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Súdny dvor Európskej únie·16.9.2003

C-171/02

ECLI:EU:C:2003:465

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Súdny dvor Európskej únie
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62002CC0171

OPINION OF MR ALBER — CASE C-171/02

OPINION OF ADVOCATE GENERAL ALBER delivered on 16 September 2003 1

I — Introduction I I— Legislative framework

A — Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of professional education and training to supplement Directive 89/48/ EEC 2 (hereinafter 'Directive 92/51')

2. The first indent of Article 1(c) of Directive 92/51 defines the term 'attestation of competence' as 'any evidence of qualifi- cations attesting to education and training not forming part of a set constituting a diploma within the meaning of Directive 1. The proceedings for failure to fulfil 89/48/EEC or a diploma or certificate obligations which the Commission has within the meaning of this Directive [Direc- brought against the Portuguese Republic tive 92/51] [...]'. concern the rules governing the activities of private security services engaged in the surveillance of persons and property in Portugal. The Commission claims that the Portuguese legislation is incompatible with the provisions of the Treaty concerning the 3. In Article 1(f), 'regulated professional free movement of workers, the freedom of activity' is defined as 'a professional activity establishment and the freedom to provide the taking-up or pursuit of which, or one of services. its modes of pursuit in a Member State, is

1 — Original language: German. 2 — OJ 1992 L 209, p. 25.

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subject, directly or indirectly, by virtue of 6. Article 7 lays down the conditions under laws, regulations or administrative provi- which an individual may pursue activities in sions, to the possession of evidence of the private security services sector. These education and training or an attestation of include, under Article 7(2)(b), 'the success- competence. [...]'. ful completion of tests of knowledge and physical aptitude, the standard content and duration of which are determined by order of the Minister for the Interior, following an initial training course meeting the requirements of Article 8(2)', and, under Article 8(2), participation in a professional induction course. B — National provisions

1. Decree-Law No 231/98 of 22 June 1998 3 (hereinafter 'Decree-Law No 231/98' or 'the Decree-Law') 7. Article 9(1) and (2) govern the issue of professional certificates:

4. Article 1(3)(a) defines activities in the private security services sector as 'the provision of services by private undertak- '(1) guarding and escort personnel and ings lawfully constituted for that purpose personal defence and protection personnel which are intended to protect persons and must be in possession of a professional property and to prevent the commission of certificate which is authenticated by the criminal offences'. General Secretary of the Ministry of the Interior, is valid for a period of two years and can be extended for equivalent periods.

5. Article 3 provides that: 'Private security activity may be pursued only by lawfully constituted undertakings authorised to do so in accordance with the provisions of this Decree-Law.' (2) authentication of the professional certi- ficate is subject to evidence, to be furnished to the General Secretary of the Ministry of 3 — Diario da República I, Series A, No 167, of 22July1998 the Interior, that the conditions set out in p. 3515. Article 7 have been fulfilled.'

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8. Article 21(1) makes the pursuit of (c) PTE 50 000 000, if they perform one activities in the private security services of the services provided for in Article sector subject to prior authorisation. 2(1)(e).'

10. Article 24(1) lists the evidence which 9. Article 22(1) and (2) provide: must accompany an application for author- isation to pursue an activity in the private security services sector. Pursuant to sub- paragraph d, this includes the provision of evidence to show that the conditions laid down in Article 22 have been fulfilled. '(1) Undertakings pursuing private security activity within the meaning of Article 1(3) (a) must be constituted in accordance with the legislation of a Member State of the European Union or the European Economic Area, have their head office or a secondary 2. Code of Commercial Companies establishment in Portugal and comply with the provisions of Article 4 of the Code of Commercial Companies.

11. Article 4(1) provides: 'A company which does not have an effective head office in Portugal but wishes to pursue its activity there for more than one year must (2) The capital of the undertakings referred set up a permanent representation and to in the foregoing paragraph must not be comply with the provisions of the Portu- less than: guese Law on the commercial register.'

(a) PTE 10 000 000, if they perform one of the services provided for in Article 2 (1)(a) and (b); III— Pre-litigation procedure

12. By letter of 6 May 1999, the Commis- sion informed the Portuguese authorities (b) PTE 25 000 000, if they perform one that it considered Decree-Law No 231/98 of the services provided for in Article to be incompatible with the provisions of 2(1)(c) and (d); the Treaty concerning the free movement of

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workers, the freedom of establishment and IV — Submissions of, and forms of order the freedom to provide services. It called on sought by, the parties the Portuguese Government to send it relevant information to show that the Decree-Law was compatible with Commu- nity law. By letter of 10 September 1999, the Portuguese Government sent a number of documents to the Commission. 16. In its application, the Commission raises a total of six complaints. It claims that, under the rules governing the author- isation to be issued by the Minister for the Interior, foreign undertakings which wish to pursue, in the private security services sector in Portugal, surveillance activities in respect of persons and property: 13. The Commission's examination of those documents failed to convince it of the lawfulness of the Portuguese legislation. On 1 February 2000, it therefore sent the Portuguese Government a letter of formal notice in which it reiterated its complaints. The Portuguese Government replied to that letter on 23 May 2000. — must have their head office or a permanent establishment in Portugal;

14. That reply from the Portuguese Gov- ernment likewise failed to convince the — may not rely on evidence or guarantees Commission that the Portuguese legislation which they have already presented in was lawful. Consequently, on 29 December the Member State of origin; 2000, the Commission served a reasoned opinion on the Portuguese Republic, to which the Portuguese Government responded on 20 March 2001.

— must be constituted as legal persons; and

15. Having formed the view, after examin- ing that response, that the Portuguese legislation was incompatible with the pro- visions of the Treaty, the Commission brought this action on 8 May 2002. — must have a specific amount of capital.

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It also criticises the fact that: preclude the creation of some form of infrastructure. However, exercise of the freedom to provide services may not be made conditional on the existence of such infrastructure. — the employees of such foreign under- takings must be in possession of a professional certificate issued by the Portuguese authorities;

18. The Commission is unconvinced by the Portuguese Government's reliance on Arti- cle 4 of the Code of Commercial Compa- and that: nies in order to limit the scope of Article 22 of Decree-Law No 231/98, as based on Article 4, to entities which provide security services for longer than a year. In the Commission's submission, the reference in — occupations in the private security Article 22 of the Decree-Law to Article 4 of sector are not subject to the Commu- the Code of Commercial Companies can be nity rules on the recognition of profes- understood only as a reference to compli- sional qualifications. ance with the provisions concerning the Commercial Register. For the requirement that providers of services must have their head office or a permanent establishment in Portugal is already apparent from the wording of Article 22(1) of the Decree-Law. 17. The Commission takes the view that the requirement laid down in Article 22(1) of Decree-Law No 231/98 that foreign undertakings must have their head office or a permanent establishment in Portugal also applies to undertakings which pursue surveillance activities in respect of persons and property in the private security services 19. It is the Commission's view that the sector in Portugal on only a temporary only plausible interpretation of Article 22 basis (in accordance with Article 49 EC). of the Decree-Law is that it also requires That requirement makes the provision of a undertakings providing security services on service impossible in practice, for, if an only a temporary basis to have at least a undertaking has its head office or a secondary establishment in Portugal. That, secondary establishment in Portugal, it moreover, was the interpretation given by exercises its freedom of establishment and the Portuguese Government on 23 May no longer exercises its freedom to provide 2000 in its reply to the letter of formal services, which is characterised by the notice. temporary nature of the service. As the Court held in Gebhard, the fact that the provision of services is temporary does not 4 — Case C-55/94 Gebhard [1995] ECR I-4165, paragraph 27.

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20. Furthermore, the Commission's inter- 23. Furthermore, the Commission con- pretation is borne out by the conjunction tends, the Court has consistently held 6 that 'and' between the rule that providers of administrative considerations, such as the services must have an establishment in fact that undertakings and their employees Portugal and the rule that they must comply are easier to supervise if the undertakings with the provisions contained in Article 4 of are established in the Member State in the Code of Commercial Companies. Cer- question, are not in principle capable of tain security services, such as the operation justifying restrictions of a fundamental of an emergency call centre, for example, freedom guaranteed by the Treaty. As cannot be provided at all without an regards the contention concerning better establishment in the host State. enforceability in the event of default, the provision of a security offers an adequate and less restrictive means of achieving that. 7

24. With regard to the consideration given by the Portuguese authorities to the evi- dence and guarantees already submitted by foreign undertakings in the Member State 21. In any event, however, the Portuguese where they are established, the Commission legislation is not unequivocal and is there- takes the view that Article 24 of Decree- fore in breach of the requirement of legal Law No 231/98 does not under any certainty. It is settled case-law that legisla- circumstances support the conclusion that, tion enacted by Member States in areas when examining applications for authorisa- covered by Community law must be tion, the Portuguese authorities take into unequivocal and satisfy the requirements consideration evidence and guarantees of legal certainty. 5 which have already been submitted in the Member State of establishment. It is clear from the wording of that provision that it is applicable not only to undertakings which have their principal establishment in Portu- gal but also to those which are already lawfully established in another Member State and wish merely to provide security services in Portugal. As the Court held in Commission v Belgium, the freedom to provide services, being one of the funda- 22. Nor is the restriction complained of mental principles of the Treaty, may be justified under Article 46 EC. Private restricted only by rules justified by over- security services must be distinguished from riding reasons in the public interest and the public forces of law and order and are applicable to all persons and undertakings not intended to maintain public security within the meaning of Article 46 EC.

6 — The Commission refers to Case 205/84 Commission v Germany [1986] ECR 3755, paragraph 54. 5 — In this connection, the Commission cites Case 25 /86 7 — In support of its view, the Commission cites Case C-101/94 Commission v Italy [1988] ECR 3249, paragraph 12. Commission v Italy [1996] ECR I-2691, paragraph 23.

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operating in the territory of the Member public security services referred to in State where the service is provided, in so far Articles 64 EC and 68 EC. as that interest is not safeguarded by the rules to which the provider of services is subject in the Member State where he is established. By requiring all undertakings to fulfil the same conditions for obtaining prior authorisation or approval, a Member State makes it practically impossible for account to be taken of obligations to which 26. As regards the requirement that foreign the person providing the service is already undertakings must have a specific minimum subject in the Member State in which he is amount of capital, the Commission takes principally established. 8In that regard, the the view that the Portuguese legislation Commission contends, the Portuguese leg- makes the setting-up of a subsidiary or a islation goes beyond what is necessary in permanent establishment in Portugal sub- order to attain the objective sought and is ject to the condition that the foreign parent therefore disproportionate, in so far as it company should have capital of not less requires evidence to be provided which has than the amount specified in Article 22(2) already been submitted in the Member State of Decree-Law No 231/98. The effect of in which the provider of services is estab- that condition is that an act by which an lished. 9 individual exercises his right to open a secondary establishment is indirectly trea-

25. With regard to the requirement that ted in the manner stipulated by national foreign undertakings must have legal per- law for principal establishments. Such a sonality, the Commission points out that condition prevents an economic operator that obligation places self-employed per- with capital which meets the legal require- sons or independent economic operators ments of the State where he is principally and individuals established in another established but falls below the minimum Member State at a disadvantage. The Court laid down in Portugal from pursuing his has recognised the right of an individual to activities throughout Community territory. work not only in the Member State where By reference to the judgment in Centros, 12 he is ordinarily resident but also, tempora- the Commission takes the view that the rily, in another Member State. 10 That case- requirement of compliance with the Portu- law is not called into question by the guese minimum capital provisions infringes division of powers set out in Title IV of the freedom to provide services more than is the EC Treaty. The Court has already held necessary to attain the objective sought.

A that private security services fall within the less restrictive measure, it contends, might scope of Articles 39 EC, 43 EC and 49 be the provision of a security, for example. EC 1 1and are not to be confused with the The reference in Article 55 EC to the provisions of Articles 45 to 48 EC means that the principles developed by the Court in relation to the freedom of establishment 8 — Case C-355/98 Commission v Belgium [2000] ECR I-1221, are applicable to the freedom to provide paragraph 37 et seq. services. 9 — The Commission relies on Case 279/80 Webb [1981] ECR 3305, paragraph 20. 10 — It refers to Case 143/87 Stanton v Inasti [1988] ECR 3877, paragraphs 11 to 13, and Case C-53/95 Inasti v Kemmler [1996] ECR I-703, paragraph 10 et seq. 11 —It relies on Case C-114/97 Commission v Spain [1998] 12 — Case C-212/97 Centros [1999] ECR I-1459, in particular ECR I-6717, paragraphs 42 and 48. paragraphs 36 to 38.

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27. The Commission rejects the Portuguese ment, or of checks and verifications already Government's submissions on the avoid- carried out in that State. This too consti- ance of discrimination against national tutes a disproportionate restriction of the undertakings. It does not consider the aforementioned fundamental freedom. principles established in Alpine Investments and Peralta 13 to be relevant. The activities in other Member States of companies formed under Portuguese law are not adversely affected. 30. The Commission considers the time- limit on the validity of the professional certificate to be a further disproportionate restriction of fundamental freedoms. The Portuguese legislation already requires undertakings which provide security ser- vices to undergo regular checks. To that 28. The Commission also criticises the extent, the Commission considers periodic obligation imposed on the employees of checks on the holders of professional foreign undertakings to be in possession of certificates to be unnecessary. a professional licence issued by the Portu- guese authorities. It sees in this an obstacle both to the freedom of movement enjoyed by employees and to the freedom to provide services enjoyed by their employer, whose right to send to another Member State 31. Finally, the Commission criticises the employees authorised to work in the fact that occupations in the private security Member State where he is established is sector are not subject to the Community restricted (Article 49 EC). rules on the recognition of professional qualifications. Activities in the private security sector in Portugal can be pursued only by staff employed on surveillance and escort, personal defence and escort duties who have successfully completed a compul- sory training course prescribed under Por- 29. Portuguese law requires that each tuguese law (Article 7(2)(b) of Decree-Law employee of a private security undertaking No 231/98). The right to take up and obtain from the Ministry of the Interior pursue such occupational activities is authorisation in the form of a professional reserved for persons in possession of a certificate in order to be able to pursue an professional certificate. This guarantees activity in Portugal. The contested legisla- that its holder fulfils all the legal require- tion does not provide for account to be ments for pursuit of that occupation, taken of equivalent legal conditions which including the successful completion of tests have already been fulfilled in the Member of knowledge and physical capacity the State where the undertaking for which the content and duration of which are laid employees work has its principal establish-

14 — By way of support for its legal analysis, the Commission again refers to Commission v Germany (cited in footnote 13 —Case C-384/93 Alpine investments [1995] ECR I-1141, 6, paragraph 47) and Commission v Belgium (cited in and Case C-379/92 Peralta [1994] ECR I-3453. footnote 8, paragraph 40).

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down by law. It also allows its holder to the Minister for the Interior, for- pursue activities in the private security eign undertakings wishing to pur- services sector. In substance, therefore, the sue surveillance activities in respect professional certificate constitutes an attes- of persons and property in the tation of competence within the meaning of private security services sector in the first indent of Article 1(c) of Directive Portugal 92/51. The Commission accordingly takes the view that activities in the private security services sector in Portugal consti- tute a regulated profession within the meaning of Article 1(e) in conjunction with the first indent of Article 1(c) and Article (a) must have their head office or an 1(f) of the directive. However, the Portu- establishment in Portugal, guese legislation introduced to transpose Directive 92/51 does not cover occupations in the private security sector. They are not therefore subject in Portugal to the provi- sions on the recognition of professional qualifications laid down by the aforemen- — may not rely on evidence and tioned directive. In Vlassopoulou, the Court guarantees already presented in held that, when examining whether an their Member State of establish- individual satisfies the conditions governing ment, the grant of authorisation to pursue certain professions, national authorities must recognise evidence which is comparable to that required to exercise the same profes- sion in the country of origin of the person concerned. 15 Under the Portuguese legisla- •— must be constituted as a legal tion at issue, such consideration is not person, possible.

— must have a specific share capi- tal; 32. The Commission seeks a declaration that:

(b) in view of the fact that the employ- ees of foreign undertakings wishing (1) in view of the fact that, under the to pursue surveillance activities in system of authorisations issued by respect of persons and property in the private security services sector in Portugal must hold a profes- 15 — Case C-340/89 Vlassopoulou [1991] ECR I-2357, para- sional certificate issued by the graphs 16 and 23. Portuguese authorities; I - 5656

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(c) in view of the fact that professions provide security services in Portugal for in the private security services longer than a year. Because of the one-year sector are not subject to the Com- threshold laid down by law, those rules do munity system for the recognition not affect the freedom to provide services of professional qualifications, but the freedom of establishment. Only services provided on a temporary basis fall within the scope of the freedom to provide services guaranteed by the Treaty, that is to say sporadic events which are limited in the Portuguese Republic has failed to time. On the other hand, services provided fulfil its obligations under Articles 39 for a certain period of time and charac- EC, 43 EC and 49 EC and under terised by a degree of frequency, regularity Council Directive 92/51; and duration fall within the scope of the freedom of establishment. To that extent, the contested rules cannot restrict the free- dom to provide services.

(2) the Portuguese Republic be ordered to pay the costs of the proceedings.

35. The Portuguese legislation also satisfies the requirements of legal certainty. Neither 33. The Portuguese Republic claims that economic operators nor the Portuguese the Court should: Government are in any doubt that Article 22 of the Decree-Law is not applicable to temporary providers of services. Indeed, there are undertakings which are princi- pally established in other Member States and provide security services in Portugal (1) dismiss the application; without having a secondary establishment there. The fact that, during the pre-litiga- tion procedure, the Portuguese Government gave what the Commission considers to be contradictory interpretations of the provi- (2) order the Commission to pay the costs sion in question does not, according to the of the proceedings. Portuguese Government, prove that the principle of legal certainty has been infringed.

34. The Portuguese Government takes the view that the scope of Article 22 of Decree- Law No 231/98 in conjunction with Article 4 of the Code of Commercial Companies is confined to companies which do not have 36. The Portuguese Government also takes their main office in Portugal and wish to the view, with regard to the criticism that

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documents which have already had to be freedom to provide services, it is not subject submitted in the State of origin are not to the minimum capital rule. That rule is, taken into consideration, that the Commis- however, applicable to secondary establish- sion misinterprets the scope of Article 24 of ments. Accordingly, if an undertaking Decree Law No 231/98. Here again, the established in another Member State opens provision is directed only at undertakings a secondary establishment in Portugal in which wish to provide security services in order to provide security services for longer Portugal for longer than a year. Conse- than a year, the Portuguese provisions on quently, Article 24 of the Decree-Law can minimum capital are applicable. likewise affect only the freedom of estab- lishment of undertakings, but not their freedom to provide services.

39. The Portuguese Government considers this restriction on the freedom to set up a secondary establishment to be justified. The security services sector, it submits, has not been harmonised in Community law. The measure is proportionate, since any other 37. The same is true of the condition that interpretation would lead to discrimination undertakings should have legal personality. against domestic undertakings. It is true Only if they wish to provide security that discrimination at national level is not services for longer than a year are they in principle prohibited by Community law, required to have their principal establish- as it is usually a purely domestic matter. If, ment or a permanent establishment in however, the requirement of strict compli- Portugal. The right to provide security ance with the provisions on minimum services on a temporary basis in Portugal capital were dispensed with, undertakings is not affected by that condition. There is would be able to set up their principal therefore no restriction on the freedom to establishment in a Member State with a provide services in this respect either. lower minimum capital requirement and, Moreover, the Commission itself recognises through the contrivance of setting up a that the pursuit of activities in sensitive secondary establishment in Portugal, cir- areas can quite legitimately be made subject cumvent the Portuguese provisions on to prior authorisation. minimum capital. This would lead to de facto harmonisation at the lowest level. By reference to the Opinion of Advocate General Vilaça in Case 63/86, 16 the Portu- guese Government points out that the freedom of establishment means only that a person may become established under the 38. In the view of the Portuguese Govern- same conditions as apply to nationals of the ment, the requirement on undertakings to Member State concerned. In so far as the comply with the provisions on minimum field in question has not been harmonised capital likewise affects not the freedom to under Community law, the Member State is provide services but the freedom of estab- lishment and, more specifically, the freedom to set up a secondary establishment. In so 16 — Opinion of Advocate General Vilaça in Case 63/86 far as an undertaking exercises only the Commission v Italy [1988] ECR 29.

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at liberty, provided that it observes the must be reviewed periodically. That is why principle of equal treatment, to regulate the authorisation is granted for only two years conditions governing establishment in its in Portugal. The requirements laid down territory. are justified by overriding reasons in the public interest, namely the security of the recipients of the services in question.

40. With regard to the alleged failure to 42. With regard to the complaint that recognise evidence which has already had Directive 92/51 has been infringed, the to be furnished in other Member States, the Portuguese Government submits that that Portuguese Government takes the view that directive is not applicable to security what matters here is not so much that a services. Neither the right to take up that professional certificate must be issued as the occupation nor the right to pursue it is lawfulness of the conditions governing its subject to the existence of evidence of issue, as laid down in Article 7 of the education and training. Indeed, evidence Decree-Law, and the evidence to show that of qualifications attesting to education and they have been fulfilled. As the Commission training within the meaning of Article 1(c) itself concedes, there is nothing to preclude of Directive 92/51 does not exist for these the requirement of prior authorisation. The activities. question of the extent to which the condi- tions laid down give rise to indirect discrimination was not raised in the rea- soned opinion and cannot therefore form part of the subject-matter of these proceed- ings. Moreover, it submits, there is no 43. The compulsory professional certificate discrimination anyway, since the conditions is valid for only two years. It cannot applicable to Portuguese nationals are, if therefore constitute evidence of education anything, more stringent than those applic- and training. As regards the education and able to nationals of other Member States. training laid down by Portuguese law, it must be borne in mind that this does not take place until after the taking-up of employment with an employer in the relevant sector. Because of that time inter- val, even this cannot be regarded as education and training, and the evidence of its completion cannot be regarded as 41. In the absence of harmonisation, the evidence of qualifications attesting to edu- Commission cannot require Portugal sim- cation and training, within the meaning of ply to accept another Member State's the directive. recognition of the lawfulness of an under- taking's situation. Many of the require- ments referred to in Article 7 are not even verified by other States. In the absence of harmonisation, the Portuguese Republic cannot be prevented from imposing those 44. Moreover, the time-limit is not a requirements. Moreover, many conditions disproportionate measure. After all, condi-

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tions which were satisfied at the outset may sents a guarantee that security services will cease to be so at a later stage, which is why be provided only by suitably qualified a regular review is necessary. The system of entities which are subject to close scrutiny ongoing inspections of entities which pro- and stringent quality standards; on the vide security services, as referred to by the other, the interests and rights of the State, Commission, does not offer the same for which the Decree-Law represents a guarantees. means of formulating a more effective security policy. And finally there are the interests and rights of undertakings offering security services, and their employees, who also have an interest in the introduction of legislation governing the right to take up and pursue the occupation in question. 45. More generally, the Portuguese Gov- ernment also points out that the task of guaranteeing security does not fall to the State alone. Private security services supple- ment the State security forces and are closely connected to them. The conditions governing the right to take up and pursue activities in the security services sector must 48. The determination of security require- therefore be imposed with care and rigour. ments is a quintessentially domestic matter which must be decided by each Member State itself. In this context, the introduction of an obligation to obtain prior authorisa- tion is not open to objection from the point of view of Community law, especially as no harmonisation measures are in place. 46. Article 27 of the Portuguese Constitu- tion confers a right to security on all citizens. Private security service providers have a pivotal role to play in enforcing that right.

49. The Portuguese Government refers to the Court's decisions in what it considers to be less serious cases in which the Court recognised restrictions on the freedom to 47. The Portuguese Government submits provide services as lawful. 17 All the more that the restrictions laid down in Decree- reason, it submits, why the requirements at Law No 231/98 must be assessed against issue here must be regarded as justified. that background. The legal assessment of that legislation must take into consideration the objectives which it pursues. These are, 17 — It refers to Case C-3/95 Reisebüro Broede [1996] ECR I- on the one hand, the interests and rights of 6511, Case C-384/95 Landboden-Agrardienste [1997] ECR I-7387, and Case C-275/92 Schindler [1994] ECR I- citizens, for whom the Decree-Law repre- 1039.

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50. The Portuguese Government considers respective fields of application of the free- the decisions concerning security services dom of establishment and the freedom to cited by the Commission to be immater- provide services. The Portuguese Govern- ial. 18 The restrictions which were at issue in ment takes the view that a worker who those cases are not imposed by the Portu- provides services for longer than a year guese legislation in question here. ceases to exercise the freedom to provide services and proceeds to exercise the free- dom of establishment. The Commission, on the other hand, assumes that such a worker continues to exercise the freedom to pro- vide services even after a year has elapsed. In the event that the measures in question constitute restrictions on the freedom of V — Assessment establishment, the Portuguese Government considers these to be justified.

51. By this action, the Commission con- tinues the series of infringement proceed- ings it has brought on grounds of restric- tions of the free movement of workers, the 53. With regard to the Commission's freedom of establishment and the freedom complaint that the requirement to open a to provide services in the field of private permanent establishment (Article 22 refers security services. The Court has already to 'delegação' (branch), Article 4 to 'repre- ruled on circumstances of a similar nature sentação permanente' (permanent represen- in the proceedings against Spain, 19 Bel- tation)) in Portugal is incompatible with the gium 20 and Italy. 21 freedom to provide services, the Portuguese Government takes the view that the article laying down that requirement, Article 22(1) of the Decree-Law, is applicable only to undertakings ('entidades' (entities)) which provide security services for longer than a year in Portugal. Where that is the case, it A — Requirement to open a permanent submits, the services are no longer per- establishment formed on a temporary basis, so there can be no infringement of the freedom to provide services. In those circumstances, they are provided on a permanent basis and fall within the scope of the freedom of 52. In the first four complaints, the parties establishment. are in dispute over the delimitation of the

18 — It refers to Case C-114/97 Commission v Spain [1998] ECR I-6717, Commission v Belgium (cited in footnote 8), and Case C-283/99 Commission v Italy [2001] ECR I-4363. 19 — Cited in footnote 18. 54. I would point out that any restriction 20 — Cited m footnote 8. of the scope of Article 22(1) of the Decree- 21 — Cited in footnote 18. Law to providers of services who provide

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their security services for longer than a year 57. However, the duration of the provision does not follow from the wording of that of services has been taken into account by provision, at least not directly. It may at the Court in its decisions to date as only one most follow from the reference to Article 4 of several factors to be considered when of the Code of Commercial Companies. classifying a particular activity. In its consideration of the activity in question, the Court has always undertaken a general assessment of all the circumstances in which the service was provided. As well as duration, the Court has had regard in this 55. The parties are in dispute as to whether connection to the regularity, periodicity or Article 22 does in fact contain such a continuity of the provision. 23 It has also reference. For the purposes of examining held that even the establishment of some the lawfulness of the requirement to open a form of infrastructure, such as the opening permanent establishment, we shall assume of an office or chambers, does not in itself that such a reference does exist and that it preclude exercise of the freedom to provide meets the requirements of legal certainty services. 24 In his Opinion in Gebhard, and legal clarity. For even if the reference Advocate General Léger suggested that, in satisfies those requirements, the question addition to duration, account should also arises whether it is lawful for national be taken of where the provider of services legislation to limit exercise of the freedom has the centre of his activity. If it is situated to provide services to a year. in a Member State other than that where the service is performed, he exercises the freedom to provide services. 25

56. In its case-law, the Court has taken into account the period for which a service is 58. It follows from the case-law cited that provided as an indicator in distinguishing delimitation based solely on the duration of between exercise of the freedom of estab- the provision of services is not sufficient to lishment and exercise of the freedom to be able to place an activity squarely in one provide services. Thus, the fact that a or other of the categories of freedom of Community national participates on a establishment or freedom to provide ser- stable and continuous basis in the economic vices. Consequently, if Article 22(1) of the life of a Member State other than his State Decree-Law excludes from its scope only of origin is an indication that he is security service providers who perform exercising the rights accruing to him by their services for a period of no more than virtue of the freedom of establishment. On a year, without taking into consideration the other hand, the fact that an activity is the other circumstances in which the pursued only temporarily in another Mem- services are performed and without provid- ber State is in principle an indication that ing for the possibility of submitting evi- the freedom to provide services is being exercised. 22 23 '— Gebhard (cited in footnote 4, paragraph 27). 24 — Gebhard (cited in footnote 4, paragraph 27). 25 — Opinion of Advocate General Léger in Gebhard (cited in 22 — See Gebhard (cited in footnote 4, paragraph 25 et seq.). footnote 4, point 37).

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dence to show that some services are not held that such a requirement is an absolute permanent and continuous even though negation of the freedom to provide services provided for longer than that period, that and that it is therefore contrary to Article article restricts the freedom to provide 49 EC. 27 It must therefore be concluded services of all those who wish to provide that, in circumstances where a provider of security services in Portugal for longer than services wishes to provide security services a year without intending to participate on a in Portugal for longer than a year, the stable and continuous basis in the economic requirement to open a permanent establish- life of that State and without wishing to ment there is incompatible with Article 49 make it the centre of their activities. EC.

59. Like the Italian legislation at issue in Gebhard, Article 22(1) of the Decree-Law in conjunction with Article 4 of the Code of 61. An examination of the objection that Commercial Companies is based on an the legislation infringes the principle of irrebuttable presumption that undertakings legal certainty is therefore unnecessary. providing security services for longer than a For even if it is assumed, as it is here, that year exercise the freedom of establish- the reference to Article 4 of the Code of ment. 26 There is no reason for such Commercial Companies is sufficiently clear compulsion to exercise the freedom of and unambiguous, the fact none the less establishment. remains that the legislation at issue is a negation of the freedom to provide services, as has been established, and is therefore contrary to Community law.

60. More specifically, such a compulsion to exercise a particular fundamental freedom must not affect the permissible restrictions on the exercise of the other fundamental freedoms. That, however, is precisely the effect of the rules contained in Article 22(1) 62. Strictly speaking, the question whether in conjunction in some cases with Article 4 or not that restriction is justified does not of the Code of Commercial Companies. therefore arise either. If the requirement to The compulsion to open a permanent open a permanent establishment entirely establishment in Portugal makes it more negates the freedom to provide services, expensive, and therefore not simply more that restriction is in any event a dispropor- difficult, to exercise the freedom to provide tionate measure. services. Indeed, the Court has consistently

27 —Case 220/83 Commission v France [1986] ECR 3663, paragraph 20; Commission v Germany (cited in footnote 26 — Seein this connection the Opinion of Advocate General 6, paragraph 52); and Commission v Belgium (cited in Léger (cited in footnote 25, point 84). footnote 8, paragraph 27).

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63. In the event that the Court does not ment of persons and services on grounds of share that view, consideration should be public policy, public security and public given briefly to the grounds of justification health is not intended to exclude entire put forward by the Portuguese Govern- economic sectors such as the private secur- ment. ity sector from the application of that principle. 29

64. By way of justification for the restric- tions arising from the Decree-Law, the 66. Reliance on imperative requirements in Portuguese Government refers first and the public interest, in particular the guar- foremost to the particular importance of antee for citizens that security services will ensuring that private security services are be provided to them only by suitably provided in a proper manner. In its qualified entities subject to close scrutiny submission, they support the public security and stringent quality standards, the possi- forces and enable the State to formulate an bility for the State to have a means of effective security policy. formulating a more effective security policy, and the introduction of legislation for undertakings and their employees concern- ing the right to take up and pursue the occupation in question, is likewise incap- able of justifying the restriction established as resulting from the requirement to open a permanent establishment. It is settled case- law that national measures which are liable to hinder or make less attractive the exercise of fundamental freedoms guaran- 65. In the infringement proceedings against teed by the Treaty must fulfil four condi- Spain, Belgium and Italy, in each of which tions: they must be applied in a non- judgment has already been given, the Court discriminatory manner; they must be justi- clearly stated that the grounds of justifica- fied by imperative requirements in the tion provided for in Articles 55 EC and 46 public interest; they must be suitable for EC are not applicable to restrictions on securing the attainment of the objective private security services,28as these do not which they pursue; and they must not go involve the exercise of official authority. beyond what is necessary in order to attain Moreover, reliance on Article 46 EC is i t . 30 precluded by the fact that the right of Member States to restrict the free move-

29 — Commission v Belgium (cited in footnote 8, paragraph 29). See also in this connection the Opinion of Advocate 28 — Commission v Spain (cited in footnote 18, paragraphs 35 General Jacobs in Commission v Italy (cited in footnote 18, to 39); Commission v Belgium (cited in footnote 8, point 47). paragraphs 24 to 26); and Commission v Italy (cited in 30 — Case C-19/92 Kraus [1993] ECR I-1663, paragraph 32, footnote 18, paragraphs 20 and 22). and Gebhard (cited in footnote 4, paragraph 37).

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67. As I have already said, the requirement view taken by the Portuguese Government to open an establishment entirely negates must be rejected. In principle, Article 24 of the freedom to provide services. In any Decree-Law No 231/98 also affects the event, therefore, that restriction goes freedom to provide services. beyond what is necessary in order to attain the aforementioned objectives. These can be achieved by more moderate means, such as, for example, the provision of securities, the taking-out of special insurance or the requirement of evidence of a specific 70. As the Commission rightly points out, professional qualification. The restriction the Court has already held, in its judgment cannot therefore be justified on grounds of in Commission v Belgium, that the freedom imperative requirements in the public inter- to provide services, being one of the est either. fundamental principles of the Treaty, may be restricted only by rules justified by the public interest and applicable to all persons and undertakings operating in the territory of the Member State where the service is provided, in so far as that interest is not 68. It must therefore be stated by way of safeguarded by the rules to which the conclusion to the examination of the provider of such a service is subject in the requirement of a permanent establishment Member State where he is established. that that rule is incompatible with the National provisions which require all freedom to provide services guaranteed by undertakings to fulfil the same conditions Article 49 EC. for obtaining prior authorisation or approval make it impossible for account to be taken of obligations to which the person providing the service is already subject in the Member State in which he is established. 31

B— Consideration of evidence furnished in the Member State of origin

71. Article 24 of the Decree-Law requires all applicants to submit with the application 69. In its examination of the lawfulness of for authorisation to pursue activities in the Article 24 of Decree-Law No 231/98, which security services sector the evidence listed in lists the evidence which must be submitted paragraph 1(a) to (g). The wording of the with the application for authorisation to provision does not make it possible for take up an activity in the security services consideration to be given to comparable sector, the Portuguese Government merely evidence already furnished by the provider points out that Article 24 is likewise of services in the Member State in which he applicable only to undertakings which provide their services for longer than a year. In accordance with my findings on the 31 — Commission v Belgium (cited in footnote 8, paragraph 37 requirement to open an establishment, the et seq.).

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is established. Moreover, the Portuguese 74. It must be borne in mind, however, that Government has not said anything to Article 22(1) requires that the entities in indicate that other precautions have been question be constituted ('devem ser consti- taken to ensure that consideration is given tuidas') in accordance with Portuguese law to evidence submitted in other Member or with the law of one of the Member States States, as recognised by Community law. It of the European Union or the European must therefore be concluded that Article 24 Economic Area, and the only entities which of the Decree-Law is also incompatible with are constituted or formed are legal persons, Article 49 EC. not natural persons. It is therefore reason- able to assume that Article 22(1) of the Decree-Law does make the pursuit of activities in the security services sector subject to the condition that the provider of services should be formed as a legal person. The pursuit of activities by a self- employed person is thus in principle pre- cluded.

C — Requirement of formation as a legal person

75. Support for this interpretation can be found in Article 22(2) of the Decree-Law, which requires the raising of a specific minimum amount of capital. This provision 72. Again in the context of its explanation will be looked at in greater detail in the next of the requirement of formation as a legal section. In this connection, it is sufficient to person, the Portuguese Government takes say that the raising of capital is required refuge behind the view that the freedom to only in relation to legal persons. This too provide services is not affected, since the lends weight to the assumption that the requirement is directed only at activities pursuit of activities in the security services pursued for more than a year. For the sector in Portugal is reserved for legal reasons given above, this argument must be persons. rejected.

76. Finally, reference must also be made to Article 3 of the Decree-Law. This provision reserves the pursuit of activities in the 73. The condition of formation as a legal security services sector for entities consti- person is not immediately apparent from tuted in accordance with the law ('... só the wording of Article 22(1) of Decree-Law pode ser exercida por entidades legalmente No 231/98. That provision refers only to constituidas ...'), and the only entities entities ('entidades'). That neutral term can which are constituted in accordance with in principle be taken to mean both legal and provisions laid down by law or regulation natural persons or associations of persons. are legal persons.

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77. Moreover, that interpretation of the 79. As the Portuguese Government does provisions of the Decree-Law was con- not put forward any grounds of justifica- firmed by the Portuguese Government in tion for that restriction, it must be con- the pre-litigation procedure. In its answer to cluded that Article 22(1) of the Decree-Law the letter of formal notice, the Portuguese infringes Article 49 EC in so far as it Government stated that the legislature's requires those who wish to pursue activities choice of a legal person as the required in the security services sector to be formed form of organisation was based on the as legal persons. assumption that that structure offered the greatest security and credibility. Past experience, it said, had shown that the security and creditworthiness of companies were considerably greater than those of sole traders with personal liability. 32 It is true that the Portuguese Government did not refer to that clarification either in the defence or in the rejoinder. On the other hand, those pleadings do not contain any D — Compliance with the Portuguese other plausible explanation for the wording provisions on minimum capital of Article 22(1) in conjunction with Article 3 of the Decree-Law. Instead, the Portu- guese Government confines itself to the argument that Article 22 is not applicable to services. As I have already said, however, that view is untenable. 80. The Commission also criticises the condition, laid down in Article 22(2) of Decree-Law No 231/98, concerning the maintenance of a specific minimum amount of capital. That provision requires under- takings which wish to provide the security 78. In conclusion, it must therefore be services governed by Article 2 of the assumed that providers of services who Decree-Law not to allow their capital to wish to provide security services in Portugal fall below certain minimum amounts. must be formed as a legal person. Natural persons, that is to say self-employed per- sons, are thus precluded from providing such services. To that extent, there is a restriction on the freedom to provide services.

81. Provisions on minimum capital affect 32 — '... a opção do legislador pela forma societaria resulta do only providers of services who are formed facto de aquela ser, no seu entender, a que se reveste de as companies limited by shares. Self- uma maior segurança e credibilidade. Os ensinamentos da história recente demonstram que a credibilidade das employed persons are not in principle sociedades, no nosso ordenamento interno, ė muito super­ ior à que goza por exemplo, o estabelecimento individual subject to any provisions making it com- de responsabilidade limitada ...' page 17 et seq. of the reply pulsory to raise capital. The very fact that of 23 May 2000 to the letter of formal notice of 1 February 2000. that provision implicitly excludes the activ-

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ities of self-employed persons means that it 83. In my Opinion in the Inspire Art case, I infringes the freedom to provide services. expressed the view that the requirement to comply with the host State's provisions on minimum capital also constitutes a restric- tion on the freedom of establishment because it precludes the recognition of companies duly formed in accordance with the law of another Member State, as required by Community law. 34That case- law is applicable to the freedom to provide services. Where a self-employed person or an undertaking is lawfully established in a Member State and provides security ser- vices there, the requirement to comply with the provisions on minimum capital has the 82. It must also be pointed out, with regard effect of precluding recognition of lawful to services performed by companies limited formation in the State of origin. This again by shares, that provisions making it com- leads ultimately to a denial of the right to pulsory to raise a minimum amount of provide services enjoyed by undertakings capital constitute an unjustified restriction lawfully established in another Member of the freedom to provide services. As far as State. concerns exercise of the freedom of estab- lishment, the Court held in Centros that the provisions of the Treaty on freedom of establishment are intended specifically to enable companies formed in accordance with the law of a Member State and having their registered office, central administra- tion or principal place of business within the Community to pursue activities in other Member States through an agency, branch 84. The justification on grounds of poten- or subsidiary. That being so, the fact that a tial discrimination at national level, as put national of a Member State who wishes to forward by the Portuguese Government, is set up a company chooses to form it in the therefore invalid. After all, the only argu- Member State whose rules of company law ment advanced under the heading of seem to him the least restrictive and to set discrimination at national level, which, as up branches in other Member States can- both parties agree, is in principle irrelevant not, in itself, constitute an abuse of the right from the point of view of Community law, of establishment. The right to form a concerns the need to combat circumvention company in accordance with the law of a of the Portuguese provisions on minimum Member State and to set up branches in capital. The Portuguese Government refers other Member States is inherent in the expressly to the danger that an undertaking exercise, in a single market, of the freedom may become established in a Member State of establishment guaranteed by the EC with a lower minimum capital requirement Treaty. 33 and, through the contrivance of setting up a

34 — Opinion in Case C-167/01 Kamer van Koophandel v 33 — Centros (cited in footnote 12, paragraph 26 et seq.). Inspire Ari [2003] ECR I-10159, points 97 to 100.

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secondary establishment in Portugal, cir- certificate as both a restriction of the free cumvent the Portuguese provisions on movement of workers enjoyed by employ- minimum capital. However, as is clear from ees (Article 39 EC) and a restriction of the the aforementioned judgment in Centros, a freedom to provide services enjoyed by their general danger of circumvention is not employer, inasmuch as it is more difficult sufficient to justify a restriction of the for him to send to Portugal employees fundamental freedoms guaranteed by the authorised to work in the Member State Treaty. Moreover, there are less restrictive where he is established (Article 49 EC). The means of ensuring equally effective protec- Portuguese Government argues in its tion for creditors, such as the provision of defence that it is in principle permissible securities or the taking-out of insurance. to make the pursuit of certain sensitive Quite apart from that, it is by no means activities subject to prior authorisation, and certain that the raising of a certain mini- that, when issuing the certificate, the mum amount of capital upon formation of competent authorities verify compliance a company or, in this case, on the taking-up with the requirements laid down in Article of activities in the services sector in 7 of Decree-Law No 231/98, which were Portugal, can actually provide the protec- imposed for overriding reasons in the public tion for creditors it seeks to ensure in the interest. first place. 35

85. It must therefore be concluded that the rule in Article 22(2) of the Decree Law 87. In its judgment in Commission v laying down the requirement to maintain a Belgium, the Court held that the require- minimum amount of capital is likewise ment of the issue of an identity card incompatible with Article 49 EC. represented a restriction of the freedom to provide services because the formalities involved in issuing such an identity card might make the provision of services across frontiers more expensive. Moreover, such a restriction was considered to be dispropor- tionate in so far as the identity card was intended to establish the identity of the E — Requirement of a professional certifi- provider of services when that could be cate established in the same way by an identity card or passport which the provider of services brought with him. 36 Pursuant to that judgment, it is appropriate to proceed on the assumption that Article 9 of the 86. The Commission regards the require- Decree-Law restricts the freedom to provide ment to be in possession of a professional services and the free movement of workers.

35 — See, in this respect, the fundamental findings contained in my Opinion in Inspire Art (cited in footnote 34, points 141 36 — Commission v Belgium (cited in footnote 8, paragraph 39 to 146). et seq.).

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88. Unlike in Commission v Belgium, the involved, that principle, which has been justification for the Portuguese legislation is developed in relation to the freedom of not the possibility of establishing the establishment, is applicable to the free identity of the provider of services but movement of workers and the freedom to verification of compliance with the condi- provide services. To that extent, it must be tions for pursuit of an activity laid down in concluded that Article 9 of the Decree-Law Article 7 of the Decree-Law. It is therefore restricts the free movement of workers and concerned with the personal characteristics the freedom to provide services more than is and abilities of the provider of services. To necessary. that extent, such verification should prob- ably be regarded as a suitable means of ensuring the quality of the security service provided.

89. The question is, however, whether the F — Applicability of Directive 92/51 measure goes beyond what is necessary in that it precludes the consideration of equivalent evidence which has already been furnished by the provider of services in his State of origin. Like Article 22(1) of the 90. Finally, the Commission criticises the Decree-Law examined above, Article 9(2) non-application of Directive 92/51 to of the Decree-Law does not make it employees in the security services sector. possible, during the verification of evidence In this respect, the parties are in dispute, in of compliance with the conditions for particular, as to whether the professional pursuit of an activity, for consideration to certificate referred to in the previous para- be given to equivalent evidence which is graph essentially constitutes an attestation already required in the State of origin for of competence within the meaning of the the purposes of taking up activities in the first indent of Article 1(c) of Directive security services sector. In accordance with 92/51. the Court's case-law, however, a Member State which receives a request to admit a person to a profession to which access, under national law, depends upon the possession of a diploma or a professional qualification is required to take into con- sideration the diplomas, certificates and 91. According to Article 1(f) of Directive other evidence of formal qualifications 92/51, a regulated profession is a profes- which the person concerned has acquired sional activity the taking-up or pursuit of in order to exercise the same profession in which is directly or indirectly, by virtue of another Member State by making a com- laws, regulations or administrative provi- parison between the specialised knowledge sions, regulated by law. The taking-up or certified by those diplomas and the knowl- pursuit of a profession is accordingly to be edge and qualifications required by national regarded as directly governed by law where law. In view of the similarity of interests the laws, regulations or administrative provisions of the host Member State con- tain rules by virtue of which the profes- sional activity in question is expressly 37 — Case C-340/89 (cited in footnote 15, paragraph 16). reserved to persons who fulfil certain

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conditions, while the pursuit of that activity 94. It must be borne in mind, however, that is denied to those who do not fulfil those the period of validity of the professional conditions. 38 Articles 7 and 9 of the certificate is limited to two years, as the Decree-Law make the pursuit of activities Portuguese Government points out. Evi- in the security services sector subject to the dence of a particular type of training, on the fulfilment of certain personal conditions. other hand, is acquired once and is valid They are to that extent concerned with the indefinitely. An authorisation to pursue a pursuit of a regulated profession within the particular profession requiring specific meaning of Directive 92/51. training, the validity of which may quite legitimately be limited in time in order to ensure that certain checks can be carried out, is entirely different. The very fact that there is a temporal restriction on its period of validity means that the professional 92. The term 'attestation of competence' is certificate cannot be regarded as permanent defined in the first indent of Article 1(c) of evidence of completion of training. Directive 92/51 as any evidence of qualifi- cations attesting to education and training not forming part of a set constituting a diploma within the meaning of Directive 89/48/EEC or a diploma or certificate within the meaning of Directive 92/51. Since there is no diploma in security 95. It must also be pointed out that the services, we are concerned here only with professional certificate does more than evidence of the completion of education or attest to completion of a particular course training. of training and the successful sitting of the test at the end of it. Pursuant to Article 9 of the Decree-Law, the professional certificate is issued only after compliance with all of the conditions laid down in Article 7 of the Decree-Law has been verified. Attestation of completion of a particular course of 93. The Commission considers the profes- training is only one of the functions of the sional certificate discussed in the previous employer's identity card. For example, it paragraph to be such an attestation of also serves to verify the nationality of, and competence. In its submission, the profes- the existence of any convictions against, the sional certificate certifies, inter alia, that the person concerned. This too argues against tests of knowledge and physical capacity — the assumption that the professional certi- the content and duration of which are ficate is an attestation of competence within governed by law — required under Article the meaning of Directive 92/51. 7(2)(b) of the Decree-Law have been successfully completed and allows its holder to pursue activities in the security services sector.

38 — Case C-164/94 Aranitis [1996] ECR I-135, paragraph 18 96. That being the case, no infringement et seq., and Case C-234/97 Fernandez de Bobadilla [1999] ECR I-4773, paragraph 16 et seq. can be established against Directive 92/51.

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VI— Costs the Court may order that the costs be shared or that the parties bear their own costs. Only one infringement against Direc- tive 92/51 could not be established. How- ever, that fact is not so significant in relation to the other Treaty infringements 97. Pursuant to Article 69(2) of the Rules which have been established as to make it of Procedure, the unsuccessful party is to be appropriate for the costs to be shared. Since ordered to pay the costs if they have been the Commission made an application to applied for in the successful party's plead- that effect in its submissions, Portugal, ings. In accordance with the first paragraph which has been unsuccessful on all other of Article 69(3), however, where each party heads of its claim that the application be succeeds on some and fails on other heads, dismissed, must be ordered to pay the costs or where the circumstances are exceptional, of the proceedings.

V I I— Conclusion

98. In the light of the foregoing considerations, I propose that the Court should rule as follows:

(1) The Portuguese Republic has infringed its obligations under Article 39 EC, 43 EC and 49 EC by requiring:

(a) that under the rules governing the authorisation to be issued by the Minister for the Interior, foreign undertakings wishing to pursue, in the private security services sector in Portugal, surveillance activities in respect of persons and property

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— must have their head office or be established in Portugal,

— may not rely on the evidence and guarantees which they have already submitted in the Member State where they are established,

— must be constituted as legal persons, and

— must have a specific amount of capital;

(b) that employees of foreign undertakings which wish to pursue, in the private security services in Portugal, surveillance activities in respect of persons and property must be in possession of a professional certificate issued by the Portuguese authorities.

(2) The application is otherwise dismissed.

(3) The Portuguese Republic is to bear the costs of the proceedings.

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