C-225/78

JUDGMENT OF THE COURT (SECOND CHAMBER) OF 11 OCTOBER 1979 1

Procureur de la République, Besançon v Mr Bouhelier and Others (preliminary ruling requested by the Tribunal Correctionnel, Besançon)

"Lever escapement watches; non-member countries"

Case 225/78

International agreements — Agreements of the Community — Agreements with Greece, Spain and Austria — National measures having an effect equivalent to quantitative restrictions on exports to those countries — Export licences or standards certificates required in 1972 — Compatibility with the said agreements (Association Agreement between the EEC and Greece, Arts. 6 and 28; Agreement between the EEC and Spain, Art. 12; Interim Agreement between the EEC and Austria, Arts. 10 and 16)

The application during 1972 of the rules incompatible with the Agreement of a Member State requiring for the establishing an Association between the export of certain goods to non-member Community and Greece concluded on countries a licence or alternatively a 9 July 1961, or with the Agreement standards certificate, which may be between the Community and Spain refused if the quality is not in accordance concluded on 29 June 1970, or with the with certain provisions laid down by the Interim Agreement concluded between authority issuing the certificate and the Community and Austria on 22 July which does not give rise to the 1972.

and

Mr BOUHELIER and Others

on the interpretation of the concept of quantitative restrictions on exports and measures having equivalent effect in respect of non-member countries with which the Community has concluded international agreements relating to trade in goods,

THE COURT (Second Chamber)

composed of: Lord Mackenzie Stuart, President of Chamber, P. Pescatore and A. Touffait, Judges,

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

known as 'technical centres for industry' tificate by virtue of two notices to may be established by decree of the exporters published in the Journal Ministers for Finance, Economic Affairs, Officiel de la République Française on 30 Industry and Commerce". Article 8 of October 1962 and 24 November 1964. that law provides that the funds of these technical centres shall be provided prin­ cipally by compulsory contributions from undertakings pursuing an activity in the 2. In proceedings in a case in which sector in question. Cetehor certificates replaced the export licence in this way the Tribunal Correctionnel, Besançon, by a judgment of 19 May 1976 referred to the Court of Within the framework of that law the Justice a preliminary question arising out technical centre for the watch- and of the fact that Claude Bouhelier, clock-making industry was transformed Charles Girardet and Rémy by a joint ministerial decree of 22 April Zimmermann were accused of forging 1949 into a technical centre for industry Cetehor certificates by adding a nought (Cetehor), a public utility institution for or another figure to the figure originally whose benefit a decree of 21 September appearing thereon and of subsequently 1966 introduced a parafiscal charge exporting from the franc area under calculated on the basis of the price of cover of the forged standards certificates blanks and the price of watches and a large quantity of lever escapement watches and watch movements which movements, whether or not intended for export. had not been inspected or did not correspond to the descriptions given in the relevant certificate.

JUDGMENT OF 11. 10. 1979 — CASE 225/78

By judgment of 3 February 1977 ([1977] answer to the arguments of the Direction ECR 197), the Court ruled as follows: Générale des Douanes, the accused pleaded international agreements concluded between the EEC and the "The expression 'quantitative restrictions countries of the European Free Trade on exports and any measures having Association, as well as agreements equivalent effect' contained in Article 34 between the EEC and other countries of of the EEC Treaty must be understood Europe, Africa, South America and the as applying to rules adopted by a Far East. They contended that these Member State which require in respect various agreements extended the only of the export of certain goods either provisions of the Treaty of Rome to a licence or a standards certificate which certain of those countries and that is issued in place of such a licence and consequently exports to those countries may be refused if the quality does not were, like exports to EEC countries, not conform to certain standards laid down subject to the requirement of the by the body issuing the said certificate, production of an export licence or a even if such a certificate does not give Cetehor certificate in place of such rise to the imposition of a charge." licence.

Following that judgment the French In the alternative, the accused sought a Government published in the Journal fresh reference to the Court of Justice of Officiel de la République Française of 14 the European Communities for a pre­ July 1977 a notice to exporters making it liminary ruling in order to determine clear that standards certificates issued by whether the Court's judgment of Cetehor for exports of certain watches or 3 February 1977 must be interpreted as clocks to other Member States of the meaning that provisions requiring the European Community were no longer production of a standards certificate for required, nor was the production of an exports to countries which had entered export licence 02 for the same products into a free trade agreement with the to the same countries. Community were also contrary to the Community rules.

2. Whether its interpretation of the terms of the Agreement concluded The Court, on hearing the report of the on 29 June 1970 between the EEC Judge-Rapporteur and the views of the and Spain, in particular Articles 1, Advocate General, decided to open the 8 and 12 thereof, allows a Member oral procedure without any preparatory State of the EEC to require from its inquiry. exporters to Spain either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if II — Written observations lodged the quality of the goods does not with the Court in pursuance conform to the standards laid down of Article 20 of the Protocol on the Statute of the Court by the body issuing the certificate; And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary The Commission of the European discrimination or a disguised restric­ Communities recalls the facts, the state of tion on trade; the French rules, the previous judgment of the Court and the arguments of the accused, who had been discharged from the prosecution as regards the products 3. Whether its interpretation of the exported by them to Member States of terms of the Interim Agreement the EEC but who were still being pro­ concluded on 22 July 1972 between secuted for exports carried out by means the EEC and the Republic of of forged certificates to non-member Austria, in particular Articles 10 and countries, certain of which have 16 thereof, allows a Member State concluded international agreements with of the EEC to require from its the EEC. exporters to Austria either an export licence or a certificate in place thereof, where such certificate does First of all the Commission puts forward not give rise to the imposition of a some general considerations. It recalls charge and may be refused only if that the judgment given by the Court of the quality of the goods does not Justice in the first case on 3 February conform to the standards laid down 1977 (which has been quoted above) by the body issuing the certificate; concerns trade between Member States And, in particular, whether or not in pursuance of the fundamental the requirement of such certificate principle of freedom of movement of constitutes a means of arbitrary goods within the Common Market. This discrimination or a disguised restric­ case-law is not transferable to the system tion on trade". of trade with non-member countries.

This was the Court's decision in three (Article XI). In its relations with non- judgments of 15 June 1976 (Case 51/75, member countries the Community has [1976] ECR 811, paragraph 17; Case already expressly maintained or adopted 86/75, [1976] ECR 871, paragraph 17; measures involving quantitative and Case 96/75, [1976] ECR 913, restrictions. The provisions of the various

In fact the application of quantitative restrictions or According to the Commission, Article 28 measures having equivalent effect forms (1) of the Agreement establishing an pan of the methods adopted under the Association between the European common commercial policy in trade with Economic Community and Greece, non-member countries. Thus the sense of signed on 9 July 1961 (Official Journal, the words used in the measures relating English Special Edition, second Series, I to the common commercial policy as (1), p. 4) made it possible for the against non-member countries may be obligation to abolish quantitative very different from the meaning of the restrictions on exports to be implemented same words used in the Treaty for use before the end of the transitional period within the Community as was stated by laid down in Article 6 of the said Mr Advocate General Warner in his agreement, that is to say, before opinion on Case 51/75, which has been 1 November 1974.

sought. These agreements, which come establishment of a free trade area under international law, use a concept of between the Community and Spain; this customs union which is less elaborate is in the first stage of realization; the than that which corresponds to the intra- obligations arising from Annexes I and II Community customs union as is proved to the agreement and Article 12 thereof by the definition given in Article XXIV do not introduce any prohibition on paragraph 8 (a) of the General quantitative restrictions which are Agreement on Tariffs and Trade capable of preventing rules similar to (GAIT) which permits restrictions those whose application is requested in based, inter alia, on quality control the main proceedings from taking effect.

From its consideration of the agreements III — Oral procedure referred to by the Tribunal Cor­ rectionnel, Besançon, the Commission At the sitting on 7 June 1979 oral concludes that they do not call in argument was presented by the question the application of the disputed French rules and it asks that the Court Commission of the European should rule as follows: Communities, represented by Jean Amphoux, a member of its Legal "1. In the absence of a decision of the Department. Council of Association within the meaning of Article 29 of the The Advocate General delivered his association agreement between the opinion at the hearing on 5 July 1979.

Decision

1 By a judgment of 29 September 1978, which was received at the Court Registry on 9 October 1978, the Tribunal Correctionnel [Criminal Court], Besançon, submitted to the Court of Justice, pursuant to Article 177 of the EEC Treaty, several questions on the interpretation of three agreements or conventions concluded between the European Community and Greece, Spain

JUDGMENT OF 11. 10. 1979 — CASE 225/78

and Austria. These questions arose in the context of criminal proceedings for forgery and uttering of forged documents and infringements of customs legislation against Mr Bouhelier and others. That judgment follows an earlier judgment of 19 May 1976 by the same court, concerning the same accused and the same charges, which was based on the following facts:

2 The French Law No 48-1228 of 22 July 1948 laid down the constitution of technical centres for industry whose main object was to ensure high standards of quality in industry, and a Ministerial Decree of 22 April 1949, adopted pursuant to that law, set up a technical centre for industry — a public utility institution — called Cetehor, the main task of which is to control the quality of lever-escapement watches and watch movements intended for export. Two notices to exporters from the Ministry of Finance and Economic Affairs, dated 30 October 1962 and 24 November 1964, require a licence for the export of such watches and watch movements except for articles accompanied by a standards certificate issued by Cetehor, which then replaces the export licence.

"1. Whether its interpretation of Articles 6, 28 and 29 of the Association Agreement concluded on 9 July 1961 between the European Community and Greece allows a Member State of the EEC to require from its exporters to Greece either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;

2. Whether its interpretation of the terms of the Agreement concluded on 29 June 1970 between the EEC and Spain, in particular Articles 1, 8 and 12 thereof, allows a Member State of the EEC to require from its exporters to Spain either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;

And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary discrimination or a disguised restriction on trade;

3. Whether its interpretation of the terms of the Interim Agreement concluded on 22 July 1972 between the EEC and the Republic of Austria, in particular Articles 10 and 16 thereof, allows a Member State of the EEC to require from its exporters to Austria either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate; And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary discrimination or a disguised restriction on trade".

9 The object of the Agreement between the Community and Spain concluded on 29 June 1970 (Official Journal, English Special Edition, Second Series, 1 (1), p. 269) is the progressive elimination of obstacles to the main body of trade between the Contracting Parties. Article 12 of that agreement provides that the provisions of the said agreement "shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of

BOUHELIER

industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade".

10 Article 12 of the agreement does not concern quality controls such as those involved in the case before the national court. Therefore that provision is not applicable to this case. Moreover it should be noted that the agreement does not contain any provision relating to the prohibition of quantitative restrictions on exports, or of measures having equivalent effect. In those circumstances, the agreement does not impose any obligation on the Community or its Member States as regards the abolition of such measures.

11 Finally, the Interim Agreement concluded on 22 July 1972 between the Community and Austria (Journal Officiel, 29 September 1972, L 223, p. 1) which came into force on 2 October 1972 cannot be invoked to call in question the application of the disputed French rules with regard to exports of watches to Austria. In fact, Article 10 of that Interim Agreement prohibits further quantitative restrictions, which does not oblige the Parties to abolish the existing restrictions.

The application during 1972 of the rules of a Member State requiring for the export of certain goods to non-member countries a licence or

OPINION OF MR CAPOTORTI — CASE 225/78

alternatively a standards certificate, which may be refused if the quality is not in accordance with certain provisions laid down by the authority issuing the certificate and which does not give rise to the imposition of any charge, was not incompatible with the Agreement establishing an Association between the Community and Greece concluded on 9 July 1961, or with the Agreement between the Community and Spain concluded on 29 June 1970, or with the Interim Agreement concluded between the Community and Austria on 22 July 1972.

Mackenzie Stuart Pescatore Touffait

Delivered in open court in Luxembourg on 11 October 1979.

A. Van Houtte A. J. Mackenzie Stuart Registrar President of the Second Chamber