Erich Ciola v. Land Vorarlberg (Case C-224/97) Court of Justice of the European Communities ECJ

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1 Erich Ciola v. Land Vorarlberg (Case C-224/97) Court of Justice of the European Communities ECJ (Presiding, Hirsch ( Rapporteur), P.C.; Schingten and Ioannou JJ.) Mr Jean Mischo, Advocate General. 29 April 1999 Services--free movement--restriction--moorings--restrictions on moorings for boat-owners resident in another Member State-- Article 59 E.C.--company found guilty of exceeding allotted numbers of moorings to non-residents by administrative court--company manager appealed against fines imposed-- freedom to provide services included the right for recipients of services to go to another Member State to receive a service--restriction on moorings infringed the first paragraph of Article 59 E.C.--the primacy of Community law over specific individual decisions. C was the manager of a company which leased land on the shores of Lake Constance. The company obtained permission to establish 200 moorings for pleasure boats there, and proceeded to rent out moorings to boat owners, some of whom were not resident in Austria. In 1996, the company became the subject of an administrative decision to the effect that a maximum of 60 boats owned by persons who were resident abroad could be accommodated in the harbour. Until that time the proportion of boats owned by persons resident abroad was to be progressively reduced. C, in his capacity as the manager of the company, was found guilty of renting two moorings to boat-owners resident abroad, even though the maximum quota of 60 moorings reserved for foreigners had already been exceeded. C appealed against that finding and the fines imposed. The national court stayed proceedings and referred to the Court of Justice the question whether Articles 59 to 66 E.C. were to be interpreted as precluding a Member State from establishing a maximum quota of moorings which could be rented to boat-owners resident in another Member State. The other question referred concerned whether a prohibition which was contrary to the freedom to provide services, laid down before a Member State's accession to the European Union by a specific individual decision, must be disregarded when assessing the validity of a fine imposed for failure to comply with that prohibition after the date of accession. That question raised the issue of whether the principle of the primacy

2 of Community law over general rules of national law applied to a specific *1221 administrative decision which was not in conformity with Community law. Held: (1) The freedom to provide services included the right for the recipients of services to go to another Member State to receive a service The right freely to provide services could be relied on by an undertaking as against the State in which it was established if the services were provided for persons established in another Member State. Moreover, that right included the freedom for recipients of services to go to another Member State to receive a service there, without being obstructed by restrictions. Articles 59 to 66 E.C. therefore applied to a service provided by a company such as C's to a boat owner resident in another Member State who received and enjoyed the services in a Member State other than that in which he resided. [11]-[13] Case C-70/95, Sodemare and Others v. Regione Lombardia [1997] E.C.R. I- 3395; [1997] 3 C.M.L.R. 591; Joined Cases 286/82 and 26/83, Luisi and Carbone v. Ministero del Tesoro (286/82 & 26/83): [1984] E.C.R. 377; [1985] 3 C.M.L.R. 52; Cowan v. Tresor Public ( 186/87): [1989] E.C.R. 195; [1990] 2 C.M.L.R. 613, followed. (2) The restriction on moorings infringed the first paragraph of Article 59 E.C. A restriction on the number of moorings which could be allocated to non-resident boat owners infringed the prohibition under the first paragraph of Article 59 E.C. against discrimination with regard to providers of services. While it was not based on nationality and so could not be regarded as direct discrimination, it did use place of residence as the distinguishing criterion. It was settled case law that national rules under which a distinction was drawn on the basis of residence were liable to operate mainly to the detriment of nationals of other Member States, as non-residents were foreigners in the majority of cases. [12]-[20] Clean Car Autoservice GmbH v. Landeshauptmann Von Wien (C-350/96): [1998] E.C.R. I-2521; [1998] 2 C.M.L.R. 637, followed. (3) The primacy of Community law The rule that it was for the national court in each case to refuse to apply any provision of national law which conflicted with Community law had been refined in two respects. First, all administrative bodies, including decentralised authorities were subject to that obligation as to primacy. Individuals could therefore rely on a provision of Community law such as, in this case, Article 59 E.C., which as regards Austria, became directly and unconditionally applicable at the date of *1222 accession. Secondly, provisions of national law which conflicted with such a provision of Community law could be legislative or administrative. It was consistent with that case law that those administrative

3 provisions of national law should include not only general abstract rules but also specific administrative decisions. Furthermore, there was no reason why the existence of the legal protection which individuals derived from the direct effect of Community law should depend on the nature of the conflicting provision of national law. [21]-[34] Amministrazione delle Finanze dello Stato v. Simmenthal SpA (106/77): [1978] E.C.R. 629; [1978] C.M.L.R. 263; Fratelli Costanzo v. Comune di Milano ( 103/88): [1989] E.C.R. 1839; [1990] 3 C.M.L.R. 239; Rewe v. Hauptzollamt Kiel ( 158/80): [1981] E.C.R. 1805; [1982] 1 C.M.L.R. 449; R. v. Secretary of State for Transport, Ex parte Factortame Ltd and Others ( C-213/89): [1990] E.C.R. I- 2433; [1990] 3 C.M.L.R. 375, followed. Representation Christine Stix-Hackl, Gesandte in the Federal Ministry of Foreign Affairs, acting as Agent, for the Austrian Government. Antonio Caeiro, Principal Legal Adviser, and Viktor Kreuschitz, Legal Adviser, acting as Agents, for the E.C. Commission. Harald Bösch, Rechtsanwalt, Bregenz, for Erich Ciola. Peter Buβkäger, lawyer in the Legislative Department, Office of the Government of the Land of Vorarlberg, and Martina Büchel, acting head of the Department of European and External Affairs, Office of the Government of the Land of Vorarlberg, acting as Agents, for Land Vorarlberg. Cases referred to in the judgment: 1. Sodemare and Others v. Regione Lombardia (C-70/95), 17 June 1997: [1997] E.C.R. I-3395; [1997] 3 C.M.L.R Luisi and Carbone v. Ministero del Tesoro (286/82 & 26/83), 31 January 1984: [1984] E.C.R. 377; [1985] 3 C.M.L.R Cowan v. Tresor Public (186/87), 2 February 1989: [1989] E.C.R. 195; [1990] 2 C.M.L.R Clean Car Autoservice GmbH v. Landeshauptmann Von Wien (C-350/96), 7 May 1998: [1998] E.C.R. I-2521; [1998] 2 C.M.L.R Bond Van Adverteerders v. Netherlands (352/85), 26 April 1988: [1988] E.C.R. 2085; [1989] 3 C.M.L.R Gouda v. Commissariaat voor de Media (C-288/89), 25 July 1991: [1991] E.C.R. I Amministrazione delle Finanze dello Stato v. Simmenthal SpA (106/77), 9 March 1978: [1978] E.C.R. 629; [1978] C.M.L.R E.C. Commission v. France (167/73), 4 April 1974: [1974] E.C.R. 359; [1974] 2 C.M.L.R * Criminal Proceedings against Webb (279/80), 17 December 1981: [1981] E.C.R. 3305; [1982] 1 C.M.L.R Fratelli Costanzo v. Comune di Milano (103/88), 22 June 1989: [1989] E.C.R. 1839; [1990] 3 C.M.L.R Rewe-Handelsgesellschaft Nord mbh et Rewe-Markt Steffen v. Hauptzollamt

4 Kiel (158/80), 7 July 1981: [1981] E.C.R. 1805; [1982] 1 C.M.L.R R. v. Secretary of State for Transport, Ex parte Factortame Ltd and Others (C-213/89), 19 June 1990: [1990] E.C.R. I-2433; [1990] 3 C.M.L.R Further cases referred to by the Advocate General: 13. Alpine Investments v. Minister Van Financiën (C-384/93), 10 May 1995: [1995] E.C.R. I-1141; [1995] 2 C.M.L.R Finanzamt Köln-Altstadt v. Schumacker (C-279/93), 14 February 1995: [1995] E.C.R. I-225; [1996] 2 C.M.L.R Costa v. Enel (6/64), 15 July 1964: [1964] E.C.R. 585; [1964] C.M.L.R Rewe v. Landwirtschaftskammer Saarland (33/76), 16 December 1976: [1976] E.C.R. 1989; [1977] 1 C.M.L.R Comet BV v. Produktschap voor Siergewassen (45/76), 16 December 1976: [1976] E.C.R. 2043; [1977] 1 C.M.L.R Hans Just I/s v. Danish Ministry for Fiscal Affairs (68/79): [1980] E.C.R. 501; [1981] 2 C.M.L.R Amministrazione delle Finanze dello Stato v. SpA San Giorgio (199/82), 9 November 1983: [1983] E.C.R Les Fils de Jules Bianco v. Directeur General des Douanes et Droits Indirects (331, 376, 378/85), 25 February 1988: [1988] E.C.R. 1099; [1989] 3 C.M.L.R E.C. Commission v. Italy (104/86), 24 March 1988: [1988] E.C.R. 1799; [1989] 3 C.M.L.R Jorion, nee Jeunehomme and Societe Anonyme D'Etude et de Gestion Immobiliere EGI v. Belgium (123 & 330/87), 14 July 1988: [1988] E.C.R E.C. Commission v. Spain (C-96/91), 9 June 1992: [1992] E.C.R. I Francovich and Others v. Italy (C 6 & 9/90), 19 November 1991: [1991] E.C.R. I-5357; [1993] 2 C.M.L.R Firma Gebrüder Lück v. Hauptzollamt Köln-Rheinau (34/67), 4 April 1968: [1968] E.C.R E.C. Commission v. Italy (48/71), 13 July 1972: [1972] E.C.R. 527; [1972] C.M.L.R Opinion of Mr Advocate General Mischo 1. In this case, the Verwaltungsgerichtshof (Administrative Court of Appeal), Austria, has referred two questions for a preliminary ruling. *1224 By the first, the Austrian court seeks an interpretation of the Community provisions relating to the free provision of services in relation to a ban imposed on an Austrian company prohibiting it from hiring out more than a specific quota of moorings to boat owners resident outside Austria. The second question is whether the principle of the primacy of Community law also applies in relation to an individual administrative decision. Background to the main proceedings

5 2. The Landschaftsschutzgesetz (Countryside Preservation Law) of the Land of Vorarlberg provides, in the first sentence of paragraph 4(1), that any alteration to the countryside around lakes or in a strip of land 500 metres from the shoreline, calculated at mean water level, is to be prohibited. 3. According to paragraph 4(2) of that Law, the administrative authority may grant derogations from the rule in sub-paragraph (1) where it is guaranteed that such alterations will not impair the interests of countryside preservation and, in particular, will not obstruct views over lakes or where those alterations are necessary for reasons of public safety. 4. The company ABC-Charter Gesellschaft mbh rented certain plots of land situated in the shore area of the Bodensee (Lake Constance) where it was allowed to build 200 moorings for boats. 5. Upon an application from that company, the Bezirkshauptmannschaft (District Administrative Authority), Bregenz, addressed a "Bescheid" to it on 9 August 1990, that is to say an individual administrative decision, point 2 of which provides: With effect from 1 January 1996 a maximum of 60 boats owned by persons resident abroad may be accommodated in the harbour. Until that time the proportion of boats owned by persons resident abroad shall be continuously reduced. No new allocation of moorings to boat owners resident abroad or extension of expired rental contracts with such owners is permitted until the maximum foreigner quota has been achieved. Before the beginning of each boating season a true list of the moorings allocted to persons resident abroad shall be provided to the authority without prior request. This decision will cease to be in force at the end of 31 December With effect from that date the original countryside preservation decision will once more apply in full. 6. By decisions of 10 July 1996, the Unabhängiger Verwaltungssenat (Independent Administrative Authority) of the Land Vorarlberg found Mr Ciola, acting as managing director of the company ABC-Boots-Charter Gesellschaft mbh and of the company ABC-Bootswerft Gesellschaft mbh, guilty of having "allocated", on 25 January 1995 and 12 May 1995, moorings to two boat owners who were resident abroad, namely in the Principality of Liechtenstein and in Germany, even though the maximum foreign quota of 60 boats owned *1225 by persons resident abroad was exceeded. For each of those offences, a fine of 75,000 Sch was imposed. 7. Mr Ciola had not therefore observed the conditions laid down in point 2 of the decision of 9 August 1990 and had thus committed an administrative infringement within the meaning of paragraph 34(1)(f) of the Landschaftsschutzgesetz, according to which any person who does not observe the measures contained in decisions adopted pursuant to that Law are guilty of an administrative offence. 8. The Verwaltungsgerichtshof, to which Mr Ciola's appeal against those decisions has been made, considers that "questions of interpretation of Community law within the meaning of Article 177 E.C. are raised in connection with its decision in this case" and has referred to the Court the following two

6 questions: 1. Are the provisions concerning the freedom to provide services to be interpreted as precluding a Member State from prohibiting the operator of a yachting harbour, on pain of criminal prosecution, from hiring out more than a specific quota of moorings to boat owners who are resident in another Member State? 2. Does Community law, in particular the provisions concerning the freedom to provide services in conjunction with Article 5 E.C. and Article 2 of the Act concerning the conditions of accession of Austria, Finland and Sweden and the adjustments to the Treaties on which the European Union is founded, [FN1] give the provider of the services referred to in question 1 above, who is resident in Austria, the right to assert that the prohibition issued in the terms set out in Question 1 in an administrative decision (Bescheid) adopted in 1990 in regard to a specific person should not be applied in decisions of the Austrian courts and authorities adopted after 1 January 1995? FN1 [1994] O.J. C241/21 and [1995] O.J. L1/1. The first question 9. The Verwaltungsgerichtshof seeks to ascertain whether the provisions of the E.C. Treaty relating to the freedom to provide services precludes the number of moorings which may be hired out, within a global quota, to boat owners resident in another Member State from itself being limited. 10. For the reasons already largely explained by the national court itself, this question must be answered in the affirmative. Applicability of Article 59 E.C. 11. The Verwaltungsgerichtshof rightly recalls that, according to the case law of the Court, Article 59 of the Treaty: covers not only restrictions laid down by the State of destination but also those laid down by the State of origin.... The right freely to provide services may be relied on by an undertaking as against the State in which it is established if the services are provided for persons established in another Member State (judgment in Case C-384/93, Alpine Investments [FN2]). FN2 [1995] E.C.R. I-1141; [1995] 2 C.M.L.R. 209, para. [30]. * Secondly, it is clear from the judgment in Luis and Carbone [FN3] to which the national court also refers and from the judgment in Cowan [FN4]: that the freedom to provide services includes the freedom for the recipients of services to go to another Member State in order to receive a service there, without being obstructed by restrictions, and that tourists, among others, must be regarded as recipients of services.

7 FN3 Judgment in Joined Cases 286/82 & 26/83: [1984] E.C.R. 377; [1985] 3 C.M.L.R. 52. FN4 Judgment in Case 186/87: [1989] E.C.R. 195; [1990] 2 C.M.L.R. 613, para. [15]. 13. Indeed, it seems to me that the present case involves, in fact, a provision of services with a dual cross-border element. 14. First of all, Mr Ciola's company provides, through a cross-border hire contract, a service to a boat owner residing in another Member State by making available to him, during the life of the contract, of a mooring for his boat. It can therefore be said that this service "crosses the frontier" throughout the year. 15. Secondly, the owner himself crosses the Austrian border, once or several times a year, to use the actual benefit he has under the hire contract, namely not having to tow his boat each time from his place of residence to Lake Constance. On those occasions, it is therefore also the recipient of the service who crosses the frontier in order to use a service. 16. The hiring out of moorings to boat owners established in another Member State therefore constitutes a provision of services within the meaning of Article 59 of the Treaty. Indeed, at the hearing this was accepted to be the case by the Land Vorarlberg. Permissibility of a measure of this kind 17. However, the Land Vorarlberg denies that the restriction arising from the 60- place limit is to be regarded as discriminatory. 18. It points out first of all that the contested decision wrongly uses the term "foreign quota" because the restriction does not relate to the nationality of boat owners but to their residence. 19. Nor, however, is there any indirect discrimination because, it says, the restriction also affects Austrian citizens residing in another Member State. 20. It must, however, be observed here that the Court has already held, in particular in its judgments in the Schumacker [FN5] and Clean Car Autoservice [FN6] cases, that "national rules under which a distinction is drawn on the basis of residence are liable to operate mainly to the detriment of nationals of other Member States, as non-residents are in the majority of cases foreigners". FN5 Judgment in Case C-279/93: [1995] E.C.R. I-225; [1996] 2 C.M.L.R FN6 Judgment in Case C-350/96: [1998] E.C.R. I-2521; [1998] 2 C.M.L.R. 637, para. [29]. 21. The placing of a maximum limit on the moorings which may be allocated to non-residents therefore constitutes indirect discrimination prohibited by Article 59 of the Treaty. 22. At the hearing before the Court, the Land Vorarlberg argued, *1227 however, that the restriction in question was objectively justified by overriding reasons

8 relating to the public interest. In the absence of the restriction, boat owners residing in the other Member States, prepared to pay higher rents, would be able to rent the majority of the moorings. There would no longer be sufficient places for persons living in the area and there would be strong pressure on the authorities of the Land to increase the overall ceiling of 200 moorings. This, it says, would have adverse consequences on the countryside and on the quality of water of Lake Constance, which is used as a water reservoir for more than four million people. 23. The fact that a measure such as that in question in the main proceedings is not applicable without distinction to all provisions of services, whatever the origin or destination, rules out any question as to the possible existence of overriding reasons relating to the public interest capable of justifying such a measure. [FN7] FN7 See, in particular, the judgment in Case C-288/89, Collectieve Antennevoorziening Gouda: [1991] E.C.R. I-4007, paras [10] to [13]. 24. Such a measure may therefore be justified only on the basis of an express derogation in the Treaty itself (in this case, Article 36) or in an act of accession. 25. It may be noted here that the concern to limit the influx of "foreigners" has, in the past, been taken into consideration by Community law, namely in relation to second homes. However, this has always been the subject of an express derogating provision. 26. Also, Protocol (No. 1) on the acquisition of property in Denmark provides "Notwithstanding the provisions of this Treaty, Denmark may maintain the existing legislation on the acquisition of second homes". 27. The Act concerning the conditions of accession of Austria, Finland and Sweden and the adaptations of the Treaties on which the Union is founded provides, in Article 70 that: Notwithstanding the obligations under the Treaties on which the European Union is founded, Austria may maintain its existing legislation regarding secondary residences for five years from the date of accession. [FN8] FN8 [1994] O.J. C241/ In the absence of an express derogating provision like Article 70, [FN9] or the possibility of relying on grounds of public policy, public security or public health (Article 56 of the Treaty), it is not possible to escape application of the general rule laid down by the Court, according to which Article 59 of the Treaty entails not only elimination of all discrimination against persons providing services or persons receiving services by reason of their nationality, but also by reason of the circumstance that the person concerned is established in a Member State other than that in which the service is to be performed. FN9 Cited above. 29. The question whether the Land Vorarlberg could possibly find another

9 criterion, which would be compatible with Community law, *1228 for resisting the pressure to increase the overall ceiling of 200 moorings is not the subject-matter of the order for reference and does not therefore fall to be examined in this Opinion. 30. In response to the first question, it must therefore be concluded that Article 59 of the Treaty is to be interpreted as precluding a Member State from prohibiting the operator of a marina, upon penalty of criminal proceedings, from hiring out moorings above a specific quota to boat owners who reside in another Member State. The second question 31. By its second question, the Austrian court essentially seeks to ascertain the consequences which would flow from an affirmative reply to the first question in the particular case where "the criminal nature of the conduct complained of is based, not on the infringement of a general norm, but on the contravention of a restriction imposed on a company, of which the appellant is managing director, by means of an administrative decision (Bescheid) adopted specifically against that company" and where "there is no general abstract provision restricting the number of services which may be offered by the company to recipients resident in another Member State". 32. The Verwaltungsgerichtshof points out in this regard that "since its judgment in Case 6/64, Costa v. Enel, [FN10] the Court of Justice has held the view that the law stemming from the Treaty could not be overridden by domestic legal provisions" and that in its judgment in Simmenthal [FN11] the Court held inter alia that "a national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provisions of national legislation". FN10 Judgment in Case 6/64: [1964] E.C.R. 585; [1964] C.M.L.R FN11 Judgment in Case 106/77: [1978] E.C.R. 629; [1978] 3 C.M.L.R The Austrian court then goes on to state that: as far as can be seen, that view has been applied without exception to facts concerning the application of general-abstract provisons of domestic law. However, in the present case, this Court decision turns on whether, when appraising the criminal nature of the appellant's conduct in 1995, the Austrian courts and authorities must refuse to apply a final administrative order (Bescheid) adopted in 1990 in relation to a specific person. 34. The Verwaltungsgerichtshof adds that: if the decision adopted in 1990 were not to be applied when assessing the lawfulness of the appellant's conduct in connection with the hire in 1995 to persons who (among other things) were resident in a Member State, the factual preconditions of the administrative offence would not be fulfilled. 35. As far as the Austrian Government is concerned, the question is "whether the

10 primacy of Community law must also be upheld in relation to individual specific decisions of administrative authorities" *1229 and it is therefore necessary to determine "whether Community law may have an effect on the rules relating to the enforceability of administrative decisions". 36. It argues that "there is no ground for transposing, without examination and without limit, the case law on the primacy of Community law, developed in the context of general rules (laws, regulations) to specific individual administrative decisons (Bescheide)". Here, Austria relies, in particular, on the case law concerning what may be called "the procedural autonomy of the Member States" [FN12] and more particularly on the judgment in Rewe, [FN13] from which it appears that, in the absence of measures harmonising procedural rules, the rights conferred by Community law must be exercised before the national courts according to the procedural rules of domestic law and this would be otherwise only if those rules and time periods resulted in making it practically impossible to exercise the rights which the national courts have the obligation to safeguard. As the Austrian Government emphasises, the Court concluded that the laying down of reasonable periods for bringing proceedings does not render it impossible to exercise those rights. FN12 Austria cites the following judgments: Case 33/76, Rewe: [1976] E.C.R. 1989; [1977] 1 C.M.L.R. 533, para. [5]; Case 45/76, Comet: [1976] E.C.R. 2043; [1977] 1 C.M.L.R. 533; Case 68/79, Just: [1980] E.C.R. 501; [1981] 2 C.M.L.R. 714, para. [25]; Case 199/82, San Giorgio: [1983] E.C.R. 3595, para. [14]; Joined Cases 331, 376 & 378/85, Bianco and Girard: [1988] E.C.R. 1099; [1989] 3 C.M.L.R. 36, para. [12]; Case 104/86, E.C. Commission v. Italy: [1988] E.C.R. 1799; [1989] 3 C.M.L.R. 25, para. [7]; Joined Cases 123 & 330/87, Jeunehomme and EGI: [1988] E.C.R. 4517, para. [17]; Case C-96/91, E.C. Commission v. Spain: [1992] E.C.R. I-3789, para. [12] and Joined Cases C 6 & 9/90, Francovich and Others: [1991] E.C.R. I-5357; [1993] 2 C.M.L.R. 66, para. [43]. FN13 Cited in fn. 12. above. 37. The Austrian Government also explains that the binding effect of the decision which prevents the Verwaltungsgerichtshof from annulling it for unlawfulness serves legal certainty and protection of legitimate expectations of the various parties in question and therefore "the principles of legal certainty, protection of legitimate expectations and protection of rights duly acquired must be weighed in this specific case against the interest in observing the principle of nondiscrimination laid down by Community law". 38. For the Austrian Government, the problem, therefore, seems to be one of the legitimacy of a period for bringing proceedings which the appellant in the main proceedings allowed to elapse, so that he would therefore no longer be entitled to challenge the 1990 decision, because it is now final. 39. I cannot share Austria's view of the nature of the legal problems raised in this case. 40. The matter before the national court is not, in my view, one concerning an

11 application for annulment, on grounds of illegality, directed against the 1990 decision which could be barred by a time limit the compatibility of which with Community law would be the subject of *1230 the preliminary question. The question, rather, is whether the national court must refrain from applying that decision in the specific case before it. 41. Nor do I discern, in the main proceedings, any issue related to legal certainty, the protection of legitimate expectations or of properly acquired rights, as raised by the Austrian Government. If the appeal court were to annul the sentence imposed on Mr Ciola and if the company in question were to be able, pursuant to Article 59 of the Treaty, to hire out moorings as freely to boat owners residing in another Member State as to boat owners residing in Austria, that would not ipso facto entail termination of the contracts in force with boat owners residing in Austria. Furthermore, I do not see how that could infringe the rights of third partners or disturb their legitimate expectations. 42. In any case, the binding effect of administrative decisions does not seem to be absolute since the Austrian Government tells us that "the appellant in the main proceedings had and still has the possibility of asking the competent authority, according to domestic procedural rules, to amend its decision or its operative part". Such a procedure is apparently provided for by paragraph 68 of the Allgemeines Verwaltungsverfahrensgesetz (General Law on Administrative Procedure). We are told that the appellant has the possibility of invoking Community law in this new procedure and, if he were not to obtain satisfaction, to lodge appeals. 43. However, it is not necessary to enter into those considerations. The sole legal issue posed by the second preliminary question is, in my view, whether the Verwaltungsgerichtshof must, in assessing the lawfulness of the appellant's action, disapply a decision incompatible with Community law, notwithstanding the fact that the decision concerned is a specific individual administrative measure and not a general, abstract rule. 44. In regard to that question, the case law of the Court contains sufficient guidance to support the conclusion that this second question also calls for a positive reply. 45. As the national court itself points out, in its judgment in Costa the Court held that: the law stemming from the Treaty, an independent source of law, could not, because of its special and original nature, be overridden by domestic legal provisions, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question. 46. Likewise, it follows from the judgment in Lück [FN14] that the direct effect of a provision of the Treaty excludes "the application of any national measure incompatible with it" and from the judgment in Case 48/71, E.C. Commission v. Italy [FN15] that the direct effect of Community *1231 law entails "a prohibition having the full force of law on the competent national authorities against applying a national rule recognised as incompatible with the Treaty".

12 FN14 Case 34/67: [1968] E.C.R FN15 Case 48/71: [1972] E.C.R. 527; [1972] C.M.L.R. 699, para. [7]. 47. Still more clearly, the Court held in the French maritime code case [FN16] that: since the provisions of Article 48 and of Regulation 1612/68 [FN17] are directly applicable in the legal system of every Member State and Community law has priority over national law, these provisions give rise on the part of those concerned, to rights which the national authorities must respect and safeguard and as a result of which all contrary provisions of internal law are rendered inapplicable to them. FN16 Case 167/73, E.C. Commission v. France: [1974] E.C.R. 359; [1974] 2 C.M.L.R. 216, para. [35]. FN17 Regulation 1612/68 on freedom of movement for workers within the Community ( [1968] O.J. English Spec. Ed. (II), p. 475). 48. Finally, in one of the Rewe cases, [FN18] the Court held that "a national authority may not apply to a person legislative or administrative measures which are not in accordance with an unconditional and sufficiently clear obligation imposed by the directive". What applies in relation to an unconditional and sufficiently precise obligation laid down in a directive obviously also applies in relation to an unconditional and sufficiently precise obligation of primary Community law, such as that laid down in Article 59 of the Treaty. FN18 Case 158/80, Rewe: [1981] E.C.R. 1805; [1982] 1 C.M.L.R. 449, para. [43]. 49. It follows from these few citations from established case law that Community law overrides any provision of domestic law. It also follows that the direct effect and primacy of Article 59 of the Treaty together oblige the national court to disapply prohibitions laid down in domestic provisions, including individual administrative decisions, that are incompatible with that article. 50. In the Factortame case [FN19] the Court also held that: it is for the national courts, in application of the principle of co-operation laid down in Article 5 E.C., to ensure the legal protection which persons derive from the direct effect of provisions of Community law. FN19 Case C-213/89, Factortame and Others: [1990] E.C.R. I-2433; [1990] 3 C.M.L.R. 375, para. [19]. 51. Moreover, it follows from the judgment in Fratelli Costanzo [FN20] that, like national courts, an administration, including decentralised authorities, has the obligation to apply unconditional and sufficiently precise provisions of Community law and to disapply those of national law which are not in conformity with it.

13 FN20 Case 103/88: [1989] E.C.R. 1839; [1990] 3 C.M.L.R. 239, paras [30] to [33]. 52. As far as Austria is concerned, that conclusion must apply in relation to circumstances occurring after 1 January 1995, the date of its accession to the European Union. Article 2 of the Act concerning the conditions of accession of Austria, Finland and Sweden and the adaptations of the Treaties on which the Union is founded [FN21] provides: *1232 From the date of accession, the provisions of the original Treaties and the acts adopted by the institutions before accession shall be binding on the new Member States and shall apply in those States under the conditions laid down in those Treaties and in this Act. FN21 Cited above. 53. Therefore, it may be said that Article 59 of the Treaty, being directly applicable, is an immediate source of rights after 1 January 1995 for the company in question and that, since that date, any administrative prohibition incompatible with Article 59 is unenforceable against it. 54. It must therefore be concluded, in response to this second question, that Community law confers on persons providing services the right to assert that a prohibition such as that in question in the main proceedings, contained in a specific individual administrative decision, must remain unapplied where an administrative authority or a court of law must determine whether conduct postdating the accession of Austria may be sanctioned. Conclusion 55. In view of this analysis, I propose that the two questions referred by the Verwaltungsgerichtshof be answered as follows: 1. Article 59 E.C. is to be interpreted as precluding a Member State from prohibiting the operator of a marina, upon penalty of criminal proceedings, from hiring out moorings above a specific quota to boat owners who reside in another Member State. 2. Community law confers on persons providing services the right to assert that a prohibition such as that in question in the main proceedings, contained in a specific individual administrative decision, must remain unapplied where an administrative authority or a court of law has to determine whether conduct postdating the accession of Austria may be sanctioned. JUDGMENT [1] By order of 26 May 1997, received at the Court Registry on 16 June 1997, the Verwaltungsgerichtshof (Administrative Court) referred to the Court for a preliminary ruling under Article 177 E.C. two questions on the interpretation of Articles 59 to 66 in conjunction with Article 5 E.C. and Article 2 of the Act

14 concerning the conditions of accession of Austria, Finland and Sweden and the adjustments to the Treaties on which the European Union is founded (hereinafter "the Act of Accession"). [FN22] FN22 [1994] O.J. C241/2 and [1995] O.J. L1/1. [2] Those questions were raised in proceedings brought by Mr Ciola against fines imposed on him for exceeding the maximum quota of *1233 moorings on the shore of Lake Constance reserved for boats whose owners are resident abroad. [3] Mr Ciola is the manager inter alia of ABC-Boots-Charter GmbH. In 1990 that company leased certain land on the shore of Lake Constance. It obtained permission to establish 200 moorings for pleasure boats there. [4] At the company's request, the Bezirkshauptmannschaft Bregenz (the administrative authority of first instance of the Land of Vorarlberg) addressed to it on 9 August 1990 an individual administrative decision (Bescheid), point 2 of which stated: With effect from 1 January 1996 a maximum of 60 boats whose owners are resident abroad may be accommodated in the harbour. Until that time the proportion of boats owned by persons resident abroad is to be progressively reduced. No new allocation of moorings to boat-owners resident abroad or extension of expired rental contracts with such owners is permitted until the maximum foreigner quota has been reached... [5] Under the first sentence of paragraph 4(1) of the Landschaftsschutzgesetz (Countryside Protection Law) of the Land of Vorarlberg, any alteration to the landscape in lake areas and in a 500-metre-wide strip of shore adjacent thereto, calculated at mean water level, is prohibited. [6] However, paragraph 4(2) allows the administrative authority to authorise exceptions to that prohibition if there is a guarantee that such alterations will not harm the interests of landscape protection, in particular that they will not obstruct views of the lake, or if the alterations are necessary for reasons of public safety. [7] By decision of 10 July 1996 the Unabhängiger Verwaltungssenat (Independent Administrative Senate) of the Land of Vorarlberg found Mr Ciola, in his capacity as manager of the aforesaid company, guilty of renting two moorings to boat-owners who were resident abroad, namely in the Principality of Liechtenstein and Germany, even though the maximum quota of 60 moorings reserved for foreigners had already been exceeded. [8] Consequently, as Mr Ciola had failed to comply with the conditions of point 2 of the administrative decision of 9 August 1990 and had therefore committed an administrative offence within the meaning of paragraph 34(1)(f) of the Landschaftsschutzgesetz, he was fined 75,000 Sch for each of the two offences. [9] Since it considered that Mr Ciola's appeal against the fines raised questions concerning the interpretation of Community law, the Verwaltungsgerichtshof stayed proceedings and referred the following two questions to the Court: 1. Are the provisions concerning the freedom to provide services to be interpreted as precluding a Member State from prohibiting the operator of a boat harbour, on pain of criminal prosecution, from renting more than a specific quota

15 of moorings to boat-owners who are resident in another Member State? 2. Does Community law, in particular the provisions concerning the *1234 freedom to provide services in conjunction with Article 5 E.C. and Article 2 of the Act concerning the conditions of accession of Austria, Finland and Sweden and the adjustments to the Treaties on which the European Union is founded, [FN23] give the provider of the services referred to in Question 1 above, who is resident in Austria, the right to assert that the prohibition issued in the terms set out in Question 1 by a specific individual administrative decision (Bescheid) adopted in 1990 should not be applied in decisions of the Austrian courts and administrative authorities adopted after 1 January 1995? FN23 Cited above. Question 1 [10] By its first question, the national court essentially asks whether the Treaty provisions on freedom to provide services are to be interpreted as precluding a Member State from establishing a maximum quota of moorings which may be rented to boat-owners resident in another Member State. [11] It should be observed at the outset that, as the national court has pointed out, first, the right freely to provide services may be relied on by an undertaking as against the State in which it is established if the services are provided for persons established in another Member State ( Case C-70/95, Sodemare and Others v. Regione Lombardia [FN24] and, second, in accordance with Joined Cases 286/82 & 26/83, Luisi and Carbone v. Ministero del Tesoro, [FN25] and Case 186/87, Cowan v. Tresor Public [FN26]), that right includes the freedom for recipients of services to go to another Member State in order to receive a service there, without being obstructed by restrictions. FN24 [1997] E.C.R. I-3395; [1997] 3 C.M.L.R. 591, para. [37]. FN25 [1984] E.C.R. 377; [1985] 3 C.M.L.R. 52, para. [16]. FN26 [1989] E.C.R. 195; [1990] 2 C.M.L.R. 613, para. [15]. [12] Consequently, Articles 59 to 66 of the Treaty apply to a service such as that which the company of which Mr Ciola is manager provides, by means of a contract for the rental of a mooring, to a boat-owned resident in another Member State who receives and enjoys the service in a Member State other than that in which he resides. [13] In those circumstances, a restriction on moorings of the kind at issue in the main proceedings infringes the prohibition under the first paragraph of Article 59 of the Treaty of all discrimination, even indirect, with regard to providers of services. [14] While the restriction of the number of moorings which may be allocated to non-resident boat-owners is not based on their nationality, and so may not be

16 regarded as direct discrimination, it does, however, use as the distinguishing criterion their place of residence. It is settled case law that national rules under which a distinction is drawn on the basis of residence are liable to operate mainly to the detriment of nationals of other Member States, as non-residents are in the majority of cases foreigners (see Case C-350/96, Clean Car Autoservice v. Landeshauptmann Von Wien [FN27]). FN27 [1998] E.C.R. I-2521; [1998] 2 C.M.L.R. 637 *1235, para. [29]. [15] To justify imposing a quota on moorings reserved for nationals of other Member States on mandatory grounds in the general interest, the Land of Vorarlberg relied at the hearing on the need to reserve access to the moorings for local boat-owners, as there is a risk of such moorings being monopolised by persons resident in other Member States and willing to pay higher rental charges. Because of the limitation of the total number of moorings available, for reasons concerning protection of the environment, lifting the quota would increase the pressure on the authorities of the Land of Vorarlberg. [16] National rules which are not applicable to services without distinction whatever the place of residence of the recipient, and which are therefore discriminatory, are compatible with Community law only if they can be brought within the scope of an express derogation, such as Article 56 E.C. (see Case 352/85, Bond Van Adverteerders and Others v. Netherlands [FN28]); however, economic aims cannot constitute grounds of public policy within the meaning of that provision ( Case C-288/89, Collectieve Antennevoorziening Gouda v. Commissariaat Vor de Media [FN29]). FN28 [1988] E.C.R. 2085; [1989] 3 C.M.L.R. 113, para. [32]. FN29 [1991] E.C.R. I-4007, para. [11]. [17] Since the Land of Vorarlberg has justified the imposition of a quota on moorings for non-resident owners not on grounds of public policy, public security or public health, but for economic reasons for the benefit of local owners, Article 56 of the Treaty cannot be applied; in those circumstances, it must be ascertained whether the existence of an exception in the Act of Accession authorised the Land of Vorarlberg to take measures such as the quota at issue in the main proceedings in order to limit the influx of boat-owners from other Member States. [18] On this point, it suffices to note that Article 70 of the Act of Accession lays down an express derogation, for a limited time, only for existing legislation regarding secondary residences. [19] Consequently, the estalishment by a Member State of a maximum quota for moorings which may be rented to boat-owners resident in another Member State is contrary to the principle of freedom to provide services. [20] The answer to Question 1 must therefore be that Article 59 of the Treaty is to be interpreted as precluding a Member State from prohibiting the manager of a

17 boat harbour, on pain of prosecution, from renting moorings in excess of a specified quota to boat-owners who are resident in other Member States. Question 2 [21] By its second question, the Verwaltungsgerichtshof essentially asks whether a prohibition which is contrary to the freedom to provide services, laid down before a Member State's accession to the European *1236 Union not by a general abstract rule but by a specific individual administrative decision that has become final, must be disregarded when assessing the validity of a fine imposed for failure to comply with that prohibition after the date of accession. [22] It appears from the grounds of the order for reference that in a case of failure to comply with general abstract rules which were not compatible with a fundamental principle of the Treaty, the Verwaltungsgerichtshof would have set aside such rules in favour of Community law on the basis of the Court's judgment in Case 106/77, Amministrazione delle Finanze dello Stato v. Simmenthal. [FN30] FN30 [1978] E.C.R. 629; [1978] 3 C.M.L.R [23] However, as the case law to date, according to the Verwaltungsgerichtshof, lays down only the principle of the primacy of Community law over general rules of national law, that court asks whether that principle also applies to a specific individual administrative decision that is not in conformity with Community law such as, in the main proceedings, the Bescheid of 9 August [24] The Austrian Government submits that there is no reason why the case law on the primacy of Community law should be applied, automatically and without restriction, to specific individual administrative acts. In support of its argument, it relies on the enforceability of administrative acts and refers in that connection to the case law on what is known as the "procedural autonomy of the Member States". In its view, to hold that Community law takes precedence over an enforceable administrative act would be liable to call into question the principles of legal certainty, protection of legitimate expectations or protection of lawfully acquired rights. [25] It must be observed at the outset, as the Advocate General does in points 40 to 43 of his Opinion, that the dispute concerns not the fate of the administrative act itself, in this case the decision of 9 August 1990, but the question whether such an act must be disregarded when assessing the validity of a penalty imposed for failure to comply with an obligation thereunder, because of its incompatibility with the principle of freedom to provide services. [26] Next, since the provisions of the E.C. Treaty are directly applicable in the legal systems of all Member States and Community law takes precedence over national law, those provisions create rights for the persons concerned which the national authorities must observe and safeguard, and any conflicting provision of national law therefore ceases to be applicable (see Case 167/73, E.C. Commission v. France [FN31]).

18 FN31 [1974] E.C.R. 359; [1974] 2 C.M.L.R. 216, para. [35]. [27] Since the essential requirements of Article 59 of the Treaty became directly and unconditionally applicable at the end of the transitional period (see Case 279/80, Webb [FN32]), that provision consequently precludes the application of any conflicting measure of national law. FN32 [1981] E.C.R. 3305; [1982] 1 C.M.L.R. 719 *1237, para. [13]. [28] As regards Austria, it is apparent from Article 2 of the Act of Accession that the provisions of the E.C. Treaty apply as from accession, that is, 1 January 1995, the date from which Article 59 of the Treaty thus became a direct source of law. [29] While the Court initially held that it is for the national court to refuse if necessary to apply any conflicting provision of national law (see Simmenthal [FN33]), it subsequently refined its case law in two respects. FN33 Cited above, para. [21]. [30] Thus it appears from the case law, first, that all administrative bodies, including decentralised authorities, are subject to that obligation as to primacy, and individuals may therefore rely on such a provision of Community law against them ( Case 103/88, Fratelli Costanzo v. Comune di Milano [FN34]). FN34 [1989] E.C.R. 1839; [1990] 3 C.M.L.R. 239, para. [32]. [31] Secondly, provisions of national law which conflict with such a provision of Community law may be legislative or administrative (see, to that effect, Case 158/80, Rewe v. Hauptzollamt Kiel [FN35]). FN35 [1981] E.C.R. 1805; [1982] 1 C.M.L.R. 449, para. [43]. [32] It is consistent with that case law that those administrative provisions of national law should include not only general abstract rules but also specific individual administrative decisions. [33] There is no reason why the legal protection which individuals derive from the direct effect of provisions of Community law and which the national courts must ensure (see Case C-213/89, R. v. Secretary of State for Transport, ex parte Factortame and Others [FN36]) should be refused to those individuals in cases where the dispute concerns the validity of an administrative measure. The existence of such protection cannot depend on the nature of the conflicting provision of national law. FN36 [1990] E.C.R. I-2433; [1990] 3 C.M.L.R. 375, para. [19].

19 [34] It follows from the foregoing that a prohibition which is contrary to the freedom to provide services, laid down before the accession of a Member State to the European Union not by a general abstract rule but by a specific individual administrative decision that has become final, must be disregarded when assessing the validity of a fine imposed for failure to comply with that prohibition after the date of accession. Costs [35] The costs incurred by the Austrian Government 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. Order On those grounds, THE COURT (Second Chamber), in answer to the questions referred to it by the Verwaltungsgerichtshof by order of 26 May 1997, *1238 HEREBY RULES: 1. Article 59 E.C. must be interpreted as precluding a Member State from prohibiting the manager of a boat harbour, on pain of prosecution, from renting moorings in excess of a specified quota to boat-owners who are resident in other Member States. 2. A prohibition which is contrary to the freedom to provide services, laid down before the accession of a Member State to the European Union not by a general abstract rule but by a specific individual administrative decision that has become final, must be disregarded when assessing the validity of a fine imposed for failure to comply with that prohibition after the date of accession. (c) Sweet & Maxwell Limited [1999] 2 C.M.L.R END OF DOCUMENT