Court of Justice 24-11-1987 ECLI:EU:C:1987:507

Opinion of Mr Advocate General Lenz

delivered on 24 November 1987^(*)

Mr President,

Members of the Court,

There is no need for me to rehearse the facts in this case since they have been thoroughly described this morning.

I can therefore turn my attention without further ado to the two main questions raised. The first is whether the 1960 Council Directive is applicable. Two arguments have been adduced to that effect.

According to the first argument the directive is applicable because what was involved was the acquisition by residents of foreign securities in so far as the shares in question were foreign shares according to Irish law.

It is not possible to accept that view since the interpretation of the expression ‘foreign securities’ used in the directive is determined not by national law but by Community law, namely in this case by the nomenclature set out on page 932 of the relevant Official Journal of 1960^(*), which according to Article 10 of the directive forms an integral part of that instrument.

According to that nomenclature, the determining factor is the place where the company has its principal place of business. And it is uncontested that the principal place of business of the companies whose shares are at issue in this case is in Ireland; consequently what is involved is the acquisition by residents of domestic securities.

The second argument put forward is that such transactions are implicitly covered by the directive. I am unable to agree with that view either. It is not supported by the wording or the scheme of the directive. Article 2 of the directive provides that general (exchange-control) permission is to be granted in respect of certain transactions set out in List B of Annex I to the directive. But the transactions at issue do not fall into that category. Transactions liberalized under the directive were therefore not involved.

In arriving at this conclusion I concur with both the Irish Government and the Commission. I therefore consider that the answer to the questions before the Court does not affect the proceedings before the Circuit Court of Ireland.

I therefore take the view that the questions submitted for a preliminary ruling should be answered in the following terms:

‘The acquisition and sale by residents of domestic securities on a foreign stock exchange are not covered by the Council Directive of 11 May 1960 for the implementation of Article 67 of the Treaty.’

Nevertheless I would like to indicate briefly how I would have answered the questions had it been necessary to consider them.

As regards the first question concerning the direct applicability of the directive, I would say that, according to the Court's case-law, individuals are of course entitled, if certain conditions are met, to invoke provisions of directives before national courts where the directives have not been duly transposed into national law, and in particular not within the prescribed period.

However, the Commission has expressly stated that in this case the directive was correctly transposed into domestic law. Consequently, that case-law has no application here; the question of direct applicability does not arise.

The second question has to be answered only in the event that the first question is answered in the affirmative. Accordingly, there is no need to consider that question either.

In order to give the national court the fullest possible answer with regard to the issues arising in the proceedings pending before it, I would add that the transactions carried out by the parties to the proceedings before the national court do not rank among the transactions which were liberalized by the Directive of 11 May 1960, and indeed at that time were still subject to the control of the Member States.

I have already stated why that is so and I will add that since then the Council has in fact adopted a directive which, as its wording makes quite clear, is intended to liberalize such transactions as well.^(*)

As regards the third question, concerning the validity of the Commission Decision of December 1980, I agree with the Commission and the Irish Government that it is not necessary to answer this question. I also consider that the Court should not answer that question in the context of the present proceedings. The answer to the question depends on whether or not the Commission is entitled to approve protective measures only when the procedure for the granting of mutual assistance has been carried out.

The parties disagree as to this point. In my opinion that issue should be resolved when it is brought before the Court either by Member States or by Community institutions. In these proceedings the Commission and the Member State which has taken part in them are at one on this point. Naturally, the defendants in the main proceedings also endorse that view. However, that view is determined to such a considerable extent by the interests of those who share it that I consider that the Court should not base its decision thereon but should leave the question to be resolved in other proceedings.

If, nevertheless, the Court should wish to resolve the matter, I consider that these proceedings have disclosed nothing capable of casting doubt on the validity of the Commission decision.

I now turn to the fourth question, that is to say, whether Ireland was entitled under the Commission decision to impose restrictions on its residents in regard to the transactions in question.

I agree with the Commission's view that that question is not relevant to these proceedings. If it should be answered, the Court should state that the Commission decision does not affect the transactions in question since they were in any case not liberalized.

In conclusion I would refer to the Commission's remark to the effect that whether the defendants in the main proceedings are entitled to rely on the fact that the transactions at issue were not approved by the Irish Government or by Irish authorities is a question of Irish domestic law.

Consequently, as I have already stated, I would answer the questions referred by the national court in the following terms: the acquisition and the sale by residents of shares in domestic undertakings on a foreign stock exchange are not covered by the Directive of 11 May 1960 for the implementation of Article 67 of the Treaty.