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

JUDGMENT OF THE COURT (Fifth Chamber)

2 October 2003 (1)

(Freedom of movement for workers - Vehicle leasing - Obligation to register vehicle in worker's Member State of residence)

In Case C-232/01,

REFERENCE to the Court under Article 234 EC by the Politierechtbank te Mechelen (Belgium) for a preliminary ruling in the criminal proceedings before that court against

Hans van Lent,

on the interpretation of Article 39 EC,

THE COURT (Fifth Chamber),

composed of: M. Wathelet, President of the Chamber, D.A.O. Edward, P. Jann, S. von Bahr (Rapporteur) and A. Rosas, Judges,

Advocate General: P. Léger,

Registrar: M.-F. Contet, Principal Administrator,

after considering the written observations submitted on behalf of:

- the Belgian Government, initially by F. van de Craen, and, subsequently, A. Snoecx, acting as Agents,

- the Danish Government, by J. Molde and J. Bering Liisberg, acting as Agents,

- the Finnish Government, by E. Bygglin, acting as Agent,

- the United Kingdom Government, by G. Amodeo, acting as Agent, and P. Whipple, barrister,

- the Commission of the European Communities, by H. van Lier and M. Patakia, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Danish Government, represented by J. Bering Liisberg, of the Finnish Government, represented by T. Pynnä, acting as Agent, of the United Kingdom Government, represented by P. Whipple, and of the Commission, represented by H. van Lier, at the hearing on 10 October 2002,

after hearing the Opinion of the Advocate General at the sitting on 5 December 2002,

gives the following

Judgment

1. By order of 11 June 2001, received at the Court on 18 June 2001, the Politierechtbank te Mechelen (Local Criminal Court, Mechelen) (Belgium) referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Articles 10 EC and 39 EC.

   Factual and legal background

2. Mr Van Lent is a Belgian national residing in Putte (Belgium).

3. During a traffic check in Willebroek (Belgium) on Sunday 22 August 1999, it was found that Mr Van Lent was driving a motor vehicle with a Luxembourg registration plate.

4. The vehicle was registered in the name of Axus Luxembourg SA, a leasing company established in Luxembourg, apparently without a place of business in Belgium. Mr Van Lent stated that he was working as a civil engineer for EDS SA (EDS), established in Bascharage (Luxembourg), who had provided him with the leased vehicle and for which he did not have to pay any rental charges. EDS also had a place of business in Anvers (Belgium).

5. The Crown Prosecutor served a summons on Mr Van Lent for having taken on the public highway a motor vehicle which had not been registered in Belgium in the name of its owner, in breach of Article 3(1) of the Royal Decree of 31 December 1953 governing the registration of motor vehicles and trailers, (Belgische Staatsblad of 9 January 1954, p. 87) as amended by the Royal Decree of 27 December 1993 (Belgische Staatsblad of 18 January 1994, p. 954) (the Royal Decree of 31 December 1953).

6. Under that provision:

   Motor vehicles and trailers shall be permitted to travel on the public highway only if, on application by and in the name of their owner, they have first been entered in the register of motor vehicles and trailers referred to in Article 2 ...

7. In accordance with Article 4 of the Royal Decree of 31 December 1953, an application for registration of a vehicle must be sent to the Road Traffic Office on a form showing, where the applicant is a legal person, inter alia, its value added tax (VAT) number or, if it has no VAT number, its national register number and the full address of its registered office in Belgium.

8. The Royal Decree of 31 December 1953 was repealed by the Royal Decree of 20 July 2001 on the registration of vehicles (Belgische Staatsblad of 8 August 2001, p. 27022, the Royal Decree of 20 July 2001). Under Article 10(1) of the Royal Decree of 20 July the user of a vehicle is now authorised to re-register it in Belgium should the owner of the vehicle be unable to do so. That new rule is not, however, applicable to this case.

9. During the hearing on 18 September 2000 before the Politierechtbank te Mechelen Mr Van Lent stated that he worked exclusively for EDS in Luxembourg, but that he attended meetings in Anvers. He stated, further, that he also used the vehicle for private purposes to go home at the weekend.

10. Before that court, Mr Van Lent submitted that Article 3(1) of the Royal Decree of 31 December 1953 infringed Community law and, more particularly, the principle of freedom of movement for workers guaranteed by the Treaty of Rome.

    The question referred for a preliminary ruling

11. Taking the view that the dispute did indeed raise a question concerning the interpretation of Community law, the Politierechtbank te Mechelen decided to stay the proceedings and referred the following question to the Court for a preliminary ruling:

    Do Community rules, in particular Article 39 EC (formerly Article 48 of the EC Treaty) and Article 10 EC (formerly Article 5 of the EC Treaty), preclude a Member State from requiring registration of a vehicle belonging (1) to a leasing company established in a neighbouring Member State, which is leased by an employer and used by an employee (2) who is resident in the first-mentioned Member State, at a distance, more specifically, of some 200 km from his place of employment, (3) in a situation where the employee in question resides in the first-mentioned Member State during the week and uses the vehicle in order to perform his contract of employment and also during his free time, including weekends and holiday periods?

    Examination of the question referred for a preliminary ruling

12. By its question, the national court asks, essentially, whether Article 39 EC precludes national rules of a Member State which prohibit a worker who is domiciled in that Member State from using on its territory a vehicle registered in another neighbouring Member State, belonging to a leasing company established in that second Member State and made available to the worker by his employer who is also established in the second Member State.

13. As a preliminary point it must be recalled that although, in the absence of complete harmonisation in the field, the Member States may prescribe the conditions for the registration of vehicles travelling on their territory, the measures adopted cannot be exempt from the application of Articles 10 EC and 39 EC (see, by way of analogy, Case C-121/00 Hahn [2002] ECR I-9193, paragraph 34).

14. Any Community national who, irrespective of his place of residence and his nationality, has exercised the right to freedom of movement for workers and who has been employed in a Member State other than that of residence falls within the scope of Article 39 EC (Case C-419/92 Scholz [1994] ECR I-505, paragraph 9, and Case C-385/00 De Groot [2002] ECR I-11819 paragraph 76).

15. Moreover, it is settled case-law that all of the EC Treaty provisions relating to the freedom of movement of persons are intended to facilitate the pursuit by Community nationals of occupational activities of all kinds throughout the Community, and preclude measures which might place Community nationals at a disadvantage when they wish to pursue an economic activity in the territory of another Member State (Case C-370/90 Singh [1992] ECR I-4265, paragraph 16; Case C-302/98 Sehrer [2000] ECR I-4585, paragraph 32; and De Groot, cited above, paragraph 77).

16. In that regard, it must be pointed out that provisions which preclude or deter a national of a Member State from leaving his country of origin to exercise his right to freedom of movement therefore constitute an obstacle to that freedom even if they apply without regard to the nationality of the workers concerned (de Groot, paragraph 78).

17. In the present case it appears, first, that Article 3 of the Royal Decree of 31 December 1953 prohibits a vehicle registered in another Member State from being driven in Belgium in circumstances such as those in this case.

18. Second, it does indeed appear to follow from Articles 3 and 4 of the Royal Decree of 31 December 1953 that the worker, Mr Van Lent, could not register the vehicle in Belgium because he is not the owner and that the owner, the leasing company, could not register it either because it is not established in Belgium and does not have a Belgian VAT number as is required for registration of the vehicle.

19. As the Advocate General states at point 23 of his Opinion, it is effectively impossible for a worker in Mr Van Lent's position, domiciled in Belgium, who uses the vehicle for work and to go home to Belgium at the weekend, to benefit from the provision of a vehicle belonging to a person established in another Member State.

20. In the same way, such rules could discourage an employer based in one Member State from engaging a worker residing in another Member State because of the higher costs and administrative difficulties involved.

21. Such a measure, which has the effect of preventing a worker from benefiting from certain advantages, in particular, the provision of a vehicle, may deter him from leaving his country of origin in order to exercise his right to free movement.

22. In those circumstances it must be considered whether the restriction arising from the national law may be justified.

23. The Member States which intervened in the present case argue that the obligation to register vehicles under the national rules is necessary to ensure road safety and to combat erosion of the tax base.

24. In that regard, it is sufficient to observe that, since the vehicle cannot be registered in Belgium, the objectives of the obligation to register cannot be achieved. It follows that the restriction on freedom of movement for workers cannot be justified.

25. That observation does not, however mean that in a case such as this, the possibility of registering the vehicle introduced by the Royal Decree of 20 July 2001 has the effect of justifying, in respect of Article 39 EC for an employee or Article 43 EC for an employer or leasing company, the obstacles which remain as a result of the Belgian legislation.

26. In those circumstances, the answer to the question referred to the Court must be that Article 39 EC precludes national rules of a Member State such as those in the present case, which prohibit a worker who is domiciled in that Member State from using on its territory a vehicle registered in another neighbouring Member State, belonging to a leasing company established in that second Member State, and made available to the worker by his employer who is also established in the second Member State.

    Costs

27. The costs incurred by the Belgian, Danish, Finnish and United Kingdom Governments and the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Fifth Chamber),

in answer to the question referred to it by the Politierechtbank te Mechelen by order of 11 June 2001, hereby rules:

Article 39 EC precludes national rules of a Member State, such as those in the present case, which prohibit a worker who is domiciled in that Member State from using on its territory a vehicle registered in another neighbouring Member State, belonging to a leasing company established in that second Member State, and made available to the worker by his employer who is also established in the second Member State.

Wathelet Edward Jann von Bahr Rosas

Delivered in open court in Luxembourg on 2 October 2003.

R. Grass M. Wathelet

Registrar President of the Fifth Chamber

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1: Language of the case: Dutch.