Action brought on 4 November 2005 by the Commission of the European Communities against the Republic of Austria

(Case C-393/05)

(2006/C 10/26)

Language of the case: German

An action against the Republic of Austria was brought before the Court of Justice of the European Communities on 4 November 2005 by the Commission of the European Communities, represented by Enrico Traversa and Gerald Braun, acting as Agents, with an address for service in Luxembourg.

The applicant claims that the Court should:

Pleas in law and main arguments

The Austrian authorities require of every inspection body in the field of organic production of agricultural products having a registered office in and approved in another Member State that it must also maintain a registered office or place of business in Austria in order to be allowed to carry out business activities in Austria. This requirement is contrary to the principle of freedom to provide services as it renders impossible the supply of services in Austria by companies with an establishment in other Member States.

Under Article 49 freedom to provide services is to be understood as the right, without hindrance, from a base in one Member State, to provide individual services in another Member State without maintaining a permanent establishment there. According to the settled case-law of the Court, the guarantee of freedom to provide services requires not only the removal of all discrimination on the basis of nationality but also the abolition of all restrictions which lend themselves to prohibiting, hindering or rendering less attractive the activities of a services provider who has an establishment in another Member State and regularly renders similar services there. Article 49 therefore precludes the application of a national regulation or administrative practice which, without objective justification, restricts the opportunity for a services provider to actually make use of the freedom to provide services.

The reasons given by the Republic of Austria — the alleged exercise of official authority by the inspection bodies and the public interest — are not such as to justify that restriction on the freedom to provide services. Reference to the exercise of official authority as a justification for the present restriction on the freedom to provide services would only be lawful and acceptable if the activity in question were one which constitutes direct and specific participation in the exercise of official authority. However, the inspection bodies are not public authorities: they cannot compulsorily enforce sanctions, they issue no public documents and the legal relationship between an inspection body and a producer is governed purely by private law.

The fact that an inspection body has no place of business in Austria does not jeopardise the public interest as the real control according to Community law criteria takes place when the inspection body in question is approved and examined by the public authorities of the approving Member State. In the present case Community coordination measures and harmonisation provisions also exist, which ensure that the interest which the Republic of Austria is putting forward is also pursued according to the same standards in other Member States.