Chemin de navigation

Left navigation

Additional tools

Autres langues disponibles: FR NL


Brussels, 17 December 1998

Freedom of capital movements: Infringement procedures against Belgium

The European Commission decided to send reasoned opinions to Belgium (second step in the infringement procedure foreseen in Article 169 EC Treaty). It considers that certain provisions of Belgian laws concerning investment in the firms SNTC S.A and Distrigaz S.A. are incompatible with European Union (EU) law on the free movement of capital (Article 73b) and the right of establishment (Article 52). In the absence of a satisfactory response within two months following the receipt of the reasoned opinions, the Commission could decide to refer the matters to the European Court of Justice. Also on similar cases in Portugal, France, Spain and Italy infringement procedures have been initiated by the Commission.

By virtue of Royal Decrees of 10.6.1994 and 16.6.1994, one ordinary share in each of the two companies SNTC S.A. and Distrigaz, respectively, were transformed into 'special shares' in order to protect the national interests of the Belgian State in the energy sector. Among the powers attached to this 'special share' in both cases are:

  • an authorisation requirement for all increases in holdings which exceed thresholds of 5%, 10%, 15% etc. of the capital of the firms concerned.

  • the right of the appropriate Minister to nominate two representatives to sit on the board of the firm and to veto any decision which is judged to be contrary to the energy policy of the State.

In addition, in the case of SNTC S.A., the Minister can oppose any disposal or the assignment as a guarantee, or change in use of the pipelines of the company, while in the case of Distrigaz S.A., he can oppose any disposal, or the assignment as a guarantee, or change in use of the strategic assets of the company.

In its Communication on certain legal aspects concerning intra-EU investment (OJ C220 of 19.7.1997), the Commission specified that, by virtue of EU law, all restrictions on the free movement of capital and the right of establishment should apply without discrimination, that they should be justified on imperative requirements in the general interest, that they should be appropriate to the achievement of the objective followed, and should not go beyond what is necessary to achieve that objective.

The Commission considers that the use by the Belgian State of the special powers referred to with the objective of protecting national interest creates an uncertainty for investors concerning the acquisition of shares in this firm. As explained in the interpretative

Communication already cited, EU law requires that the authorization procedure in effect not only be justified on imperative requirements in the general interest, but also be based on a set of objective criteria, stable over time and made public. The present terms of these special powers do not respond to these requirements.

Belgium replied on 9 September 1998 to the letters of formal notice of the Commission. It considered that the special powers attached to both shares did not constitute discriminatory provisions and were appropriate and proportionate in the general interest. The Government proposed to reexamine the 'specific share' in any important opening of the energy market and, in the meantime, to inform the Commission of each case in which the powers were applied, as well as their motivation. The Commission, while recognising imperative general interest considerations, did not consider that the Belgian reply responded to the arguments made in the letters of formal notice and that the specific restrictive measures in the two cases in question did not satisfy the conditions necessary for compatibility with EU law. It consequently decided to issue reasoned opinions in both cases. The Commission has already opened infringement proceedings in the case of Portugal (IP/97/1111), France (IP/98/1058), Spain (IP/98/909) and Italy (IP/98/1134), and is currently examining the situation in other Member States. The United Kingdom following action from the Commission, has accepted to modify the 1975 Industry Act in accordance with the Communication's requirements.

Side Bar