Keywords
Summary

Keywords

1. Freedom of movement for persons — Freedom of establishment — Registration of a vessel in a Member State — Conditions relating to the nationality of the owners or the place in which they have their seat — Not permissible — (EC Treaty, Arts 6, 48, 52, 58 and 221; Commission Regulation No 1251/90, Art. 7; Council Directive 75/34, Art. 7)

2. Member States — Obligations — Failure to fulfil — Retention of a national provision incompatible with Community law — Justification on the basis of administrative practice ensuring the application of the Treaty — Not permissible

3. Actions against Member States for failure to fulfil obligations — Judgment of the Court finding the failure — Period allowed for compliance — (EC Treaty, Art. 171)

Summary

1. A Member State which retains in force laws, regulations or administrative provisions restricting the right to register a vessel in the national register and to fly the national flag to vessels

─ more than half the shares in which are owned by natural persons having the nationality of the Member State in question or

─ which are owned by legal persons having a seat in that Member State or

─ which are owned by legal persons a certain proportion of whose directors, administrators or managers are nationals of the State or,

─ in the case of a private limited company, limited partnership, or general commercial or non-commercial partnership, which are owned by legal persons more than half of whose capital is held by nationals of the State or all of whose capital is held by nationals who fulfil certain conditions

fails to fulfil its obligations under Community law.

Specifically, with regard to vessels used in the context of an economic activity, it is contrary to Articles 6 and 52 of the Treaty to restrict that right to vessels more than half the shares in which are owned by natural persons having the nationality of the Member State whose flag is flown or to require that the actual control or management of legal persons owning vessels must be in the hands of nationals or that a certain proportion of the capital of certain legal persons owning vessels must be controlled by nationals. The latter condition is also contrary to Article 221 of the Treaty since it restricts participation by nationals of other Member States in the capital of such legal persons. Finally, in so far as it requires legal persons owning vessels to have their seats on national territory and thus precludes the registration or management of a ship in the case of a secondary establishment such as an agency, branch or subsidiary, the legislation in issue is contrary to Articles 52 and 58 of the Treaty.

With regard to vessels which are not used in the context of an economic activity, registration in the host Member State by a national of another Member State falls within the scope of the Community provisions relating to freedom of movement for persons, and the legislation in issue, in so far as it allows only nationals to register leisure craft in which they own more than half the shares is contrary to Articles 6, 48 and 52 of the Treaty, Article 7 of Regulation No 1251/70 on the right of workers to remain in the territory of a Member State after having been employed in that State and Article 7 of Directive 75/34 concerning the right of nationals of a Member State to remain in the territory of another Member State after having pursued therein an activity in a self-employed capacity.

2. The incompatibility of national legislation with provisions of the Treaty, even provisions which are directly applicable, can be finally remedied only by means of national provisions of a binding nature which have the same legal force as those which must be amended. Mere administrative practices, which by their nature are alterable at will by the authorities and are not given the appropriate publicity, cannot be regarded as constituting the proper fulfilment of obligations under the Treaty.

3. Even though Article 171 of the Treaty does not specify the period within which a judgment must be complied with, the importance of immediate and uniform application of Community law requires that the process of compliance must be initiated at once and must be completed as soon as possible.