C-158/82

APPLICATION for a declaration that by levying a charge for health inspection on the importation from other Member States of groundnuts and groundnut products the Kingdom of Denmark has failed to fulfil its obligations under Articles 9 and 13 of the EEC Treaty,

COMMISSION v DENMARK

THE COURT

composed of: J. M e n e n s de Wilmars, President, T . K o o p m a n s a n d K. Bahlmann (Presidents of C h a m b e r s ) , P. Pescatore, A. O'Keeffe, G. Bosco and O . D u e , J u d g e s ,

Advocate G e n e r a l : G. F. M a n c i n i Registrar: J. A. P o m p e , D e p u t y Registrar

gives the following:

JUDGMENT OF 9. 11. 1983 — CASE 158/82

The Commission came to the conclusion that the sole purpose of the charge was to make importers pay for a specific The charges for sampling and analysis to inspection applicable solely to imports of be paid to Danish laboratories for the products concerned, and therefore carrying out the inspections, which are sent a reasoned opinion on the subject payable by the importer, are not fixed by dated 3 September 1981 to the Kingdom the State but by the laboratories of Denmark by letter of 14 September themselves without its being : necessary 1981. The letter expressed the opinion

COMMISSION v DENMARK

that by levying a charge for health The Kingdom of Denmark contends that inspection on the importation from other the Court should: Member States of groundnut and groundnut products the Kingdom of 1. Dismiss the application as unfounded; Denmark had failed to fulfil its obligations under Articles 9 and 13 of 2. Order the Commission to pay the the EEC Treaty. costs.

The charge at issue can only be justified II — C o n c l u s i o n of t h e p a r t i e s on two grounds, first that it constitutes payment for a service rendered to the importer and is of an amount in pro- The Commission claims that the Court portion to that service, or secondly, that should: it constitutes part of a general system of internal taxation systematically applicable 1. Declare that by levying a charge for to categories of products according to health inspection on the importation objective criteria applied regardless of from other Member States of the origin of the products. However, those conditions are not fulfilled in the groundnuts and groundnut products present case. the Kingdom of Denmark has failed to fulfil its obligations under Articles 9 and 13 of the Treaty establishing On the one hand, the charge does not the European Economic Community; constitute the payment for a service rendered to the importer because it is not the consideration for an individual 2. Order the Kingdom of Denmark to advantage conferred upon the importer. pay the costs. The health inspection was established to

JUDGMENT OF 9. 11. 1983 — CASE 158/82

As for the fact that the importer may avoid the Danish health inspection by producting a certificate of analysis drawn up by a foreign laboratory, the In its defence the Danish Government Commission is of the view that that is a contends that the charge in question somewhat theoretical option since does not amount to a charge having an consignments of groundnuts are not effect equivalent to a customs duty, as subject to health inspection in all the the Commission maintains, but forms Member States and such an inspection part of a general system of internal could only be carried out therefore at the taxation systematically applicable to cate- express request of the exporter or the gories of products according tó objective importer concerned, who, however, criteria regardless of their origin. The would have no interest in asking for such Danish Government adds that the an inspection the costs of which he essential characteristic of a charge having would have to bear in any event. an effect equivalent to a customs duty is that it specifically affects imported products as such, to the exclusion of similar national products, whereas The Commission states, moreover, that internal taxation affects both imported the Danish administration's discretionary products and national products. That is power to grant an exemption in certain confirmed by several judgments of the individual cases does not relieve the Court. charge of its compulsory nature in all other cases. The implementation of the principle of the free circulation of goods must not depend on the discretion or tolerance of a national administration. The Court has held that charges levied for health inspections may lawfully be imposed on producers or importers if the On the other hand, the Commission payment is required without distinction points out that the charge does not form from importers and national producers

Finally, the Danish Government states The Danish Government maintains that groundnuts and groundnut products further that what is concerned here is are not foodstuffs, being primarily not a charge in the strict sense of the consumed as "snacks". That is a well- term, but costs incurred in analysing the defined category of product, separate products, the payment and the means of from foodstuffs, in respect of which it recovery of which do not involve the is perfectly legitimate for the costs State but only the private parties connected with the establishment of any concerned. deleterious effect which they might have upon the health of consumers to be met by private traders. That, moreover, is the general rule with regard to the inspection of industrial products. It is of the view that the Commission has not sufficiently demonstrated in its application that the disputed charges are to be classified as charges having an effect equivalent to a customs duty. Certainly, where there exists an identical In its reply, the Commission stresses the or comparable national product the fact that the essential characteristic of a criteria for the application of Article 9 of charge having an effect equivalent to a the Treaty are simple, but they become customs duty, according to the Court, is more difficult to apply when there is no that it is unilaterally imposed and affects identical or comparable national product. goods solely by virtue of their having Since the Court has not yet given a crossed a frontier. Neither its desig- definitive ruling on that question the nation, nor the method by which it is present case cannot be judged with any collected, nor the existence of a discrim- degree of certainty on the basis of inatory effect, nor its payment to the previous decisions but calls for the determination by the Court of new State is a decisive criterion. The criteria allowing for the presumption of Commission has already shown in its an "internal tax in good faith" in certain application that the two necessary circumstances. conditions are fulfilled since the importer's obligation to discharge the

costs relating to the system of health choose whether the public purse or inspection on groundnuts derives consumers should bear the costs incurred expressly from the Order of 7 January in connection with health inspections, 1971 and the costs are directly connected and that that is the case at least as long with the health inspection. as Community law does not provide otherwise. The Commission has deliberately avoided that issue in its reply, just as it has avoided answering the argument that the case is concerned with the payment of costs and not a true charge. In the Commission's view, the decisive question in the present case is in what circumstances a charge for health inspection carried out solely on imported products in the absence of any similar national product (for climatic reasons) may be regarded as part of a general The Danish Government denies that a system of internal taxation systematically charge is being imposed on the products applicable to categories of products in question solely because they have according to objective criteria applied crossed a frontier, and is of the view that regardless of the origin of those in any case the required fees are not so products. Although the existing case-law great as to inhibit the free circulation of cannot resolve the problem, it may the goods. Moreover, the decisions of provide useful indications as to whether the Court indicate clearly that a charge such a charge does or does not form part may constitute internal taxation even in of a general system of internal taxation. the absence of a comparable national Moreover, the charge in question must product. There is no reason to favour be viewed in the context of the system.of imported products for the sole reason which it logically forms part, that is to that there is no comparable national say health inspection of foodstuffs in product capable of being protected. The general. Whilst admitting that the case criterion put forward is not exclusive and concerns a charge which is entirely the charge might also be in conformity specific in character, the Commission with the Treaty for other reasons. disputes the contention that any charge levied for health inspection of imported products and based on the law relating to foodstuffs may constitute a general system of internal taxation on its own, and rejects the Danish Government's argument that the disputed charge may be considered to have been imposed "in With regard to the relevant group of good faith". products, the Danish Government submits that the group must be defined bearing in mind the risks attaching to the various products. There is not the slightest reason to include other food products in the group in question, because in general food products do not In its rejoinder the Danish Government bear the same risk of contamination by stresses the fact that Member States may aflatoxin as do groundnut products.

Questions put by the Court The Danish Government also refers to Law No 340 relating to animal foodstuffs which allows for State control of the maximum level of anatoxin in food and food mixes for animals and provides that the cost of inspections is to be covered by a charge. The Government of the Kingdom of Denmark gave its answers to the questions put by the Court in a letter of 7 April 1983. In answer to the first question, namely how are the costs fixed With regard to the second question, for health inspections carried out on namely in what circumstances does other food products in Denmark, the Denmark recognize analyses carried out Danish Government refers primarily to by laboratories in other Member States Law N o 310 of 6 June 1973 relating on products of the same type, the Danish (inter alia) to foodstuffs, a law which is Government answers that such analyses complemented by a series of other legal are recognized "under certain con- provisions governing the health in- ditions". It is, however, impossible to spection carried out on special categories give a general definition of those of food products. The general health conditions, and only a few points of inspection which is provided for therein principle may be noted, such as that the is carried out by the local authorities by analyses must be carried out by an means of inspections in undertakings and independent laboratory so as to give all businesses and by means of examinations possible assurances that significant of samples. The costs of those changes in circumstances relating to the inspections are met by local taxation. By value of the sample do not supervene contrast, the costs of the individual after the analysis. inspections provided for by Articles 18 and 41 of that Law for special food products or food products particularly at risk are borne by the undertakings in a In answer to the third question, namely manner determined by the competent what other products are subject to the ministries, in such a way that the costs same system, the Danish Government are not borne by the company but, on states that the system of inspection of the contrary, only affect the price of the groundnuts is an example of a general product. The Orders adopted pursuant principle observed in Denmark and to the above-mentioned provisions relate applied in an identical manner to a to products which contain certain number of both imported and Danish additives as well as to groundnuts and products. Brazil nuts. Moreover, a special law makes certain products subject to a state health and quality inspection at the production and wholesale distribution stages. Those products include margarine, poultry, fish and fish IV — O r a l p r o c e d u r e products, eggs and egg products, milk and dairy products. The relevant laws enable producers or importers to be required to defray the costs of special inspections, a course which is adopted At the sitting of 5 May 1983 the for most of the products. Commission, represented by Johannes Føns Buhl, and the Kingdom of

2 By O r d e r N o 7 of the Minister for the Interior of 7 J a n u a r y 1971 the Danish G o v e r n m e n t prohibited the sale o r assignment in D e n m a r k of foodstuffs containing g r o u n d n u t and g r o u n d n u t products containing detectable quantities of a n a t o x i n . At the same time, the O r d e r made the importation of g r o u n d n u t s and certain g r o u n d n u t products subject to an administrative a u t h o r i z a t i o n if they w e r e intended to be sold as foodstuffs or to be used in the m a n u f a c t u r e of foodstuffs. Such authorization is granted only on

COMMISSION v DENMARK

production of a certificate of analysis issued by a Danish laboratory on the basis of a systematic health inspection intended to establish that the goods do not contain anatoxin in discernible quantities, based on samples and a laboratory analysis.

3 Since aflatoxin is one of the most virulent carcinogenic substances, even in very small quantities, the Commission has accepted that such inspections are permitted by Article 36 of the Treaty.

4 The Danish laboratory which is required to carry out the analysis is designated by the Director of the Statens Levnedsmiddelinstitut [State ŕoodstuŕfs Institute] of Denmark. However, in certain circumstances he may approve a certificate of analysis drawn up by a foreign laboratory on the basis of a sample taken and analysed in that country.

s Article 5 (3) of the aforementioned Order provides that the costs of analysis and sampling are to be borne by the importer.

,, The Commission also maintains that the charge in question cannot escape the prohibition in Articles 9 and 13 of the Treaty on the ground that " f o r m s part of a general system of internal taxation within the meaning of Article 95 of the Treaty. In the absence of identical or similar national products a charge on imported products may be regarded as an internal tax only if it forms part of "a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products" (judgment of 3 February 1981 in Case 90/79, Commission v France [1981] ECR 283, at paragraph 14 of the decision). In the present case the disputed charge is applicable exclusively to imports oi groundnuts and groundnut products.

1 2 Per contra, the Danish Government denies that the charge in question is in fact a charge fixed by the State. On the contrary it represents payment ot the cost of the laboratory analysis, which is determined by the laboratory itsell on the basis of the cost making the analysis. Even if it must be regarded as a charge, it does not constitute a charge having an effect equivalent to a customs duty because it is not required by reason of the product's crossing a frontier but corresponds to an internal tax which forms part of a general system of taxation applied systematically to categories of products according to objective criteria irrespective of their origin.

COMMISSION v DENMARK

i3 It maintains that the charge is not discriminatory either in form or in substance because there is no identical or similar national product. The burden on imports represented by the disputed charge is minimal.

JUDGMENT OF 9. 11. 1983 — CASE 158/82

i9 The only exception is where the. charge in question represents payment for a service rendered to the importer, of a sum in proportion to the service, or if it forms part of a general system of internal dues applied systematically in accordance with the same criteria to both national products and imported or exported products.

20 The Danish Government conceded in the course of the proceedings that the charge at issue was not in the nature of payment for a service rendered to the importer. It maintained, however, that it was a charge forming part of a general system of internal taxation.

2i In that regard it may be observed that there is a well-established line of authority to the effect that a charge on importation does not constitute internal taxation under Article 95 unless it forms part of a general system applicable systematically to categories of products in accordance with objective criteria irrespective of the origin of the products.

22 As the Danish Government rightly emphasizes, the Court has indeed recognized that a charge which is imposed on products imported from another Member State, even when there is no identical or similar national product, does not, by that fact alone, constitute a charge having an effect equivalent to a customs duty and may constitute internal taxation within the meaning of Article 95 of the Treaty if it fulfils the above conditions.

23 However, examination of the facts relied on before the Court by the Danish Government in support of its argument that Article 95 applies does not permit the conclusion that the charge at issue forms part of a general system of internal taxation.

25 With regard to the Danish Government's argument that the general approach followed in the legislation applicable in Denmark is that the taxpayer is responsible for general health inspection costs whilst the costs of laboratory analyses necessitated by special health inspections for certain foodstuffs are borne by the undertakings concerned, it should be emphasized that a distinction between general inspection and so-called "special" inspections does not in itself constitute a sufficiently precise and, above all, objective criterion to form the basis for a general system of internal dues within the meaning of the decisions of the Court of Justice cited above. The Danish Government has not shown that the two types of inspection are objectively distinguishable, for example on the basis of their technical approach. Moreover, in a number of cases even general inspection requires laboratory analyses similar to those carried out in the context of special inspections.

26 With regard to the products covered by the Orders based on Article 41 of the Law on foodstuffs, it appears from the file that they comprise on the one hand food products subject to inspection to determine whether certain nutrients have in fact been added and on the other products considered to be potentially harmful because of certain risks they present, namely groundnuts and Brazil nuts. The difference regarding the nature, the character and the purpose of the inspections envisaged for each of those two groups prevent the fees levied on groundnuts and Brazil nuts from being regarded as forming part of the same system as those levied for the checking of additives.

THE COURT

hereby declares:

1. By levying a charge for health inspection on the importation of groundnuts and groundnut products the Kingdom of Denmark has failed to fulfil its obligations under Articles 9 and 13 of the EEC Treaty.

2. The defendant is ordered to pay the costs.

Mertens de Wilmars Koopmans Bahlmann

Pescatore O'Keeffe Bosco Due