C-90/63

laid down. not possibly be separated from its con-

. stituent institutions, nor can it exist

3. Articles 39 to 46 contain nothing con­ independently of these institutions. ferring exemption from Article 12. The maintenance of a national mar­

ket organization cannot possibly 4. Article 12 also prohibits measures mean anything other than the main­

taken within the framework of a tenance of the institutions on which it

market organization in so far as they depends. On any other view the con­

Manzanarès, Secretary of the Legal Department of the European Executives, 2 place de Metz, Luxembourg,

applicant,

v

Grand Duchy of Luxembourg (Case 90/63), represented by Édouard Molitor, Assistant Legal Adviser at the Ministry of Foreign Affairs, Luxem­ bourg, acting as Agent, with an address for service in Luxembourg, at the Ministry of Foreign Affairs, Luxembourg, 5 rue Notre-Dame, and

Kingdom of BELGIUM (Case 91/63), represented by the Deputy Prime

Minister, and Minister of Foreign Affairs, by his Agent Jacques Karelle, Director at the Ministry of Foreign Affairs and Foreign Trade, assisted by Marcel Verschelden, Advocate at the Cour d'Appel, Brussels, with an

composed of: Ch. L. Hammes, President, A. M. Donner (Rapporteur) and

R. Lecourt, Presidents of Chambers, L. Delvaux and A. Trabucchi, Judges,

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

fixed by these decrees, and the amounts By letter of 8 May 1963 the Belgian

actually charged were fixed in each case government stated that it agreed 'to by a ministerial order made on the same abolish the duties in force on licences for day. These duties were later amended by milk products so soon as an adequate

both governments by a long series of substitute formula by is established

orders fixing the maximum rates and agreement with By the Commission'. the rates actually charged. letter of 9 May 1963 the Luxembourg The Commission took the view that government stated that it supported the these measures, which applied to the attitude adopted by the Belgian govern­

importing of originating in products ment for the products in question. Member States or in free circulation in Since the levying of the duties in question those States, were contrary to Article 12 the Commission insti­ was continued

of the Treaty. So by letter of 8 Novem­ tuted the present proceedings on 15 ber 1961 it expressed its disapproval of October 1963. the maintenance of these measures to By order dated 28 November 1963 the the Belgian and Luxembourg govern­ Court joined the two cases as having

but Com­ each of cases the applicant more precisely the claims that the Court should hold that mission which is having recourse to law, the imposition and the charging of a and that the Commission has not failed special duty leviable upon the issue of in any obligation since it conformed with import licences for skimmed-milk pow­ the Council Resolution of 4 April 1962, der whether sweetened or not, whole- by presenting its proposal as early as

milk powder whether sweetened or not, 7 May 1962. concentrated and sweetened canned Furthermore in order to reject the

milk, hard and semi-hard cheeses, pro­ objection of inadmissibility which has cessed soft cheeses and blue- been raised it need only be observed cheeses, veined cheese, decided upon by the that the infringement of the Treaty defendant and introduced after 1 Jan­ alleged against the Belgian and Luxem­

uary 1958, are contrary to the Treaty, bourg governments goes back respec­

especially Article 12 thereof. tively to 3 November 1958 and 17 The applicant also asks that in each case November 1958 and is thus several years the defendant should be ordered to pay earlier than the wrong of which the

the costs. defendants accuse the Community. The defendants contend that the Court Whatever else may be said, the setting declare the inad­ for should application up of a common agricultural policy missible, further declare that it is un­ milk products could not in any case put

sion on the basis of Article 43 of the compliance with the obligations of the

Treaty before 31 July 1962 such that the Treaty which the Commission has given regulation referred to above would come that State in its reasoned opinion.

into force on 1 November 1962 at the If the Community itself infringes the

latest and invited the Commission to Treaty prior to the expiry of this

present its proposals on this matter time-limit and if the consequence of

before 1 May 1962. that infringement is that the Member Therefore in this case it is impossible to State does not comply with obligations

having equivalent effect and that, fail­ trade, but simply maintains the status

ing any limitation indicated to the as at the coming into force of the 'standstill' be in­ contrary, this prohibition must Treaty and, secondly, the

terpreted as applying to all taxes in so principle does not prevent the carrying far as their effect is equivalent to that of out of longer-term agreements or con­

customs duties on imports. tracts and does not prevent Member A special duty levied upon the issue of States from maintaining their existing import licences for certain goods con­ national market organizations pending stitutes a charge having an effect equiv­ the establishment of a common organiz­

alent to customs duties as the Court of ation of agricultural markets.

Justice has recognized in its judgment Without making any exceptions to these of 14 December 1962 (Joined Cases 2 principles the Commission has simply and 3/62). It follows from this that the allowed, in certain cases, the continu­

imports, these exceptions to the principle panied by a common agricultural policy that the development of trade is brought based on a common organization of

about by the free circulation of goods are markets.

only a logical consequence of Articles T he common agricultural policy for

40, 43 and 45 of the Treaty, because milk products had not been established respect for the abovementioned prin­ either when the Treaty came into force, ciple would in fact render nugatory the or on the date when notice of the opin­

application of allowing for provisions ion of the Commission was given, or

the conclusion of long-term agreements when the present application was made.

ber States, the permission to maintain tinue to be completely effective under

national market organizations until the new conditions and that the national

establishment of the common organiz­ products will command a ready sale. ation of markets connotes the inapplica­ Thus the right which is recognized by 'standstill'

bility of the laid down in Articles 43 and 45 to maintain national Article 12 to agricultural products so market organizations does not mean so

long as the common agricultural policy much the maintenance of the various

has not been set up. arrangements applied when the Treaty 'standstill' Since the principle is on a came into force as the maintenance of the

barriers and the application of the national market organization existed 'standstill' would bring about the dis­ for the products in question in Belgium solution of national market organiza­ and in the Grand Duchy of Luxembourg tions because the restrictions and duties when the Treaty came into force. To on imports, which are integral parts of support this assertion it relies on the

such organizations, could no longer legislation in force on this subject in respond to world prices and would Belgium on 1 January 1958, and on the therefore become ineffective. fact that at that date no legal provision In recognizing, as the applicant does, provided for control over imports of

that import duties the rates of which vary those products into the Grand Duchy of.

in response to fluctuations of price on Luxembourg so far as it is aware. the world market, and which existed On the basis both of the Spaak report

when Treaty came into force, are not the and of Article 40 of the Treaty, legal incompatible with the Treaty and do not theory and certain statements of the

strengthen pre-existing barriers to trade, Commission itself, the defendants argue

provisions already in existence at the tries in question.

COMMISSION v LUXEMBOURG AND BELGIUM

Grounds of judgment

Admissibility

The defendants, arguing that the application is inadmissible, complain that the Community failed to comply with the obligations falling on it by reason of the Resolution of the Council of 4 April 1962, and was thus responsible

for the continuance of the alleged infringement of the Treaty, which should have ceased before the issue of the reasoned opinion under Article 169. In their view, since international law allows a party, injured by the failure of another party to perform its obligations, to withold performance of its own, the Commission has lost the right to plead infringement of the Treaty. However this relationship between the obligations of parties cannot be recognized under Community law.

Moreover, the Resolution of the Council to take a decision under Article 43 by 31 July 1962 at the latest, so that the rules for milk products would enter force by 1 November 1962 at the latest, does not create time-limits having the same effect as those laid down in the Treaty. The intention of the

authors of the measures is clear from the fact that they adopted it under a style and form which are not those of the binding measures of the Council within the meaning of Article 189 of the Treaty. Therefore the Council did not infringe the Treaty when it failed to observe the time-limits which it had set itself in its Resolution of 4 April 1962.

Furthermore the alleged breach of Article 12 of the Treaty was not caused

by anything done by the Community, particularly the Council. The disputed Belgian and Luxembourg decrees were made before both the Resolution of 4 April 1962 and the time-limits laid down therein, and nothing proves that

they somehow became different just because the said time-limits expired.

On the other hand, according to the arguments put forward by the de­ fendants themselves, had the Resolution of 4 April 1962 been carried out as

It is not disputed that the contested measures are customs duties on imports or chargeshaving equivalent effect within the meaning of Article 12 of the Treaty, and that they were introduced after the Treaty entered into force. The defendants only argue that this provision does not apply in the present case.

To this end they state that Article 38 (2) provides that the rules laid down for the establishment of the Common Market shall apply to agricultural

products, save as otherwise provided in Articles 39 to 46 of the Treaty, and that it is clear particularly from Articles 43 and 45 that national market

organizations shall continue to function so long as one of theof forms

common organization mentioned in Article 40 (2) has not replaced them.

The defendants further argue that it follows from these provisions combined with those of Article 44 that until national organizations have been replaced

It follows that, insofar as the defendants case is designed to prove that the

progressive elimination of customs duties in the sphere of agriculture could

only take place parallel with the substitution of a common organization of

the agricultural market for national market organizations, it is not relevant

here.

Article 12 prohibits the introduction of new customs barriers, so as to facili­ tate the integration of national markets and the establishment of a common

trary to the prohibition of new customs barriers in the agricultural sector. On the contrary, Article 44 which, in terms similar to those of Article 13, decrees the 'progressive abolition of customs duties', whilst providing for a possible exemption from the concerning the elimination of provisions cus­

toms duties, contains nothing from which any sort of exception to the

principle laid down in Article 12 can be inferred.

Furthermore Article 44 (2), which provides that minimum prices shall not cause a reduction of the trade existing between Member States, is based on a concern identical to that shown in Article 12. The same is true of Article 45,

paragraph (2) of which provides that, as regards quantities, the agreements contemplated shall be based on the average volume of trade during the three

years before the entry into force of the Treaty, and provides for an appro­ priate increase.

Such a distinction between market organizations, on the one hand, and the legal institutions and measures constituting them, on the other, cannot be admitted. A market organization is a combination of legal institutions and measures on the basis of which appropriate authorities seek to control and

regulate the market. Therefore a market organization cannot possibly be separated from its constituent institutions, nor can it exist independently of these institutions. The maintenance of a national market organization

institu­ cannot possibly mean anything other than the maintenance of the tions on which it depends. On any other view the concept of a national

market organization would lose all force and plain meaning.

Thus the argument that prohibition on the use of new measures must

gradually lead to national market organizations losing their effectiveness and so jeopardize agricultural activity during the transitional period is

measures were taken in infringement of Article 12.

Therefore the applications are well founded.

Costs

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be

ordered to pay the costs. The defendants have failed in their submissions.

On those grounds,

1. Rules that the Government of the Kingdom of Belgium and the Government of the Grand Duchy of Luxembourg have failed to comply with the obligations laid down in Article 12 of the Treaty in that after 1 January 1958 they introduced and charged a special duty leviable upon the issue of import

licences for skimmed-milk powder whether sweetened or

whole-milk powder sweetened or con­ not, whether not, centrated and sweetened canned milk, hard and semi-hard

cheeses, processed cheeses, soft cheeses and blue-veined

che se ;

2. Orders the defendants to pay the costs.

Legal consideration 637

1—Translated from the German.