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Brussels, 3 July 1998

Free movement of capital: Commission brings action against Belgium before Court of Justice

The European Commission has decided to bring an action against Belgium before the Court of Justice for infringing Article 73b of the Treaty concerning the free movement of capital. The reason is that persons resident in Belgium are not allowed to subscribe for a public loan of DM 1 billion taken out by the Belgian State. The Commission has received no reply to its reasoned opinion dated 16 April 1997.

According to the Decree of 4 October 1994 authorising the Belgian Minister of Finance to take out a public loan of DM 1 billion with Dresdner Bank AG and Schweizerischer Bankverein (Deutschland) AG in Frankfurt, Belgian residents with the exceptio n of banks, financial intermediaries and institutional investors cannot subscribe.

The Belgian authorities justify this decision on tax grounds, referring to difficulties with conducting tax checks. The Commission takes the view that it is up to the Belgian authorities to find ways of improving such checks and to enforce the requirement - already contained in Belgian law - that the beneficiaries of such revenue must declare it. The alleged difficulties do not, therefore, justify measures liable to hinder the free movement of capital.

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