(Failure to fulfil obligations – Articles 43 EC and 49 EC – Restrictions on the freedom of establishment and the freedom to provide services – Private security undertakings and services – Conditions – Legal personality – Minimum share capital – Security – Minimum number of staff – Directives 89/48/EEC and 92/51/EEC – Recognition of professional qualifications)

Summary of the Judgment

(Arts 43 EC and 49 EC)

(Council Directive 92/51)

1.A Member State which imposes a series of requirements on foreign private security undertakings for the pursuit of their activities in its territory, namely the obligation:

–to be constituted as legal persons;

–to have a specific minimum share capital;

–to pay a security to a national body;

–to employ a minimum number of workers, insofar as the undertaking in question carries out its activities in fields other than the transport and distribution of explosives;

–generally, for members of their staff, to hold a special administrative authorisation issued by the national authorities;

fails to fulfil its obligations under Articles 43 EC and 49 EC.

(see paras 31, 36, 41, 48, 50, 55-56, operative part)

26 January 2006 (*)

(Failure to fulfil obligations – Articles 43 EC and 49 EC – Restrictions on the freedom of establishment and the freedom to provide services – Private security undertakings and services – Conditions – Legal personality – Minimum share capital – Security – Minimum number of staff – Directives 89/48/EEC and 92/51/EEC – Recognition of professional qualifications)

In Case C-514/03,

ACTION under Article 226 EC for failure to fulfil obligations, brought on 8 December 2003,

Commission of the European Communities, represented by M. Patakia and L. Escobar Guerrero, acting as Agents, with an address for service in Luxembourg,

applicant,

Kingdom of Spain, represented by E. Braquehais Conesa, acting as Agent, with an address for service in Luxembourg,

defendant,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, K. Schiemann, N. Colneric, J.N. Cunha Rodrigues and E. Levits (Rapporteur), Judges,

Advocate General: J. Kokott,

Registrar: R. Grass,

having regard to the written procedure,

after hearing the Opinion of the Advocate General at the sitting on 7 July 2005,

gives the following

Legal context

Community legislation

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

or

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

…

2.Second phase

(a) A team composed of at least one engineering technician and five fitters for undertakings whose range of activity is national and of an engineering technician and two fitters for those whose range covers an Autonomous Community.

10By application of Article 10 of the Law on private security services, read in conjunction with Article 53 of the Regulation on private security services, each member of private security staff must obtain authorisation from the Ministry of the Interior. To that end, he must be of age, not be older than the age limit set by regulation, have the physical and mental attributes necessary for performance of his work and pass the tests required to show his knowledge and capabilities.

11With regard in particular to the profession of private detective, Article 54(5)(b) of the Regulation on private security services also requires the persons concerned to hold a private detective diploma. That diploma is awarded on condition that a person has achieved a certain level of training, taken special courses and passed aptitude tests.

12Directives 89/48 and 92/51 were transposed into national law by, respectively, Royal Decree No 1665/1991 of 25 October 1991 governing the general system for recognition of higher-education diplomas awarded in the Member States of the European Union requiring studies of at least three years’ duration (BOE No 280, 22 November 1991, p. 37916) and Royal Decree No 1396/1995 of 4 August 1995 governing the second general system for recognition of professional education and training of the Member States of the European Union and other States signatory to the Agreement on the European Economic Area and supplementing what was established by Royal Decree No 1665/1991 (BOE No 197, 18 August 1995, p. 25657). The annexes to those two decrees contain lists of the regulated professions covered by the procedures for recognition in question. However, the professions covered by the Regulation on private security services do not appear on those lists.

Pre-litigation procedure and written procedure before the Court

13In 1997, the Commission brought, against the Kingdom of Spain, a first action for failure to fulfil obligations with regard to certain provisions of the Law and Regulation on private security services. In the judgment in Case C‑114/97 Commission v Spain [1998] ECR I‑6717, delivered on that action, the Court held that, by maintaining in force Articles 7, 8 and 10 of the Law on private security services which limit the grant of authorisation to carry on private security activities to Spanish undertakings and by issuing security staff permits only to Spanish nationals, the Kingdom of Spain had failed to fulfil its obligations under the EC Treaty.

14By letter of 29 November 1999, the Commission informed the Spanish Government that the national laws and regulations on private security activities remained in breach of Community law.

15Not having received an answer from the Spanish Government within the period prescribed, on 24 July 2000 the Commission issued a reasoned opinion requesting the Kingdom of Spain to take the measures necessary to end the breaches alleged within two months of notification of that opinion. Taking the view that the observations submitted by the Spanish authorities in answer to that reasoned opinion were not satisfactory, the Commission brought the present action.

16In its reply, the Commission noted that, following the judgment in Commission v Spain, the Spanish authorities had amended the Law and the Regulation on private security services by abolishing the nationality requirement. The Commission therefore withdrew the complaint relating to that requirement, whilst maintaining the other complaints.

The action

17In support of its action, the Commission raises six complaints concerning in essence the conditions prescribed by Spanish legislation for carrying on private security activities in Spain.

18 Those complaints may be stated as follows:

(1) incompatibility with Articles 43 EC and 49 EC of the requirement that private security undertakings must always be constituted as legal persons;

(2) incompatibility with Articles 43 EC and 49 EC of the requirement that such an undertaking have a minimum share capital;

(3) incompatibility with Articles 43 EC and 49 EC of the requirement that such an undertaking lodge security with a Spanish body, the Caja General de Depósitos;

(4) incompatibility with Articles 43 EC and 49 EC of the requirement that such an undertaking employ a minimum number of workers;

(5) incompatibility with Articles 43 EC and 49 EC of the requirement that special authorisation is required for security staff carrying out their work in Spain;

(6) breach of Directives 89/48 and 92/51 as a result of the lack of recognition of professional qualifications.

19Before considering the substance of each of those complaints, it is appropriate to set out the preliminary arguments put forward by the parties and to recall the general principles laid down in the Court’s settled case-law.

General observations

Arguments of the parties

20The Commission recognises that private security activities have not been harmonised at Community level. However, the restrictive provisions of Spanish law on the subject do not comply with the basic requirements laid down by the Court’s established case-law with respect to Articles 43 EC and 49 EC. The Commission disputes in particular the alleged closeness between private security and public security. In its view, the contribution of the undertakings concerned to the maintenance of public security is no different from the contribution which any individual may be called upon to make. In the present case, the Commission claims that the fact of making a foreign private security undertaking subject to the same requirements as those to which Spanish undertakings are subject – without taking into account the obligations, guarantees and requirements which may already have been imposed on the same undertaking in another Member State – constitutes an unjustified obstacle to its establishment on Spanish territory and a highly dissuasive factor in respect of the provision of cross-border services in that sector, particularly with regard to small and medium-sized undertakings.

21According to the Spanish Government, private security is closely linked to public security, of which it constitutes an extension. Thus, a large part of the activities in that sector involves use of certain means which, normally, are not permitted (in particular weapons). Those activities are also likely to have a serious effect on the free exercise of citizens’ rights and freedoms. Consequently, in that sector, a Member State may legitimately have recourse to means of intervention and monitoring which would not be justified in other fields. Since this sector is not harmonised at Community level, its regulation in other Member States may be radically different from that in Spain, hence the necessity of requiring compliance with the particular requirements existing in Spain, in particular those connected with the problem of terrorism.

Findings of the Court

22In its action, the Commission refers both to Article 43 EC, which guarantees freedom of establishment, and Article 49 EC, which relates to freedom to provide services. In that regard, it should be noted that the key element defining the respective fields of application of those two provisions is whether or not the economic operator concerned is established in the Member State in which it offers the service in question (the host Member State). When it is established there, by either its principal or secondary establishment, its situation falls within the scope of the principle of freedom of establishment within the meaning of Article 43 EC. In the contrary case, it must be classified as a ‘cross-border provider of services’ and falls under the principle of freedom to provide services pursuant to Article 49 EC (see, to that effect, Case C‑55/94 Gebhard [1995] ECR I‑4165, paragraphs 25 to 28, and Case C‑215/01 Schnitzer [2003] ECR I‑14847, paragraphs 28 to 32). In the context of the present case, the national laws and regulations in question appear to apply without distinction both to private security undertakings established in Spanish territory and to those established in other Member States and active in Spain on an occasional or temporary basis.

23Private security services are not, to date, harmonised at Community level. However, although it is true that, in such circumstances, Member States remain, in principle, competent to define the conditions for the pursuit of the activities in that sector, they must, when exercising their powers in this area, respect the basic freedoms guaranteed by the Treaty (see Case C‑58/98 Corsten [2000] ECR I-7919, paragraph 31; Case C‑108/96 Mac Quen and Others [2001] ECR I-837, paragraph 24; and Case C‑294/00 Gräbner [2002] ECR I‑6515, paragraph 26).

24In accordance with the case-law of the Court, Article 59 of the EC Treaty (now, after amendment, Article 49 EC) requires not only the elimination of all discrimination on grounds of nationality against providers of services who are established in another Member State, but also the abolition of all restrictions, even if applicable without distinction to national providers of services and to those of other Member States, which are liable to prohibit or render less advantageous the activities of a provider of services established in another Member State, where he lawfully provides similar services (Case C‑43/93 Vander Elst [1994] ECR I‑3803, paragraph 14, and Case C‑17/00 De Coster [2001] ECR I‑9445, paragraph 29).

25Furthermore, the Court has already held that Article 49 EC precludes the application of any national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State (De Coster, paragraph 30).

26It should also be noted that any national measure liable to hinder or make less attractive the exercise of those freedoms can be justified only if it fulfils four conditions: it must be applied in a non-discriminatory manner; it must be justified by overriding reasons based on the general interest; it must be suitable for securing the attainment of the objective which it pursues; and it must not go beyond what is necessary in order to attain that objective (see, inter alia, Case C‑19/92 Kraus [1993] ECR I‑1663, paragraph 32; Case C‑424/97 Haim [2000] ECR I‑5123, paragraph 57; and Mac Quen and Others, paragraph 26).

27In general, such a measure, when it involves the imposition of certain conditions on the exercise of the guaranteed rights, may only be justified in so far as the public interest relied on is not safeguarded by the rules to which the provider of the service is subject in the Member State in which he is established (Corsten, paragraph 35). In other words, as the Advocate General observed in point 45 of her Opinion, the authorities of the host Member State must, in principle, take account of the requirements which the economic operators concerned and their employees already satisfy in their country of origin.

28Finally, with regard to the argument of the Spanish Government concerning the closeness between the field of private security and that of public security, the Court has already held that the exception laid down in Article 46(1) EC authorising the Member States to maintain special regimes for foreign nationals justified on grounds of public safety did not apply to the general system for private security undertakings (Commission v Spain, paragraphs 45 and 46, and Case C‑355/98 Commission v Belgium [2000] ECR I‑1221, paragraphs 28 and 30).

The first complaint, concerning the legal form of the undertaking

Arguments of the parties

29According to the Commission, the obligation that a private security undertaking be a legal person in almost all cases means that a person established in another Member State and lawfully providing services such as those at issue would be obliged to constitute a legal person in order to be able to carry out those activities in Spain, even on a temporary or occasional basis. That requirement, having, in principle, no direct connection to the actual activity of the undertaking, is not effective in guaranteeing the protection of recipients of those services or the maintenance of public security. All the conditions imposed by the Spanish legislation could be met effectively without the undertaking being a legal person.

30The Spanish Government responds that any provision of the services in question by natural persons would not only create a whole series of practical problems but would also be unacceptable from the point of view of public security. Firstly, in order to permit natural persons to provide all the disputed services, it would be necessary to review the existing obligations relating to possession of firearms which, in Spain, are very strict. Secondly, the provision of certain services by a natural person would prevent effective communication between the guard and the company’s main office and that communication can be vitally important to the safety of the persons protected and that of the guard himself. Thirdly, there would be a likelihood of confusion because of the variety of staff uniforms. The relaxation of the above rules would generally reduce the guarantees of security considered appropriate by the Spanish authorities.

Findings of the Court

31It should be remembered at the outset that, with regard to legislation analogous to the Spanish legislation criticised by the Commission, the Court has already held that the requirement that a private security undertaking must be constituted as a legal person in order to be able to carry out its activities constituted a restriction contrary to Articles 43 EC and 49 EC (Case C‑171/02 Commission v Portugal [2004] ECR I‑5645, paragraphs 41 to 44).

32

In the present case, to justify that restriction, the Spanish Government puts forward the protection of the safety of the recipients of the services in question and the remainder of the population. For reasons set out more fully by the Advocate General in point 52 of her Opinion, the requirement of legal personality is not a measure suitable for attaining the objectives pursued. None of the practical problems listed by that government is directly connected to the legal form of the undertaking.

33In those circumstances, the first complaint is well founded.

The second complaint, concerning the requirement for a minimum share capital

Arguments of the parties

34The Commission submits that, in order to be able to establish itself in Spain or to supply cross-border services there, a foreign private security undertaking is subject to the requirement for a minimum share capital. Such a requirement cannot be justified either by considerations of public security or on grounds of protection of the recipients of the services concerned. Private security undertakings of other Member States apparently meet those objectives without being required to have a specific share capital.

The Spanish Government notes that, since private security services are a sector which is not harmonised at Community level, very great differences may exist between the Kingdom of Spain and the other Member States, particularly as regards the detailed rules for the carrying and use of firearms. Taking into account the particular situation of that Member State with regard to the terrorist threat, it is justified in adopting stricter requirements than the other Member States. Although it is true that, in Spain, private security undertakings are also subject to two additional guarantees, namely obligatory security and insurance, each of them has a specific function. However, those two guarantees alone are therefore not sufficient to attain the objectives pursued of security and protection of citizens.

Findings of the Court

36In this regard, the Court has already held that the requirement to have a minimum share capital, imposed on private security undertakings, infringed Articles 43 EC and 49 EC (Commission v Portugal, paragraphs 53 to 57). The justifications put forward by the Spanish Government, especially the particular terrorist threat existing in Spain, have no direct connection with the amount of the share capital of the undertaking and do not explain the restrictions placed on freedom to provide services and freedom of establishment.

37Moreover, there are less restrictive means which would permit the attainment of the objective of protection of the recipients of the services in question, such as lodging security or taking out insurance. Even if, as the Spanish Government submits, in certain cases each of those two measures may alone be insufficient, the possibility remains of applying them both cumulatively. The Spanish Government has therefore failed to present arguments to show how the above two measures do not suffice to meet the objectives of security and protection of citizens.

38In those circumstances, the second complaint is also well founded.

The third complaint, concerning the lodging of security with a Spanish body

Arguments of the parties

39The Commission understands the main objective of that requirement, which is to keep available to the Spanish authorities sums guaranteeing cover of the risks connected with possible liabilities or when a fine is imposed. However, it claims that that requirement is disproportionate to the aims which it pursues. In particular, the national provisions do not allow account to be taken of payment of security in the Member State of origin of the undertaking, which, in principle, should be sufficient.

For the Spanish Government, paying security or taking out insurance are legitimate means of guaranteeing protection of the recipients of the services in question. Indeed, the Regulation on private security services requires the undertakings in question to conclude a contract of civil liability insurance. However, given the economic factors characteristic of the insurance market, that method can offer only a limited safeguard. In other words, the function of the security is complementary but cannot take the place of that of the other two safeguards, namely minimum share capital and insurance.

Findings of the Court

41It should be noted that the requirement to lodge security with the Caja General de Depósitos, as laid down in Spanish law, is likely to hinder or make less attractive the exercise of freedom of establishment and freedom to provide services within the meaning of Articles 43 EC and 49 EC. It makes the provision of services or the formation of a subsidiary or secondary establishment in Spain more onerous for private security undertakings established in other Member States than for those established in Spain. It must be determined whether this requirement is justified.

42The Court has already expressly held that providing security is less of a restriction on the freedom of establishment and freedom to provide services than is the setting of a minimum share capital to ensure the protection of creditors (Commission v Portugal, paragraph 55).

43However, it is established case-law that such an obstacle may be justified only in so far as the public interest relied on is not safeguarded by the rules to which the provider of the service is subject in the Member State in which he is established (see Corsten, paragraph 35). The Spanish legislation at issue requires the security to be lodged with a Spanish body, the Caja General de Depósitos, without taking into account any security lodged in the Member State of origin. Furthermore, in the current state of development of the systems for cross-border debt recovery and execution of foreign judgments within the Union, such strictness appears disproportionate. The requirement to lodge security goes beyond what is necessary to ensure adequate protection of creditors.

44Indeed, it is clear from the observations of the Spanish Government that it has declared itself prepared to take into account securities lodged with financial bodies of the other Member States, provided that sums relating to the activities carried out on Spanish territory are set aside and held at its disposal. In that regard, it should be noted that, according to settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion and that the Court cannot take account of any subsequent changes (see, inter alia, Case C‑103/00 Commission v Greece [2002] ECR I‑1147, paragraph 23, and Case C‑323/01 Commission v Italy [2002] ECR I‑4711, paragraph 8). Moreover, the present case involves a mere declaration by the defendant government and not a concrete legislative or regulatory measure.

45In those circumstances, the third complaint is well founded.

The fourth complaint, concerning the minimum number of employees

Arguments of the parties

46According to the Commission, any foreign undertaking lawfully providing private security services in its Member State of establishment but not having the number of employees required by Spanish legislation is required to increase its staff, even if its actual activities do not require it. That requirement has a dissuasive effect, particularly on small and medium-sized undertakings, with regard to the exercise of both the right to set up secondary establishments and the freedom to provide cross-border services. Articles 43 EC and 49 EC prohibit the application of that legislation to an undertaking established in another Member State without the Spanish authorities taking into account obligations which are, if not identical, at least comparable and have already been met by that undertaking in its country of establishment.

47The Spanish Government points to the undertaking given by the Spanish authorities generally to reduce by 50% the minimum requirements with regard to human, material and technical resources. The legislative requirements relating to the number of employees in the field of transport of explosives, however, are justified by considerations of security linked particularly to the Spanish situation.

Findings of the Court

48As a preliminary point, it should be noted that the provisions setting a minimum number of persons employed by security undertakings constitute an impediment to freedom of establishment and freedom to provide services in that they make the formation of secondary establishments or subsidiaries in Spain more onerous and dissuade foreign private security undertakings from offering their services on the Spanish market.

49With regard to the justification for that restriction, the mere fact that one Member State imposes less strict rules than another Member State does not necessarily mean that the stricter rules are disproportionate and incompatible with Community law (Case C‑384/93 Alpine Investments [1995] ECR I‑1141, paragraph 51; Case C‑3/95 Reisebüro Broede [1996] ECR I‑6511, paragraph 42; Mac Quen and Others, paragraphs 33 and 34; and Gräbner, paragraphs 46 and 47).

50With the exception of the transport of explosives, the Spanish Government has not demonstrated in a detailed manner that the minimum number of employees required by the legislation in force does not go beyond what is necessary in order to attain the objective pursued, namely ensuring the required level of security for transport of valuables and dangerous objects and installation and maintenance of surveillance and alarm systems. To that extent, the fourth complaint must therefore be considered well founded.

51With regard to the requirement for a minimum number of employees in undertakings active in the transport of explosives, referred to in point 2(b) of the annex to the Regulation on private security services, it must be held that it is justified. In the light of the security considerations put forward by the Spanish Government, that requirement appears appropriate for the attainment of that objective without going beyond what is necessary to attain it.

52The fourth complaint must therefore be rejected insofar as that Spanish legislation requires a minimum number of employees for undertakings active in the field of transport or distribution of explosives.

The fifth complaint, concerning the authorisation of staff

Arguments of the parties

53The Commission notes that, in Spain, the members of staff of a foreign private security undertaking must, in all cases, obtain specific administrative authorisation. However, there is no clause recognising an authorisation already issued in the Member State of establishment of the undertaking in question, even if the requirements in that regard are analogous there to those in force in Spain. That formality constitutes a significant obstacle to the freedom to provide services since a foreign undertaking cannot transfer to Spain staff authorised in its State of establishment.

54The Spanish Government explains that the national rules require private security staff to have undergone training which is the longest at the European level. Its requirements are therefore very different from those in force in the other Member States, such that in principle there cannot be any ‘analogous requirements’ permitting comparison of the legal rules.

Findings of the Court

55The Court has already held that the requirement that members of staff of a private security undertaking must obtain a fresh specific authorisation in the host Member State constitutes an unjustified restriction on that undertaking’s freedom to provide services within the meaning of Article 49 EC, in so far as it does not take account of the controls and verifications already carried out in the Member State of origin (Commission v Portugal, paragraph 66, and Case C‑189/03 Commission v Netherlands [2004] ECR I‑9289, paragraph 30).

56Similarly, with regard to freedom of establishment within the meaning of Article 43 EC, the above requirement may make the formation of a secondary establishment more difficult in the host Member State. It therefore constitutes an obstacle to the exercise by foreign private security undertakings of their freedom of establishment in Spain.

57With regard to the justification for that obstacle, the Court has held that, in the event of establishment in another Member State, an undertaking is in principle required to meet the same conditions as apply to nationals of the host Member State (Gebhard, paragraph 36). That being the case, general application of an administrative authorisation procedure to foreign security undertakings is not of itself contrary to Article 43 EC. However, as the Advocate General rightly observed in points 84 and 85 of her Opinion, the Spanish legislation does not provide for the possibility of taking into account the requirements already met by individual members of the staff of those undertakings in their Member State of origin. Such strictness goes beyond what is necessary to attain the legitimate objective of checking the abovementioned staff.

58The argument of the Spanish Government that its requirements are very different from those in force in other Member States, such that in principle there cannot be any ‘analogous requirements’ which permit comparison of the respective legal rules, is irrelevant.

59In those circumstances, the fifth complaint is also well founded.

According to the Spanish Government, neither of those directives has been infringed. Neither taking up the professions in the private security sector nor pursuit thereof is made subject to the possession of any ‘attestation of competence’. With regard to the training required by national legislation, it is undertaken only after the person concerned is recruited. What is more, and contrary to the Commission’s submissions, the authorisation required by the Law on private security services is limited in time. According to Article 10 of that law, where a member of staff of a private security undertaking ‘remains inactive for a period of time greater than two years, he must pass new tests in order to be able to carry out his work’. Consequently, there is no question of an ‘attestation of competence’ and the situation referred to in the complaint does not fall within the field of application of Directives 89/48 and 92/51.

Findings of the Court

62At the outset, it must be stated that the Commission alleges failure to fulfil obligations under both Directive 89/48 and Directive 92/51. However, it should be noted that those two directives have different fields of application. In particular, Directive 89/48 relates to higher-education diplomas awarded on completion of professional education and training of at least three years’ duration. However, it is not apparent from the application lodged by the Commission that the qualifications which, in Spain, must be held by members of staff of private security undertakings and private detectives require those persons to have completed higher-education training of at least three years’ duration. The Commission has therefore failed to show how and why the above professions fall within the field of application of Directive 89/48.

63With regard to Directive 92/51, the parties agree that the security staff of private security undertakings pursue in Spain a regulated profession within the meaning of Article 1(e) of that directive. However, in order to determine whether that directive is applicable to that activity, it is appropriate to examine whether, according to the Spanish legislation, the grant of an administrative authorisation to private security staff is subject to their holding an attestation of competence within the meaning of Article 1(c) of that directive. As the Advocate General rightly observed in points 96 to 100 of her Opinion, the Commission has not clearly indicated precisely which formal attestations of competence are required by the Spanish authorities in the field of private security. Accordingly, the complaint concerning Directive 92/51 is also unfounded insofar as it relates to that field.

64However, with regard to the profession of private detective, Article 54(5)(b) of the Regulation on private security services requires that the persons concerned hold a private detective diploma. That diploma is awarded on condition that a person has achieved a certain level of training, taken special courses and passed aptitude tests in accordance with the particular provisions of the regulation. It should be noted that, although that document is not a ‘diploma’ in the strict sense of the word, since it does not require a training period of at least a year, there is no doubt that it corresponds to the concept of ‘attestation of competence’ within the meaning of the second indent of Article 1(c) of Directive 92/51, insofar as it is awarded following an assessment of the personal qualities, aptitudes or knowledge which are essential for the applicant to have for the pursuit of the professions in question. The Spanish legislation therefore falls within the field of application of that directive.

65It must be held that, with regard to the profession of private detective, to date there is in Spain no system of mutual recognition for professional qualifications, contrary to the requirements of Directive 92/51.

66In those circumstances, the sixth complaint is well founded insofar as it relates to the recognition of attestations of professional competence for the pursuit of the activity of private detective.

Costs

67Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. In the present case, since the Commission applied for the Kingdom of Spain to be ordered to pay the costs and the Kingdom of Spain has been unsuccessful in respect of the first to third and the fifth complaints raised by the Commission, it must be ordered to pay the costs relating to those complaints.

68With regard to the complaint relating to nationality which was withdrawn by the Commission, each party applied for the other to be ordered to pay the costs. It is therefore appropriate to apply the first subparagraph of Article 69(5) of the Rules of Procedure and the Commission must be ordered to pay the costs, unless it appears justified to order the defendant to pay the costs, having regard to its conduct. As the Advocate General rightly observed in points 109 and 110 of her Opinion, since the Kingdom of Spain only belatedly amended the Regulation on private security services, its conduct led the Commission to bring its action. In those circumstances, it is appropriate to order that Member State to pay the costs relating to the complaint withdrawn.

69Having regard to the foregoing, and in light of the fact that, in respect of the fourth and sixth complaints, the Commission was only successful in part, it is appropriate to order the Kingdom of Spain to pay three quarters of the Commission’s costs and to decide that, for the rest, each party should bear its own costs.

On those grounds, the Court (First Chamber) hereby:

Declares that, by maintaining in force provisions of Law No 23/1992 of 30 July 1992 on private security services and Royal Decree No 2364/1994 of 9 December 1994 approving the Regulation on private security services which impose a series of requirements on foreign private security undertakings for the pursuit of their activities in Spain, namely the obligation:

to be constituted as legal persons;

to have a specific minimum share capital;

to pay a security to a Spanish body;

to employ a minimum number of workers, insofar as the undertaking in question carries out its activities in fields other than the transport and distribution of explosives;

generally, for members of their staff, to hold a special administrative authorisation issued by the Spanish authorities, and

by failing to adopt the provisions necessary to ensure recognition of attestations of professional competence for the pursuit of the activity of private detective, the Kingdom of Spain has failed to fulfil its obligations under, firstly, Articles 43 EC and 49 EC and, secondly, Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of professional education and training to supplement Council Directive 89/48/EEC of 21 December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years’ duration;

Dismisses the remainder of the action;

Orders the Kingdom of Spain to pay three quarters of the costs of the Commission of the European Communities and to bear its own costs;

Orders the Commission of the European Communities to bear one quarter of its own costs.

[Signatures]

*

Language of the case: Spanish.