Alpine Investments BV v. Minister Van Financiën (Case C-384/93)

Before the Court of Justice of the European

Communities

ECJ

(Presiding, RodrÍguez Iglesias C.J.; Schockweiler, Kapteyn and Gulmann PP.C.;

Mancini, Moitinho de Almeida, Murray, Edward ( Rapporteur) and Puissochet JJ.)

Mr Francis Jacobs, Advocate General.

10 May 1995

Reference from the Netherlands by College van Beroep voor het Bedrijfsleven (Commercial Administrative Appeal Court) under Article 177 EEC.

Provision considered: EEC 59 Services. Sales promotion. Since the freedom to provide services would become illusory if national rules were at liberty to restrict offers of services, the prior existence of an identifiable recipient cannot be a condition for application of the Community provisions on the freedom to provide services. [19] Services. Sales promotion. Telesales. Services which the provider offers by telephone to potential recipients established in other Member States and provides without moving from the State in which he is established are covered by Article 59 EEC. [22] Services. Regulation of trade. Telesales. Cold calling. A national prohibition against providers of services established in a Member State making telephone calls to potential clients in other Member States without

their prior consent does not constitute a restriction on freedom to provide services within the meaning of Article 59 EEC solely by virtue of the fact that other Member States apply less strict rules to providers of similar services established in their territory. [27] Services. Regulation of trade. Cold calling. *210 A national prohibition on cold calling potential customers does not fall outside the scope of Article 59 EEC simply because it is imposed by the Member State in which the provider of the relevant services is established. [31] Corsica Ferries Italia v. Corpo dei Piloti del Porto di Genova (C-18/93): [1994] 1 E.C.R. 1783; Peralta (C-379/92): [1994] I E.C.R. 3453; E.C. Commission v. France (C-381/93): [1994] E.C.R. 5145, followed. Services. Regulation of trade. Telesales. Cold calling. Rules of a Member State which prohibit providers of services established in its territory from making unsolicited telephone calls to potential clients established in other Member States in order to offer their services, directly affect access to the market in services in the other Member States and thus constitute a restriction on the freedom to provide services within the meaning of Article 59 EEC. [38]-[39] Keck and Mithouard (C267-268/91): [1995] 1 C.M.L.R. 101, distinguished. Services. Financial services. Public policy. Maintaining the good reputation of the financial sector of a Member State may constitute an imperative reason of public interest capable of justifying restrictions on the freedom to provide financial services. [44] Services. Regulation of trade. Proportionality. The fact that one Member State imposes less strict rules for the purpose of regulating the provision of certain services than those of another, which are caught by Article 59 but justifiable in the public interest, does not mean that the latter's rules are disproportionate and hence incompatible with Community law. [51] Services. Regulation of trade. Financial services. Telesales. Cold calling. National rules which, in order to protect investor confidence in national financial markets, prohibit the practice of making unsolicited telephone calls to potential clients resident in other Member States to offer them services linked to investment in commodities futures are not precluded by Article 59 EEC. [56] The court interpreted Article 59 EEC in the context of a prohibition imposed by the Netherlands authorities against traders on the commodities futures market cold calling potential clients by telephone (having held that Directives 93/22 and

85/577 were inapplicable) to the effect that Article 59 was applicable to the offering of services to clients in other Member States by telephone, that the ban could not be deemed to restrict freedom to provide services simply because regulatory regimes in other Member States were less strict, that, on the *211 other hand, the fact that it was imposed by the home State of the provider of the services as opposed to the home State of the potential recipient did not take it outwith the scope of Article 59, that it was, in fact, caught by Article 59, but that restrictions on freedom to provide services were justifed in the public interest in order to maintain the integrity of the Netherlands in the financial services sector and that the ban was an appropriate tool for that purpose and not disproportionate. Representation G. van der Wal and W. B. J. van Oberbeek, Advocaten, for the applicant company. A. Bos and J. S. Van den Oosterkamp, Legal Advisers at the Ministry of Foreign Affairs, for the Dutch Government. J. Devadder, Director of Administration at the Ministry of Foreign Affairs, for the Belgian Government as amicus curiae. V. Kontolaimos, Assistant Legal Adviser at the Council of State, and V. Pelekou, Legal Representative at the Council of State for the Greek Government as amicus curiae. Christopher Vajda, of the English Bar, instructed by J. D. Colahan, of the Treasury Solicitor's Department, for the United Kingdom Government as amicus curiae. B. Smulders and P. van Nuffel, of the Legal Service of the E.C. Commission, for the Commission as amicus curiae. The following cases were referred to in the judgment: 1. Peralta (C-379/92), 14 July 1994: [1994] I E.C.R. 3453. 2. Corsica Ferries Italia v. Corpo dei Piloti del Porto di Genova (C-18/93), 17 May 1994: [1994] I E.C.R. 1783. 3. E.C. Commission v. France (C-381/93), 5 October 1994: [1994] I E.C.R. 5145. 4. Keck and Mithouard (C 267-268/91), 24 November 1993: [1993] I E.C.R. 6097, [1995] 1 C.M.L.R. 101. 5. Collectieve Antennevoorziening Gouda and Others v. Commissariaat voor de Media (C-288/89), 25 July 1991: [1991] I E.C.R. 4007. The following further cases were referred to by the Advocate General: 6. Bond Van Adverteerders v. Netherlands (352/85), 26 April 1988: [1988] E.C.R. 2085, [1989] 3 C.M.L.R. 113. 7. E.C. Commission v. Greece (C-198/89), 26 February 1991: [1991] I E.C.R. 727. 8. Procureur du Roi v. Debauve (52/79), 18 March 1980: [1980] E.C.R. 833,

[1981] 2 C.M.L.R. 362. 9. Höfner and Elser v. Macrotron GmbH (C-41/90), 23 April 1991: [1991] I E.C.R. 1979, [1993] 4 C.M.L.R. 306. 10. Distribuidores Cinematográficos v. Estado Español andUnion de Productores de Cine Y Televisión (C-17/92): 4 May 1993: not yet reported. *212 11. Transporoute et Travaux SA v. Minister of Public Works (76/81): 10 February 1982: [1982] E.C.R. 417, [1982] 3 C.M.L.R. 382. 12. Luisi and Carbone v. Ministero del Tresoro (286/82 and 26/83), 31 January 1984: [1984] E.C.R. 377, [1985] 3 C.M.L.R. 52. 13. E.C. Commission v. France (C-154/89), 26 February 1991: [1991] I E.C.R. 659. 14. E.C. Commission v. Italy (C-180/89), 26 February 1991: [1991] I E.C.R. 709. 15. Säger v. Dennemeyer (C-76/90), 25 February 1991: [1991] I E.C.R. 4221, [1993] 3 C.M.L.R. 639. 16. E.C. Commission v. Netherlands (C-353/89), 18 April 1991: [1991] I E.C.R. 4069. 17. Tv10 SA v. Commissariaat voor de Media (C-23/93), 5 October 1994: [1994] I E.C.R. 4795. 18. Firma J. Van Dam en Zonen (185-204/78), 3 July 1979: [1979] E.C.R. 2345, [1980] 1 C.M.L.R. 350. 19. Pesca Valentia v. Minister for Fisheries and Forestry (223/86), 19 January 1988: [1988] E.C.R. 83, [1988] 1 C.M.L.R. 888. 20. HM Customs and Excise v. Schindler (C-275/92), 24 March 1994: [1994] I E.C.R. 1039, [1995] 1 C.M.L.R. 4. 21. Schul v. Inspecteur der Invoerrechten en Accijnzen (15/81), 5 May 1982: [1982] E.C.R. 1409, [1982] 3 C.M.L.R. 229. 22. Groenveld v. Produktschap voor Vee en Vlees (15/79), 8 November 1979: [1979] E.C.R. 3409, [1981] 1 C.M.L.R. 207. 23. Oebel (155/80), 14 July 1981: [1981] E.C.R. 1993, [1983] 1 C.M.L.R. 390. 24. Fabricants Raffineurs D'Huile de Graissage v. Inter-Huiles (172/82), 10 March 1983: [1983] E.C.R. 555, [1983] 3 C.M.L.R. 485. 25. Delhaize et Le Lion SA v. Promalvin (C-47/90), 9 June 1992: [1992] I E.C.R. 3669. 26. Leclerc-Siplec (C-412/93), 9 February 1995: not yet reported. 27. Re Insurance Services: E.C. Commission v. Germany (205/84), 4 December 1986: [1986] E.C.R. 3755, [1987] 2 C.M.L.R. 69. 28. Re Co-Insurance Services: E.C. Commission v. France (220/83), 4 December 1986: [1986] E.C.R. 3663, [1987] 2 C.M.L.R. 113. 29. Openbaar Ministerie v. Oosthoek's Uitgeversmaatschappij BV (286/81), 15 December 1982: [1982] E.C.R. 455, [1983] 3 C.M.L.R. 428. 30. Aragonesa de Publicidad Exterior and PublivÍa v.Departamento Da Sanidad (C-176/90), 11 June 1991: [1991] I E.C.R. 4151, [1994] 1 C.M.L.R. 887 *213 . TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE

Opinion of the Advocate General (Mr Francis Jacobs)

1. In this case the College van Beroep voor het Bedrijfsleven (Administrative Court for Trade and Industry) of the Netherlands has referred certain questions concerning the interpretation of Article 59 of the Treaty. The referring court seeks essentially to know whether the prohibition of the marketing practice known as "cold calling" imposed pursuant to the Dutch Act of 30 October 1985 concerning Securities Transactions is compatible with the provisions of the Treaty on the free movement of services in so far as it prohibits a firm established in the Netherlands from approaching prospective clients established in other Member States. 2. Alpine Investments BV, a firm established in the Netherlands, provides financial services and specialises in commodities futures trading. It acts as "introducing broker", that is to say, it receives orders from clients relating to transactions in the commodities futures markets and passes them for execution to brokers dealing in those markets within and outside the Community. It has three types of accounts with its clients: "managed accounts", "semi-managed accounts", and "non-managed accounts". In the case of a managed account, the firm is authorised by the client to effect transactions in the commodities futures market on his behalf on a discretionary basis. In the case of a semi-managed account, the firm informs the client of various opportunities for investment in the commodities futures market and it is up to the client to take a decision as to whether an investment will be made. In the case of a non-mananged account, the firm offers no investment advice and only executes the client's instructions. 3. At the material time in the Netherlands, financial services were subject to the Act of 30 October 1985 concerning Securities Transactions (Wet Effectenhandel, WEH). [FN1] Article 6(1) of that Act prohibits a person from acting as an intermediary in securities transactions without a licence. Article 6(2) and Article 6(3) lay down the conditions which must be fulfilled in order for a person to obtain a licence. Article 8(1) provides that, in special circumstances, the Minister of Finance ("the Minister") may grant an exemption from the *214 prohibition laid down in Article 6(1). Article 8(2) states that, with a view to preventing undesirable developments in securities trading, conditions may be attached to an exemption. FN1 [1985] Stb. 570. That Act was repealed on 15 June 1992 and was replaced by The Wet Toezicht Effectenverkeer (Wte), [1991] Stb. 141. 4. On 6 September 1991, the Minister granted to Alpine Investments an exemption pursuant to Article 8 of the WEH which allowed Alpine Investments to place orders with Merrill Lynch Inc. By a decision of 12 November 1991, the Minister attached a condition to that exemption, effectively preventing Alpine Investments from cold calling, namely, approaching prospective clients by telephone or in person unless they had first expressly agreed in writing to be approached in such a manner and as long as that agreement had not been revoked by registered letter. Such agreement had to be evident from a dated statement signed by the client which was to be kept in the records of Alpine Investments. The statement had to be kept for five years after the most recent

transaction had taken place or the relation between Alpine Investments and the client had ended. 5. Alpine Investments raised an administrative objection against the Minister's decision of 12 November 1991, but on 14 January 1992 the Minister withdrew the exemption that he had granted to Alpine Investments and granted a new exemption allowing it to place orders with Rodman & Renshaw Inc. That exemption was again subject to the condition that Alpine Investments was prohibited from approaching prospective clients by telephone or in person unless they had expressly agreed in writing to be approached in such a manner. On 13 February 1992 Alpine Investments raised an administrative objection against the Minister's decision of 14 January 1992. 6. It appears that a condition prohibiting cold calling similar to that imposed on Alpine Investments accompanied all exemptions granted after 1 October 1991 on the basis of Article 8 of the WEH. During 1991 the Minister received many complaints from investors claiming that, as a result of cold calling, they had entered into transactions which subsequently they regretted. As a result, the Minister decided to ban cold calling in general and announced that decision in a press release dated 1 October 1991. 7. On 29 April 1992, the Minister adopted a decision rejecting the administrative objections of Alpine Investments, which appealed against that decision to the referring court. In the main proceedings, Alpine Investments argued, inter alia, that the prohibition of cold calling was contrary to Article 59 of the Treaty. It prevented Alpine Investments from approaching prospective clients in other Member States and was a restriction on the freedom to provide services which was not justified on the grounds of public policy, public security or public health. As a result of those arguments the following questions have been referred to the Court: (1) Must Article 59 EEC be interpreted as meaning that it also covers services which the provider offers by telephone from the Member *215 State of his establishment to (potential) clients established in another Member State and therefore also provides from that Member State? (2) Does Article 59 also apply to the provisions and/or restrictions which in the Member State of establishment of the provider of services govern the lawful exercise of the occupation or business concerned but do not apply--in any event not in the same way and to the same extent--to the exercise of that occupation or business in the Member State of establishment of (potential) recipients of the service in question and for that reason may constitute for the provider of services when offering his services to (potential) clients established in another Member State hindrances that do not apply to providers of similar services established in that other Member State? If the answer to the second question is yes: (3)(a) Can the concern to protect consumers and safeguard the reputation of the Netherlands securities trading sector which underlies a provision aimed at combating undesirable developments in the securities trading sector be regarded as imperative reasons of public interest justifying a hindrance such as that referred to in question (2)?

(3)(b) Is a proviso in an exemption banning cold calling to be regarded as objectively necessary to protect the aforementioned concern and as proportionate to the objective pursued? 8. Written observations have been submitted by Alpine Investments, by the Governments of the Netherlands, Greece and the United Kingdom, and by the Commission. In addition, the Belgian Government presented oral argument to the Court. 9. There can be no doubt that the activities of Alpine Investments fall within the scope of application of Article 60. That article defines as services those which are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. Alpine Investments offers financial services. As already stated, those include executing orders on the instructions of clients, advising clients and managing clients' accounts. 10. Although the contested prohibition of cold calling prohibits Alpine Investments from approaching clients by telephone and in person unless they have previously agreed to it in writing, it appears from the order for reference and from the first question referred that the national court is concerned especially with the prohibition of contacting clients by telephone. 11. It appears that Alpine Investments uses cold calling in order to market its services. In particular, it telephones prospective clients in other Member States in order to ask them if they are interested in receiving further information or to invite them to seminars where the services which it offers are explained. It states that no complaints have been made by anyone about the way in which it markets its services. 12. Before turning to the questions referred, it will be helpful to examine briefly the rules of Community legislation which might be relevant to cold calling. 13. The objective of Council Directive 93/22 on investment services *216 in the securities field [FN2] is to facilitate the freedom of establishment and the freedom to provide services for investment firms. FN2 [1993] O.J. L141/27. 14. The Directive on Investment Services, even if applicable ratione materiae, does not apply to the present case since it had not been adopted at the material time. However, it is relevant because it shows the legal framework adopted by the Community in order to facilitate the freedom of establishment and the freedom to provide services for investment firms. It is notable that the directive does not harmonise the rules of the Member States concerning the marketing of investments. 15. Under the directive, an investment firm may not carry on investment business unless it has received authorisation by the competent authorities of its home Member State. [FN3] Once it has received that authorisation, it may carry on investment business either by the establishment of a branch or by exercising the freedom to provide services throughout the Community. The host Member State may not make the carrying on of investment business in its territory subject to

any authorisation requirement or to any requirement to provide endowment capital or to any other measure having equivalent effect. [FN4] FN3 Article 3(1). FN4 Article 14(1) and (2). 16. The home Member State is responsible for ensuring that a firm complies at all times with the conditions which must be fulfilled in order for a firm to be granted authorisation. [FN5] Each home Member State must draw up prudential rules which investment firms must observe at all times. The general principles of those rules are laid down in the directive. [FN6] The prudential supervision of an investment firm is the responsibility of the home Member State. [FN7] FN5 Article 8(1) and (2). FN6 Article 10. FN7 Article 8(3). 17. Member States must draw up rules of conduct which investment firms must observe at all times. The content of those rules is laid down in general terms in the directive. [FN8] Article 11(2) states as follows: Without prejudice to any decisions to be taken in the context of the harmonisation of the rules of conduct, their implementation and the supervision of compliance with them shall remain the responsibility of the Member State in which the service is provided. FN8 Article 11(1). 18. According to Article 13, the directive does not prevent investment firms authorised in other Member States from advertising their services through all available means of communication in their host Member States, subject to any rules governing the form and the content of such advertising adopted in the interest of the general good. 19. However, it is not entirely clear from the directive how responsibility is divided between the authorities of the home State and the authorities of the host State. In any event, it may not always be *217 clear in a particular case precisely where a particular service is provided. 20. On 20 December 1985, the Council adopted Directive 85/577 concerning the protection of consumers in respect of contracts negotiated away from business premises, [FN9] the purpose of which is to protect consumers against unfair commercial practices in respect of doorstep selling. [FN10] The directive does not apply to contracts concluded by telephone or to "contracts for securities". [FN11] With regard to contracts which fall within its scope of application, the directive does not prohibit what might be described as cold calling at the

doorstep, but gives the consumer the right of cancellation. It allows Member States to adopt more stringent requirements in order to protect consumers. [FN12] FN9 [1985] O.J. L372/31. FN10 Preamble, third recital. FN11 Article 3(2)(e). FN12 Article 8. 21. In October 1993, the Commission submitted an amended proposal for a Council directive on the protection of consumers in respect of contracts negotiated at a distance (distance selling). [FN13] The proposed directive seeks to approximate the laws of the Member States concerning "contracts negotiated at a distance between consumers and suppliers and solicitations with a view to the conclusion of such contracts and preparatory acts with a view to such contracts. [FN14] FN13 COM(93) 396, [1993] O.J. C308/18. Initial proposal COM(92) 11, [1992] O.J. C156/14. FN14 Article 1. 22. Article 4 would require Member States to take the measures necessary to protect consumers who have indicated that they do not wish to be solicited against such soliciting. The second paragraph of Article 4 states as follows: The means of communication listed below shall be used only with the prior consent of the consumer: --facsimile machine (fax), --electronic mail, --telephone, --automatic calling units. Therefore, the proposed directive, as it stands, prohibits cold calling by telephone. It appears that the proposed directive applies to contracts concerning the supply of financial services, including the type of services provided by Alpine Investments. [FN15] FN15 See Articles 1, 2 and 12 of the proposed directive. 23. As the Commission points out, the above survey shows that, at present, Community legislation neither prohibits cold calling by telephone or in person nor prevents Member States from prohibiting it. *218 24. I turn now to examine the questions referred.

The first question

25. By the first question, the referring court seeks effectively to determine whether Article 59 applies to services which a person provides from the Member State of his establishment to persons established in other Member States. In my view, there is no doubt that that question should receive an affirmative answer. 26. Since the aim of Article 59 is to abolish restrictions on the freedom to provide services within the Community, its application presupposes the existence of a cross-border element. As the court has stated, the services in question must be "transfrontier in nature". [FN16] Article 59 does not apply where all the elements of the activity in question are confined within a single Member State. [FN17] FN16 Case 352/85, Bond Van Adverteerders v. Netherlands: [1988] E.C.R. 2085, [1989] 3 C.M.L.R. 113 para. [13]. FN17 Case C-198/89, E.C. Commission v. Greece: [1991] I E.C.R. 727, para. [9]; Case 52/79, Procureur du Roi v. Debauve: [1980] E.C.R. 833, [1981] 2 C.M.L.R. 362, para. [9] and Case C-41/90, Höfner and Elser: [1991] I E.C.R. 1979, [1993] 4 C.M.L.R. 306, paras [37] to [39]. 27. A cross-border element exists where the provider and the recipient of services are established in different Member States. [FN18] Where that is the case, Article 59 applies irrespective of the Member State where the services are provided. That interpretation is supported by the language of Article 59, the first paragraph of which provides for the abolition of restrictions on the freedom to provide services "in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended". FN18 See Case C-17/92, Distribuidores Cinematográficos: [1993] I E.C.R. 2239, para. [11]. 28. That interpretation is also confirmed by the case law of the Court which makes it clear that the provisions of the Treaty on the freedom to provide services apply in the following cases: where the provider of services moves to another Member State in order to provide services [FN19]; where the recipient of services moves to another Member State in order to receive services [FN20]; where both the provider and the recipient are established in the same Member State but the provider moves to another Member State in order to offer his services [FN21]; and where neither the provider nor the recipient moves physically and services are provided by post or telecommunications, such as telephone, fax or electronic mail. [FN22] FN19 See e.g. Case 76/91, Transporoute v. Minister of Public Works: [1982] E.C.R. 417 *219 , [1982] 3 C.M.L.R. 382. FN20 Joined Cases 286/82 and 26/83, Luisi and Carbone v. Ministero del

Tresoro: [1984] E.C.R. 377, [1985] 3 C.M.L.R. 52. FN21 See the cases on tourist guides: Case C-154/89, E.C. Commission v. France: [1991] I E.C.R. 659. Case C-180/89 E.C. Commission v. Italy: [1991] I E.C.R. 709, and Case C-198/89, Commission v. Greece cited in note 17. FN22 See e.g. Case C-76/90, Säger v. Dennemeyer: [1991] I E.C.R. 4221 [1993] 3 C.M.L.R. 639. See also the "Mediawet" cases: Case C-288/89, Collectieve Antennevoorziening Gouda: [1991] I E.C.R. 4007, Case C-353/89, E.C. Commission v. Netherlands: [1991] I E.C.R. 4069, and Case C-23/93, Tv10 SA v. Commissariaat voor Media: [1994] E.C.R. 4795. 29. Alpine Investments states that the services in issue in this case belong to the last category referred to above. For the purposes of the present case, it is not necessary in my view to determine precisely where the services are provided. A cross-border element exists since the provider and the recipient of the services are established in different Member States. 30. The Dutch Government claims that the contested prohibition of cold calling concerns purely internal situations. That argument is fallacious. The present case concerns the prohibition of cold calling to the extent that it prohibits Alpine Investments from contacting prospective customers in other Member States. In its observations relating to the second question referred, the Dutch Government itself accepts that that prohibition also applies to approaches by telephone from the Netherlands to persons established in other Member States. 31. The Dutch Government further claims that the great majority of futures transactions in the commodities markets take place in the Chicago commodities exchange, that is to say, outside the territory of the Community. That does not mean, however, that Article 59 is not applicable in the present case, where the use of a marketing technique within the Community is prohibited, and where a person established in one Member State is thereby prohibited from providing services to a client resident in another Member State. 32. The Government of the Netherlands and the Government of the United Kingdom refer to the judgment in Keck and Mithouard [FN23] and claim that the interpretation that the Court gave to Article 30 in that case should be transposed to Article 59. They argue that the disputed prohibition of cold calling would then not amount to a restriction on the freedom to provide services and conclude that the answer to the first question should be that Article 59 is not applicable in this case. FN23 Cases C-267/91 and C-268/91: [1993] I E.C.R. 6097, [1995] 1 C.M.L.R. 101. 33. That reasoning seems to me to be based on a misunderstanding of the first question. As explained above, by that question the referring court merely asks whether Article 59 applies to services which the provider provides from the Member State of his establishment to persons resident in other Member States. It

does not enquire as to whether the disputed prohibition of cold calling is a restriction on the freedom to provide services. That is the subject of the second question. It is in the context of that question that the arguments of the Netherlands Government and of the United Kingdom Government should be examined. 34. I conclude that the first question referred should be answered in the affirmative.

*220 Second Question 35. By the second question, the referring court seeks effectively to determine whether the contested prohibition of cold calling is a restriction on the freedom to provide services within the meaning of Article 59. 36. In particular, it appears from the order for reference that the referring court seeks to determine two issues. First, it seeks to know whether the fact that the disputed prohibition is imposed by the Member State where the provider of services is established may preclude Article 59 from applying. Secondly, it seeks to know whether that prohibition is a restriction within the meaning of Article 59 by reason of the fact that the same prohibition is not imposed, or at least not to the same extent, by the Member States where the recipients of services are established on providers of services established in their territory. 37. With regard to the first issue, it should be noted that the provisions of the Treaty on the freedom to provide services impose obligations not only on the Member State of destination but also on the Member State of origin. The Court has held that the freedom 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. [FN24] It follows that the disputed prohibition does not fall outside the scope of application of Article 59 by reason of the fact that it is imposed by the State where the provider of services is established. FN24 Case C-18/93, Corsica Ferries: [1994] I E.C.R. 1783, para. [30]; Case C-379/92, Peralta: [1994] I E.C.R. 3453, para. 40 and Case C-381/93, E.C. Commission v. France: [1994] I E.C.R. 5145, para. [14]. 38. With regard to the second issue, it should first be noted that the contested prohibition is non-discriminatory. It applies without discrimination to all providers of services established in the Netherlands. It applies irrespective of whether the prospective clients of Alpine Investments are resident in the Netherlands or in other Member States. Thus, it applies without discrimination as regards the recipients of services. 39. The fact that different Member States may impose different restrictions does not amount to discrimination, nor does it result in a situation incompatible with the Treaty. The prohibition on cold calling imposed by Dutch law, which applies equally to all persons subject to it, cannot be incompatible with the Treaty merely because other Member States may apply less strict rules to providers of services established in their territory. [FN25]

FN25 See Peralta *221 , cited above, para. [48]. See also Joined Cases 185-204/78, Van Dam: [1979] E.C.R. 2345, [1980] 1 C.M.L.R. 350, para. [10] and Case 223/86, Pesca Valentia v. Minister for Fisheries and Forestry: [1988] E.C.R. 83, [1988] 1 C.M.L.R. 888, para. [18]. 40. The question remains, however, whether the contested prohibition is a restriction on the freedom to provide services within the meaning of Article 59. Alpine Investments and the Commission argue that that question should be answered in the affirmative; the Government of the United Kingdom and the Government of the Netherlands take the contrary view. 41. Alpine Investments argues that since the contested prohibition applies to contacting prospective clients outside the Netherlands it restricts its freedom to provide services. It concludes that the second question should be answered to the effect that Article 59 precludes rules imposed by the Member State where the provider is established which seek to regulate the manner in which services are provided in other Member States, to the extent that those rules restrict the provision of transfrontier services. 42. The Government of the United Kingdom argues that the disputed prohibition is not a restriction on the freedom to provide services because it is generally applicable, it is non-discriminatory, and it does not have as its object or effect the provision of an advantage for the national market over providers of services from other Member States. The same reasoning is followed by the Government of the Netherlands. 43. Most of the cases on the provision of services decided by the Court so far concern restrictions imposed by the Member State of destination. With regard to that situation, the case law of the Court makes it clear that Article 59 is not concerned solely with restrictions which are discriminatory, that is to say, which discriminate against the provider of services on account of his nationality or on account of the fact that he is established in a Member State other than the one in which the service is provided; Article 59 also covers restrictions which are non-discriminatory. That was made clear in the judgment in Säger v. Dennemeyer, where the Court stated as follows [FN26]: ...Article 59 requires not only the elimination of all discrimination against a person providing services on the ground of his nationality but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, when it is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides similar services. FN26 Säger, cited above, paras [12] and [13]. See also Gouda and Netherlands, cited above. In particular, a Member State may not make the provision of services in its territory subject to compliance with all the conditions required for establishment and thereby deprive of all practical effectiveness the provisions of the Treaty

whose object is, precisely, to guarantee the freedom to provide services. Such a restriction is all the less permissible where, ... unlike the situation governed by the third paragraph of Article 60, the service is supplied without it being necessary for the person providing it to visit the territory of the Member State where it is provided. *222 44. In Schindler [FN27] the Court confirmed that Article 59 covers non-discriminatory restrictions. FN27 Case C-275/92: [1994] I E.C.R. 1039, [1995] 1 C.M.L.R. 4. 45. In my view, similar principles apply with regard to restrictions on the freedom to provide services imposed by the Member State where the provider of services is established. Rules of that State which are non-discriminatory, that is to say, which apply to all providers established in its territory and without distinction to domestic services or intra-Community services, may in certain circumstances constitute restrictions within the meaning of Article 59. 46. As Alpine Investments points out, Article 59 refers to the abolition of all restrictions on the freedom to provide services without distinguishing between discriminatory and non-discriminatory ones. Also, as shown above, the case law of the Court makes it clear that Article 59 prohibits even non-discriminatory restrictions imposed by the Member State of destination. It would be incongruous if the opposite view were taken with regard to restrictions imposed by the Member State of origin. So far as possible the same principles should apply to all restrictions on the provision of services, whether imposed by the Member State of origin, by the Member State of the recipient of the service, or indeed by a third Member State which is neither that of the provider nor of the recipient of the service, if the service is provided there. 47. Whether a rule of the Member State of origin constitutes a restriction on the freedom to provide services should be determined by reference to a functional criterion, that is to say, whether it substantially impedes the ability of persons established in its territory to provide intra-Community services. It seems to me that that criterion is consonant with the notion of an internal market and more appropriate than the criterion of discrimination. 48. From the point of view of the realisation of the internal market, what matters is not whether the rules of a Member State are discriminatory but whether they have an adverse effect on its establishment or functioning. The Court has held that the concept of the common market involves the elimination of all obstacles to intra-Community trade "in order to merge the national markets into a single market bringing about conditions as close as possible to those of a genuine internal market". [FN28] National rules, whether of the "importing" or of the "exporting" Member State, which substantially impede the exercise of the freedom to provide services, adversely affect the establishment and functioning of the internal market and therefore fall within the scope of the Treaty. FN28 Case 15/81, Schul v. Inspecteur der Invoerrechten en Accijnzen: [1982] E.C.R. 1409, [1982] 3 C.M.L.R. 229, para. [33].

49. That view is supported by the recent judgment of the Court in E.C. Commission v. France. [FN29] In that case, the Court held that the *223 freedom to provide services precludes the application of any national legislation which has the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State. However, the Court did not state that national rules constitute a restriction on the freedom to provide services only where they make the provision of internal services more favourable than the provision of intra-Community ones. On the contrary, the Court declared in general terms that "Article 59 precludes the application of any national legislation which without objective justification impedes a provider of services from actually exercising that freedom". [FN30] The Court also stated that the freedom to provide services should be interpreted "in the perspective of a single market in order to permit the realisation of its objectives". [FN31] FN29 Case C-381/93, cited above. FN30 Para. [16]. FN31 Para. [17]. 50. The view that Article 59 covers non-discriminatory restrictions is consonant with the objectives of the Treaty; at the same time, it does not infringe the legitimate interests of the Member States since the fact that a national rule is a restriction on the freedom to provide services does not mean that it is incompatible with the Treaty. That will be the case only if it fails to satisfy certain conditions which, according to the case law of the Court, are more strict in the case of discriminatory measures than in the case of non-discriminatory measures. 51. In this case, the contested prohibition is a restriction within the meaning of Article 59 becuse it applies not only to the provision of services within the territory of the Netherlands but also to the provision of intra- Community services. A Member State is free to regulate the marketing in its territory of services provided by persons established in that State. However, it does not have unlimited freedom to regulate the marketing of such services in the territory of other Member States. Rules of a Member State which restrict the marketing of services provided by persons established in that State in the territory of other Member States fall within the scope of Article 59 and cannot be compatible with Community law unless they are justified. 52. It is suggested however that the case law of the Court on the free movement of goods should be applied by analogy, and that, according to that case law, in the case of an "exporting" Member State, only discriminatory restrictions come within the scope of the Treaty. 53. It is true that the Court has interpreted the notion of restrictions on exports of goods under Article 34 of the Treaty more narrowly than the notion of restrictions on imports under Article 30. Whereas even non-discriminatory rules may fall

within the ambit of Article 30, the application of Article 34 requires the existence of discrimination in law or in fact. In Groenveld the Court held that Article 34 [FN32] concerns national measures which have as their specific object or effect *224 the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade in such a way as to provide a particular advantage for national production or for the domestic market of the State in question at the expense of the production or of the trade of other Member States. FN32 Case 15/79, Groenveld v. Produktschap voor Vee en Vlees: [1979] E.C.R. 3409, [1981] 1 C.M.L.R. 207 para. [7]. 54. The same formula has been repeated in subsequent cases. [FN33] In Oebel the Court held that Article 34 does not apply to rules [FN34] which are part of economic and social policy and apply by virtue of objective criteria to all the undertakings in a particular industry which are established within the national territory, without leading to any difference in treatment whatsoever on the ground of the nationality of traders and without distinguishing between the domestic trade of the State in question and the export trade. FN33 See Case 155/80, Oebel [1981] E.C.R. 1993, [1983] 1 C.M.L.R. 390, para. [15]; Case 172/82, Fabricants Raffineurs D'Huile de Graissage v. Inter-Huiles: [1983] E.C.R. 555, [1983] 3 C.M.L.R. 485, para. [12] and Case C-47/90, Delhaize et Le Lion: [1992] I E.C.R. 3669, para. [12]. FN34 Case 155/80, cited above, para. [16]. 55. It may be doubted however whether the case law of the Court under Article 34 applies to rules of the exporting Member State concerning the marketing of goods. A Member State may prohibit traders established in its territory from using a marketing technique in order to sell their products in that State. However, it does not follow that it is entitled to prohibit them from using that marketing technique in order to sell their products in other Member States. Clearly, a trader cannot be required by the exporting Member State to abstain from using in another Member State a form of advertising which is prohibited in the exporting State but is permitted in the other Member State in order to market his products in the latter, unless there is a good reason for the prohibition. 56. In any event, whatever the position might be in relation to goods under Article 34, a restriction on marketing services in another Member State must be seen as a restriction on the freedom to provide services. As stated above, in this case the contested prohibition is a restriction within the scope of Article 59 because it applies not only to clients resident in the Netherlands but also to clients resident in other Member States. 57. The recent judgment of the Court in Peralta [FN35] does not contradict that view. In that case the Court was concerned with rules of Italian law under which

all vessels irrespective of nationality were prohibited from discharging substances harmful to the marine environment in Italian territorial waters and internal maritime waters. Vessels flying the Italian flag were also prohibited from discharging such substances outside Italian territorial waters. Mr Peralta, an Italian national, was the master of a tanker flying the Italian flag which was specially equipped for the transport of chemicals. He was charged with ordering the discharge into the sea of flushing liquid containing caustic *225 soda at a time when the vessel was outside Italian territorial waters. The Court rejected the argument that the difference in treatment between vessels flying the Italian flag and those flying the flags of other Member States was discrimination prohibited by the Treaty. It then examined the argument that the Italian legislation in issue gave rise to restrictions on the freedom to provide maritime transport services to other Member States, even if that legislation could not be held to be discriminatory. The Court rejected that argument, stating that [FN36]: ... legislation like the Italian legislation, which prohibits the discharge of harmful chemicals at sea, applies objectively to all vessels without distinction, whether carrying products within Italy or to other Member States. It does not make any distinction regarding services for exported products and for products marketed in Italy. It does not afford any particular advantage to the domestic Italian market, to Italian transport operations or to Italian products. FN35 Cited above. FN36 Para. [51]. 58. It does not follow from the judgment in Peralta that rules of a Member State which apply without distinction to all providers of services established in its territory and irrespective of whether the services are provided within national territory or in other Member States may never be regarded as restrictions within the meaning of Article 59. The rules in issue in Peralta can be distinguished from those in issue in the present case both with regard to their subject-matter and with regard to their effects. The rules in issue in Peralta did not regulate either the provision or the marketing of services. By contrast, in this case, the contested prohibition restricts the marketing of intra-Community services. Moreover, in Peralta the effect of the rules of the Member State of origin on the freedom to provide services was so remote, tenuous and indirect as hardly to constitute a restriction within the meaning of Article 59. That is not so in the present case where the contested prohibition directly restricts the ability of Alpine Investments to carry on business in other Member States. 59. The Government of the United Kingdom and the Government of the Netherlands also rely on the judgment in Keck [FN37] on the scope of Article 30 of the Treaty and submit that a similar view should be taken of the scope of Article 59 in the present case. In Keck the Court held that rules of the importing State restricting or prohibiting certain selling arrangements do not fall within the scope of Article 30 provided that they apply to all affected traders operating within the national territory and provided that they affect in the same manner, in

law and in fact, the marketing of domestic products and those from other Member States. It is argued that, similarly, Article 59 does not apply to *226 non-discriminatory measures which affect the manner in which services are provided, such as the prohibition of cold calling in the present case. FN37 Cited above. 60. While I accept that, in general, similar principles should apply to the interpretation of Articles 30 and 59, I do not find the reliance on Keck of assistance in the present case. In the first place, there are difficulties in determining the effect of the Keck judgment even in relation to Article 30. [FN38] Moreover, even if one were to accept that some analogy with Keck might be appropriate here, there is a significant difference between Keck and the present case. In Keck, the Court was concerned with rules of the importing State relating to selling arrangements for the sale of goods in the territory of that State. In the present case, the exporting State requires compliance with its own rules of marketing not only for the provision of services in its territory but also in the territory of other Member States. FN38 See my Opinion in Case C-412/93, Leclerc-Siplec. 61. There is a further reason why the principle laid down by the Court in Keck should not be applied in the present case. If it were accepted that that principle applies both to rules concerning selling arrangements imposed by the Member State of exportation and to those imposed by the Member State of importation, then it would follow that both sets of rules would fall outside the scope of application of Article 59, provided that they were non-discriminatory. A person exporting services would then need to comply with both sets of rules even if they were not objectively justified. That would render the freedom to provide services nugatory. Moreover those sets of rules might even impose contradictory requirements. 62. I conclude therefore that the contested prohibition of cold calling is a restriction on the freedom to provide services within the meaning of Article 59.

The third question 63. Before examining the third question, it is necessary to deal with a preliminary issue. With regard to restrictions on the freedom to provide services imposed by the Member State of destination, the case law of the Court draws a distinction between restrictions which are discriminatory and those which are non-discriminatory. 64. Restrictions which are discriminatory are compatible with the Treaty only if they fall within the scope of an express derogation, such as that contained in Article 56. [FN39] Restrictions which are non-discriminatory may be compatible with the Treaty even if they do not benefit from an express derogation. The Court has accepted that the freedom to provide services may be restricted by non-discriminatory rules of the Member State where the service is provided where the

following conditions are satisfied: those rules are justified by imperative reasons of public interest; adequate protection of the public *227 interest in question cannot be attained by less restrictive means; and the interest in question is not protected adequately by the law of the Member State where the provider of services is established. [FN40] FN39 See Gouda, cited above, paras [10] and [11]. FN40 See Säger, cited above, para. [15] and see cases referred to there. 65. The issue whether the contested prohibition is justified by imperative reasons of public interest and whether that interest can be protected adequately by less restrictive rules is the subject-matter of the third question. The issue which must be examined at this stage is whether it can be argued that the interest in question can be adequately protected by the law of the Member State where the prospective client is established. 66. Alpine Investments argues that the Minister may not prohibit it from cold calling prospective clients in other Member States. In its view, when it contacts prospective clients in other Member States it must comply with the law of the State where the prospective client is established and not with the law of the Netherlands. 67. I do not find that argument persuasive. It is clear that the Member State from which the telephone call is made is better placed to regulate cold calling than the Member State of destination. Even if the Member State to which the telephone call is made prohibits cold calling, it is unable to stop telephone calls made from another Member State without the co-operation of the regulatory authorities of that State. Services rendered by means of telecommunication can more readily be controlled at the Member State of exportation, where the service provider is supervised, rather than at the Member State of importation. In a case such as the present, therefore, it is not correct to say that restrictions imposed by the Member State where the provider is established are compatible with the Treaty only if the public interest which they pursue cannot be adequately protected by the rules of the Member State of destination. Moreover, as will appear from the answer to the third question, the former Member State may have a legitimate interest in prohibiting the provision of services to another Member State, independently of any interest of the latter Member State. 68. I turn then to the third question, which is divided into two parts. The first part asks whether the concern to protect consumers and the concern to safeguard the reputation of the Netherlands securities markets, which are the underlying reasons for the contested prohibition, can be regarded as imperative reasons of public interest capable of justifying the imposition of restrictions on the free movement of services. The second part asks whether the contested prohibition of cold calling can be regarded as objectively necessary to protect investors and the integrity of the financial markets and whether it can be considered as proportionate to the objective pursued. I shall examine the two parts of the third question in turn.

69. In my view, there can be no doubt that the concern to protect *228 consumers and the concern to safeguard the reputation of the Netherlands securities markets may justify the imposition of restrictions on the free movement of services. 70. The Court has recognised that consumer protection is an overriding reason relating to the public interest. [FN41] That is confirmed by Article 100a(3) of the Treaty which states that, in proposals for measures which have as their object the establishment and functioning of the internal market and which concern consumer protection, the Commission must take as a base a high level of protection. FN41 See the insurance cases, Case 205/84, E.C. Commission v. Germany: [1986] E.C.R. 3755, [1987] 2 C.M.L.R. 69, paras [30]-[33]; Case 220/83, E.C. Commission v. France: [1986] E.C.R. 3663, [1987] 2 C.M.L.R. 113, para. [20] and the "Mediawet" cases, Gouda, cited above, para. [14] and Netherlands, cited above, para. [18]. 71. Special considerations apply with regard to the protection of persons who invest in securities and commodities markets. It is generally acknowledged that investments in those markets involve a high element of risk and are susceptible to abuse. Because of the nature of the investment, the investor exercises little or no control over its value. In contrast to goods, the real value of the investment does not depend on its physical characteristics. It depends rather on a series of extraneous factors which the ordinary investor may neither determine nor influence. Those considerations apply in particular to investments in the commodities markets which are highly speculative and are considered particularly risky for the unsophisticated investor. 72. An investor in securities or in commodities markets is more dependent on the advice of an intermediary than, say, a person who invests in real property, both as regards the choice of investment which is suitable to his needs and as regards the appropriate time when an investment should be made. That is why all countries with developed financial markets have sought to regulate them by adopting rules concerning not only the issuers of investments but also the financial intermediaries. 73. As the Commission points out, the need to safeguard the integrity of the securities markets is closely linked with the need to protect investors. It is a fair assumption that if the law does not guarantee satisfactory investor protection, investors will lose confidence in the financial markets and, as a result, they will seek alternative forms of investment. The link between investor protection and the integrity of the financial markets is well illustrated by reference to the travaux préparatoires of the WEH and the Community harmonisation programme on financial services. 74. It appears from the travaux préparatoires of the WEH that before its adoption the regulation of the financial services market in the Netherlands was less developed in comparison with other Member States and that a number of foreign firms were established in the Netherlands with a view to taking advantage of the

lax regulation applicable there and to pursuing fraudulent activities. That is why, *229 under section 8 of the WEH, issuing an exemption to a financial intermediary, the Minister has the discretion to attach conditions with a view to preventing undesirable developments in securities trading. 75. Moreover, the need to protect investors and the need to ensure the integrity of the financial markets are related objectives, as is apparent from the Community harmonisation programme in the financial services sector. 76. That programme seeks to provide equivalent standards for the protection of investors throughout the Community, thus facilitating the interpenetration of national securities markets and ultimately the establishment of a European capital market. [FN42] Although the harmonisation directives provide minimum rules, they seek to ensure a high level of investor protection. They recognise that ensuring investor confidence in the securities markets will promote the smooth operation of those markets. [FN43] By providing a regulatory framework they will encourage investment, and so enable the securities markets to perform their economic function, namely the efficient allocation of resources. [FN44] FN42 See e.g. Council Directive 79/279, [1979] O.J. L66/21, co-ordinating the conditions for the admission of securities to official stock exchange listing, preamble, recital 1. FN43 See e.g. Council Directive 89/592/EEC, [1989] O.J. L334/30, co-ordinating regulations on insider trading, preamble, recitals 1-4. FN44 See Commission Recommendation 77/534, [1977] O.J. L212/37, concerning a European code of conduct relating to transactions in transferable securities, Explanatory Memorandum. 77. Alpine Investments argues that, unlike the protection of Dutch investors, the protection of the investors of other Member States is not an imperative reason of public interest which may justify the imposition of restrictions on the freedom to provide services by the Netherlands authorities. That argument is erroneous, since unfair or abusive practices against foreign investors by financial intermediaries established in the Netherlands may well affect adversely the integrity of the Netherlands financial markets. 78. I conclude therefore that the concern to protect investors and to safeguard the integrity of the Netherlands securities markets may justify the imposition of restrictions on the freedom to provide financial services. 79. I turn now to examine the second part of the third question in which, as we have seen, the referring court asks whether the contested prohibition of cold calling can be regarded as objectively necessary to protect investors and the integrity of the Netherlands financial market and whether it can be considered proportionate to those objectives. 80. According to the case law, requirements imposed on providers of services must be such as to guarantee the achievement of the intended objective and must not go beyond what is necessary in order to achieve that objective. In other

words, it must not be possible to obtain the same result by less restrictive rules. [FN45] FN45 Gouda *230 , cited above, para. [15]; Case C-154/89, E.C. Commission v. France, cited above, para. [15] and Case C-198/89, E.C. Commission v. Greece, cited above, para. [19]. 81. Alpine Investments argues that the contested prohibition does not meet the requirement of proportionality because there are other less restrictive means capable of attaining the same result. It refers to less strict prohibitions in force in the United Kingdom and in the United States. 82. In the United Kingdom, in particular, financial services are subject to the regulatory framework established by the Financial Services Act 1986. Under that Act, a person may not carry on investment business unless he has received authorisation or unless he is an exempted person. A person may receive authorisation by membership of a recognised self-regulating organisation. One of those organisations is the Securities and Futures Authority (SFA). Alpine Investment refers to the Conduct of Business Rules of the SFA, under which a firm must establish and maintain compliance procedures designed to ensure that all employees and agents of the firm comply with the rules concerning unsolicited calls on private investors. The compliance procedures must include tape recording any unsolicited calls made to investors and keeping documentary records of any such calls at the time when they are made. Alpine Investments concludes that it is possible to protect investors by tape recording the telephone calls. It refers to similar rules adopted by the National Futures Association in the United States. 83. Alpine Investments also argues that, since the ban on cold calling applies in general to all firms, the conduct of the individual firm is not taken into account in imposing the ban. It is therefore indiscriminate and imposes an unnecessary burden on firms which carry on legitimate activities. 84. I do not find those arguments persuasive. The reasons which led the Minister to impose the contested prohibition are explained in the order for reference. During 1991 the Minister received many complaints from people who, as a result of cold calling, had entered into transactions which they later regretted. As a consequence, the Minister took the view that cold calling was undesirable and decided as a matter of policy to ban it. In accordance with that policy, any exemptions issued under section 8 of the WEH after October 1991 were accompanied by a prohibition similar to that imposed on Alpine Investments. 85. In my view, seen in the light of the reasons which led to it, the decision to ban cold calling is not disproportionate. Although the ban applies indiscriminately to all firms irrespective of their individual conduct, its objective is to restore and maintain investor confidence in the securities market which, in effect, will benefit all providers of services in that market. Moreover, if the Minister imposed a ban only on certain firms depending on their past conduct that would be more difficult and more expensive to administer, it might give rise to inequalities and might prove ineffective.

86. Nor is it correct to say that the prohibition of cold calling is *231 disproportionate from the point of view of its effects. Alpine Investments is by no means prohibited from marketing its services. It is merely prohibited from contacting prospective clients by telephone or in person without their prior express agreement in writing. That is not an unduly restrictive obligation. First, it affects only new clients of Alpine Investments, since established clients will obviously have the opportunity to give their written consent to future approaches. Secondly, as I understand it, all that Alpine Investments has to do is to contact prospective clients by post asking them to respond in writing if they wish to be contacted in the future. That seems to me to be a marketing technique which is, on the one hand, inexpensive for the service provider and, on the other hand, unintrusive and simple for the prospective client. 87. From the point of view of the prospective client, the prohibition of cold calling has two additional safeguards. Since the service provider is required to approach prospective customers in writing, he is likely to explain in more detail and in clearer terms the type of services he offers. Also, the prospective client has more time to reflect on the information supplied and need not make a quick decision at a time when he is unprepared to do so, as would be the case if he had to respond over the telephone. I cannot see how a person who seriously contemplates an investment in the commodities market and wishes to benefit from the services of Alpine Investments is harmed by the fact that it is unable to contact him in pereson or by telephone without his prior consent. 88. Nor do I find persuasive Alpine Investments' argument that the Conduct of Business Rules of the SFA in the United Kingdom impose a less strict prohibition. The fact that another Member State imposes less strict rules does not mean that the rules of the Netherlands infringe the principle of proportionality. That is made clear by the fact that harmonisation directives in the field of consumer protection usually permit Member States to impose stricter or additional requirements. A fortiori, where no harmonisation measures have been introduced, the rules of a Member State cannot be held contrary to the principle of proportionality merely because another Member State applies less strict rules. That is confirmed by the judgment in Oosthoek. [FN46] In that case Netherlands law prohibited the giving of free gifts as a means of sales promotion unless the consumption or use of the free gift was related to the product in respect of the purchase of which it was given. The Court found that, although the requirement of related consumption or use had not been incorporated in the laws of other Member States, it did not exceed what was necessary for the attainment of the objectives pursued. FN46 Case 286/81, Oosthoek's Uitgeversmaatschappij: [1982] E.C.R. 4575, [1983] 3 C.M.L.R. 428. See also Joined Cases C1/90 and 176/90, Aragonesa de Publicidad Exterior and PublivÍa: [1991] I E.C.R. 4151, [1994] 1 C.M.L.R. 887, paras [16] and [17]. 89. As already stated, the Directive on Investment Services does not *232 harmonise national rules concerning the marketing of investments. The preamble to the directive expressly states that "the door-to-door selling of transferable

securities should not be covered by this Directive and the regulation thereof should remain a matter for national provisions". [FN47] FN47 Preamble, eighth recital. 90. It is clear therefore that, in the absence of harmonisation rules, each Member State enjoys some discretion in determining the level of investor protection in its territory. Otherwise, it would follow that, in the absence of harmonisation rules, Member States would need to align their legislation with that of the Member State which imposed the least onerous requirements. That might have the effect of undermining, rather than promoting, investor confidence. 91. Whether restrictions imposed by national law on the use of a marketing technique satisfy the test of proportionality should be assessed inter alia by reference to the conditions prevailing in the national market and the reasons which led to its adoption. In my view, the contested prohibition does not infringe the principle of proportionality. It was introduced to meet abusive practices as a result of which investors had suffered financial loss; it was a reasonable response in view of the aim of protecting investors in markets in which they are especially vulnerable; and it does not prevent firms such as Alpine Investments from marketing their services but only from using a particular marketing technique.

Conclusion 92. I am accordingly of the opinion that the questions referred by the national court should be answered as follows: (1) Article 59 of the Treaty must be interpreted as meaning that it applies where a person established in one Member State offers by telephone to potential clients in another Member State to provide services to them. (2) Legislation of a Member State which prohibits persons established in its territory from making unsolicited telephone calls to potential clients in other Member States with a view to marketing their services is a restriction on the freedom to provide services. (3)(a) The concern to protect investors and to safeguard the integrity of the financial markets may justify the imposition of restrictions on the freedom to provide services. (3)(b) Article 59 does not preclude legislation which, in order to prevent abuses likely to harm investors, prohibits the practice of making unsolicited telephone calls to potential clients resident in other Member States with a view to offering them services related to investment in securities and commodities. *233 JUDGMENT [1] By order of 28 April 1993, received at the Court on 6 August 1993, the College van Beroep voor het Bedrijfsleven (Administrative Court for Trade and Industry; hereinafter "the Administrative Court") referred to the Court for a preliminary ruling under Article 177 EEC several questions on the interpretation

of Article 59 of the Treaty. [2] Those questions were raised in proceedings brought by Alpine Investments BV challenging the restriction imposed on it by the Netherlands Ministry of Finance prohibiting it from contacting individuals by telephone without their prior consent in writing in order to offer them various financial services (a practice known as "cold calling"). [3] Alpine Investments BV, the applicant in the main proceedings (hereinafter "Alpine Investments"), is a company incorporated under Netherlands law and established in the Netherlands which specialises in commodities futures. [4] The parties to a commodities futures contract undertake to buy or sell a specified quantity of a commodity of a given quality at a price and date fixed at the time the contract is concluded. They do not, however, intend actually to take delivery of or to deliver the commodity but contract solely in the hope of profiting from price fluctuations between the time the contract is concluded and the month of delivery. This can be done by entering into a mirror-image transaction on the futures market before the beginning of the month of delivery. [5] Alpine Investments offers three types of service in relation to commodities futures contracts: portfolio management, investment advice and the transmission of clients' orders to brokers operating on commodities futures markets both within and outside the Community. It has clients not only in the Netherlands but also in Belgium, France and the United Kingdom. It is not however established anywhere outside the Netherlands. [6] At the time of the events which gave rise to the main proceedings, financial services were governed in the Netherlands by the Wet Effectenhandel (Law on Securities Transactions) of 30 October 1985. Article 6(1) of that Act prohibited a person from acting as an intermediary in securities transactions without a licence. Article 8(1) empowered the Minister for Finance to grant an exemption from that prohibition in special circumstances. However, Article 8(2) provided that the exemption could "be subject to restrictions and conditions with a view to preventing undesirable developments in securities trading". [7] On 6 September 1991 the Minister for Finance, respondent in the main proceedings, granted Alpine Investments an exemption permitting it to place orders with a specified broker, Merrill Lynch Inc. *234 The exemption required Alpine Investments to comply with any rules which might be issued by the Minister for Finance in the near future regarding its contacts with potential clients. On 1 October 1991 the Minister for Finance decided to impose a general prohibition on financial intermediaries who offered investments in off-market commodities futures from cold calling potential clients. [9] According to the Netherlands Government, that decision was taken following numerous complaints received during 1991 by the Minister for Finance from investors who had made unfortunate investments in that sector. Since some of those complaints came from investors established in other Member States, he extended the prohibition to offers of services made to other Member States from the Netherlands, with a view to preserving the reputation of the Netherlands financial sector. [10] Those are the circumstances in which the Minister for Finance on 12

November 1991 prohibited Alpine Investments from contacting potential clients by telephone or in person unless those clients had first expressly authorised it in writing to contact them in such a manner. [11] Alpine Investments raised an administrative objection against the Minister's decision prohibiting it from cold calling. Subsequently, the exemption having been replaced on 14 January 1992 by another exemption allowing it to place orders with another broker, Rodham & Renshaw Inc., an exemption which also included the prohibition of cold calling, it raised a new administrative objection on 13 February 1992. [12] By decision of 29 April 1992, the Minister for Finance rejected Alpine Investment's administrative objection. On 26 May 1992 Alpine Investments appealed to the Administrative Court. [13] Alpine Investments pleaded in particular that the prohibition of cold calling was incompatible with Article 59 EEC in so far as it concerned potential clients established in Member States other than the Netherlands. The Administrative Court referred several questions on the interpretation of that provision to the Court of Justice: (1) Must Article 59 EEC be interpreted as meaning that it also covers services which the provider offers by telephone from the Member State of his establishment to (potential) clients established in another Member State and therefore also provides from that Member State? (2) Does Article 59 also apply to the provisions and/or restrictions which in the Member State of establishment of the provider of services govern the lawful exercise of the occupation or business concerned but do not apply -- in any event not in the same way and to the same extent -- to the exercise of that occupation or business in the Member State of establishment of (potential) recipients of the service in question and for that reason may constitute for the provider of services when offering his services to (potential) clients established in another Member State hindrances that do not apply to providers of similar services established in that other Member State? If the answer to the second question is yes: *235 (3) (a) Can the concern to protect consumers and safeguard the reputation of the Netherlands securities trading sector which underlies a provision aimed at combating undesirable developments in the securities trading sector be regarded as imperative reasons of public interest justifying a hindrance such as that referred to in question (2)? (b) Is a proviso in an exemption banning cold calling to be regarded as objectively necessary to protect the aforementioned concern and as proportionate to the objective pursued? [14] It should be noted as a preliminary point that, were it applicable to transactions on commodities futures markets, Council Directive 93/22 [FN48] on investment services in the securities field post-dates the events which gave rise to the main proceedings. Furthermore, Council Directive 85/577 [FN49] concerning the protection of consumers in respect of contracts negotiated away from business premises applies neither to contracts concluded by telephone nor

to contracts for securities (Article 3(2)(e)). FN48 [1993] O.J. L141/27. FN49 [1985] O.J. L372/31. [15] The questions referred to the Court must therefore be examined solely in the light of the Treaty provisions on the freedom to provide services. It is common ground that, since they were provided for remuneration, the services provided by Alpine Investments are services covered by Article 60 EEC. [16] The national court's first and second questions essentially ask whether the prohibition of cold calling falls within the scope of Article 59 of the Treaty. If so, its third question asks whether that prohibition may nonetheless be justified. The first question [17] There are two aspects to the national court's first question. [18] First, it asks whether the fact that the services in question are just offers without, as yet, an identifiable recipient of the service precludes application of Article 59 of the Treaty. [19] The freedom to provide services would become illusory if national rules were at liberty to restrict offers of services. The prior existence of an identifiable recipient cannot therefore be a condition for application of the provisions on the freedom to provide services. [20] The second aspect of the question is whether Article 59 covers services which the provider offers by telephone to persons established in another Member State and which he provides without moving from the Member State in which he is established. *236 [21] In this case, the offers of services are made by a provider established in one Member State to a potential recipient established in another Member State. It follows from the express terms of Article 59 that there is therefore a provision of services within the meaning of that provision. [22] The answer to the first question is therefore that, on a proper construction, Article 59 EEC covers services which the provider offers by telephone to potential recipients established in other Member States and provides without moving from the Member State in which he is established. The second question [23] The national court's second question asks whether rules of a Member State which prohibit providers of services established in its territory from making unsolicited telephone calls to potential clients established in other Member States in order to offer their services constitute a restriction on freedom to provide services within the meaning of Article 59 of the Treaty. [24] The preliminary observation should be made that the prohibition at issue applies to the offer of cross-border services.

[25] In order to reply to the national court's question, three points must be examined in turn. [26] First, it must be determined whether the prohibition against telephoning potential clients in another Member State without their prior consent can constitute a restriction on freedom to provide services. The national court draws the Court's attention to the fact that providers established in the Member States where the potential recipients reside are not necessarily subject to the same prohibition or in any event not on the same terms. [27] A prohibition such as that at issue in the main proceedings does not constitute a restriction on freedom to provide services within the meaning of Article 59 solely by virtue of the fact that other Member States apply less strict rules to providers of similar services established in their territory (see Case C-379/92, Peralta. [FN50]) FN50 [1994] I E.C.R. 3453. [28] However, such a prohibition deprives the operators concerned of a rapid and direct technique for marketing and for contacting potential clients in other Member States. It can therefore constitute a restriction on the freedom to provide cross-border services. [29] Secondly, it must be considered whether that conclusion may be affected by the fact that the prohibition at issue is imposed by the Member State in which the provider is established and not by the Member State in which the potential recipient is established. [30] The first paragraph of Article 59 of the Treaty prohibits restrictions on freedom to provide services within the Community in general. Consequently, that provision covers not only restrictions laid *237 down by the State of destination but also those laid down by the State of origin. As the Court has frequently held, 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 (see Case C-18/93, Corsica Ferries Italia v. Corpo dei Piloti del Porto di Genova, [FN51] Peralta, [FN52] and Case C-381/93, E.C. Commission v. France. [FN53] FN51 [1994] I E.C.R. 1783. FN52 Cited above, para. [40]. FN53 [1994] I E.C.R. 5145. [31] It follows that the prohibition of cold calling does not fall outside the scope of Article 59 simply because it is imposed by the State in which the provider of services is established. [32] Finally, certain arguments adduced by the Netherlands Government and the United Kingdom must be considered. [33] They submit that the prohibition at issue falls outside the scope of Article 59

of the Treaty because it is a generally applicable measure, it is not discriminatory and neither its object nor its effect is to put the national market at an advantage over providers of services from other Member States. Since it affects only the way in which the services are offered, it is analogous to the non-discriminatory measures governing selling arrangements which, according to the decision in Joined Cases C-267 and 268/91, Keck and Mithouard, [FN54] do not fall within the scope of Article 30 of the Treaty. FN54 [1993] I E.C.R. 6097, [1995] 1 C.M.L.R. 101. [34] Those arguments cannot be accepted. [35] Although a prohibition such as the one at issue in the main proceedings is general and non-discriminatory and neither its object nor its effect is to put the national market at an advantage over providers of services from other Member States, it can nonetheless, as has been held above (see paragraph [28]), constitute a restriction on the freedom to provide cross-border services. [36] Such a prohibition is not analogous to the legislation concerning selling arrangements held in Keck and Mithouard to fall outside the scope of Article 30. [37] According to that judgment, the application to products from other Member States of national provisions restricting or prohibiting, within the Member State of importation, certain selling arrangements is not such as to hinder trade between Member States so long as, first, those provisions apply to all relevant traders operating within the national territory and, secondly, they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States. The reason is that the application of such provisions is not such as to prevent access by the latter to the market of the Member State of importation or to impede such access more than it impedes access by domestic products. [38] A prohibition such as that at issue is imposed by the Member *238 State in which the provider of services is established and affects not only offers made by him to addressees who are established in that State or move there in order to receive services but also offers made to potential recipients in another Member State. It therefore directly affects access to the market in services in the other Member States and is thus capable of hindering intra-Community trade in services. [39] The answer to the second question is therefore that rules of a Member State which prohibit providers of services established in its territory from making unsolicited telephone calls to potential clients established in other Member States in order to offer their services constitute a restriction on freedom to provide services within the meaning of Article 59 of the Treaty. The third question [40] The national court's third question asks whether imperative reasons of public interest justify the prohibition of cold calling and whether that prohibition must be considered to be objectively necessary and proportionate to the objective

pursued. [41] The Netherlands Government argues that the prohibition of cold calling in off-market commodities futures trading seeks both to safeguard the reputation of the Netherlands financial markets and to protect the investing public. [42] Financial markets play an important role in the financing of economic operators and, given the speculative nature and the complexity of commodities futures contracts, the smooth operation of financial markets is largely contingent on the confidence they inspire in investors. That confidence depends in particular on the existence of professional regulations serving to ensure the competence and trustworthiness of the financial intermediaries on whom investors are particularly reliant. [43] Although the protection of consumers in the other Member States is not, as such, a matter for the Netherlands authorities, the nature and extent of that protection does nonetheless have a direct effect on the good reputation of Netherlands financial services. [44] Maintaining the good reputation of the national financial sector may therefore constitute an imperative reason of public interest capable of justifying restrictions on the freedom to provide financial services. [45] As for the proportionality of the restriction at issue, it is settled case law that requirements imposed on the providers of services must be appropriate to ensure achievement of the intended aim and must not go beyond that which is necessary in order to achieve that objective (see Case C-288/89, Collectieve Antennevoorziening Gouda and Others v. Commissariaat voor de Media. [FN55] FN55 [1991] I E.C.R. 4007, para. [15]. [46] As the Netherlands Government has justifiably submitted, in *239 the case of cold calling the individual, generally caught unawares, is in a position neither to ascertain the risks inherent in the type of transactions offered to him nor to compare the quality and price of the caller's services with competitors' offers. Since the commodities futures market is highly speculative and barely comprehensible for non-expert investors, it was necessary to protect them from the most aggressive selling techniques. [47] Alpine Investments argues however that the Netherlands Government's prohibition of cold calling is not necessary because the Member State of the provider of services should rely on the controls imposed by the Member State of the recipient. [48] That argument must be rejected. The Member State from which the telephone call is made is best placed to regulate cold calling. Even if the receiving State wishes to prohibit cold calling or to make it subject to certain conditions, it is not in a position to prevent or control telephone calls from another Member State without the co-operation of the competent authorities of that State. [49] Consequently, the prohibition of cold calling by the Member State from which the telephone call is made, with a view to protecting investor confidence in the financial markets of that State, cannot be considered to be inappropriate to achieve the objective of securing the integrity of those markets.

[50] Alpine Investments also argues that a general prohibition of telephone canvassing of potential clients is not necessary for the achievement of the objectives pursued by the Netherlands authorities. Requiring broking firms to tape-record unsolicited telephone calls made by them would suffice to protect consumers effectively. Such rules have moreover been adopted in the United Kingdom by the Securities and Futures Authority. [51] That point of view cannot be accepted. As the Advocate General correctly states in point 88 of his Opinion, the fact that one Member State imposes less strict rules than another Member State does not mean that the latter's rules are disproportionate and hence incompatible with Community law. [52] Alpine Investments argues finally that, since it is of a general nature, the prohibition of cold calling does not take into account the conduct of individual undertakings and accordingly imposes an unnecessary burden on undertakings which have never been the subject of complaints by consumers. [53] That argument must also be rejected. Limiting the prohibition of cold calling to certain undertakings because of their past conduct might not be sufficient to achieve the objective of restoring and maintaining investor confidence in the national securities markets in general. [54] In any event, the rules at issue are limited in scope. First, they prohibit only the contacting of potential clients by telephone or in person without their prior agreement in writing, while other *240 techniques for making contact are still permitted. Next, the measure affects relations with potential clients but not with existing clients who may still give their written agreement to further calls. Finally, the prohibition of unsolicited telephone calls is limited to the sector in which abuses have been found, namely the commodities futures market. [55] In the light of the above, the prohibition of cold calling does not appear disproportionate to the objective which it pursues. [56] The answer to the third question is therefore that Article 59 does not preclude national rules which, in order to protect investor confidence in national financial markets, prohibit the practice of making unsolicited telephone calls to potential clients resident in other Member States to offer them services linked to investment in commodities futures. Costs [57] The costs incurred by the Belgian, Netherlands and Greek Governments, the United Kingdom and the Commission of the European Communities, 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 proceedings pending before the national court, the decision on costs is a matter for that court. Order On those grounds, THE COURT, in answer to the questions referred to it by the College van Beroep voor het Bedrijfsleven by order of 28 April 1993,

HEREBY RULES: 1. On a proper construction, Article 59 EEC covers services which the provider offers by telephone to potential recipients established in other Member States and provides without moving from the Member State in which he is established. 2. Rules of a Member State which prohibit providers of services established in its territory from making unsolicited telephone calls to potential clients established in other Member States in order to offer their services constitute a restriction on freedom to provide services within the meaning of Article 59 of the Treaty. 3. Article 59 does not preclude national rules which, in order to *241 protect investor confidence in national financial markets, prohibit the practice of making unsolicited telephone calls to potential clients resident in other Member States to offer them services linked to investment in commodities futures.

(c) Sweet & Maxwell Limited [1995] 2 C.M.L.R. 209 END OF DOCUMENT