1

By its application, the European Commission requests the Court to find that, by adopting Articles 137(8), 138, third indent, 153 and 157(3) of the loi-programme (Programme Law) (I) of 27 December 2006 (Moniteur belge, 28 December 2006, p. 75178), in the version in force since 1 April 2007 (‘the provisions at issue’ and ‘the Programme Law’ respectively), namely by imposing a prior declaration requirement on self-employed service providers established in Member States other than the Kingdom of Belgium in respect of their activity in Belgium (‘the Limosa declaration), the Kingdom of Belgium has failed to fulfil its obligations under Article 56 TFEU.

2

By order of the President of the Court of 11 April 2011, the Kingdom of Denmark was granted leave to intervene in support of the form of order sought by the Kingdom of Belgium.

3

Chapter VIII of Title IV of the Programme Law, concerning social security affairs, governs the ‘prior declaration for posted employed and self-employed workers’. It was supplemented by the Royal Decree of 20 March 2007 made in implementation of that Chapter (Moniteur belge, 28 March 2007, p. 16975), as amended by the Royal Decree of 31 August 2007 (Moniteur belge, 13 September 2007, p. 48537) (‘the Royal Decree’).

4

The declaration requirement in question was instituted as part of a wider project, called ‘Limosa’, the acronym of ‘Landenoverschrijdend Informatiesysteem ten behoeve van Migratieonderzoek bij de Sociale Administratie’ (cross-border information system for the investigation of migration by the social security administration; ‘the Limosa system’). That project seeks to create an electronic one-stop shop for all formalities related to employment in Belgium. The information gathered via the Limosa declaration is thus intended to feed a central register and will be made accessible, for purposes of statistics and monitoring, in particular to the Belgian federal and regional inspection services, by means of a common IT platform.

5

Under Article 137 of the Programme Law:

‘For the purposes of this Chapter and its implementing decrees:

…

…’

6

Article 138 of the programme law at issue states:

‘This Chapter shall apply to:

…

…’

The King may … exclude from application of this Chapter, as necessary on the conditions which he shall determine and having regard to the duration of their activity in Belgium or the nature of their activities, categories of posted self-employed workers …’

7

Section 3 of that Chapter is entitled ‘prior declaration for posted self-employed workers’. Article 153 of the Programme Law, concerning the prior declaration, provides:

‘Prior to carrying out his professional activity within Belgian territory, a posted self-employed worker or his agent must make, to the Institut national d’assurances socials pour travailleurs indépendants (National Social Security Institute for Self-employed Workers), a declaration by electronic means, drawn up in accordance with Article 154 and with the detailed rules determined by the King.

…

Where the posted self-employed worker or his agent or the posted self-employed trainee or the institution at which pursues his studies or undergoes his vocational training is unable to make that declaration by electronic means, he may send it, by fax or by post, to the Institut national d’assurances socials pour travailleurs indépendants, in accordance with the detailed rules laid down by that institution.

As soon as the declaration referred to in the preceding subparagraphs has been made, the declarant shall receive an acknowledgement of receipt as provided for by Article 3 of the abovementioned Law of 24 February 2003. Where the declaration has been made by fax or by post, the Institut national d’assurances socials pour travailleurs indépendants shall issue an acknowledgement of receipt by fax or by post in accordance with a model which it shall establish.

The King shall determine the period within which a prior declaration may be cancelled.

Where the posting is extended beyond the duration originally envisaged, the declarant must make a new declaration before the end of the originally envisaged duration of the posting.’

8

Article 154 of the Programme Law provides that ‘[t]he King shall determine the groups of data which must appear in the prior declaration referred to in Article 153’.

9

Article 157 of the Programme Law, which forms part of Section 4 of Chapter VIII thereof, entitled ‘Supervision and penalties’, provides:

‘Without prejudice to Articles 269 to 274 of the Penal Code, the following shall be punished by imprisonment for eight days to one year and by a fine of EUR 500 to 2 500 or by one of those sentences only:

…

...’

10

Article 167 of the Programme Law provides that Chapter VIII thereof is to enter into force on 1 April 2007.

11

Article 2 of the Royal Decree states:

‘The following categories of posted self-employed workers shall be excluded from application of Chapter 8, Title IV, of the [Programme Law]:

12

Article 4(2) of the Royal Decree specifies the information which must be given in the ‘ordinary’ declaration. That provision states:

‘For posted self-employed workers, the declaration referred to in Article 154 of the [Programme Law] comprises the following categories of data:

13

Article 5 of the Royal Decree sets out the information which must be given in the ‘simplified’ declaration. It provides:

‘For posted employees or self-employed workers who regularly work on Belgian territory and that of one or more other countries, the declaration provided for in Articles 140 and 154 of the [Programme Law] must include the following data:

This declaration is valid for a maximum period of 12 months and may be extended each time at the end of that period for a maximum consecutive period of 12 months.

However, the provisions of this article do not apply to activities in the construction or temporary employment sectors.

For the purposes of this Decree, regularly working on Belgian territory and that of one or more other countries shall mean: an activity which is carried out in a structured manner in different countries including a substantial part in Belgium, for which the person concerned is present in Belgium for frequent short periods for professional reasons.’

14

By a letter of formal notice sent on 2 February 2009 to the Kingdom of Belgium, the Commission informed that Member State that the imposition of a prior declaration requirement on self-employed service providers with such broad scope as the Limosa declaration, provided for in Articles 137 to 167 of the Programme Law, appeared, in its view, to be incompatible with the freedom to provide services guaranteed in Article 49 EC.

15

By a letter of 26 March 2009, the Kingdom of Belgium disputed the Commission’s analysis. It submitted in particular that this system made it possible to combat the abusive use of self-employed status for workers who are, in reality, employees (‘bogus self-employed persons’) in order to circumvent the minimum standards applicable as regards the social protection of workers.

16

On 9 October 2009, the Commission sent a reasoned opinion to the Kingdom of Belgium, in which it stated that it disputed the compatibility of Articles 137(8), 138, third indent, 153 and 157(3) of the Programme Law concerning self-employed service providers established or resident in a Member State other than the Kingdom of Belgium.

17

Since the Commission was not convinced by the arguments submitted by the Kingdom of Belgium in its letter of 11 December 2009 in response to that reasoned opinion, the Commission decided to bring the present action.

18

The Commission claims, primarily, that the provisions at issue constitute a discriminatory restriction on the freedom of self-employed workers to provide services, the declaration requirement in question applying only to self-employed service providers established or resident in a Member State other than the Kingdom of Belgium.

19

On that basis, the Kingdom of Belgium could rely solely on the justifications listed in Article 52 TFEU, but is not doing so. Accordingly, the failure to fulfil obligations is established.

20

Subsequently, the Commission submits that, in any event, the provisions at issue are neither justified nor proportionate in the light of the objectives in the public interest referred to by the Kingdom of Belgium.

21

Firstly, even if the objective of the prevention of unfair competition, since it has a social security dimension, could constitute an objective in the public interest, the Kingdom of Belgium does not put forward any specific argument to support its assertion that the declaration requirement at issue helps to combat social dumping.

22

Secondly, that Member State does not provide any factor proving that there is a true risk of seriously undermining the financial balance of the social security system, since a mere allegation of the existence of social security fraud does not suffice in that regard. That objective cannot therefore be accepted.

23

Thirdly, the Commission argues that, although the objectives of combating fraud and the protection of workers could effectively be relied on in the present case, the measures to monitor compliance with requirements justified on grounds of public interest must not render the freedom to provide services illusory. That would, however, be so in the present case.

24

In that regard, the Commission challenges in particular the general and cross-sector scope of the Limosa declaration. That declaration requirement rests on a general presumption of fraud, which cannot be used to justify a measure such as the declaration requirement at issue.

25

The Commission also points out that there are already, at European Union level, a number of mechanisms in place to improve administrative cooperation between the Member States in order to combat undeclared work and legal proceedings which harm the freedom to provide services.

26

The Kingdom of Belgium submits, principally, that the present action must be dismissed as manifestly unfounded. It rests on a number of presumptions, suppositions or conjectures and is not based on objective facts concerning the specific situation with which the Belgian authorities are faced in exercising their power to monitor compliance with social security legislation. In any event, the Commission cannot establish that there is a failure to fulfil obligations on the basis on presumptions or suppositions. Accordingly, the Commission also fails to have regard to Article 38(1)(e) of the Rules of Procedure of the Court of Justice, pursuant to which the application must, where appropriate, contain any evidence offered.

27

In the alternative, the Kingdom of Belgium submits that the Commission has failed to show that the declaration requirement at issue is not necessary or, in any event, disproportionate in the light of the objectives put forward.

28

Firstly, with regard to the alleged existence of a discriminatory restriction on the freedom of self employed workers to provide services, the Commission has not established that the Limosa system is dissuasive, since, according to the Kingdom of Belgium, a self-employed service provider needs only 20 to 30 minutes per year for the formalities connected with that system. Moreover, that system is free and enables an official document to be obtained immediately, without any constraint similar to obtaining a prior authorisation. What is more, the exceptions arranged for certain sectors show that the Belgian authorities seek to be flexible.

29

Furthermore, even if the Limosa declaration constitutes an obstacle to freedom to provide services, it is not discriminatory, in the submission of the Kingdom of Belgium. The monitoring of self-employed service providers who are not established in Belgium cannot be likened to that of those established in that Member State since those two categories of self-employed service providers have different objectives.

30

As regards, secondly, the justification of the declaration requirement at issue and its proportionality, the Kingdom of Belgium submits, first, that the Limosa system is justified in part by the objective of preventing unfair competition, which includes a social security dimension connected with the protection of workers and consumers and the prevention of social dumping. It contributes to the protection of service providers who comply with the rules from those who do not and obtain an unjustified competitive advantage.

31

Next, the Kingdom of Belgium argues that it follows from the case-law that, in principle, a system of prior declaration intended to gather data necessary for monitoring and the detection of fraud, in this case social security fraud, particularly undeclared work and bogus self-employed persons, does not go beyond what is necessary to prevent abuse to which the implementation of the freedom to provide services may give rise. In response to the allegation regarding the general presumption of fraud, the Kingdom of Belgium points out that, in order to detect and, if necessary, penalise social security fraud, it is necessary for that system to apply a priori to all service providers.

32

Thirdly, the objective of protection of workers, including combating trafficking in human beings and particularly exploitative working conditions and the need to ensure the well-being of self-employed workers must be distinguished from that of combating fraud. In that regard, the Kingdom of Belgium points out, in particular, that the new context following the Treaty of Lisbon must be taken into consideration and understood as strengthening the legitimacy of that objective.

33

The Kingdom of Denmark states that it is intervening in support of the submissions made by the Kingdom of Belgium because Danish law also contains provisions requiring a prior declaration to be made by foreign service providers, applicable to self-employed workers. That Member State submits, in essence, arguments comparable to those of the Kingdom of Belgium. It adds, in particular, that the monitoring of proper working conditions and compliance with social security norms seeks to avoid the risk of accidents at work or occupational diseases, that the fact of whether declaration requirements are discriminatory cannot vary according to whether or not the undertaking which supplies the service has employees and that there is no system in force for the exchange of information between Member States offering the same possibilities for achieving the objectives pursued, pointing out, in that regard, the importance, for the purposes of checks, of knowing where the service is to be provided.

34

At the outset, it must be borne in mind that, in proceedings under Article 258 TFEU for failure to fulfil obligations, it is for the Commission, which is responsible for proving the existence of the alleged infringement, to provide the Court with the information necessary for it to determine whether that infringement is made out, and the Commission may not rely on any presumption for that purpose (see, in particular, Case 96/81 Commission v Kingdom of the Netherlands [1982] ECR 1791, paragraph 6, and Case C-458/08 Commission v Portugal [2010] ECR I-11599, paragraph 54).

35

Although the Court has indeed already held that those requirements for evidence are more strict where the Commission’s complaints relate to an action concerning the implementation of a national provision (Case C-287/03 Commission v Belgium [2005] ECR I-3761, paragraph 28, and judgment of 22 January 2009 in Case C-150/07 Commission v Portugal, paragraph 66), the fact remains none the less that, by the present action for failure to fulfil obligations, the Commission disputes the conformity with Article 56 TFEU not of an administrative practice but of legislative provisions the effective existence of which are not in any way disputed by the Kingdom of Belgium. It does not appear, therefore, that the present action rests on mere presumptions.

36

Consequently, the main allegation of the Kingdom of Belgium that the present action should be dismissed as manifestly unfounded, since the Commission has not satisfied the burden of proof upon it, or as inadmissible since it breaches the requirements of Article 38(1)(e) of the Rules of Procedure relating to evidence, must be rejected.

37

In order to rule on the merits of the Commission’s action, it is necessary, firstly, to ascertain whether the provisions at issue constitute an obstacle to the freedom to supply services, it having been specified that that action concerned only the prior declaration required of self-employed service providers lawfully established in a Member State other than the Kingdom of Belgium and wishing to supply services in Belgium on a temporary basis, excluding cases of posting of workers carried out in accordance with Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services (OJ 1996 L 18, p. 1).

38

It is settled case-law that Article 56 TFEU requires not only the elimination of all discrimination against providers of services on grounds of nationality or the fact that they are established in a Member State other than that where the services are to be provided, but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less advantageous the activities of a provider of services established in another Member State where he lawfully provides similar services (Joined Cases C-369/96 and C-376/96 Arblade and Others [1999] ECR I-8453, paragraph 33, and judgment of 21 July 2011 in Case C-518/09 Commission v Portugal, paragraph 63 and the case-law cited).

39

In the present case, it must be noted that the declaration requirement at issue means, for the persons referred to in Articles 137(8) and 138, third indent, of the Programme Law who reside or are established in a Member State other than the Kingdom of Belgium to register by creating an account before, in principle and in accordance with Article 153 of the Programme Law, then providing the Belgian authorities, before each supply of services on Belgian territory, with a certain amount of information such as the date, duration and place of the service which will be supplied, its nature and the identity of the legal or natural person receiving it. That information must be provided on a form which must preferably be completed online or, if that is impossible, which must be sent to the competent service by post or by fax. Failure to comply with those formalities is subject to criminal penalties laid down in Article 157(3) of the Programme Law.

40

The formalities implied by the declaration requirement at issue are thus such as to impede the supply of services on the territory of the kingdom of Belgium by self-employed service providers established in another Member State. That obligation thus constitutes an obstacle to the freedom to provide services.

41

The same applies in the situation where a ‘simplified’ declaration is required. The self-employed service provider concerned is also required, after having registered by creating an account, to inform the Belgian authorities inter alia of the date, duration of his posting to Belgium and the type of service which he will supply. In addition, failure to comply with those requirements is also subject to criminal penalties laid down in Article 157(3) of the Programme Law.

42

In those circumstances, contrary to the submissions of the Kingdom of Belgium, it cannot be accepted that the declaration requirement produced too indirect or too uncertain an effect on the freedom to provide services to be classified as an obstacle.

43

Accordingly, it is appropriate, secondly, to ascertain whether the declaration requirement at issue could be justified, taking into consideration the fact that matters relating to the cross-border supply of services by self-employed workers, which is the subject-matter of the present action, have not, to date, been harmonised at European Union level.

44

Where national legislation falling within an area which has not been harmonised at European Union level is applicable without distinction to all persons and undertakings operating in the territory of the Member State concerned, it may, notwithstanding its restrictive effect on the freedom to provide services, be justified where it meets an overriding requirement in the public interest and that interest is not already safeguarded by the rules to which the service provider is subject in the Member State in which he is established and in so far as it is appropriate for securing the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain it (Arblade and Others, paragraphs 34 and 35; Case C-224/04 Commission v Germany [2006] ECR I-885, paragraph 31; and Case C-219/08 Commission v Belgium [2009] ECR I-9213, paragraph 14).

45

In that regard, it is appropriate to note that the objectives relied on in the present case by the Kingdom of Belgium can be taken into consideration as overriding requirements in the public interest which are capable of justifying a restriction on the freedom to provide services. On that point, it is sufficient to state that the objective of combating fraud, particularly social security fraud, and preventing abuse, in particular detecting ‘bogus self-employed persons’ and combating undeclared work, can form part not only of the objective of the financial balance of social security systems, but also of the objectives of preventing unfair competition and social dumping and protecting workers, including self-employed service providers.

46

However, the Commission argues that the Kingdom of Belgium cannot rely on those justifications in the present case, since the declaration requirement at issue is discriminatory.

47

In that regard, it is sufficient to state that, as argued by the Kingdom of Belgium and the Kingdom of Denmark, in the light of the necessary checks and having regard to the absence of harmonisation of national laws in the field of employment and labour, in order to ensure the protection of the overriding requirements in the public interest relied on by the Kingdom of Belgium, self-employed service providers established in a Member State other than the Kingdom of Belgium who travel on a temporary basis to that Member State to supply services there are in a position objectively different from that of self-employed service providers established on Belgian territory who supply services there on a permanent basis.

48

The Court has previously held that, as regards the ability of the authorities of the Member State in whose territory services are supplied to check that the rules intended to ensure that the rights conferred by national law on workers in its territory are followed, there are, clearly, objective differences between businesses established in the Member State where the services are supplied and those established in other Member States posting workers to the first Member State to supply services there (see, to that effect, Joined Cases C-49/98, C-50/98, C-52/98 to C-54/98 and C-68/98 to C-71/98 Finalarte and Others [2001] ECR I-7831, paragraphs 63, 64 and 73). The fact that self-employed service providers established in Belgium are not subject to strictly equivalent requirements, in particular as regards the information to be provided, to those following from the declaration requirement at issue for self-employed service providers established in another Member State may thus be attributed to objective differences between those two categories of self-employed service providers.

49

Accordingly, it must be examined whether the provisions at issue are proportionate, it being understood that measures which restrict the freedom to provide services may be justified by the objective which they pursue only if they are suitable for securing the attainment of that objective and do not go beyond what is necessary in order to attain it (see, to that effect, Case C-255/04 Commission v France [2006] ECR I-5251, paragraph 44 and the case-law cited).

50

In that regard, it must be pointed out from the outset that the arrangements for administrative co-operation referred to by the Commission cannot be decisive as regards that examination. Firstly, Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36) has only limited scope.

51

Secondly, although Decision 2004/387/EC of the European Parliament and of the Council of 21 April 2004 on the interoperable delivery of pan-European eGovernment services to public administrations, businesses and citizens (IDABC) (OJ 2004 L 144, p. 65, and corrigendum OJ 2004 L 181, p. 25) has made it possible since 28 December 2009 to implement the obligations of administrative cooperation which follow from Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22), and although Article 4 of Directive 96/71 also lays down the principle of administrative cooperation between those administrations, it is not established that those mechanisms would enable the Kingdom of Belgium to hold the information which it regards as necessary in order to achieve the objectives of public interest on which it relies.

52

Thirdly, it is clear that the electronic exchange of social security information project (EESSI project), provided for in Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1, and corrigenda OJ 2004 L 200, p. 1, and JO 2007 L 204, p. 30), was not yet in place at the end of the period laid down in the reasoned opinion.

53

That being so, it must be borne in mind that a general presumption of fraud is not sufficient to justify a measure which compromises the objectives of the FEU Treaty (see, to that effect, Commission v France, paragraph 52, and Case C-433/04 Commission v Belgium [2006] ECR I-10653, paragraph 35).

54

In the present case, even if it were accepted that self-employed service providers established in a Member State other than the Kingdom of Belgium could be subject, in the latter State, to tax and social security obligations, it is established that the application of the declaration requirement at issue is not restricted to cases where there is cause to ascertain that those tax and social security obligations are met.

55

Furthermore, the declaration requirement at issue includes the obligation to provide the Belgian authorities with very detailed information, particularly in the ‘ordinary’ declaration. Although it may be feasible for a Member State to ask self-employed service providers established in another Member State, travelling to Belgium to supply a service there, to provide it with certain specific information, that is on condition that the provision of that information be justified in the light of the objectives pursued. However, the Kingdom of Belgium fails to give a sufficiently convincing justification as to how the provision of that very detailed information is necessary in order to achieve the objectives of public interest on which it relies and how the obligation to give that information in advance does not go beyond what is necessary to achieve those objectives, despite the fact that it should have done so (see, to that effect, Case C-319/06 Commission v Luxembourg [2008] ECR I-4323, paragraph 51 and the case-law cited).

56

In those circumstances, the provisions at issue must be regarded as disproportionate since they go beyond what is necessary to achieve the objectives of public interest relied upon by the Kingdom of Belgium. Consequently, the declaration requirement at issue cannot be regarded as compatible with Article 56 TFEU.

57

It follows that the Commission’s action should be upheld and that it should be declared that, by adopting the provisions at issue, namely by imposing a prior declaration requirement on self-employed service providers established in Member States other than the Kingdom of Belgium in respect of their activity in Belgium, the Kingdom of Belgium has failed to fulfil its obligations under Article 56 TFEU.

58

Under Article 138(1) 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. Since the Commission has applied for costs to be awarded against the Kingdom of Belgium and the latter has been unsuccessful, the Kingdom of Belgium must be ordered to pay the costs. The Kingdom of Denmark, which intervened in support of the form of order sought by the Kingdom of Belgium, must bear its own costs, in accordance with Article 140(1) of the Rules of Procedure.

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