C-89/76

In Case 89/76

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Robert Caspar Fischer, acting as Agent, with an address for service in Luxembourg at the office of Mario Cervino, Legal Adviser to the Commission, Bâtiment Jean Monnet, Kirchberg, applicant, v

KINGDOM OF THE NETHERLANDS, represented by W. Riphagen, Legal Adviser to the Ministry for Foreign Affairs, acting as Agent, assisted by Adriaan Bos,

1 — Language of the Case: Dutch.

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assistant Legal Adviser, with an address for service in Luxembourg at the Netherlands Embassy, defendant,

Facts and issues

The facts, the course of the procedure, certificate that in the opinion of the the conclusions and the submissions and official carrying out the inspection the arguments of the parties may be consignment which has been examined summarized as follows: fulfils the requirements of the State of destination'.

I — Facts As provided for in Article 7 of this decree, in so far as the inspections are Article 3 (c) of the Netherlands Royal carried out on application by the persons Decree of 24 September 1951 laying or undertakings concerned, a fee is down new rules for the phytosanitary charged by way of compensation for the service (Nederlandse Staatscourant No expenses incurred, in accordance with a 191) provides for the 'inspection of tariff fixed by the Minister for consignments of plants for export for the Agriculture, Fisheries and Food. purpose of determining whether they contain any harmful organisms and for The phytosanitary department's tariff was issuing, after it has been approved, a introduced by a decree of the Minister

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for Agriculture and Fisheries of 23 June English Special Edition 1968 (I), p. 26) 1967, No J. 1287 (Staatscourant No 123) and Article 4 of Regulation (EEC) No as last amended by a decree of 27 June 827/68 of the Council of 28 June 1968 1975, No J. 1474 (Staatscourant No 122). on the common organization of the market in certain products listed in The first paragraph of Article 1 of this Annex II to the Treaty (OJ English decree provides that: Special Edition 1968 (I), p. 209).

plants, bulbs, roots and the like, cut that very serious doubts were being flowers and ornamental foliage (OJ entertained in business circles in the

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Netherlands as to the legality, under II — Written procedure European law, of the obligatory charging of fees for the inspections which are at The written procedure followed its issue in this case and that, having regard normal course.

to the large amounts which were involved, it was a matter of urgency to After hearing the report of the put an end to this legal uncertainty by Judge-Rapporteur and the views of the referring the issue to the Court of Justice Advocate-General the Court decided to for its ruling. Consequently the open the oral procedure without any Netherlands Government requested the preparatory inquiry. Commission to initiate without any further delay the procedure laid down in Article 169 of the Treaty. III — Conclusions of the parties

The Commission, by an application The Commission stresses that the only lodged on 17 September 1976 pursuant problem raised in the present to the second paragraph of Article 169 of proceedings is whether the fee itself, and the Treaty, brought before the Court of not the inspection upon the basis of Justice the alleged failure by the which it is charged, is lawful. The fee Kingdom of the Netherlands to fulfil its should be regarded as a charge having an obligations under the Treaty by charging effect equivalent to a customs duty on fees for phytosanitary inspections of exports which is prohibited under plants and certain products of plant Articles 9, 12, 13 and 16 of the Treaty: it origin exported to the other Member is charged on exported products only; it States of the Community. is not part of a general system of

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are irrelevant. The determining factor in this case is that the fee, which is in That phytosanitary inspections of exports dispute, is only charged on products in the Netherlands constitute a system which are exported or intended for adopted in the public interest is export and not on products for the established first and foremost by the fact domestic market; the fee does not that, as things stand at the moment necessarily have to be levied at the time within the Community in the sphere of when, and the place where, the frontier is phytosanitary regulations, those Member in fact crossed in order to constitute a States which are anxious to maintain the charge having an effect equivalent to a level of their exports find that in practice customs duty. such inspections cannot be dispensed with: importing Member States normally (b) Pecuniary charges imposed on require production of phytosanitary certain goods crossing the frontier are certificates issued by the public not caught by the prohibition of charges authorities of the exporting Member having an effect equivalent to customs State.

has in fact been provided may give rise undertakings in the sector concerned to some consideration corresponding to may derive benefit from State the said service; it did, however, intervention in the public interest is not

respect of the products in question and in the absence of such certificates do (g) There is neither under the Treaty not accept commercially any other nor derived Community law a general equivalent mode of importation. legal principle to the effect that costs incurred by public authorities for the sale (e) The answers to the questions of certain products are borne by those whether Netherlands law provides for a products themselves and are a factor in compulsory phytosanitary inspection on the determination of the cost price. On exports or whether such an inspection is the contrary the prohibition of charges only carried out on the application of the having an effect equivalent to customs exporter has no relevance. duties (on imports or exports) is one of the fundamental principles of the Although in the last resort the Common Market; Community law compulsory phytosanitary inspection of moreover expressly rejects the principle exports is not carried out pursuant to invoked in relation to phytosanitary Netherlands legislative provisions but in inspections in intra-Community trade. order to comply with the requirements of the importing Member States, the levying The Government of the Kingdom of the of the fee which is at issue in these Netherlands takes the view that the proceedings nevertheless contravenes the present case raises a question of Treaty. It does not matter whether the principle, namely whether Community requirements of the importing Member law provisions imposing the prohibition States are solely in the national interests in question run contrary to the levying of

a charge designed to make good the cost Phytosanitary inspections on exports of inspections which are optional, and cannot either be regarded as a measure offer the exporter a guarantee that the aimed at promoting exports: they are a exported product will be accepted in the reaction against another Member State's country of destination in accordance with conditions for importing and are not the rules for public health protection in designed to increase sales outlets. force in that country. The fact that phytosanitary regulations (a) In the light of the case-law of the concerning exports can be made either Court of Justice relating to charges under international conventions or by having an effect equivalent to customs Community provisions is irrelevant: duties, two features of the said fees must these conventions or directives also aim be stressed: they are bound up with the at reducing the serious effects of certain inspections carried out, not on import obstacles to trade or eliminating them but on export; these inspections are by the harmonization of national connected with obstacles to trade regulations; they are not applied solely in originating in the country of destination the public interest. In particular, upon a and justified by the phytosanitary proper construction, Article V of requirements of that country. the International Plant Protection Convention of 1951 simply states that (b) The Commission takes the view, provision is to be made for the possible which is the reverse of its previous issue of certificates, to the extent to attitude, that the difference between which the importing States, which are imports and exports is irrelevant and that parties to the Convention, require them; a phytosanitary inspection on exports is it does not in any way adversely affect so much a matter of public interest that the individual benefit which exporters it cannot be accepted that a service is concerned derive as individuals from the provided for any individual. In doing so operation of the particular system in it overlooks the fact that, owing to the question. nature of the provisions making a phytosanitary inspection necessary, the exporting country is not responsible for (d) The fact that the system of them and exerts no influence on them; phytosanitary inspections on exports is they constitute a basic exogenous fact. also designed to serve the public interest Phytosanitary inspection in exporting by no means prevents undertakings in countries is only applied because of the their individual capacity from taking obstacles to imports which the country of advantage of the specific benefits destination decided to raise and with a resulting from their application. The fact view to restricting the unfavourable that the system of inspections is effects thereof as much as possible. The absolutely necessary in many cases purpose of the inspection of the goods applies in particular to those persons for export is their admission into the who are most directly concerned, namely country of destination in accordance with exporters.

Phytosanitary inspection of exports offers payable in the case of a consignment the exporter who arranges for such an which was inspected on application, inspection of his products a double but which owing to unforeseen advantage, both tangible and real: he can, circumstances was not exported. on importing the goods, comply with the formal requirements to produce a Account must be taken of the overriding certificate of inspection and he is principle of political economy that reasonably confident beforehand that expenses incurred by public authorities when his products are inspected on in relation to certain products must be being imported no defects will be found. borne by the latter and are therefore an element in their cost price. In this (e) It must be stressed that the fees at connexion it is appropriate to point out issue are only charged for inspections of that inspections of exports are justified consignments for export in so far as such by the phytosanitary conditions to which inspections are carried out at the request imports into other countries are made of the persons and undertakings subject and that, having regard to the concerned; neither the phytosanitary tangible gain which they offer exporters, inspection nor the phytosanitary they cannot be treated in the same way certificate issued subsequently is a legal as pecuniary charges on the legality of condition precedent to exportation. which the Court of Justice has already ruled.

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and, in particular, to comply with the prohibition of charges having an effect equivalent to customs duties on exports in Articles 9, 12 and 16 of the Treaty.

2 The Kingdom of the Netherlands charges a fee for phytosanitary inspections on the export to the other Member States and to third countries of plants and certain products of plant origin on the basis of Articles 3 (c) and 7 of the Royal Decree of 24 September 1951 laying down new rules for the phytosanitary service (Nederlandse Staatscourant No 191).

3 The Commission takes the view that the levying of these fees charged only on products intended for export from the Member State in question when they cross the frontier and not on domestic products marketed in that State would amount to levying a charge having an effect equivalent to a customs duty on exports which is prohibited under the provisions of Articles 9, 12 and 16 of the Treaty as interpreted by the case-law of the Court and in particular in its judgment of 14 December 1972 in Case 29/72, S.p.A. Marimex v Italian Finance Administration [1972] II ECR 1309 and in its judgment of 11 October 1973 in Case 39/73, Rewe-Zentralfinanz eGmbH v Direktor der Landwirtschaftskammer Westfalen-Lippe [1973] II ECR 1039.

4 The Netherlands Government submits in its defence that the fees are

intended to cover the costs of the inspections carried out at the time of issue of the phytosanitary certificates provided for by the International Plant Protection Convention, concluded in Rome on 6 December 1951 (United Nations, Treaty Series, 1952, Vol. 150, No 1963).

comply with the International Plant Protection Convention of 6 December 1951 to which all Member States are parties.

9 The purpose of this Convention as stated in Article I thereof is to secure common and effective action to prevent the introduction and spread of pests and diseases of plants and plant products and to adopt appropriate legislative, technical and administrative measures for this purpose, inter alia, by setting up in each State an official plant protection organization.

10 As provided for in Article V of this Convention each contracting government shall make arrangements for the issue of phytosanitary certificates to accord with the plant protection regulations of other contracting governments and in conformity with the provisions of the Convention.

11 The purpose of these certificates in international trade is to encourage the free import of plants into the country of destination by carrying out inspections in the country of origin of the products in question.

12 This Convention therefore performs within its sphere of application a function similar to that of the public health and phytosanitary measures adopted within the Community such as Council Directive No 64/432/EEC of 26 June 1964 (OJ English Special Edition, 1963-1964, p. 164) — which was the subject-matter of the judgment of the Court in Case 46/76, W.J.G. Bauhuis v The Netherlands State [1977] ECR 5 — and Council Directive No 77/93 of 21 December 1976 on protective measures against the introduction into Member States of harmful organisms of plants or plant products (OJ L 26, 1977, p. 20) issued after the Commission lodged its application at the Court.

17 However as it is only the question of principle whether the fees at issue are compatible with Community law and not the question of their amount which has been referred to the Court for a ruling the condition set out in the previous paragraph need not be considered in this case.

18 Although it thus appears that under the rules relating to the free movement of goods within the Community no objection can in principle be raised against charging the fees at issue, the practices adopted in this connexion by the various Member States show that there can be different ways of dealing with the financing of phytosanitary inspections; either the whole or part of the cost thereof is defrayed out of public funds or it is passed on to the trade by charging fees corresponding to the cost of the inspections carried out.

19 It is therefore necessary to stress that the present judgment cannot restrict the freedom of the Community institutions to adopt in future any measures

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which may be necessary for the standardization of the procedure for the financing of the inspections in question and that from the point of view of any such standardization this judgment cannot confer on the Kingdom of the Netherlands the right to maintain its present system.

20 It follows from the foregoing that, subject to this reservation, the application lodged by the Commission against the Kingdom of the Netherlands must be dismissed.

THE COURT

hereby:

1. Dismisses the application;

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2. Orders each party to bear its own costs.

Kutscher Donner Pescatore Mertens de Wilmars Sørensen

Mr President, the present legal uncertainty, the Members of the Court, Netherlands Government requested the Commission, as a matter of urgency, to The origin of the present application press on without delay with a procedure brought by the Commission against the which it initiated on 15 February 1971 Government of the Netherlands for against that government under Article failure to fulfil obligations under the 169. If it was to turn out that charging Treaty is the 'serious doubt' expressed in these fees is in fact incompatible with Netherlands trade circles as to the Articles 12 and 16 of the Treaty then obligatory nature, within the meaning of they have been wrongly paid from 1 Community law, of the fees charged on January 1962 or, at the latest, from the the phytosanitary inspection of plants entry into force of the regulations on the and certain plant products, intended in common organization of the markets in particular for planting or propagation, such of those products as are covered by which have been exported from the these regulations. Netherlands to other Member States and, in addition, to third countries. The fees at issue are levied on the occasion of inspections carried out In a large number of cases a claim has pursuant to the International Plant been made for repayment of the amounts Protection Convention concluded in collected in this way during the last few Rome under the aegis of the United years; sometimes there have even been Nations on 6 December 1951. refusals to make any further payment. The preamble to this Convention refers Having regard to the large sums involved to 'the usefulness of international and in order to bring to an end cooperation in controlling pests and