There are three principles for the introduction of a permit requirement:
- There is always the question of whether the objective could be achieved by a less restrictive measure. The judge will also examine that point.For example, if canal-cruise boats are in danger of colliding at junctions in Amsterdam’s canal, you could adjust the navigational route and traffic rules without having to limit the number of permits, which would cost entrepreneurs their livelihood.
- There must be an overriding reason relating to the public interest for the establishment of a licensing system. This follows, inter alia, from the Court judgments of 11 March 2010, case C-384/08, Attanasio Group Srl, ECLI:EU:C:2010:133, and of 13 January 2000, C-254/98, TK-Heimdienst, ECLI:EU:C:2000:12, in which the Court recognised the objectives of environmental protection, traffic safety and health as overriding reasons relating to public interest.
- If the number of permits to be granted is limited due to an overriding reason relating to the public interest, permits may not be granted for an indefinite period.
Below are some examples where the introduction of a permit did not go well. See also: Business permit requirement
Mandatory car rental permit
The mayor of Heerlen wanted to introduce a permit requirement for car rental companies, as they were suspected of often being involved in criminal activities. The introduction of a mandatory permit meant that all companies had to undergo the so-called Bibob proceedings (Bibob procedure). The matter went to court. The Court (Dutch) examined whether the mayor made reasonable use of his authority. It found the designation rrder to be unlawful because the mayor designated commercial activities to which the prohibition to operate a business without a permit does not apply.
The same thing happened in Tilburg. On 21 February 2017, the city’s mayor decided to impose a permit requirement on the car rental sector in Tilburg. This designation order entered into force on 2 June 2017. The Administrative Court (Dutch) also had to intervene there. According to the Court, the mayor did not sufficiently substantiate that the use of his authority met the requirements in accordance with Article 9 of the Services Directive.
Court can suspend unsubstantiated permit requirement
The Administrative Court can intervene in the event of an inadequate statement of grounds or careless preparation of the underlying decision for a permit requirement. If the Court is unable to assess whether the purport on which the contested decision is based is contrary to higher-level legislation, the general principles of law, or the principle of proportionality, it may refuse to apply the underlying decision and quash a decision based on it (cf. Judgment of 12 February 2020 [ECLI:NL:RVS:2020:452]).
Ban on holiday rentals in districts of Amsterdam
This ban on holiday rentals means that in certain areas of Amsterdam to be designated by the defendant, no conversion permit for holiday rentals is granted. In the opinion of the Court (Dutch), the Dutch Housing Act 2014, as it applied until 1 January 2021, did not offer any scope for this.
In the opinion of the Court, it follows from this that a ban on holiday rentals is not an option in one or more Amsterdam districts to be determined by the municipality where in any case no conversion permit is granted. Contrary to what the defendant apparently believes, a prohibition in one (or more) district(s) of Amsterdam cannot, by its very nature, be regarded as a precondition or requirement for a conversion permit. It is a general ban on holiday rentals in the districts designated by the defendant. The Court finds support for this judgment in the fact that this possibility has been created with the entry into force of the Dutch Letting of Residential Accommodation to Tourists (Registration and Sanctions) Act, albeit only in extreme cases. If this had already been possible under the Dutch Housing Act 2014, as it applied at the time relevant to us, the Letting of Residential Accommodation to Tourists (Registration and Sanctions) Act would not have had to provide for this explicitly.
The defendant acted in violation of the Housing Act 2014 with the designation order, and therefore Article 3.3.8b(3) of the Regulation should be declared ineffective.
Refusal of electric vehicle charging points at service stations
The government’s policy of refusing permission under private law for additional facilities at electric vehicle charging points is contrary to the Services Directive. The interests mentioned by the government are not compelling enough to support the refusal of its permission under private law to realise the additional facilities for which a permit under the Public Works and Water Management Act (Wbr) has already been granted. This decision (Dutch) shows clearly how the Court reviews the policy of the government against the Services Directive. The following explains the Court’s main considerations.
No overriding reason relating to the public interest
“4.11 Article 10(2) of the Services Directive provides, inter alia, that licensing systems must be based on criteria that are justified by an overriding reason relating to the public interest (subparagraph b) and that are also proportionate to that reason relating to the public interest (subparagraph c). “Overriding reasons relating to the public interest” according to Article 2(8) of the Services Directive are: reasons recognised as such in the case law of the Court of Justice, including public order, public safety, state security, public health, maintenance of the financial balance of the social security system, protection of consumers, recipients of services and employees, fairness of commercial transactions, combating fraud, protection of the environment and the urban environment, animal health, intellectual property, preservation of the national historical and artistic heritage, and social policy objectives and cultural policy. Purely economic objectives (of a member state) cannot constitute an overriding reason relating to the public interest.
4.12 Art 14 opening paragraph and clause 5 of Directive 2006/123, entitled “Prohibited requirements”, provides that Member States shall not make access to, or the exercise of, a service activity in their territory subject to economic criteria, whereby the granting of authorisation is subject to proof of the existence of an economic need or market demand, an assessment of the potential or current economic effects of the activity or an assessment of the appropriateness of the activity in relation to the economic planning objectives set by the competent authority. This prohibition does not apply to planning requirements that do not pursue economic aims but serve overriding reasons relating to the public interest. The government has explained that the grounds for its categorical refusal of the permission under private law lies in protecting the auction proceeds. The government has an interest in compliance with the agreements made with VPR and others because the government must use general resources to compensate VPR and the others if it does not comply with those agreements. The government’s own financial interest in not having to pay compensation for breach of contract does not qualify, however, with reference to legal consideration 4.11 of this judgment, as an overriding reason relating to the public interest within the meaning of Articles 2 and 10 of the Services Directive.”
Licensing policy not proportionate
In addition, the government has not argued, nor has it become apparent, that the government has examined the extent to which its categorical refusal is proportionate to the stated aim. Thus, it is not clear how the refusal of permission for additional facilities at the De Horn, Kruisoord and Robbenoord service areas relates to the stated aim. Moreover, there is no motor fuel point of sale at Den Horn, so that the proceeds of the first auction will benefit the government entirely. And the concessions of the Kruisoord and Robbenoord service areas have already been auctioned for the first time, so that the risk of undermining the value of the auction proceeds at those locations is no longer an issue. Nor has it been argued or shown that the government has weighed up how the categorical refusal relates to the principle of the free establishment and free movement of services within the Union. Without further explanation, which is lacking, this policy is contrary to this principle. The policy laid down in the Notification of 2013 therefore also fails to meet the requirement of Article 10(2)(c) of the Services Directive.