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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Jany & Ors (External relations) [2001] EUECJ C-268/99 (20 November 2001) URL: http://www.bailii.org/eu/cases/EUECJ/2001/C26899.html Cite as: [2001] ECR I-8615, [2003] CEC 561, Case C-268/99, EU:C:2001:616, [2003] 2 CMLR 1, ECLI:EU:C:2001:616, [2001] EUECJ C-268/99, [2003] All ER (EC) 193 |
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JUDGMENT OF THE COURT
20 November 2001 (1)
(External relations - Association agreements between the Communities and Poland and between the Communities and the Czech Republic - Freedom of establishment - Economic activities - Whether or not they include the activity of prostitution)
In Case C-268/99,
REFERENCE to the Court under Article 234 EC by the Arrondissementsrechtbank te 's-Gravenhage (Netherlands) for a preliminary ruling in the proceedings pending before that court between
Aldona Malgorzata Jany and Others
and
Staatssecretaris van Justitie,
on the interpretation of Articles 44 and 58 of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Poland, of the other part, concluded and approved on behalf of the Communities by Decision 93/743/Euratom, ECSC, EC of the Council and the Commission of 13 December 1993 (OJ 1993 L 348, p. 1), and of Articles 45 and 59 of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, concluded and approved on behalf of the Communities by Decision 94/910/ECSC, EC, Euratom of the Council and the Commission of 19 December 1994 (OJ 1994 L 360, p. 1),
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, P. Jann, F. Macken and N. Colneric (Presidents of Chambers), C. Gulmann, D.A.O. Edward, A. La Pergola (Rapporteur), L. Sevón, M. Wathelet, V. Skouris and C.W.A. Timmermans, Judges,
Advocate General: P. Léger,
Registrar: L. Hewlett, Administrator,
after considering the written observations submitted on behalf of:
- the Netherlands Government, by M.A. Fierstra, acting as Agent,
- the Belgian Government, by P. Rietjens, acting as Agent,
- the French Government, by K. Rispal-Bellanger and A. Lercher, acting as Agents,
- the Italian Government, by U. Leanza, acting as Agent, assisted by F. Quadri, avvocato dello Stato,
- the United Kingdom Government, by J.E. Collins, acting as Agent, assisted by S. Kovats, Barrister,
- the Commission of the European Communities, by M.-J. Jonczy, P.J. Kuijper and P. van Nuffel, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of Ms Jany and the other applicants, represented by G.J.K. van Andel, advocaat; of the Netherlands Government, represented by J.S. van den Oosterkamp, acting as Agent; of the United Kingdom Government, represented by J.E. Collins, assisted by S. Kovats; and of the Commission, represented by M.-J. Jonczy and W. Neirinck, acting as Agent, at the hearing on 20 February 2001,
after hearing the Opinion of the Advocate General at the sitting on 8 May 2001,
gives the following
The Association Agreement between the Communities and Poland
Subject to the conditions and modalities applicable in each Member State:
- the treatment accorded to workers of Polish nationality legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals,
...
3. Each Member State shall grant, from entry into force of this Agreement, a treatment no less favourable than that accorded to its own companies and nationals for the establishment of Polish companies and nationals as defined in Article 48 and shall grant in the operation of Polish companies and nationals established in its territory a treatment no less favourable than that accorded to its own companies and nationals.
4. For the purposes of this Agreement:
(a) establishment shall mean
(i) as regards nationals, the right to take up and pursue economic activities as self-employed persons and to set up and manage undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another Party. The provisions of this chapter do not apply to those who are not exclusively self-employed;
...
...
(c) economic activities shall in particular include activities of an industrial character, activities of a commercial character, activities of craftsmen and activities of the professions.
Article 53(1) of the Association Agreement between the Communities and Poland provides:
The provisions of this chapter shall be applied subject to limitations justified on grounds of public policy, public security or public health.
For the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons, and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. ...
The Association Agreement between the Communities and the Czech Republic
The national legislation
(a) satisfy the conditions generally governing access to an activity as a self-employed person and any special conditions applicable to the exercise of the planned activity;
(b) have sufficient financial resources;
(c) not represent a danger to public peace, public order or national security.
The dispute in the main proceedings
- Ms Jany pays rent to the owner of the premises where she carries on her activity. Her net monthly income is approximately between NLG 1 500 and NLG 1 800. She has an accountant who draws up her tax return;
- Ms Szepietowska carries on her activity three to four times a week in rented premises. She claims that her net monthly income amounts approximately to between NLG 1 500 and NLG 1 800. Her accountant drew up her first tax return in 1997;
- Ms Padevetova submitted accounts relating to income and expenditure for the 1997 financial year drawn up by her accountant;
- Ms Hrubcinova pays rent to the proprietress of the premises where she carries on her activity. Her accountant ensures that she satisfies her tax obligations. She returns to the Czech Republic two or three times each year;
- Ms Überlackerova pays rent to the proprietress of the premises where she carries on her activity. According to the estimates which her accountant has submitted to the tax authorities, her annual turnover amounts to NLG 35 000. Since she works for 10 days each month in Amsterdam and resides in the Czech Republic for the remainder of the time, the Netherlands authorities doubt whether she is genuinely resident in the Netherlands.
The questions submitted for preliminary ruling
1. Can Polish and Czech nationals rely directly on the Agreements in the sense that they are entitled, vis-à-vis a Member State, to claim that they derive a right of entry and residence from the right laid down in Article 44 of the Agreement with Poland and Article 45 of the Agreement with the Czech Republic in order to take up and pursue economic activities as self-employed persons and to set up and manage undertakings, irrespective of the policy which the Member State in question pursues in this regard?
2. If the answer to that question is in the affirmative: is a Member State free under Article 58 of the Agreement with Poland and Article 59 of the Agreement with the Czech Republic to make the right of entry and residence subject to specific conditions, such as those contained in the policy followed by the Netherlands, which include the condition that the alien must, in carrying on his business, have adequate means of support (in accordance with Chapter A 4/4.2.1. of the 1994 Vreemdelingencirculaire, this means a net income which is at least equal to the subsistence level within the meaning of the Algemene Bijstandswet (General Law on Welfare))?
3. Do Article 44 of the Agreement with Poland and Article 45 of the Agreement with the Czech Republic allow prostitution to be excluded from the notion of economic activities as self-employed persons on the ground that prostitution does not come within the description in Article 44(4), opening words, and (c), of the Agreement with Poland and Article 45(4), opening words, and (c), of the Agreement with the Czech Republic, for reasons of a moral nature, on the ground that prostitution is prohibited in (a majority of) the associate countries, and on the ground that it gives rise to problems concerning the freedom of action of prostitutes and their independence which are difficult to monitor?
4. Do Article 43 (ex Article 52) of the EC Treaty and Article 44 of the Agreement with Poland and Article 45 of the Agreement with the Czech Republic permit a distinction to be drawn between the notions of activities as self-employed persons and economic activities as self-employed persons contained in those respective provisions so that the activities carried out by a prostitute in a self-employed capacity come within the term used in Article 43 (ex Article 52) of the EC Treaty but not within that used in those articles of the Agreements?
5. If the answer to the previous question is that the distinction therein referred to is permissible:
(a) Is it compatible with Article 44 of the Agreement with Poland and Article 45 of the Agreement with the Czech Republic and the freedom of establishment which those provisions are intended to realise to impose minimum conditions on the self-employed persons referred to in paragraph (3) of those articles in regard to the range of their activities and also to impose restrictions such as that:
- the business operator must perform skilled work;
- a business plan must exist;
- the business operator must (also) attend to the management of the business and not (exclusively) to executive (production) activities;
- the business operator must strive to ensure continuity of the undertaking, which means inter alia that he must have his principal place of residence in the Netherlands;
- there must be investment, and long-term commitments must be entered into?
(b) Do Article 44 of the Agreement with Poland and Article 45 of the Agreement with the Czech Republic provide justification for not regarding as self-employed any person who is dependent on and indebted to the person who recruited her and/or placed her in work, even though it is established that, as between the person concerned and that third party, there is no question of an employment relationship, against which the term self-employed in paragraph 4 of Articles 44 and 45 of the Agreements seeks to establish a barrier?
The first and second questions
- Article 44(3) of the Association Agreement between the Communities and Poland and Article 45(3) of the Association Agreement between the Communities and the Czech Republic must be construed as establishing, within the respective scopes of application of those two Agreements, a precise and unconditional principle which is sufficiently operational to be applied by a national court and which is therefore capable of governing the legal position of individuals.
The direct effect which those provisions must therefore be recognised as having means that Polish and Czech nationals relying on those provisions have the right to invoke them before the courts of the host Member State, notwithstanding the fact that the authorities of that State remain competent to apply to those nationals their own national laws and regulations regarding entry, stay and establishment, in accordance with Article 58(1) of the Association Agreement between the Communities and Poland and Article 59(1) of the Association Agreement between the Communities and the Czech Republic.
- The right of establishment, as defined by Article 44(3) of the Association Agreement between the Communities and Poland and by Article 45(3) of the Association Agreement between the Communities and the Czech Republic, means that rights of entry and residence, as corollaries of the right of establishment, are conferred on Polish and Czech nationals wishing to pursue activities of an industrial or commercial character, activities of craftsmen or activities of the professions in a Member State.
However, it follows from Article 58(1) of the Association Agreement between the Communities and Poland and from Article 59(1) of the Association Agreement between the Communities and the Czech Republic that those rights of entry and residence are not absolute privileges, inasmuch as their exercise may, in some circumstances, be limited by the rules of the host Member State governing the entry, stay and establishment of Polish and Czech nationals.
Substantive requirements such as those set out in section 4.2.3 of Chapter B 12 of the Circular on Aliens, in particular the requirement that Polish and Czech nationals wishing to become established in the host Member State must from the outset have sufficient financial resources to carry on the activity in question in a self-employed capacity, are designed precisely to enable the competent authorities of that State to carry out such checks and are appropriate for ensuring that such an objective is attained.
The fourth question
The activity of prostitution pursued in a self-employed capacity can be regarded as a service provided for remuneration and is therefore covered by both those expressions.
The third question
- in view of its illegal nature;
- for reasons of public morality;
- on the ground that it would be difficult to control whether persons pursuing that activity are able to act freely and are therefore not, in reality, parties to disguised employment relationships.
- outside any relationship of subordination concerning the choice of that activity, working conditions and conditions of remuneration;
- under that person's own responsibility; and
- in return for remuneration paid to that person directly and in full.
- outside any relationship of subordination concerning the choice of that activity, working conditions and conditions of remuneration;
- under that person's own responsibility; and
- in return for remuneration paid to that person directly and in full.
It is for the national court to determine in each case, in the light of the evidence adduced before it, whether those conditions are satisfied.
The fifth question
Costs
73. The costs incurred by the Netherlands, Belgian, French, Italian and United Kingdom Governments and by 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,
in answer to the questions referred to it by the Arrondissementsrechtbank te 's-Gravenhage by decision of 15 July 1999, hereby rules:
1. Article 44(3) of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Poland, of the other part, concluded and approved on behalf of the Communities by Decision 93/743/Euratom, ECSC, EC of the Council and the Commission of 13 December 1993, and Article 45(3) of the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part, concluded and approved on behalf of the Communities by Decision 94/910/ECSC, EC, Euratom of the Council and the Commission of 19 December 1994, must be construed as establishing, within the respective scopes of application of those two Agreements, a precise and unconditional principle which is sufficiently operational to be applied by a national court and which is therefore capable of governing the legal position of individuals.
The direct effect which those provisions must therefore be recognised as having means that Polish and Czech nationals relying on those provisions have the right to invoke them before the courts of the host Member State, notwithstanding the fact that the authorities of that State remain competent to apply to those nationals their own national laws and regulations regarding entry, stay and establishment, in accordance with Article 58(1) of the above Agreement with the Republic of Poland and Article 59(1) of the above Agreement with the Czech Republic.
2. The right of establishment, as defined by Article 44(3) of the above Agreement with the Republic of Poland and by Article 45(3) of the above Agreement with the Czech Republic, means that rights of entry and residence, as corollaries of the right of establishment, are conferred on Polish and Czech nationals wishing to pursue activities of an industrial or commercial character, activities of craftsmen or activities of the professions in a Member State.
However, it follows from Article 58(1) of the above Agreement with the Republic of Poland and from Article 59(1) of the above Agreement with the Czech Republic that those rights of entry and residence are not absolute privileges, inasmuch as their exercise may, in some circumstances, be limited by the rules of the host Member State governing the entry, stay and establishment of Polish and Czech nationals.
3. Articles 44(3) and 58(1) of the above Agreement with the Republic of Poland, read together, and Articles 45(3) and 59(1) of the above Agreement with the Czech Republic, read together, do not in principle preclude a system of prior control which makes the issue by the competent immigration authorities of leave to enter and remain subject to the condition that the applicant must show that he genuinely intends to take up an activity as a self-employed person without at the same time entering into employment or having recourse to public funds, and that he possesses, from the outset, sufficient financial resources for carrying out the activity in question as a self-employed person and has reasonable chances of success.
Substantive requirements such as those set out in section 4.2.3 of Chapter B 12 of the Netherlands Vreemdelingencirculaire (Circular on Aliens), in particular the requirement that Polish and Czech nationals wishing to become established in the host Member State must from the outset have sufficient financial resources to carry on the activity in question in a self-employed capacity, are designed precisely to enable the competent authorities of that State to carry out such checks and are appropriate for ensuring that such an objective is attained.
4. Article 44(4)(a)(i) of the above Agreement with the Republic of Poland and Article 45(4)(a)(i) of the above Agreement with the Czech Republic must be construed to the effect that the economic activities as self-employed persons referred to in those provisions have the same meaning and scope as the activities as self-employed persons referred to in Article 52 of the EC Treaty (now, after amendment, Article 43 EC).
The activity of prostitution pursued in a self-employed capacity can be regarded as a service provided for remuneration and is therefore covered by both those expressions.
5. Article 44 of the above Agreement with the Republic of Poland and Article 45 of the above Agreement with the Czech Republic must be construed to the effect that prostitution is an economic activity pursued by a self-employed person as referred to in those provisions, where it is established that it is being carried on by the person providing the service:
- outside any relationship of subordination concerning the choice of that activity, working conditions and conditions of remuneration;
- under that person's own responsibility; and
- in return for remuneration paid to that person directly and in full.
It is for the national court to determine in each case, in the light of the evidence adduced before it, whether those conditions are satisfied.
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Rodríguez Iglesias
Colneric
La Pergola
SkourisTimmermans
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Delivered in open court in Luxembourg on 20 November 2001.
R. Grass G.C. Rodríguez Iglesias
Registrar President
1: Language of the case: Dutch.
