C-46/76

JUDGMENT OF 25. 1. 1977 —CASE 46/76

the fundamental principle of the having an effect equivalent to a elimination of all obstacles to the free customs duty on exports but fall movement of goods between Member within the prohibition of discrimi­ States. It is not to be understood as nation under Article 95 of the Treaty. authorizing measures of a nature 5. Fees charged for veterinary and public different from those contemplated by health inspections, which are Articles 30 to 34. prescribed by a Community provision, 3. Article 36, in accordance with the which are uniform and are required to conditions which it prescribes, does be carried out before despatch within not prevent the retention of certain the exporting country do not restrictions. In this respect it does not constitute charges having an effect matter that the inspections carried out equivalent to customs duties on by importing States on the occasion of exports, provided that they do not the crossing of the frontier are exceed the actual cost of the replaced by inspections initially inspection for which they were carried out by the exporting Member charged. State. However Article 36 does not 6. Apart from the exceptions laid down permit the collection of duties by the directive itself, any additional charged on the goods subjected to inspection of bovine animals or swine these inspections since this collection for export to another Member State is not necessary for the exercise of the imposed unilaterally by a Member process provided for by Article 36 and State, whether on its own initiative or therefore constitutes an additional in order to meet the requirements of obstacle to intra-Community trade. another Member State, which are no 4. If the fees for veterinary and public longer justified, would constitute a health inspections are demanded in measure having an effect equivalent to the case of internal marketing as well a quantitative restriction and any fee as in the case of exportation then they charged on this occasion would, for form part of a general system of that reason, be incompatible with domestic charges and are not charges Community law.

BAUHUIS v NETHERLANDS

THE COURT

composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate-General: G. Reischl

Registrar: A. Van Houtte

gives the following

JUDGMENT OF 25. 1. 1977 -CASE 46/76

open the oral procedure without any proposed to bring before the Court the preparatory inquiry. matter dealt with under the procedure laid down by Article 169 of the Treaty which it initiated as far back as 1970 II — Observations submitted to against the Netherlands and other the Court Member States in connexion with the

charging of fees for veterinary and public A — Observations of the plaintiff in health inspections, it pointed out that the main action pursuant to the rules governing particular agricultural markets the prohibition of Bauhuis emphasizes the importance of charges having an effect equivalent to the present proceedings. Other livestock import duties came into force in several dealers have claimed a refund of the fees cases before 1 January 1970, the date they have paid but the Netherlands State when the transitional period ended. This still continues to levy the fees which are prohibition applies as from 1 July 1962

BAUHUIS v NETHERLANDS

for the importation of swine (Article 14 protection of health and life of humans (1) and Article 23 of Regulation No 20 and animals in this Member State, of the Council of 4. 4. 1962, OJ L 30, whereas in this case the measures of p. 945). inspection are justified by the protection of health and life of humans and animals The Commission infers from the recitals in the Member State of destination.

of the judgment making the reference Secondly because national measures may that the inspection fees for exports fulfil only be adopted pursuant to Article 36 all the conditions for them to be provided that measures have not been designated charges having an effect taken by the Community to protect the equivalent to customs duties on exports: interests mentioned in Article 36.

is made subject by the State of The Commission deduces from this, destination (subparagraphs (b) and (c) a contrario, that in intra-Community of the question). trade such fees may not be charged. — The Council itself may not permit or The Commission considers however that charge such fees since the it is helpful to examine first of all what Community legislature is also bound relationship there may be, in this case, by the provisions of Articles 13 and between Article 36 of the EEC Treaty 16 of the EEC Treaty. and the inspections or the fees charged — On the basis of Articles 43 of the for them. In its view the application of EEC Treaty measures which derogate Article 36 of the EEC Treaty should be from the general rules of the Treaty ruled out for two reasons. First because may only be taken by way of Article 36 only permits a Member State exception if the functioning of the to take protective measures for the agricultural markets were to meet

JUDGMENT OF 25. 1. 1977 —CASE 46/76

with special difficulties; this justified on grounds of public health in exception does not apply in this case the Member State which adopts the because there is no need to receive measures but in the Member State of

With regard to the fact that the fees necessary for the benefit of a product which are at issue are imposed on the should be borne by this product and its occasion of inspections which are consumer. This argument put forward by the Netherlands Government in other intended to comply with the special conditions laid down by the Member cases, Marimex, 29/72 [1972] ECR 1309 State of destination the Commission and Cadsky, 63/74 [1975] ECR 281) was takes the view that the arguments which rejected by the Netherlands court. it put forward relating to the inspections justified by Community rules must apply, The Commission also points out that a fortiori, in this "case of national sales. neither a legal principle nor even a general principle of economic policy Furthermore the inspections themselves applies and that according to the cannot be reconciled with Community case-law of the Court the decisive test for law and this, ipso facto, means that the the purposes of levying certain charges fees relating thereto are also illegal. on importers or exporters engaged in intra-Community trade is the specific As far as the exports of horses and also of benefit which the said importers and bovine animals and swine is concerned exporters derive individually from the the inspections are unquestionably service provided. Finally, assuming that charges having an effect equivalent to the principle defended by the quantitative restrictions which are Netherlands Government is a general prohibited by Article 34 of the EEC principle of Community law, the Treaty and at the same time cannot be Commission does not see why it should brought within the exception provided take precedence over the principle of the by Article 36 because they are not free movement of goods.

The Commission's answer to the have to be refunded. But the principles argument of the Netherlands Govern­ raised by the questions referred are much ment that, if the costs of veterinary and more important. What is at issue is the public health supervision were financed correct method of financing veterinary, out of public funds, there would be the public health and phytosanitary danger of concealed aid to exporters to inspections of exports which the other Member States, is that to accept directives, issued with a view to removing such a proposition would be tantamount obstacles to intra-Community trade, to treating the abolition of any charge compel Member States to carry out. Is having an effect equivalent to a customs this financing to be borne by the product duty on exports whereby certain or must it be a compulsory charge on the expenses are borne by the exporter as a general public funds of Member States? measure granting aid. As far as the distinctions made by the The Commission submits that the Arrondissementsrechtbank, The Hague, question referred by the Arrondisse­ under subparagraphs (b) and (c) of the mentsrechtbank, The Hague, should be question referred are concerned, the answered as follows: Netherlands Government draws attention to the fact that, in the case of bovine 'A pecuniary charge levied unilaterally on animals and swine, Article 8 of Council goods exported to another Member State Directive No 64/432/EEC permits when they cross the frontier, by whatever importing Member States to lay down name it is called and in whatever way it special conditions for their importation is made up, is a charge having an effect and to the fact that in the case of the equivalent to a customs duty. In order to other species the veterinary conditions to interpret this concept it does not matter which imports are subject are still whether such a pecuniary charge is levied national in character. The veterinary for reasons of veterinary inspection on inspections of exports carried out by the exportation, whether this inspection is Netherlands veterinary service, cover the provided for by Community law or conditions prescribed by the Community whether it is compatible with it.' authorities (Directive No 64/432) or by national authorities in the context of

the fees under Community law, a provisions or provisions laid down by distinction must be drawn between those other Member States. If the exporting charged when the authority concerned State helps the exporter to satisfy the provides a service for imports and those conditions prescribed by the importing charged when the service is provided for country that amounts in fact to the exports. In the latter case the fees arise provision of a service which brings the out of restrictions imposed either by the product one stage nearer the consumer Community or by another Member State. in another State. Moreover the service provided free of charge by the authority on exportation The Netherlands Government considers may be an aid to exports which that having regard to those grounds contravene the rules of the Treaty. which have already been accepted by the Court as justified: It is clear from the case-law of the Court (a) the service provided by the veterinary of Justice that there are two possible inspection exercised by the authority ways of justifying fees charged on exports confers upon each individual exporter which are charges having an effect a specific and real benefit if by means equivalent to customs duties on exports: of this inspection a condition is 1. that the fee forms part of a general fulfilled or a guarantee undertaken system of domestic charges levied with regard to the importation into according to the same criteria; the Member State of destination; 2. that the fee is the consideration for a (b) the inspection fee is consideration of specific service which was in fact equivalent value if it covers and does provided and does not exceed either not exceed the expenses of the the value or the cost of such a service. inspection.

BAUHUIS v NETHERLANDS

actual cost of a veterinary inspection by Mr Van Boeschoten, Advocate of the carried out by a Member State for the Bar at The Hague, the Netherlands purposes of the performance of the Government represented by Mr Van de obligations set out in Directive No Does and Mr Alexander, Advocates at the 64/432/EEC and/or in order to ascertain Bar at The Hague and the Commission that the animals in question satisfy the of the European Communities, rep­ requirements to which the Member State resented by its Agent, Mr Bourgeois, of destination has subjected their submitted their oral observations.

importation.' The Advocate-General delivered his At the hearing on 26 October 1976 the opinion at the hearing on 23 November plaintiff in the main action represented 1976.

Law

1 By order of 10 May 1976 received at the Court Registry on 2 June 1976 the Arrondissementsrechtbank, The Hague, requested the Court under Article 177 of the EEC Treaty to give a ruling on the interpretation of Article 16 of the Treaty and in this connexion to state whether:

'... the phrase "charges having an effect equivalent to customs duties on exports" (is) to be interpreted as including pecuniary charges which are imposed by a Member State in respect of the veterinary and public health inspection of livestock which is intended to be exported to another Member State in so far as such pecuniary charges suffice to cover, and do not exceed, the actual costs of a veterinary and public health inspection which is carried out by authority of the Government:

JUDGMENT OF 25. 1. 1977 —CASE 46/76

2 These questions were referred during proceedings brought against the Netherlands administrative authorities by a cattle dealer who, between August 1966 and July 1971, exported live animals to other Member States and claims a refund of the fees paid for the veterinary and public health inspections carried out by the Netherlands administrative authorities prior to their export.

3 He submits that these fees are charges having an effect equivalent to customs duties on exports prohibited as from 1 January 1962 by Article 16 of the Treaty and that they were therefore improperly paid.

4 It is clear from the judgment delivered by the national court that the fees at issue were charged, on the one hand, on the occasion of veterinary and public health inspections of bovine animals and swine prescribed and provided for by Council Directive No 64/432/EEC of 26 June 1964 on animal health problems affecting intra-Community trade in bovine animals and swine (OJ English Special Edition 1963-1964, p. 164) and, on the other hand, on the occasion of veterinary and public health inspections other than those laid down by this directive or again on animals other than those referred to in the directive and coming solely within the provisions of national law.

5 These situations must be examined separately.

6 It is however advisable to specify first of all the legal framework within which the questions referred have to be answered.

they cross a frontier and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9, 12, 13 and 16 of the Treaty, even if it is not imposed for the benefit of the State.

11 The position would be different only if the charge in question is the consideration for a benefit provided in fact for the exporter representing an amount proportionate to the said benefit or if it related to a general system of internal dues applied systematically in accordance with the same criteria to domestic products and imported products alike.

12 Although Article 36 of the Treaty provides that 'The provisions of Articles 30 to 34 shall not preclude prohibitions or quantitative restrictions on imports ... justified on grounds of ... the protection of health and life of humans, animals ...', this provision constitutes a derogation from the basic rule that all obstacles to the free movement of goods between Member States shall be eliminated and must be interpreted strictly and thus cannot be understood as authorizing measures of a different nature from those referred to in Articles 30 to 34.

13 Consequently, although Article 36 does not prevent veterinary and public health inspections it cannot nevertheless be interpreted as thereby permitting the imposition of charges levied on imported goods subjected to the said inspections and intended to cover the costs thereof.

14 In fact this charge is not intrinsically necessary for the exercise of the power laid down in Article 36 and is thus capable of constituting an additional barrier to intra-Community trade.

19 This approximation consists mainly in imposing upon Member States exporting cattle the obligation to ensure compliance with certain veterinary and public health measures intended, inter cilia, to guarantee that the exported animals are not a source of contagious disease.

20 It is apparent from all these considerations that the harmonized system of veterinary and public health inspections introduced by the directive is based on the principle that the veterinary and public health guarantees required by each of the Member States have equivalent effect and it is this principle which guarantees both the protection of health and equal treatment of products.

21 Seen in this light the aim of the system is to transfer supervision to the exporting Member State and to replace in this way the systematic .measures of protection at the frontier with a uniform system so as to make multiple frontier inspections unnecessary and at the same time to give the Member State of destination the opportunity of ensuring that the guarantees provided by the system of inspections thus standardized are in fact given.

22 This system is based on the trust which Member States should place in each other as far as concerns the guarantees provided by the inspections carried out initially by the veterinary and public health departments of the Member States from which the animals are exported.

23 With a view to making these guarantees effective the directive harmonized the provisions adopted by Member States by making unusually strict methods of supervision of universal application.

28 These measures are laid down unilaterally by each Member State but have been made obligatory and uniform in the case of all the products in question whichever the exporting Member State or the Member State of destination may be.

29 On the other hand they are not prescribed by each Member State in order to protect some interest of its own but by the Council in the general interest of the Community.

30 They cannot therefore be regarded as unilateral measures which hinder trade but rather as operations intended to promote the free movement of goods, in particular by rendering ineffective the obstacles to this free movement which might be created by the measures for veterinary and public health inspections adopted pursuant to Article 36.

31 In these circumstances fees charged for veterinary and public health inspections, which are prescribed by a Community provision, which are

JUDGMENT OF 25. 1. 1977 -CASE 46/76

uniform and are required to be carried out before despatch within the exporting country do not constitute charges having an effect equivalent to customs duties on exports, provided that they do not exceed the actual cost of the inspection for which they were charged.

37 With a view to promoting the free movement of bovine animals and swine Directive No 64/432 has made veterinary and public health inspections intended to protect the health and life of humans and animals generally applicable and uniform in the whole of Community territory.

BAUHUIS v NETHERLANDS

38 The mutual confidence, which Member States must have in the inspections carried out, under the prescribed conditions, by the competent authorities of the other Member States, constitutes a basic element of the system introduced by the directive, without which it would have no purpose.

39 It follows that bovine animals and swine which have undergone inspections prescribed by this directive must be able to be transported from one Member State to the others without additional health and veterinary requirements.

40 Consequently, apart from the exceptions laid down by the directive itself, any additional inspection of bovine animals or swine for export to another Member State imposed unilaterally by a Member State, either on its own initiative or in order to meet the requirements of another Member State, which are no longer justified, would constitute a measure having an effect equivalent to a quantitative restriction and any fee charged on this occasion would, for that reason, be incompatible with Community law.

41 The position would be different only if this inspection and an identical fee were also prescribed and charged under domestic regulations in connexion with the sale and transport of bovine animals and swine on the territory of the Member State concerned.

45 These measures which are intended to protect the veterinary and public health interests of the importing country comply with the Treaty subject to the conditions laid down in Article 36 thereof.

46 Article 36 does not prohibit the replacement of the inspections carried out by the importing State on the occasion of the crossing of the frontier by inspections initially carried out by the Member States.

47 However the transfer of these inspections which continue to be carried out in the interest of the importing State does not in fact change their nature.

48 As it has been noted above that, although Article 36, in accordance with the conditions which it prescribes, does not prevent the retention of certain restrictions, in particular those which take the form of veterinary and public health inspections, it does not however permit the collection of duties charged on the goods subjected to these inspections, since this collection is not necessary for the exercise of the powers provided for by Article 36 and therefore constitutes an additional obstacle to intra-Community trade.

49 The reasons which render lawful the collection of appropriate duties for the carrying out of uniform Community inspections of general application cannot be applied to situations which continue to consist of obstacles set up unilaterally.

so This is the case even if the domestic inspections are measures for the promotion of exports.

On those grounds,

THE COURT

in answer to the questions referred to it by the Arrondissementsrechtbank, The Hague, by order of 10 May 1976, hereby rules:

1. Fees charged for veterinary and public health inspections which are prescribed by a Community provision, which are uniform and are required to be carried out before despatch within the exporting country, do not constitute charges having an effect equivalent to customs duties on exports, provided that they do not exceed the actual cost of the inspection for which they were charged.

2. Consequently, apart from the exceptions laid down by Directive No 64/432 /EEC itself, any additional inspection of bovine animals or swine intended for export to another Member State, which is prescribed unilaterally by a Member State, either on its own initiative or in order to meet the requirements of another Member State which are no longer justified, constitutes a measure having an effect equivalent to a quantitative restriction and any fee charged on that occasion would, for that reason, be incompatible with Community law.

3. Fees charged by the exporting Member State for veterinary and public health inspections carried out by the authorities of that State, which are not required by a Community regulation or directive but which have been prescribed for the purpose of checking whether the conditions to which the Member State of destination has made the importation subject have been

Registrar President

OPINION OF MR ADVOCATE-GENERAL REISCHL DELIVERED ON 23 NOVEMBER 1976 1

Mr President, bovine animals is subject to an Members of the Court, inspection by the veterinary authority the goods in question were inspected. The plaintiff had to pay fees for these These proceedings are concerned with inspections, the particulars of which had the interpretation of Article 16 of the been fixed by the Minister for EEC Treaty which provides that Member States shall abolish between themselves Agriculture. Since he considered that this was unlawful he sued the Netherlands customs duties on exports and charges State for a refund. having equivalent effect by the end of the first stage at the latest. As far as imports were concerned the plaintiff regards the fees as charges The plaintiff in the main action, a dealer having equivalent effect and rests this residing in the Netherlands, imported view on the fact that a corresponding into the Netherlands at the end of 1970 prohibition applying to intra-Com- swine from other Member States. munity trade had direct effect in the Between August 1966 and July 1971 he Member States as from 1 January 1970. also exported swine, swine for breeding, In so far as the fees were charged on his bovine animals, bovine animals for exports the plaintiff takes the view that breeding and horses from the they are charges having an effect Netherlands to other Member States. In equivalent to customs duties. In this accordance with the Netherlands' Law on connexion a corresponding prohibition livestock and the implementing rules relating to intra-Community trade had adopted thereunder which provide that direct effect in its entirety as from 1 the import and export of particular January 1962.