C-52/65

3. Customs duties — Charges having equivalent effect — Elimination — Time-table — Detailed rules of progression — Powers of the Commission (EEC Treaty, Articles 13 and 14)

4. European Economic Community — Legal system of the Community — Community institution — Failure to fulfil its obligations — Member State — Retaliatory measures — Prohibition

1. The object of the provisions of Article 13 Cf. para. 4, summary, Joined Cases 2 in their entirety is to prohibit all measu­ and 3/62 [1962] E.C.R. 425. res by Member States taken by a uni­ 3. The obligation placed upon the Commis­ lateral decision and not under Commun­ sion to abolish charges having equivalent ity procedures, which, whatever they are effect in accordance with a particular called and by whatever means they have timetable does not preclude it from been introduced, have, at the time of determining itself the procedure for such importation, the same discriminating progressive abolition. and protective effects as customs duties. 4. Any possible failure by a Community Cf. para. 4, summary, Joined Cases 2 institution to fulfil its obligations and 3/62, [1962] E.C.R. 425. towards other Member States cannot 2. Since Article 13 is a fundamental provi­ exempt one of them from performing the sion for establishing the free movement obligations which are legitimately placed of goods, it lays down an essential legal upon it by measures taken in application principle and consequently the only of the Treaty. possible exceptions are those which on a Cf. para. 1, summary, Joined Cases 90 strict construction of the Article can and 91/63, Rec. 1964, p. 1221. clearly be allowed.

V

COMMISSION OF THE EUROPEAN ECONOMIC COMMUNITY, represented by Hubert Ehring, Legal Adviser of the European Executive, acting as Agent, with an address for service in Luxembourg at the office of Henri Manzanarès, Secretary of the Legal Department of the European Executives, 2 place de Metz,

defendant,

Application

(a) In Case 52/65 for the annulment of the Commission's directive of 16 June 1965 relating to the determination of the time-table for the abolition of the charge imposed by the Federal Republic of Germany on the importation of sheep for slaughter and mutton originating in other Member States;

(b) In Case 55/65 for the annulment of the Commission's directive of 28 July 1965 relating to the determination of the time-table for the abolition of the charge imposed by the Federal Republic of Germany on the importation of all agricultural products and foodstuffs subject to import licences originating in other Member States,

JUDGMENT

Issues of fact and of law

of the Federal Minister for Food, Agri­ On 16 June 1965 the Commission of the culture and Forests, performs the essential European Economic Community sent the tasks of making regulations for the market applicant a directive 'referring to the deter­ and for intervention measures. mination of the time-table for the abolition Independently of the customs formalities, of the charge imposed by the Federal the importers have to offer the products in Republic of Germany on the importation of question for sale to the Einfuhr-und Vor­ sheep for slaughter and mutton originating ratsstelle. This organization is authorized to in other Member States'. This directive was buy the products offered for sale without brought to the notice of the Federal Govern­ being under any obligation to do so. If it ment by a letter from the Commission of 18 does not avail itself of the right to take the June 1965: it was published in the Official products, they cannot be put on the market Journal of the European Communities No or used in any other way inside the territory 120 of 5 July 1965, p. 2074/65. of the Federal Republic of Germany. If the The directive calls upon the applicant to Einfuhr-und Vorratsstelle accepts respon­ abolish the charges in question by successive

JUDGMENT OF 16. 6. 1966 — JOINED CASES 52 AND 55/65

In the Federal Republic of Germany the to be taken into account, whether the Außenhandelsstelle fur Erzeugnisse der imports would be spread over a relatively Ernahrung und Landwirtschaft, later re- long period, whether an accumulation of the organized and named 'Bundesamt fur product within a short period of time com Ernahrung und Forstwirtschaft' and en bined with a saturation of the domestic trusted with certain additional tasks, was market was to be feared and what other exercising at the time when the present economic data ought to be taken into con dispute arose certain centralized adminis

products were imported. Its main task was checks, final offers, the imposing of special to issue import licences to the extent conditions, invitations to tender when all necessary having regard to the provisions licences are granted, invitations to tender applying at that time to a limited number of with no restrictions, special procedures agricultural products, for which there were (imports for trade fairs, small imports, still no common organizations of the making goods available for the home markets. The main products consisted of markets, special purposes) certain feedingstuffs, sheep and mutton, In the case of all the applications for the fish, vegetable oils and fats, sugar, seeds, grant of import licences, whatever the pro cut flowers, wines, various kinds of fruit cedure it adopted, the Außenhandelsstelle and vegetables as well as preserved fruit and scrutinized them to ascertain whether they vegetables. had been submitted in accordance with the The work carried out by the Außenhandels- formalities and within the prescribed time- stelle when issuing import licences included limit and whether they complied with the a large number of formalities which varied conditions applicable to invitations to according to the product and the procedure tender or to the special procedure (justifica for granting the licence. In general import tion of the application); if necessary it licences were granted following an invitation checked the evidence in support of the

Having 1 January 1958 was 0.2 % of the value of the decided the amount of products to be amount of products covered by the import covered by the invitation to tender the licence—for a series of products which, as a Außenhandelsstelle had to decide what general rule, are imported as goods in bulk

the rate was only 0.02 %—was reduced from A — Ultra vires actions and infringement of 1 April 1958 to 0.15% or 0.015% respect the Treaty ively. On 28 July 1965 the Commission of the The applicant emphasizes that the disputed European Economic Community sent the directives are based on Articles 13 and 14 applicant a directive 'referring to the deter of the EEC Treaty, pursuant to which the mination of the time-table for the abolition Commission may issue directives to deter of the charge imposed by the Federal mine the time-table for the abolition of Republic of Germany on the importation of charges having an effect equivalent to cus all agricultural products and foodstuffs toms duties charged on imports between subject to import licences originating in Member States.

According to the appli The directive calls upon the applicant to cant the charges which are the subject of the abolish the charges in question by successive disputed directives and which are levied on reductions (60 % on 1 January 1966, 100 % at importers availing themselves of the services the latest by the date when the customs of the Einfuhr-und Vorratstelle (Case duties between Member States have to be 52/55) and the Außenhandelsstelle (Case abolished). 55/65) are not charges having an effect equivalent to custome duties on imports. II — Conclusions of the parties The defendant has therefore no authority to issue such directives and has exceeded its The applicant claims that the Court should: powers, since under the first paragraph of Article 189 of the EEC Treaty, it may only (a) In Case 52/65 issue directives in accordance with the pro annul the directive of the Commission of the visions of the Treaty. European Economic Community of 16 At the same time through a mistaken inter June 1965 addressed to. the Federal Republic pretation of Articles 13 and 14 of the of Germany; Treaty on which it bases the contested directives it has infringed the Treaty. It is clear both from national law and the

either protection or discrimination. III — Submissions and arguments of The effect of an import duty is the protection the parties of national production or, in the exceptional case of a revenue-producing import duty, The submissions and arguments of the the collection of a sufficiently large amount parties may be summarized as follows: of revenue to play a significant part in the

financing by a state of its expenditure. On the charges are based must procure a per the other hand the purpose and effect of an sonal benefit for the interested party is administrative charge is to offset the finan wrong. The interest which an individual cial costs of certain special operations by the derives from the steps taken by the ad administration which have to be performed ministration consists of the removal of all for specific reasons; it has an entirely obstacles to the importation of the products, different object from that of protection and which makes it necessary for the administra discrimination which is the feature of a tion to take these steps; it is legitimate to customs duty. impose a charge on the individual concerned A considerations of all these various dis in consideration of the tasks undertaken by tinguishing criteria for the examination of the administration which are in his interest. the charges levied by the Einfuhr-und The applicant also maintains that the char Vorratsstelle and by the Außenhandelsstelle ges in question in the present case do not establishes that they are levied for a specific have an effect equivalent to a customs duty service undertaken by the administration because their actual effects are not com and are not a measure having the same parable with those of a customs duty; they effect as a customs duty. cannot contribute to the protection of the The Einfuhr-und Vorratsstelle levies this domestic market or, as a fiscal tax does, charge because under the German system for produce a considerable amount of revenue the organization of the markets for sheep for the general finances of the state. for slaughter and for mutton, the importer It appears from the small amounts raised by has to enter into an agreement with the these charges that they do not on any Einfuhr-und Vorratsstelle that he will reckoning have an effect equivalent to a accept responsibility for delivery of the customs duty in the sense that anyone can

The The grant or refusal of import licences is the principle that the cost of the special tasks final outcome of various investigations and which the administration has to perform other operations performed by the Außen must be covered explains the meaning and handelsstelle for the purpose of applying the at the same time the limitations of the system of restricted imports, which is still charges levied, which, in conformity with necessary for the time being and moreover their very nature, are to be regarded as the authorized by the EEC Treaty. The charges consideration given to the administration in question levied by the Außenhandels- for those tasks. stelle are the consideration for the ad The applicant submits that the charges ministrative work arising out of the applica which have been called in question are not tions lodged by importers. according to their nature customs duties nor, The fact that the work of the administration having regard to the amount actually col in this field is also performed in the public lected and to their objectives, do they have interest does not change the nature of these an effect equivalent to a customs duty.

GERMANY v COMMISSION

An upper limit to regarded as a duty imposed unilaterally such price increases, below which import either at the time of importation or sub duties would be permitted, is incompatible sequently, and which, if imposed specifically with the system of the Treaty, which pro upon a product imported from a Member hibits customs duties without laying down State to the exclusion of a similar domestic any restrictions on their amount. product, has, by altering its price, the same Both in its judgment of 14 December 1962 effect upon the free movement of products in Joined Cases 2 and 3/62 and in its Judg as a customs duty'. The charges referred to ment of 13 November 1964 in Joined Cases in the contested directives fall within this 90 and 91/63 the Court laid down the prin definition. ciple that Article 12 is a fundamental provi The application of the provisions of the sion and that any exceptions must be Treaty to charges having an effect equivalent specified clearly and umambiguously in its to customs duties does not depend upon the text. The low yield from the charges in reasons for the charge or on its object, its question or the fact that these charges are rate or the ways and means used for levying levied because of administrative tasks un it or on the use to which the money collected dertaken in connexion with imports and will be put; the only criterion laid down in have as their object the financing of those the Treaty, to the exclusion of all others, is tasks can only be put forward as reasons the effect of the said charges. By effect is justifying an exception to the provisions meant the effect which the charges have on relating to charges having an effect equiva the free circulation of goods; it is unneces lent to customs duties, that is to say, an sary whether it was intended to achieve exception not only to the obligation in other principal or subsidiary aims in addi Article 12 not to introduce any new customs tion to this effect. « duties but also to the provisions governing The only effect common to all customs the abolition of existing charges having an duties, which is essential for a charge to effect equivalent to customs duties.

It is even more production which it protects, it is a charge obvious that the Treaty does not contain having an effect equivalent to a customs any provision providing clearly and un duty and, as such, is prohibited by the ambiguously for such an exception. Treaty. The defendant submits that the effect of the With regard to the amount raised by the obligation in the Treaty to abolish pro charges, the defendant submits that a gressively before the end of the transitional charge has the same effect on the free cir period charges on imports is that no charges culation of goods as a customs duty, because can any longer be imposed relating to the

formalities and procedures to which im the Member States or to select some facts at ports may be subject, unless similar charges random and ignore others, even if the view are imposed on domestic production. This were accepted that the charges in question in no way conflicts with the right of Member fall within Article 13(2) of the EEC Treaty. States to keep these formalities and pro When the defendant issues directives, it cedures in being. They fulfil their purpose 'shall be guided by the rules contained in whether or not they give rise to the levy of Article 14(2) and (3) and by the directives any charges. issued by the Council pursuant to Article 14 The defendant takes the view that the (2)'. This provision does not refer only to control of imports by granting import the time-table for reductions by stages; on licences is in the public interest and that the the contrary the Treaty in a general way obligation placed on importers to apply draws a close comparison between the before the importation of any goods for an reduction of charges having an effect equi import licence, which is connected with valent to customs duties and a reduction of their control, is not a service performed for these customs duties as between Member the personal benefit of the importers.

It follows from this that the procedure laid B — Misuse of powers and infringement of down by Article 14 is based on the idea of the Treaty reductions of the same amount in all customs duties between Member States The applicant submits that, even if the dis being effected according to a fixed time puted charges were admitted to be charges table, so that as they are progressively having an effect equivalent to customs duties reduced the customs union between Mem on imports, the circumstances in which the ber States comes into being in accordance contested directives were issued show that with a time-table applicable to all Member in dealing with them the Commission com

of the Member States. The applicant takes powers conferred upon it by Articles 13 and the view that the defendant had no right 14, because it treats certain facts in a partic either to intervene in this incomplete and ular way without bothering to find out unpremeditated way against some only of whether there are other similar facts, which

it should have considered at the same time to any other products; the second, which is in the context of the tasks with which it has much more limited, covers import charges been entrusted. which are levied in the same way and at the The same principles would be applicable same rate on all products. The charges in the even if it were impossible to infer from first category impede the movement of Article 14 that the time-table for the goods and distort competition to a greater abolition of charges must be essentially the extent than those in the second, since their

are bound. Infringement of this principle is mission were not issued simultaneously but a legal infringement which must lead to the in succession. The directives which still have annulment of the contested directives. to be adopted must be issued in the same The defendant replies that an investigation way. This procedure does not call in ques which it carried out showed that in 1961 the tion the principle of equality of treatment import duties which have to be taken into of Member States which must at all times be account in applying Article 13(2), because observed. Bearing this principle in mind, the they were already in existence when the decisive question is not in fact the date when Treaty entered into force and were not an the directives provided for by Article 13(2) essential part of the market organizations of were issued but at what date and to what Member States for agricultural products, extent the import charges in question have produced a very small yield.

A taking these considerations into account. In directive whereby a Community institution doing so it proceeded in accordance with the calls upon a Member State to remove an last sentence of Article 13(2). obstacle to the free movement of goods, The Commission divided into two catego services and capital or of persons can only ries the charges which have to be taken into be challenged on the ground that a similar account when applying Article 13(2). directive has not been issued for the aboli The first includes import charges on one or tion of a similar obstacle by another more specified products and does not apply Member State by bringing proceedings for

The substance of the case

With regard to the subject-matter of Application 55/65 directed against the Com­ mission's directive of 28 July 1965, the applicant government does not deny that the charges levied by the Außenhandelsstelle für Erzeugnisse der Ernährung und Landwirtschaft called, since the entry into force of the Law of 24 August 1965, 'Bundesamt fur Ernährung und Forstwirtschaft', on the importation of certain 'liberalized' products are charges having an effect equivalent to customs duties. 1

The Court takes note of this fact.

The first submission of Application 55/65 is directed against the contested directive only in so far as it relates to the charges levied on the importation of a limited number of products which have not been 'liberalized', originating in other Member States, namely certain feedingstuffs, sheep and mutton, fish, vegetable oils and fats, sugar, seeds, cut flowers, wines, various kinds of fruit and vegetables as well as preserved fruit and vegetables.1

The first submission

The Federal Republic of Germany claims that the charges levied on the one hand by the Einfuhr-und Vorratsstelle fur Schlachtvieh, Fleisch und Fleischerzeugnisse

The question whether certain charges have an effect equivalent to customs duties cannot be determined according to the criteria and differences, often uncertain and sometimes contradictory, derived from the laws and doctrine relating to the finances of each Member State.

This question must on the contrary be considered in the light of the objectives of the Treaty.

It is necessary in particular to consider whether the charges in question have an effect equivalent to customs duties and whether they therefore have the character­ istics which led the authors of the Treaty to adopt as one of the fundamental principles of the Common Market the prohibition of customs duties.

The object of the provisions of Article 13 in their entirety is to prohibit all measures by Member States taken by a unilateral decision and not under Community pro­ cedures, which, whatever they are called and by whatever means they have been introduced have, at the time of importation, the same discriminatory and protective effects as customs duties.

Since Article 13 is a fundamental provision for establishing the free movement of

JUDGMENT OF 16. 6. 1966 — JOINED CASES 52 AND 55/65

The imported products themselves enjoy no direct or indirect advantage on the German market.

For this reason the disputed charges have a discriminatory effect on the imported products, which, however small it may be, is equivalent to that of a customs duty.

The Commission was therefore legally entitled, in application of Article 13 (2), to order the abolition of these charges and to determine by means of directives the time-table for such abolition.

The first submission is unfounded.

The second submission

The applicant government submits in the alternative, in the event of the Court's holding that the disputed charges are charges having an effect equivalent to cus­ toms duties, that the disputed directives are defective because they infringe the Treaty and amount to a misuse of powers.

According to Article 13 (1) import duties shall be progressively abolished by Member States 'in accordance with Articles 14 and 15'.

The rules relating to the time-table for the abolition of charges having equivalent effect in Article 14 (2) and (3) are thus less strict than those for the abolition of the customs duties themselves.

Although it is true that the abolition by the Commission of charges having an effect equivalent to customs duties and of customs duties should to some extent be harmonized, nevertheless the procedure adopted in this case cannot be regarded as amounting to an infringement of the Treaty.

Moreover the obligation placed upon the Commission to abolish charges having equivalent effect in accordance with a particular time-table does not preclude it from determining itself the procedure for such progressive abolition.

JUDGMENT OF 16. 6. 1966 — JOINED CASES 52 AND 55/65

With regard to the complaint of misuse of powers by the Commission the applicant government has not established that the Commission has used its powers for a purpose other than that for which they were conferred upon it.

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. The applicant has failed in its submissions and must be ordered to bear the costs.

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 the Treaty establishing the European Economic Community, especially Articles 5, 9, 12, 13, 14, 15, 173, 175 and 189; Having regard to the Protocol on the Statute of the Court of Justice of the Euro­ pean Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

GERMANY v COMMISSION

THE COURT

hereby:

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER DELIVERED ON 4 MAY 19661

Mr President, Fleisch of 25 April 1951 (Bundesgesetzblatt Members of the Court, I, 272) to a national marketing organization. In accordance with this law the Federal The subject-matter of these proceedings, Minister for Food, Agriculture and Forests upon which I give my opinion today, is determines each year in his annual national mainly the interpretation of Articles 13 and plan for food supplies what quantities of a 14 of the EEC Treaty, more precisely the particular product are available from the definition of the expression 'charges having home market and how much must be an effect equivalent to customs duties' imported to meet the demand for it. In (hereinafter referred to in its abridged form accordance with this plan invitations to as: 'charges having equivalent effect'). The tender for importation are organized. The Court has already in an earlier case (Joined Einfuhr-und Vorratsstelle fur Schlacht- Cases 2 and 3/62) had to construe this ex­ vieh, Fleisch und Fleischerzeugnisse, an pression in connexion with a charge which organization subject to public law (which was levied in Belgium and Luxembourg on is under the authority of the Federal the granting of import licences for ginger­ Minister for Food, Agriculture and Forests bread. Now this expression is once more who has power to issue directions to it) is disputed and in the two following sets of made responsible for imports. The respect­ circumstances. ive importers have to offer the products in question to it for sale. If it does not exercise Case 52/65 its right to purchase the goods, they cannot be sold or used in any way on the domestic Trade in sheep for slaughter and mutton market. If, on the other hand, the Einfuhr- (for which so far no common organization und Vorratsstelle does exercise its right to of the markets has been set up) is subject in buy the products, it can acquire the goods the Federal Republic of Germany under the either through a storage contract or, also by Gesetz über den Verkehr mit Vieh und means of a contract, by formally taking