is primarily a question of fact for the contracting auth- ority to determine, subject to review by the national courts.' 18 52. The Belgian Government countered the Commission's suggestion of 46.56% with another calculation. According to the Bel- gian Government, the Commission had taken into account in its calculation only services of category I, II and II of the 50. In this case, however, there is no contract to provide services, but had failed question of a review by the national courts, to suggest a percentage to cover services in since these are infringement proceedings. category IV 'sum in reserve' 19in relation to The question of fact will therefore have to aerial photography. The purpose of the be decided by the Court of Justice in this 'sum in reserve' is to cover all kinds of instance. requirements that might prove necessary but could not be anticipated at the time the

55. I therefore see no reason to call into question the Belgian Government's assess- ment that aerial photography accounts for the predominant value of the contract. 53. If the percentage the Commission sug- Accordingly, the contract falls under gests to cover aerial photography in Annex I B, with the result that the tender- relation to services in categories I, II and ing procedure under Community law, III, that is to say 61.80%, is taken as a under Titles III to VI of Directive 92/50, basis, and that percentage is transferred to does not have to be followed. From that services in category IV, we have to assume point of view also, the action for failure to that aerial photography accounts for a total fulfil an obligation must, therefore, be of 61.80% of the contract. That figure dismissed. seems appropriate based on the ex ante assessment, which had to be made when the contract was awarded. It is clear, if we look at the services actually provided in the context of an assessment ex post facto, that aerial photography accounts for 56% of category IV services. In any event, the 56. The question whether the Belgian Gov- percentage taken up by aerial photography e r n m e n t can successfully rely on clearly represents more than 50% of the Article 11(3)(b) can therefore be left aside. contract.

54. I do not consider that there can be any fundamental objections to the submissions of the Belgian Government, as set out VI — Costs above. In addition, I consider that the wording of the Swoboda judgment, 21 according to which the classification of services in Annexes I A and I B of the Directive is for the contracting authority to 57. Under Article 69(2) of the Rules of determine, indicates that the Court accords Procedure, the unsuccessful party is to be order to pay the costs. The Belgian Govern- ment has not, however, applied for costs. It 20 — Sec the wording of Clause 7 of the contract of 13 January 1995 (cited in footnote 19 above). follows that the parties must be order to 21 — Case C-411/00 (cited in footnote 14 above), paragraph 62. bear their own costs.

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