Commission of the European Communities v Italian Republic (C-134/05)

Contents

Judgment of the Court (First Chamber)18 July 2007^noteIn Case C-134/05,ACTION under Article 226 EC for failure to fulfil obligations, brought on 22 March 2005,Commission of the European Communities, represented by E. Traversa, acting as Agent, with an address for service in Luxembourg,vItalian Republic, represented by I.M. Braguglia, acting as Agent, and P. Gentili, avvocato dello Stato, with an address for service in Luxembourg,THE COURT (First Chamber),composed of P. Jann, President of the Chamber, K. Lenaerts, E. Juhász, K. Schiemann and E. Levits (Rapporteur), Judges,Advocate General: M. Poiares Maduro,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 5 October 2006,after hearing the Opinion of the Advocate General at the sitting on 14 December 2006,gives the following

Judgment

1By its application, the Commission of the European Communities requests the Court to declare that, by making the pursuit of the activity of extrajudicial debt recovery subject to a series of conditions, the Italian Republic has failed to fulfil its obligations under Articles 43 EC and 49 EC.

Legal context

2The Consolidated Law on public security (Testo unico delle leggi di pubblica sicurezza), approved by Royal Decree No 773 of 18 June 1931 (GURI No 146 of 26 June 1931) (‘the Consolidated Law’) provides as follows.

3Under Article 115 of the Consolidated Law:‘It is not permitted to open or manage a pawnbrokers or other business agency, whatever the purpose or duration, even in the form of sales agencies, exhibition agencies, showrooms, commercial exhibition agencies or any other agencies, without a licence issued by the Questore (the local police authority).A licence is also necessary in order to pursue the profession of broker or agent.The agencies covered by the present article include agencies for the collection of data to be disseminated by bulletins or other similar means.The licence shall be valid exclusively for the premises which are specified therein.Representation by an agent shall be permitted’

4In accordance with Article 8 of the Consolidated Law:‘Police licences are personal: they cannot under any circumstances be transferred or give rise to agency relationships, except where expressly provided for by law.Where representation by an agent is permitted under a police licence, the agent must possess the qualifications necessary to obtain the licence and be approved by the police authority which issued it’

5Article 9 of the Consolidated Law provides:‘In addition to the conditions laid down by law, any person who has obtained a police licence shall comply with instructions that the public law-enforcement authority considers necessary to issue to him in the public interest’

6Article 11 of the Consolidated Law provides:‘Without prejudice to the specific conditions provided by law in each case, police licences shall be refused to:1. any person who has been sentenced to a term of imprisonment of more than three years for a crime committed intentionally and who has not been discharged;2. any person who has received a caution or detention order, who has been declared a habitual or inveterate offender, or as someone having criminal tendencies.Police licences may be refused to persons who have been sentenced for crimes against the State or public order, for violent crimes against the person, theft, robbery, extortion, kidnapping for the purpose of theft or extortion, for violence towards or resistance to authority, or to any person who is unable to prove that he is of good conductLicences shall be revoked where the conditions to which they are subject are no longer satisfied, either wholly or in part, with respect to the person to whom the licence was issued, and may be revoked where circumstances arise or come to light which would have required or permitted the licence to be refused’

7Article 16 of the Consolidated Law provides:‘Public security officials and agents are entitled to gain access at any time to premises to be used for activities requiring a licence issued by the police and to ensure compliance with the obligations imposed by law, regulations or the authorities’

8Article 120 of the Consolidated Law is worded as follows:‘The traders and public agencies referred to in the preceding articles shall be required to keep a daily business record in a manner to be determined by regulation and to display permanently and visibly on the premises the table of services provided and the scale of charges applicable to those services.Those traders cannot supply services other than those listed in that table or apply higher prices than those set out in the scale of charges ...’

9The Ministry of the Interior Circular 559/C 22103.12015 of 2 July 1996 (‘the circular’), sent to all Questori in the Italian State, supplements and interprets a number of provisions in the Consolidated Law.

10That circular states, inter alia, that, in order to avoid wide variations in the scales of charges being applied within the same province, it is necessary to set objective and uniform parameters.

11As regards the compatibility of the pursuit of the activity of extrajudicial debt recovery with other activities subject to different rules, the circular states that debt recovery agencies are deemed not to be entitled to provide the financial services governed by Legislative Decree No 385/93 [relating to the Consolidated Law on banking and credit services] (Testo unico delle leggi in materia bancaria e creditizia) of 1 September 1993 (Ordinary Supplement to GURI No 230 of 30 September 1993) (‘the Law on banking and credit services’), which are reserved exclusively for financial intermediaries expressly entered in the appropriate register of the Ministry of the Treasury’.

The pre-litigation procedure

12Since the Commission took the view that a number of provisions of the Consolidated Law, as amplified and supplemented by the circular, were incompatible with Articles 43 EC and 49 EC, it sent a letter of formal notice to the Italian Republic on 21 March 2002.

13Although they denied any infringement of the abovementioned articles of the EC Treaty, the Italian authorities replied that they had set up a working group to undertake a detailed examination of the rules concerned for the purpose of revising them.

14After requesting the Italian authorities to communicate to it the working group's findings, the Commission received a letter, in May 2004, announcing the preparation of a draft law designed to amend the relevant legislation.

15However, as neither the text nor the timetable for the adoption of that draft legislation was communicated to it, the Commission sent a reasoned opinion to the Italian Republic on 7 July 2004, calling on that Member State to comply with the reasoned opinion within two months of receipt. Taking the view that the situation continued to remain unsatisfactory, the Commission brought the present action.

The action

16In support of its action, the Commission puts forward eight heads of complaint concerning the conditions and obligations imposed by the legislation in force in Italy for the purpose of pursuing the activity of extrajudicial debt recovery in that Member State.

17Those heads of complaint are based on:— the incompatibility with Article 49 EC of the condition that a licence issued by a Questore be obtained;— the incompatibility with Articles 43 EC and 49 EC of the territorial limitation of the licence;— the incompatibility with Articles 43 EC and 49 EC of the obligation to have premises in the territory covered by the licence;— the incompatibility with Articles 43 EC and 49 EC of the requirement that authority must be conferred on an authorised agent in order to pursue the activity of extrajudicial debt recovery in a province for which the operator does not hold a licence;— the incompatibility with Article 49 EC of the obligation to display on the premises a list of the services which may be provided to clients;— the incompatibility with Articles 43 EC and 49 EC of the power granted to the Questore to impose additional requirements designed to ensure compliance with public safety in the general interest;— the incompatibility with Articles 43 EC and 49 EC of the limit on the freedom to fix scales of charges; and— the incompatibility with Articles 43 EC and 49 EC of the prohibition of the concurrent pursuit of the activities covered by the Law on banking and credit services.

The first head of complaint: incompatibility with Article 49 EC of the condition that a licence issued by a Questore be obtained

Arguments of the parties

18The Commission claims that Italian law, inasmuch as it makes pursuit of the activity of extrajudicial debt recovery subject to obtaining a licence issued by a Questore, constitutes a restriction on the freedom to provide services. That restriction, it argues, is not compatible with Article 49 EC on the ground that it applies to operators established in another Member State without any consideration being given as to whether those operators comply with the requirements laid down by the law of their Member State of origin on the protection of the public interest.

19In that connection, the Italian Republic submits, first of all, that the activity of extrajudicial debt recovery is one of overriding public interest. That justifies the fact that Article 115 of the Consolidated Law requires both Italian nationals and nationals of other Member States to have a licence in order to be able to pursue that activity. Such a licence is issued by a Questore.

20The Italian Government further submits that the national law applies in like manner to Italian nationals and nationals of other Member States, and is in no way based on conditions such as residence, which might lead to indirect discrimination of nationals of other Member States as compared with Italian nationals. Furthermore, neither Article 115 of the Consolidated Law nor the circular provides, explicitly or implicitly, that the legal situation of the person concerned in his Member State of origin may not to taken into account in the course of the procedure for granting a licence.

21In practice, the situation is as follows: any person wishing to pursue activities of extrajudicial debt recovery, public auctioneering or public relations, or to operate a matrimonial agency, must submit an application to a Questore for a licence pursuant to Article 115 of the Consolidated Law. That request is made by lodging an application form available on the internet, an example of which was produced before the Court at the hearing on 5 October 2006, by which the person concerned declares in substance that he does not fall within one of the excluded categories laid down by Article 11 of the Consolidated Law.

22In accordance with Article 2 of Law No 241/90 establishing new standards in administrative matters and relating to the right of access to administrative documents (Nuove norme in materia di procedimento amministrativo e di diritto di accesso ai documenti amministrativi) of 7 August 1990 (GURI No 192 of 18 August 1990, p. 7), that declaration must be examined within 30 days from the date on which the application for a licence was lodged. Where there is nothing to give rise to doubts on the part of the Questore as to the accuracy of that declaration, the licence is issued. Otherwise, any investigations deemed necessary are carried out. For that purpose, the Questore contacts, if necessary, the authorities in the applicants Member State of origin. The information or documents supplied in that event by the latter are taken into account without being re-examined or challenged in any manner whatsoever.

Findings of the Court

23It must be stated, first of all, that it is clear from settled case-law that national legislation which makes the provision of services on national territory by an undertaking established in another Member State subject to the issue of an administrative authorisation constitutes a restriction on the freedom to provide services within the terms of Article 49 EC (see, inter alia, Case C-189/03 Commission v Netherlands [2004] ECR I-9289, paragraph 17, and Case C-168/04 Commission v Austria [2006] ECR I-9041, paragraph 40).

24It follows that a law such as that in issue in the main proceedings in the present case is in principle contrary to Article 49 EC and, therefore, prohibited by that article unless it can be justified, in particular, by overriding grounds of public interest.

25In that connection, it should be recalled that the Court has ruled that, by excluding consideration of the obligations to which the trans-frontier service provider is already subject in the Member State in which it is established, a national law goes beyond what is necessary to attain the objectives sought, namely to ensure close supervision of those activities (Case C-171/02 Commission v Portugal [2004] ECR I-5645, paragraph 60, and Commission v Netherlands, paragraph 18).

26It must be observed that, at the hearing, the Italian Republic gave a detailed explanation of the practice followed for the issue of a licence under Article 115 of the Consolidated Law. That practice, described in paragraphs 21 and 22 of the present judgment, is in reality merely a requirement that the person concerned lodge, by way of an application form available on the internet, a simple declaration of ‘good conduct’ within the meaning of Article 11 of the Consolidated Law, the competent authority having a 30-day period within which to verify the content of that declaration.

27The existence of that practice as described was not challenged by the Commission at the hearing and there is nothing before the Court capable of casting doubt on the reality of that practice.

28Since the application form concerned is available on, inter alia, the internet, the system of granting licences for exercising the activity of extrajudicial debt recovery can be regarded as being given adequate publicity.

29The requirement of a declaration of ‘good conduct’ within the meaning of Article 11 of the Consolidated Law is much less onerous than the obligation to supply documents to the competent authority. In so far as it requires a supplier of services to declare that he is not in one of the situations mentioned in that article, without distinguishing between the situation of a person established in Italy and that of a person established in another Member State, it cannot be argued that the procedure fails to take account of compliance by the latter with the requirements laid down in the legislation of his State of origin.

30Therefore, it cannot be held that the Italian practice goes beyond what is necessary to attain the objective pursued, which is to ensure close supervision of extrajudicial debt recovery activities. Therefore, that practice is in accordance with the principle of proportionality.

31It follows that the condition that a licence must first be obtained in order to pursue the activity of extrajudicial debt recovery, as laid down by Italian law and implemented in practice, is justified by reasons relating to the public interest.

32That being so, the Commissions first head of complaint is unfounded.

The sixth head of complaint: incompatibility with Articles 43 EC and 49 EC of the possibility for a Questore to impose additional requirements designed to ensure compliance with public safety in the general interest

Arguments of the parties

33According to the Commission, the fact that a Questore may, pursuant to Article 9 of the Consolidated Law, impose requirements in addition to those provided for by law, not known in advance by the operators concerned and intended to ensure compliance with public safety in the general interest infringes Articles 43 EC and 49 EC

34With regard to those requirements, set out under the heading ‘Warnings’ in the application form mentioned in paragraph 21 of this judgment, the Italian Republic notes that, since the administration's discretion is clearly limited by Article 11 of the Consolidated Law, the directions laid down in Article 9 thereof are marginal and residual Therefore, they are not such as to genuinely dissuade the persons concerned from operating in Italy. Furthermore, having regard to changing and unforeseeable circumstances, it is inevitable that the administration may find it necessary to carry out individual assessments on a case-by-case basis. Therefore, it would be excessive to require the legislation to set out exhaustively all the criteria to which the administration must adhere.

Findings of the Court

35It is undoubtedly the case, as the Italian Republic submits, that the national law enforcement authority must have some discretion to assess situations on a case-by-case basis and that it might be required to issue instructions to police licence holders which cannot be determined in advance.

36As it is clear from the actual wording of Article 9 of the Consolidated Law, any person who has obtained a police licence must comply with the instructions issued to him which are deemed to be necessary by the law enforcement authority.

37Even though that provision does not set out in detail the requirements to which a person may be subject in carrying on the activity of extrajudicial debt recovery in Italy, the Commission has not established that the situation gives rise to legal uncertainty such as to affect access to the Italian market in extrajudicial debt recovery services.

38The Commission does not provide any example of the exercise of that discretion on the basis of which it could be argued that the establishment in Italy of undertakings wishing to carry on activities of extrajudicial debt recovery and the pursuit in that Member State of such activities by an undertaking established in another Member State might be impeded.

39The existence of an obstacle to the freedoms of movement and establishment cannot be inferred solely from the fact that a national authority has the power to supplement the legal framework regulating an economic activity at a particular time by subsequently making that activity subject to further conditions.

40It follows that the Commissions sixth head of complaint is also unfounded.

The third (in part) and fifth heads of complaints: incompatibility with Article 49 EC of the obligations to have premises in the territory covered by the licence and to display in those premises a list of the services which may be provided to clients

Arguments of the parties

41The Commission points out that the obligation to have premises in the territory covered by the licence, arising from the fourth paragraph of Article 115 of the Consolidated Law, amount to a requirement that the operator establishes itself there, which is, according to well-established case-law of the Court, fundamentally incompatible with the principle of freedom to provide services guaranteed by Article 49 EC. It follows, the Commission argues, that the subsidiary obligation to display on the premises a list detailing the services which may be provided to clients, imposed by Article 120 of the Consolidated Law, is itself also contrary to Article 49 EC.

42The Italian Republic takes the view that the obligation to have premises in the territory covered by the licence is justified by the need to allow the law enforcement authority, in the public interest, to have access, for purposes of supervision, to documents relating to operations carried out in Italy. Therefore, the subsidiary obligation to display the list of services which may be provided, laid down with respect to all public agencies the activities of which require a licence, is also compatible with the freedom to provide services guaranteed by the Treaty.

Findings of the Court

43It must be observed, at the outset, that it is settled case-law that the requirement that a service provider must have its place of business in the Member State in which the service is provided directly negates the freedom to provide services in so far as it makes it impossible for service providers established in other Member States to provide services in that State (Case C-257/05 Commission v Austria, not published in the ECR, paragraph 21 and the case-law cited). The Italian Republic also does not deny that the obligation to have premises in the territory covered by the licence constitutes an obstacle, prohibited in principle, to the free provision of services guaranteed by Article 49 EC.

44That obstacle cannot be justified by the objective relied on by the Italian Republic.

45According to settled case-law of the Court, measures which restrict the freedom to provide services may be justified on overriding grounds of public interest only if they are necessary for the protection of the interests which they are intended to guarantee and only if those objectives cannot be attained by less restrictive measures (Commission v Austria, paragraph 23 and the case-law cited).

46The supervision of the activities of extrajudicial debt recovery agencies and of their documents relating to operations carried out in Italy is by no means dependent on the existence of premises which such undertakings are required to have in that Member State. Likewise, the services provided by those undertakings can be brought to the attention of clients by less onerous means than display at premises established, inter alia, for that purpose, such as publication in a local newspaper or appropriate publicity.

47Therefore, it must be held that, by requiring persons wishing to pursue activities of extrajudicial debt recovery to have premises in the territory covered by the licence and to display at those premises a list of the services which may be provided to clients, the Italian Republic has failed to fulfil its obligations under Article 49 EC.

The second and fourth heads of complaints: incompatibility with Articles 43 EC and 49 EC of the territorial limitation of licences to pursue the activity of extrajudicial debt recovery and of the obligation to confer authority on an authorised representative in order to pursue that activity in a province in which the operator does not have a licence; and the third head of complaint, in so far as it is based on the incompatibility with Article 43 EC of the obligation to have premises in each province

Arguments of the parties

48The Commission takes the view that the fact that the licence issued by a Quetore is valid only in the province covered by the latter s authority constitutes a restriction on both the freedom of establishment and the freedom to provide services. As Italian territory is divided into 103 provinces, the number of licences required in order to pursue the activity of extrajudicial debt recovery throughout that territory constitutes an almost insurmountable obstacle for an economic operator from another Member State.

49According to the Commission, that restriction, which has consequences in regard to both the representation and the premises which the operator must have in each province, is not justified by public-safety requirements, in particular more effective supervision of the activities concerned.

50The Commission submits that that supervision may be organised at national level, possibly by carrying out some supervision at local level, but without it being necessary to require operators to hold a licence for each province in which they carry on their activities. Furthermore, that supervision could be operated effectively through exchanges of information between the law enforcement authorities in the different provinces in which operators intend to carry on their activities.

51The Commission also disputes the ability of the Italian system to attain the objective pursued, since the number of administrative bodies involved may, having regard to all the licences necessary and the number of premises to supervise with respect to the same operator, prove to be counter-productive in terms of effective supervision.

52The Italian Republic takes issue with the Commission's view. In light of its specific nature, the activity concerned is linked to local economic conditions. It is therefore vital that the Questore, prior to granting a licence, should assess the situation within the territory under its authority. If licences were valid over a more extensive geographic area than the territory of the province for which they are requested, that assessment could not be carried out in another province, even though the situation there might be different.

53The Italian Republic adds that, since it is accepted that the activity concerned may be supervised by a law enforcement authority, a point not challenged by the Commission, it is not for the Commission or the Court to lay down the specific technical rules according to which such supervision should be carried out.

54As regards the number of bodies involved in such supervision, the Italian Republic fails to see how that information could affect the assessment of the suitability of a system of supervision to attain its objective.

55The Italian Republic concludes that the system of territorial licences is justified by overriding reasons of public interest and is proportionate with regard to the objective pursued, even if other systems may be envisaged.

Findings of the Court

56According to the legislation at issue, an undertaking may pursue activities of extrajudicial debt recovery only in the province for which a licence has been granted to it, except where authority is conferred on an agent with a view to pursuing those activities in another province. Furthermore, an undertaking can obtain licences to pursue those activities in other provinces only if it has premises in each of them.

57Even though those rules apply in exactly the same way to operators established in one Italian province which wish to extend their activities to other provinces and to operators from other Member States which wish to pursue their activities in several Italian provinces, they nonetheless constitute, for any operator not established in Italy, a serious obstacle to the pursuit of its activities in that Member State and one which affects its access to the market.

58Inasmuch as those rules require an operator from another Member State wishing to pursue its activities in several Italian provinces not to confine itself to one single establishment in Italian territory, but on the contrary require it to have premises in each of those provinces unless authority is conferred on an authorised agent, they place that operator at a disadvantage as compared with Italian operators established in Italy which already have premises in at least one of those provinces and generally have better opportunities than foreign operators to establish contacts with authorised operators in other provinces in order to issue, where necessary, powers of agency (see, to that effect, Case C-442/02 CaixaBank France [2004] ECR I-8961, paragraphs 12 and 13).

59With regard to the grounds put forward by the Italian Republic in justification of that obstacle to the freedoms guaranteed by Articles 43 EC and 49 EC, it must be stated first of all that neither the territorial limitation of the licence nor the obligation to have premises in the province for which the licence has been granted can a priori be considered to be inappropriate for attaining the objective of effective supervision of the activities concerned which is assigned to them.

60However, as the Commission points out, those rules go beyond what is necessary to attain that objective in so far as it may be achieved by less restrictive means.

61As was stated in paragraph 26 of this judgment, the Italian system provides for the issue of territorial licences on the basis of a declaration of ‘good conduct’ within the meaning of Article 11 of the Consolidated Law. If that declaration has been verified by the competent authority in the province in which it was lodged and that authority has issued a licence to the person concerned, the submission of the same declaration to the authorities in other provinces would serve no purpose.

62A licence issued by the Questore in one province should be sufficient to enable extrajudicial debt recovery activities to be pursued throughout Italy, unless the declaration on the basis of which the licence was granted becomes inaccurate, a matter which the licence holder is obliged to declare.

63In so far as the Italian Republic contends that the recognition by the competent authorities in one province of a licence issued in another is hampered by the fact that the issue of such a licence also depends on the assessment of local economic conditions by the Questore in each province, suffice it to recall that, in accordance with established case-law, any system of prior authorisation must be based on objective criteria which are non-discriminatory and known in advance by the persons concerned (Case C-463/00 Commission v Spain [2003] ECR I-4581, paragraph 69 and the case-law cited, and Case C-372/04 Watts [2006] ECR I-4325, paragraph 116). Since such an assessment lacks objective criteria which are known in advance by the undertakings concerned, that argument cannot justify the non-recognition by the Questore in one province of a licence issued by the Questore in another.

64Therefore, it must be held that, by requiring an extrajudicial debt recovery undertaking which has a licence to pursue that activity issued by the Questore in one province to apply for a separate licence in each province in which it wishes to pursue its activities, unless authority is conferred on an authorised agent in that other province, the Italian Republic has failed to fulfil its obligations under Article 43 EC and Article 49 EC.

65With regard to the obligation imposed on extrajudicial debt recovery undertakings to have premises in each province in which they intend to pursue their activities, suffice it to recall, as stated in paragraph 46 of this judgment, that the supervision of the activities of those undertakings and their documents relating to activities carried out is by no means dependent on the existence of premises which those undertakings are required to have in that province.

66By requiring extrajudicial debt recovery undertakings to have premises in each province in which they intend to pursue their activities, the Italian Republic has therefore also failed to fulfil its obligations under Article 43 EC.

The seventh head of complaint: incompatibility with Articles 43 EC and 49 EC of the limitation on the freedom to fix scales of charges

Arguments of the parties

67The Commission submits that the provisions of the circular addressed to Questori stating that it is necessary to set objective and uniform parameters in order to avoid widely divergent scales of charges in the same province lack transparency and predictability. Those provisions constitute, in the view of the Commission, an obstacle to the freedoms enshrined in Articles 43 EC and 49 EC inasmuch as they are more onerous for foreign operators than for Italian operators.

68Furthermore, the Commission claims that those provisions do not address the objective of protecting public safety and recalls, in that regard, the Court's case-law to the effect that the reasons which may be invoked by a Member State by way of justification must be accompanied by an analysis of the appropriateness and proportionality of the restrictive measure in question. The Italian Republic, it submits, has failed to forward any convincing arguments in that regard.

69The Italian Republic contends, on the contrary, that the operators concerned are not deprived of the freedom to fix scales of charges since the circular contains only a recommendation addressed to the Questori, requesting the latter to indicate to operators the lists of rates based on objective factors such as costs or the relationship between supply and demand for the service concerned. Those recommendations are intended to prevent the development of unbridled competition in regard to prices of services, which might potentially threaten public policy in this sector of activity.

Findings of the Court

70According to settled case-law, Article 49 EC precludes the application of any national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within a Member State (see Joined Cases C-544/03 and C-545/03 Mobistar and Belgacom Mobile [2005] ECR I-7723, paragraph 30 and the case-law cited).

71Therefore, as regards compulsory minimum rates, the Court has already held that legislation containing an absolute prohibition of derogation, by agreement, from the minimum fees set by a scale for services which are, on the one hand, court services and, on the other, reserved to lawyers constitutes a restriction on the freedom to provide services laid down in Article 49 EC (Joined Cases C-94/04 and C-202/04 Cipolla and Others [2006] ECR I-11421, paragraph 70).

72A prohibition of that nature deprives economic operators established in another Member State of the opportunity to compete more effectively, by offering charges lower than those in the scale of charges imposed, with the economic operators traditionally established in the Member State concerned, which therefore have greater opportunities than economic operators established abroad to build up their clientele (see, to that effect, Cipolla and Others, paragraph 59, see also, by way of analogy, CaixaBank France, paragraph 13).

73Likewise, such a prohibition limits the choice of recipients of the services in question in the Member State concerned, inasmuch as they cannot have recourse to the services in the Member State of foreign operators which would offer their services at a lower rate than the minimum fees set by the scale (see, to that effect, Cipolla and Others, paragraph 60).

74However, it must be observed that in Cipolla and Others the prohibition categorised as an obstacle to Article 49 EC derived from legislation in force which specifically and unconditionally prohibited any derogation by agreement from a mandatory scale, whereas in the present case there is merely an indication contained in a circular addressed to the Questori and described as a ‘recommendation’ by the Italian Republic which simply requests a number of ‘objective and uniform parameters’ to be set

75It must also be stated, as the Commission itself observes in its application, that the Italian authorities have not provided specific details as to the measures adopted on the basis of the recommendation in the circular, which dates from 1996. Thus, it is not even certain that price lists for extrajudicial debt recovery undertakings actually exist

76It follows that the Commission has not established that there is a restriction on the free provision of services guaranteed by Article 49 EC.

77The same holds true with regard to the Commission's present complaint in so far as it relates to the incompatibility with Article 43 EC of the limitation on the freedom to fix scales of charges.

78In those circumstances, it must be held that the Commission's seventh head of complaint is entirely unfounded.

The eighth head of complaint: incompatibility with Articles 43 EC and 49 EC of the prohibition of the concurrent pursuit of activities covered by the Law on banking and credit services

Arguments of the parties

79The Commission takes the view that the incompatibility of the pursuit of the activity of extrajudicial debt recovery with the pursuit of other activities provided for in the circular amounts, for banking and credit service providers from other Member States, to a prohibition, contrary to Articles 43 EC and 49 EC, of the pursuit in Italy of extrajudicial debt recovery.

80Even if the circular were interpreted differently by the Italian authorities, the contested provision would still infringe those articles by reason of its highly ambiguous wording. Those operators are not in a position to determine clearly and precisely whether they are authorised to pursue the activity of extrajudicial debt recovery in Italy. According to settled case-law of the Court, that is sufficient for a finding of an infringement of Community law.

81The Italian Republic rejects those assertions. The circular, it contends, merely states that the activity of extrajudicial debt recovery is not part of the activity of savings collection and credit management regulated by the Law on banking and credit services and that, as a result, authorisation to pursue the former activity does not also permit an operator to pursue the latter.

82That Member State contends that, even if it were to be found that in the circular the term ‘incompatibility’ is used in an inappropriate manner, there could be no reasonable doubt as to the fact that there is nothing to prevent a person authorised to pursue those two types of activity from pursuing them concurrently.

Findings of the Court

83It must be held, first, that the circular deals with the powers of extrajudicial debt recovery agencies with respect to the financial transactions regulated by the Law on banking and credit services and not with the prohibition of banking and credit service providers pursuing extrajudicial debt recovery activities in Italy.

84Second, it must be observed, as the Italian Republic submits, that it is clear from the text of the circular, as cited in paragraph 11 of this judgment, that it merely confirms that authorisation of the activity of extrajudicial debt recovery does not automatically entail authorisation to engage in the activities covered by the Law on banking and credit services.

85In the absence of legal uncertainty in the circular as regards the exercise of the activity of extrajudicial debt recovery vis-à-vis the exercise of activities covered by the Law on banking and credit services, there is no obstacle to the freedom guaranteed by Article 49 EC with respect to foreign operators with regard to the pursuit of the activity of extrajudicial debt recovery in Italy.

86The Commissions eighth head of complaint is therefore unfounded.

87Having regard to the foregoing, it must be held that, by requiring, within the context of the Consolidating Law, every undertaking pursuing the activity of extrajudicial debt recovery:— to apply, even though the undertaking holds a licence issued by the Questore of a province, for a new licence for each other province in which it wishes to carry on its activities, unless it confers authority on an authorised agent in that other province, the Italian Republic has failed to fulfil its obligations under Articles 43 EC and 49 EC;— to have premises in the territory covered by the licence and to display in those premises a list of the services which may be provided for clients, the Italian Republic has failed to fulfil its obligations under Article 49 EC;— to have premises in each province in which it intends to carry on its activities, the Italian Republic has failed to fulfil its obligations under Article 43 EC.

88The remainder of the action must be dismissed.

Costs

89Under Article 69(3) of the Rules of Procedure, the Court may order that the costs be shared or that the parties bear their own costs, if each party succeeds on some and fails on other heads.

90In the present case, since the Commission and the Italian Republic have each been partly unsuccessful on a number of heads, each must be ordered to bear its own costs.

Operative part

On those grounds, the Court (First Chamber) hereby:

1.Declares that, by requiring, within the context of the Consolidated Law on public security (Testo unico delle leggi di pubblica sicurezza), approved by Royal Decree No 773 of 18 June 1931, every undertaking pursuing the activity of extrajudicial debt recovery:— to apply, even though the undertaking holds a licence issued by the Questore of a province, for a new licence for each other province in which it wishes to carry on its activities, unless it confers authority on an authorised agent in that other province, the Italian Republic has failed to fulfil its obligations under Articles 43 EC and 49 EC;— to have premises in the territory covered by the licence and to display in those premises a list of the services which may be provided for clients, the Italian Republic has failed to fulfil its obligations under Article 49 EC;— to have premises in each province in which it intends to carry on its activities, the Italian Republic has failed to fulfil its obligations under Article 43 EC;

2.Dismisses the action as to the remainder;

3.Orders the Commission of the European Communities and the Italian Republic to bear their own respective costs,