Opinion of the Advocate-General
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My Lords,
1 . In this case the Court is asked by the Belgian Council of State ( Raad van State ) to rule on the direct effect of Article 75(1)(a ) and ( b ) of the EEC Treaty in so far as it requires the Council to implement freedom to provide services in the transport sector . The issue is one of considerable importance, as is apparent from the vital economic importance of the transport sector and from the prominent place accorded by the Treaty both to the freedom to provide services and to the introduction of a common transport policy .
2 . The case arises in the following way . The plaintiff in the national proceedings, Lambregts Transportbedrijf (" Lambregts "), a company having its main establishment in the Netherlands, carried out transport operations in and from Belgium and held a number of Belgian authorizations for domestic and international transport : 10 general authorizations for domestic transport, 11 general authorizations for international transport and a number of authorizations for frontier-zone and short-distance transport . General authorizations for domestic and international transport are issued by a Member State to a transport undertaking in respect of particular vehicles registered in the name of the undertaking .
3 . One of the conditions under Belgian law for holding such authorizations for operations in and from Belgium is that the operator should have a place of business (" siège d' opération/zetel van het bedrijf ") in Belgium; under Belgian law that place of business need not be the sole establishment of the relevant undertaking but it must be a genuine "centre of operations ". For that purpose Lambregts had given an address at Baarle-Hertog in Belgium . In late August and early September 1981, the Belgian transport authorities, having become suspicious about the genuine nature of this address as a "centre of operations", paid unannounced visits to it and discovered it to be a locked-up caravan with no outward sign of identification and that all post was redirected to an address in Breda in the Netherlands . As a result of these visits the Belgian transport authorities wrote to Lambregts stating that they considered its authorizations should be withdrawn since it possessed no genuine centre of operations in Belgium . Despite Lambregts' protests, the authorizations were withdrawn on 24 February 1982 .
4 . Lambregts contested the withdrawal in an application made on 4 March 1982 to the Council of State, and obtained interim suspension of the withdrawal from the Court of Appeal of Brussels pending determination of the case by the Council of State . The Council of State, while rejecting some of Lambregts' submissions, considered that, as a court of last instance, it was obliged by the last paragraph of Article 177 of the EEC Treaty to refer the question of the direct effect of Article 75(1)(a ) and ( b ) of the EEC Treaty in respect of freedom to provide services in the field of transport, in the light of the Court' s judgment in Case 13/83 Parliament v Council (( 1985 )) ECR 1513 . It therefore submitted that question, and a consequential question, by a judgment of 1 December 1987 which was registered at the Court on 8 January 1988 . The questions are worded as follows :
"1 . Does Article 75(1)(a ) and ( b ) of the EEC Treaty, at least in so far as it requires the Council to implement freedom to provide services in the field of transport, create individual rights on which nationals of the Member States may rely in proceedings before national courts with regard to events which took place on 24 February 1982?
2 . If the answer to the first question is in the affirmative : under those provisions, can the retention of licences for national or international transport issued by the authorities of a Member State to a transport undertaking established in another Member State be made subject to the condition that the undertaking concerned have a 'centre of activities' in the first State, or in other words that the undertaking regularly enter into transactions in that State which form part of its business activities and that it be represented there by an agent who is authorised to deal with third parties on its behalf?"
5 . Freedom to provide services generally is governed by Articles 59 to 66 of the Treaty . Article 59 requires the removal of any discrimination against the person providing services based on his nationality or the fact that he is established in a Member State other than that where the services are to be provided; and those requirements became directly and unconditionally effective on the expiry of the transitional period provided for by Article 8 of the Treaty; see Case 279/80 Webb (( 1981 )) ECR 3305 . However, Article 61(1 ) states that "Freedom to provide services in the field of transport shall be governed by the provisions of the Title relating to transport ". Title IV "Transport" ( Articles 74 to 84 ), like Title III ( which contains inter alia Articles 59 to 66 on "Services "), appears in Part Two of the Treaty, "Foundations of the Community", and Article 74, the first Article in that Title, reads :
"The objectives of this Treaty shall, in matters governed by this Title, be pursued by Member States within the framework of a common transport policy ".
6 . Article 75 of the EEC Treaty provides as follows :
" ( 1 ) For the purpose of implementing Article 74, and taking into account the distinctive features of transport, the Council shall, acting unanimously until the end of the second stage and by a qualified majority thereafter, lay down, on a proposal from the Commission and after consulting the Economic and Social Committee and the European Parliament :
( a ) common rules applicable to international transport to or from the territory of a Member State or passing across the territory of one or more Member States;
( b ) the conditions under which non-resident carriers may operate transport services within a Member State;
( c ) any other appropriate provisions .
( 2 ) The provisions referred to in ( a ) and ( b ) of paragraph 1 shall be laid down during the transitional period .
( 3 ) ...".
7 . Before the establishment of the EEC the Member States had bilateral agreements with each other providing for the reciprocal admission of predetermined numbers of commercial vehicles to carry out transport services in and over each other' s territories . It was envisaged that the liberalization of road transport services would be progressively achieved by the replacement of those bilateral agreements and national quotas with the adoption of a Community authorization system whereby vehicles from Member States would be granted an authorization to operate transport services on all routes between all Member States within the framework of a Community quota to be divided among all Member States . Progress in achieving such liberalization was lamentably slow, and the Commission, in its written observations, cited only two Community measures in this field, Council Directive 65/269/EEC of 13 May 1965 ( Official Journal English Special Edition 1965-1966, p . 64 ) and Council Regulation ( EEC ) No 3164/76 of 16 December 1976 on the Community quota for the carriage of goods by road between Member States ( Official Journal 1976 L 357, p . 1 ). While other Community measures have been cited, in particular in the very full observations of the Belgian Government, the fact remains that freedom to provide services in the transport sector was, at the date of the reference in this case, very far from being realized .
8 . Council Directive 65/269/EEC provided for standard types of form authorizing intra-Community carriage of goods by road on a vehicle-by-vehicle basis, either for single journeys or over a period of time . Article 1 of the Directive provided that the Member States should take the necessary measures to ensure "that from 1 January 1966, authorizations required for the international carriage of goods by road to or from the territory of a Member State or passing across the territory of one or more Member States shall be issued by the competent authorities of the Member State in which the vehicle to be used for such carriage is registered ". The State where the vehicle is registered is in general the State where the carrier using the vehicles is established .
9 . Council Regulation ( EEC ) No 3164/76 introduced a Community quota and made provision for Community authorizations . As the Commission points out in its written observations, Article 2(6 ) of the Regulation provides that Community authorizations are to be issued by the competent authorities of the Member States, in respect of carriers established in their territory . By virtue of Article 2(1 ) of the Regulation, Community authorizations entitle their holders to effect the carriage of goods by road between Member States, with the exception of internal transport operations within the territory of a Member State . It will be noted that both the Directive and the Regulation are based on the establishment of the carrier in the Member State granting the authorization .
10 . Following the judgment in Case 13/83 Parliament v Council, the Commission produced a comprehensive proposal for a Council Regulation on access to the market for the carriage of goods by road between Member States ( Official Journal 1987 C 65, p . 4 ) providing for substantial increases in the Community quota system until 1992, and thereafter a complete abolition of quotas ( both Community and bilateral ) and the issue of Community authorizations, provided that certain standards are met, which would permit carriers to have access to the transport markets without quantitative restrictions . Such authorizations would be issued by the authorities of the Member State where the carrier is established . Acting on that proposal, the Council adopted Regulation ( EEC ) No 1841/88 of 21 June 1988 amending Regulation No 3164/76 ( Official Journal 1988 L 163, p . 1 ), which refers in its preamble to the judgment in Parliament v Council and to the Council' s agreement to the creation of a single market in the international carriage of goods by road without quantitative restrictions by 1992 at the latest . It is necessary to refer only to Article 1(4 ) of the Regulation, which adds the following articles to Regulation No 3164/76 :
"Article 4a
1 . Community quotas, bilateral quotas between Member States and quotas for transit traffic to and from non-member countries shall be abolished on 1 January 1993 for Community hauliers .
2 . As from the date referred to in paragraph 1, access to the market for transfrontier carriage of goods by road within the Community will be governed by a system of Community licences issued on the basis of qualitative criteria .
Article 4b
The Council, acting on the basis of Commission proposals, shall no later than 30 June 1991 adopt pursuant to the provisions laid down in Article 75 of the Treaty, necessary measures to implement Article 4a .
Article 4c
The volume of those bilateral quotas which remain applicable during the transitional period must, from 1 July 1988 until their scheduled abolition, be adapted to the requirements of trade and traffic, including transit ."
11 . The starting-point for consideration of the first question referred by the Council of State is the judgment of the Court in Parliament v Council, which examined the scope and effects of the obligations of the Council under Article 75 of the Treaty, and in particular the role of freedom to provide services in the transport sector . The Court found ( paragraph 46 of the judgment ) that there was not yet in existence a coherent set of rules which might be regarded as a common transport policy for the purposes of Articles 74 and 75 of the Treaty . As regards, in particular, the freedom to provide services, the Court held that the obligations imposed on the Council by Article 75(1)(a ) and ( b ) included the introduction of the freedom to provide services in relation to transport . The Council was required, pursuant to Article 75(1)(a ) and ( b ), to extend freedom to provide services to the transport sector before the expiry of the transitional period, as regards international transport to or from the territory of a Member State or across the territory of one or more Member States and, within the framework of freedom to provide services within the transport sector, to lay down, pursuant to Article 75(1)(b ) and ( 2 ), the conditions under which non-resident carriers may operate transport services within a Member State ( paragraph 67 of the judgment ). The Court accordingly declared that in breach of the Treaty the Council had failed to ensure freedom to provide services in the sphere of international transport and to lay down the conditions under which non-resident carriers might operate transport services in a Member State .
12 . However, in the same judgment, at paragraphs 62 and 63, the Court expressly rejected the argument to the effect that on the expiry of the transitional period under Article 8 of the Treaty the provisions of Articles 59 and 60 were of direct application in the transport sector . The Court pointed out that application of the principles governing freedom to provide services must be achieved, according to the Treaty, by introducing a common transport policy and, more particularly, by laying down common rules applicable to international transport and the conditions under which non-resident carriers may operate transport services, the rules and conditions of which are referred to in Article 75(1)(a ) and ( b ) and necessarily affect freedom to provide services .
13 . The Council of State recognizes that, in the light of that judgment, the Treaty provisions on services could not be relied upon before the national courts in the transport sector . The Council of State considers, however, that it is possible that Article 75(1)(a ) and ( b ) could be relied upon, in so far as it requires the Council to implement freedom to provide services in the transport sector, because the Court accepted that those provisions included a specific obligation to extend freedom to provide services to the transport sector, ruled that that obligation was sufficiently clearly defined to enable the Court to find the Council in breach of the Treaty to that extent, and held that the obligation ought to have been discharged before the expiry of the transitional period .
14 . The reasoning of the Council of State has considerable force, since the judgment of the Court does indeed show that the provisions of the Transport Title do more than merely confer a general legislative power on the Council but impose specific and precise obligations upon it . In my view, however, it cannot be accepted that the failure of the Council to carry out its obligations under Article 75(1)(a ) and ( b ) had the result that those provisions, in so far as they required the Council to implement freedom to provide services in the field of transport, created individual rights on which nationals of the Member States might rely in proceedings before national courts with regard to events which took place on or before 24 February 1982, the material date in the present case . In the first place, it must be borne in mind that the precise scope of those obligations could be ascertained only by reference to the Treaty provisions on services, and the Court reached its conclusion in that respect by referring ( at paragraph 64 ) to Articles 59 and 60, as interpreted in Case 279/80 Webb, already cited, and referring also ( at paragraph 65 ) to the combined effect of Articles 59, 60, 61 and 75(1)(a ) and ( b ). To hold that Article 75(1)(a ) and ( b ), taken alone, had direct effect would be tantamount to giving direct effect to Article 59 in relation to transport services, notwithstanding the express reservation contained in Article 61(1 ) and the express ruling in the judgment that Article 59 did not have direct effect in the transport sector on the expiry of the transitional period . Moreover the Court specifically held in the same section of its judgment that application of the principles of freedom to provide services must be achieved within the context of the common transport policy and expressly reserved to the Council ( at paragraph 71 ) the liberty to adopt, in addition to the requisite measures of liberalization, such accompanying measures as it considers necessary and to do so in the order it holds to be appropriate . On this analysis of the judgment in Parliament v Council, to hold that Article 75(1)(a ) and ( b ), taken alone, had direct effect on the expiry of the transitional period would be inconsistent with the terms of that judgment .
15 . Moreover the Council of State' s first question refers to the legal situation on 24 February 1982, that is more than three years prior to the judgment in Parliament v Council . While the question might arise whether the continuing failure of the Council to act after that judgment might lead to a re-consideration of the possible direct effect of the Treaty provisions - a question to which I return below - they cannot in my view have had direct effect, in the light of the Court' s judgment, on the date in issue in these proceedings .
16 . It follows in my opinion from that judgment that, in relation to transport, neither the Treaty provisions on services, nor the Treaty provisions on transport, nor those provisions in combination, can be relied on with regard to events which took place on 24 February 1982 as creating rights on which nationals of Member States can rely in proceedings before national courts, and that accordingly the first question referred must be answered in the negative .
17 . It follows also that the second question, which is referred only in the event that the first question is answered in the affirmative, does not require an answer .
18 . Before concluding, I should mention a point which has been emphasized in particular by the Netherlands Government . In Parliament v Council, the Court found that it was unnecessary to consider what the consequence would be if, after judgment against it, the Council still failed to act . That issue had been raised in the proceedings, but the Court considered that the problem was hypothetical, and would arise only if the Council failed to comply with the judgment within a reasonable period . The Netherlands Government considers that the effect of the judgment in that respect is to give the Council a time limit to fulfil its obligations to implement freedom to provide services in relation to transport, and it contends that, on the expiry of that time-limit, the provisions of Article 75(1)(a ) and ( b ), combined with Articles 59, 60 and 61 of the Treaty, must be recognized as having direct effect because the scope and nature of the freedom to provide services in the transport sector have been accepted by the Court as being defined with sufficient precision . The Netherlands Government considers that it is desirable, in the interests of legal certainty, that the Court should clarify in this case the point at which the reasonable period referred to in its earlier judgment expires .
19 . In response to questions put at the oral hearing, the Government did not advance any criteria for determining at what stage the reasonable period would expire, but the agent of the Commission pointed out that, where the Commission had made a proposal to the Council, the Council must be given a reasonable period to discuss that proposal . He also raised the question, referring to Regulation No 1841/88, whether the Council might comply with the requirement of acting within a reasonable time by introducing a transitional system, accompanied by a final date at which liberalization of services would be achieved .
20 . I agree with the view of the Netherlands Government to the extent that, in my opinion, the judgment in Parliament v Council can properly be regarded as leaving open the possibility that, in the event of a continuing failure by the Council to act after the expiry of a reasonable period from the date of that judgment, the Treaty provisions might be regarded as, within certain limits, creating rights on which individuals would be able to rely in the national courts .
21 . But that issue does not arise in the present case, since the situation which the national court has stated that it has to consider is the situation on 24 February 1982, whereas the judgment in Parliament v Council was given some three years later, on 22 May 1985 . Consequently, as regards the present case, the issue remains a hypothetical one, and it would not in my view be appropriate for the Court to rule on it . If the question did fall to be decided, it would be necessary in my view to consider whether the Council had acted with sufficient expedition to liberalize transport services, inter alia by taking the necessary measures under Article 4a(2 ) of Regulation No 3164/76 to implement Article 4a(1 ) of that Regulation, to liberalize also transport services in respect of the conditions under which non-resident carriers may operate transport services within a Member State, and, if the question were to arise in relation to forms of transport other than road transport, whether the Council had acted with sufficient expedition to ensure freedom to provide services in relation to those other forms of transport . It would also be necessary to consider whether the measures of liberalization adopted by the Council were adequate to realise fully the principle of freedom to provide services, subject only to the necessary requirements of the transport sector taken in the context of the common transport policy . As to the expiry of the reasonable period referred to in the judgment in Parliament v Council, it is plainly likely in my view, now that more than four years have passed since the date of that judgment ( and nearly 20 years since the end of the transitional period ), that the point will very soon be reached when that period will expire, if indeed it has not already expired .
22 . Accordingly, I conclude that the questions from the Council of State should be answered as follows :
Article 75(1)(a ) and ( b ) of the EEC Treaty does not create individual rights on which nationals of the Member States may rely in proceedings before national courts with regard to events which took place on 24 February 1982 .
(*) Original language : English .
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