CJEC, 4th chamber, July 8, 1999, No C-203/98

THE COURT (Fourth Chamber),

1. By an application lodged at the Registry of the Court on 28 May 1998, the Commission of the European Communities has brought an action under Article 169 of the EC Treaty (now Article 226 EC) for a declaration that, by requiring that Community operators be resident or established for one year in Belgium before they can register aircraft there and by refusing to authorise flights requested by them, thus unjustifiably or excessively hindering the temporary or permanent provision of services in the field of air traffic other than for transport, the Kingdom of Belgium has failed to fulfil its obligations under Articles 6, 52 and 59 of the EC Treaty (now, after amendment, Articles 12 EC, 43 EC and 49 EC).

2. The second subparagraph, points (c) and (d), of Article 3(3) of the Royal Decree of 15 March 1954 regulating air traffic (hereinafter 'the Royal Decree') establishes a special regime for foreigners under which aircraft may only be registered in Belgium by 'foreigners authorised to establish their domicile in Belgium or authorised to reside in Belgium and who have been resident there continuously for

at least one year' and '... foreign legal persons that have had a place of business, agency or office in the Kingdom of Belgium for at least one year' respectively.

3. By letter of 31 October 1995 the Commission drew the Belgian Government's attention to certain restrictions, which it alleged were contrary to Article 59 of the Treaty, encountered by Community operators wishing to carry out aerial photography over Belgian territory and to the problems of compatibility raised by the second subparagraph, points (c) and (d), of Article 3(3) of the Royal Decree in relation to Articles 6 and 52 of the Treaty.

4. By letter of 9 February 1996 the Belgian authorities replied that they were preparing a decree establishing the conditions for issuing authorisations for aerial work. They added in a letter of 27 August 1996 that work of preparation had commenced and that they would soon be submitting a draft decree to the Commission.

5. Noting that the Royal Decree had not yet been amended, the Commission sent the Kingdom of Belgium on 19 June 1997 a reasoned opinion requesting it to comply with that opinion within two months of receipt thereof.

6. In its reply of 28 July 1997 the Kingdom of Belgium indicated that it had been the position since 1996 that certain restrictions on the freedom to provide aerial services were no longer being imposed in practice, but it failed to provide fresh information on the restrictions on the registration of aircraft in Belgium.

7. Having received no further information on the adoption of measures amending the relevant provisions of the Royal Decree, the Commission brought this action.

8. In the light of the observations submitted by the Belgian Government in its defence, the Commission restricted the scope of its application to the incompatibility of the Royal Decree with Articles 6 and 52 of the Treaty and withdrew the part of its action based on Article 59.

9. According to the Commission, the relevant provisions of the Royal Decree, which preclude any registrations of aircraft belonging to a person or a company established in another Member State before that person has resided or that company has been established in Belgium for one year, are contrary to Articles 6 and 52 of the Treaty as they discriminate against natural and legal persons from other Member States and constitute an obstacle to their establishment.

10. The Belgian Government has challenged neither the form of order sought nor the arguments submitted by the Commission. It indicates that it intends to amend the second subparagraph, points (c) and (d), of Article 3(3) of the Royal Decree so as to meet the Commission's concerns and that, pending the entry into force of the

new provisions, the authorities have undertaken not to apply the provisions in question to legal and natural persons from other Member States.

11. Article 6 of the Treaty prohibits, within the scope of application of the Treaty, any discrimination on grounds of nationality, and that rule was implemented as regards freedom of establishment by Article 52 of the Treaty.

12. Just as the Court has held in relation to registration of a ship (see Case C-221-89 Factortame and Others [1991] ECR I-3905, paragraph 22), it must be held that where an aircraft constitutes an instrument by which a Community national pursues an economic activity which involves a fixed establishment in another Member State, registration of that aircraft cannot be dissociated from the exercise of the freedom of establishment. The conditions laid down for the registration of aircraft must therefore not discriminate on grounds of nationality or form an obstacle to the exercise of that freedom.

13. In making natural and legal persons from Member States other than the Kingdom of Belgium subject to a special regime under which it is necessary to have been resident or established in Belgium for at least one year in order to have an aircraft registered there, the provisions of the Royal Decree which are in point here clearly constitute discrimination on grounds of nationality which impedes the exercise of the freedom of establishment of those persons.

14. The argument, submitted by the Kingdom of Belgium in its defence, that it has been the practice of the authorities since 1996 not to apply the provisions in question, does not in any way alter that finding. As the Court has consistently held, mere administrative practices, which by their nature are alterable at will by the authorities and are not given appropriate publicity, cannot be regarded as constituting proper fulfilment of obligations under the Treaty (see Case C-334-94 Commission v France [1996] ECR I-1307, paragraph 30).

15. In the light of the foregoing considerations, it must be held that, by requiring Community operators to be resident or established for one year in Belgium before they can register aircraft there, the Kingdom of Belgium has failed to fulfil its obligations under Articles 6 and 52 of the Treaty.

16. Since the Commission has informed the Court that it is no longer pursuing the action in so far as it is based on Article 59 of the Treaty, it is no longer necessary to rule on the plea, initially raised by the Commission, alleging infringement of that article.

Costs

17. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's

pleadings. Since the Commission applied for an order for costs against the Kingdom of Belgium and the latter was unsuccessful, it must be ordered to pay the costs.

On those grounds,

THE COURT (Fourth Chamber)

hereby:

1. Declares that, by requiring Community operators to be resident or established for one year in Belgium before they can register aircraft there, the Kingdom of Belgium has failed to fulfil its obligations under Articles 6 and 52 of the EC Treaty (now, after amendment, Articles 12 EC and 43 EC);

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