C-94/79

JUDGMENT OF 26. 2. 1980 — CASE 94/79

Community is concerned the common approved by an official authority, organization of the market in the reserves exclusively to persons products in question is based on affiliated to such bodies the right to freedom of commercial transactions market, resell, import, export and and is opposed to any national rule offer for export material for plant which could hinder directly or propagation such as chrysanthemum indirectly, actually or potentially, plants which are covered by the intra-Community trade. common organization of the market For this reason any national in live trees and other plants, bulbs, provisions or practices which could roots and the like, cut flowers and modify the patterns of imports and ornamental foliage established by exports by not allowing producers to Regulation No 234/68 and forbids market the products concerned freely persons who are not so affiliated to are incompatible with the common market, resell, import, export and organization of the market established offer for export such products, by Regulation No 234/68. whatever their quality may be, is incompatible with the said regulation 3. National rules whereby a Member and in particular with Article 10 State, directly or through the thereof and also with Articles 30 and intermediary of bodies established or 34 of the EEC Treaty.

In Case 94/79

REFERENCE to the Court under Article 177 of the EEC Treaty by the Gerechtshof [Regional Court of Appeal], Amsterdam, Economische Kamer [Economic Chamber], for a preliminary ruling in the criminal proceedings pending before that Court against

gives the following

JUDGMENT

Facts and Issues

I — Facts and written p r o c e d u r e "It may be decided by a regulation of the public administration, in relation to 1. On 14 April 1978 the Economische any cultivated plant, that the production, Politierechter [Magistrate in Economic keeping and cultivation for purposes Matters] of the Arrondissementsrecht- other than utilization in a person's own bank [District Court], Alkmaar, in the undertaking, as well as the marketing, Netherlands, gave judgment against resale, importation, exportation and Pieter Vriend, merchant of Andijk, offering for export of material for propa- under, inter alia, Article 1 (1) (a) of the gation, or engaging in such activities by Aansluitingsbesluit N.A.K.S., hereinafter way of trade shall be confined referred to as "the A.N.A.K.S." (Decree exclusively to persons affiliated to a on affiliation to the Netherlands General supervisory body designated for that Inspection Service for Ornamental plant in the regulation of the public Plants) and Article 87 (1) of the administration". Zaaizaad- en Plantgoedwet, hereinafter referred to as "the Z . P . W " (Law on Article 88 of the same law contains the seed for sowing and stock for plant following provision: propagation). That judgment pro- "In order to be approved as a nounced the accused guilty of having supervisory body under the provisions of sold between May and June 1975 in the the preceding article the following commune of Andijk, or at least in the conditions must be fulfilled : Netherlands, several lots of chrysan- themums, being material for propagation 1. According to its rules the supervisory within the meaning of the Z.P.W., body: without being affiliated to the above- (a) must have as its objective the mentioned N.A.K.S. Institute. promotion, by means of a system of control, of the marketing, Article 87 (1) of the last-mentioned law resale and exportation of viable provides that: propagation material;

(b) . . . together with the secretary, shall be appointed by the minister (c) must have a management concerned; committee which is sufficiently representative of the parties or (g) · · · groups of parties affected; (h) . . . 2. The rules of the supervisory body (i) ...» must provide that: (a) . . . The A.N.A.K.S., mentioned above, which was adopted under Article 87 (1) (b) .. . of the above-mentioned Z.P.W., provides (c) affiliation is open to all on in Article 1 (1) (a) that only persons request; affiliated to the N.A.K.S. are authorized to: (d) where an affiliated member fails to fulfil the obligations imposed "(a) Undertake by way of trade the on him by virtue of the rules or production for purposes other than the general instructions in force utilization in their own under- under (a), one or more of the taking, marketing, resale, impor- following measures may be taken tation, exportation and offering for with regard to him: censure, a export or material for the propa- fine not exceeding 10 000 florins, gation of the plants listed in the strict supervision of the affiliated present decree, including the member at his own expense for a chrysanthemum (Chrysanthemum period not exceeding two years morifolium Ram.), referred to in and publication of the disciplinary the second paragraph of Article 1)". measure; if, within the five years immediately preceding the failure 2. Pieter Vriend lodged an appeal to observe an obligation, referred against that judgment in the Gerechtshof to above, the affiliated member [Regional Court of Appeal], Amsterdam, has been placed under strict Economic Chamber. In the course of the supervision at his own expense, or deliberations in that court the question has been ordered on two arose as to whether the Netherlands occasions to pay a fine, he may be rules in question, namely those suspended for a period not introduced by Article 87 of the Z.P.W., exceeding three years; in conjunction with Article 1 of the A.N.A.K.S., because it involves "com- (e) with regard to decisions taken by pulsory affiliation" to the N.A.K.S. for one of the organs of the the purposes of marketing cultivated supervisory body, other than plants, is compatible with Articles 30 to those listed under (g), the 47 of the EEC Treaty, and with Regu- affiliated member may, within one lation No 234/68 of the Council of 27 month from the date of February 1968 on the establishment of a notification of such decisions, common organization of the market in submit a complaint to an 'Appeals live trees and other plants, bulbs, roots Board', the composition of which and the like, cut flowers and ornamental and the procedure to be followed foliage (Official Journal, English Special are defined in rules of procedure; Edition 1968 (I), p. 26), Article 10 (1) of such decisions shall not include which prohibits, at the second indent, the general instructions; "in the internal trade of the Community any quantitative restriction or (f) the Chairman and the other measure having equivalent effect". members of the Appeals Board,

Considering that a decision in the case regulation are to be interpreted as rests on the question of interpretation of meaning that the rules referred to in Community law, the Gerechtshof, Question 1 are not — or not wholly Amsterdam, decided by judgment of 10 — incompatible therewith, do those May 1979, to stay the proceedings and provisions of Community law allow to refer to the Court for a preliminary of rules such as those described in ruling under Article 177 of the EEC Question (1), whereby for, in Treaty the following questions: particular, dealers in chrysanthemum cuttings, affiliation to the said Stichting is, pursuant to its statute and in conjunction with the " 1 . Must Articles 30 to 47 inclusive of provisions of Articles 87 and 90 of the EEC Treaty and Regulation the Zaaizaad- en Plantgoedwet, (EEC) N o 234/68 of the Council of confined to those who accept that 27 February 1968 on the decisions of the Appeals Board of establishment of a common organiz- the Stichting on rulings affecting ation of the market in live trees and them made by an organ of the other plants, bulbs, roots and the Stichting, which do not relate to the like, cut flowers and ornamental approval of material for propagation, foliage [Official Journal, English have the character of a binding Special Edition 1968 (I), p.26] as decision which, under Netherlands subsequently amended, in particular law, precludes the right of appeal to Article 10 (1) thereof, be interpreted the civil courts in proceedings in as meaning that the following are which the courts have unlimited wholly incompatible therewith: rules jurisdiction?" such as those contained in Article 87 of the Zaaizaad- en Plantgoedwet in conjunction with the Aaansluit- ingsbesluit N.A.K.S., which rules, in the light of the history of the Law, 3. A copy of the judgment making the are primarily intended to guarantee reference was received at the Court on the high quality of the material for 14 June 1979. propagation put on the market and pursuant to which rules anyone who is not affiliated to the Stichting Under Article 20 of the Protocol on the Nederlandse Algemene Keurings- Statute of the Court of Justice of the dienst voor Siergewassen is European Communities written obser- prohibited from putting on the vations were submitted by the Govern- market, reselling, importing, ment of the Netherlands, represented by F. Italianer, Secretary General at the exporting and offering for export by Ministry for Foreign Affairs, acting as way of trade in the Netherlands, Agent, and by the Commission of the material for the propagation of European Communities, represented by chrysanthemums (Chrysanthemum H. J. Bronkhorst, a member of the morifolium Ram.) such as chrys- Commission's Legal Department, acting anthemum cuttings irrespective of as Agent. whether the material for propagation satisfies the quality requirements laid down by the said Stichting? After hearing the report of the Judge- Rapporteur and the views of the Advocate General the Court decided to 2. If Articles 30 to 47 inclusive referred open the oral procedure without any to above and the aforesaid Council preparatory inquiry.

II — W r i t t e n o b s e r v a t i o n s s u b - moreover to be approved by the Minister m i t t e d u n d e r A r t i c l e 20 of of Agriculture and Fisheries. The t h e P r o t o c o l on t h e S t a t u t e supervisory bodies have power to adopt of t h e C o u r t of J u s t i c e rules covering the health, purity and quality of material for propagation, as well as other matters connected In the view of the Netherlands therewith. The central authority is Government it is appropriate before empowered however to suspend the examining the questions on which the application of such provisions or to Court has been asked to give a ruling by annul them if they are contrary to the the court making the reference to general interest. Should the supervisory summarize the historical process which bodies fail to act, that authority is led to the delegation in the Netherlands empowered to make the provisions in of certain public duties to professional or question itself. trade bodies in the sector of agriculture and horticulture. In addition, the Z.P.W. lays down the procedure to be followed in disputes As regards the production and marketing which may arise between a supervisory of material for propagation in particular, body and its members. Two types of products have been officially approved action are provided for: action against and certificates issued by those active in decisions concerning the approval of a the trade themselves since 1900. As time product and action against other went on the various bodies governed by decisions. The latter is reserved to a private law which fulfilled these Raad van Beroep (Appeals Board), which functions showed a growing tendency to guarantees lack of bias in settling amalgamate, so that by 1941 the above- disputes. mentioned activities were being performed by a single body for each In order to compensate for the fact that particular variety of plant. the rules laid down by a body governed by private law are binding only on its The historical evolution explained above, affiliated members, and the fact that only the fairly limited number of persons affiliated members are subject to concerned and the need to establish a supervision by the body and to its direct link between the highly specialized disciplinary powers, it was provided that knowledge of those concerned and the affiliation to the supervisory bodies is methods of application which had to be compulsory. Thus, compulsory affiliation drawn up were taken into consideration must be considered as a part of the in adopting the Z.P.W., section 6 of system whereby certain regulatory and which deals with trade in material for supervisory powers are delegated to propagation and with supervisory bodies. bodies governed by private law.

It has in fact been established by the rights which individuals acquire through case-law of the Court of Justice (cf. the direct effect of Community law, judgment of 15 December 1971 in Joined provided that such rules are not less Cases 51 to 54/71 [1971] ECR 1107) favourable than those governing the that it is for the Member States to same right of action on an internal determine which institutions within the matter". national system shall be empowered to adopt the appropriate measures to ensure fulfilment of the obligations arising out For the sake of completeness, however, it of the Treaty, and that the question of should be pointed out that when public how the implementation of such duties are delegated in a Member State obligations may be entrusted to specific to bodies governed by private law such national authorities is solely a matter for bodies must be considered, for the the constitutional system of each State. purposes of applying the provisions of The inescapable conclusion to be drawn the EEC Treaty, as organs of that from this is that the rule concerning Member State. The provisions adopted compulsory affiliation to a supervisory by them and the manner in which they body governed by private law is not supervise the application thereof are contrary to Community law, nor to therefore subject to judicial scrutiny in Article 30 et seq. of the EEC Treaty. relation to Community law.

JUDGMENT OF 26. 2. 1980 — CASE 94/79

plants. This is one part of the more the supervisory bodies in the general problem of defining the Netherlands. Although in Case 83/78 discretion which is still left to Member Pigs Marketing Board, the Court States in the adoption of measures once condemned compulsory registration with Community rules have been established a national authority, its view was due to for markets. the fact that that measure formed a single entity with other measures The Commission recalls the cases in preventing the free circulation of which the Court has already had products subject to the organization of occasion to tackle this problem, also in the markets. relation to Regulation No 234/68 (Case 190/73 Van Haaster; Case 51/74 Van der Hulst's Zonen; Case 50/76 Amsterdam As to the second question, the Bulb), and points out that according to Commission observes that the N.A_K_S_ the case-law of the Court national and its Raad van Beroep are not measures are to be considered applying rules of Community law and • incompatible with the existence of a therefore the Community need not common organization of the market only concern itself with whether rights are if they are of such a nature as to being safeguarded in the application of prejudice the aims and objectives of the those rules. Community rules.

VRIEND

matter. By virtue of Article 88 (1) (f) of other plants, bulbs, roots and the the Z.P.W., the Chairman and the other like, cut flowers and ornamental members of the Raad van Beroep of the foliage. N.A.K.S. are appointed by the Minister 2. The existence of national rules which of Agriculture and Fisheries. That Board provide that those affiliated to a cannot therefore be considered as a Stichting responsible for ensuring the court which, by reason inter alia of its maintenance of quality standards in independence from the administration, is respect of chrysanthemum cuttings such as to offer individuals the same are bound to accept the decisions of guarantees as those to which they would an Appeals Board is not incompatible be entitled through the direct effect of with the afore-mentioned provisions Community law. of Community law, even in view of For those reasons the Commission the fact that that Appeals Board proposes the following replies to the cannot be considered as an questions which have been referred to independent tribunal and the the Court by the Gerechtshof, decisions of the Appeals Board with Amsterdam, for a preliminary ruling: respect to them have the character of binding opinions, which fetters the " 1 . The existence of national rules right of appeal to the civil courts prohibiting the marketing, resale, against the decisions of the Appeals importation, exportation and Board." offering for export, by way of trade, of material for the propagation of chrysanthemums, such as chrys- Ill — Oral procedure anthemum cuttings, irrespective of whether the material for propagation satisfies the quality requirements laid The Commission of the European down by the Stichting in question, is Communities, represented by H. J. not incompatible with Articles 30 to Bronkhorst, a member of its Legal 47 of the EEC Treaty and Regu- Department, presented oral argument at lation (EEC) No 234/68 of the the hearing on 27 November 1979. Council of 27 February 1968 on the The Advocate General delivered his establishment of a common organiz- opinion at the sitting on 10 January ation of the market in live trees and 1980.

2 The questions were raised during the hearing of an appeal by a merchant, having his place of business at Andijk, against his conviction by the Economische Politierechter (Magistrate in Economic Matters) of the Arron- dissementsrechtbank [District Court], Alkmaar, for having sold between May and June 1975 in the commune of Andijk, or at least in the Netherlands, several lots of chrysanthemum cuttings, without being affiliated to the Nederlandse Algemene Keuringsdienst voor Siergewassen [The Netherlands General Inspection Service for Ornamental Plants], hereinafter referred to as "the N.A.K.S." and having therefore been in breach of the provisions of the Zaaizaad- en Plantgoedwet [Law on seed for sowing and stock for plant propagation] and also of the Decree of 6 October 1966, the Aanslui- tingsbesluit N.A.K.S. [Decree on affiliation to the Netherlands General Inspection Service for Ornamental Plants], adopted in implementation of that Law. The file shows that the trader in question had bought the products which are the subject-matter of the criminal proceedings from producers who are affiliated to the N.A.K.S.

VRIEND

4 It is in the light of these national rules that the national court has referred to the Court for a preliminary ruling the following questions:

" 1 . Must Articles 30 to 47 inclusive of the EEC Treaty and Regulation (EEC) No 234/68 of the Council of 17 February 1968 on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage (Official Journal, English Special Edition 1968 (I), p. 26), as sub- sequently amended, in particular Article 10 (1) thereof, be interpreted as meaning that the following are wholly incompatible therewith: rules such as those contained in Article 87 of the Zaaizaad- en Plantgoedwet in conjunction with the Aansluitingsbesluit N.A.K.S., which rules, in the light of the history of the Law, are primarily intended to guarantee the high quality of the material for cultivation put on the market and pursuant to which rules anyone who is not affiliated to the Stichting Nederlandse Algemene Keuringsdienst voor Siergewassen is prohibited from putting on the market, reselling, importing, exporting and offering for export by way of trade in the Netherlands, material for cultivation of chrysanthemums (Chrysanthemum morifolium Ram.) such as chrys- anthemum cuttings irrespective of whether the material for cultivation satisfies the quality requirements laid down by the said Stichting?

6 It is an established fact that the products at issue are "plants" within the meaning of subheading 06.02 D of the Common Customs Tariff. Since they are therefore products falling within Chapter 6 of the Common Customs Tariff they are governed, as provided for in Article 1 of Regulation (EEC) No 234/68 of the Council of 27 February 1968, by the common organiz- ation of the market established by that regulation. As the Court has held in its case-law — judgment of 30 October 1974 in Case 190/73 Officier van Justitie v J.W.J, van Haaster [1974] ECR 1123 and judgment of 23 January 1975 in Case 51/74 P.J. van der Hulst's Zonen v Produktschap voor Sierge- wassen [1975] ECR 79 — Regulation No 234/68 has established a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage falling within Chapter 6 of the Common Customs Tariff which, according to Article 1 of the said regu- lation, shall comprise "common quality standards and a trading system". The third recital in the preamble to that regulation indicates that the system of quality standards for products or product groups governed by the common organization of the market introduced in accordance with the procedure laid down in Article 43 (2) of the Treaty should inter alia "have the effect of . . . promoting commercial relations on the basis of genuine competition" and the second paragraph of Article 3 of the regulation forbids dealings in these products or product groups only if they are not in accordance with the above-mentioned quality standards.

9 For this reason any national provisions or practices which could modify the patterns of imports and exports by not allowing producers to market the products concerned freely are incompatible with the common organization of the market established by Regulation N o 234/68. Any national rules and regulations such as those at issue in this case which make the freedom of traders to market, resell, import and export or offer for export the material for plant propagation in question conditional on their being affiliated to a public body or a body approved by an official authority such as the N.A.K.S. which was referred to by the national court, would definitely be incompatible with that common organization. Such a restriction on freedom of commercial transactions contravenes Article 10 of Regulation N o 234/68 which lays down the principle of an open market, upon which the common organization of the market in question is based, and moreover does not satisfy the requirement of genuine and effective competition, since by reason of its general application to products offered for sale by persons who are not affiliated it in fact even eliminates from the market those products which are of satisfactory quality.

io For these reasons the answer to the first question must be that national rules of the kind referred to by the national court whereby a Member State, directly or through the intermediary of bodies established or approved by an official authority, reserves exclusively to persons affiliated to such bodies the

JUDGMENT OF 26. 2. 1980 — CASE 94/79

in answer to the questions referred to it by the Gerechtshof, Amsterdam, by an order of 10 May 1979, hereby rules:

National rules of the kind referred to by the national court whereby a Member State, directly or through the intermediary of bodies established or approved by an official authority, reserves exclusively to persons affiliated to such bodies the right to market, resell, import, export and offer for export material for plant propagation such as chrysanthemum plants which are covered by the common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and

VRIEND

ornamental foliage established by Regulation (EEC) No 234/68 of the Council of 27 February 1968 (Official Journal English Special Edition 1968 (I), p. 26) and forbids persons who are not so affiliated to market, resell, import, export and offer for export, such products whatever their quality may be, is incompatible with the said regulation and also with Articles 30 and 34 of the EEC Treaty.

Kutscher O'Keeffe Touffait

Mertens de Wilmars Pescatore Bosco Due