- Thus, certain regulations adopted pursuant to a Portuguese Law of 1990 specify in each case the maximum authorised foreign shareholding in the context of the privatisation of certain undertakings. A Portuguese Decree of 1993 also provides for a mechanism of prior authorisation by the Minister for Finance for the acquisition of shares representing more than 10% of the capital (with voting rights) of companies which are being privatised (companies which were nationalised after the Revolution of 25 April 1974 and which can now be privatised following the revision of the Constitution).

- In France, a Decree of 1993 prescribes a specific State holding in the Société Nationale Elf- Aquitaine. This holding carries rights whereby holdings of capital or voting rights by a natural or legal person in excess of certain thresholds must be approved by the Minister responsible for the economy, who must also authorise proposals for the transfer of shares in that undertaking.

- Last, a Belgian Royal Decree of 1994 establishes in favour of the State a specific holding in the Société Nationale de Transport par Canalisations; by virtue of this specific holding, the Minister responsible for energy is able to object to the transfer of shares to natural or legal persons if he considers that the changes within the company might adversely affect the national interests of Belgium in the field of energy.

The Commission considers that these provisions are not compatible with the principles of freedom of establishment and free movement of capital.

Advocate General DAMASO RUIZ-JARABO COLOMER delivered his opinion on today's date.

The Role of the Advocate General

It is the duty of the Advocate General to assist the Court of Justice by delivering reasoned Opinions containing a proposal as to the way in which the Court of Justice should, in his view, resolve the case before it. The Advocate General acts with complete impartiality and independence; the Court of Justice is not bound by the Advocate General.s Opinion.

The Advocate General considers the compatability of the national systems which reserve certain prerogatives of intervention to the executive power in relation to
- the structure of shareholdings
- and the organisation of privatised companies in the field of strategic economics,
with Community law

The principle of these “golden shares”, (administrative authorisation formalities, privileged shares, nominations) is examined by the Advocate General in the context of obstacles that it may represent for non-nationals in relation to the fundamental freedom of establishment and freedom to provide services.

According to the Advocate General, the Portuguese law of 1990 is contrary to Community law in that it is discriminatory against non-Portuguese Community citizens.

The Advocate General considers that for the restrictions which are indistinctly applicable to nationals and non-nationals ( Portuguese Decree of 1993, French and Belgian regulations), it is necessary to refer to the provisions in the Treaty; the Treaty does not prejudice the system of company ownership in the Member states. According to the Advocate General, the aim of this provision is to affirm the neutrality of the Treaty in relation to the control of companies as production resources, the Member state retaining the possibility to impose certain economic policy objectives which are distinguished from the aim of maximum profit which characterises private sector activity.

The Advocate General considers that the national systems which provide for golden shares in favour of the state are covered by this principle of neutrality. As they are indistinctly applicable to national citizens and non-national citizens, the systems are not in themselves contrary to the Treaty. It is only the concrete implementation of the national regulations which could be contrary to the Treaty.

Therefore, the Advocate General recommends that the Court of Justice should validate the three national regulations in question.

N.B. Case C-463/00 concerns infringement proceedings brought by the Commission against Spain and Case C-98/01 concerns infringement proceedings brought by the Commission against the United Kingdom. Both of these actions were brought for the same reasons and are still pending.

Unofficial document for media use only; not binding on the Court of Justice. Available in English, Spanish and French. For the full text of the Opinion, please consult our Internet page www.curia.eu.int  at approximately 15.00 hrs today. For further information please contact Fionnuala Connolly: Tel: (00 352) 4303 3355; Fax: (00 352) 4303 2731