C-10/61

JUDGMENT OF THE COURT <ap note>1</ap note> 27 FEBRUARY 1962­

Commission of the European Economic Community

v Government of the Italian Republic­ <apnote>2</apnote>

Case 10/61

Summary

1. Customs Duties — Abolition — Duties applied within the meaning of Articles 12 and 14 of the EEC Treaty — Concept (EEC Treaty, Articles 12, 14 and 19)

of the EEC Treaty which, while it tions which conflict with rights held refers only to the common customs under an earlier agreement, refrains

tariff, is not limited in scope to this from exercising such rights to the

area but allows the conclusion to be extent necessary for the performance drawn that the authors of the Treaty of its new obligations; Article 234 were aware of the difference between of the EEC Treaty only guarantees those duties legally applicable and the rights held by third countries

those actually applied and that by under earlier agreements.

In Case 10/61

COMMISSION OF THE EUROPEAN ECONOMIC COMMUNITY­ , represented by its Legal Adviser, Hubert Ehring, acting as Agent, with an address for service

Monaco, Head of the Diplomatic Legal Department of the Foreign Ministry (replaced at the oral procedure by Dr Paolo Massimo Antici, Counsellor at the Italian Embassy in Luxembourg), acting as Agent, assisted by Pietro Peronaci, Deputy State Advocate-General, acting as Adviser, with Marie- an address for service in Luxembourg at the Italian Embassy, 5 rue

Adélaïde,

defendant,

Application forruling that by applying a fixed minimum duty of 150 a

lire, entry into force of the Treaty establishing the European after the

Economic Community, and by taking that duty as the basis for the calculation of the successive reductions in customs duties in relation to other Member States on tubes, valves and lamps for imported radio receivers from other Member States, with a dutiable value not exceeding 428 lire per article, the Italian Republic has failed in its obligations under the Treaty establishing the EEC;

I —

Conclusions ofthe parties of the Treaty, and by taking that duty as the basis for the calculation of the

The applicant claims that the Court successive reductions in customs duties should: in relation to other Member States on

imported tubes, valves and lamps for 'rule that, by applying a fixed minimum radio receivers from other Member

duty of 150 lire after the entry into force States with a dutiable value not exceeding

COMMISSION v ITALY

II Facts Ministry of Finance provided that —

the

the Italian customs authorities should The facts may be summarized as fol ws: in future apply only the 30% duty, Case 10/61 concerns the duty in the subject to the fixed minimum of 150 Italian customs tariff on tubes, valves lire, to all radio tubes, valves and lamps and lamps for radio receivers. imported into Italy, including those

Following the tariff conference held at with a dutiable value not exceeding Annecy in 1949, Italy imposed a duty 428 lire per article. of 35% on the goods in question. The first reduction of 10% in the

Following the tariff conference held customs duties in force on 1 January at Geneva during the first half of 1956 1957, provided for by Article 14 of the between the contracting parties to the EEC Treaty, was, by Decree No 1103 'General Agreement on Tariffs and of 29 December 1958 of the President Trade'

(GATT), this duty was unbound of the Republic, applied in Italy from and a joint duty of 30%, subject to a 1 January 1959 with respect to imported fixed minimum levy of 150 lire per goods from other Member States. How­

duty of 30% subject to a fixed minimum Ministry of Finance provided that the

of 150 lire per article. In these circum­ Italian customs authorities should apply stances the Italian customs authorities a duty of 24%, subject to a fixed were required, by Circular No 3526 of minimum of 120 lire, to imported tubes, 13 1956 from Directorate- lamps for July the valves and radio receivers

General of Customs at the Ministry from other Member States.

JUDGMENT OF 27.2. 1962 — CASE 10/61

By a letter dated 31 March 1960, put an end to the infringement within a

addressed to the Minister of Foreign period of thirty days. Affairs of the Italian Republic, the By letters dated 11 and 25 January Commission drew attention to the fact 1961, the Italian Government informed that on 1 January 1957 two customs the Commission that it could not comply

it was taken as the basic duty within the under Article 12 of the EEC Treaty 14 of the EEC not to increase customs duties on imports meaning of Article Treaty. According to the Italian Govern­ applied on 1 January 1958, the date

the simultaneous application at of entry into force of EEC Treaty, in its ment, trade with other Member States. this date of the 35% duty resulted from Imposition of a duty of 150 a mere circular of no binding force and lire' minimum

be on tubes, valves and lamps the temporary effect which could not

used as a basis for an dutiable value of which does not exceed perpetuating 428 lire per article amounts in fact to an abnormal system of customs taxation, as it was impossible to impose fiscal increase in relation to the duty of 35% applied by Italy on 1 January 1958 in charges otherwise than by means of

trade the other Member States. a measure having the force of law. with

Com­ has failed in its Rejecting this point of view, the (b) Italy one of

The fixed minimum duty on tubes, The applicant states therefore that a valves and lamps the dutiable value customs duty which, at the reference of which did not exceed 428 lire per date shown in the Treaty, was

article was 135 lire from 1January actually applied but which it was 1959 and 120 lire from 1 July 1960, intended to abolish within a short although this duty should have been period, is nonetheless a duty applied restricted to 31.5% and 28% respectively at that date within the meaning of had the duty of 35­ % applied on 1 January the Treaty.

1957 been taken as the basis. In EEC (2) the Treaty there are no

(c) The grounds of complaint set criteria for the definition of duties of out under (a) and (b) above do not a temporary nature, which, accord­

depend for their validity on whether ing to the interpretation of the

the duty of 35% was applied on 1 Italian Government, may be left

General Agreement on Tariffs and reductions.

Trade signed at Geneva on 23 May (4) By virtue of the third subparagraph 1956, for the abolition of the duty of of Article 19 (2), there are prescribed 35%. Articles 12 and 14 (1) of the EEC case by case the exceptions to the Treaty refer to duties applied, without principle that any duty actually in any way distinguishing between the imposed is a duty applied within the

temporary permanent their meaning of the Treaty. These excep­ or nature of application. tions relate to customs duties, the

The application of which on the reference following arguments support this

interpretation. date was unusual and temporary,

and their effect is expressly limited (1) For the purpose of calculating the to the calculation of the common common customs tariff, the third customs tariff and cannot be subparagraph of Article 19 (2) of extended to the calculation of the the EEC Treaty substitutes for the successive reductions. duties applied on 1 January 1957 those shown in List A of Annex I (e) By signing the EEC Treaty, and to the EEC Treaty, that is, the duties thus giving up the freedom to increase in the French customs tariff which customs duties (Article 12), Italy lost on 1 January 1957 were subject to the right to increase the duty of 35% temporary suspension, although which it had unbound by signing on some of them were reintroduced and 23 May 1956 the Sixth Protocol on

reference in Article 14 (1) of the EEC second subparagraph of Article 19 (2) Treaty to duties applied is as wide as of the EEC Treaty which, referring that in Article 12 and does not therefore specifically to the Italian tariff, provides admit of any distinction between applied that, with respect to items on which the and non-bound customs duties. Italian tariff contains a conventional

(f) The binding duty of of the customs duty, this duty shall be substituted for 30% subject to the fixed minimum duty the duty applied. Thus, the defendant

of 150 lire involves for I­ taly the obligation contends that it is impossible to imagine

not to impose a customs duty higher a simultaneous binding of two basic than the bound duty. However, it duties; the basic duty can only be a does not prevent the application of a lower single duty.

customs duty. The applicant replies to this objection

It follows that, by continuing to impose that, if the true purpose of this provision the duty of 35% after 1 April 1958 and is, in certain cases and under certain by treating it, in relation to other conditions, to substitute a conventional

Italy to the goods in question was the applicable concurrently.

duty of 30% with a minimum of 150 At the hearing, the parties were asked

lire per article and that this alone was by one of the Members of the Court to be regarded as the basic duty within the which duty had been used in the calcula­

meaning of Articles 12 and 14 of the tion of the arithmetical average which

EEC Treaty. In fact, although on the had served as the basis in setting up the one hand this duty was imposed by common external tariff. Article 19(1) Presidential Decree No 657 of 12 July of the EEC Treaty provides that, in

1956, which is a measure having the making this calculation, 'the arith­

would have been no different if the more third countries on the other, simultaneous application of the two shall not be affected by the provisions of duties for that section of the tariff this Treaty'. heading dealing with tubes, valves and By GATT, signed at Geneva on 23 lamps for radio receivers had been taken May 1956, before the entry into force of into account. the EEC Treaty (1 January 1958), Italy 2. Alternatively, the applicant main­ agreed to abolish the duty of 35% in

tains that on 1 January 1957 and 1 force at that time and to replace it by a January 1958 only the duty of 35% duty of 30%; in return, however, Italy without fixed minimum had been bound obtained the right to impose a minimum in by the Italian a convention ratified duty of 150 lire per article. Under this Parliament, that is to say, the tariff Agreement, Italy has not only obligations conference held at Annecy in 1949. but also rights which must be maintained The delegation of powers allowed to in accordance with Article 234 of the the executive enabled the Italian EEC Treaty. Government to enact temporary It is impossible to raise the objection

measures suspending or reducing the that GATT, which was signed on

legal tariffs, but not to increase them. 23 May only ratified by 1956, was

Therefore, the Presidential Decree of Italian Law No 25 of 2 January 1958 12 July 1956, applying provisionally EEC the entry into force the —

after of

July 1956 had therefore rightly 'obligations', to the obligations of Member interpreted the Presidential Decree as States. The Commission states that it is a instructing the customs authorities to recognized fact of international law

apply the new duty only where it was that by assuming an obligation which

more favourable to the importer than conflicts with rights held under earlier

the old duty. treaties, a State undertakes to refrain

JUDGMENT OF 27.2. 1962 — CASE 10/61

from exercising such rights to the extent IV — Procedure necessary for the performance of its new obligations. It is therefore no longer The procedure followed the normal

There is no dispute as to the admissibility of the action and there is no reason for the Court to raise the matter of its own motion. The action is therefore admissible.

II — On the substance of the case

A. One must first examine the meaning given by Articles 12 and 14 respectively to the words 'customs duties . . . or any charges having equivalent effect. . . which (Member States) . . . already apply in their trade with each 1957'

(Article 12) and 'the duty applied on 1 January (Article 14). other'

The applicant alleges that these provisions relate to the duties actually

applied on 1 January 1958 (Article 12) and on 1 January 1957 (Article 14) respectively and therefore concludes that, in this case, only the duty arising from the application of the tariff which is the more favourable to importers, as provided in the Ministerial Circular of 13 July 1956, should be retained.

Support for this argument is found in the fact that the view held by the defendant would lead to unacceptable results.

In fact, as is shown by the discussion between the parties concerning the circumstances surrounding the issue of the Circular of 13 July 1956, the argument of the defendant would oblige the Commission and possibly the Court itself to consider in each specific case the validity of national admini­

strative measures in relation to the law of the Member State concern d; such consideration would fall outside the role of ensuring the proper applica­

tion of the Treaty given to those institutions by the Treaty itself.

Moreover, it should be remembered that by means of the Circular to

which reference has been made the Ministry of Finance, which was respons­

duties appearing in that List shall be substituted for the duties applied.

This concerned the duties in the French customs tariff, which had been

temporarily suspended on 1 January 1957 and for the reintroduction of

which provision had been made. An exception was made to the rule and

these duties were retained as a basis for calculating the duties in the common

external tariff without taking into account the fact that they were not applied on 1 January 1957.

The defendant also refers to the second subparagraph of Article 19 (2), which provides that, in the case of the Italian customs tariff, with respect to items on which this tariff contains a conventional duty, this duty shall be substituted for the duty applied.

This provision is an exception to the rule that the duties taken as the basis for calculating the common customs tariff shall be those applied on 1

January 1957. Its sole purpose is to determine the duties which are to be taken as the basis for calculating the common customs tariff.

Without the need to consider the other submissions of the parties, it must be inferred from the foregoing that Articles 12 and 14 of the Treaty refer to the duties actually applied on 1 January 1958 and 1 January 1957 respectively and that in this case therefore the practice of the Italian Customs Admini­

stration conforms with the official instructions from the competent authorities

contained in the Circular of 13 July 1956.

terms

refer, as regards the 'rights', to the rights of third countries and, as regards the 'obligations', to the obligations of Member States and that, by virtue of the principles of international law, by assuming a new obligation which is incompatible with rights held under a prior treaty a State ipso facto gives up the exercise of these rights to the extent necessary for the performance of its

new obligations.

The applicant's interpretation is well founded and the objection raised by the defence must be dismissed.

In fact, in matters governed by the EEC Treaty, that Treaty takes precedence

over agreements concluded between Member States before its entry into

the rights and obligations of Member States in relation to third countries

which arise from agreements concluded before the entry into force of the

EEC Treaty.

As a result of Article 234 different tariffs are applied to Member States and third countries, even though they are parties to the same Geneva Agreement

of 1956. This is the normal effect of the Treaty establishing the EEC. The manner in which Member States proceed to reduce customs duties

amongst themselves cannot be criticized by third countries since this

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General;

Having regard to Articles 12, 13, 14, 19, 169, 171 and 234 of the Treaty establishing the European Economic Community; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community;

OPINION OF MR LAGRANGE — CASE 10/61

Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

Donner Riese Rueff Delvaux Hammes Rossi Catalano

Delivered in open court in Luxembourg on 27 February 1962.

A. Van Houtte A. M. Donner

Registrar President

OPINION OF MR ADVOCATE-GENERAL LAGRANGE DELIVERED ON 7 DECEMBER 1961­ <apnote>1</apnote>

Mr President, the Treaty. As in the first case it Members of the Court, concerns the application of the 'stand­

1 —

Translated from the French.