International Law

Case C-393/05 concerned an Austrian requirement that every private inspection body in the field of organic production of agricultural products having a registered office in and approved in another Member State that it must also maintain a registered office or place of business in Austria in order to be allowed to carry out business activities in Austria (the German case involved a similar requirement).

The Commission sought a declaration from the Court of Justice that this requirement was contrary to Art. 49 EC.

Austria inter alia alleged that the exercise of official authority, within the meaning of Art. 55 EC, justified a restriction on the freedom to provide services.

The Court reiterated that all measures which prohibited, impeded or rendered less attractive the exercise of the freedom to provide services must be regarded as restrictions of that freedom (see C-452/04, Fidium Finanz).

It found that the Austrian requirement ran directly contrary to the freedom to provide services, since it rendered impossible, in Austria, the provision of the services in question by private bodies established only in other Member States (see C-355/98, Commission v Belgium).

The Court furthermore held that, since it provided for a derogation from the fundamental rule of freedom to provide services, Art. 55 EC, read in conjunction with Art. 45(1) EC, must be interpreted in a manner which limited its scope to what was strictly necessary to safeguard the interests which it allowed the Member States to protect.

Derogation under those Articles must be restricted to activities which, in themselves, were directly and specifically connected with the exercise of official authority which excluded from being regarded as connected with the exercise of official authority, within the meaning of that derogation, functions that were merely auxiliary and preparatory vis-à-vis an entity which effectively exercised official authority by taking the final decision. (see e.g. C-451/03, Servizi Ausiliari Dottori Commercialisti and C-42/92, Thijssen).

The auxiliary and preparatory role devolved on the private bodies could not be regarded as being directly and specifically connected with the exercise of official authority, within the meaning of Art. 55 EC, read in conjunction with Art. 45(1) EC.

Text of Judgment

Full post as published by ECJBlog.com on December 13, 2007 (boomark / email).