C-132/78

French State (Customs Authorities)

on the interpretation of Articles 9, 12, 13 and 95 of the EEC Treaty and of Regulation No 2759/75 of the Council of 29 October 1975 on the common organization of the market in pigmeat (Official Journal 1975, L 282, p. 1),

THE COURT (First Chamber)

composed of: J. Mertens de Wilmars, President of Chamber, A. O'Keeffe and G. Bosco, Judges,

Advocate General: J.-P. Warner Registrar: A. Van Houtte

gives the following

The order for reference and the written constitutes the chargeable event giving observations submitted under Article 20 rise to the charge. Article 4 provides as of the Protocol on the Statute of the follows: "The charge for the protection Court of Justice of the EEC may be of public health and for the organization summarized as follows: of the markets in meat shall be levied on the importation of meat, whether or not prepared, of the animals mentioned in Article 2. It shall be payable by the I — Facts and procedure importer or by the person making the customs declaration when the goods are given customs clearance for release to the market. It shall be levied by the The French Law No 77-646 of 24 June customs authorities. It shall be collected 1977 (Journal Officiel de la République according to the same rules and under Française of 25 June 1977) introduced a the same guarantees as those relating to charge for the protection of public health customs duties." and for the organization of the markets in meat (Article 1). This charge is levied when certain animals for slaughter and Article 9 of Order No 77-899 of 27 July poultry are slaughtered in private or 1977 (Journal Officiel de la République public slaughter-houses as well as when Française of 9 August 1977) laying down meat of animals of the same kind, conditions for the application of Law No whether or not prepared, is imported 77-646, lists the meat on which the into France. import charge is levied and Article 10 thereof specifies that the charge for the release inter alia of lard (tariff heading The rate of the charge is fixed by 15.01) to the market in the customs kilogramme net weight of meat for a territory is levied on the net weight of calendar year on the basis of the guide the meat accepted or permitted by the prices laid down in Article 2 of that law; customs authorities, less the weight of this rate corresponds in the case of pigs the offal. to 0.54 % of the Community basic price. Having regard to this guide price, the rate of the charge for the protection of On 7 October 1977, Denkavit Loire public health and the organization of the S.à.r.l., the plaintiff in the main action, markets in meat amounted for the 1977 imported from the Federal Republic of calendar year to FF 0.034 per Germany 22 400 kilogrammes of lard kilogramme net weight in the case of intended for the manufacture in France pigs, pursuant to the Order of the of animal feeding-stuffs. On that Minister delegated to Economic Affairs occasion, the customs authorities levied a and Finances and of the Minister for sum of FF 672 as the charge for the Agriculture of 9 August 1977 (Journal protection of public health and for the Officiel de la République Française of 12 organization of the markets in meat, in August 1977). Under Article 3 of Law accordance with Law No 77-646 of 24 No 77-646, the slaughtering process June 1977.

Taking the view that the levying of that the meaning of Articles 9, 12 and 13 charge was incompatible with of the Treaty establishing the Community law and in particular with European Economic Community to Articles 9, 12, 13 and 95 of the EEC apply a charge imposed on imports Treaty and with Regulation No 2759/75 of lard from another Member State of the Council on the common organiz­ intended for use in animal feeding- ation of the market in pigmeat (Official stuffs in order to compensate for the Journal 1975, L 282, p. 1) Denkavit levying of a domestic charge on the brought proceedings against the slaughter of swine? competent authorities before the Tribunal d'Instance, Lille, for repayment of the sum paid. 2. If the answer to the first question is in the negative: Is the levying of the charge referred to in Question 1 The customs authorities, for their part, above contrary to the prohibition on claim that a pecuniary charge such as tax discrimination under Article 95 that levied on imported meat should only of the Treaty? be considered to be a charge having equivalent effect if similar national products are not subject to a similar 3. If the reply to Questions 1 and 2 is charge. However, the charge, within the in the negative: Must the levying of domestic system, is also levied on the net the charge referred to in Question 1 weight of meat after slaughter so that above be considered as contrary to domestically produced lard resulting Regulation No 2759/75 of the Council of 29 October 1975 on the from the processing of pigmeat is subject to the same tax burden as imported lard. common organization of the market The imported product is even subject to in pigmeat?" a lower tax burden than that levied on the national product in so far as the chargeable weight of the latter includes The order for reference and the that of various waste products which corrective judgment amending it were have been eliminated for the purposes of entered on the Court Register on 12 obtaining imported lard. June and 18 July 1978. In accordance with Article 20. of the Protocol on the Statute of the Court of Justice of the Taking the view that the case raised EEC, the plaintiff in the main action and questions of interpretation of the Commission of the European Community law, the Tribunal d'Instance, Communities submitted written obser­ Lille, by judgment of 25 May 1978 vations. followed by a corrective judgment of 6 July 1978 amending a clerical error in the operative part of the judgment of 25 After hearing the report of the Judge- May 1978 (it is necessary to read Rapporteur and the views of the "domestic charge" (tax intérieure) Advocate General, the Court decided to instead of "lower charge" (tax open the oral procedure without any inférieure)), referred to the Court of preparatory inquiry. Justice the following questions for a pre­ liminary ruling: By order of 22 November 1978 it decided, in accordance with Article 95 of "1. Is it contrary to the prohibition on the Rules of Procedure, to refer the charges having an effect equivalent present case to the First Chamber of the to customs duties on imports within Court.

II — Observations submitted v Direktor der Landwirtschaftskammer under Article 20 of the Westfalen-Lippe [1973] ECR 1039). Protocol on the Statute of Even if it related to that general system a the Court of Justice of the duty would constitute a charge having an EEC effect equivalent to a customs duty if it appeared to have the sole purpose of A — Observations submitted by the financing activities for the specific plaintiff in the main action advantage of domestic products alone so (Denkavit Loire S.à.r.l.) as to make good the charge imposed upon those domestic products (judgment The plaintiff in the main action recalls of the Court of Justice of 25 May 1977 first of all that according to the recitals in Case 77/76, Fratelli Cucchi v Avez of the preamble to Law No 77-646 and S.p.A. [1977] ECR 987).

p. 1403). As for the levying of the charge charge having an effect equivalent to a on imported products, it is considered to customs duty. be essential in order to compensate for the charge levied on similar domestic (a) It is not consideration for a benefit products. provided in fact since the charge in question is, in the The first question view of the legislature, to make good the The plaintiff in the main action charge levied on national production, it considers, relying in this respect on the is not therefore consideration for any case-law of the Court of Justice, that any activity carried out by the authorities. pecuniary charge, whatever its purpose, designation and mode of application, (b) It is not a charge relating to a which is imposed unilaterally on goods general system of internal dues when or by reason of the fact that they The result of the fact that the charge for cross a frontier and which is not a the protection of public health is levied customs duty in the strict sense, on the slaughter of French-produced pigs constitutes a charge having equivalent whilst a charge at the same rate is levied effect within the meaning of Articles 9, on importation is that national products 12 and 13 of the Treaty.

The

judgment of 28 June 1978 in Case 70/77 effect equivalent to a customs duty. It is (Simmenthal S.p.A. v Amministrazione therefore necessary to answer the first delle Finanze dello Stato [1978] ECR question as follows: 1453) stated this criterion and it was held that the charges must be levied at the "The prohibition on charges having an same stage of marketing. In the present effect equivalent to customs duties on case, a domestic charge on swine (tariff imports in accordance with Articles 9, heading 02.01 of the Common Customs 12, and 13 of the Treaty prevents the Tariff) cannot therefore justify the levying by a Member State of a charge levying of an import charge on lard imposed on imports of lard from another (tariff heading 15.01 of the Common Member State intended for use in animal Customs Tariff). feeding-stuffs in order to compensate for the levying of a domestic charge on the The plaintiff in the main action adds that slaughter of swine." in the judgment of 17 February 1976 in Case 45/75 (Rewe-Zentrale des Lebensmittel-Großhandels GmbH v Haupt­ The second question zollamt Landau/Pfalz [1976] ECR 181) the Court acknowledged that "the fact Relying, in the alternative, on Article 95 that the domestic product and the of the Treaty, the plaintiff in the main imported product are or are not action claims that since the imported classified under the same heading in the products and the domestic products are Common Customs Tariff constitutes an not classified under the same tariff important factor in this assessment". heading of the Common Customs Tariff the charge in question is not therefore applied to them systematically in (c) Double taxation accordance with the same criteria. The customs authorities therefore wrongly The plaintiff in the main action observes maintained before the national court, finally that imported lard comes from referring to the judgment of the Court of animals which, in the Member State, Justice of 22 June 1976 in Case 127/75 have also been subject to a pecuniary (Bobie Getränkevertrieb GmbH v Haupt­ charge on slaughter so that the levying zollamt Aachen-Nord [1976] ECR 1079) of the charge for the protection of public that the charge in question is compatible health on the lard in France constitutes with Article 95, because that case double taxation creating discrimination involved a tax imposed on the same against the imported products. product (beer) in both cases.

French produced lard but rather by Article 38 (1) of the Treaty and, as such, French produced pigmeat. listed in Annex II to the Treaty, falls within the scope of Regulation No Relying upon the Community legislation 2759/75 of the Council on the common on the levies and sluice-gate prices organization of the market in pigmeat, applicable to imports from third so that a national organization of the countries, and in particular on Regu­ market is illegal. The plaintiff in the lation No 2754/73 of the Commission of main action then appraises the legality of 10 October 1973 (Official Journal 1973, the levying of the charge in question, L 284, p. 13), the plaintiff in the main examines in detail the price system in the action considers that the objective value pigmeat sector and concludes that the of lard in the Community is deemed not charge in question jeopardizes the to exceed 32% of that of whole pig uniform price system within the carcasses! These are therefore the Community because it is added to the circumstances referred to in the price level reached at the stage of "pig judgment of 22 March 1977 in Case carcasses on the hook" only in the case 74/76 (Ianelli & Volpi S.p.A. v Ditto of imported products and not in the case Paolo Meroni [1977] ECR 557) in which of national production. the prohibition laid down in Article 95 of the Treaty is infringed where in the case If the Court replies to the first and of the imported product alone factors for second questions in the negative, it assessment are taken into consideration proposes that the third questions referred which are likely to increase the value of to the Court for a preliminary ruling the imported product vis-à-vis the should be answered as follows: corresponding domestic product. "It is contrary to Regulation (EEC) No It is therefore necessary to give the 2759/75 of the Council on the common following answer to the second question: organization of the market in pigmeat to levy a charge imposed on imports of lard "The levying of a charge imposed on from another Member State intended for imports on lard from another Member use in animal feeding-stuffs in order to State intended for use in animal feeding- compensate for the levying of a domestic stuffs — a fortiori if that charge is levied charge on the slaughter ofswine." at a rate calculated on the Community basic price for pig carcasses — in order to compensate for the levying of a B — Observations submitted by the domestic charge on the slaughter of Commission swine infringes the prohibition on tax discrimination laid down in Article 95 of the Treaty." Having recalled the facts which gave rise to the proceedings and analysed the procedure before the national court, the The third question Commission observes as regards the law that the first and third questions merge The plaintiff in the main action, recalling and that the second is an extension of that according to the wording of Law the first and is subsidiary to it. No 77-646 that law concerns the intro­ duction of a charge for the protection of public health and for the organization of The first and third questions the markets in meat, takes the view that lard, an agricultural product of first- According to the Commission, the stage processing within the meaning of concept of a charge having an effect

The charge in question seems, according (b) The economic effects of the to the Commission, to be an internal due charge in question applied systematically, in the same way and at an identical rate to national The Commission considers that if the products and imported products. Since economic effects and the impact which it the charge is imposed on meat solely by reason of its importation it is not in fact may have on trade are taken into account, the charge in question has a fee for a veterinary and public health restrictive effects identical to those of a inspection and, in the view of the customs duty or a charge having national legislature, the levying of the equivalent effect. charge on imports is intended to prevent any discrimination between national producers and importers of the same According to the Commission this products. In spite of that it is necessary becomes clear if the charge provided for to ask whether the charge in question in Law No 77-646 of 24 June 1977 is must not be considered as a charge compared with the charges which it having an effect equivalent to a customs replaces, in other words, the public duty in the light of the case-law of the health charges and charges for Court, in particular in the judgment of inspections and stamps which were the 25 May 1977 in Case 77/76 (Fratelli subject-matter of the law which was Cucci v Avez S.p.A. [1977] ECR 987), repealed, Law No 65-543 of 8 July 1965

DENKAVIT v FRANCE

The 169 of the EEC Treaty. Commission therefore considers that in spite of the amendment introduced in the Applying those criteria to the charge at new enactment, the analysis of the issue, the Commission considers that charge laid down in the 1965 law applies although its legal appearance is that of equally to the charge laid down in the an internal due its impact on trade is 1977 law. identical to that of a charge having an equivalent effect. Relying upon the However, the public health charge fundamental nature of the freedom of referred to in Article 5 of the Law of movement of goods, the Commission 8 July 1965 and Article 15 of the Finance takes the view that it is necessary to take Law for 1966 (Law No 65-997 of into account the actual effect rather than 29 November 1965 — Journal Officiel its formal characteristics and it therefore de la République Française of 30 tends to consider that the charge in November 1965) was, according to the question must be classified as a charge Commission, in the category of fees for having an effect equivalent to a customs veterinary and public health inspection duty.

JUDGMENT OF 31. 5. 1979 — CASE 132/78

The Commission concludes that the duties laid down in Articles 9 and 13 of charge in question cannot in any case be the Treaty." a charge relating to a general system of domestic taxation where it is levied on imports of lard from the other Member III — Oral procedure States and that such a charge must therefore be considered, so far as lard is At the hearing on 22 February 1977, the concerned, as a charge having an effect plaintiff in the main action, represented equivalent to a customs duty. by Mr Veroone, Advocate at the Lille Bar, the French Government, rep­ The second question resented by Mr Sidre, and the Com­ mission of the European Communities, The Commission takes the view that the represented by its Agents, Mr Amphoux reply given to the first and the third and Mr Beschel, presented oral questions makes the second question on argument. the interpretation of Article 95 of the Treaty purposeless. In its observations submitted during the oral procedure, the French Government The Commission therefore suggests that claimed, on the one hand, that the the following answer should be given to charge for the protection of public health the questions referred for a preliminary introduced by Law No 77-646 of ruling: 24 June 1977 is not contrary to Article 9 et seq. of the EEC Treaty because it "The levying by a Member State by forms part of a general system of internal reason of importation of a charge on dues and, on the other, that it is not in meat and meat-based products and in breach of Article 95 of the Treaty particular on lard from the other because it has never been maintained that Member States which has the characte­ a French product similar to lard benefits ristics of the French charge for the from a more favourable tax arrangement. protection of public health and for the organization of the markets in meat is The Advocate General delivered his contrary to the prohibition on charges opinion at the hearing on 29 March having an effect equivalent to customs 1979.

4 As regards meat slaughtered on French territory, the chargeable event giving rise to that charge is the slaughtering operation and the charge is levied in public or private slaughterhouses for the account, as the case may be, of the State or of local authorities or groups of local authorities which own slaugh­ terhouses, when the animals listed in Article 2 of the law are slaughtered, the rate being fixed per kilogramme net weight of meat per calendar year and the charge being payable by the owners of animals slaughtered with a view to the sale thereof. As regards imported meat, Article 4 of the Law provides that the charge "is imposed on the importation of the meat, whether or not prepared, of the animals mentioned in Article 2" and that it is payable by the importer or by the person making the customs declaration when the goods are given customs clearance for release to the market. It is collected according to the same rules and under the same guarantees as those relating to customs duties.

5 Under Order No 77-899 of 27 July 1977 (Journal Officiel de la République Française of 9 August 1977, p. 4136) laying down conditions for the application of Law No 77-646, the charge, as regards indigenous products, is imposed on fresh meat on the basis of the net weight of the meat as defined in Articles 2 to 5 of the order. As regards imported products, the charge is imposed on a certain number of meat-based preparations and the fats listed

JUDGMENT OF 31. 5. 1979 — CASE 132/78

in Article 9 of the order by reference to tariff heading or subheading numbers of the Common Customs Tariff as well as on fresh meat. Lard and other pig fat are referred to in particular under tariff heading 15.01. The charge is imposed on the net weight of the meat — in the present case the lard — and the amount thereof is identical per kilogramme to that of the charge imposed on indigenous pigmeat when it is slaughtered.

7 As the Court has acknowledged several times, and in particular in its judgment of 25 January 1977 in Case 46/76, W. J. G. Bauhuis v The Netherlands State [1977] ECR 5, any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier and which is not a customs duty in the strict sense, constitutes a charge having an equivalent effect within the meaning of Articles 9, 12, 13 and 16 of the Treaty. Such a charge however escapes that classification if it constitutes the consideration for a benefit provided in fact for the importer or exporter representing an amount proportionate to the said benefit. It also escapes that classification if it relates to a general system of internal dues supplied systematically and in accordance with the same criteria to domestic products and imported products alike, in which case it does not come within the scope of Articles 9, 12, 13 and 16 but within that of Article 95 of the Treaty.

8 It is however appropriate to emphasize that in order to relate to a general system of internal dues, the charge to which an imported product is subject must impose the same duty on national products and identical imported

DENKAVIT v FRANCE

10 The other two questions have been submitted by the court making the reference only if the Court of Justice rules that a charge of the kind referred to escapes the classification of a charge having an effect equivalent to a customs duty. It follows that the reply to those questions has, having regard to the reply given to the first question, become purposeless.

Costs

11 The costs incurred by the Government of the French Republic and by the Commission of the European Communities, 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 on costs is a matter for that court.

OPINION OF MR WARNER — CASE 132/78

On those grounds,

THE COURT (First Chamber)

My Lords, which carries on business at Montreuil

This case comes to the Court by way of Bellay in the Département of Maine-et- Loire as a manufacturer of animal a reference for a preliminary ruling by the Tribunal d'Instance of Lille. feeding stuffs. The Defendant is the French State, in the form of the The Plaintiff in the proceedings before "Administration des Douanes". that Court is the SARL Denkavit Loire,