C-32/82

LUDOVICUS VAN DE WEYER, clerk, of Stabroek,

NV TRANSMARCOM, a transport undertaking whose registered office is in Antwerp,

JOZEF GULDENTOPS, transport-undertaking manager, of Wervik,

PVBA CORDITRANS, a transport undertaking whose registered office is in "Wervik,

JAN FLOUR, civil engineer, of Asse,

NV TRANSLEV, a transport undertaking whose registered office is in Antwerp,

Advocate General: S. Rozes Registrar: J. A. Pompe, Deputy Registrar

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of Bracket uriffs are uriffs laying down the procedure and the observations maximum and minimum rates. The submitted pursuant to Article20 of the difference between the two rates Protocol on the Statute of the Court of constitutes the bracket spread (Article Justice of the EEC may be summarized 2 (1)). as follows:

According to the fifth recital in the If no agreement is reached, the dispute preamble to Regulation No 1174/68, the may be referred to the Commission at tariffs must be drawn up in such a way the request of any of the Member States as to avoid both abuse of dominant concerned. After consulting a Committee positions and damaging competition. of Experts, composed of government experts and having a represenutive of the Commission as Chairman (Anicie In fact, each tariff is to be drawn up by 11), the Commission, acting as soon as reference to a base-rate which is the possible is to adopt a decision which is middle point of the bracket (first subpara- to be notified to the Member States graph of Article 3 (1)). The base-rate concerned and at the same time itself is to be fixed having regard to the communicated to the other Member average cost of the transport operation, States. That decision is to uke effect including the general expenses of the after a period of twenty days, unless business, for a properly managed under- before the expiry of that period the taking enjoying normal conditions of use matter is referred to the Council by a of its carrying capacity, and to market Member Sute. In such cases, the Council conditions and is to be such as to provide is to give its decision by a qualified a fair return for carriers (second subpara- majority within twenty days. The graph of Article 3 (1)). decisions so adopted by the Council or Commission are to remain in force until such time as an agreement is concluded Tariffs may vary according to the between the Member Sutes concerned circumstances of the service provided, in or until any further decision by the particular according to the technical and Council or the Commission in economic characteristics of the operation accordance with the same procedure in question, the route concerned, the (indent (b) of the third subparagraph of length of the transit period, the tonnage Article 4 (2)). conditions and the type of goods carried (Article 3 (2)). Each Member Sute is to bring the uriffs The tariffs are to be fixed or amended by into force within two months following agreement between the Member States conclusion of negotiations for the fixing directly concerned, that is the States on or amendment of uriffs or, as the case whose territory the goods are to be may be, following completion of the loaded or unloaded (first subparagraph procedure leading to a decision by the of Article 4 (1)). The Commission may Commission or Council (second subpara- participate in an advisory capacity in the graph of Anicie 4(1)). The tariffs are to negotiations; it may submit to the be communicated by Member States to Member Sutes directly concerned the Commission (Anicie 4 (3)). proposals designed to produce agreement (first subparagraph of Article 4 (2)). Bracket tariffs are to be officially published in the Member States If an agreement is reached between the concerned. The particulars published are Member States directly concerned, it to include the dates of their entry into is to be notified forthwith to the force; only the maximum rate for each Commission and to the other Member bracket need be published (Article 6).

Regulation No 1174/68 entered into force on 1 September 1968 and remained valid until 31 December 1971. It pro- The transport rate is to constitute the full vided however that it would remain in remuneration for the actual transport force for a period of one year in the operations and for the periods when the event of the Council's not having vehicle is immobilized for loading or decided before that date on the system to unloading (Article 6 (1)). It is to be be applied subsequently (Articles 17 and determined separately for each operation 18). In fact, the period of validity of the on the basis of the tariff distance, the regulation was extended several times, nature of the goods and the chargeable on the last occasion to 31 December weight thereof (Article 6(2)). The 1977 by Council Regulation No 3181/76 transport rate may be freely fixed by of 21 December 1976 (Official Journal agreement between the parties within a 1976, L 359, p. 13). spread of 23% of the maximum rate (Anicie 6 (3)). It is to be expressed in Belgian francs or French francs and centimes (Anicie 6 (4)). The general scales, which set the maximum tariff Pursuant to Regulation No 1174/68, the rate, were laid down by the decree on Kingdom of Belgium negotiated and the basis of a fixed conversion rate of FF concluded several tariff agreements with 1 : BFR 9 and no provision was made for the Member States concerned. Thus, the any adjustment in the event of changes Royal Decree of 17 November 1971 in exchange rates. (Moniteur Belge [Belgian Official Gazette] of 9 December 1971), adopted in accordance with the Law of 1 August 1960 on the Carriage of Goods by Road for Remuneration (Moniteur Belge of 12 Regulation No 1174/68 was superseded August 1960) and the Law of 18 by Council Regulation No 2831/77 of February 1969 on Measures for the 12 December 1977 on the fixing of rates Implementation of International Treaties for the carriage of goods by road and Instruments relating to Transport by between Member States (Official Journal Road, Rail or Waterway (Moniteur 1977, L 334, p. 22). Belge of 4 April 1969), brought into force with effect from 19 December 1971 the tariff for the carriage of goods by road for remuneration between the Kingdom of Belgium and the French Since it is considered that a single system for the fixing of rates and conditions for

the carriage of goods by road between lations and administrative provisions Member States can be achieved only introduced by the Member States progressively and in parallel with the pursuant to Regulation No 1174/68 are development of the markets concerned, to remain in force for the compulsory the regulation offers Member States, as tariffs established pursuant to the new an experiment, the choice, on the basis regulation until they are replaced by of a common principle, between a non- provisions adopted on the basis of the binding reference tariff and compulsory latter (Article 20 (3)). bracket tariffs (second and third recitals in the preamble). Regulation No 2831/77 contains a significant innovation as compared with It is for the Member States concerned to Regulation No 1174/68 — it provides decide by mutual agreement on the that a Member Sute may, in order to application of one or other of the tariff offset the effects of monetary fluc- systems, taking particular account of the tuations, unilaterally carry out an economic and technical conditions of the upward revision of price schedules transport market concerned (first expressed in its currency: the Member subparagraph of Article 2 (3)). Subject to Sute concerned is then to inform the compliance with that principle, the other Member Sutes concerned and the Member States may maintain compulsory Commission at least one month before tariffs where such tariffs have been that measure is brought into effect applied in pursuance of a Community (Article 11 (3)). regulation and may introduce reference tariffs where no Community tariff rules have been applied (second subparagraph When an inspector from the Ministry of ofArticle 2(3)). Transport carried out checks in Belgium, he ascertained that during January 1979 a number of Belgian undertakings had The reference tariffs are merely transported goods between France and recommendations. They provide guide- Belgium at rates lower than those lines for the determination of transport determined in accordance with the rates and each transport undertaking has minimum compulsory uriff fixed by the the responsibility of agreeing the rate Royal Decree of 17 November 1971, as with its customer according to the amended by the Royal Decree of 11 market situation and the interests of both October 1978 (Moniteur Belge of 8 parties. November 1978), which raised all the uriffs by 15 %.

In the appeal proceedings, the appellants The judgment of the Rechtbank van whilst not denying that they took the Eerste Aanleg, Ghent, was received at action of which they were accused, the Court Registry on 18 January 1982. claimed that the parity between the French franc and the Belgian franc no longer corresponded, at the material In accordance with Article 20 of the time, to the fixed parity adopted in the Protocol on the Statute of the Court of Royal Decree of 17 November 1971 and Justice of the EEC, written observations that, in order to avoid having to operate were lodged on 10 March 1982 by the at a loss, they had been obliged to apply appellants in the main proceedings, Jozef the real exchange rate of 1 :6.85 to the Guldentops and PVBA Corditrans, both transport rates. The rates actually applied represented by Marc Decramer, of the were lower than the minimum fixed by Wervik Bar; on 23 March by the the Royal Decree in Belgian francs but Kingdom of Belgium, represented by the higher than the minimum expressed in Minister of Transport, assisted by Robert French francs and converted into Belgian Wijffels, of the Antwerp Bar; on 26 francs at the rate ruling on the day of March by the Council of the European conversion. Communities, represented by Jill Aussant, Principal Administrator in the Legal Department; on 29 March by By interlocutory judgment on appeal of 8 the Commission of the European May 1981 the Sixth Chamber of the Communities, represented by Auke Rechtbank van Eerste Aanleg, Ghent, Haagsma, a member of its Legal held that the proceedings were to be Department, and on 6 April 1982 by the stayed until, pursuant to Article 177 of appellants in the main proceedings, Jan the EEC Treaty, the Court of Justice Flour and NV Translev, both rep- had given a preliminary ruling on the resented by Professor Michel Wael- following questions: broeck, of the Brussels Bar.

Since it contains no provisions to counter the effects of the disparity between the The Government of the Kingdom of currencies of the Member States, Regu- Belgium was called upon to have its lation No 1174/68 is incompatible with agent assisted by an expert able to Article 75 of the EEC Treaty. It explain to the Court the practical disregards one of its own essential aims. operation of the bracket-tariff system at Instead of achieving harmonization it the material time; creates discrimination between citizens of the various Member States. It breaches the principles of proportionality and equality and does not conform to The Government of the French Republic Article 2 of the EEC Treaty. was called to have itself represented at the hearing, if possible by an expert able to explain to the Court the conditions which at the material time had developed The appellants in the main proceedings, between French and Belgian carriers Jan Flour and NV Translev, observe that following the devaluation of the French Regulation No 1174/68 was no longer franc. applicable when the events giving rise to the main proceedings occurred. It is appropriate however to examine its validity on the twofold ground that Regulation No 2831/77 repeated the provisions of Regulation No 1174/68 II — Written observations sub- and that it provides for the laws, regu- mitted to the Court lations and administrative provisions adopted by the Member States in order to implement it to be maintained in force.

The appellants in the main proceedings, Jozef Guldentops and PVBA Corditrans, claim that the parity fixed by law at 1 :9, whilst the actual parity was 1 :6.85, (a) Regulation No 1174/68 is contrary entailed unacceptable discrimination to the objectives of the Treaty, as set against Belgian carriers and a distortion forth in Articles 74 and 75, in so far as, of the conditions of competition. That whilst imposing upon Member Sutes the discriminatory situation is in direct obligation to fix common transport breach of the EEC Treaty, in particular tariffs, it conuins no provision enabling Article 75 thereof. It is incompatible with the problem of fluctuations in currency Regulation No 1174/68, the object of exchange rates to be dealt with.

When the Community institutions adopted Regulation No 2831/71, they were informed that the fluctuations in According to the judgment of the monetary parities between the various Politierechtbank, Ghent, of 15 April Member States had brought about, to a 1980, the Royal Decree of 17 November considerable extent, a distortion of the 1971 fixes the tariff solely in Belgian bracket-tariff system, they are guilty of currency, without any reservation or neglecting to impose upon Member basis for amendment or adjustment. For States the obligation to adapt their tariffs the transpon of identical goods by the to take account of developments in the same means, French carriers therefore fix international monetary system. their prices in French francs and Belgian carriers fix theirs in Belgian francs. The schedules for the fixed tariffs, in Belgian francs and French francs, date from 1971 and incorporate a fixed parity of (b) The case-law of the Court, in FF 1 : BFR 9. They have not been particular the judgments of 3 June 1980 amended, even though at the date of the in Case 135/79 Gedelfi [1980] ECR 1713 events at issue the parity used in the and of 3 February 1982 in Case 248/80 schedules was rendered completely Glunz [1982] ECR 197, confirms the irrelevant by the fall in value of the obligation of the Community legislature French franc and despite the fact that the to be mindful of developments in the exchange rate was in the region of FF international monetary system and the 1 : BFR 6.85, that is to say a difference finding that a regulation which gives rise of almost 25%. to the application of different tariffs for the carriage of the same goods by the same means, depending upon which currency is used, does not conform to the Community aim of ensuring equality. The fact that Belgian carriers are Regulation No 1174/68 is therefore obliged, bv the Royal Decree, to express void, by reason of default on the partof their tariffs in Belgian francs involves the legislature, if it appears that it cannot considerable discrimination, of such a be interpreted in such a way as not to nature as to entail a wholesale distortion infringe Community law. of competition: Belgian carriers, obliged

In such a case, the minimum tariff, expressed in the weaker currency, would This interpretation is the only one always be lower than the minimum tariff compatible with the aims of the regu- expressed in the stronger currency and lation and with the common transport the maximum tariff expressed in the policy. By applying the same bracket stronger currency would always be tariffs to all carriers, regardless of higher than the maximum tariff nationality or the currency habitually expressed in the weaker currency. The used by them, it ensures equality as upper and lower limits would therefore between carriers and the existence of fair differ depending on whether the rates conditions of competition between them. were expressed in Belgian francs or in French francs.

(d) It is appropriate to answer the Moreover, depending on whether the questions submitted by the Rechtbank minimum or maximum rate is fixed, on van Eerste Aanleg, Ghent, as follows:

SUYS

JUDGMENT OF 30. 11. 1982 — CASE 32/82

Regulations Nos 1174/68 and 2831/77 therefore included provisions intended to take account of currency movements. The Commission too points out that whilst the measures implementing Regu- lation No 1174/68 were in fact still in force in Belgium when the infringements In such circumstances it is no longer giving rise to the main proceedings were necessary to consider whether, in the esublished, that regulation had in the absence of such provisions, Regulation meantime been replaced by Regulation No 1174/68 is to be regarded as valid in No 2831/77. Moreover, the questions the light of its legal basis and purpose. referred to the Court relate to the

SUYS

JUDGMENT OF 30. 11. 1912 — CASE 32/82

exchange value in Belgian francs, at the lowest minimum and the highest rate ruling on the day in question, of the maximum. This is moreover the main minimum expressed in French francs. argument in favour of the second point Conversely must a rate invoiced in of view. French francs be lower than the maximum expressed in French francs according to the tariff or may it go as high as the exchange value in French The court making the reference did not francs, at the rate ruling on the day in deal with that problem and since the question, of the maximum rate expressed two approaches lead ultimately to a in Belgian francs? practically identical result it is not necessary to choose one or the other. In any event, both give rise to a real bracket wider than the spread of 23 % laid down in the regulations. One approach is strict adherence to the tariff so that if an invoice expressed in Belgian francs is used, the rate must then fall within the bracket expressed in that currency according to the tariff. In such cases, it is incumbent upon the Likewise, if the rate is invoiced in French Member Sutes, by virtue of the regu- francs, it must fall within the bracket lations, to review and adjust the tariff in expressed in that currency. This ap- accordance with the variations in the proach involves the fewest difficulties of exchange rates so as to re-establish a real verification. It also appears to be the spread of 2 3 % . That obligation is not most acceptable according to the letter affected by the right, provided for in of the regulation. It is not discriminatory Article 11 (3) of Regulation No 2831/77, since it allows undertakings to choose of a Member State in such a situation freely in which currency they wish to unilaterally to "carry out an upward invoice the rate, having regard to the revision of price schedules expressed in consequences of that choice as far as the its currency". Moreover, equilibrium tariff is concerned. However, it displays could also be restored by a reduction of the clear disadvantage of being extremely the rates expressed in the strong formalistic. currency or by such a reduction together with an increase in the rates expressed in the weak currency.

for which, pursuant to Article 3 thereof III — Oral procedure (Article 10 of Regulation No 2831/77), the tariffs must be drawn up by reference to a base-rate, having regard to the average cost of transport operations. It is also made clear that the upper limit of At the sitting on 29 September 1982 oral the bracket is intended to prevent abuse argument was presented and answers to of a dominant position and the minimum questions put by the Court were given by to prevent damaging competition. the appellants in the main proceedings, Jan Flour and the company NV Translev, represented by Mr Waelbroek, the Government of the Kingdom of Belgium, represented by Mr Wijffels, the The requirement contained in Article 190 Government of the French Republic, of the Treaty that the reasons upon represented by Alexandre Carnelutti, which a measure is based must be stated Secretary for Foreign Affairs in the is thereby satisfied. Ministry of External Relations, the Council, represented by Hessel Daalder, a member of its Legal Department, and the Commission, represented by Mr If it were established practice that the Haagsma. Franco-Belgian tariff nevertheless gives rise to abuse of a dominant position or to damaging competition either because the base-rate no longer reflects the costs The appellants in the main proceedings, or because by reason of currency fluc- Flour and Translev, conceded that their tuations the spread extends beyond interpretation of the Royal Decree of 17 23 %, such a situation would entail the November 1971 conflicted with the obligation to adjust the tariff. provision in the Community Regulations to the effect that the bracket spread may not exceed 23 %. In those circumstances none of the three possible interpretations of the Royal Decree led to a result (c) As regards the problem of discrimi- compatible with the wording and nation, it should be recalled that Regu- objective of Regulations Nos 1174/68 lation No 1174/68 introduced a bracket- and 2831/77. Article 11(3) of Regu- tariff system which was in principle lation No 2831/77 did not impose any compulsory for all carriage of goods by obligation on the Member States but road between Member States and that simply gave them the power, in the event that system, and also the exceptions to of currency fluctuations, to adapt the it, apply to those concerned with price schedules expressed in their such carriage without distinction as to currency. Because they make no nationality or residence. provision for automatic and mandatory adaptation of transport tariffs to variations in exchange rates Regulations Nos 1174/68 and 2831/77 must be regarded as invalid. (d) Consideration of the questions raised by the Rechtbank van Eerste Aanleg, Ghent, has disclosed no factor of such a kind as to effect the validity of Regulation No 1174/68 or of Regulation The Government of the French Republic No 2831/77. observed that the two Community regu-

2 It appears from the file on the case that those questions were raised in criminal proceedings brought against several Belgian transport operators charged with failure to comply, when fixing their rates for the carriage of

SUYS

goods between France and Belgium in January 1979, with the provisions of the Royal Decree of 17 November 1971 laying down the tariff for the carriage of goods by road for remuneration between the Kingdom of Belgium and the Republic of France (Moniteur Belge [Belgian Official Gazette], 14413) adopted in application of Regulation No 1174/68 on the basis of the Law of 1 August 1960 on the Carriage of Goods by Road for Remuneration (Moniteur Belge, p. 6101) and the Law of 18 February 1969 on measures for the implementation of international treaties and instruments relating to transpon (Moniteur Belge, p. 2988), hereinafter referred to as "the Belgian legislation".

The state of the applicable legislation

3 Article 1 of Regulation No 1174/68 which was adopted pursuant to Article 75 of the EEC Treaty subjects the carriage of goods by road between Member States to a "system of compulsory bracket tariffs". Articles 2 and 3 provide that the brackets are to be calculated by reference to a base-rate which is fixed having regard both to the average cost of the transpon operation concerned, including the general expenses of the business, for a properly managed undertaking enjoying normal conditions of use of its carrying capacity, and to market conditions, and is to be such as to provide a fair return for carriers. Brackets calculated on the base-rate have an upper and lower limit and the difference between them is 23 °/o. The rates for any given transpon operation may be freely determined within the upper and lower limits of the relevant bracket tariff.

8 The tariffs fixed by the aforesaid decree were increased by 15 % by the Royal Decree of 11 October 1978 (Moniteur Belge, p. 13536). It is to be observed that the exchange rate of FF 1 : BFR 9 was amended subsequently to the facts of the case by the Royal Decree of 3 October 1979 (Moniteur Belge, p. 12126).

, Following the enlargement of the Community, Regulation No 1174/68 was replaced by Council Regulation No 2831/77 of 12 December 1977 on the fixing of rates for the carriage of goods by road between Member States (Official Journal 1977, L 334, p. 22) That regulation g a v e t h e Member States an option between a system of "reference tariffs' and the fomer system of "compulsory tariffs". The latter system, which has remained applicable as beween Belgium and France, is essentially identical to he system under the previous regulation, as is emphasized in the seventh recital i nthepreamble, save that by virtue of Article 11 (3) a Member State may, in

SUYS

order to offset the effects of monetary fluctuations, unilaterally carry out an upward revision of price schedules expressed in its currency. By its nature that power of unilateral revision is open to a Member State which has devalued its currency.

10 According to Article 20 (3) of the new regulation measures adopted by Member States in implementation of Regulation No 1174/68 are to remain in force until they are replaced by subsequent provisions. Since no new provision was introduced in Belgium before the occurrence of the matters which gave rise to the main proceedings the position must be considered on the basis of Regulation No 1174/68 and the measures adopted by the Belgian State to implement that regulation.

1 4 In order to obtain clarification in regard to these matters the Rechtbank referred the following questions to the Court:

" 1 . Is Regulation No 1174/68 of the Council of 30 July 1968 compatible with Anicie 75 of the EEC Treaty if no provision is made to eliminate the disparity in currencies between the Member States?

2. Is the regulation compatible with its aim that tariffs must be drawn up in such a way as to avoid both abuse of dominant positions and damaging competition?

3. As a measure adopted by the Council, must the regulation still be regarded as valid if instead of producing harmonization it leads to excessive discrimination between the inhabitants of the various Member States?"

The validity of Regulation No 1174/68

15 The questions submitted by the Rechtbank essentially seek to ascertain whether in the absence of provisions to eliminate the effects of currency disparities in the event of an alteration in the exchange rate Regulation No 1174/68 has the effect of creating, in the matter of determination of transport rates, a distortion of competition which is contrary to the very objective of the regulation and to the requirements of a common transport policy, so that the validity of the regulation is affected.

20 The scope of that obligation must nevertheless be understood in the sense that there cannot be automatic adaptation of the brackets to the variations in exchange rates in a system of floating rates of exchange. To take account of the frequent and generally small variations which characterize such a system would make any stability in transport rates impossible. The Member States

JUDGMENT OF 30. II. 1982 — CASE 32/82

must therefore be recognized as having an appropriate discretion in fulfilling their obligation under Regulation No 1174/68 to undertake revisions inasmuch as revision is not required except where the conditions of competition are appreciably affected.

21 It therefore appears that Regulation No 1174/68 contains the necessary provisions to eliminate the effects of disparities between currencies. For that reason, if it is correctly applied by the Member States concerned, it is not apt to create distortions of competition or to cause discrimination against carriers in the event of a parity change in the currencies of the States concerned with a given transport relationship. Under the distribution of powers effected by the regulation it is for the Member States concerned to take, in pursuance of Article 4 thereof, the necessary steps to bring about an amendment of the tariffs when a change in the conversion rate between their currencies causes distortions of competition incompatible with the objective of the regulation.

22 The validity of the regulation cannot therefore be doubted on the ground that it does not make it possible for the effects of disparities in currencies between the Member Sutes to be eliminated.

in answer to the questions referred to it by the Rechtbank van Eerste Aanleg by judgment of that court of 8 May 1981, hereby rules:

Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Regulation No 1174/68 of the Council of 30 July 1968 on the introduction of a system of bracket tariffs for the carriage of goods by road between Member States.

Mertens de Wilmars Pescatore O'Keeffe

Everling Mackenzie Stuart Bosco Due

Delivered in open court in Luxembourg on 30 November 1982.

P. Heim J. Mertens de Wilmars Registrar President