OPINION OF ADVOCATE GENERAL

SZPUNAR

delivered on 16 July 2015 (1)

Joined Cases C‑340/14 and C‑341/14

R.L. Trijber (C‑340/14)

(Request for a preliminary ruling from the Raad van State (Netherlands))

(Directive 2006/123/EC – Article 2(2)(d) – Concept of services in the field of transport – Application of Chapter III of Directive 2006/123 in purely internal situations – Article 11(1)(b) – Duration of authorisation)

J. Harmsen (C‑341/14)

(Request for a preliminary ruling from the Raad van State (Netherlands))

(Directive 2006/123/EC – Application of Chapter III of Directive 2006/123 in purely internal situations – Article 10(2)(c) – Conditions governing the granting of authorisations – Action against trafficking in human beings)

1.        The present two cases, which relate to proceedings between Mr Trijber and the College van burgemeester en wethouders van Amsterdam (Board of Mayor and Aldermen of Amsterdam, hereafter ‘the College’) and Mr Harmsen and the Burgemeester van Amsterdam (Mayor of Amsterdam), raise a number of fundamental questions relating to the scope of application as well as substantive requirements in the chapter on establishment of Directive 2006/123/EC. (2)

I –  Legal framework

A –    European Union law

2.        Article 2 of Directive 2006/123 is headed ‘Scope’ and reads as follows:

‘1.      This Directive shall apply to services supplied by providers established in a Member State.

2.      This Directive shall not apply to the following activities:

…

(d)      services in the field of transport, including port services, falling within the scope of Title V of the Treaty

…’

3.        According to Article 4 of Directive 2006/123, entitled ‘Definitions’,

‘For the purposes of this Directive, the following definitions shall apply:

…

(5)      “establishment” means the actual pursuit of an economic activity, as referred to in Article 43 of the Treaty, by the provider for an indefinite period and through a stable infrastructure from where the business of providing services is actually carried out;

…

(8)      “overriding reasons relating to the public interest” means reasons recognised as such in the case-law of the Court of Justice, including the following grounds: public policy; public security; public safety; public health; preserving the financial equilibrium of the social security system; the protection of consumers, recipients of services and workers; fairness of trade transactions; combating fraud; the protection of the environment and the urban environment; the health of animals; intellectual property; the conservation of the national historic and artistic heritage; social policy objectives and cultural policy objectives;

…’

4.        Article 10 of the directive, headed ‘[Conditions] for the granting of authorisation’ is worded as follows:

‘1.      Authorisation schemes shall be based on criteria which preclude the competent authorities from exercising their power of assessment in an arbitrary manner.

2.      The criteria referred to in paragraph 1 shall be:

(a)      non-discriminatory;

(b)      justified by an overriding reason relating to the public interest;

(c)      proportionate to that public interest objective;

(d)      clear and unambiguous;

(e)      objective;

(f)      made public in advance;

(g)      transparent and accessible.

…’

5.        Article 11 of Directive 2006/123 is headed ‘Duration of authorisation’ and reads as follows:

‘1.      An authorisation granted to a provider shall not be for a limited period, except where:

…

(b)      the number of available authorisations is limited by an overriding reason relating to the public interest;

…’

B –    Dutch law

1.      Services

6.        Under Article 33(1)(b) and (c) of the Dienstenwet (Netherlands Law on Services), a law that partly transposes Directive 2006/123, a competent body may not limit the period of validity of an authorisation which it may grant for an unlimited period, except where the number of available authorisations is limited by an overriding reason relating to the public interest or a limited authorisation period can be justified by an overriding reason relating to the public interest.

2.      Inland waterways

7.        Under Article 2.4.5(1) of the Verordening op het binnenwater (Regulation on Inland Waterways) 2010, adopted by the Raad van de gemeente Amsterdam (City Council of the Municipality of Amsterdam), it is prohibited to transport goods or passengers by means of a commercial vessel without, or contrary to, an authorisation from the College. Under Article 2.4.5(5) of the same regulation, having regard to the interests relevant to limitations on the number of passenger vessels, the College may refuse the authorisation. Under Article 2.3.1(2) of that regulation, mooring authorisation may be denied in the interests of general welfare, planning, safety, the environment and smooth and safe passage.

8.        Under Article 2.1(1) of the policy laid down in the Regeling passagiersvervoer te water Amsterdam (Regulation on Passenger Transportation by Water in Amsterdam), as it applied at the time of the contested decision in the main proceedings, authorisations are granted by means of allocation rounds. Under Article 2.1(3) of that policy, applications submitted at a time when there is no allocation round in force are to be rejected on the basis of a volume policy. Under Article 2.1(4) of the same policy, the College, in derogation from the first paragraph, may grant an authorisation outside of an allocation round for a specific initiative with environmental objectives or for an innovative transport concept.

3.      Prostitution

9.        Under Article 3.27(1) of the Algemene plaatselijke verordening 2008 van Amsterdam (2008 General Local Regulation of Amsterdam), it is prohibited to operate a prostitution business without authorisation of the Mayor. Under Article 3.30(2)(b), the Mayor may refuse authorisation if, in his opinion, it is not sufficiently likely that the operator or the manager will comply with the obligations referred to in Article 3.32.

10.      Under Article 3.32(1), the operator and the manager of a prostitution business must ensure that in that business: (a) no offences within the meaning of Article 273f of the Wetboek van Strafrecht (Criminal Code) take place in respect of prostitutes; (b) only prostitutes are employed who are in possession of a valid residence permit or for whom the operator has an authorisation within the terms of Article 3 of the Wet arbeid vreemdelingen (Law on the employment of foreign nationals) and (c) the customers cannot become the victims of criminal offences such as robbery, theft, fraud or similar offences. Under Article 3.32(3), the operator of a window prostitution business must ensure that the prostitutes working in his prostitution business do not constitute a serious nuisance to the neighbourhood, do not breach the provisions in Article 2.12(4) and do not disturb public order.

11.      Article 273f of the Criminal Code regulates in a detailed manner the criminal prosecution of human trafficking, which is punishable by a prison sentence of up to eight years or a fifth-category fine.

II –  Facts

A –    Case C‑340/14, Trijber

12.      Mr Trijber owns a boat which is an open sloop powered by an electrical motor and is suitable for transporting small groups of up to 34 persons. He applied for an operating authorisation for that boat for the transportation of passengers by water. He wishes to use his boat to carry passengers, in return for payment, on a tour of Amsterdam by waterway, for example, for corporate outings or to celebrate a festive occasion.

13.      By decision of 22 November 2011, the College refused the operating authorisation. The College based that refusal on its policy as laid down in Article 2.1 of the Regulation on Passenger Transportation by Water in Amsterdam because Mr Trijber made the application outside of an issuing round and because, according to the College, his boat does not constitute a special initiative and his transport concept is not innovative.

14.      The College upheld that refusal by a decision of 27 April 2012.

15.      By a ruling of 7 December 2012, the Amsterdam Rechtbank declared the appeal lodged by Mr Trijber against that decision to be unfounded.

16.      Subsequently, Mr Trijber lodged an appeal against that ruling before the Raad van State, claiming that the policy pursued by the College is not in conformity with the provisions of Directive 2006/123.

B –    Case C‑341/14, Harmsen

17.      Mr Harmsen operates a window prostitution business in Amsterdam. He applied for authorisations from the Mayor for the operation of two further window prostitution businesses. In the corresponding operating plan which was submitted as part of this application, he stated that he would not rent out rooms to prostitutes with whom he could not communicate in English, Dutch or any other language comprehensible to him.

18.      The Mayor refused such operating authorisations by decision of 28 July 2011. He based that refusal on events described in nine reports on the findings of supervisory officials of the City of Amsterdam and in two records of findings compiled by the police. All those events related to the operation of the existing window prostitution business of Mr Harmsen. Thus, according to the Mayor, contrary to what was stated by Mr Harmsen in the operating plan which he had submitted, Mr Harmsen rented rooms out in shifts to prostitutes from Hungary and Bulgaria who, during the immigration admission procedure, could not communicate in English, Dutch or any other language comprehensible to Mr Harmsen.

19.      The Mayor contends that it follows from the reports and records referred to above that Mr Harmsen’s window prostitution business was not conducted in such a way as to prevent abuse. The Mayor is for that reason not confident that Mr Harmsen will put sufficient safeguards in place with regard to the two prostitution businesses which he envisages to ensure that no offences take place in respect of the prostitutes who might work there. The Mayor is of the view that it is therefore not sufficiently likely that Mr Harmsen will comply with the obligation laid down in Article 3.32(1)(a) of the 2008 General Local Regulation of Amsterdam.

20.      By decision of 23 December 2011, the Mayor upheld on appeal the refusal of the requested operating authorisations.

21.      Mr Harmsen appealed against this decision to the Rechtbank Amsterdam which, by a ruling of 11 July 2012, declared the appeal to be unfounded.

22.      Mr Harmsen lodged an appeal against that ruling to the referring court.

III –  The questions referred for a preliminary ruling and the procedure before the Court

23.      By orders of 9 July 2014, received at the Court Registry on 14 July 2014, the Raad van State decided to stay the proceedings in both cases and to refer questions to the Court of Justice for a preliminary ruling.

A –    Case C‑340/14, Trijber

‘(1)      Is the transportation of passengers by open sloop on the internal waterways of Amsterdam, with the main purpose of providing, for payment, tours and rentals for festive occasions, as in the case in the present proceedings, a service to which the provisions of Directive [2006/123] apply, regard being had to the exception set out in Article 2(2)(d) of that directive in respect of services in the field of transport?

(2)      If the answer to Question 1 is in the affirmative, does Chapter III of Directive 2006/123 apply to purely internal situations, or is the assessment of the question as to whether that chapter applies subject to the case-law of the Court of Justice concerning the Treaty provisions on freedom of establishment and the free movement of services in purely internal situations?

(3)      If the answer to Question 2 is that the case-law of the Court of Justice concerning the Treaty provisions on freedom of establishment and the free movement of services in a purely internal situation applies to the assessment of the question as to whether Chapter III of Directive 2006/123 is applicable:

(a)      Should the national courts apply the provisions laid down in Chapter III of Directive 2006/123 in a situation such as that in the present case, in which the service provider has not established himself on a cross-border basis and does not offer services on a cross-border basis, but nevertheless relies on those provisions?

(b)      Is it relevant to the answer to that question that the services are expected to be provided mainly to residents of the Netherlands?

(c)      In order to answer that question, is it necessary to determine whether undertakings established in other Member States have shown or will show genuine interest in providing the same or comparable services?

(4)      Does it follow from Article 11(1)(b) of Directive 2006/123 that, if the number of authorisations is limited by an overriding reason relating to the public interest, the duration of the validity of the authorisations must also be limited, regard being had also to the objective pursued by that directive of securing free access to the market for services, or is this a matter which lies within the discretion of the competent authority of the Member State?’

B –    Case C‑341/14, Harmsen

‘(1)      Does Chapter III of Directive [2006/123] apply to purely internal situations, or is the assessment of the question as to whether that chapter applies subject to the case-law of the Court of Justice concerning the Treaty provisions on freedom of establishment and the free movement of services in purely internal situations?

(2)      If the answer to Question 1 is that the case-law of the Court of Justice concerning the Treaty provisions on freedom of establishment and the free movement of services in a purely internal situation applies to the assessment of the question as to whether Chapter III of Directive 2006/123 is applicable:

(a)      Should the national courts apply the provisions laid down in Chapter III of Directive 2006/123 in a situation such as that in the present case, in which the service provider has not established himself on a cross-border basis and does not offer services on a cross-border basis, but nevertheless relies on those provisions?

(b)      Is it relevant to the answer to that question that the operator provides services primarily to self-employed prostitutes from Member States other than the Netherlands?

(c)      In order to answer that question, is it necessary to determine whether undertakings established in other Member States have shown or will show genuine interest in establishing a window prostitution business in Amsterdam?

(3)      To the extent to which the operator is entitled to rely on the provisions of Chapter III of Directive 2006/123, does Article 10(2)(c) of that directive preclude a measure such as that at issue here, whereby an operator of window prostitution businesses is allowed to rent out rooms in shifts only to prostitutes who are able to make themselves understood by the operator in a language which he understands?’

24.      By decision of 16 September 2014, the President of the Court joined the two cases.

25.      The applicants in the main proceedings submitted written observations, as did the Netherlands Government and the Commission.

IV –  Analysis

A –    Question 1 in Case C‑340/14: Applicability of Directive 2006/123 ratione materiae – The notion of transport

26.      The first question in Case C‑340/14 concerns the applicability ratione materiae of Directive 2006/123. The subject of that question is whether an activity such as the transportation of passengers by open sloop on the internal waterways of Amsterdam, with the main purpose of providing, for payment, tours and rentals for festive occasions, constitutes a ‘service in the field of transport’ in the sense of Article 2(2)(d) of Directive 2006/123. (3) Were this to be the case, this activity would fall outside the scope of the directive and within the scope of transport policy under the FEU Treaty. (4)

27.      The reason why services in the field of transport are subject to separate provision in the FEU Treaty is that such services are traditionally regulated more densely. (5) The legal consequence of Article 58(1) TFEU and Article 2(2)(d) of Directive 2006/123 is that there is no direct effect of Treaty or secondary law provisions on services when it comes to the field of transport. (6) This is a far-reaching legal consequence, for it deprives economic operators of the right to invoke Article 56 TFEU et seq. and the provisions of Directive 2006/123 before national courts. Application of the principles governing freedom to provide services must therefore be achieved, according to the FEU Treaty, by introducing a common transport policy. (7) This does not, however, preclude a(n) (direct) application of the Treaty provisions on establishment. (8)

28.      Against this background, Part Three, Title VI, of the FEU Treaty, rather than being a classical exception to the general rules on freedom to provide services, constitutes a set of leges speciales to the general rules on freedom to provide services. (9) As far as the relationship between the freedom to provide services in general and the freedom to provide services in the field of transport goes, I therefore concur with Advocate General Wahl, according to whom ‘it would be problematic to go as far as to read Title VI TFEU – even when having regard to Article 58(1) TFEU – as an “exception” to the rules on freedom of movement which must, accordingly, be construed restrictively’. (10)

29.      Neither the Court nor the Union legislature appear to have given a general, all-encompassing definition of the term ‘transport’.

1.      Conveying people or goods from point A to point B

30.      According to the Court’s settled case‑law, the meaning and scope of a term must be determined by considering its usual meaning in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part. (11)

31.      The term ‘transport’ derives from Latin and, literally, means ‘to bring/carry across/beyond/on the other side’. (12) In a similar vein, legal literature stresses that a determining criterion is the bringing of people (or goods) from place A to place B. (13) Moreover, pursuant to recital 21 to the directive, transport services, including urban transport, taxis and ambulances as well as port services, should be excluded from the scope of the directive. All the examples cited by the Union legislation have in common the conveying of people or goods from point A to point B.

32.      If one only considered these elements, the activity of Mr Trijber would not constitute a service in the field of transport, given that the starting and end point of the trip on the boat will frequently be the same.

33.      Yet, the criterion of conveying from point A to point B should perhaps not be applied too strictly. The Court has previously held that a cruise which starts and ends, with the same passengers, in the same port of the Member State in which it takes place, is covered by the term ‘maritime cabotage’ within the meaning of Regulation (EEC) No 3577/92. (14) This means that such a service undeniably falls under the Union’s transport policy.

34.      I therefore infer from the above that the conveying of people or goods from point A to point B can but constitute an indication as to whether we are in the presence of a service in the field of transport.

2.      Main purpose of the activity

35.       Recital 33 to the directive states that services covered by the directive are services such as car rental, travel agencies and consumer services in the field of tourism, including tour guides.

36.      Pursuant to the Commission’s non-binding but nevertheless enlightening (15) ‘Handbook on the implementation of the Services Directive’, (16) the exclusion in Article 2(2)(d) of the directive ‘does not cover services which are not transport services as such like driving schools services, removal services, car rental services, funeral services or aerial photography services’. (17) Nor does it cover ‘commercial activities in ports or airports such as shops or restaurants’. (18)

37.      All of the examples just cited may appear to be of a random nature. There is, however, one thing which can, in my opinion, be derived in any event: where the main purpose of the activity is not the physical conveying of goods or people but other matters such as entertainment or renting, one cannot speak of services in the field of transport.

38.      By way of example, the main purpose of driving school services is for the recipient to learn to drive and not to be transported. The purpose of an aerial photography service is, as the name implies, photography. The essential element of car rental services is rental. The primary purpose of a guided tour is to learn something about a certain place or area, not to be transported.

39.      The same yardstick should be applied to the case at issue: is the main purpose of the service offered by Mr Trijber to be transported across the canals of Amsterdam or is it rather to be entertained on a boat which is rented out? On the basis of information provided by the referring court, the latter appears to me to be the case.

3.      Distinction from Neukirchinger

40.      Finally, it may appear tempting to infer from Neukirchinger (19) that the present case falls within services in the area of transport, as suggests the Netherlands Government. In that case, the Court ruled that the concept of air transport within the meaning of what is now Article 100(2) TFEU (20) must be understood as covering a form of transport which consists of the carriage by air of passengers in a hot-air balloon for commercial purposes. (21) One may be tempted to compare a journey in a hot air balloon, which, arguably, is made for recreational purposes, with that on a boat such as that of Mr Trijber.

41.      I would, however, advise the Court to be cautious with such reasoning, tantalising as it may seem. The present case should be distinguished from Neukirchinger, as that case had two particularities, not present in the case at issue. First, the Convention on International Civil Aviation, signed in Chicago on 7 December 1944, (22) also applies to hot-air balloons. Secondly, with regard to the carriage by air of passengers in a hot-air balloon for commercial purposes, the – then – Community legislature had already adopted several measures on the basis of – now – Article 100(2) TFEU. (23) In other words, in Neukirchinger, both international law and the Community legislature considered carriage in a hot-air balloon to constitute transport. This cannot be said of the case at issue.

42.      There is another, more general, consideration which leads me to believe that the present case should be distinguished from Neukirchinger. In the case of a flight in a hot-air balloon, it is precisely the flight experience which is sought by the passenger. In the case of a cruise along the canals on an open sloop such as that of Mr Trijber, the cruising experience seems to me to be much more in the background to the general entertainment purpose.

43.      I would therefore propose that the Court should reply to Question 1 in Case C‑340/14 that an activity such as the one at issue in the main proceedings which consists of the transportation of passengers by open sloop on the internal waterways of Amsterdam, with the main purpose of providing, for payment, tours and rentals for festive occasions, does not constitute a ‘service in the field of transport’ in the sense of Article 2(2)(d) of Directive 2006/123.

B –    Questions 2 and 3 in Case C‑340/14 and Questions 1 and 2 in Case C‑341/14: Applicability of Chapter III of Directive 2006/123 ratione loci – Purely internal situations

44.      The subject of Questions 2 and 3 in Case C‑340/14 and Questions 1 and 2 in Case C‑341/14, which should all be examined together, is whether Chapter III of Directive 2006/123, entitled ‘Freedom of establishment of providers’, applies to situations without a cross-border element. The referring court would like to know whether it can apply the provisions of Chapter III of the directive to the cases at issue.

45.      In referring to Chapter III of Directive 2006/123, the referring court sees the current cases as being governed by the rules on establishment rather than by those on services. This appears also to me to be the correct starting point: it constitutes settled case-law that the provision of services is distinguished from establishment first and foremost by the stability and continuity of the activity in question, as opposed to an activity of a temporary nature. (24) This is also confirmed by recital 77 to the directive. (25)

46.      In the two cases at issue, both Messrs Trijber and Harmsen intend that the pursuit of their activities will be stable and continuous. It is therefore appropriate to examine them in the light of freedom of establishment.

47.      In my view, the Court should not answer the question by resorting to its standard case-law on the scope of application of EU law or admissibility in the context of purely internal situations, (26) given that this case-law takes as its premiss the fact that the Treaty provisions on the four freedoms regulate cross-border situations only. Answering by resorting to this case-law would, therefore, amount to giving a reply in the negative in the sense that Chapter III of the directive does not apply to purely internal situations – without the questions being discussed.

48.      Neither should the Court, in my opinion, ‘answer’ the questions by inviting the national court to try to identify possible cross-border elements in both cases, (27) for this, too, would amount to not answering the questions as they are asked by the referring court.

49.      Rather, the Court should reply to the questions as they are asked, namely whether Chapter III of Directive 2006/123 applies in situations which constitute purely internal situations. I would submit to the Court that the questions deserve to be answered, and this for two reasons. First, according to settled case-law, preliminary questions enjoy a presumption of relevance, that is to say, unless it can be demonstrated that, for example, they are hypothetical they should be answered. (28) Secondly, Directive 2006/123 still being fairly young and this question being hotly debated, I would consider that there is an interest in the Court shedding light on this issue.

50.      Against Chapter III of the directive being applicable to purely internal situations, one could argue that an act of secondary law cannot go further than the Treaty provisions in that, if the latter (only) apply to cross-border situations, the same should go for the former. (29) One could also try to establish a difference between ‘coordination’, (30) ‘approximation’ (31) and ‘harmonisation’. (32)

51.      I am not convinced by such a line of reasoning and I have more sympathy for the opposing view, according to which Chapter III of the directive also applies to purely internal situations.

52.      First, it appears to me otiose to establish a difference between the terms ‘coordination’, ‘approximation’ and ‘harmonisation’. As I understand it, these terms are used interchangeably. It should be borne in mind in this context that the term ‘harmonisation’ was used in the Treaty of Rome in one instance only, (33) before it was gradually resorted to across the whole FEU Treaty.

53.      Secondly, it is undisputed that, in principle, harmonisation in the domain of the internal market can cover situations not covered by the fundamental freedoms guaranteed by the Treaty. The Court has, in the past, seen no problem in explicitly admitting this. (34) This is also stressed in legal literature, when it is affirmed that the harmonisation of standards of products and services, aimed at achieving the free movement of these, applies throughout the EU, without distinction between exported and domestically sold products or services. (35)

54.      Thirdly, the Commission’s handbook provides further clarification: according to it, the chapter on establishment covers both the situation where a service provider seeks to establish itself in another Member State and the situation where a provider seeks to establish itself in its own Member State. (36)

55.      Fourthly, a textual and systemic interpretation of the provisions of the directive supports my approach. Article 2(1) of the directive, entitled ‘Scope’ states that the directive applies ‘to services supplied by providers established in a (37) Member State’. There is no mention of any cross-border activity. In a similar vein, the provisions of Chapter III of Directive 2006/123 and in particular its Article 9(1) does not make any reference to cross-border activity – in contrast to Chapter IV of the directive and in particular its Article 16(1). (38)

56.      Fifthly, clarification can be found if one looks at the legislative procedure leading to the adoption of the directive. Here, several proposals for amendment were tabled in the European Parliament with a view to rephrasing Article 2(1) of Directive 2006/123 so as to limit that provision to cross-border situations: two proposals within the Parliament’s Committee on the Internal Market and Consumer Protection (IMCO) (39) and one by the Parliament’s Committee on Legal Affairs. (40) None of the amendments were accepted, which indicates that Chapter III of Directive 2006/123 is to apply also in internal situations. (41)

57.      I therefore propose that the Court should reply to Questions 2 and 3 in Case C‑340/14 and to Questions 1 and 2 in Case C‑341/14 that the provisions of Chapter III of Directive 2006/123 are applicable to situations such as those in the main proceedings, i.e. the transportation of passengers by open sloop on the internal waterways of Amsterdam, with the main purpose of providing, for payment, tours and rentals for festive occasions and the renting out of rooms in shifts to prostitutes in the context of a window prostitution business, regardless of whether or not all the factors are confined within a single Member State.

C –    Question 4 in Case C‑340/14 and Question 3 in Case C‑341/14: Justification of restrictions?

58.      Question 4 in Case C‑340/14 and Question 3 in Case C‑341/14 deal with possible justifications to restrictions on the freedom of establishment of Messrs Trijber and Harmsen respectively.

1.      Case C‑340/14: Interpretation of Article 11(1)(b) of Directive 2006/123

59.      By virtue of Article 11(1)(b) of Directive 2006/123, an authorisation granted to a provider shall not be for a limited period, except where the number of available authorisations is limited by an overriding reason relating to the public interest. In essence, the referring court would like to know whether the competent authority of a Member State has discretion when it comes to the application of that article.

60.      The answer is ‘no’.

61.      By virtue of Article 4, point 6, of Directive 2006/123, an ‘authorisation scheme’ means any procedure under which a provider or recipient is in effect required to take steps in order to obtain from a competent authority a formal decision, or an implied decision, concerning access to a service activity or the exercise thereof.

62.      There is no doubt that the local Amsterdam regulations constitute such a scheme. The effect of this ipso facto constitutes a restriction on Mr Trijber’s freedom of establishment.

63.      Yet, such a scheme must comply with the requirements laid down in Article 9 et seq. of the directive. In particular, such a scheme cannot be resorted to unless it is non-discriminatory, justified by an overriding reason relating to the public interest and proportionate to that public interest objective.

64.      In this respect, the following remarks are called for.

65.      First, the national court must establish whether a sufficient number of authorisations is granted. If, for instance, the number is too low, then surely we are not in the presence of a proportional measure.

66.      Secondly, once the national court has established that an authorisation scheme is, in principle, justified, the duration of authorisation must be limited. It follows from Article 11(1) that, as a rule, an authorisation cannot be limited in time. There are exceptions to this, such as point (b), according to which the number of available authorisations is limited by an overriding reason relating to the public interest. In such a situation, logically, authorisation can only be granted for a limited period.

67.      I do not see any room for discretion on the part of Member States when it comes to the application of that article.

68.      Put differently: in my understanding of Article 11(1)(b) of Directive 2006/123, as soon as the number of available authorisations is limited by an overriding reason relating to the public interest, the authorisation granted is to be for a limited period. Any other interpretation would fall foul of the aim of Article 11 which is, as the Commission rightly points out in its observations, to guarantee the access of service providers to the market in question.

69.      Finally, I should like to draw the Court’s attention to the fact that the same result would be achieved by an application of Article 12(1) and (2): where the number of authorisations available is limited because of the scarcity of natural resources, authorisations granted in the context of impartial and transparent selection procedures are to be granted for an appropriate limited period.

70.      The Court should therefore reply to this question that Article 11(1)(b) of Directive 2006/123 should be understood to mean that once a Member State considers that the number of available authorisations must be limited by an overriding reason relating to the public interest, every individual authorisation must be limited in time.

2.      Case C‑341/14: Interpretation of Article 10(2)(c) of Directive 2006/123

71.      As the referring court rightly considers, the measures in question undeniably constitute a restriction on freedom of establishment. Again, the measures in question are subject to Article 9 et seq. of Directive 2006/123.

72.      The referring court would like to know whether Article 10(2)(c) of Directive 2006/123 precludes a measure such as that in the main proceedings whereby an operator of a window prostitution business is allowed to rent out rooms only to prostitutes who are able to make themselves understood by the operator in a language which he understands.

73.      Pursuant to Article 10(2)(a) of Directive 2006/123, the measures in question must not be discriminatory. If the measures were discriminatory, based directly or indirectly on nationality, they could not be part of an authorisation scheme and could under no circumstances be justified. (42) In such a case, one would therefore not have to proceed to the identification of overriding reasons relating to the public interest and to carrying out a proportionality test. Yet, it appears to me that the measures in question in the present case do not constitute discrimination against Mr Harmsen. (43) That said, it is for the referring court to establish whether the authorisation scheme in the case at issue does not discriminate against Mr Harmsen.

74.      Moreover, the scheme must be justified by an overriding reason relating to the public interest (Article 10(2)(b) of Directive 2006/123).

75.      In this respect, the referring court advances the interest of the prevention of offences laid down in Article 273f of the Criminal Code, i.e. the offence of trafficking in human beings. The aim is to protect prostitutes and to prevent victims of human trafficking or minors from working in prostitution.

76.      Such a ground can, in my view, in principle, be invoked by the City of Amsterdam to justify the restriction on the freedom of establishment via the authorisation scheme. It is, therefore, capable of constituting an overriding reason relating to the public interest.

77.      The area in question can be termed as a fundamental rights-sensitive area. Combating trafficking in human beings and protecting its victims is a policy pursued at an international and at EU level. The Netherlands have signed and ratified the Council of Europe Convention on Action against Trafficking in Human Beings (44) and the United Nations Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime (45) and are bound by Directive 2011/36/EU. (46) All these instruments seek to combat trafficking in human beings and contain obligations on (respective) Member States. (47) Moreover, with respect to the ECHR, the European Court of Human rights has held that trafficking in human beings within the meaning of Article 3(a) of the Palermo Protocol and Article 4(a) of the Council of Europe Convention falls within the scope of Article 4 of the ECHR. (48) In addition, according to the EHR Court, it follows from Article 4 of the ECHR that States have positive obligations to adopt criminal-law provisions which penalise the practices referred to in this article and to enforce them (49) and to effectively protect the victims of the acts prohibited by this article. (50) Also, that article entails a procedural obligation to investigate where there is a credible suspicion that an individual’s rights under that article have been violated. (51)

78.      Article 273f of the Criminal Code has been amended in recent years, in particular to align it to the Council of Europe Convention and to transpose Directive 2011/36. In their fight against trafficking in human beings, the Netherlands put an emphasis on measures at the municipal level. They have been commended for such an approach by the relevant monitoring body of the Council of Europe. (52)

79.      Pursuant to Article 10(2)(c) of Directive 2006/123, the scheme must also be proportionate to the public interest objective just mentioned. (53)

80.      Before examining the proportionality of the measure in the case at issue, I should like to make a preliminary remark by recalling settled case-law of the Court. It is ultimately for the national court, which has sole jurisdiction to assess the facts and interpret the national legislation, to determine whether the national law is proportionate to the public interest objective. (54) However, the Court of Justice may provide guidance based on the information provided in the context of the proceedings. (55) The Court has held in the specific contexts of unequal treatment with regard to access to medical and paramedical university studies, (56) of ‘safeguarding the homogeneity of [a] higher or university education system’, (57) of a residence requirement for the purposes of obtaining a recruitment subsidy (58) and of the conditions of reimbursement of health-cure in another Member State (59) that the reasons invoked by a Member State by way of justification must be accompanied by an analysis of the appropriateness and proportionality of the measure adopted by that State and by specific evidence substantiating its arguments.

81.      To meet the requirement of proportionality, the measure must, first, be appropriate or, in the language of the directive, (60) suitable for securing the attainment of the objective pursued. I do not have any reason to question that the measure in the case at issue reflects a genuine concern on the part of the City of Amsterdam to prevent criminal offences in the domain of trafficking in human beings. However, the referring court, when examining the appropriateness of the measure should examine closely to what extent the City of Amsterdam substantiates this policy, it being clear that it is not necessary to demonstrate that every single crime is detected by way of the measure, as this would stretch the requirements of appropriateness too far.

82.      Secondly, the measure must not go beyond what is necessary to attain the objective. If there is a choice between various measures to achieve the same aim, the means to be chosen should be that which is the least restrictive with respect to the freedom of establishment guaranteed by the directive.

83.      The question is, therefore, whether the language requirement, as required by the City of Amsterdam (61) is necessary for the achievement of the aim pursued. This is a delicate question on which it is difficult to resort to past case-law of the Court.

84.      It is true that the Court has, on numerous occasions, been called upon to establish whether national language requirements were in conformity with the four freedoms or, more recently, with the Treaty provisions on EU citizenship. (62) However, such cases had a different angle to them in that the language requirement only extended to the languages of the Member States in question. (63)

85.      The overriding interest pursued was either the promotion and encouragement of the use of a language itself (64) or an interest closely related to the nature of the activity to be pursued, such as the social protection of employees or the facilitation of the related administrative controls. (65) In all cases, Member States sought to protect or promote one or more of their official languages. (66) That is not the case here. The language requirement is not imposed in order that the prostitute can carry out his/her activity, but for Mr Harmsen to fulfil his duties under public law vis-à-vis the Kingdom of the Netherlands.

86.       Moreover, the present case is not one about the ‘particular importance’ of ‘the protection of the linguistic rights and privileges of individuals’. (67)

87.      Prostitutes who have been subject to trafficking in human beings are in a situation of isolation and vulnerability. It is therefore in the interest of them and of those fighting against trafficking in human beings that they are in a position to communicate. Obviously, being able to communicate in the same language hugely facilitates communication.

88.      I can therefore understand that the City of Amsterdam resorts to such requirements in order to ensure that communication between the owner of a brothel and a prostitute effectively takes place. However, this must not necessarily go as far as requiring a command on both sides of the same languages. What counts is that Mr Harmsen can effectively communicate verbally with the prostitutes, not that they necessarily have a command of the same languages.

89.      Different scenarios are in my view possible, in particular when a third person is required for effective communication to take place. Here, the referring court should examine very closely whether an element of proximity of that person to the prostitute can be guaranteed. It can, for instance, make a difference if the ‘interpreter’ is a person known to, close to and trusted by the prostitute rather than someone chosen by Mr Harmsen.

90.      This factual assessment of whether effective verbal communication between Mr Harmsen and each prostitute exists is for the referring court to determine, on the basis of the guidance offered.

91.      The reply to this question should therefore be that Article 10(2)(c) of Directive 2006/123 precludes a measure such as that in the main proceedings of Case C‑341/14, whereby an operator of a window prostitution business is allowed to rent out rooms only to prostitutes who are able to make themselves understood by the operator in a language which he understands unless is it established by the referring court that such a requirement is necessary for effective verbal communication between the operator and the prostitutes to take place.

V –  Conclusion

92.      In the light of all of the foregoing considerations, I propose that the Court answer the questions referred by the the Raad van State (Netherlands) as follows:

(1)      An activity such as the one at issue in the main proceedings of Case C‑340/14, which consists of the transportation of passengers by open sloop on the internal waterways of Amsterdam, with the main purpose of providing, for payment, tours and rentals for festive occasions does not constitute a ‘service in the field of transport’ in the sense of Article 2(2)(d) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market.

(2)      The provisions of Chapter III of Directive 2006/123 are applicable to situations such as those in the main proceedings, i.e. the transportation of passengers by open sloop on the internal waterways of Amsterdam, with the main purpose of providing, for payment, tours and rentals for festive occasions (Case C‑340/14) and the renting out of rooms in shifts to prostitutes in the context of a window prostitution business (Case C‑341/14), regardless of whether or not all the factors are confined within a single Member State.

(3)      Article 11(1)(b) of Directive 2006/123 should be understood to mean that once a Member State considers that the number of available authorisations must be limited by an overriding reason relating to the public interest, every individual authorisation must be limited in time.

(4)      Article 10(2)(c) of Directive 2006/123 precludes a measure such as that in the main proceedings of Case C‑341/14, whereby an operator of a window prostitution business is allowed to rent out rooms only to prostitutes who are able to make themselves understood by the operator in a language which he understands unless it is established by the referring court that such a requirement is necessary for effective verbal communication between the operator and the prostitutes to take place.

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1 – Original language: English.

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2  Directive of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJ 2006 L 376, p. 36.

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3 – This provision is the counterpart in the directive to Article 58(1) TFEU in the Treaty chapter on services. See Opinion of Advocate General Wahl in Grupo Itevelesa and Others (C‑168/14, EU:C:2015:351, point 17).

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4 – Part Three, Title VI TFEU, formerly and at the time of the adoption of the directive, Part Three, Title V EC.

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5 – See Müller-Graff, P.-C., in Streinz, R. (ed.), EUV/AEUV, Beck, 2^nd edition, Munich 2012, Artikel 58 AEUV, point 1.

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6 – See judgment in Parliament v Council (13/83, EU:C:1985:220, paragraphs 62 and 63).

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7 – See judgment in Pinaud Wieger (C‑17/90, EU:C:1991:416, paragraph 7).

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8 – The Court has explicitly stated that the provisions of the FEU Treaty on freedom of establishment ‘are applicable directly to transport’, see judgment in Yellow Cab Verkehrsbetrieb (C‑338/09, EU:C:2010:814, paragraph 33).

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9 – See also Weiss, F., and Kaupa, C., European Union Internal Market Law, Cambridge University Press, Cambridge, 2014, p. 242.

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10 – Opinion of Advocate General Wahl in Grupo Itevelesa and Others (C‑168/14, EU:C:2015:351, point 22). See also Opinion of Advocate General Cruz Villalón in Yellow Cab Verkehrsbetrieb (C‑338/09, EU:C:2010:568, footnote 10) who points to the Court’s case-law which stresses that the Union’s transport policy needs to be interpreted in the light of Article 56 TFEU. It is also for this reason that I do not find the Commission’s argument convincing, which says that Article 2(2)(d) of Directive 2006/123 must be interpreted narrowly.

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11 – See only judgment in Deckmyn and Vrijheidsfonds (C‑201/13, EU:C:2014:2132, paragraph 19 and the case-law cited).

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12 – The term ‘transport’ is composed of the Latin terms ‘trans’ and ‘portare’.

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13 – See, for instance, Schäfer, R., in Streinz, R. (ed.), op. cit., Artikel 90 AEUV, point 12.

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14 – Council Regulation of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage), OJ 1992 L 364, p. 7. See judgment in Alpina River Cruises and Nicko Tours (C‑17/13, EU:C:2014:191, paragraph 29).

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15 – See Opinions of Advocate General Cruz Villalón in Femarbel (C‑57/12, EU:C:2013:171, point 22) and in Rina Services and Rina (C‑593/13, EU:C:2015:159, point 39).

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16 – This handbook has already been referred to in support of argument by the Court in judgment in Femarbel (C‑57/12, EU:C:2013:517, paragraphs 37 and 45).

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17 – See Handbook on the implementation of the Services Directive, Office for Official Publications of the European Communities, 2007, p. 11 of the English language version, available at http://ec.europa.eu/internal_market/services/docs/services-dir/guides/handbook_en.pdf

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18 – Ibid.

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19 – Judgment in Neukirchinger (C‑382/08, EU:C:2011:27).

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20 – Formerly Article 80(2) EC.

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21 – Judgment in Neukirchinger (C‑382/08, EU:C:2011:27, paragraph 20).

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22 – United Nations Treaty Series, Vol. 15, p. 295, available at: http://www.icao.int/publications/pages/doc7300.aspx.

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23 – Judgment in Neukirchinger (C‑382/08, EU:C:2011:27, paragraph 23).

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24 – See only judgment in Gebhard (C‑55/94, EU:C:1995:411, paragraph 25 et seq.). On the distinction between freedom to provide services and the right to establishment, see also Opinion of Advocate General Cruz Villalón in Yellow Cab Verkehrsbetrieb (C‑338/09, EU:C:2010:568, points 15 to 18).

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25 – By virtue of that recital, the key element is whether or not the operator is established in the Member State where it provides the service concerned. If the operator is established in the Member State where it provides its services, it should come under the scope of application of the freedom of establishment. If, by contrast, the operator is not established in the Member State where the service is provided, its activities should be covered by the free movement of services. The Court of Justice has consistently held that the temporary nature of the activities in question should be determined in the light not only of the duration of the provision of the service, but also of its regularity, periodical nature or continuity. The fact that the activity is temporary should not mean that the provider may not equip itself with some forms of infrastructure in the Member State where the service is provided, such as an office, chambers or consulting rooms, in so far as such infrastructure is necessary for the purposes of providing the service in question.

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26 – For a summary, categorisation and analysis of this case-law, I would refer to the reader to Advocate General Wahl’s Opinion in Joined Cases Venturini (C‑159/12 to C‑161/12, EU:C:2013:529, points 26 to 53).

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27 – Indeed, an exercise of finding such cross-border elements should not be too difficult. As regards Case C‑340/14, typically also tourists originating from other Member States tend to take boats such as the one of Mr Trijber, whereas concerning Case C‑341/14, the recipients of the services offered by Mr Harmsen, i.e. the prostitutes in question, originate from EU Member States other than the Netherlands.

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28 – See to that effect e.g. judgment in Cipolla and Others (C‑94/04 and C‑202/04, EU:C:2006:758, paragraph 25).

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29 – See Müller-Graff, P.-C., in Streinz, R. (ed.), op. cit., Artikel 49 AEUV, point 20.

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30 – This is the term used in Article 53 TFEU, the legal basis, together with Article 62 TFEU, of Directive 2006/123. I should like to stress that ‘coordination’ as it is used here has, in my view, nothing to do with ‘coordination’ as it is now used in Articles 2, 5 and 6 TFEU, further to the entry into force of the Treaty of Lisbon.

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31 – Terminology used, for instance, in Articles 114 and 115 TFEU.

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32 – Terminology used, by now, across the Treaty.

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33 – Article 117(2) EEC, now Article 151 TFEU: ‘harmonisation of social systems’.

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34 – See, by way of example, judgment in Centrosteel (C‑456/98, EU:C:2000:402, paragraph 13) where the Court states that Council Directive 86/653/EEC on the coordination of the laws of the Member States relating to self-employed commercial agents (OJ 1986 L 382, p. 17) ‘is intended to harmonise the laws of the Member States governing the legal relationship between the parties to a commercial contract, irrespective of any cross-border elements. Its scope is therefore broader than the fundamental freedoms laid down by the EC Treaty.’

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35 – See Davies, G., ‘The Services Directive: extending the country of origin principle, and reforming public administration’, 32 European Law Review, 2007, pp. 232-245, at p. 242. See also Kluth, W., in Calliess, C. and Ruffert, M. (ed.), EUV/AEUV, Beck, 4^th edition, Munich 2011, Artikel 59 AEUV, point 24.

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36 – See Handbook on the implementation of the Services Directive, op cit., p. 24 of the English language version.

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37 – My emphasis.

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38 – Article 16 is entitled ‘Freedom to provide services’. According to Article 16(1), first sentence, Member States shall respect the right of providers to provide services in a Member State other than that in which they are established.

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39 – See proposed amendments 476 and 477 tabled by MEPs Joachim Wuermeling and Klaus-Heiner Lehne respectively, as reproduced in Draft report (PE 355.744v04-00) by MEP Evelyne Gebhardt, rapporteur, document PE 360.091v02-00 of 24.06.2005, at pp. 25 and 26, available at http://www.europarl.europa.eu/RegData/commissions/imco/amendments/2005/360091/IMCO_AM%282005%29360091_EN.pdf.

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40 – See proposed amendment 11 in Opinion of the Committee on Legal Affairs for the Committee on the Internal Market and Consumer Protection on the proposal for a European Parliament and Council directive on services in the internal market, document 2004/0001(COD) of 01.07.2005, at p. 11, available at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+COMPARL+PE-353.583+03+DOC+PDF+V0//EN&language=EN.

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41 – Barnard, C., ‘Unravelling the services directive’, 45 Common Market Law Review, 2008, pp. 323-396, at p. 351, appears to have sympathy for such reasoning, even though after subsequently listing the arguments against some parts of the directive applying to internal situations, she concludes at p. 352 that ‘we shall have to await an ECJ ruling on this crucial issue’.

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42 – See Article 14, point 1, of Directive 2006/123, according to which Member States shall not make access to, or the exercise of, a service activity in their territory subject to compliance with discriminatory requirements based directly or indirectly on nationality. See also judgment in Rina Services and Rina (C‑593/13, EU:C:2015:399, paragraph 35).

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43 – From the perspective of the prostitutes as service providers the situation could be different. On the assumption that, in Amsterdam, people who rent out premises to prostitutes are typically Dutch who typically (but) have a command of the Dutch and English languages, a prostitute from Hungary or Bulgaria who does not speak either of these languages is discriminated against as compared with one who does and who would, typically, be Dutch.

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44 – This convention was signed in Warsaw on 16 May 2005. It entered into force on 1 February 2008 in general, further to the ratification of 10 States. It was ratified by the Netherlands on 22 April 2010 and entered into force there on 1 August 2010. The text of the convention is available at: http://conventions.coe.int/Treaty/EN/Treaties/Html/197.htm. The convention also sets up an intergovernmental monitoring system in order to supervise the implementation of the obligations contained in it.

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45 – Also known as the ‘Palermo Protocol’. Available at: http://www.ohchr.org/EN/ProfessionalInterest/Pages/ProtocolTraffickingInPersons.aspx.

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46 – Directive of the European Parliament and of the Council of 5 April 2011 on preventing and combating trafficking in human beings and protecting its victims, and replacing Council Framework Decision 2002/629/JHA, OJ 2011 L 101, p. 1. This directive recognises in its recital 9 the existence of the Council of Europe Convention and the Palermo Protocol while stressing that ‘[c]oordination between international organisations with competence with regard to action against trafficking in human beings should be supported in order to avoid duplication of effort’.

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47 – To complete the picture, Article 5(3) of the Charter states that trafficking in human beings is prohibited.

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48 – See Rantsev v. Cyprus and Russia, no. 25965/04, § 282, 7 January 2010. Article 4 of the ECHR finds its functional equivalent in Article 5(1) and (2) of the Charter.

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49 – See EHR Court, Siliadin v. France, no. 73316/01, paragraph 89, 26 July 2005.

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50 – See EHR Court, C.N. and V. v. France, no. 67724/09, paragraph 69, 11 October 2011.

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51 – See EHR Court, C.N. v. The United Kingdom, no. 4239/08, paragraph 69, 13 November 2012.

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52 – See Report concerning the implementation of the Council of Europe Convention on Action against Trafficking in Human Beings by the Netherlands, First evaluation round, adopted by Group of Experts on Action against Trafficking in Human Beings on 21 March 2014, published by the convention Secretariat on 18 June 2014, GRETA(2014)10, paragraph 59, available at: http://www.coe.int/t/dghl/monitoring/trafficking/Docs/Reports/GRETA_2014_10_FGR_NLD_w_cmnts_en.pdf.

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53 – The term ‘proportionality’ is more clearly defined in Article 15(3)(c) of Directive 2006/123.

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54 – See mutatis mutandis with respect to justifications of restrictions in the context of Treaty provisions on the four freedoms and citizenship judgments in Bressol and Others (C‑73/08, EU:C:2010:181, paragraph 75), Rinner-Kühn (171/88, EU:C:1989:328, paragraph 15) and Schönheit and Becker (C‑4/02 and C‑5/02, EU:C:2003:583, paragraph 82).

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55 – See judgment in Bressol and Others (C‑73/08, EU:C:2010:181, paragraph 65).

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56 – Ibidem, paragraph 74. At stake was a requirement of residence.

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57 – See judgment in Commission v Austria (C‑147/03, EU:C:2005:427, paragraph 63)

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58 – See judgment in Caves Krier Frères (C‑379/11, EU:C:2012:798, paragraph 49).

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59 – See judgment in Leichtle (C‑8/02, EU:C:2004:161, paragraph 45).

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60 – See Article 15(3)(c) of Directive 2006/123.

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61 – One can speak of a language requirement since the City of Amsterdam makes the commitments which Mr Harmsen gave in his operating plan (not to rent out rooms to prostitutes with whom he could not communicate in English, Dutch or any other language comprehensible to him) a condition for granting the authorisation.

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62 – See judgment in Grauel Rüffer (C‑322/13, EU:C:2014:189, paragraphs 18 et seq.).

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63 – See, by way of example, judgments in Groener (C‑379/87, EU:C:1989:599, paragraph 20) and Haim (C‑424/97, EU:C:2000:357, paragraph 59).

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64 – See judgment in Las (C‑202/11, EU:C:2013:239, paragraph 27).

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65 – See judgment in Commission v Germany (C‑490/04, EU:C:2007:430, paragraphs 70 and 71).

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66 – See judgments in Groener (C‑379/87, EU:C:1989:599, paragraph 19); Runevič-Vardyn and Wardyn (C‑391/09, EU:C:2011:291, paragraph 85); and Las (C‑202/11, EU:C:2013:239, paragraph 25).

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67 – Terminology used by the Court in, for instance, judgments in Mutsch (137/84, EU:C:1985:335, paragraph 11) and Bickel and Franz (C‑274/96, EU:C:1998:563, paragraph 13).