October 14, 06

NEWS / Commission says notaries must open up to foreigners

In Short:
Member states must abolish nationality requirements for notaries offering legal services in their country, the Commission has decided. This should allow more choice and better prices for citizens.

Background:

The Commission on 12 October 2006 sent reasoned opinions to Austria, Belgium, France, Germany, Greece, Luxembourg and the Netherlands, requesting them to scrap nationality requirements currently restricting access to the notarial profession.

The seven states now have two months in which to act. If they do not, the Commission could refer the matter to the European Court of Justice.

The Commission has also requested explanations from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia about their regulations, which impose similar nationality conditions.

Italy, Spain and Portugal already abolished this requirement from their legislation following pressure from the Commission.

Issues:

The accused member states stipulate that only their own nationals can be appointed to the profession in their countries because notaries exercise ???official authority??™, therefore falling within an exception to the freedom of establishment provided by Article 45 of the Treaty.

However, the Commission has taken the view that, because notaries ???cannot impose a decision against the will of one of the parties they are advising???, they ???cannot be deemed to exercise such authority???.

The notarial profession is one of the most regulated professions in the EU, with very high entry barriers. In 2005, Luxembourg, had only one notary per 12,750 people, and Belgium, France, Germany, and the Netherlands had roughly one per 8,000 citizens.

This lack of competition means that competition is low and prices paid by citizens when seeking advice on important legal transactions, such as buying a house or signing a marriage contract, are too high.

With so many countries applying nationality restrictions, the Commission??™s decision is likely to face strong opposition ??“ as was the case when it attempted to include notaries in the Services Directive, which aims to facilitate cross-border trade in services within the EU, and both the European Parliament and the Council objected.

Positions:

The Council of the Notariats of the European Union (CNUE) said it was ???shocked??? by the decision, which it says contradicts previous Commission and Parliament decisions explicitly recognising that civil law notaries carry out a public official role. It adds: ???The Commission??™s argument that civil law notaries ???do not take decisions with regard to State authority??™ is unacceptable,??? stressing that it only refers to notaries??™ activities as advisers and ignores the fact that notaries also provide a ???public service of authenticity???.

The CNUE also accuses the Commission of intervening in an area that falls under the sovereignty of member states and calls on the latter to decide for themselves whether to comply to the Commission??™s decision.

Mark Kober-Smith, a UK notary who has been fighting to open up access to the profession in the EU since 1996, was ???absolutely delighted??? by the decision. Nationality restrictions do not apply in the UK and many foreign notaries currently work there. He said the removal of restrictions to the profession should result in a larger choice and better prices for citizens.

Nevertheless, he remained doubtful that member states would actually comply with the Commission??™s decision: ???There is a very strong lobby not to do this,??? he said, complaining that the CNUE seemed to act like ???a mouthpiece for notaries rather than representing the views of citizens???.

He also cautioned that, even if implemented, the decision may not lead to any real changes in practice. ???Even in the three countries (Italy, Spain and Portugal) where countries have removed their nationality conditions, the freedom remains largely theoretical,??? because countries continue to shield themselves from foreign competition by demanding that notaries from abroad pass examinations, by maintaining strict ???numerus clausus??™ restrictions, by not replying to requests for establishment or by claiming that the ???official authority exemption??™ continues to apply, he explained.


Tags: notary, marriage,