C-77/76

on the interpretation of Article 13 (2) of the EEC Treaty and also of Council Regulations Nos 1009/67/EEC of 18 December 1967 and 3330/74 of 19 December 1974 on the common organization of the market in sugar (OJ, English Special Edition 1967 p. 304, and OJ L 359 of 31. 12. 1974, p. 1),

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

The facts, the procedure and the written to 1979/80 marketing years, adaptation observations submitted pursuant to aid which may not exceed a total of 5·9 Article 20 of the Protocol on the Statute u.a. per tonne of beet with a 16% sugar of the Court of Justice of the EEC may content processed into sugar. This be summarized as follows: maximum of 5·9 u.a. was, for the 1976/77 marketing year, raised to 9·9 u.a., a portion of which might be granted I — Facts and procedure to the processing industry (Regulation (EEC) No 1487/76 of the Council of A — On 18 December 1967 the 22. 6. 1976, OJ L 167, p. 9). Council adopted Regulation No 1009/67/EEC on the common Order No 1195, adopted on 22 June organization of the market in sugar, 1968 by the Comitato Interministeriale which came into force on 1 July 1968; dei Prezzi (Interdepartmental Com­ the regulation applied inter alia to white mittee on Prices, hereinafter referred to and raw beet sugar and cane sugar and as 'the CIP' (Gazzetta Ufficiale No 162 also to sugar beet and sugar cane. of 27. 6. 1968, p. 4057) established on the Italian market the Cassa Conguaglio Under Article 34 the Italian Republic is, Zucchero (Sugar Equalization Fund) up to and including the 1974/75 financed in particular by a sovrapprezzo marketing year, authorized to grant (surcharge) on every quantity and type of 'adaptation subsidies to its beet growers white sugar, whether home-produced or and to its beet processing industry' — imported. that is to say, the sugar industry. The subsidy may not exceed a specified sum Paragraph 6 of the operative part of this per metric ton of beet or per 100 kg of measure provided that the income of the white sugar; it may only be granted in Fund must be used to pay for: respect of a quantity which is within the — the subsidy to beet growers and the basic quota. With reference to this, the beet processing industry 'pursuant to fourteenth recital in the preamble to the Article 34 of Regulation No said regulation states that 'beet and sugar 1009/67'; production in Italy is rendered difficult — the subsidy to the processing industry by climatic conditions and, in the case of in the form of the refund of tax paid beet production, by the additional on the proceeds of the purchase and problems presented by the application of transport of beet; modern production methods and that — the subsidy in respect of the storage 'provision should be made for granting costs of the surplus from the 1967/68 temporary subsidies to both these harvest and 'in respect of losses in activities'. exporting it [surplus white sugar produced during the 1967/68 sugar Under Article 38 of Regulation (EEC) No year]… which has to be exported 3330/74 of the Council of 19 December before 1 July 1969 (Regulation No 1974, which repeals Regulation No 457/68 of 11 April 1968'); 1009/67/EEC, the Italian Republic is — the subsidy to sugar undertakings in authorized to grant, during the 1975/76 order to offset payments made by the

latter to beet growers in accordance Believing it to be necessary for the with an earlier national measure; purposes referred to in the preceding — aid towards a financial reorganization paragraph to order the payment to the in respect of the cost of transactions Sugar Equalization Fund of an carried out in the past by the appropriate special surcharge on stocks Equalization Fund in respect of the but taking into account also the need to price of imported sugar; exempt from the special surcharge in — a subsidy to exporters equivalent to question stocks on hand with consumer the amount of the surcharge referred undertakings to the extent of to above; two-twelfths of annual consumption and — interest on debit balances for subsidy denatured sugar for animal feed.' payments related to surplus output; — payment of the management Anyone who, at midnight on 2 July expenses of the Fund. 1976, held on the national territory sugar of any quality or type in excess of 500 kg The surcharge was fixed at Lit 56 per kg was required to declare such quantities to for the marketing year 1975/1976 (CIP the Sugar Equalization Fund before 15 Order No 14/1975 of 1 July 1975) and July 1976 (paragraph 6). increased to Lit 70 per kg for the 1976/1977 marketing year (CIP Order On any quantity of white sugar, raw No 20/1976 of 1 July 1976). sugar or sugar syrups, whether home-produced or imported, and stored During the 1975/1976 marketing year on the national territory at midnight on provision was made for the following 2 July and held by any person on any subsidies: ground whatsoever, a special surcharge was due: (a) a subsidy for home-produced beet amounting to Lit 5 056·30 per tonne. (a) of Lit 37·842 per net kg of white (CIP Order No 18/1975 of 11. 8. sugar if the surcharge of 56 lire per 1975, paragraph 3); net kilogramme provided for under CIP Order No 14/1975 had not been (b) an additional subsidy for home-produced beet amounting to paid to the Sugar Equalization Fund; Lit 3 165·11 per tonne (above­ (b) of Lit 51·842 per net kg of white mentioned CIP Order, paragraph 4); sugar if the surcharge of Lit 56 had already been paid into the Fund (c) a subsidy for home-produced sugar amounting to Lit 2 156·30 per 100 kg (paragraph 7). (CIP Order No 19/1975 of 11. 8. B — Fratelli Cucchi had instructed the 1975, paragraph 5 d). company Avez S.p.A., Milan, to import 10 000 kg of sugar on its behalf from the CIP Order No 20/1976 of 1 July 1976 Federal Republic of Germany. A first introduced (in paragraph 6 et seq.) a consignment of 4 000 kg was delivered sovrapprezzo straordinario (special on 28 June 1976 and the remainder was surcharge). In the preamble to the order to be delivered on 17 July 1976. it is stated:

there is no authority in Community products mentioned in the said EEC provisions and which is wholly contrary regulations the imposition of a to the principles of the EEC. On this pecuniary charge having the following ground it brought proceedings against characteristics is prohibited: Avez before the Pretore, Abbiategrasso, (a) it is applied by a measure of a claiming that he should: national authority on any quantity 1. Find and declare that the applicant of sugar whether home-produced owes nothing to the defendant in or imported; payment of the surcharge of Lit 56 (b) the revenues collected through a per kg of sugar (Order No 14/1975) public body are employed for the and order Avez to repay the sum of sole benefit of the sugar industry Lit 224 000 to the defendant; and producers of beet established 2. Find and declare that the applicant in the territory of the State in owes nothing to the defendant in which the charge is imposed (see payment of the special surcharge Order No 1195 of the Comitato imposed by CIP Order No 20/1976 Interministeriale dei Prezzi of 22. and totalling Lit 311 400. 6. 1968 as subsequently amended); (c) it forms part of a system of aids for In its defence the defendant company which specific provisions have contested the application, contending been laid down in Community law that it could not exempt itself from (see Article 34 of Regulation No payment of the amounts in question, 1009/67/EEC; Article 38 of which were provided for under Italian Regulation (EEC) No 3330/74 and law, and that the Community institutions Article 4 of Regulation (EEC) No could alone give a ruling on the legality 1487/76); of these charges. (d) it has never been authorized by any Community institution and it On 11 July 1976 the Federazione has never been imposed in Nazionale per il Commercio Alimentare conformity with the procedure of — Sindacato Nazionale dello Zucchero Article 41 of Regulation No (the National Food Trade Federation — 1009/67/EEC or with that of National Sugar Association) ('Feder­ Article 36 of Regulation (EEC) No grossisti') applied to intervene. 3330/74? 2. If the reply to Question 1 is in the By Order of 16 July 1976 the Pretore di affirmative, must it be considered that Abbiategrasso allowed the intervention of the prohibition against imposing the the Federgrossisti and decided to stay the abovementioned pecuniary charge proceedings and to refer to the Court of operates from the entry into force of Justice of the European Communities Regulation No 1009/67/EEC or from under Article 177 of the EEC Treaty for some other date? a preliminary ruling on the following 3. From the date when the prohibition questions: entered into force, have individual

traders who have imported sugar (or Articles 1 to 8 and 38 to 43 of the the products referred to in the said Treaty of Rome, be interpreted in EEC regulations) from other member such a way that the imposition on countries of the common market an both home-produced and imported individual right not to pay the sugar of a pecuniary charge according pecuniary charge referred to in to the following criteria must be Question 1, and have they accordingly regarded as improper and prohibited: the right to claim reimbursement (a) it is imposed by a measure of the where payment has been made?

munity'? exemption from the charge; (e) it is imposed when sugar passes from one sugar undertaking to (II) Concerning the special surcharge another, in the absence of the grounds mentioned in Article 33 5. Are there also infringements of the of Regulation (EEC) No 3330/74 Community rules referred to in the which justify recourse to the questions set out above if the measures to be adopted according pecuniary charge imposed at the same to the procedure laid down in time both upon home-produced sugar Article 36 of the same regulation; and upon imported sugar is partially (f) it is imposed under the equivocal collected, in so far as sugar imported title of 'sovrapprezzo straordi from the other member countries of nario' (special surcharge), whilst the EEC is concerned, not when it substantially it deals with the same crosses the frontier but rather when levy termed 'tassa di sfioramento the sugar is already in stock with the sullo zucchero' (skimming-off tax importers or the (commercial and on sugar) which in the past has industrial) undertakings which have always been applied directly bought the imported sugar from the through Community measures (see

992­

CUCCHI v AVEZ

from the latter? referred to the Court for a preliminary 8. Is it possible on the basis of the ruling is contained in the Court's Community provisions referred to in case-law, in particular the judgments of Question 6 and in the light of the 19 June 1973 and of 18 June 1975 in general principles of law by which the Cases 77/72 Capolongo v Maya and Community rules and case-law must 94/74 IGAV v ENCC ([1973] ECR 611 be guided, to consider it lawful that and [1975] ECR 699 respectively). one category of citizens is rendered liable, with retroactive effect, to a In the latter judgment the Court declared pecuniary charge the revenue from that financial charges within a general which is applied for the benefit of system of internal taxation applying other categories of citizens whose systematically to domestic and imported economic and commercial interests products according to the same criteria conflict with theirs? are not to be considered as charges having equivalent effect and that:

In the first the Government of the Italian Republic, place, the normal surcharge does not represented by its Ambassador Adolfo arise under any general system of Maresca, and assisted by Ivo Maria internal taxation but is applied Braguglia, Deputy State Advocate- exclusively to a clearly specified product. General; and by the Commission of the A levy of this kind could easily constitute European Communities, represented by the instrument of a protectionist policy its Legal Adviser, Cesare Maestripieri, which would not fail to have serious acting as Agent. repercussions.

The connexion is, for the most part, clear As regards the Court's reference to a and express and this likewise applies in 'fiscal device' which would only 'appear' cases where the revenue from the levy is to be a system of internal taxation (see paid not only to sugar producers but to ground of judgment no 16 of the beet growers as well. This form of judgment in the IGAV case), the subsidy provides funds for the benefit of plaintiff and the intervener in the main the national sugar industry. The effect of action refer to the arguments put forward the subsidy on the agricultural product is during the oral proceedings in the IGAV case and the conclusions therein of the to encourage production in Italy, thus Advocate-General. The use of the word ensuring for the sugar industry supplies which can be relied upon and are not 'appear' raises the problem of evasion of burdened with high transport costs. the law and illegal purposes. In the Moreover, by keeping the price of the present case it would be of value to agricultural product within limits, the ascertain whether, apart from the subsidy reduces the manufacturing costs apparent legality conferred on the of sugar undertakings and ultimately the surcharge by the CIP regulations, it price of the domestic product. This contravenes absolute rules of Community connexion is equally important in law: law, inter alia, the prohibition of the Community machinery provided for measures which are protectionist or are under the regulations on sugar applies in restraint of trade and competition within the common market. both at the stage of the finished product and at the stage of the agricultural product, the two products being thus One immediate ground of incompati­ regarded as essentially one and the same. bility involves the constitutional aspect of the agricultural markets and the division of powers between the institutions and Similar conclusions are justified even as the Member States. The imposition of a regards the allocation of the surcharge to surcharge, to whatever purpose the cover the Fund's working costs, since the proceeds are put, is one of the establishment of the Fund and its 'manipulations' of economic policy working constitute an essential which can be stopped only by the instrument to ensure that income from Community institutions because, in the charge reaches the producers in creating a common organization of the receipt of subsidies. markets, the Member States surrendered their jurisdiction in this field. Moreover, Again, it must be pointed out that the the imposition of a surcharge must of fact that a levy which possesses the necessity form part of a system of characteristics described in the imposed prices, which makes it judgments quoted above constitutes a incompatible with the fundamental 'charge having equivalent effect' is principles of the common organization wholly unaffected by the compatibility or of the markets. otherwise with Community law of 'activities which … benefit' the domestic Other grounds of incompatibility arise in product. connexion with the rules on aids. There

is in fact a difference in wording between Fith, sixth, seventh and eighth questions the aids authorized by the Community regulations on the market in sugar and Although it has a different name, the those provided for under Article 6 of special surcharge possesses substantially Order No 1195 of the CIP. the same features as the tassa di sfioramento on increased value which Furthermore, Regulation (EEC) No was the subject of Case 23/75 Rey Soda v 3330/74 expressly made the market in Cassa Conguaglio Zucchero (Judgment sugar subject to the provisions of Articles of the Court of 30 October 1975, [1975] 92 to 94 of the EEC Treaty (see Article ECR 1279). In that case the Court ruled 41), which make it possible for the that it was in principle for the Community institutions to review the Commission to adopt 'a measure of aids granted by the Member States and to equalization in order to prevent the prohibit those which are incompatible market from being disturbed as a result with the common market. Article 38 of of an alteration in price level on the Regulation (EEC) No 3330/74 on aids to change-over from one sugar year to the next'. the Italian sugar industry cannot be construed as being covered by the words 'save as otherwise provided' in Article 41 This finding refers to administrative and as excluding the application of measures expressly provided to deal with Articles 92 to 94 of the Treaty; developments connected with the accordingly, the rules governing the change-over from one sugar year to the powers of the Community institutions in next. The Community institutions which this matter apply equally to Italian aids. control the market are, a fortiori, empowered to adopt administrative measures which may prove to be equally Finally, the introduction of the surcharge necessary in the course of a single sugar is a serious infringement of the year (see, for example, the tenth recital in prohibition against discrimination under the preamble to Regulation (EEC) No the second subparagraph of Article 40 (3) 3330/74). This assignment of power to of the EEC Treaty. Regardless of the the Community institutions means that effect of applying the surcharge on it is not within the competence of competition between Community Member States to adopt a domestic producers in this sector, there is serious measure subjecting the stocks of a single discrimination against Italian importers specific product to the payment of a and consumers compared with other pecuniary charge on a given date, sugar importers and consumers in the whatever the measure may be called in Community. national law.

to the tassa di sfioramento since it with respect for acquired rights, which is exempts from the surcharge up to two- a principle of the rule of law on which twelfths of the stock in hand held by the Court has always laid special consumer undertakings. The special emphasis. As for the principle of good surcharge was also imposed by the Sugar faith it can be inferred from the Equalization Fund in order to achieve its judgment of 4 July 1973 in Case 1/73, objectives and, furthermore, it expressly Westzucker v Einfuhr- und Vorratsstelle pursued the objective of equalization. Zucker ([1973] ECR 723) that a trader is Finally, the special surcharge is clearly entitled not to suffer injury through a revealed as a device for regulating the measure adopted contrary to all market by the fact that the decision of reasonable expectations.

In the present described in connexion with the normal case there can be no doubt that the surcharge. In particular, as regards the rights of traders in the sector in question prohibition of discrimination it is open are worthy of protection: after being to question whether this prohibition is exempted from a Community levy on observed by a measure which exempts sugar stocks, those traders subsequently the consumer undertakings from the found themselves affected by an Italian pecuniary charge by referring to stock measure which, in addition, had 'on hand' without at the same time retroactive effect. exempting stocks held by the large importing undertakings.

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CUCCHI v AVEZ

preliminary ruling to be answered wholly subsidies in question are lawful and in the negative. The surcharge is a fiscal authorized by the Community. measure imposed by the State in order to offset increases in the cost of production As regards the characteristic features of of home-produced sugar to meet the 'pecuniary charge' described by the industrial and structural difficulties court making the reference, the Italian recognized by the Community and Government submits the following within the limits authorized by it. It observations: affects home-produced sugar and imported sugar in the same way, to the As to (b) same extent and under the same

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JUDGMENT OF 25. 5. 1977 — CASE 77/76

which it put forward in Case 33/76, revenue from the surcharge. As it is REWE Zentralfinanz eG and REWE- possible for forecasts on these two Zentral AG v Landwirtschaftskammer subjects to prove incorrect the surcharge (judgment of the Court of 16. 12. 1976, may result in a net surplus or deficit [1976] ECR 1989). compared with requirements.

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CUCCHI v AVEZ

When they pay the special surcharge they are merely making a Again, the special surcharge does not belated payment of what they should constitute a kind of una tantum charge have paid in respect of purchases made based on a special criterion. Because of during the previous sugar year if the its function it can be imposed every time ordinary surcharge had, from the that there is a deficit to be met from the beginning, been determined on a scale previous marketing year. This means that which made it possible for the cost of there is also no question of any production subsidies to be met in full. theoretical retroactive effect of the special surcharge because all it does is, ex post The Commission also refers to the facto, to compensate the consumers for decisions of the Court in Cases 77/72 what they would have had to pay as and 94/74, cited above. ordinary surcharge if this had been It is clear from the latter of these correctly fixed from the beginning. judgments that the definition of a charge Again, it must be pointed out that the which prima facie appears to be an sugar stocks benefited from the increase internal charge as a charge having an in national prices which took place on 2 effect equivalent to a customs duty July despite the fact that, in view of the requires a clearly established connexion between, on the one hand, the collection forecasting error described above, those holding them paid for the sugar at a of a fiscal duty levied without distinction price which was lower than the correct on the products in question and, on the

to another. Accordingly, the references to 17.01 of the Common Customs Tariff) Articles 33 and 36 of Regulation (EEC) whereas the products benefiting from the No 3330/74 have no relevance and for aids are sugar and sugar-beet (heading the same reason the special surcharge 12.04). cannot be the equivalent of the tassa di sfioramento imposed on sugar. Moreover, the proceeds of the charge are not used exclusively for the benefit of On the seventh question the Italian sugar undertakings; once the operating Government refers to its comments costs of the Fund have been met, the under Questions 2 and 3. The funds accumulated by it are handed over characteristic features of the special to beet producers and sugar producers.

The objection can certainly be raised that The reference to Article 40 (3) is the aid for beet has of necessity an effect irrelevant since the principle of on the price of sugar but if the principle non-discrimination applies to measures that the products must be identified with adopted as part of the common each other is abandoned this will open organization of the markets by the the door to endless argument. A Community or by a Member State. comparison between the levy imposed on Measures taken by the Member States the domestic product and the aid which outside the common organization must it receives requires, in each case, an be appraised on the basis of the specific appraisal of the advantages enjoyed by all rules in the Treaty which likewise the products concerned in the prohibit discrimination. manufacture of the product in question. Before these advantages can be assessed, Fifth and sixth questions account must also be taken of any levies which may be imposed on these The characteristic features of the special

Treaty. Italy on 1 July 1976. The special surcharge includes the increase in the So far as the present case is concerned, price of sugar caused by the increase in according to a rough estimate for the the surcharge and the increase arising 1975/1976 marketing year, the levy of Lit from application of the lira's new rate of 75 milliard on domestic production was exchange. On the other hand the in part offset by subsidies amounting to increase caused by the rise in the 28 milliard paid to the sugar manu intervention price is not affected.

CUCCHI v AVEZ

July (new prices). The measure established by the case-law of the Court authorized by the Commission, pursuant to the effect that, in sectors covered by a to the said Article 33, must have been common organization of the markets, the known to traders and thus adopted in Member States may only lay down time, namely before 1 July. Accordingly certain detailed rules for the application the special surcharge fixed on 2 July of the Community regulations, which could have had no effect on the position cannot be subject to addition or before 1 July. subtraction.

JUDGMENT OF 25. 5. 1977 — CASE 77/76

2. The provisions necessary to prevent amounts provided for under national the market in sugar from being measures which are inconsistent with disturbed as a result of a change in it. the level of Community prices, expressed in national currency during the change-over from one sugar year III — Oral procedure to another, including equalization The plaintiff and the intervener in the measures may, by virtue of the main action, the Government of the provisions of Article 33 of Regulation Italian Republic and the Commission of (EEC) No 3330/74, be adopted by the the European Communities submitted Commission alone in accordance with oral observations at the hearing on 22 the procedure laid down in that March 1977. regulation. This provision confers on individuals the right, which national The Advocate-General delivered his opin­ courts must protect, not to pay the ion at the hearing on 3 May 1977.

Decision

1 By order of 16 July 1976, received at the Court Registry on 28 July 1976, the Pretore di Abbiategrasso referred to the Court a number of questions concerning the interpretation of Articles 1 to 8, 13 (2) and 38 to 43 of the EEC Treaty and of Council Regulations No 1009/67/EEC of 18 December 1967 and No 3330/74 of 19 December 1974 on the common organization of the market in sugar (OJ, English Special Edition 1967, p. 304, and OJ L 359 of 31. 12. 1974, p. 1).

2 These questions are submitted in connexion with proceedings between two Italian undertakings.

3 Fratelli Cucchi, the plaintiff in the main action, instructed Avez S.p.A., Milan, the defendant in the main action, to import into Italy from the Federal Republic of Germany 10 000 kg of sugar, of which 4 000 were delivered on 28 June 1976, and the remainder were to be delivered during the following July. Avez subsequently asked Cucchi, in addition to the price for the goods, for repayment of the two charges called the surcharge (sovrapprezzo) and the special surcharge (sovrapprezzo straordinario) in accordance with measures of the Comitato Interministeriale dei Prezzi (Interdepartmental Committee on Prices, hereinafter referred to as 'the CIP').

In its observations the Government of the Italian Republic contends that the grant of these aids was expressly authorized by Article 38 of Regulation (EEC) No 3330/74 for the 1975/1976 to 1979/1980 sugar marketing years.

8 It considers that this authorization empowers it to find the funds necessary for financing by means which appear to it to be the fairest and most appropriate within the limits of Community law.

9 Authorization under Article 38 of Regulation (EEC) No 3330/74 to grant the aids provided for therein cannot be taken to mean that any method of financing these aids, whatever its character or conditions, is compatible with Community law.

In the financing of the aid granted, the national authorities are in particular subject not only to the obligations arising under the Treaty but also to those arising under the other provisions of Regulation (EEC) No 3330/74.

JUDGMENT OF 25. 5. 1977 — CASE 77/76

A method of financing which provides for derogation from the other provisions must arise from an express provision or, at least, a form of words which make clear the Council's intentions in this respect.

13 As was ruled in the judgments of 19 June 1973 (Case 77/72, Capolongo [1973] ECR 611) and of 18 June 1975 (Case 94/74, IGAV[1975] ECR 699), the prohibitions contained in Articles 9 and 13 are aimed at any tax demanded at the time or by reason of importation and which, being imposed

CUCCHI v AVEZ

specifically on imported products to the exclusion of the similar domestic product, results in the same restrictive consequences on the free movement of goods as a customs duty by altering the cost price of that product.

On the other hand, the fact that a charge is applied without distinction to domestic products as well as to products from other Member States gives rise to the question whether the taxation at issue falls within the prohibition in Articles 9 and 13 or the rule against discrimination in matters of internal taxation laid down by Article 95.

14 One and the same scheme of taxation cannot, under the system of the Treaty, belong simultaneously to both the categories mentioned, having regard to the fact that the charges referred to in Articles 9 and 13 must simply be abolished whilst, for the purpose of applying internal taxation, Article 95 provides solely for the elimination of any form of discrimination, direct or indirect, in the treatment of the domestic products of a Member State and of products originating in other Member States.

15 Financial charges within a general system of internal taxation applying systematically to domestic and imported products according to the same criteria are not to be considered as charges having equivalent effect.

according to the information on the file, it appears that the revenue produced by the imposition of the contested charge benefits beet-producers as well as the processing industry in such a way that sugar, as distinct from beet, only receives less than half of the funds collected.

19 It follows from the foregoing that the answer to the first question must be that a duty falling within a general system of internal taxation applying to domestic products as well as to imported products according to the same criteria can constitute a charge having an effect equivalent to a customs duty on imports only if it has the sole purpose of financing activities for the specific advantage of the taxed domestic product; if the taxed product and the domestic product benefiting from it are the same; and if the charges imposed on the domestic product are made good in full.

20 In these circumstances the second and third questions, which depend on an affirmative answer to the first, no longer arise.

21 The fourth question is whether the application of a pecuniary charge such as that referred to in the first question constitutes an infringement of the prohibition of discrimination between producers or consumers laid down in the second subparagraph of Article 40 (3) of the Treaty.

In this connexion it is sufficient to note that the prohibition of any discrimination between the products of other Member States and similar domestic products, laid down in Article 95 of the Treaty, enables any infringement of fundamental Community principles in the matter referred to by the national court to be more specifically identified.

25 The fifth question is whether the issues raised by the first four questions arise also when a pecuniary charge, applied simultaneously on home-produced sugar and imported sugar, is imposed, in the case of imported sugar, not when it crosses the frontier but subsequently, when the sugar has been placed in store.

26 This question is clearly concerned with the proportion of the special surcharge which corresponds to the increase in the rate of the ordinary surcharge for the new marketing year.

This proposition of the special surcharge is of the same nature as the ordinary surcharge to which it is added, so that the answer to be given to the first question also suffices as an answer to the fifth question.

27 The sixth question is whether a pecuniary charge imposed during the change-over from one marketing year to another by a measure of the national government without any prior authorization from the Community institutions on sugar held at a given date by undertakings is compatible with Community rules, in particular with Regulation (EEC) No 3330/74.

This question is concerned with the proportion of the special surcharge under which payment is demanded from certain holders of sugar stocks of an amount corresponding to the increase in the price of sugar arising from the

JUDGMENT OF 25. 5. 1977 — CASE 77/76

32 In consequence, the contention that Article 33 of Regulation (EEC) No 3330/74 covers only cases of impending disturbance of the market and,

CUCCHI v AVEZ

consequently, leaves the Member States free to adopt special intervention measures for other reasons, such as an increase in the level of prices, cannot therefore be upheld.

33 Such an interpretation of Article 33, reserving to the Community authorities the adoption of special measures, such as the imposition of a charge on stocks during the change-over from one marketing year to another, only to the extent to which those measures were designed to prevent disturbances on the market but which left the Member States free to enact, for different reasons, measures the nature and detailed implementation of which were virtually identical, would make the provision meaningless.

34 Moreover, the contention that the measure before the national court correctly avoided imposing on sugar stocks the amounts corresponding to the increase in intervention prices for the 1976/1977 marketing year, compared with those in the preceding year, and accordingly did not infringe upon the powers conferred on the Community authorities by Article 33 ignores the fact that this provision is as much concerned with the consequences of an alteration in rates of exchange as with those of an alteration in intervention prices and that, under the common agricultural policy, both are matters within the Community's exclusive powers.

35 The answer to be given must, therefore, be that under Regulation (EEC) No 3330/74 the Community is, in the absence of express derogation, alone competent to adopt specific measures involving intervention in the machinery of price formation, in particular by limiting the effects of an alteration in the level of Community prices, whether as regards intervention prices or the rate of exchange of the national currency in relation to the unit of account.

39 The costs incurred by the Government of the Italian Republic and by the Commission of the European Communities, both of which submitted observations to the Court, are not recoverable.

As these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision as to costs is a matter for that court.

On those grounds.

THE COURT,

in answer to the questions referred to it by the Pretura di Abbiategrasso by order of 16 July 1976 hereby rules:

1. A duty falling within a general system of internal taxation applying to domestic products as. well as to imported products according to the same criteria can constitute a charge having an effect equivalent to a customs duty on imports only if it has the sole purpose of financing activities for the specific advantage of the taxed domestic product, if the taxed product and the domestic product benefiting from it are the same, and if the charges imposed on the domestic product are made good in full.

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE-GENERAL REISCHL DELIVERED ON 3 MAY 1977 1

Mr President, European Communities, Judgment of 16 Members of the Court, December 1975 [1975] ECR 1663 et seq.). My preliminary remarks may therefore Both the references for a preliminary be very brief. ruling (Case 77/76 and Case 105/76), on which I shall give a single opinion Before the entry into force of the because to some extent they raise the common organization of the market in same problems and because they were sugar (Regulation No 1009/67/EEC of dealt with at a single oral hearing, the Council of 18 December 1967, OJ, concern the interpretation of Com­ English Special Edition 1967, p. 304) munity law with regard to Italian prices in the Italian sugar market were legislation concerning the market in officially regulated by the fixing of sugar. The broad outlines of this maximum prices. The level of these legislation are familiar to the Court from prices was above that in other Member other cases, in particular from the States. This was caused by higher well-known sugar case (Joined Cases 40 production costs in Italy owing to to 48, 50, 54 to 56, 111, 113 and 114/73, particular climatic conditions affecting Coöperatieve vereniging 'Suiker Unie' cultivation of sugar-beet and the UA and Others v Commission of the structure of the processing industry. In

1 — Translated from the German.