JUDGMENT OF 29. 11. 1978 — CASE 21/78 DELKVIST v ANKLAGEMYNDIGHEDEN

In Case 21/78 REFERENCE to the Court under Article 177 of the EEC Treaty by Københavns Byret (Copenhagen City Court) for a preliminary ruling in the action pending before that court between

THE COURT composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and written procedure

A — The Council Directive

B — The national legislation applicable

C — The facts

D — The questions referred to the Court for a preliminary ruling

II — Summary of the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

A — Observations submitted by the Danish Government

B — Observations submitted by the Italian Government

C — Observations submitted by the Netherlands Government

D — Observations submitted by the Commission

III — Oral procedure

Decision

The first part of Question 1

Questions 3 and 4 (a)

Question 4 (b)

Question 5

Costs

I —. Facts and written procedure

A —. The Council Directive

(1). Natural persons or undertakings wishing to engage in the occupation of road passenger transport operator shall:

(2). Pending co-ordination at a later date, each Member State shall determine the provisions relating to good repute which must be satisfied by the applicant and, where appropriate, the natural persons referred to in paragraph (1).

B —. The national legislation applicable

C —. The facts

D —. The questions referred to the Court for a preliminary ruling

1. Is the Council Directive of 12 November 1974 lawful, valid, directly binding on Danish courts and applicable to relations between a Danish national and the Danish public authorities?

2. Does the Council Directive of 12 November 1974 cover a legal situation such as the present case?

3. If Question 2 is answered in the affirmative an answer to the following preliminary question is requested, namely must it be considered that the Council Directive of 12 November 1974 has amended Article 78 (2) and (3) of the Penal Code in that the stipulation in that provision that criminal conduct may only entail loss of civil rights if such conduct provides grounds for considering that there is imminent danger of misuse of the position of the person concerned has been superseded wholly or in part so that the provision relating to good repute in the Council Directive has been substituted for the provision in Article 78 (2) and (3) of the Penal Code?

4. (a) Does Article 78 (2) and (3) of the Danish Penal Code, which is worded in negative terms, namely that a person can be deprived of the right to engage in an occupation which requires special public authorization or approval only if his conduct provides grounds for considering that there is imminent danger of misuse of his position or occupation, satisfy the requirements relating to good repute which, according to the Council directive, the Member States must lay down for persons in this situation since the Member States, pending co-ordination at a later date, remain free themselves to lay down a more detailed definition of the requirement relating to good repute? (b) Is the present case covered by the transitional provisions in Article 4 (1) so that, because the applicant was authorized before 1 January 1978 under the Danish provisions to engage in the occupation of road passenger transport operator within Denmark, he is exempt from the requirement to furnish proof that he fulfils inter alia the requirement relating to good repute contained in Article 2 (1) (a)?

5. If the answer to Question 4 (b) is in the affirmative, does this imply that the case can be decided by Københavns Byret without regard to the provisions laid down in the Council Directive of 12 November 1974 or does Article 5 (2), concerning the duty of Member States to withdraw authorizations when the conditions in Article 2 (1) (a) (b) and (c) are no longer satisfied, mean that it is in any event necessary to fix requirements relating to the good repute of the applicant?

II —. Summary of the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

A —. Observations submitted by the Danish Government

(a). As regards Question 1, the court making the reference did not state any reason to doubt the validity of the directive. As to its direct applicability, it is unacceptable for reasons of legal certainty, which are decisive in this case, for a directive to be able to give rise directly to duties on the part of citizens or to restrict their rights.

(b). As regards Questions 2 and 4 (b), it follows from the combined provisions of Article 6 (1) (implementation of the directive) and of Article 4 (1) (transitional provisions) that the directive does not apply to a decision granting or refusing authorization which was notified before 1 January 1977, and also does not concern the legal effects flowing from such a decision after that date. Consequently, Article 5 (2) is not relevant to this case.

B —. Observations submitted by the Italian Government

(a). Anicle 2 (1) (a) of Directive No 74/562 is valid and binding on individuals in so far as it is held that they may rely upon it, but it cannot directly repeal or take the place of a national provision which is incompatible with it.

(b). Article 2 (1) (a) must be interpreted as meaning that as a general rule the requirements relating to good repute are unconnected with the general status of an applicant for admission to the occupation of road passenger transport operator, and cannot be stultified by internal provisions of a Member State.

(c). Anicle 4 (1) cannot apply in favour of a person not formally authorized before 1 January 1978 to engage in the occupation at issue.

C —. Observations submitted by the Netherlands Government

D —. Observations submitted by the Commission

1. Council Directive No 74/562/EEC of 12 November 1974 on admission to the occupation of road passenger transport operator in national and international transport operations is lawful and valid. The answer to the question whether the various provisions of the directive can apply directly to relations between the Member States and their nationals depends on a specific interpretation and assessment of the nature, structure and wording of each of them.

2. An application for the renewal of a road passenger transport licence (tourist category) falls within the scope of the Council directive mentioned in the preceding answer.

3. Article 2 (1) (a) and (2) of the aforesaid Council directive cannot be regarded as having amended or repealed Article 78 (2) and (3) of the Danish Penal Code which provide that criminal conduct may entail forfeiture of certain rights only if such conduct provides grounds for considering that there is imminent danger of misuse by the person concerned of his occupation.

4. (a) The provisions of Article 78 (2) and (3) of the Danish Penal Code satisfy the requirements relating to good repute which under Article 2 (1) and (2) of the aforesaid Council directive the Member States must impose on such of their citizens as apply for admission to the occupation of road passenger transport operator. (b) Article 4 (1) of the aforesaid Council directive must be interpreted as meaning that persons who had been authorized before 1 January 1978 to engage in the occupation of road passenger transport operator are exempt from the requirement to furnish proof that they satisfy the requirements relating to good repute laid down in Article 2 (1) (a) of the directive.

5. Article 5 (2) of the Council directive must be interpreted as meaning that the Member States are under a duty to ensure that the requirements laid down in Article 2 (1) (a), (b) and (c) are fulfilled as from the time when the directive is implemented in national law. However, when road passenger transport operators (tourist category) coming within Article 4 (1) of the directive are the subject of verification, they cannot be obliged to furnish proof that they satisfy inter alia the requirements relating to good repute.

III —. Oral procedure

1. By an order of 10 February 1978, which was received at the Court on 24 February 1978, Københavns Byret (Copenhagen City Court) referred to the Court under Article 177 of the EEC Treaty several questions on the interpretation and validity of Article 2 (1) (a) of Council Directive No 74/562/EEC of 12 November 1974 on admission to the occupation of road passenger transport operator in national and international transport operations (Official Journal 1974, L 308, p. 23), in particular the concept of good repute contained in that article.

2. These questions were raised in the context of an action concerning the rejection by the competent Danish authority on 29 December 1976 of an application by a road passenger transport operator (tourist category) for the renewal of his transport licence.

3. The grounds for that rejection were that the applicant's previous record showed that he had several convictions for theft and burglary and that his criminal conduct provided grounds for considering that there was imminent danger of misuse of his position as a passenger transport operator.

4. The competent Danish authority applied the provisions of Article 78 (2) of the Danish Penal Code (Straffelov), according to which a person may be prohibited on grounds of criminal conduct from engaging in an occupation which requires special public authorization or approval only if the criminal conduct provides grounds for considering that there is imminent danger of misuse of the position or occupation which he wishes to keep or take up.

5. For the purpose of harmonizing the legislation of the Member States in the matter of transport, on 12 November 1974 the Council adopted Directive No 74/562/EEC on admission to the occupation of road passenger transport operator in national and international transport operations.

6. Article 2 of that directive provides that:

7. Article 6 (1) provides that the Member States shall, after consulting the Commission, implement the directive before 1 January 1977.

8. Københavns Byret has referred the following questions to the Court for a preliminary ruling:

9. The Council directive was adopted in accordance with Article 75 of the Treaty for the implementation of a common transport policy.

10. The aim pursued in the directive, namely the introduction of common rules for admission to the occupation of road passenger transport operator in national and international transport operations in order to ensure that road passenger transport operators are better qualified, in the interests of users, transport operators and the economy as a whole, is unquestionably in accordance with the objectives of the said Article 75.

11. Therefore the answer to the first part of Question 1 must be that consideration of the directive has disclosed no factor of such a kind as to affect its validity.

12. It will be convenient to deal with Questions 3 and 4 (a) before the others.

13. Article 2 (2) of the directive provides that pending co-ordination at a later date, each Member State shall determine the provisions relating to good repute which must be satisfied by the applicant.

14. That provision leaves the Member States a wide margin of discretion as to the requirements relating to good repute imposed on applicants wishing to engage in the occupation of road passenger transport operator.

15. A provision of national law whereby an applicant who has a criminal conviction may be regarded as not being of good repute if the criminal conduct provides grounds for considering that there is imminent danger of misuse of his occupation cannot be regarded as exceeding the margin of discretion left to a Member State.

16. Therefore the answer to Questions 3 and 4 (a) should be that a statutory provision such as Article 78 of the Danish Penal Code is to be regarded as a provision validly enacted by the State within the limits of the directive.

17. Article 4 (1) of the directive provides that: Natural persons and undertakings furnishing proof that before 1 January 1978 they were authorized under national regulations in a Member State to engage in the occupation of road passenger transport operator in national and/or international transport operations shall be exempt from the requirement to furnish proof that they satisfy the provisions laid down in Article 2.

18. Question 4 (b) raises the general issue of the effects of a directive adopted under Article 189 of the Treaty.

19. On this issue, the Court has already held, in its judgment of 1 February 1977 in Case 51/76 (Nederlandse Ondernemingen [1977] ECR 113)inter alia, that if, by virtue of the provisions of Anicle 189, regulations are directly applicable and, consequently, may by their very nature have direct effects, it does not follow from this that other categories of acts mentioned in that article can never have similar effects.

20. It would be incompatible with the binding effect attributed to a directive by Article 189 to exclude, in principle, the possibility that the obligation which it imposes may be invoked by those concerned.

21. In particular, where the Community authorities have, by directive, imposed on Member States the obligation to pursue a particular course of conduct, the effectiveness of such an act would be weakened if individuals were prevented from relying on it before their national courts and if the latter were prevented from taking it into consideration as an element of Community law.

22. Therefore it is to be inferred that even if national law does not contain any provision analogous to Article 4 of the directive, a national authority cannot, subject to application of Article 5 of the directive, require an applicant wishing to engage in the occupation of road passenger transport operator to furnish proof that he satisfies the requirements relating to good repute, if he furnishes proof that he was authorized to engage in that occupation before 1 January 1978.

23. However, Article 5 (2) of the directive provides that Member States shall ensure that the competent authorities withdraw the authorization to pursue the occupation of passenger transport operator if they establish that the provisions of Article 2(1) (a), (b) or (c) are no longer satisfied. In that case however, they are to allow sufficient time for a substitute to be appointed.

24. If the authorities consider that applicants do not fulfil the requirements relating to good repute, they must therefore refuse them renewal of their transport licence, but when transport operators coming within Article 4 (1) of the directive are the subject of verification, they cannot be obliged to furnish special proof.

25. Therefore the answer to Question 5 must be that although persons who before 1 January 1978 had obtained authorization to engage in the occupation of road passenger transport operator are exempt from the requirement themselves to furnish proof that they satisfy the requirement relating to good repute laid down in Article 2 (1) (a) of the directive, the national authorities nevertheless remain competent to verify in each case that the said requirement is fulfilled.

26. The answers given make it unnecessary to reply to the other questions.

27. The costs incurred by the Danish Government, the Italian Government, the Netherlands Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.

28. As these proceedings are, in so far as the parties to the main action are concerned, 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 Københavns Byret by an order of 10 February 1978, hereby rules:

1 Consideration of Council Directive No 74/562/EEC of 12 November 1974 has disclosed no factor of such a kind as to affect its validity.

2 A statutory provision such as Article 78 of the Danish Penal Code is to be regarded as a provision validly enacted by the State within the limits of the directive.

3 Although persons who before 1 January 1978 had obtained authorization to engage in the occupation of road passenger transport operator are exempt from the requirement themselves to furnish proof that they satisfy the requirement relating to good repute laid down in Article 2 (1) (a) of the directive, the national authorities remain competent to verify in each case that the said requirement is fulfilled.