The Gazette 1975

Legal Europe F R E E D OM O F E S T A B L I S HME NT A N D F R E E D OM TO P ROV I DE S ERV I CES IN T H E E . E .C. AS I L L U S T R A T ED BY TWO R E C E NT J U D G E M E N TS O F T HE C O U RT O F J U S T I CE by GERALD FITZGERALD, SOLICITOR, BRUSSELS

Part I

Introduction The EEC Treaty, reduced to its bare bones, is based on four fundamental freedoms, namely the free move- ment of goods, of persons, of services and of capital. It also provides for the establishment of a common agricultural policy, a common transport policy and a common commercial policy, and of rules to ensure that competition is not distorted within the Common Market. The Court of Justice of the European Communities recently delivered two Judgements which lealt with two of the fundamental freedoms referred to above, namely free movement of persons (specifically, the freedom of the establishment) and the freedom to provide services. Although the conclusions of .the Court were predictable enough, the Judgements have clarified a number of points and should give some stimulus to the detailed implementation of these freedoms, particularly in relation to the liberal professions. The Reyners Case—Freedom of Establishment The first Judgment, which dealt with freedom of establishment, was delivered on 21st June 1974 in Case 2/74 Reyners v. Belgium (1974 E.C.R. 631). The right of establishment, with which Articles 52-58 of the EEC Treaty are concerned, may be briefly defined as the right of a national of one Member State to work as a self-employed person in any other Mem- ber State on the same terms as nationals of that Member State. The concept of establishment, as opposed to the provision of services on a temporary basis, implies an intention of setting up business in • the host Member State on a long-term, though not necessarily, permanent, basis. The right also extends to companies as defined in Article 58 of the Treaty, but since only natural persons were involved in the case under consideration, the implications of the right for companies will not be considered here. The first sentence of Article 52, which sets out the basic right, reads as follows: "Within the framework of the provisions set out below, restrictions on the freedom of establish- ment of nationals of a Member State in the territory of another Member State shall be abolished by progressive stages in the course of the transitional period." The transitional period ended on 31st December, 1969.

The details of the measures to be adopted for the abolition of restrictions in accordance with Article 52 are set out in Articles 54 and 57. Article 54 requires the Council of Ministers, after consultation with the Economic and Social Committee and the European Parliament, to draw up a General Programme for the progressive abolition of such restrictions. This Programme, which was drawn up in December 1961, specified, in general terms, the bene- ficiaries of the right, the restrictions to be removed, and in detail, the stages during the transitional period by which specified activities were to be liberalised. Article 54 further provides that the General Pro- gramme should be implemented by means of Council Directives. Article 57 requires the Council to issue directives for the mutual recognition of qualifications and for "the co-ordination of the provisions laid down by law, regulation or administrative action in the Member St tes concerning the taking up and pursuit of activities as self-employed persons". The provisions of this Article are particularly relevant for the liberal professions, for which effective freedom of establish- ment can be achieved only through the co-ordination of qualification requirements in the different Member States and the mutual recognition of such qualifications. Articles 55 and 56 contain exemption provisions. The first, which was particularly relevant in the Reyners Case, states that the provisions relating to the right of establishment "shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the- exercise of official authority." Article 56 allows Member States to deny the right of establishment to nationals of other Member States on the grounds of public policy, public security or public health, and provides for the co-ordination of national measures relating to these matters. The facts of the Reyners Case have already been set out in the Gazette (June 1974 p. 164) and there- fore do not require repetition here. The official translation of the questions posed by the Belgian Conseil d'Etat reads: "1) What is to be understood by "activities which in that State are connected, even occasion- ally, with the exercise of official authority" within

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