Case C-577/10

European Commission

v

Kingdom of Belgium

‛Failure of a Member State to fulfil obligations — Article 56 TFEU — Freedom to provide services — National legislation which imposes a prior declaration requirement on self-employed service providers established in other Member States — Criminal penalties — Obstacle to freedom to provide services — Objectively justified distinction — Overriding requirements in the public interest — Prevention of fraud — Protection against unfair competition — Protection of self-employed workers — Proportionality’

Summary — Judgment of the Court (Fourth Chamber), 19 December 2012

1. Actions for failure to fulfil obligations — Proof of failure — Burden of proof on Commission — Presumptions — Unlawful — Actions concerning the content and implementation of a national provision not contested by the Member State concerned — Meeting the requirements of proof

   (Art. 258 TFEU)

2. Freedom to provide services — Restrictions — Prohibition — Scope

   (Art. 56 TFEU)

3. Freedom to provide services — Restrictions — Posting of self-employed workers — Obligation of prior declaration for service providers established in other Member States only — Justification based on overriding requirements in the public interest — Prevention of fraud, combating unfair competition and proportionality — Unlawful

   (Art. 56 TFEU)

1.  See the text of the decision.

   (see paras 34, 35)

2.  See the text of the decision.

   (see para. 38)

3.  By imposing a prior declaration requirement on self-employed service providers established in Member States other than the Member State in question in respect of their activity in that Member State, a Member State fails to fulfil its obligations under Article 56 TFEU.

   In that regard, national legislation falling within an area which has not been harmonised at EU level which is applicable without distinction to all persons and undertakings operating in the territory of the Member State concerned 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.

   However, although the objective of combating fraud, specifically 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, the fact remains that a general presumption of fraud is not sufficient to justify a measure which compromises the objectives of the FEU Treaty and it is for the Member State concerned to give a convincing justification as to how the rules at issue do not go beyond what is necessary to achieve those objectives.

   (see paras 44, 45, 53, 55, 57, operative part)

Case C-577/10

European Commission

v

Kingdom of Belgium

‛Failure of a Member State to fulfil obligations — Article 56 TFEU — Freedom to provide services — National legislation which imposes a prior declaration requirement on self-employed service providers established in other Member States — Criminal penalties — Obstacle to freedom to provide services — Objectively justified distinction — Overriding requirements in the public interest — Prevention of fraud — Protection against unfair competition — Protection of self-employed workers — Proportionality’

Summary — Judgment of the Court (Fourth Chamber), 19 December 2012

1. Actions for failure to fulfil obligations — Proof of failure — Burden of proof on Commission — Presumptions — Unlawful — Actions concerning the content and implementation of a national provision not contested by the Member State concerned — Meeting the requirements of proof

   (Art. 258 TFEU)

2. Freedom to provide services — Restrictions — Prohibition — Scope

   (Art. 56 TFEU)

3. Freedom to provide services — Restrictions — Posting of self-employed workers — Obligation of prior declaration for service providers established in other Member States only — Justification based on overriding requirements in the public interest — Prevention of fraud, combating unfair competition and proportionality — Unlawful

   (Art. 56 TFEU)

1.  See the text of the decision.

   (see paras 34, 35)

2.  See the text of the decision.

   (see para. 38)

3.  By imposing a prior declaration requirement on self-employed service providers established in Member States other than the Member State in question in respect of their activity in that Member State, a Member State fails to fulfil its obligations under Article 56 TFEU.

   In that regard, national legislation falling within an area which has not been harmonised at EU level which is applicable without distinction to all persons and undertakings operating in the territory of the Member State concerned 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.

   However, although the objective of combating fraud, specifically 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, the fact remains that a general presumption of fraud is not sufficient to justify a measure which compromises the objectives of the FEU Treaty and it is for the Member State concerned to give a convincing justification as to how the rules at issue do not go beyond what is necessary to achieve those objectives.

   (see paras 44, 45, 53, 55, 57, operative part)