C-249/81

JUDGMENT OF 24. 11. 1982 — CASE 249/81

based on decisions which are binding consumers in that State and thus of upon undertakings. Even measures frustrating the aims of the adopted by the government of a Community as set out in Article 2 and Member Sute which do not have enlarged upon in Article 3 of the binding effect may be capable of Treaty. influencing the conduct of traders and

In Case 249/81

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Rolf Wägenbaur, acting as Agent, assisted by Peter Oliver, a member of its Legal Department, with an address for service in Luxembourg at the office of Oreste Montalto, Jean Monnet Building, Kirchberg, applicant, v

IRELAND, represented by Louis J. Dockery, Chief State Solicitor, assisted by John D. Cooke, Senior Counsel and H. J. O'Flaherty, Senior Counsel, with an address for service in Luxembourg at the Irish Embassy, defendant,

APPLICATION for a declaration that, by taking measures to promote Irish goods within Ireland, Ireland has failed to fulfil its obligations under Article 30 of the EEC Treaty,

Facts and Issues

The facts of the case, the course of the The Minister defined the four basic procedure and the conclusions and objectives of the programme as follows: submissions and arguments of the parties may be summarized as follows:

"(i) To bring home to the consumer the economic consequences — in terms of jobs, living standards and I — Facts and written procedure economic progress — of failing to give fair and reasonable support to Irish goods. 1. In a speech delivered on 18 January 1978 Mr Desmond O'Maliey, TD, Minister for Industry, Commerce and Energy, launched a three-year (ii) To communicate the home truth programme for the promotion of Irish that Irish exports are proving daily goods in the following terms: around the world that Irish goods deserve support on their competitive merits, and that, by and large, Irish products compare at least as well — "Today, we are launching a three-year and often better — with the programme which, if fully successful, equivalent import in quality and will have the effect of creating 10 000 value. additional full-time jobs in Irish manu- facturing industry and services through increased support for Irish goods by the Irish consumer and Irish industry. The (iii) To secure the fullest support from programme has set a target of a switch the wholesale and reuil trade from imports to Irish products equivalent sectors. We are asking for to 3% of total consumer spending, with reasonable cooperation in buying, a corresponding shift in industrial displaying and promoting Irish spending. merchandise. It should be remembered that the economic benefits of this programme will be Meeting this target will not only achieve felt by the retail trade as much as by these 10 000 jobs; it will provide many everyone else. additional benefits to the economy. Among other things, it will safeguard existing jobs threatened by the continued erosion of home market sales by manu- (iv) To create a new spirit of dynamism factured imports and it will achieve a and cooperation among Irish manu- substantial reduction in the balance of facturers. It has been suggested that payments deficit." one reason why home market share

has dropped is that Irish manufac- "Guaranteed Irish" symbol and the turers have tended to take it for purchaser is unable to bring the granted. The experience of recent complaint to a satisfactory con- years is an indication of the serious clusion, the matter is investigated by consequences of such an approach." the Irish Goods Council. That scheme is designed to encourage the consumer to look for and buy products bearing that symbol and 2. In a letter of 28 May 1979, pursuant thus encourages the purchase of to the first paragraph of Article 169 of domestic products. the EEC Treaty, the Commission of the European Communities requested the Irish Government to submit its obser- vations on the compatibility with Article (b) The publication by the Irish Goods 30 of the Treaty of a series of measures Council of documents such as taken in the context of the three-year "Expanding for Sales", "Guaranteed programme for the promotion of Irish Irish — That's the ticket!" and "You products, announced by the Irish and your shopping", which contain Government in January 1978. deuiled information on the action uken by the Irish authorities to encourage Irish consumers to purchase only domestic products. In its letter the Commission first referred to the above-mentioned speech by Mr O'Malley, as well as to a speech delivered on 11 May 1978 by Raphael (c) The "Shoplink Service", which is Burke, TD, Minister of Sute at the free of charge and located in five Department of Industry, Commerce and centres in Dublin, Cork, Limerick, Energy, from which it emerged that IRL Waterford and Galway; its aim is to 600 000 were to be devoted to the three- provide consumers with information year programme which was designed to as to the availability of products strengthen brand awareness of grocery made in Ireland. goods made in Ireland. According to Mr Burke, the programme would be the biggest sectoral operation for Irish goods in 1978 under the "Guaranteed Irish" (d) The exhibition facilities available banner. Moreover, the private sector had solely for domestic products in the proposed to participate in joint-venture Ireland House Trade Centre, which promotions with the Sute and to provide is operated in Dublin by the Irish one half of the funds. Goods Council.

In its letter to the Irish Government, the Commission stated that in its opinion the Irish Goods Council was a public authority within the meaning of Commission Directive No 70/50/EEC (k) hinder the purchase by private of 22 December 1969, based on the individuals of imported products provisions of Article 33 (7), on the only, or encourage, require or give abolition of measures which have an preference to the purchase of effen equivalent to quantitative domestic products only; restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty (Official Journal, English Special Edition, 1970 (1) totally or partially preclude the use (I), p. 17). According to the second of national facilities or equipment in recital in the preamble to that directive, respect of imported products only, "measures", for the purposes of Article or totally or partially confine the use 30 et seq., include "any instruments of such facilities or equipment to issuing from a public authority which, domestic products only;" while not legally binding on the addressees thereof, cause them to pursue a certain conduct". 3. By a letter of 20 July 1979, the Irish Government replied that it understood the Commission's objections as meaning In the Commission's opinion, the above- that it was not opposed to the three-year mentioned speeches, documents and programme per se, but only to certain activities are "instruments", within the features of it, and in particular to the meaning of that directive, which appear fact that the exhibition facilities available to be of such a nature as to cause the at the Ireland House Trade Centre and addressees thereof to purchase domestic the facilities of the Shoplink Service products and which therefore constitute could be used only for domestic measures having an effect equivalent to products. It stated that it was prepared to quantitative restrictions prohibited by extend those facilities to products from Article 30 of the Treaty. Whilst other Member States. admitting that Member States may take measures to promote the sale of their own products, the Commission drew the Irish Government's attention to the fact A meeting between Irish officials and that those measures had to be compatible Commission officials on 22 November with the EEC Treaty and in particular 1979 failed to produce the desired results with the principle of the free movement and in a letter of 9 March 1981 the of goods. Commission forwarded to the Irish

Government the reasoned opinion of 25 Council from private sources during February 1981, addressed to Ireland those years; pursuant to the first paragraph of Article 169 of the Treaty, concerning the "Buy (b) To supply further information Irish" campaign. concerning the joint working party referred to in the speech given by the At a second meeting on 5 May 1981, the Irish Minister for the Environment Commission was informed of the fact on 9 April 1981. that it had been decided to terminate the Shoplink Service scheme and the exhibition facilities available at the Ireland House Trade Centre instead of II — Conclusions of the parties extending them to products from other Member States. The applicant claims that the Court should: 4. The Commission lodged this application on 15 September 1981. 1. Declare that, by promoting the sale Upon hearing the report of the Judge- and purchase of Irish goods within its Rapporteur and the views of the territory, Ireland has failed to fulfil its Advocate General, the Court decided to obligations under Article 30 of the open the oral procedure without any EEC Treaty; preparatory inquiry. However, it requested the Commission: 2. Order the Irish Government to pay the costs. (a) To indicate precisely which of the measures adopted by the Irish auth- orities are considered by it to be The defendant contends that the Court measures having equivalent effet [to should: quantitative restrictions] within the meaning of Article 30 of the EEC 1. Dismiss the Commission's application; Treaty; 2. Order the Commission to pay the (b) To sute which of these measures costs. continued to be applied after the "Buy Irish" campaign was supposed to end, early in 1981; III — Submissions and argu- (c) To give the Court details of the ments of the parties results of any investigations made by it of similar advertising campaigns in other Member Sutes. In its application, the applicant, the Commission of the European Communities, first sutes that the At the same time, the Court requested campaign for the promotion of Irish the Irish Government: goods continues unabated in spite of the (a) To supply the Court with a copy of fact that three years have elapsed since the Memorandum of Association and the three-year programme was launched of the Articles of Association of the in 1978. The promotion ukes the form Irish Goods Council, and to sute in particular of advertisements in the how much it granted to that body by Irish press and on radio and television way of annual subsidies during the with slogans such as "Tip just a few three-year period from 1978 to 1981 purchases over to Irish products and tip and how much was available to the jobs in Ireland's favour".

An aniele published on page 17 of the possible measures to promote import Irish Times of 24 June 1981 stated as substitution and greater purchases of follows: Irsih goods. The working party included representatives of the Irish Congress of Trade Unions, Confederation of Irish "Last year [1980] the role of impon Industry, Construcdon Industry substitution was given increased attention Federation, Federated Union of as an efficient and effective instrument of Employers, Irish Goods Council, industrial policy in a free trade situation. Industrial Development Authority, During the year the Industrial Division Department of Finance and Department of the [Irish Goods] Council identified of Industry, Commerce and Tourism. IRL 64 million worth of impon sub- stitution opportunities of which IRL 18 million of new business was secured for The working party introduced an Irish manufacturers . . . intensive programme involving all sectors of industry and the compilation of a directory of Irish building materials formed part of the building sector The Irish Goods Council has set up a programme... target of IRL 30 million worth of impon substitution business for this year and it is intended to intensify promotional work with manufacturers and retailers I believe that this document [the directory of Irish building materials] is central to the whole import substitution programme." That article forms pan of a feature containing six unsigned anieles, which are assumed by the Commission to Among the main aspects of the emanate from die Irish Goods Council promodon of Irish goods, the applicant and which bear the subtide mendons the use of the "Guaranteed "Advertisement Feature". Irish" symbol and the considerable financial aid provided by the Irish Government to the Irish Goods Council: IRL 940 000 in the 1980 budget and IRL The Commission draws attendon in 922 000 in the 1981 budget. particular to the phrase "import sub- stitution" appearing in the extract quoted above. That concept also appeared in a Moreover, the measures taken by the speech delivered on 9 April 1981 by Mr Irish authorides to promote Irish goods Burke, Minister for the Environment, within Ireland are so many and varied who announced new government that it is not possible to list them all. The inidatives, in the following manner: promotion campaign as a whole covers all categories of Irish goods and all cat- egories of purchasers, be they individual "In August last year [1980] new consumers, industrial or commercial government inidatives on the promotion undertakings or State bodies. Thus there of import substitution were announced. is not only a "Buy Irish" campaign, but A working party was set up under my also a "Sell Irish" campaign, designed to chairmanship as the then Minister of encourage wholesalers and retailers to State at the Department of Industry, sell Irish goods in preference to imported Commerce and Tourism, to consider goods.

The Commission considers that the accorded with the outline presented by measures in question constitute measures the Commission. However, it disputes "which encourage the purchase of the significance attributed by the domestic products only" within the Commission to the various elements of meaning of Article 2 (3) (k) of the campaign and the Commission's Commission Directive No 70/50 and interpreution thereof. that they are attributable to the Irish Sute. In that regard, the defendant draws attention first to the fact that, in view of the withdrawal of the Shoplink Service Those measures constitute actual or and of the exhibition facilities at the potential, direct or indirect hindrances to Ireland House Trade Centre, the imports, which fall within the prohibition Commission's application is directed in on measures having an effect equivalent essence towards one type of activity to quantitative restrictions. In the alone, that is to say the publicity and circumstances, it is irrelevant whether advertising operations of the Irish Goods those measures have actually had the Council. Those promotions uke the effect of reducing imports. form of a general public advertising campaign for the most part with some ancillary operation such as the pub- Furthermore, in view of the economic lication of information about Irish nature of the objectives of the promotion products in particular categories. The campaign, the contested measures are primary objective of the "Buy Irish" not justified under Article 36 of the campaign is the creation of new Treaty, which is concerned solely with employment. It does not seek to promote non-economic matters. particular brand-names or individual products, but seeks to create a general sense of awareness of the availability of Irish products. Thus the campaign in no Finally, the Commission emphasizes that way seeks to restria, prohibit, eliminate the measures referred to are fundamen- or penalize the importation of competing tally different from those by which a products. Member State promotes the sale of its national products outside its territory. When such measures to promote Irish With regard to the role and position of exports are carried out in another the Irish Goods Council, the defendant Member Sute, they serve to increase considers that the suggested influence trade between Member Sutes and are and impact upon the public, which the therefore entirely compatible with Article Commission seems to attribute to that 30 and 34. On the other hand, a body as a "public authority", are widely Member Sute may not promote exaggerated. In fact the Council was domestic products within its own esublished to create a framework in territory. which diverse industries could come together to cooperate for their common good. The members of the Management The Government of Ireland, the Committee are chosen so as to be rep- defendant, admits that the speeches of the resentativeof the interested sectors of various ministers were made as quoted the economy, and the only purpose of and that the three-year programme, the government sponsorship was to generally referred to as the "Buy Irish" encourage Irish industry to help itself. campaign, took place and in broad terms The Government has not enacted any

There is no basis in Article 30 itself or in the scheme of the Treaty or the case-law of the Court, however, which would Next, the Irish Government contends warrant extending the meaning of the that, by their very nature, the contested word "measures" so as to include purely activities are not "measures" within the gratuitous statements in speeches or meaning of Article 30 of the Treaty. advertisements which may well be Even if it is accepted for the purposes of ignored by those receiving them. argument that activities promoting public awareness of domestic products are capable of placing imported products at a disadvantage, it is submitted that they cannot fall to be considered under The Commission does not suggest any Article 30 for that reason alone. way in which the campaign achieves its objective otherwise than by persuasion of the general public in the manner described, nor does it seek to argue that the sponsorship of the campaign by the Irish Government involves the creation In this regard, the defendant states that or imposition of any "trading rule" such in all the interpretations of the phrase as is mentioned above. "measures of equivalent effect" in the judgments of the Court there is found the common element of some direct regulatory intervention emanating from a public authority and carrying some The defendant states that, in order to degree of compelling force. Thus the establish the proposition that gratuitous general definition adopted by the Court advertisements constitute measures of in its judgment of 11 July 1974 in Case equivalent effect, the Commission relies 8/74 (Procureur du Roi v Dassonville, exclusively on the definition found in [1974] ECR 837) refers to "all trading Directive No 70/50, which provides that rules enacted by Member States ...", for the purpose of Article 30 et seq. of and in the vast majority of cases decided the Treaty, the term "measures" means by the Court the contested measure is a "all instruments issuing from a public legally binding act or instrument. In authority, including recommendations" the defendant's opinion, the word (first recital in the preamble) "which, "measures" for purposes of Article 30 of while not legally binding on the the Treaty contemplates laws, decrees, addressees thereof, cause them to pursue rules, administrative practices or a certain conduct" (second recital arrangements or some other form of therein).

It considers, however, that that advantage and may thereby make the definition is of no legal effect and that in sale of competing imported products adopting that directive the Commission more difficult. Nevertheless, such a was clearly acting ultra vires. Indeed, subsidy is not within the ambit of Article Article 33 (7) of the Treaty, on which 30 but falls to be considered under the directive was based, does not Articles 92 and 93 of the Treaty. authorize the Commission to elaborate an extended definition of the word

Whilst it is true that rules". Such efforts to aid industries in the Court's interpretation of Article 30 general are precisely the kind of has emphasized the significance of the measures in relation to which the' words "equivalent effect", it has Commission exercises a discretion under nevertheless always presupposed the Articles 92 and 93. The Commission's existence of measures likely to cause claim that the "Buy Irish" campaign such an effect. With regard to the leads to a distortion in the free applicability of Article 30, the movement of goods in the common Commission points to the effects of the market is but another way of stating its "Buy Irish" campaign upon imports as if incompatibility with the common market, those effects were the sole determining to which reference is made in Article 92

COMMISSION v IRELAND

JUDGMENT OF 24. 11. 1982 — CASE 249/81

[1969] ECR 523), from which it is clear The Irish Government lodged a copy of that a general aid in the form of a pref- the Memorandum and Articles of erential re-discount rate for exports, Association of the Irish Goods Council, granted in favour of national products as well as the following table showing exported, constitutes an aid within the contributions from the State and from meaning of Article 92. private sources to the Council from 1978 to 1981.

Government Private Year IV — Answers to the written financing contributions questions put by the Court Period from the creation of The Commission states that the measures the IGC on 25 August taken by the Irish Government may be 1978 until divided into two categories, namely: 31 December 1979 IRL 1 005 000 IRL 175 000 (i) the payment of considerable amounts 1980 IRL 940 000 IRL 194 000 of money to the Irish Goods 1981 IRL 922 000 IRL 218 000 Council, and

COMMISSION v IRELAND

Decision

1 By an application lodged at the Court Registry on 15 September 1981 the Commission of the European Communities brought an action before the Court under Anicie 169 of the EEC Treaty for a declaration that by organizing a campaign to promote the sale and purchase of Irish products in its territory Ireland has failed to fulfil its obligations under the Treaty.

I — The subject-matter of the application

2 In a reasoned opinion addressed to Ireland on 25 February 1981 concerning the "Buy Irish" campaign, the Commission noted that in January 1978 the Irish Government had introduced a three-year programme to help to promote Irish products. The campaign was launched on 18 January 1978 in a speech delivered by the Irish Minister for Industry, Commerce and Energy. The Minister declared on that occasion that the aim of the campaign was to achieve "a switch from imports to Irish products equivalent to 3°/o of total consumer spending" and that the campaign was "a carefully thought out set of initiatives that add up to an integrated programme for promoting Irish goods, with specific proposals to involve the producer, distributor and consumer".

3 The Irish Government, it was said, had taken and was continuing to take a series of measures designed to promote Irish products in accordance with the terms of that speech. The reasoned opinion cited the following measures:

4 The Commission notes in the application that the activities connected with the Shoplink Service and the exhibition facilities in Dublin have now been abandoned by the Irish Government. However, the other two activities have continued, even after the expiry of the three-year period for which the campaign was to last. Moreover, the publicity campaign has been gradually extended, in particular by means of widespread advertising in favour of Irish products in the press and on television.

5 The Irish Government admits that there was a three-year programme in favour of buying Irish products in Ireland. It says that since the Shoplink Service and the exhibition facilities in Dublin were abandoned at the request of the Commission the programme consists merely of an advertising campaign, by means of the press and television, the publication of posters and pamphlets and the use of the "Guaranteed Irish" symbol, designed to make Irish consumers better acquainted with products made in Ireland and to stimulate awareness in the Irish public of the link between the marketing of such products in Ireland and the unemployment problem in that country.

6 As far as the advertising campaign is concerned, the Irish Government confirms that it forms part of the activities of the Irish Goods Council. However, that institution cannot be regarded as a public authority; it is merely an arrangement whereby the various industries in Ireland may cooperate for their common good. The activities of the Irish Goods Council are not based on any official enactment and the involvement of the Government consists exclusively of financial aid and moral support.

1 1 The Irish Government maintains that the Irish Goods Council was created under the sponsorship of the government in order to encourage Irish industry to overcome its own difficulties. The Council was established for the purpose of creating a framework within which the various industries could come together in order to cooperate for their common good.

1 2 The Management Committee of the Irish Goods Council consists, according to the Articles of Association of that institution, of 10 persons appointed in their individual capacities by the Minister for Industry, Commerce and Energy; the same Minister appoints the chairman from among the members of the Management Committee. The members and the chairman are appointed for a period of three years, and their appointments may be renewed. In practice, the members of the Management Committee are selected by the Minister in such a manner as to represent the appropriate sectors of the Irish economy.

JUDGMENT OF 24. 11. 1982 — CASE 249/81

13 It appears from the information supplied by the Irish Government at the request of the Court that the activities of the Irish Goods Council are financed by subsidies paid by the Irish Government and by private industry. The subsidies from the State and from the private sector amounted, respectively to IRL 1 005 000 and IRL 175 000 for the period between August 1978 and December 1979; IRL 940 000 and IRL 194 000 for 1980; and IRL 922 000 and IRL 238 000 for 1981.

1 4 The Irish Government has not denied that the activities of the Irish Goods Council consist in particular, after the abandonment of the Shoplink Service and the exhibition facilities offered to Irish manufacturers in Dublin, in the organization of an advertising campaign in favour of the sale and purchase of Irish products, and in promoting the use of the "Guaranteed Irish" symbol.

18 It must be observed, however, that the fact that a substantial part of the campaign is financed by the Irish Government, and that Articles 92 and 93 of the Treaty may be applicable to financing of that kind, does not mean that the campaign itself may escape the prohibitions laid down in Article 30.

19 In any case, if the Irish Government considered that such financing amounted to aid within the meaning of Articles 92 and 93 it ought to have notified the aid to the Commission in accordance with Article 93 (3).

IV — The application of Article 30 of the Treaty

20 The Commission maintains that the "Buy Irish" campaign and the measures taken to prosecute the campaign must be regarded, as a whole, as measures encouraging the purchase of domestic products only. Such measures are said to be contrary to the obligations imposed on the Member States by Article 30. The Commission refers to Article 2 (3) (k) of Commission Directive No 70/50/EEC of 22 December 1969, based on the provisions of Article 33 (7), on the abolition of measures which have an effect equivalent to quantitative restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty (Official Journal, English Special Edition 1970 (I), p. 17). According to Article 2 (3) (k), measures which encourage the purchase of domestic products only must be regarded as contrary to the prohibitions contained in the Treaty.

21 The Irish Government maintains that the prohibition against measures having an effect equivalent to quantitative restrictions in Article 30 is concerned only with "measures", that is to say, binding provisions emanating from a public authority. However, no such provision has been adopted by the Irish Government, which has confined itself to giving moral support and financial aid to the activities pursued by the Irish industries.

26 T h e advertising campaign to encourage the sale and purchase of Irish products cannot be divorced from its origin as part of the government programme, or from its connection with the introduction of the "Guaranteed Irish" symbol and with the organization of a special system for investigating complaints about products bearing that symbol. T h e establishment of the system for investigating complaints about Irish products provides adequate confirmation of the degree of organization surrounding the "Buy Irish" campaign and of the discriminatory nature of the campaign.

COMMISSION v IRELAND

27 In the circumstances the two activities in question amount to the establishment of a national practice, introduced by the Irish Government and prosecuted with its assistance, the potential effect of which on imports from other Member States is comparable to that resulting from government measures of a binding nature.

28 Such a practice cannot escape the prohibition laid down by Anicie 30 of the Treaty solely because it is not based on decisions which are binding upon undertakings. Even measures adopted by the government of a Member State which do not have binding effect may be capable of influencing the conduct of traders and consumers in that State and thus of frustrating the aims of the Community as set out in Article 2 and enlarged upon in Article 3 of the Treaty.

29 That is the case where, as in this instance, such a restrictive practice represents the implementation of a programme defined by the government which affects the national economy as a whole and which is intended to check the flow of trade between Member States by encouraging the purchase of domestic products, by means of an advertising campaign on a national scale and the organization of special procedures applicable solely to domestic products, and where those activities are attributable as a whole to the government and are pursued in an organized fashion throughout the national territory.

hereby:

1. Declares that by organizing a campaign to promote the sale and purchase of Irish products within its territory Ireland has failed to fulfil its obligations under the Treaty;

2. Orders the defendant to pay the costs.

Mertens d e Wilmars Pescatore O'Keeffe

Everling Mackenzie Stuart Bosco Koopmans

Delivered in open court in Luxembourg on 24 November 1982.