C-2/81

In Case 2/81

REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal de Grande Instance [Regional Court], Paris, (Eleventh Criminal Chamber) for a preliminary ruling in the criminal proceedings brought against

ALBERT CLÉMENT, GÉRARD CES AND OTHERS

on the interpretation of Article 26 (4) of Regulation (EEC) No 816/70 of the Council of 28 April 1970 laying down additional provisions for the common organization of the market in wine (Official Journal, English Special Edition 1970 (I), p. 234),

1 — Language of the Case: French

JUDGMENT OF 17. 12. 1981 — CASE 2/81

The facts of the case, the course of the value of FF 1316 056 under internal procedure and the observations Community transit documents (Form submitted pursuant to Article 20 of the "T2") issued by the Netherlands auth- Protocol on the Statute of the Court of orities and with having declared them as Justice of the EEC may be summarized originating in the country from which as follows: they had come, whereas they ought to have been declared as originating in "non-member countries". I — Facts and written procedure The wines were derived from Greek and Algerian wines which had been imported into the Netherlands before 1 June 1970 1. Mr Clement and Mr Ces, wine (the date on which the Community rules merchants, are being prosecuted before in question came into force) and had the Tribunal de Grande Instance, Paris, been blended in an Amsterdam for having "imported without a warehouse. declaration prohibited goods with the help of invoices, certificates or any other The French customs authorities referred false, inaccurate, incomplete or inap- to Article 26 (4) of Regulation No plicable documents", an offence under 816/70 in support of their charge. They Article 426 (3) of the Code Français des took the view that wines intended for Douanes [French Customs Code]. vinegar-making should be regarded as table wines for the purposes of that provision. The accused are charged with having imported from the Netherlands between 19 October 1970 and 3 August 1971 2. According to the twelfth recital in 20 834.32 hectolitres of wine "intended the preamble to Regulation No 816/70 for vinegar-making" with a customs " . . . a precise definition of products, in

"(1) Where coupage takes place, only Pursuant to paragraph (4) derogations products resulting from the from the prohibition contained in that coupage between table wines and provision were provided for by the from the coupage of table wines following regulations, certain of which, with wines suitable for yielding moreover, no longer apply: table wines shall be considered as table wines, provided that the suitable wines in question have a — Regulation No 1021/70 of the total natural alcoholic strength not Commission of 29 May 1970 auth- exceeding 17° and subject to the orizing coupage between imported provisions of the following wines (Journal Officiel 1970, L 118, paragraphs. p. 19) and Regulation No 1430/70 of the Commission of 20 July 1970 on imported wines coming from Algeria (2) The coupage of a wine suitable for (Journal Officiel 1970, L 159, p. 18): yielding a table wine from a given those regulations were intended to wine-growing zone with a table authorize the Member States to

JUDGMENT OF 17. 12. 1981 — CASE 2/81

3. Whilst sharing the view of the II — W r i t t e n o b s e r v a t i o n s sub- customs authorities regarding the m i t t e d to the C o u r t prohibition of the blending of table wines from non-member countries, the 1. Mr Clément and Mr Ces take the Tribunal de Grande Instance, Paris view that there are no grounds in this (Eleventh Criminal Chamber) case for the application of the considered, on the other hand, that since prohibition laid down by Article 26 (4) the wines were intended for vinegar- of Regulation No 816/70 as the goods in making, a question of interpretation of question had been put into free circu- Community law arose. Since its decision lation within the Community prior to the depended upon that interpretation, by a date on which the regulation came into judgment of 24 January 1980 the said force and, in any event, the regulation Tribunal decided to stay the proceedings does not apply to wines intended for on the charge and refer to the Court the vinegar-making. question asking:

"whether the provisions of Article 26 (4) It is clear from Article 5 of Regulation of Regulation (EEC) No 816/70 of (EEC) No 802/68 of the Council of 28 April 1970 apply to wines intended 27 June 1968 on the common definition for vinegar-making". of the concept of the origin of goods (Official Journal, English Special Edition The order for reference reached the 1968 (I), p. 165) that a product in the Court on 12 January 1981. production of which two or more countries were concerned is to be Pursuant to Article 20 of the Protocol on regarded as originating in the country in the Statute of the Court of Justice of the which the last substantial process or European Economic Community, written operation that is economically justified observations were submitted by Mr was performed, having been carried out Clément and Mr Ces, parties to the in an undertaking equipped for the

It is clear from the report drawn up by the Netherlands customs authorities 2. The French Government takes the following an inquiry that "all the view that the answer to be given to the constituent wines of the product question put to the Court must be in the exported were already in this country affirmative in the sense that wines before the Community rules on the obtained by coupage could not enter market in wine came into force". The Community territory as wine within the processes in question are therefore lawful meaning of Regulation No 816/70. and cannot be affected by a prohibition which is retroactive in nature. If the Court were to declare that the prohibition laid down by Article 26 (4) of Regulation No 816/70 applied, such a The prohibition of coupage laid down by decision would result in the withdrawal Article 26 (4) of that regulation applies from the exporting country in favour of to wines irrespective of their intended the importing country of the authority use, unless they fall within one of the which the former has to determine a exceptions provided for by Regulations product's origin or would at least give Nos 1021/70 and 1430/70, which is not rise to the risk of a difference of opinion the case here. Indeed, it is clear from between those authorities which would Regulation No 816/70 that the be contrary to the principles of the definition of wine and of coupage rests Treaty. If the processes of coupage were on the criterion of the (Community) unlawful, proceedings should have been origin of the products in question and brought by the Netherlands authorities. not on their intended use.

France and, consequently, inasmuch as On the other hand, the unlawfulness of the product in question had not the importation into France of the undergone that transformation, it blended wines concerned is beyond remained "wine" within the meaning of dispute. Indeed, Article 306 of the Code Community law on agriculture and des Vins [Wine Code] and Order No customs. 67-678 of 12 September 1967 lay down the principle that "wines originating in or coming from abroad (except from the Member States of the Community) must be kept without coupage or blending" subject to the exception provided for by the order of 1967 which states that coupage may be used as an oenological The products in question were moreover method for two purposes only: the imported under tariff subheading coupage of French wines exclusively with 22.05 C I (b) which affirms their nature Algerian wines for a limited period as wine and not vinegar (heading (modernization or reconversion of wine 22.10). On this point Community production: identical aim to Regulation customs law displays absolute parallelism No 1430/70) and the preparation of with the provisions on the common aperitifs falling under the fiscal system organization of the market in wine: there for spirits, excluding any other industrial is no tariff heading covering "wines purpose (use falling within the scope of intended for vinegar-making", a term the derogation provided for by Regu- which, moreover, is not represented by lation No 1021/70). The first case cited any technical stage in the production does not permit the importation into cycle. France of the wines blended in Amsterdam and, secondly, the French State did not at the time make use of the derogation provided for under Regu- lation No 1021/70 in favour of an industrial use such as that envisaged by the accused, namely vinegar-making. The French Government is not in a position to give an opinion on the compatibility of the process of coupage performed in Amsterdam with Netherlands law, of which it has no knowledge. However, it recalls that Article 1 of Regulation No 1021/70 required that coupage was to be carried out "between red wines (white or rosé)" 3. In the view of the Commission, the and that it has not been shown that the difference in the system for the coupage processes in question fulfilled that of wines intended for human requirement; it recalls also that under the consumption produced respectively in the second subparagraph of Article 2 (1) of Community or in non-member countries that regulation, wines so obtained by can be explained by the fact that the coupage could be re-exported only until control exercised by the national auth- 31 December 1970, whereas it is clear orities over the former ensures that they from the facts of the case that actually meet the requirements laid down consignments destined for France were by Community rules, whereas the latter made between 19 October 1970 and do not necessarily bear the same 3 August 1971. guarantees because they do not fulfil

common criteria of quality and are not in fact applies only to wines (table wine, subject to comparable control by the wine suitable for producing table wine) national authorities. The guarantees intended for human consumption. Fur- regarding the quality of each are thermore, the precautions taken in that therefore likely to become ineffective if provision in order to maintain the quality the wines are blended. of wines obtained by coupage do not apply, since the wines are intended for distillation or vinegar-making. Nor is It is of prime importance to maintain and there any justification in the case of improve the quality of products intended wines obtained by coupage intended for for consumption and to direct towards vinegar-making for a specific prohibition other uses such as distillation and the applying solely to wines imported from production of wine vinegars those which non-member countries. Since the do not fulfil those requirements of prohibition of coupage which applies quality. It is for that reason that the solely to those wines is due to the Community rules draw a clear distinction difficulty in controlling their quality between wines offered or disposed of for when they are blended, the sole criterion direct human consumption and others. of quality control is no longer decisive Thus, Title IV of Regulation (EEC) seeing that the wines are not intended No 337/79 is concerned with "rules for direct human consumption. concerning oenological processes and conditions for release to the market" and, even more explicitly, Article 48 (3) (a) of Regulation No 337/79 (Article 28 III — Oral procedure of Regulation No 816/70) provides that "wine . . . not corresponding to the definitions contained in items 10 to 16 of Annex II may be used only for At the sitting on 9 July 1981 oral consumption in the families of individual argument was presented by the wine-growers, for the production of following: J.-P. Karsenty, of the Paris wine-vinegar or for distillation". Bar, for Mr Clément and Mr Ces; A. Carnelutti, acting as Agent, for the French Government; and J. C. Séché, Although Article 43 of Regulation No acting as Agent, for the Commission of 337/79 does not expressly mention wines the European Communities. intended for direct human consumption, it is applicable only to such wines: it falls The Advocate General delivered his under Title VI (cited above) concerning opinion at the sitting on 19 November conditions for release to the market and 1981.

4 It appears from the judgment making the reference that the wines in question were Greek and Algerian wines which were imported into the Netherlands before 1 June 1970 (the date on which the above-mentioned regulation of the Council entered into force) and were blended in the Netherlands. The wines were in free circulation in the Netherlands and were sold by a Netherlands company to the French companies, Albert Clément and Gérard Ces, which imported them into France and declared them as being intended for vinegar-making.

5 Article 26 (4) of Regulation No 816/70 cited above, which concerns wines from non-member countries, provides that "the coupage of an imported wine with a Community wine and the coupage on Community territory of imported wines shall be prohibited except by way of derogation to be decided by the Council, acting in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission".

6 Regulation No 1021/70 of the Commission of 29 May 1970 (Journal Officiel 1970, L 118, p. 19) authorized coupage between imported wines until 31 December 1970 on the territory of the Member States which had

CLÉMENT

availed themselves of the authorization accorded as a transitional measure. However, under Article 2 of the regulation wines produced by such coupage could be marketed only on the territory of the Member State in which they had been subject to coupage and until 31 December 1970 on the territory of other Member States which had availed themselves of the authorization thus accorded as a transitional measure. It is established that France did not avail itself of that authorization.

10 In order to reply to the question raised, it is necessary to consider the general scheme of Article 26 of the regulation. Paragraph (1) provides that where coupage takes place, only products resulting from the coupage between table wines and from the coupage of table wines with wines suitable for yielding table wines are to be considered as table wines, provided that the suitable wines in question have a total natural alcoholic strength not exceeding 17° and subject to the provisions of the following paragraphs. Paragraph (2) provides that the coupage of a wine suitable for yielding a table wine from a given wine-growing zone with a table wine produced in another wine-growing zone may yield a table wine only if that process takes place in the wine-growing zone where the wine suitable for yielding a table wine was produced. Coupage between wines suitable for yielding table wines is to be authorized only if they are produced in the same wine-growing zone and if coupage is carried out in the said zone.

JUDGMENT OF 17. 12. 1981 — CASE 2/81

1 1 Paragraph (3) adds that coupage of a wine suitable for yielding a white table wine or of a white table' wine with a wine suitable for yielding a red table wine or with a red table wine may not yield a table wine, except in certain cases to be determined and in which the resultant product has the charac- teristics of a red table wine.

12 According to Annex II to the regulation, the descriptions "wine suitable for yielding table wine" and "table wine" appearing in those three paragraphs and also in paragraph (6) concerning the detailed rules for the application of Article 26 are reserved for wines produced in the Community.

On those grounds,

T H E COURT (First Chamber),

in answer to the question submitted to it by the Tribunal de Grande Instance, Paris, by judgment of 24 January 1980, hereby rules:

The provisions of Article 26 (4) of Regulation (EEC) No 816/70 of the Council of 28 April 1970 laying down additional provisions for the common organization of the market in wine (Official Journal, English Special Edition 1970 (1), p. 234) do not apply to wines intended for vinegar-making.

Bosco O'Keeffe Koopmans

Delivered in open court in Luxembourg on 17 December 1981.