C-823/79

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunale Civile e Penale [Civil and Criminal Court], Ravenna, for a pre- liminary ruling in the criminal proceedings pending before that court against

GIOVANNI CARCIATI

on the interpretation of the Community rules applicable in respect of the free movement of goods,

1 — Language of the Case: Italian.

JUDGMENT OF 9. 10. 1980 — CASE 823/79

T H E COURT (First Chamber)

CARCIATI

implementing the International persons normally resident outside its Convention of New York of 4 June territory." 1954, and Articles 67, 69, 70 and 71 of the Decree of the President of the That Convention has been ratified by all Republic No 633 of 26 October 1972 in the Member States of the European conflict with the Community rules in Communities. relation to the free movement of goods?" The Geneva Convention of 18 May 1956 (United Nations Treaty Series, Volume 339, p. 3) on the taxation of private road B — The legislation applicable vehicles in international traffic exempts vehicles registered in the territory of one of the Contracting Parties and imported duty-free into another State from taxes (a) The international conventions and charges levied on the circulation or possession of vehicles with the exception, however, of tolls or of taxes or charges on consumption. The Convention does The customs and fiscal facilities relating not define directly the conditions to be to journeys by private car are governed met in order to gain exemption, but at international level by two agreements refers to the provisions of the New York made under the auspices of the United Customs Convention. It was ratified by Nations. all the Member States of the European Communities, with the exception of The Customs Convention of New York Belgium and Italy. of 4 June 1954 (United Nations Treaty Series, Volume 282, p. 249) provides that vehicles belonging to persons normally resident outside the country may be Those Conventions apply only to foreign granted admission without payment of vehicles imported and utilized by persons taxes and customs duties and all dues who are resident abroad. and payments payable on importation if they are imported and utilized, on the occasion of a temporary visit, by their owners or by other persons resident (b) The Italian rules governing the outside the territory. According to temporary importation of motor Article 2 (1) of that Convention: vehicles

On 30 October 1975 the Commission submitted to the Council a Proposal for The Italian Government, represented by a Directive on tax exemptions for certain Dante d'Avanzo, Avvocato dello Stato, means of transport temporarily imported and the Commission of the European into one Member State from another Communities, represented by Eugenio (Official Journal C 267 of 21 November de March, a member of its Legal 1975, p. 8). The proposal is at present Department, acting as Agent, submitted being considered by the Council. written observations under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC. The purpose of the proposal is to improve intra-Community travel. Com- Upon hearing the report of the Judge- pared with the international agreements, Rapporteur and the opinion of the it provides for various improvements, in Advocate General the Court decided to particular the extension of the open the oral procedure without any exemptions to utilization of the vehicle preparatory inquiry and to assign the for business purposes, the abolition of case to the First Chamber of the Court. temporary importation papers, the determination of common rules for establishing residence and the fixing of a uniform duration for the exemption (six months in any twelve months). II — Written observations sub- mitted to the Court

Article 3 of the Proposal for a Directive provides that the individual importing A — Admissibility the vehicle must have his principal residence in a Member State of the Community other than that of temporary In its observations the Commission notes importation and that the means of that although the Court has no transport must not be disposed of or jurisdiction under Article 177 of the hired out in the Member State of Treaty to rule on the compatibility of a temporary importation, or lent to a provision of national law with resident of that State. The only exception Community law, it is a matter of settled allowed concerns cars belonging to a case-law that it may elicit from the

wording of the question which has been temporary importation arrangements referred to it by the national court, in which is the subject of the proposal for a the light of the information supplied by Community directive is intended not so the latter, such matters as are relevant to much to encourage trade in goods as to the interpretation of Community law. facilitate the movement of persons and services, that is to say, of the residents of a Member State who intend to use their The case-file reveals, according to the car in another Member State and for Commission, that a solution to the whom the national tax provisions might dispute in the main proceedings turns on cause grave problems (commercial the compatibility of national rules agents, frontier workers and so on). prohibiting residents from using motor vehicles subject to the temporary import- ation arrangements and prescribing penal The Italian Government states that the sanctions for contravention of that mere fact that all the Member States of prohibition with the provisions on the the EEC have ratified the international free movement of goods. Convention at present applicable in respect of private vehicles travelling between the Member States of the Community is clear evidence that there is E — Substance no conflict such as that perceived by the Italian court between the Italian rules and the Community provisions applicable The Commission and the Italian on the subject. Government maintain in their obser- vations that the temporary importation scheme in force in Italy is not Furthermore, penal provisions (including incompatible with the provisions of the the provisions in Articles 25, 216, 282, Treaty on the free movement of goods. 287 and 339 of Decree of the President No 43 of 1973) lie within the exclusive competence of the Member States, The Commission states that the whose sovereign right it is to lay down prohibition against the use by residents the constituent elements of an offence, of a vehicle registered abroad is merely a including that of smuggling, together means of preventing tax frauds and of with the type and extent of the penalties guaranteeing, in particular, that taxes attaching thereto. will in fact be paid in the country of destination of the goods. The only principle concerned with the free movement of goods which Member At the sitting on 19 June 1980 the Italian States are bound to respect is that which Government, represented by Dante prohibits discrimination between national d'Avanzo, Avvocato dello Stato, and the products and imported products and is Commission, represented by Eugenio de expressed in Articles 13 and 95 of the March, a member of its Legal Treaty. Hence the Italian provisions Department, acting as Agent, presented referred to in the order of the Tribunale oral argument. di Ravenna are not contrary to the Treaty provisions on the free movement of goods. Furthermore, the Commission The Advocate General delivered his points out that the harmonization of opinion at the sitting on 10 July 1980.

4 Whilst the Court has no jurisdiction in proceedings under Article 177 of the Treaty to decide on the compatibility or otherwise of national legislative provisions with Community law it may, when presented with an imprecisely formulated reference, identify the question of Community law in such terms

CARCIATI

as enable it to give a ruling. In this case, the question to be determined is whether the principles in the Treaty concerning the free movement of goods prevent the adoption of national rules which, whilst subjecting the normal importation of vehicles to payment of value added tax, prohibit the residents of the State in question, subject to criminal penalties, from using vehicles which have been brought in under the temporary importation arrangements and are thus exempted from that tax.

5 Article 2 of the New York Convention of 4 June 1954 which has been ratified by all the Member States of the European Community governs the temporary tax-free importation of motor vehicles. Paragraph (1) of that article provides that each of the Contracting States shall "grant temporary- admission without payment of import duties and import taxes . . . to vehicles owned by persons normally resident outside its territory which are imported and utilized, for their private use on the occasion of a temporary visit, either by the owners of the vehicles or by other persons normally resident outside its territory".

6 Article 216 of the Decree of the President of the Italian Republic No 43 of 23 January 1973 (Consolidated Text of the Legislative Provisions in Customs Matters) governs the temporary importation of road vehicles for private use by referring to the New York Convention and provides in paragraph (2) that the penalties prescribed for the offence of smuggling apply when the conditions laid down by that Convention are lacking or are no longer present. The same enactment also lays down the fine to be imposed on anyone who is in possession of foreign goods without being able to show that they were lawfully obtained (Article 282 in conjunction with Article 85), or who uses foreign goods which have been imported duty-free and at a reduced rate of tax wholly or partly for a purpose other than that for which the tax exemption or reduction was granted (Article 287).

10 As regards the prohibition imposed by a Member State on persons resident in its territory on the use of vehicles imported temporarily tax-free, it is an effective way of preventing tax frauds and ensuring that taxes are paid in the country of destination of the goods. In fact the Proposal for a Council Directive on tax exemptions for certain means of transport temporarily imported into one Member State from another submitted by the Commission . on 30 October 1975 (Official Journal C 267, p. 8) recognized the need for such a measure in proposing in Article 3 (concerning the temporary impor- tation of certain means of transport for private use) the condition that "(a) the individual importing such goods: (aa) has his principal residence in a Member State of the Community other than that of temporary importation, . . . "and that "(b) the said means of transport is not disposed of or hired out in the Member State of temporary importation, or lent to to a resident of that State".

CARCIATI

n Provided that provisions such as those contained in the national legislation in question in this instance are found to be compatible with the rules of the Community legal order, there is no argument capable of calling in question the power of a Member State to impose criminal penalties for contravening the national rules.

12 The reply to the question which has been submitted by the Tribunale di Ravenna should therefore be that the rules of the EEC Treaty relating to the free movement of goods do not preclude the imposition by national rules on persons residing in the territory of a Member State of a prohibition, subject to criminal penalties, on the use of motor vehicles admitted under temporary importation arrangements and thus exempt from payment of value added tax.

OPINION OF MR CAPOTORTI — CASE 823/79

penalties, on the use of motor vehicles admitted under temporary importation arrangements and thus exempt from payment of value added tax.

Koopmans O'Keeffe Bosco

Delivered in open court in Luxembourg on 9 October 1980.

J. A. Pompe T. Koopmans Deputy Registrar President of the First Chamber For the Registrar

OPINION OF MR ADVOCATE GENERAL CAPOTORTI DELIVERED O N 10 JULY 1980 1