C-41/76

JUDGMENT OF 15. 12. 1976 - CASE 41/76

the Member States, irrespective of the question are covered by measures of

actual origin of these products. commercial policy adopted by that

2. Measures State in the Treaty. having an effect equivalent conformity with

to quantitative restrictions prohibited Such a requirement would, however, by the Treaty include all trading rules fall under the prohibition contained

enacted by Member States which are in Article 30 of the Treaty if the

Article 9 (2) excludes any adminis­ trative character. Any administrative

trative procedure intended to establish or penal measure which goes beyond between products different rules with what is strictly necessary for the

regard to movement depending on purposes of enabling the importing whether they originated in the Member State to obtain reasonably Community or, having originated in complete and accurate information on third countries, they were put into the movement of goods falling within free circulation in one of the Member specific measures of commercial

States. policy must be regarded as a measure

3. Because they constitute not only an having an effect equivalent to a

exception to the provisions of Articles quantitative restriction prohibited by 9 and 30 of the Treaty which are the Treaty. fundamental to the operation of the 5. During the transitional period

country of origin on the customs prohibited by the Treaty in so far as

declaration document for products in that requirement did not render more

free circulation whose Community onerous the rules applicable on the

status is attested by the Community entry into force of the Treaty. It is for movement certificate does not in itself the national court to examine whether

constitute a measure equivalent to a this is so in the individual cases

quantitative restriction if the goods in before them.

HENRI SCHOU­ , Export Agent and Manager, residing at Saint-Denis-Westrem, Belgium,

v

THE PROCUREUR DE LA RÉPUBLIQUE AU TRIBUNAL DE GRANDE INSTANCE, LILLE­ , and

THE DIRECTOR GENERAL OF CUSTOMS, PARIS,

on the interpretation of the concept of measures having an effect equivalent to quantitative restrictions on imports within the meaning of Articles 30 et

seq. of the EEC Treaty,

Facts

The facts of the case, the procedure and Ledeberg, Belgium, whose Manager is the observations submitted pursuant to Mrs Suzanne Criel, nee Donckerwolcke, Article 20 of the Protocol on the Statute imported into France between 23 of the Court of Justice of the EEC may January and 27 October 1970 by means

be summarized as follows: of a forwarding agent, eight con­

signments of bales of fabric of synthetic

textile fibres (falling under subheading I — Facts and written procedure 56.07 A II of the Common Customs The Société de personnes à responsabilité Tariff) and 13 consignments of packing limitée Sackin, incorporated under sacks in synthetic fibre material (falling Belgian law, with its registered office in within subheading 62.03 B II).

JUDGMENT OF 15. 12. 1976 — CASE 41/76

into France during the month of necessary for the application of customs December 1969 five consignments of measures and for the establishment of sacks, made of synthetic fibres, for the customs statistics and in particular must, packing of goods and between 1 January on importation, state the country of and 2 June 1970, four further con­ origin and the country of last export as signments of sacks for the packing of required by Article 5 (10) of the Decree goods. of the Director General of Customs of 1 December 1961 made in pursuance of The total value of these imports amounts Article 95 (4) of the Code des Douanes. for Cototextil to FF 152 618 and for By means of this false declaration of Sackin to FF 677 491. origin the parties concerned are said to Thirty customs declarations on form D 3 have evaded application of the procedure issued for the release to the market in of automatically issued import licences, a France were made in respect of these procedure to which the imports in imports at the customs office of Halluin; question should have given rise these declarations stated the origin of the according to the French customs goods to be the Belgo-Luxembourg regulations. Economic Union. When they were introduced into France the products were By judgment of 19 June 1975 the Tribunal Correctionnel, Lille, before accompanied by movement certificates in form DD 1 established in application of which the case had been brought by the a decision of the Commission of 6 customs authorities, imposed on Mrs December 1960 concerning the methods Criel and Mr Schou suspended terms of of administrative co-operation for the imprisonment of one and three months application of Article 9 (2) of the EEC respectively and ordered them jointly to Treaty (JO, 1961, p. 29). pay to the customs administration, in lieu of confiscation of goods which could An inquiry by the French customs, the not be seized, an amount equal to the results of which are contained in official value of these goods (FF 470 043) and a records made on 24 November 1972 and fine equal to double their value (FF 940 086). 3 and 18 May 1973, established, especially having regard to documents supplied by the Belgian customs Mrs Criel and Mr Schou lodged appeals department, that the cloth declared on against this judgment before the Cour the application of Sackin originated in d'Appel Douai. the Lebanon, that the sacks declared in 1969 by Cototextil originated in Syria The Cour d'Appel, Douai, 4th Criminal and that the sacks declared in 1970 both Chamber, by interlocutory judgment of by Sackin and by Cototextil had been 7 April 1976 decided to stay the made up in Belgium with cloth which proceedings until the Court of justice originated in the Lebanon. had given a preliminary ruling on the following questions pursuant to Article Customs duty had been paid in respect 177 of the EEC Treaty: of the goods in Belgium and these were 1. Does the fact that the importing therefore in free circulation. Member State requires the country of origin to be indicated in the customs The French customs administration took declaration form for products in free the view that the imports in question circulation whose Community status

in a Member State and originating in national procedures do not make

a third country subject to an importations more difficult or more

application for authorization for the onerous. More particularly the

purposes of a possible application of permissibility from the point of view of

Article 115 of the Treaty establishing Community law of the requirement of

the European Economic Community the indication of the country of origin on constitute a measure equivalent to a customs declarations must be considered

conformity with the EEC Treaty or, at In accordance with Article 20 of the least, have been approved by a competent Protocol on the Statute of the Court of Community institution. As free Justice of the EEC written observations movement is the general principle any were submitted on 13 July 1976 by the exception therefrom must be justified Government of the French Republic, on and restrictively interpreted. 14 July by the Commission of the

European Communities, and on the Between 1969 and 1971 the Commission same date by the appellants in the main never authorized France to exclude from proceedings. Community treatment pursuant to

Article 115 of the EEC Treaty imports of

Upon hearing the report of the the products in question; France had also

Judge-Rapporteur and the views of the made no notification of a unilateral

Advocate-General the Court decided to measure of this nature. As Article 115 open the oral procedure without holding constitutes an exception to the general

(a) The first question a system of monitoring could only be lawful if it had been authorized by the The right of Member States in certain Commission. The importing country was cases to require from importers customs applying customs measures contrary to

JUDGMENT OF 15. 12. 1976 - CASE 41/76

the principle of free movement which the requirement, even as a pure

had not been authorized by the formality, of an import licence Commission and therefore the constitutes a measure having an effect

requirement of indication of the country equivalent to a quantitative restriction,

of origin is a measure having an effect the prohibition of which produces direct equivalent to a quantitative restriction. effects in the legal orders of the Member States. As to the application of such a States'

provision intended for the purpose of The second question must therefore also

establishing customs statistics the penalty be answered in the affirmative subject to

may only be proportional to the possible reservations concerning the

statistical aim of the measure; in the transitional period.

present case the fine imposed by the

court of first instance is wholly out The oberservations of the Government of of proportion with the alleged the French Republic may be summarized

As the goods were products in free That Treaty contains no provision for the circulation and benefiting from abolition of written declarations in

Community status it is evident from the intra-Community trade; no provision of

judgment of the Court of Justice of 15 secondary legislation established

December 1971 in Joined Cases 51 to simplified declarations in such trade as

54/71 (International Fruit Company the provision for such a declaration

[1971] ECR 1107) that apart from the would have to be implemented as a

At least as regards the period subsequent within the meaning af Article 30 of the

to the expiry of the transitional period EEC Treaty as no directive or

DONCKERWOLCKE v PROCUREUR DE LA RÉPUBLIQUE

recommendation was published in this requirement of information as to the

connexion pursuant to Article 33 (7) and origin of the product for the purposes of

Article 35. considering application for the import authorization entails the requirement of

countries which are in free circulation'

it certain special rules for the control of

is not possible to infer that the concept customs value. This falls within the

of origin no longer has any force in context of formalities authorized by the

intra-Community trade. Regulation No Treaty. 802/68 of the Council of 27 June 1968 on the common definition of the The obligation to indicate the origin of

concept of the origin of goods (OJ, goods on the declarations is therefore

possible implementation of Article 115. coming from a third State does not

It is for that reason that Decision No constitute a measure having an effect

71/202 of the Commission of 12 May equivalent to a quantitative restriction if 1971 empowering Member States to take these licences are issued without delay interim protective measures with regard and for all the quantities sought. The to the importation of certain products system of monitoring applied in France originating in third countries and put therefore does not constitute a measure into free circulation in other Member having an effect equivalent to a

States (OJ, English Special Edition 1971 quantitative restriction either during the (I), p. 343) provides that 'a Member State transitional period or after the end of

may require an applicant for an import that period.

authorization to supply all relevant

of national measures under the States and to avoid abuse. Between 1 supervision of the Commission. These January 1970 and 12 May 1971 the

national measures consisted essentially in Member States were deemed to have the submission of a licence obtained by been authorized by the Commission to

an application containing an indication maintain the requirements of an

of the real country of origin in respect of authorization enabling them to subject

products originating in third countries imports to prior check. Such a check

and coming from a Member State. To constituted the only means of making implement the safeguard clause it was possible the application of Article 115 by sufficient for the Directorate General for means of the prior calculation of imports Customs and Indirect Taxation to refuse of which calculation it was the

completed and thus enables their 22). This system was applicable before economic incidence to be forecast and the Decision of 12 May 1971. It is on the other, it makes it possible to inseparable from the application both of

apply the prohibition where necessary by the first paragraph and the second

Article 115. In the most simple method namely by not paragraph of addition the

licence. This system Decision 12 May 1971 that it issuing the was of shows

never criticized by the Commission was in the light of the experience

which, on the contrary, seems to have acquired that it proved necessary to

12 May 1971 and in the case-law of the

From the end of the transitional period Court of Justice, the system cannot be

the legal basis of the measures intended regarded as a measure having an effect

to ensure the proper execution of the equivalent to a quantitative restriction.

commercial policy is the first paragraph of Article 115 of the EEC Treaty. The (c) Therefore neither the obligation to

of this provision in no indicate the origin in customs application way requires the prior publication of a declaration nor the obligation to submit

of goods which are entitled to freedom of The system of monitoring adopted for movement, it must be stated, first, that the purposes of the application of Article the Community provisions intended to 115 of the Treaty in order to detect establish administrative co-operation for deflections of trade and to enable purposes of the application of Article 9 Member States in so far as they are of the EEC Treaty do not themselves required and subject to the authorization pre-judge the applicability by the of the Commission, to take the necessary Member States of other customs protective measures, constitutes an formalities. It is evident from the decided indispensable mechanism for the proper cases of the Court of Justice that any functioning of the common commercial rules of such a nature as to obstruct trade policy. Placing it in doubt once again within the Community, whether directly could have serious consequences. or indirectly, actually or potentially

The Commission the European constitute a measure having an effect of equivalent to a quantitative restriction Communities emphasizes that the

provisions of the EEC Treaty concerning prohibited by the Treaty unless they can be justified under Article 36 or another the elimination of quantitative provision of the Treaty. The prohibition restrictions and measures having equivalent effect between Member States of measures having an equivalent effect

Community institutions, goods in absence of a decision by the Commission circulation in the territory of each of the under Article 115 of the EEC Treaty Member States continue to be subject to authorizing such measures the Member the various internal laws, regulations and States may notlegitimately establish a administrative provisions, the application separate system Community trade for in of which is justified by Community products originating in the Community provisions. Goods imported from one and for in or producting originating Member State into another, even if they coming from third countries and which comply with the conditions laid down in are in free circulation. The prohibition on quantitative restrictions and measures Articles 9 and 10 (1) of the Treaty, remain subject to the completion of having equivalent effect applies with the customs clearance formalities whose same force to both categories of products. object is the application of such

provisions. Customs clearance procedures (a) The first question of course fall within the prohibition of

With if regard to the relationship between measures having an equivalent effect

the concept of measures having an effect their restrictive effect goes beyond the

JUDGMENT OF 15. 12. 1976 - CASE 41/76

extent necessary for the realization of the equivalent to quantitative restrictions. In aim pursued. particular for intra-Community trade it must not constitute an excessive obstacle

origin on customs declarations prescribed beyond what may by required from him

for the release to the market on the for purely statistical purposes. The direct national territory of goods in free or indirect burdening of the person circulation in the Community, it is making the declaration with the whole

evident, with regard to the objectives, responsibility for the correctness of the that save in exceptional cases of information supplied and the linking of protective measures which have been this to the importation of the goods itself

expressly authorized by Community law, has the subjecting the exercise effect of

origin is of no relevance for the purposes of the right of freedom of movement to a

of the application of customs measures supplementary condition which is not

statistics of the Community and statistics origin for each importation because of

of trade between Member States (OJ, the severity of the penalties risked. The L 183, p. 3) the origin does not have same would be true if the absence of an

to be mentioned in 'the statistical indication pr an erroneous indication of

information medium'

concerning the the country of origin were to be regarded

import of goods in free circulation within as a 'false declaration with the object and

Member States to demand an indication Such stringent requirements would

be intra- of the country of origin on customs hardly permissible, as

declarations for goods imported from Community trade in goods in free other Member States, this requirement circulation is concerned, save in the

would nevertheless not escape the exceptional case where the Member State prohibition of measures having an effect concerned had been able to rely on a

DONCKERWOLCKE v PROCUREUR DE LA RÉPUBLIQUE

derogating provision contained in the formalities, is only permissible in so far

provisions Treaty (in particular of the

The reply to be given to this question is Articles 30, 32, 33 (7) and 8 (7)) that the clear from the judgment delivered by the prohibition on quantitative restrictions

Court on 15 December 1971 in Joined and measures having an equivalent effect Cases 51 to 54/71 (International Fruit has entered fully into force and directly Company): apart from the exceptions in relations between Member States and

provided by Community law itself individuals, on the expiry of the

Articles 30 and 34 (1) of the EEC Treaty transitional period on 31 December prevent the application in intra- 1969.

Community trade of any national

the Court of Justice laid down a very not at that time directly applicable. clear distinction between the rules for for intra- In conclusion, the external trade and those (d) following answer Community trade which covers goods should be given to the questions referred

originating from third countries in free by the Cour d'Appel, Douai: circulation within the Community in the 1. Although, until the entry into force of same way as goods originating within the Regulation No 1736/75 of the

Community itself. Council of 24 June 1975 on the

external trade statistics of the

Further, a Member State cannot justify Community and statistics of trade

the application at the time of the facts in between Member States, a Member the main proceedings of a system of State was able to require, for the

on which it was based. The Commission effect equivalent to quantitative

took account of the case-law in its restrictions solely in so far as:

Decision No 73/55 of 9 March 1973. The —

it concerned the origin of the

requirement by Member States of prior products in so far as the declarant licences, even if they are issued knew it or could reasonably be automatically, or of any other similar expected to know it;

JUDGMENT OF 15. 12. 1976 - CASE 41/76

formality merely made the person Adviser, Jean Amphoux, sumitted oral

concerned subject to a penalty argument at the hearing on 27 October proportionate to the purely 1976. statistical purpose of the formality. In the course of these proceedings the

More stringent requirements relating Government of the French Republic to the the following in checking of the origin of goods emphasized matters

can only be accepted, in trade particular: examination of internal penal

between Member States in goods in law is not the concern of the Community free circulation, in so far as they are authorities; With regard to the free authorized by derogating provisions movement of goods in free circulation, adopted pursuant to the Treaty. goods which originate in a country of the 2. National provisions which make Community are assimilated to those

imports of goods in free circulation originating in a third country but there is subject to the issue of an import no confusion of their origins. It is licence constitute, save in exceptional evident from Article 42 (1) of Regulation cases provided by Community law No 1736/75 of the Council that Member

became fully effective from the end of necessary to possess information capable

the transitional period. These of revealing one of the situations referred in in Article provisions have direct effect the to 115 of the EEC Treaty. legal orders of the Member States and

confer on individuals rights which The Advocate-General delivered his national courts must protect as from opinion at the hearing on 24 November that date. 1976.

Law

1 By judgment of 7 April 1976, which was received at the Court Registry on 13 May 1976, the Cour d'Appel de Douai referred, pursuant to Article 177 of

the EEC Treaty, two questions concerning in particular the interpretation of

3 It is accepted that the movement certificates which certify the due admission

of goods to the status of free circulation within the meaning of Article 9 (2) of the Treaty do not contain any indication of the actual origin of the product.

4 When the goods were imported into France they were declared on a national 3'

document of the French customs known as 'D as having come from the

Belgo-Luxembourg Economic Union on the territory of which they had been put into free circulation.

5 After the real origin of the goods in question had been established by the French authorities the appellants were sentenced by a judgment of 19 June

provisions of the Treaty, the obligation of the importer to declare on

document D 3 not merely the State where they had thus been released to the

market but also their original source.

7 These declarations, coupled with the issue of import licences, enable the

national authorities to follow the trends in the imports of goods subject to

JUDGMENT OF 15. 12. 1976 - CASE 41/76

restriction?

2. Do the national rules subjecting the importation of textile products

coming from and in free circulation in a Member State, and originating in

a third country, to an application for authorization for the purposes of a

possible application of Article 115 of the Treaty establishing the European Economic Community constitute a measure equivalent to a quantitative

restriction:

re-exported to another Member State.

11 They concern more particularly the compatibility with the Treaty of monitoring measures introduced unilaterally by the importing Member State before obtaining a derogation, pursuant to the second sentence of the first paragraph of Article 115, from the rules of free circulation within the

Community.

DONCKERWOLCKE v PROCUREUR DE LA RÉPUBLIQUE

12 The monitoring measures in question consist of the importer's obligation to

declare the actual origin of the imported goods and the issue of an import

'free circulation'

in the Community.

16 Products in free circulation are to be understood as meaning those products which, coming from third countries, were duly imported into any one of

the Member States in accordance with the requirements laid down by Article 10.

17 It appears from Article 9 that, as regards free circulation of goods within the

Community, products entitled to 'free definitively and wholly circulation'

JUDGMENT OF 15. 12. 1976 - CASE 41/76

20 This provision precludes the application to intra-Community trade of a

national provision which requires, even purely as a formality, import licences or other similar procedure. any

21 In addition Article 9 (2) excludes any administrative procedure intended to establish between products different rules with regard to movement

depending on whether they originate in the Community or, having originated in third countries, were put into free circulation in one of the Member States,

since both types of product are included without distinction in the same

without the addition of any measure of national law, guarantee to the person

holding it the benefit of free circulation for the goods which it is intended to cover.

24 However it results from the system of the Treaty that the application of the principles referred to above is conditional upon the establishment of a

common commercial policy.

25 The assimilation to products originating within the Member States of goods

in 'free may only take full if circulation'

circumstances calculated to maintain in being between the Member States differences in commercial capable of bringing about deflections of policy trade or of causing economic difficulties in certain Member States.

28 Article 115 allows difficulties of this kind to be avoided by giving to the

Commission the power to authorize Member States to take protective

measures particularly in the form of derogation from the principle of free circulation within the Community of products which originated in third

countries and which were put into free circulation in one of the Member

States.

described above with the rules concerning the free circulation of goods within the Community should be considered.

31 First of all it should be stressed with regard to the scope of such provisions, that under Article 115 limitations may only be placed on the free movement

within the Community of goods enjoying the right to free by circulation

virtue of measures of commercial policy adopted by the importing Member State in accordance with the Treaty.

32 As full responsibility in the matter of commercial policy was transferred to

the Community by means of Article 113 (1) measures of commercial policy of a national character are only permissible after the end of the transitional

34 In these circumstances it may be admitted that knowledge of that origin is

necessary both for the Member State concerned, so that it may determine the

scope of commercial policy measures which it is authorized to adopt pursuant

to the Treaty, and for the Commission, for the purpose of exercising the right of supervision and decision conferred on it by Article 115.

35 Nevertheless the Member States may not require from the importer more in

this respect than an indication of the origin of the products in so far as he knows it or may reasonably be expected to know it.

goods.

38 In general terms any administrative or penal measure which goes beyond what is strictly necessary for the purposes of enabling the importing Member State to obtain reasonably complete and accurate information on the

movement of goods falling within specific measures of commercial policy must be regarded as a measure having an effect equivalent to a quantitative

restriction prohibited by the Treaty.

39 A fortiori the requirement of an import licence for the introduction into a

Member State of goods put into free circulation in another Member State is incompatible with the provisions of the Treaty in so far as the goods are not the subject of a derogation properly authorized by the Commission by virtue of the second sentence of the first paragraph of Article 115.

Community status is attested by the Community movement certificate does not in itself constitute a measure equivalent to a quantitative restriction if the

goods in question are covered by measures of commercial policy adopted by that State in conformity with the Treaty.

42 Such a requirement would, however, fall under the prohibition contained in Article 30 of the Treaty if the importer were required to declare, with regard to origin, something other than what he knows or may reasonably be expected to know, or if the omission or inaccuracy of that declaration were to attract penalties disproportionate to the nature of a contravention of a purely administrative character.

43 The reply to be given to the second question is, therefore, that national rules making the importation of products coming from and in free circulation in a

Member State and originating in a third country subject to the issue of a

licence for the purposes of a possible future application of Article 115 of the

products coming from and in free circulation in a Member State and

originating in a third country to an application for authorization for the

purposes of a possible application of Article 115 of the Treaty establishing the European Economic Community constituted a measure equivalent to a

quantitative restriction.

45 Under Articles 30 to 35 of the Treaty, considered in conjunction with Article 8 (7), quantitative restrictionall measures having equivalent effect were to and

be progressively in intra-Community trade during the transitional eliminated

establishment of a common commercial policy, differences could legitimately

continue to exist between the external trade policies pursued by the various

Member States.

48 In conformity with the spirit of these provisions the second paragraph of

Article 115 authorized Member States in case of urgency during the

transitional period to take the necessary measures to guard against deflections of trade on condition that they notify such measures to the other Member

respect during the period in question.

51 By virtue of Articles 31 and 32 of the Treaty the Member States had to refrain from introducing any new quantitative restrictions or measures having equivalent effect or from making more restrictive the rules existing on the

entry into force of the Treaty.

52 It is therefore for the national court to examine whether the measures

applicable at the time of the imports in question, in so far as those imports took place before the end of the transitional period, were possibly more

restrictive than those which existed on 1 January 1958, the date of the entry into force of the Treaty.

quantitative restriction prohibited by the Treaty in so far as that requirement

did not render more onerous the rules applicable on the entry into force of

the Treaty.

Costs

54 The costs incurred by the Government of the French Republic and the

Commission of the European Communities which submitted observations to

in answer to the questions referred to it by the Cour d'Appel de Douai by judgment of 7 April 1976, hereby rules:

1. The requirement by the importing Member State of the

indication of the country of origin on the customs declaration document for products in free circulation whose Community status is attested by the Community movement certificate does not in itself constitute a measure equivalent to a quantitative

restriction if the goods in question are covered by measures of commercial policy adopted by that State in conformity with

the Treaty.

Such a requirement would, however, fall under the prohibition contained in Article 30 of the Treaty if the importer were

originating in a third country subject to the issue of a licence for the purposes of the possible future application of Article 115 of the Treaty in any event constitute a quantitative

restriction prohibited by Article 30 of the Treaty.

During the transitional period national rules making the

importation of products coming from and in free circulation

in a Member State and originating in a third country subject

to an application for authorization for the purposes of a

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE-GENERAL CAPOTORTI

DELIVERED ON 24 NOVEMBER 1976­ <apnote>1</apnote>

Mr President, and especially of the concept of

Members of the Court, 'measures having an effect equivalent to quantitative restrictions.'