C-36/83

In Case 3 6 / 8 3

R E F E R E N C E to the C o u r t u n d e r Article 41 of the E C S C T r e a t y by the Fihanzgericht [Finance C o u r t ] Düsseldorf, for a preliminary ruling in the proceedings p e n d i n g before t h a t court between

MABANAFT G M B H , H a m b u r g ,

and

HAUPTZOLLAMT [Principal C u s t o m s Office] EMMERICH

o n the validity of the R e c o m m e n d a t i o n s of the H i g h A u t h o r i t y of 28 J a n u a r y 1959 and 30 O c t o b e r 1962, ΜΛΒΛΝΑΡΤ / HAUPTZOLLAMT EMMERICH

The facts of the case, the course of The High Authority adopted a series of the procedure and the observations recommendations whereby the protective submitted under Article 103 (3) of the measures sought by certain Member Rules of Procedure of the Court may be States were authorized on condition that summarized as follows: they did not exceed certain limits. As regards the Federal Republic of Germany, the High Authority after I — Facts and procedure consulting the German Government, adopted a recommendation on 28 Janu­ ary 1959 pursuant to subparagraph (3) 1. Legislative background: The evolution of the first paragraph of Article 74 of of external controls in the coal sector the ECSC Treaty. The recommendation, published in the Amtsblatt of 11 February 1959 at p. 197, makes the following In 1958 the common market in coal proposals: encountered serious upheavals, attri­ butable on the one hand to a con­ (i) The Government of the Federal siderable decline in demand due to a Republic of Germany should impose period of economic depression and, on customs duties, on a temporary basis, the other, to the inroads made by fuel on coal originating in non-member oil. The crisis induced a number of countries and intended for the producer countries, including Belgium Federal Republic, to be levied on and the Federal Republic of Germany, to imports in excess of a duty-free introduce restrictions on the importation quota, at a rate which should not of coal from non-member countries. exceed DM 20 per tonne; for 1959

JUDGMENT OF 28. 6. 1984 — CASE 36/83

The rules at present in force in the The German Law of 3 December 1959 Federal Republic of Germany in the on the tariff quotas on solid fuels for matter of coal imports from non-member 1959 and 1960 laid down a quota of countries consist of Article 3 of the slightly more than 5 million tonnes. Second Law for the amendment of the provisions on energy. That Law, of By recommendations of 3 November 25 August 1980, introduced inter alia: 1960 (Amtsblatt of 19. 11. 1960, p. 1425), 13 December 1961 (Amtsblatt of 19. 12. (i) an extension until i 995 of the 1961, p. 1600) and 30 October 1962 validity of the present rules; (Amtsblatt oí 12. 11. 1962, p. 2683), the High Authority on each occasion fixed the quotas to be made available by the (ii) a considerable increase in the quotas Federal Republic for the years 1961, (7 million tonnes per annum); 1962 and 1963 at a minimum of 6 million tonnes. The German Law of (iii) the setting up of a new system of 23 December 1960 on the tariff quotas import licences. on solid fuels for 1961 and 1962, and that of 27 December 1962 on the quotas for 1963 and 1964, fixed the quotas in The collection of customs duties on accordance with those recommendations. imports exceeding the duty-free quota When a review was carried out in late was also maintained in the most recent 1963, the High Authority took the view, rules. according to the explanations supplied by the Commission, that it was unnecessary Mention should also be made of to adopt a recommendation in respect of Commission Recommendation (77/328/ 1964 since the above-mentioned German ECSC) of 15 April 1977 (Official Law of 27 December 1962 afforded an Journal, L 114, 5. 5. 1977, p. 4). The adequate legal basis for the duty-free recommendation, which makes the whole importation in 1964 of at least 6.2 range of ECSC products from non- million tonnes. member countries subject to a procedure for reciprocal notification an consul- Over the following years the High tation, recommends that Member States Authority addressed no further rec- should not resort to national measures ommendations to the Government of the until after the above-mentioned pro- Federal Republic, which, for its part, cedure has been employed.

2. Facts of the case free movement of goods between Member States, were still in force and might thus afford a legal basis for the In 1977 and 1978 the limited partnership German rules in force at the time of the Fisser & van Doornum Köln GmbH disputed import operations. By an order (hereinafter referred to as "Fisser"), of of 7 February 1983 it therefore stayed which Mabanaft GmbH is the successor the proceedings and requested the Court, in title, bought from LVOB, a pursuant to Article 41 of the ECSC Netherlands undertaking, coal described Treaty, to give a ruling on the following as "EEC products of Netherlands origin, question: dump stocks and storage stocks". The supplier produced certificates of mine origin issued by the Netherlands State "Are the Recommendations of the High mines, and consequently the coal was Authority of 28 January 1959 (Amtsblatt imported duty-free into the Federal der Europäischen Gemeinschaften of 11. 2. Republic of Germany. 1959, p. 197) and of 30. 10. 1962 (Amtsblatt of 12. 11. 1962, p. 2683) compatible with Article 4 (a) of the Investigations by German customs en- Treaty establishing the European Coal forcement officers subsequently revealed and Steel Community; are they capable that, contrary to Fisser's statements, the of justifying national measures intro- coal in fact derived from various non- ducing a differential duty on coal member countries and that the certi- imported from the open market in a ficates of origin produced in 1977 and Member State but which originated in a 1978 had been forged. The Haupt- non-member country; and if so for how zollamt Emmerich thereupon approached long are such measures justified?" Mabanaft, as successor in title to Fisser, which was dissolved on 1 January 1979, with a demand for payment of 3. Written procedure differential customs duties totalling D M 1 382 829.77. The order making the reference was Mabanaft brought proceedings before received at the Court on 8 March 1983. the Finanzgericht Düsseldorf for an- nulment of the notices of alteration of In accordance with Article 103 (3) of the customs duties addressed to it, arguing Rules of Procedure of the Court, written that the levying of customs duties on observations were submitted by Maba- coal released into free circulation within naft, represented by Dr Krause-Ablass, the Community was contrary to Article 4 of the firm of Bruckhaus, Kreifels, (a) of the ECSC Treaty. The Haupt- Winkhaus & Lieberknecht of Düsseldorf, zollamt Emmerich contended that the by the Government of the Federal differential customs duty was legitimate Republic of Germany, represented by as a measure of commercial policy falling Martin Seidel and Albert Bleckmann, within the powers of the Member States, acting as Agents, and by the Commission in accordance with the first paragraph of of the European Communities, Article 71 of the ECSC Treaty. represented by its legal Advisers Peter Gilsdorf and Peter Karpenstein, acting as The Finanzgericht Düsseldorf doubted Agents. whether the recommendations issued by the High Authority between 1959 and Upon hearing the report of the Judge- 1962, which in any case it regards as Rapporteur and the views of the incompatible with the principle of the Advocate General, the Court decided to

The Commission, the only party to deal Substance with the point, observes that the pre- liminary question is undeniably a Mabanafi argues that the Law of the question relating to the “validity” of an Federal Republic of Germany on tariff act of the High Authority, in the words quotas for coal contravenes Article 4 (a) of Article 41 of the ECSC Treaty, of the ECSC Treaty, under which import inasmuch as it inquires whether the High and export duties, or charges having Authority's recommendations of 28 equivalent effect, and quantitative re- January 1959 and 30 October 1962 are strictions on the movement of products, compatible with Article 4 (a) of the are incompatible with the common ECSC Treaty, and whether they are market in coal and steel and accordingly capable of affording a legal basis for are to be abolished and prohibited within national measures under which a the Community, as provided in the differential duty is levied on the impor- Treaty. That principle, which was con- tation of coal in free circulation in a firmed by the Court in its judgment of Member State but which originated in 14 July 1961, in Joined Cases 9 and a non-member country — which is 12/60 (Vloeberghs ν High Authority, tantamount to calling in question [1961] ECR 197), applies to all products generally the content of the enabling in free circulation in a Member State, clauses incorporated in those rec- irrespective of their origin. ommendations. Turning to the argument put forward by On the other hand, the preliminary the Hauptzollamt, namely that the question is one of interpretation in- levying of a differential customs duty is asmuch as it inquires for how long the none the less justified by the provisions above-mentioned recommendations are of Chapter X of the ECSC Treaty on capable of affording a legal basis for the commercial policy, Mabanft denies that national measures. According to the Member States have an independent Commission it is in fact a matter of right to levy such duties. interpreting the word “vorübergehend” [temporarily], appearing in the recom- In that connexion, Mabanaft notes a mendation of 28 January 1959. conflict between Article 72 of the ECSC Treaty, whereby the Council may, at the The Commission none the less takes the request of a Member State, fix minimum view that that part of the question too and maximum rates of customs duties, may be understood as meaning that the on the one hand, and the first paragraph Finanzgericht is asking whether the of Article 71, whereby the Treaty is not recommendations in question were still to affect the powers of the governments compatible with Article 4 (a) of the of Member States in matters of ECSC Treaty once the disputed import commercial policy, on the other; that

conflict cannot be avoided unless the States an independent right to collect latter provision in interpreted to mean customs duties, it cannot, in Mabanaft's that the basic freedom granted to view, be allowed to override Article 4 of Member States in the field of commercial the Treaty, if it is borne in mind that the policy in fact excludes the collection of latter (a) is one of the provisions defining customs duties. the Community's tasks and determining its foundations, (b) is not subject to the effects of any amendments of the Treaty In support of that interpretation, rules adopted under Article 95, and (c) is Mabanaft argues as follows: devoid of any reservation admitting of contrary provisions such as is contained in Article 71. (i) The serious interference which customs duties represent in trade with non-member countries is a justi- fication for reserving to the Council Mabanaft also disputes the applicability permission to charge them. to the present circumstances or the first paragraph of Article 73, under which "The administration of import and (ii) That conclusion also results from a export licences for trade with third consistent interpretation of the countries shall be a matter for the Community Treaties and from an government in whose territory the place application in the alternative of the of destination for imports . . . is EEC Treaty provisions on the situated". The article refers only to customs union and on the common imports which come direct from non- commcercial policy — at least, member countries, and seeks to prevent whenever there are no contrary any State whose territory is traversed by provisions in the ECSC Treaty. a thoroughfare from obstructing transit by demanding a licence. It is therefore not permissible to infer from that article (iii) Community practice is consistent an entitlement on the part of Member with that viewpoint, as is proved not States to authorize or prohibit the impor- only by the reference to a "standard tation of products already in free circu- ECSC tariff" within the General lation in the Community. Agreement on Tariffs and Trade, (hereinafter referred to as "GATT"), but also by the High Authority's participation in the According to Mabanaft the right which customs negotiations in the context the Hauptzollamt claims on behalf of the of the Dillon Round (1960-61) and Federal Republic of Germany, namely of the Kennedy Round (1964-67), and protecting itself from deflected imports by Opinion No 1/75 of the Court by means of national measures, without of Justice of 11 November 1975, the prior assent of the Commission, which recognized the exclusive simply does not exist. If Member States powers of the Community to were entitled to protect themselves conclude agreements in matters of unilaterally against indirect imports, the commercial policy in the ECSC scheme set up under the third paragraph sector. of Article 71, whereby: "The govern- ments of Member States shall afford each other such mutual assistance as However, even if Article 71 were to be is necessary to implement measures interpreted as conferring on Member recognized by the High Authority as

Thus it only remains to be asked whether the right to collect customs duties on In that regard Mabanaft observes that coal originating in non-member coun- following the dramatic development of tries which was already in free circu- the coal crisis in the Federal Republic of lation in another Member State arose Germany towards the end of the 1950s, from the Recommendation of the High there was an economic recovery which Authority of 28 January 1959. became quite apparent in the late 1960s and led to an increase in the con- sumption of coal and to shortages there On that point Mabanaft takes the view on the German market, owing to its that the above-mentioned recommen- closure to imports from non-member dation runs counter to Article 72 of the countries. Treaty, which vests in the Council alone the power of fixing, on the proposal of the High Authority, minimum and Those developments show, according to maximum rates within which Member Mabanft, the extent to which the cir- States may charge customs duties. cumstances in which the High Authority is able to make recommendations under Article 74 of the ECSC Treaty may Mabanaft adds that, even if the change; they point to the inescapable foregoing argument is rejected, the conclusion that the High Authority is not recommendation of 28 January 1959 empowered to make such recommen- does not in any event serve as a proper dations except for a limited period, as legal basis for the collection of customs was the case in this instance. duties from 1977 to 1979.

The recommendations made to the According to Mabanaft the expression Federal Republic of Germany are based "temporarily" used in the recom- on Article 74 of the ECSC Treaty and mendation of 28 January 1959 to limit cannot, according to Mabanaft, be the period during which the Federal regarded as lawful unless the coal orig- Republic was authorized to collect

The Government of the Federal Republic Quite apart from the foregoing, the of Germany is of the opinion that the longest period which might be regarded Federal Republic's powers over customs as "temporary" was the one during duties derive, in cases of differential which no change occurred in the customs duties, from the fact that the circumstances which, in the High Auth­ ECSC reflects on that point, not the ority's view, had justified the rec­ principle of a customs union but only ommendation of 28 January 1959; yet that of a free-trade area. If the viev were those circumstances changed fundamen­ none the less taken that Article 4 (a) of tally by the end of the 1960s, at the the ECSC Treaty excludes the levying, in latest. the course of trade within the Com­ munity, of customs duties on goods orig­ inating in non-member countries, the It is unimportant that first the High Federal Government is of the opinion Authority and then the Commission that the Federal Republic of Germany is should, as the Hauptzollamt claims, have entitled to charge customs duties, by tacitly consented to the charging of a virtue either of an application by analogy customs duty by the Federal Republic of Article 73 of the ECSC treaty or else of Germany. Mabanaft remarks in that of the recommendation of the High connection that, according to the Authority dated 28 January 1959. case-law of the Court (judgment of 16 December 1981, Case 269/80, Regina ν Tymen, [1981] ECR 3079), a Member The Federal Government observes that State is no longer entitled, in an area whilst, in its judgment of 14 July 1961 falling within the competence of the (Joined Cases 9 and 12/60, Vloeberghs), Community, to adopt national measures the Court concurred with the Advocate unilaterally whenever Community General's Opinion in holding that the institutions abstain from acting. principle of the free movement of goods laid down by Article 4 (a) extends also to products from non-member countries, it On the strength of the foregoing did not endorse that part of the Opinion considerations, Mabanaft proposes that in which the Advocate General extended the following reply be given to the to scope of the above-mentioned pro­ question submitted: vision to customs barriers as well.

It is nevertheless out of the question that However, the Federal Government notes the Court can be bound by a general rule that, unlike the Advocate General in his such as that, even when new categories Opinion, the Court placed a very broad of case are under consideration. That is interpretation on Article 73, construing so both because the Court has at its the expression "place of destination", disposal neither the time nor the means which occurs therein, as meaning the of inquiry needed in order to ascertain final place of destination envisaged by whether a general rule is adapted to all the importer, which rules out the categories of individual cases, and application of Article 4 (a) in respect of because any other solution would lead to any goods routed into one Member State a risk that the supreme courts or via another Member State. tribunals of the Member States would be induced merely to apply the general rule In the Federal Government's opinion, to new circumstances, without allowing therefore, the Court must have had the Court the opportunity of passing crucial objections to overrule the judgment, as is clearly necessary, at least Opinion of its Advocate General and in cases in which there are substantial give a liberal interpretation to Article 73. doubts as to such an application. The true, deep-seated reason for that attitude lies in the fact that the interests protected by the ECSC Treaty are not Moreover, in the above-mentioned judg- sufficient to warrant a demand for a ment, the Court itself indicated that the limitation of the powers of Member principle which it had laid down might States. have to be interpreted differently when the goods in question originated in a non-member country, as distinct from It follows that in the context of Article 4 the Community. Indeed, by basing the (a), in respect of customs duties as well, principle primarily on the assent of the the interests protected by the Treaty, parties and by founding it's decision on a especially those of the Community's own provision such as Article 73 of the ECSC undertakings, must be weighed up Treaty, thereby depriving a specific against the national interests safeguarded decision on the principle itself of any by Chapter X in obtaining protection practical value, the Court demonstrated against competition from goods orig- that it viewed those pronouncements as inating in non-member countries. Here, no more than an obiter dictum. too, it is thus no more than an obiter dictum which is involved.

In that regard the Federal Government as State interests in the allocation of observes in the first place that, even if an powers, protected by Article 73, ulti- interpretation of that nature were mately called for a narrow interpretation adopted, it would still be necessary to of Article 4 (a). investigate whether Chapter X does not contain derogations in respect of customs duties such as Article 73 contains in respect of quantitative restrictions. If Article 4 (a) were interpreted in

movement within the Community. That (a) does in principle preclude the consideration is especially relevant application of Chapter X to goods orig- whenever, as for instance under the rules inating in a non-member country which of the EEC Treaty, goods originating in are in free circulation within the a non-member country are not available Community, the actual question whether for movement within the Community such goods are in free circulation is until after proper clearance through governed by Chapter X, and hence by customs in the State initially importing the allocation of powers in customs them. matters under the ECSC Treaty and by the measures adopted on the basis of

If the article can justify and not merely trade within the quantitative restrictions which seriously Community as referred to in Article 4 affect trade between States, there is (a). The interpretation of Article 4 (a) cause, in the case of lesser interference in thus determines that of Article 73, and the interests protected under Article 4 conversely the interpretation of Chapter (a), to apply it by analogy to customs X, especially Article 73 thereof, in turn duties in accordance with the rule a affects that of Article 4.

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In order to study the relationship be- were bought or manufactured in a tween Article 4 (a) and Chapter X of the member country, in order to prevent ECSC Treaty, it is appropriate to start national safeguards from being cir- once again with the interpretation of cumvented by the initial importation of Article 4 (a) seen in isolation. It should products originating in non-member be observed at the outset that the Court, countries into whichever member State in the above-mentioned judgment, held has the lowest customs duties, in order in principle that both the wording of subsequently to bring them into the true Article 4 (a) and its interpretation in country of destination within the free- the light of the EEC Treaty depart from trade area. the teleological and, still more, the systematic interpretation of the ECSC Treaty itself. That is, incidentally, in keeping with the interpretative methods In a customs union, by contrast, the prevailing in European law, according to importation conditions for products orig- which the wording of the Treaty is inating in non-member countries are subordinated to the teleological and identical in all Member States, with the systematic interpretation. result that indirect imports are generally not a matter for concern.

MABANAFT / HAUPTZOLLAMT EMMERICH

with the result that the concept em- The distinction between a free trade area bodied therein is not that of a customs and a customs union has its deeper raison union but that of a free trade area. d'être in Member States' differing spheres of interest. Thus, a State having a considerable domestic output of coal, such as the Federal Republic of Ger- many, is vitally concerned to protect it, None the less, there is a contradiction by means of customs duties for example, between the wording of Article 4 (a), whereas that concern is not to be found which does not confine the abolition of in some other countries such as the customs duties and other trade re- Netherlands for example. It would not strictions to products originating in the be possible to take account of the Member States, and Article 71, which in interests of countries applying higher principle reserves power to the Member customs duties if the movement of goods States in matters of commercial policy as within the Community were completely regards non-member countries. That free irrespective of their origin and if contradiction cannot, it believes, be they could enter that country via another resolved otherwise than by a restrictive Member State which applied lower interpretation of Article 4 (a). It is only customs duties. If, on the other hand, by accepting such an interpretation that the ECSC itself established a common it is possible to justify the existence of customs tariff, the Member States would Article 71, which would be meaningless have the opportunity of having their if national customs protection could be interests taken into consideration at the circumvented by reason of the fact time when that tariff was being prepared. that goods originating in non-member countries enjoyed free movement within the Community by passing through Member States which applied lower external customs tariffs..

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Treaty. The absurd consequence of such The ECSC Treaty is, as the second rules would therefore be that all the paragraphs of Articles 71 and 71 and customs provisions laid down by the subparagraph (1) of the first paragraph ECSC Treaty would be circumvented of Article 74 thereof demonstrate, and the interests of Member States and designed to ensure compliance with joint undertakings, despite their being GATT on the part of both the Com- protected by Articles 2, 3 and 74, would munity itself and the Member States.

of the first. Article X X I V of GATT provides a broad exception to the rules The Federal Government then turns to consider the interpretation in isolation of of that Agreement, but only, in principle, Chapter X of the ECSC Treaty on in the case of a customs union, not of a commercial policy. free trade area. It may therefore be argued that the Member States of the ECSC Treaty may not, on the strength Since Chapter X relates only to trade of that Treaty, waive the customs powers with non-member countries, it might be conferred on them by GATT, even in inferred that Article 4 (a) is to be connection with the movement within distinguished from that chapter by the the Community of products, originating fact that it covers actual trade within the in non-member countries; the ECSC Community, whilst Chapter X covers Treaty should be interpreted accordingly. only direct, actual trade with non-

MABANAFT / HAUPTZOLLAMT EMMERICH

found in another Member State. That Member State when determining and shows that even the EEC Treaty, and a implementing its economic policy, can be fortiori the ECSC Treaty, do not adopt a inferred from the principle of loyalty to factual approach to the movement of the Community laid down by Article 5 of goods within the Community. the EEC Treaty, even on the supposition that that principle may be directly transposed into the context of the ECSC For the purpose of interpreting Article 4 Treaty. A broad interpretation of Article (a) and Chapter X of the ECSC Treaty, 4 (a) would therefore tend to deprive the allocation under GATT of powers in Member States of the power ultimately matters of customs duties is the only to deal with their own interests, whereas

would therefore also harm private interests protected by Articles 2 and 3 of The Federal Government further ob- the ECSC Treaty, especially those of serves that, as is clearly shown by the Community industries and direct im- EEC Treaty with its detailed provisions porters. on customs powers, Member States wished in principle to insert into the ECSC Treaty as well explicit and definitive provisions to cover those The Federal Government concedes that problems. However, as Article 4 (a) does the above interpretation of the re- not totally liberate the movement within lationship between Article 4 (a) and the Community of goods originating in Chapter X of the ECSC Treaty may be non-member countries, the ECSC Treaty called in question by Articles 73 and 74 would display a considerable lacuna if thereof. In that regard, however, it may Chapter X were not equally applicable to be pointed out that it is precisely subpara- that aspect of trade in goods with non- graph (2) of the first paragraph of Article member countries, because otherwise 74 which militates in favour of an there would be no limitation on Member application of Chapter X as a whole also States' powers in that field since an to the movement within the Community application by analogy of the restrictions of goods originating in non-member under Article 71 alone is inconceivable. countries.

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Article 74 cannot be interpreted as In order to refute the objection that the excluding from the customs powers held commercial policy referred to in Chapter by Member States under Article 71 the X does not extend to the movement matters of commercial policy defined in within the Community of goods orig- the various subparagraphs of its first inating in non-member countries, the ΜΑΒΑΝΑFΤ / HAUPTZOLLAMT EMMERICH

matically continues to apply until it is ommendations, wished to include fixed afresh. precisely that type of traffic within the Community emerges from the fact that the recitals in the preamble to the recom Lastly, even if it is possible that subpar mendations also relate to that sector, and agraph (3) of the first paragraph of that Point A of the recommendation of Article 74 of the Treaty does basically 28 January 1959 refers in very general vest in the High Authority the exclusive terms to coal originating in non-member power to authorize Member States to countries. depart from Article 4 (a), there is in this particular case a state of emergency due to the High Authority's failure to act, which allows the view, as the Court Turning to the opinion expressed by the admitted in the fishing sector, that there court making the reference, namely that is a subsidiary power on the part of the no adequate powers were conferred on Member States to adopt provisional rules the Federal Republic principally on the in their capacity as agents of the ground that the recommendations are Community.

to 1959. In the following years the The Federal Government thereby arrives recommendation itself was not extended at the conclusion that, although Article 4 as regards the collection of customs (a) is equally applicable to goods orig duties; indeed, only, the tariff quota was inating in non-member countries, it does fixed for each year. In such a legal not impinge on Chapter X of the ECSC situation it cannot be supposed that the Treaty, which deals with the customs recommendation ceases to be valid if the powers of Member States as regards customs quota is not fixed for a given goods from non-member countries in

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powers in matters of commercial policy As regards actual developments, the in the field of ECSC products. Commission notes that after the EEC Treaty entered into force there was a growing trend towards incorporating It starts by observing that the ECSC ECSC products also in the single Treaty, unlike the EEC Treaty, left commercial policy which was in the Member States' powers in matters of making. Thus, in the steel sector, rapid commercial policy largely intact, as may progress was made towards a broad de be seen chiefly from the first paragraph facto harmonization of customs duties of Article 71, and transferred only and the development of a Community limited powers to the Community. policy characterized by the conclusion of Nevertheless, the Community's powers agreements by the Commission, acting in the field of external trade are not on the basis of a mandate conferred by negligible. They entail not only unilateral the Member States' representatives measures under Articles 72, 73 and 74 of meeting within the Council. No stan- the ECSC Treaty but also contractual dardization of that nature has occurred measures such as the negotiation and with regard to coal. Here, too, however, conclusion of trade agreements, which first the High Authority and then the are not expressly envisaged by the Treaty Commission were vested by Member but over which a power, on the part of States with a mandate to negotiate in the the Community, may be inferred from a context of the GATT negotiations which whole series of Treaty provisions. * led to a consolidation of national customs duties.

MABANAFT / HAUPTZOLLAMT EMMERICH

mentioned considerations at all events the common commercial policy have not support the conclusion that the so far subscribed to that thesis, yet allocation of powers has not been neither have they expressly rejected it. fundamentally changed by the progress of events and that the basic powers of Member States to levy autonomous If that contention (the "extension duties on coal cannot be called in thesis") were accepted, the consequences question. would be the following:

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Unlike the first paragraph of Article 115 of the The Commission nevertheless considers EEC Treaty, the third paragraph of that the Court's judgment of 14 July Article 71 of the ECSC Treaty confers 1961, whilst acknowledging the principle no powers on the High Authority as of free movement, limited its scope to a regards the adoption of national significant degree, mainly in the finding measures; on the other hand, the High that: "Although the principle of free Authority does have to consider such movement . . . prohibits the Member measures and to determine whether they States from refusing entry into their comply with the Treaty and the inter- territory of products originating in third national agreements which are in force. countries and lawfully imported into Moreover, it is important that such another Member State, Article 73 of the measures should not be adopted unilat- Treaty on the other hand assigns the erally but by mutual agreement with the administration of import licences for Member State or States concerned, in trade with third countries to the order to avoid administrative hindrances. government in whose territory the place of destination for imports is situated." The Commission notes, however, that the restriction subjects free movement to a subjective criterion (namely the ap- pointment of a destination on the The legal entitlement to adopt protective occasion of the first importation into the measures is based here, therefore, in Community) which is not, for practical contrast to Article 115 of the EEC purposes, capable of proof; the result is Treaty, directly on the Treaty, but is of that the principle of the free movement no avail without the agreement of the of goods from non-member countries is, other Member State concerned.

The same considerations are valid in the context of the ECSC Treaty, and therefore the Interpreted and described in that light, Commission can now no longer agree the machinery under the third paragraph with the restriction mentioned above. of Article 71 is quite adequate for

obviating the problem of harmful de- of Article 74 of the ECSC Treaty, which flection of trade, and there is no need to limit the free movement of products vest in Member States, in addition, any from non-member countries, should be autonomous powers whatever for the regarded as valid for as long as the adoption of precautionary measures in powers granted to the Commission by trade in goods between Member States. Article 115 of the EEC Treaty are not In particular, such a right may not be actually exercised. inferred from the power granted to Member States by the first paragraph of Article 73 to administer import and In drawing its conclusions from the export licences in trade with non- foregoing observations, the Commission member countries; indeed, if it were claims, first and foremost, that no otherwise, the mutual assistance scheme ground may be seen to point to the would be rendered quite ineffective. invalidity of either the High Authority's recommendation of 28 January 1959 or its other recommendations concerning However, the Commission believes that the continuation until 1962 of the duty- the High Authority should, in addition, free quota scheme. when adopting under subparagraph (3) of the first paragraph of Article 74 a Community measure on the importation Article 4 (a) of the ECSC Treaty in no of goods from non-member countries, be way means that the Community may not empowered to introduce an ancillary order the introduction of customs duties provision in association with that on goods crossing the internal frontiers measure, in order to curtail the free of the Community as well, with a view to movement of goods if that appears affording measures of economic policy necessary in view of its nature; it would protection against the indirect deflection indeed be a pointless duplication in the of trade. present instance to allow the essential "flank protection" to be achieved only by the devious expedient of utilizing the Nor are there any objections to be raised mutual assistance scheme. by the Court of its own motion against the validity of the High Authority's recommendations. For various reasons, According to the Commission, con- Germany encountered a serious slump sideration should lastly be given to the on the coal market during 1958. The legal situation which is arrived at if the slump was aggravated by the constant "extension thesis" which it set forth pressure of coal imports from non- earlier is adopted. member countries. The material con- ditions for intervention under subpar- It would be consistent with the logic of agraph (3) of the first paragraph of that thesis to resort to the machinery of Article 74 of the ECSC Treaty were Article 115 of the EEC Treaty for the thereby satisfied. purposes of derogation as well. None the less, the transitional situation should once again be taken into account; In the light of the serious threats mesures validly adopted as part of the affecting the German coal market on mutual assistance scheme under the third account of the unlimited import oppor- paragraph of Article 71, or measures tunities available until September 1958, introduced by the High Authority under the measures adopted by the High subparagraph (3) of the first paragraph Authority were not disproportionate,

2. The recommendation of 28 January As regards 1964, in view of the fact that 1959 was never formally repealed. the German Law of 27 December 1962 Even if the view be taken that the on tariff quotas for solid fuels for 1963 obligation which it contains to fix a and 1964 had created a firm legal basis duty-free quota every year has been for the duty-free importation of at least replaced since 1964 be independent 6.2 million tonnes of coal from non- German measures, nevertheless the member countries, the High Authority other provisions made by the considered it unnecessary to revise that recommendation hold good. In any quota by way of a special recom- case, the Federal Republic's right to mendation. Since the continuous revision levy, on coal imported from non- of the tariff quotas in German legislation member countries in excess of the afforded adequate guarantees for subs- fixed quota, a differential customs equent years as well, the High Authority, duty in conformity with the prevailing after 1964, again considered that there GATT requirements cannot be were no grounds for adopting special challenged, owing to Community Community measures. endorsement of the relevant German legislation in 1971, even if the rec- ommendation of 28 January 1959 were to be regarded as no longer mandatory in all its parts.

Following the adoption of the German Law of 14 December 1970 on tariff quotas for solid fuels for 1971 to 1976 The Commission therefore suggests that inclusive, it became apparent during the following answer be given to the consultations within the Council, held in question raised by the court making the November 1971 in pursuance of the reference : Protocol on Energy Problems of 21 April 1964, that there was no significant opposition or objection to the German import system. Thus, even if the rec- "Consideration of the recommendations ommendation of 28 January 1959 were adopted by the High Authority between to be regarded as being no longer auth- 1959 and 1962 on the arrangements for oritative in all its aspects, the system the importation by the Federal Republic must be regarded as endorsed by the of Germany of coal from non-member Community. countries has disclosed no factor of such

4 The corrective notices dealing with the charging of a differential customs duty which were served on Mabanaft by the Hauptzollamt Emmerich are based on the German Law of 14 December 1970 on tariff quotas for solid fuels for 1971 to 1976 inclusive (Bundesgesetzblatt I 1970, p. 1713) as

JUDGMENT OF 28. 6. 1984 — CASE 36/83

amended by the Law of 28 June 1976. The latter, whilst amending the quota previously in force, extended until 1981 the validity of the 1970 Law.

5 The Hauptzollamt Emmerich argued before the Finanzgericht that the levying of a differential customs duty on imported coal originating in non- member countries and released into free circulation in another Member State was not contrary to Community law. In its opinion, the issue concerned a measure of commercial policy, which remains within the powers of Member States pursuant to the first paragraph of Article 71 of the ECSC Treaty.

6 In reply, Mabanaft claimed that the disputed measure was incompatible with Article 4 (a) of the ECSC Treaty, which prohibits within the Community "import and export duties, or charges having equivalent effect, and quantitative restrictions on the movement of products".

7 The Finanzgericht considered that the charging of a differential customs duty in the above-mentioned case did not fall within the powers of Member States in matters of commercial policy, but that it might none the less be compatible with the ECSC Treaty as a measure adopted on the basis of recommendations which were made to the Federal Republic of Germany by the High Authority under Article 74 of the ECSC Treaty, on condition that those recommendations were validly adopted and were still valid at the material time. The Finanzgericht accordingly referred the following question to the Court:

1 1 The first part of the question simply amounts to asking whether the disputed recommendations are compatible with the principle of the free movement of products, as laid down by Article 4 (a) of the ECSC Treaty, in respect of goods which have been released into free circulation in a Member State. In fact, as regards the conditions to which subparagraph (3) of the first paragraph of Article 74 of the ECSC Treaty subjects the adoption of a recommendation, it is not denied that they were fulfilled during the period from 1959 to 1963.

12 An interpretation of the aforesaid Article 4 may thus be seen to be essential for an appraisal of the validity of the disputed recommendations.

1 3 In that connection it is appropriate to begin by considering the interpretation suggested in its observations by the Government of the Federal Republic of Germany, which takes the view that the article cannot be correctly understood unless account is taken of the first paragraph of Article 71 of the ECSC Treaty, according to which: "The powers of the Governments of Member States in matters of commercial policy shall not be affected by this Treaty, save as otherwise provided therein."

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14 According to the German Government, the scope of Article 4 (a) and of the first paragraph of Article 71 must be determined by reference to the fact that the ECSC is not a true customs union but, although displaying the charac- teristics of a common market, is without a common customs tariff, with the result that products falling within the ECSC — in this instance, coal — may be imported into the various Member States sometimes subject to payment of a more or less high rate of customs duty, and sometimes duty-free. In those circumstances the first paragraph of Article 71 enables Member States not only to pursue an independent commercial policy but also to ensure compliance with that policy by avoiding deflections of trade by means of customs duties levied on imports from another Member State which have originated in non-member countries.

the Treaty, which lays down the tasks of the Community institutions, provides in subparagraph (a) that they must "ensure an orderly supply to the common market, taking into account the needs of third countries" and in subparagraph (f) must "promote the growth of international trade".

20 Article 15 of the Convention on the Transitional Provisions, annexed to the ECSC Treaty, presupposes the existence of the principle of the free movement of goods, inasmuch as it requires inter alia, with reference to steel, authorization from the High Authority to enable States to take appropriate steps of their own to afford their indirect imports through Member States with lower tariffs the same degree of protection as that afforded by their own tariffs to their direct imports. In fact, there would have been no need for such authorization if Member States had been free to adopt unilaterally, within the framework of their own commercial policy, whichever measures were considered most expedient in dealing with indirect imports.

21 In its judgment of 14 July 1961 (Vloebergbs, Joined Cases 9 and 12/60, [1961] ECR 197), the Court expressly endorsed the principle (which was not disputed by the parties) of the free movement of products originating in non- member countries and released into free circulation in a Member State.

22 All the foregoing considerations show that the ECSC does not constitute a free-trade area in which the origin of a product is a determining factor, but is more akin in its structure to the principle of a customs union.

23 Whilst it should therefore be concluded that Article 4 (a) of the ECSC Treaty lays down a principle of free movement which embraces also products originating in non-member countries and released into free circulation within the Member States, it should none the less be pointed out that, unlike Article 9 of the EEC Treaty which does not refer to any limitation, Article 4 of the ECSC Treaty specifies that import duties and other restrictions are recognized as incompatible with the common market for coal and steel and are accordingly to be abolished and prohibited within the Community, "as provided in this Treaty".

27 In the light of the foregoing considerations, the disputed recommendations must therefore be recognized as being compatible with Article 4 (a) of the ECSC Treaty.

28 The second part of the question raised by the court making the reference inquires in substance how long the recommendations in question have remained valid.

29 Since the circumstances envisaged by subparagraph (3) of the first p a r a g r a p h of Article 74 are acknowledged to have been present during the years 1959 to 1963, only the period from 1964 to 1978 inclusive remains to be considered.

ΜAΒAΝΑFΤ / HAUPTZOLLAMT EMMERICH

30 In that regard it should first be made clear that, in relation to the above-mentioned period, the question is in fact concerned only with the recommendation of 28 January 1959.

31 As may be seen from Section A, the recommendation authorizes the Government of the Federal Republic of Germany to introduce temporary customs duties on coal originating in non-member countries and destined for the Federal Republic, to be levied on imports in excess of a duty-free quota. Paragraph 2 of Section A stipulates that the duty-free quota for 1959 may not be less than 5 million tonnes.

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output had to adapt itself, was in constant decline. There is therefore no doubt that the liberalization of imports of products originating in non- member countries during the majority of the years to be taken into consideration would still further have depressed the market and would very seriously have harmed German output by increasing to an intolerable extent stocks which were already very high.

36 Further, certain increases in demand such as those of 1968 to 1970 and of 1974, which were subsequently shown to be short-lived phenomena, cannot, contrary to the opinion of the plaintiff in the main proceedings, be regarded as having put an end to the circumstances which justified the existence of the disputed recommendation.

37 The view may indeed be taken that there was no reason to believe that the crisis in the coal sector had come to an end merely on the strength of a few slight improvements in demand which, as experience later showed, were simply due to short-term economic factors.

38 The threat of serious damage to Community output moreover never ceased to exist, even in the most favourable years, as is apparent from the statistics included in the documents before the Court which deal with output, consumption and stocks during the above-mentioned years.

39 A study of the position on the coal m a r k e t during the period from 1964 to 1978 therefore points to the conclusion that, over that period, there was n o reversal of trends such as t o p u t an end to the circumstances which h a d justified the a d o p t i o n of the disputed r e c o m m e n d a t i o n .

in answer to the question referred to it by the Finanzgericht Düsseldorf, by order of 7 February 1983, hereby rules:

Consideration of the question raised has disclosed no factor of such a kind as to call in question the compatibility of the Recommendations of the High Authority of 28 January 1959 and 30 October 1962 with Article 4 (a) of the ECSC Treaty, the validity of the Recommendation of 30 October 1962 as regards the year 1963 or that of the Recommendation of 28 January 1959 from the date of its adoption until the end of 1978. Those recommendations may, therefore, for the period in question, serve as a legal basis for national rules providing for the charging of a differential customs duty on coal originating in a non- member country and imported after its release into free circulation in another Member State.

Mackenzie Stuart Koopmans Bahlmann Galmot Pescatore O'Keeffe Bosco Due Everling

Delivered in open court in Luxembourg on 28 June 1984.

P. Heim A. J. Mackenzie Stuart Registrar President