C-148/77

on the interpretation of Articles 9, 37, 92, 93, 95 and 227 of the EEC Treaty in relation to the application of the German Gesetz Uber das Branntweinmonopol (Law on the spirits monopoly) of 8 April 1922,

THE COURT,

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

Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

consumption. For that purpose it uses proceedings until the Court of Justice various types of alcohol, some of which had given a preliminary ruling on the are imported inter alia from following questions: Guadeloupe, Surinam, Jamaica and 1. Is Anide 227 (2) of the EEC Treaty, Indonesia, then stored in its own under which the general and warehouse. particular provisions of the Treaty In September 1974, Hansen cleared relating to the free movement of through customs into free circulation goods shall apply with regard to the spirits with a declared wine-spirit French overseas departments, to be content of 427 884.3 litres. interpreted as meaning that the said By notice of 11 October 1974, the provisions also include the tax Hauptzollamt (Principal Customs provisions in Pan 3, Title I, Chapter Office) Flensburg required Hansen to 2 of the EEC Treaty, in particular pay DM 6 476 473.50 tax on the spirits, Anide 95, or do the provisions basing its calculations on a quantity of relating to the free movement of 431 764.9 litres of wine-spirit and a rate goods within the meaning of Article of DM 1 500 per hectolitre of wine 227 (2) only include the provisions in Pan 2, Title I?

Law. Since at the material time that 3. Can a reduction of the burden of surcharge was DM 1 210.60 per charges on a proportion of national hectolitre of wine-spirit, under Article production constitute a Sute aid 95 (1) and (2) of the EEC Treaty only which falls under the provisions of that amount, and not the amount of Articles 92 to 94 of the EEC Treaty DM 1 500 per hectolitre of wine-spirit, or by what criteria are Sute aids should be levied on rum imported either within the meaning of Article 92 of from non-member countries or from the the EEC Treaty to be distinguished French overseas departments. from reductions in charges whose By an order of 24 October 1977, the compatibility with the Treaty must be Fourth Senate of the Finanzgericht assessed under the tax provisions in Hamburg decided pursuant to Article Article 95 and possibly also under 177 of the EEC Treaty to stay the die provisions concerning Sute

monopolies of a commercial on 24 February 1978 by the character under Article 37? Government of the Federal Republic of Germany. 4. If the burden of charges on impor­ tation of goods imported from Upon hearing the report of the Judge- Member States or also from the Rapporteur and the views of the territories mentioned in Article 227 Advocate General, the Court decided to (2) of the EEC Treaty must not be in open the oral procedure without any excess of the lowest charge for the preparatory inquiry. same, similar or substitutable home­ However, it requested the Government produced goods, must the concept of of the Federal Republic of Germany, a charge having an effect equivalent the Government of the French Republic to a customs duty used in Article 9 and the Commission of the European of the EEC Treaty be interpreted as Communities to provide written answers also including consumer taxes if to a certain number of questions before taxes on consumption are levied on the opening of the oral procedure. imports from non-member countries These requests were complied with after in excess of those on imports of the extension of the time-limit originally set. same, similar or substitutable goods from Member States or from the territories mentioned in Article 227 II — Written observations sub­ (2) of the EEC Treaty? mitted to the Court 5. If Question 4 is answered in the affir­ mative: H. Hansen jun. & O. C Balle GmbH & Co, the plaintiff in the main action, Must Article 9 of the EEC Treaty in divides its observations into four main conjunction with Regulation (EEC) No 950/68 and Article 189 of the points : EEC Treaty be interpreted as (a) Article 37 (1) and (2) are by nature meaning that after 1 July 1968 the directly applicable; that direct Member States cannot introduce any applicability operates in respect of charges having an effect equivalent imports not only from other Member to a customs duty which would lead Sutes of the Community but also from to a charge on goods imported from non-member countries which is in the countries expressly mentioned in Article 227 (2) of the EEC Treaty, excess of that borne by the same, which include the French overseas similar or substitutable goods from Member States or from the departments. In referring to the general territories mentioned in Article 227 and particular provisions of the Treaty relating to the tree movement of goods, (2) of the EEC Treaty? Article 227 (2) abo refers to the principle of non-discrimination The order of the Finanzgericht enshrined in Article 37; that principle Hamburg was received at the Court applies in the particular form of the Registry on 7 December 1977. prohibition on charges having an effect In accordance with Article 20 of the equivalent to a customs duty, and also Protocol on the Statute of the Court of applies in trade with non-member Justice of the EEC, written observations countries. In the present case, it is also were submitted on 13 February 1978 by necessary to take account of the fan the Commission of the European that the imported goods were put into Communales, on 23 February 1978 by free circulation in the Community, H. Hansen jun. & O C Balle GmbH & within the meaning of Article 10 of the Co., the plaintiff in the main action, and EEC Treaty, and are therefore the

subject-matter of intra-Community In interpreting Article 95, the lowest trade. rate of taxation on a domestic product The German federal spirits monopoly is should be taken for the purpose of a Sute monopoly of a commercial comparing taxation on similar products, even if such disparity arises only in a character within the meaning of Article 37 of the EEC Treaty. That article also minority of cases. The same interpre tation must be adopted for the principle applies to any body entrusted by the of fiscal non-discrmination in Anide Sute with the management of the

follows : creates discrimination against imported products in relation to domestic Article 37 of the EEC Treaty is to be products coming under the monopoly. interpreted as meaning that spirits and The combination in Article 37 of the products based on spirits coming from prohibition on discrimination and the Member States or from the French obligation to adjust Sute monopolies overseas departments mentioned in gives that anide a wider scope even Anide 227 (2) of the Treaty may not be than the second paragraph of Anide made subject upon importation to any 95: it applies to imports or exports monopoly equalization duty (tax on which are not directly the subject- consumption) which is in excess of that matter of the monopoly; a new charge borne by the same, similar or sub constitutes discrimination when it has stitutable home-produced goods at the the effen of imposing heavier burdens lowest rate of charge.

JUDGMENT OF 10. 10. 1978 —CASE 148/77

In the absence of enteria for the calcu­ The fiscal element in the lation of the Monopolausgleich similar Monopolausgleich applying on 1 July to those enabling the Brannt­ 1968, which amounted to DM 1 200 per weinaufschlag and the normal selling hectolitre of wine-spirit, is also pnce to be calculated, the fiscal element applicable to imports of rum from contained in the Monopolausgleich is Guadeloupe, since they are pan of also in the nature of a charge having intra-Community trade for the pur­ equivalent effect Not only does the poses of Article 227 (2). calculation system fail to provide any guarantee that domestic products and (c) The questions concerning the imponed products are charged in the direct applicability and the interpre­ same wav in all cases, but the system tation of Article 95 of the EEC Treaty

HANSEN v HAUPTZOLLAMT FLENSBURG

It is irrelevant that such Article 95 is without question directly cases concern only a small proportion of applicable. The question is whether it domestic production and are based on also comes within the "general and special, allegedly social, reasons. particular provisions . . . relating to the The first and second questions referred free movement of goods" within the to the Court of Justice for a preliminary meaning of Anide 227 (2). In this ruling should be answered in the af connexion, it is striking that the firmative. provisions relating to the free movement of goods, agriculture, the liberalization (d) The provisions concerning aid of of services and the rules on competition Article 92 et seq. of the EEC Treaty must be applied to trade with apply to the main action inasmuch as it Guadeloupe, whereas the tax provisions, concerns prohibited aid. With regard to

jurisdiction. Community and Guadeloupe. Fur thermore, Article 37, which is one of Arodes 92 and 93 on the one hand and the provisions on the free movement of Anide 95 on the other have different goods, contains a prohibition on fiscal objectives. The fan that a national discrimination the scope of which is at measure satisfies the requirements of least as broad as that of Article 95 as Article 95 does not imply that it is

lawful with regard to Articles 92 and word for word to certain titles and 93; this is true a fortiori where measures certain chapter headings in the Treaty, adopted by a Sute are also incompatible it is not possible to bring in titles or with Article 95. Both sets of provisions chapters designated in a different way; are applicable in this case; since the accordingly, the reference to the free question is whether or not the imported movement of goods relates only to Title products are subject to taxation in I of Pan Two of the Treaty and does excess of that imposed directly or not include other tides or chapters, such indirectly on similar domestic products, as the chapter on tax provisions. it is necessary to take account of aid in Moreover, the Council has taken no so far as it is in the nature of a decision pursuant to the second subpara government tax which is introduced and graph of Article 227 (2) to extend the quantified by the public administration. ambit of the first subparagraph thereof Only such taxation as is lawfully And the fact that any application of imposed, directly or indirectly, on other provisions of the Treaty is subject similar domestic products is taken into to a decision by the Council also

However, the Government of the an integral pan of a Sute monopoly of a commercial character. In the context Federal Republic of Germany doubts whether such a solution would be of the spirits monopoly, all the discrimi natory effects deriving from subsidized compatible with the purpose of Articles acceptance prices and from tax 95 and 227 and with the objectives of abatements are already covered by the the Treaty. very extensive prohibitions in Article 37. Article 95 is of fundamental importance However, Articles 92 and 93 may for the achievement of the objectives of become relevant if, instead of monopoly the Treaty, since the prohibition on measures, States lay down "equivalent fiscal discrimination is one of the pre safeguards" within the meaning of conditions of the setting up of the Article 37 (4) which are contrary to the common market, and it is closely provisions on aid. connected as regards its content with the provisions on the free movement of The Government of the Federal Republic goods. The role played by Article 95 in of Germany submits in essence the the Community's external relations is no following observations: less important: by prohibiting taxation which has the effect of distorting (a) The chapter "Tax Provisions" competition, it encourages the does not appear among the sections of progressive development of trade; based the EEC Treaty which are to apply to on Article III (2) of the General the French overseas departments under Agreement on Tariffs

HANSEN v* HAUPTZOLLAMT FLENSBURG

domestic manufacture. That paragraph products; nevertheless, this would be covers any activity connected with the the case if, where domestic products are existence of a Sute monopoly, and subject to taxation at different rates, all applies inter alia to taxation; on this imported products were in every case point it repeats the prohibition laid subject to the lowest rate of taxation. down in Article 95 on any fiscal discrimi The principle of fiscal equality means nation in the treatment of imported merely that imponed products must be goods which are subject to the

Branntweinmonopolgesetz, it is provision: the obligation to adjust Sute monopolies would be incomplete if submitted that the manner of imposing discrimination of a fiscal nature could national taxation may be said to comply continue for certain products. with the principle of fiscal equality in so far as imponed products can enjoy the — The prohibition on discrimination same advantages. laid down in Article 37 (1) requires that Finally, the obligation to apply the the tax burden on imported goods lowest rate of taxation to imported should be no heavier than that on products could lead to the abandonment

second paragraph of Article 95. The second part of the third question However as regards the relationship does not call for an answer; it was between the same or similar products on clearly asked only in the event of the the one hand and merely substitutable first part being answered in the products on the other, it follows from negative. In any case, the rules laid the structure and content of Article 95 down in Article 79 (2) of the that the second paragraph of that article Branntweinmonopolgesetz are legal. is subsidiary to the first: in so far as there is a domestic product similar to The Commission of the European the imported product, comparison of Communities submits observations only the tax burden on each of them must be on the first two questions: restricted to those products. To set the tax burden at the lower rate which (a) The general and particular might apply to substitutable products provisions of the EEC Treaty relating to could well put the similar domestic the free movement of goods, declared product at a disadvantage. applicable to the French overseas departments by Article 227 (2), are Otherwise, the principle of fiscal grouped under Title I of Part Two of equality applies to substitutable products the Treaty (Articles 9 to 37). Outer in the same way as to the same or sections of the Treaty also concern or similar products for the purposes of the could also concern the movement of first paragraph of Article 95, which goods; it necessarily follows from the means that imported products must not act that the tax provisions are not be treated better than domestic among those expressly cited by Article products. 227 (2) as being applicable that the tax The second question should be provisions, in particular Article 95, are answered as follows: not applicable to the French overseas Article 37 of the EEC Treaty is to be departments. interpreted as meaning that goods from Moreover, no decision has yet been Member States or from the French taken in the field of Article 95, even

though the second subparagraph of rights are the essence of a monopoly. Article 227 (2) empowers the Council, The abolition of the exclusive rights put acting on a proposal from the an end to the existence of monopolies Commission, to determine the as such. Therefore Article 37 (1) is no conditions under which the other longer applicable, except in order to provisions of the Treaty are to apply. seek the elimination of exclusive rights Therefore the answer to the first to import, export or market goods.

to the duties, quantitative restrictions, charges Federal of Germany, the Republic and measures having equivalent effect amount of alcohol produced for human and by the prohibition on fiscal discrimi consumption which benefited from nation. As from 31 December 1969, Article 79 (2) of the Branntwein State monopolies of a commercial monopolgesetz in the financial year character should have been adjusted so 1973/1974 represented 4.84 % of the as to remove any exclusive right to total volume produced. import from other Member States. Since Under the first subparagraph of Article the end of the transitional period, the 79 (2), the privilege provided for in same principle has applied as regards Article 79 (2) concerns Abfindungsbren exclusive rights to export from Member nereien (distilleries for which States and to market products within production is estimated at a standard Member Sutes, since such exclusive level for tax purposes) (approximately

30 000 undertakings), Stoffbesitzer having an effect equivalent to a customs (owners of the raw materials used to duty. produce spirits) (approximately200 000 As regards the main action, the criteria undertakings), Verschlußkleinbren­ laid down in the case-law of the Court nereien (small "bonded" distilleries) (46 of Justice lead, by way of reasoning a undertakings) and Obstgemeinschafts­ contrario, to the conclusion that the brennereien (collective fruit farm taxation in the Federal Republic of distilleries) (11 undertakings comprising Germany of rum imported from approximately 5 000 members); under Guadeloupe is a charge having an effect the second subparagraph of Article 79 equivalent to a customs duty within the (2) the tax privilege is also granted to meaning of Article 12 of the Treaty. distilleries with an annual production not exceeding 300 hectolitres of wine- (b) Article 227 (2) of the EEC Treaty spirit. expressly provided for the Treaty to Not counting production of this latter apply to the French overseas kind, the proportion of production departments, which are an integral pan which enjoyed the reduced rate of of the French Republic; the intention Branntweinaufschlag (spirits surcharge) was that this application would take was 2.09% of the total production in place in two stages, certain provisions of the financial year 1973/1974. Despite the Treaty being applicable immediately the privilege which it grants, the second (those appearing in the first subpara­ subparagraph of Article 79 (2) of the graph of Article 227 (2)), and others Branntweinmonopolgesetz — which being applicable only after a transitional moreover has been repealed as from 18 period not exceeding two years and March 1976 — does not result in a subject to any possible adjustments charge to tax of less than DM 1 500 per (other provisions of the Treaty referred hectolitre, so that such production to in the second subparagraph of Article should not be taken into account for the 227 (2)). That transitional period is purpose of any comparison with total over; even though the Council has production. power to adopt, where necessary, any On the interpretation of Article 227 (2) special provisions for the overseas of the EEC Treaty, the Government of departments which may be required to the French Republic considers it appro­ allow for their special nature, which is priate to make certain comments acknowledged in the Treaty, those concerning the concept of free departments are an integral part of the movement of goods and the application Community and consequently all the of the provisions of the Treaty to the provisions of the Treaty apply to them French overseas departments. automatically.

purpose of extending provisions of subtle than the wording of the question Community law to the French overseas would indicate. The second paragraph departments is not yet completed. Thus, of Article 95 does not mention "sub the Commission's proposal concerning a stitutable home-produced goods"; the Council regulation on the common criterion adopted is the capacity "to organization of the market in ethyl afford indirect protection to other alcohol provides that the Council may, products". It is not a question merely of on a proposal from the Commission, comparing the tax charge imposed on adopt measures intended to maintain the imported product with that borne by the level of employment among sugar such home-produced goods as may be cane producers in the French overseas "substitutable"; the second paragraph of departments and to assure them of an Article 95 imposes an obligation to adequate income; the extension of examine the economic effects of internal further provisions of the Treaty and of taxation: the prohibition which it lays secondary Community law to the down applies only if those effects are of French overseas departments is probable such a nature as to afford indirect and should be examined in detail, in protection to "other" products. particular where it is likely to involve Therefore it is incumbent upon the additional burdens on the Community national court to assess whether any differences between the tax burdens

A imports of rum into metropolitan Member Sute may apply to an France benefit from certain reductions imported product a system of taxation different from the one to which the in the normal rate of tax on similar domestic product is subject, consumption; the production tax on provided that the charge to tax on the spirits is occasionally applied at reduced imported product remains at all times rates in the overseas departments. the same as or lower than the charge As to whether it follows from Article 95 applicable to the similar domestic of the EEC Treaty that goods from product; the first paragraph of Article Member States or from the French 95 does not restrict the freedom of each overseas departments may not be made Member Sute to establish the system of subiect on importation to taxes on taxation which it considers the most consumption which are in excess of suitable in relation to each product.

JUDGMENT OF 10. 10. 1978 — CASE 148/77

However, that tax system within its territory. Although prohibition is not decisive in the present that system provides for different levels case: the principle that the provisions of of taxation, it applies to all producers; Article 9 et seq. and those of Article 95 thus there is no question of preferential cannot be applied simultaneously to one treatment restricted to certain under and the same situation also applies in takings. This is not an aid within the relation to non-member countries. meaning of Article 92; as a general

or the intended use. In such a case there Trade (GATT), and Surinam applies the is treatment >"favouring certain under provisions of GATT de facto. Article III takings or the production of certain (2) of GATT contains provisions goods". any tax abatements resulting broadly corresponding to Article 95. rom a tax system with different rates However, the questions asked by the based on such criteria must be assessed Finanzgericht Hamburg confine solely according to Article 92 et seq. themselves to the interpretation of It is open to a Member Sute to Article 9 of the EEC Treaty, and

HANSEN v HAUPTZOLLAMT FLENSBURG

on the interpretation of the provisions represented by Martin Seidel, Ministe­ of GATT. For this reason alone, rialrat at the Federal Ministry for consideration of the question asked is Economic Affairs, assisted by Egon superfluous; furthermore, Article 177 Scherping, Ministerialrat at the Federal provides for the interpretation of Ministry of Finance, and the Community law alone. Commission of the European Communities, represented by its Legal IV — Oral procedure Adviser, Rolf Wägenbaur, presented oral argument and answered questions H. Hansen jun. & O. C. Balle GmbH & asked by the Court at the hearing on Co., the plaintiff in the main action, 6 June 1978. represented by Dietrich Ehle, Advocate of Cologne, the Government of the The Advocate General delivered his Federal Republic of Germany, opinion at the hearing on 4 July 1978.

Decision

1 By an order of 24 October 1977 which was received at the Court on 7 December 1977, the Finanzgericht (Finance Court) Hamburg referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty five questions on the interpretation of Articles 9, 37, 92 to 94, 95 and 227 (2) of the EEC Treaty in relation to the system of taxation applicable to certain imponed spirits.

2 It appears from the case file that in 1974 the plaintiff in the main action marketed spirits of various origins, either unprocessed or as coupages made from both home-produced spirits and products from Guadeloupe, Surinam, Jamaica and Indonesia.

3 A dispute arose between the plaintiff and the tax administration concerning the rate of taxation applicable to the various spirits: the administration assessed them at the ordinary rate, whereas the plaintiff claims that the imported spirits should be assessed at the minimum rate of tax which under Article 79 (2) of the Branntweinmonopolgesetz (Law on the spirits monopoly) is restricted by German law to certain types of products, in particular spirits made from fruit, and to certain classes of distilleries such as Abfindungsbrennereien (distilleries for which production is estimated at a standard level for tax purposes), Verschlußkleinbrennereien (small "bonded" distilleries) and Obstgemeinschaftsbrennereien (collective fruit farm distilleries).

4. If the burden of charges on importation of goods imported from Member States or also from the territories mentioned in Article 227 (2) of the EEC Treaty must not be in excess of the lowest charge for the same, similar or substitutable home-produced goods, must the concept of a charge having an effect equivalent to a customs duty used in Article 9 of the EEC Treaty be interpreted as also including consumer taxes if taxes on consumption are levied on imports from non-member countries in excess of those on imports of the same, similar or substitutable* goods from Member States or from the territories mentioned in Article 227 (2) of the EEC Treaty?

HANSEN v HAUPTZOLLAMT FLENSBURG

5. If Question 4 is answered in the affirmative: Must Article 9 of the EEC Treaty in conjunction with Regulation (EEC) No 950/68 and Article 189 of the EEC Treaty be interpreted as meaning that after 1 July 1968 the Member States cannot introduce any charges having an effect equivalent to a customs duty which would lead to a charge on goods imported from non-member countries which is in excess of that borne by the same, similar or substitutable goods from Member States or from the territories mentioned in Article 227 (2) of the EEC Treaty?

Question 1 (application of the tax provisions of the Treaty to the French overseas departments)

5 Since some of the spirits in question were imported from Guadeloupe, a French overseas department, the Finanzgericht asks whether the tax provisions of the Treaty, in particular the rule on non-discrimination laid down in Article 95, apply to those products.

The Government of the Federal Republic of Germany did not adopt any position on this question of principle, but expressed the view that in any case Article 95 is applicable as being the necessary complement to the provisions on the elimination of customs duties and charges having equivalent effect.

8 Article 227 (1) provides that the Treaty shall apply to the "French Republic" in its entirety.

The special position of the French overseas departments is dealt with in the following terms by Article 227 (2):

"With regard to ... the French overseas departments, the general and particular provisions of this Treaty relating to:

— the free movement of goods; — agriculture, save for Article 40 (4); — the liberalization of services;

— the rules on competition;

HANSEN v HAUPTZOLLAMT FLENSBURG

The question raised by the national court is to be answered in the light of these factual and legal considerations.

10 It follows from Article 227 (1) that the status of the French overseas departments within the Community is primarily defined by reference to the French constitution under which, as the French Government has stated, the overseas departments are an integral part of the Republic. However, in order to make due allowance for the special geographic, economic and social situation of those departments, Article 227 (2) made provision for the Treaty to be applied by stages, and in addition it made available the widest powers for the adoption of special provisions commensurate to the specific requirements of those pans of the French territories.

11 For that purpose, Article 227 precisely stated certain chapters and articles which were to apply as soon as the Treaty entered into force, while at the same time reserving a period of two years within which the Council could determine special conditions under which other groups of provisions were to apply. Therefore after the expiry of that period, the provisions of the Treaty and of secondary law must apply automatically to the French overseas departments inasmuch as they are an integral part of the French Republic, it being understood, however, that it always remains possible subsequently to adopt specific measures in order to meet the needs of those territories. It follows from these considerations that Article 95 applies to the tax treatment of products coming from the French overseas departments.

It appears from the same study that such arrangements can exist independently of any connexion with a commercial monopoly, within the framework of legislation of a purely fiscal character.

Accordingly, it appears preferable to examine the problem raised by the national court primarily from the point of view of the rule on taxation laid down in Article 95, because it is of a general nature, and not from the point of view of Article 37, which is specific to arrangements for Sute monopolies.

This approach is further justified by the fact that Article 37 is based on the same principle as Article 95, that is the elimination of all discrimination in trade between Member Sutes.

It also appears preferable to consider the question raised by the national court from the point of view of Article 95 rather than in the light of the provisions on aid contained in Articles 92 to 94, since the latter also rest on the same basic idea as Article 95, namely the elimination of Sute interventions — including tax abatements — which might have the effect of distorting the normal conditions of trade between Member States.

15 From the point of view of Article 95, the questions asked by the Finanz gericht are essentially intended to ascertain whether and, if appropriate, in what circumstances imported spirits may enjoy preferential treatment reserved by national tax legislation to certain types of products or certain classes of producers.

16 At the present suge of its development and in the absence of any unification or harmonization of the relevant provisions, Community law does not prohibit Member States from granting tax advantages, in the form of exemption from or reduction of duties, to certain types of spirits or to certain classes of producers.

19 With regard to these difficulties of comparison, it must be emphasized that the first paragraph of Article 95 refers to both "direct" and "indirect" discrimination, and that the application of that provision is based not on a stria requirement that the products should be identical but on their "similarity".

Furthermore, the second paragraph of Article 95 prohibits any system of internal taxation which is "of such a nature as to afford indirect protection to other products".

It follows that the special advantages provided by national legislation for certain types of spirits or certain classes of producers could be claimed for imponed Community spirits wherever the criteria underlying the first and second paragraphs of Article 95 are satisfied.

JUDGMENT OF 10. 10. 1978 — CASE 148/79

20 Therefore the answer to Questions 2 and 3 should be that where national tax legislation favours certain classes of producers or the production of certain types of spirits by means of tax exemptions or the grant of reduced rates of taxation, even if such advantages benefit only a small proportion of domestic production or are granted for special social reasons, those advantages mun be extended to imported Community spirits which fulfil the same conditions, taking into account the criteria which underlie the first and second paragraphs of Article 95.

Questions 4 and 5 (tax arrangements for spirits coming from non-member countries)

23 For trade with non-member countries, and as far as internal taxation is concerned, the Treaty itself does not include any rule similar to that laid

HANSEN v HAUPTZOLLAMT FLENSBURG

down in Article 95, which applies only to products coming from the Member States.

Accordingly — subject to the provisions of regulations of which the application is not at issue here — the answer to the question raised by the national court depends upon the sute of relations under treaties, whether multilateral or bilateral, between the Community and the various non- member countries falling to be considered.

24 Therefore the answer to Questions 4 and 5 should be that the EEC Treaty does not include any provision prohibiting discrimination in the application of internal taxation to products imported from non-member countries, subject however to any treaty provisions which may be in force between the Community and the country of origin of a given product.

Costs

2. Where national tax legislation favours certain classes of producers or the production of certain types of spirits by means of tax exemptions or the grant of reduced rates of taxation, even if such advantages benefit only a small proportion of domestic production or are

OPINION OF МR САРОТОRTI — CASE 148/77

granted for special social reasons, those advantages must be extended to imported Community spirits which fulfil the same conditions, taking into account the criteria which underlie the first and second paragraphs of Article 95 of the EEC Treaty.

3. The EEC Treaty does not include any provision prohibiting discrim­ ination in the application of internal taxation to products imported from non-member countries, subiect however to any treaty provisions which may be in force between the Community and the country of origin of a given product.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait

cipally concerning the interpretation of which, in German domestic law, falls Article 37 of the EEC Treaty. I refer to within the scope of the law on spirits; the judgment of 16 December 1970 in however, this case is distinguished from

1 — Translated from the Italian