Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE COURT (Sixth Chamber)

29 June 1999 (1)

(Failure of a Member State to fulfil its obligations - Article 6 of the EC Treaty (now, after amendment, Article 12 EC) - Freedom of establishment - Requirement for there to be Belgian members in order for an association to be granted legal personality)

In Case C-172/98,

Commission of the European Communities, represented by Maria Patakia, of its Legal Service, acting as Agent, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Kingdom of Belgium, represented by Jan Devadder, General Adviser in the Directorate-General for Legal Affairs of the Ministry of Foreign Affairs, External Trade and Cooperation with Developing Countries, acting as Agent, with an address for service in Luxembourg at the Belgian Embassy, 4 Rue des Girondins,

defendant,

APPLICATION for a declaration that by requiring the presence of a Belgian member in the administration of an association or a minimum, and majority, presence of members of Belgian nationality in order for the legal personality of an

association to be recognised, the Kingdom of Belgium has failed to fulfil its obligations under Article 6 of the EC Treaty (now, after amendment, Article 12 EC),

THE COURT (Sixth Chamber),

composed of: P.J.G. Kapteyn, President of the Chamber, J.L. Murray and H. Ragnemalm (Rapporteur), Judges,

Advocate General: G. Cosmas,

Registrar: R. Grass,

having regard to the Report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 28 January 1999,

gives the following

Judgment

1. By application lodged at the Court Registry on 8 May 1998, the Commission of the European Communities brought an action under Article 226 EC (ex Article 169) for a declaration that by requiring the presence of a Belgian member in the administration of an association or a minimum, and majority, presence of members of Belgian nationality in order for the legal personality of an association to be recognised, the Kingdom of Belgium has failed to fulfil its obligations under Article 6 of the EC Treaty (now, after amendment, Article 12 EC).

2. Article 1 of the Belgian Law of 25 October 1919 conferring legal personality on international associations which pursue philanthropic, religious, scientific, artistic or pedagogical objectives ('the Law of 1919') provides that 'legal personality may be granted by royal decree, under the conditions and within the limits of this Law, to associations open to Belgians and foreign nationals which have as executive organ an institution or committee whose administration includes at least one Belgian member and pursue a philanthropic, religious, scientific, artistic or pedagogical non-profit-making objective'.

3. Article 26 of the Law of 27 June 1921 conferring legal personality on non-profit-making associations and on institutions promoting the public interest ('the Law of 1921') provides that '... the association may not rely on its legal personality against third parties ... unless three fifths of the members are of Belgian nationality'.

4. By letter of 25 March 1996 the Commission pointed out to the Kingdom of Belgium that the above two Laws appeared to be contrary to Article 6 of the Treaty and asked it to submit its observations within two months.

5. On 9 August 1996 the Belgian Government informed the Commission that it intended to amend the Laws at issue in order to comply with the observations set out in the letter of 25 March 1996. On 26 February 1997 it forwarded to the Commission two preliminary draft Laws for the amendment of the abovementioned Laws.

6. On 19 June 1997 the Commission, having established that the provisions in question were still in force, sent a reasoned opinion to the Kingdom of Belgium, calling on it to adopt, within a period of two months from notification thereof, the measures necessary in order to comply with Article 6 of the Treaty.

7. The Belgian Government then sent to the Commission, by letter of 11 August 1997, the text of a draft Law amending the Law of 1921 and, by letter of 27 February 1998, of a preliminary draft Law relating to the Law of 1919.

8. However, since the Commission received no information regarding the actual adoption of measures amending the provisions in question, it brought this action.

9. In its application, the Commission states that the Law of 1919 and the Law of 1921 contain provisions which discriminate on grounds of nationality; they fall within the scope of the EC Treaty inasmuch as they affect freedom of establishment and are accordingly contrary to Article 6 thereof.

10. The Belgian Government indicates in its defence that a preliminary draft law has been drawn up on which the Conseil d'État (Council of State) must give an opinion before its submission for parliamentary approval.

11. It should be noted first of all that, under the first paragraph of Article 6 of the Treaty, any discrimination on grounds of nationality within the scope of application of the Treaty is prohibited.

12. The Belgian Laws at issue regulate the right to form, in Belgium, associations with legal personality and nationals of the other Member States are among the persons to whom they apply. Those Laws thus affect one of the fundamental freedoms guaranteed by the Treaty and accordingly fall within its field of application.

13. Article 1 of the Law of 1919 and Article 26 of the Law of 1921 require there to be a minimum number of members of Belgian nationality in order for such associations to be set up, thereby imposing a condition which discriminates on grounds of nationality, contrary to Article 6 of the Treaty.

14. It must accordingly be held that by requiring the presence of a Belgian member in the administration of an association or a minimum, and majority, presence of members of Belgian nationality in order for the legal personality of an association to be recognised, the Kingdom of Belgium has failed to fulfil its obligations under Article 6 of the Treaty.

    Costs

15. Under Article 69(2) 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 and the Kingdom of Belgium has been unsuccessful, the latter must be ordered to pay the costs.

On those grounds,

THE COURT (Sixth Chamber)

hereby:

1. By requiring the presence of a Belgian member in the administration of an association or a minimum, and majority, presence of members of Belgian nationality in order for the legal personality of an association to be recognised, the Kingdom of Belgium has failed to fulfil its obligations under Article 6 of the EC Treaty (now, after amendment, Article 12 EC);

2. Orders the Kingdom of Belgium to pay the costs.

KapteynMurray Ragnemalm

Delivered in open court in Luxembourg on 29 June 1999.

R. Grass P.J.G. Kapteyn

Registrar President of the Sixth Chamber

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1: Language of the case: French.