C-270/83

French Republic, represented by François Renouard, acting as Agent, and Alain Sortais, acting as Deputy Agent, with an address for service in Luxembourg at the French Embassy,

defendant,

APPLICATION for a declaration that, by not granting the benefit of share- holders' tax credits to the branches and agencies in France of insurance companies established in another Member State, the French Republic has failed to fulfil its obligations under the EEC Treaty, in particular Article 52 thereof,

THE COURT

composed of: Lord Mackenzie Stuart, President, U. Everling, K. Bahlmann and R. Joliét, (Presidents of Chambers), T. Koopmans, O. Due, Y. Galmot, C. Kakouris and T. F. O'Higgins, Judges,

Advocate General: G. F. Mancini Registrar: D. Louterman, Administrator

The facts of the case, the course of the In order to limit cumulative taxation of procedure and the conclusions, submissions revenue distributed by companies which is and arguments of the parties may be liable first to the corporation tax payable by summarized as follows: the companies which distribute the dividends and secondly, in the hands of the recipients to personal income tax or I — Facts corporation tax, Article 158 bis of the code général des impôts created a tax credit 1. The French legislation concerning share- called 'avoir fiscal' in favour of recipients of holders' tax credits dividends. That article is in the following terms: Article 205 of the French code général des impôts [General Tax Code] provides, in 'Persons who receive dividends distributed regard to companies and other legal persons by French companies dispose in that respect designated in Article 206, for tax to be paid of an income consisting of: on all profits or income earned by taxable companies and legal persons. That tax is known as corporation tax. Its rate is fixed at the sums which they receive from the 50%. For the companies and legal persons company; liable to it, it corresponds to the income tax to which natural persons are liable under and Article 1 of the code général des impôts. a shareholders' tax credit in their favour In principle, companies are liable to with the Treasury. corporation tax regardless of where their registered office or the centre of their acti- That tax credit is equal to half the sums vities is located. Article 209 of the code actually paid by the company. général des impôts provides in that regard that account may be taken solely of profits made in undertakings operating in France It may only be utilized in so far as the or in those liable to taxation in France by abovementioned income forms part of the virtue of an international double taxation sum on which the recipient is liable to agreement. income tax.

It is accepted in payment of that income tax. insurance company] may set off against the corporation tax to which they are liable the entire tax credit from which they benefit by ...' virtue of Article 158 bis of the code général des impôts in respect of the dividends which they receive. Article 158 ter of the Code général des Impôts limits the benefit of the tax credit to 2. Pre-litigation procedure 'persons who have their habitual residence or registered office in France'. By letter of 29 July 1981, the Commission informed the French Government, pursuant Article 242 quater of the code général des to Article 169 of the EEC Treaty, that, in its impôts provides that: view, the fact of applying to the agencies and branches in France of insurance companies established in another Member 'the benefit of the tax credit may be granted State rules concerning the shareholders' tax to persons resident in the territory of States credit different from those applied to which have concluded an agreement with French insurance companies constituted France for the purpose of avoiding double discrimination contrary to Article 52 of the taxation. The arrangements and conditions EEC Treaty. for its implementation shall be fixed for each country by a diplomatic agreement.' In its reply of 30 December 1981, the French Government explained that that situation was merely a particular aspect of The result of those provisions is that in the the more general problem of the use of the absence of a contrary provision in a double- tax credit by natural or legal persons taxation agreement, companies and other pursuing an activity in France but residing legal persons whose registered office is in elsewhere. It justified the rules in question France, including subsidiaries set up in by arguing that the tax position of a French France by foreign companies, benefit from company differed in various respects from the shareholders' tax credit; however, that that of a secondary establishment (an benefit is denied to agencies and branches agency or a branch) which belonged to a established in France by companies whose foreign company and was not a legal entity. registered office is in another country. As is The ensuing fiscal problems could not be set out in administrative instructions of 30 unilaterally resolved on the basis of Article July 1976, dividends distributed by French 52 of the EEC Treaty but could only be companies to foreign companies having a resolved in the context of an approximation secondary establishment in France are not of the legislation concerning direct taxation to have the benefit of the tax credit even if or in the context of bilateral tax those dividends are included in the income conventions. Any other solution would lead of such establishments which is liable to to the risk of tax evasion. taxation in France.

of shareholders' tax credits on the same Declare that, by not granting to the terms as applied to French companies, the branches and agencies, in France, of foreign French Government had failed to fulfil its insurance companies based in another obligations under the Treaty, in particular Member State of the Community, the Article 52 thereof. The French rules obliged benefit of shareholders' tax credits on the foreign companies to set up subsidiaries in same terms as applied to French companies, France that is to say, companies incor- the French Republic has failed to fulfil its porated under French law, and placed obligations under the EEC Treaty, in branches and agencies without separate particular Article 52 thereof; legal personality at a disadvantage, with the result that Article 52 of the Treaty was deprived of its meaning. According to the Order the French Republic to pay the costs. Commission, the fact that work on harmonization had been commenced did not release the Member States from their 2. The French Republic contends that the obligation to already apply their own tax Court should: legislation in a non-discriminatory way. Dismiss the Commission's application; By letter of 6 July 1983, the French Government replied that the taxation system applying to branches in France of foreign Order the applicant to pay the costs. insurance companies could not be modified unilaterally. In order to ensure absolutely equal tax treatment of subsidiaries and 3. The written procedure followed the branches of foreign insurance companies, a normal course. large number of other provisions would have to be amended and certain of those provisions placed branches at an advantage Having heard the views of the Advocate vis-à-vis subsidiaries. Moreover, measures General, the Court decided to open the oral limited to insurance companies would be procedure without any preparatory inquiry. discriminatory because the problem arose in The parties were however invited to reply in relation to agencies set up by all foreign writing to a number of questions before the companies. It added that a foreign company hearing. could always set up a subsidiary in France in order to have the benefit of the share- holders' tax credit. III — Submissions and arguments of the parties advanced during the written procedure II — Procedure and conclusions 1. The discriminatory character of the French 1. By an application received at the Court system of shareholders' tax credits Registry on 12 December 1983, the Commission brought an action against the French Republic under Article 169 of the (a) The Commission claims that the French EEC Treaty. rules at issue are contrary to the second paragraph of Article 52 of the EEC Treaty inasmuch as they discriminate against The Commission claims that the Court companies incorporated under the law of should : another Member State.

Those rules provide for different treatment natural persons because the registered office for French insurance companies, including of a company serves to connect the French subsidiaries of foreign companies, on company to a given legal system. Moreover, the one hand, and the agencies and taking account of a person's domicile branches in France of insurance companies constitutes disguised discrimination. whose registered office is in another Member State, on the other, even though the business of insurance in France, as carried on by a French company, is no different from the same activity carried on by an agency of a foreign company.

Treaty. On the other hand, it limits the freedom of agencies and branches of foreign insurance ' companies in regard to the composition of their share portfolio and their investments in moveable property because the First Council Directive of 24 July 1973 on the coordination of laws, regu- lations and administrative provisions relating to the taking up and pursuit of the business of direct insurance other than life insurance The essential difference between the French (Directive 73/239/EEC, Official Journal subsidiary of a foreign company and an 1973, L 228, p. 3), the First Council agency or branch is that the subsidiary is in Directive of 5 March 1979 on the coordi- fact a company incorporated under French nation of laws, regulations and adminis- law, whereas the agency or branch remains trative provisions relating to the taking up an integral part of the foreign company. and pursuit of the business of direct life The discrimination being criticized is insurance (Directive 79/267/EEC, Official therefore due to the fact that, in respect of Journal 1979, L 63, p. 1) and the French the same activity, a company incorporated legislation adopted to implement those under French law and a company incor- directives, by requiring the establishment of porated under the law of another Member technical reserves composed of 'equivalent State are subject to different tax rules. and matching assets localized in each However, using the registered office as a country where business is carried on', which criterion amounts in fact to making a presupposes 'the representation of under- distinction according to a criterion equi- writing liabilities expressed in a particular valent to that of nationality in regard to currency by assets expressed or realizable in

the same currency', prevents branches of holders' tax credits to agencies and branches foreign insurance companies from holding of insurance companies established in foreign shares and securities with the result another Member State subject to the same that they are in practice obliged to include advantage being granted to French in their portfolios only French securities, companies in the context of bilateral tax which do not have the benefit of a tax conventions. In its judgment of 25 October credit. 1979 (Case 159/78 Commission v Italy [1979] ECR 3247), the Court decided that Member States' obligations under Article 52 The discrimination against companies incor- may not be made subject to a condition of porated under the law of another Member reciprocity.

foreign companies. According to the income by the undertaking distributing principle of the territoriality of tax legis- them, and of Luxembourg and the lation, a French company or a branch of a Netherlands, which apply the classic foreign company operating in France are taxation system, all the other Member States taxed only in respect of income produced by either already grant the benefit of the tax their activities in France and the activities of credit to branches of foreign companies the foreign branch of a French company are (Denmark, Germany and Italy) or do not not taxed in France. tax the dividends received (Belgium, Ireland and the United Kingdom).

company. Furthermore, the reputation and sources of French law, as is the case of the business experience of an insurance international conventions under Article 55 company whose registered office is in of the French Constitution. another Member State may to some extent be lost from view if a new company is set up.

The principle of non-discrimination is not involved since the position of a secondary establishment is different from that of a The registered office has also been adopted as the criterion in international tax law in body having separate legal personality and the model double-taxation agreement each of those forms has advantages and adopted by the OECD. The agreements disadvantages for insurance companies designed to avoid double taxation which wishing to operate in France. In accordance France has concluded with many countries, with the accepted principles of international including all the Member States, all make law and the practice of most of the Member the distinction, not withstanding the special States, those differences led France to apply features resulting from the characteristics of the rules governing the taxation of non- the various national systems of taxation in residents to secondary establishments. The question, between residents and non- distinction between residents and non- residents and they classify branches and residents exists in most countries. It is agencies of companies whose registered regarded as necessary and non-discrimi- office is abroad as secondary establishments natory in all of those countries. subject to specific legal provisions. Those agreements are also based on the principle of non-discrimination.

the reputation of that company and the secondary establishments do not in fact arise guarantee of solvency which it provides. in reality. The principles requiring represen- tation of underwriting liabilities and matching assets, laid down in Council Directive 73/239/EEC of 24 July 1973 and the French code des assurances [Insurance Code] in no way require that an insurance Although the rules applicable to secondary company hold shares but merely lay down a establishments do not grant them the benefit maximum percentage authorized in addition of the shareholders' tax credit, in other to securities. Moreover, a branch may hold, respects they are more favourable than those in addition to securities, foreign shares applicable to subsidiaries. Secondary estab- quoted on French stock exchanges.

is based. Finally, in the context of the companies as it is to companies whose double-taxation agreements and in registered office is in France. In fact, some accordance with the principles evolved by of the insurance companies offering the the OECD, France does not tax at source lowest premium rates on the French market profits distributed abroad. hold nothing but securities. Experience has shown that insurance companies operating through branches or agencies do not have higher premium rates and that should not be surprising because competitiveness and level of premiums depends much more on the level of general overheads, the type of The French Government contends that the distribution network and the underwriting Commission's solution also raises problems policy than on the tax credit obtained on a in regard to the so-called 'précompte', part, which is in any event limited, of the which is complementary to the shareholders' assets in the company's investment portfolio. tax credit. The shareholders' tax credit is granted only if the corporation tax which gives rise to it has been paid at a rate of 50%; in other cases, such as that of capital gains, taxed at 15%, the company distri- buting the dividends must pay an additional The French Government argues that the tax called a 'précompte'. Commission's solution would cause France to disturb unilaterally the balance estab- lished by the double-taxation agreements with the other Member States.

COMMISSION v FRANCE

non-discrimination and their purpose is to restriction on the setting-up of secondary exclude the principle cause of discrimi- establishments within the meaning of the nation, namely double taxation. Unilateral first paragraph of Article 52 of the EEC action is an inappropriate means of Treaty and on the choice by companies achieving those objectives whereas the incorporated in other Member States of the bilateral nature of the double taxation form of agency or branch as the means agreements makes it possible to arrive at through which to pursue their activities in balanced solutions. France.

JUDGMENT OF 28. 1. 1986 — CASE 270/83

apply their own tax systems in a non- 3. Other arguments capable of justifying discriminatory manner. In that regard, the refusal to grant the benefit of the shareholders' Court's reasoning in regard to free tax credit movement of goods (see judgment of 9 December 1981 in Case 193/80 Commission v Italy [1981] ECR 3019) may be readily transposed to the free movement of persons. (a) According to the French Government, Article 52 must be fully effective whether or acceptance of the Commission's argument not the different tax systems have been would lead to the introduction of discrimi- approximated. nation between different sectors of activity in favour of the insurance sector.

COMMISSION v FRANCE

be extended to all branches and agencies in credit, tax ot FF 25 will be payable in France of companies established in another France. The amount of tax payable in Member State, whatever economic sector France is therefore higher when the shares they operate in, and this action is limited to are held by the branch. Similarly, in the case the insurance sector merely because it was of a foreign company with a major holding to that area that the Commission's attention in the capital of a French company, when was drawn. The Court's decision in this case the benefit of the tax credit is never granted, will however be of general application. the danger of tax evasion is non-existent.

JUDGMENT OF 28. 1. 1986 — CASE 270/83

secondary establishment set up by a foreign sector concerning which complaints had company was treated in the same way as a been made to it and in which unlike other resident company, as advocated by the areas, the right of secondary establishment Commission, it would not be in the interests is widely exercised through branches, it of foreign companies to hold French shares nonetheless considers, without wishing to other than through a secondary estab- suggest that the Court rule on a situation lishment in France. Even though such a other than that which gave rise to the transfer of shares might be to the advantage proceedings, that the Member States must of the French treasury in certain cases, there draw the appropriate consequences from a is nonetheless a danger of evasion on the judgment condemning the French system. international level and in particular, between the Member States and that is precisely the situation which the double- taxation agreements are designed to avoid. The Commission's analysis is also wrong in regard to large holdings, in respect of which 2. The double-taxation agreements between a comparison of the overall tax burden, France and the other Member States viewed in an international context also reveals a danger of tax evasion.

COMMISSION v FRANCE

agreements do not provide for the transfer 3. Calculation of the tax burden on of the tax credit, relating in particular to the dividends characteristics of the tax systems in question, the need to make different kinds of concessions in order to obtain a balanced agreement and a number of considerations The French Government submits expla- not connected with taxation such as the nations concerning the comparative table by need to avoid encouraging investment which it seeks to establish the existence of a abroad. danger of tax evasion by demonstrating the consequences of the Commission's argument that secondary establishments should be treated in the same way as companies resident in France. It compares the position of a foreign company which includes its French shares among the assets of its The Commission explains that the grant of principal establishment abroad with that of a the shareholders' tax credit in respect of foreign company which includes the same dividends paid to secondary establishments shares in the assets of a secondary estab- of companies whose registered office is in lishment in France which is, for the sake of another Member State is not regulated by argument, assimilated to a French company the double-taxation agreements but depends in regard to the shareholders' tax credit. In exclusively on national legislation. France is such a comparison, where a profit of FF 200 the only Member State operating an impu- has been made and a dividend of FF 100 tation system where dividends paid to distributed, to which must be added the tax secondary establishments of non-resident credit of FF 50, the tax due is FF 125 where companies are taxed without having the the shares are held by the company itself but benefit of the corresponding tax credit. would be only FF 87.50 if there was a Everywhere else in the Community, liability secondary establishment in France which of dividends to national taxation is accom- was assimilated to a resident company. That panied by the grant of tax credit. comparison thus demonstrates the existence of a distortion which could give rise to tax evasion.

the shares are held by a company whose (d) The systems in force in the other registered office is in France or one whose Member States which provide for a registered office is in another Member State partial set off of the corporation tax with which France has an agreement against the tax payable by the person providing for the grant of the shareholders' receiving the dividends by granting an tax credit, it is heavier when the shares are 'avoir fiscal', 'crédit d'impôt' or 'tax held by the secondary establishment in credit' at a rate which varies from one France of a non-resident company. The State to another. discrimination which exists in the latter case would disappear if the benefit of the share- holders' tax credit was granted. In order to benefit from the tax credit, the person receiving the dividends must 4. Legislation of the Member States on this generally be resident in the Member State subject involved and liable to tax on the dividends received. However, non-resident companies having a secondary establishment on the territory of the State have the benefit of the The Commission stated that with regard to tax credit on dividends paid to that estab- the taxation of profits and dividends lishment in all the Member States operating distributed by companies, there are four a tax credit scheme, except in France where different situations within the Community, the dividends paid to secondary estab- namely: lishments are taxed without the share- holders' tax credit being granted.

COMMISSION v FRANCE

V — Oral procedure oral argument and replied to questions put by the Court at the sitting on 19 June 1985. The Commission, represented by Mr Druesne and the French Government, The Advocate General delivered his represented by Mr Guillaume, presented Opinior at the sitting on 16 October 1985.

Decision

1 By an application lodged at the Court Registry on 12 December 1983, the Commission of the European Communities has brought an action under Article 169 of the EEC Treaty for a declaration that by not granting the benefit of share- holders' tax credits to the branches and agencies in France of insurance companies established in another Member State on the same terms as those enjoyed by French companies, the French Republic has failed to fulfil its obligations under the EEC Treaty, in particular Article 52 thereof.

The national legislation at issue

2 French tax legislation provides for the charge of corporation tax at a rate of 5 0 % on all profits made by companies and other taxable legal persons; that tax is the equivalent of the income tax to which natural persons are liable. In principle, companies are liable to corporation tax irrespective of where their registered office is situated. However, by virtue of Article 209 of the code général des impôts, account is taken only of profits made in undertakings operating in France or in those liable to taxation in France by virtue of a double-taxation agreement.

6 It is clear from the aforementioned provisions, and also from Article 15 of the loi des finances [Finance Law] for 1978 (Law No 77-1467 of 30 December 1977, Journal Officiel de la République Française 1977, p. 6316), that insurance companies whose registered office is in France, including subsidiaries set up in France by foreign insurance companies, benefit from the shareholders' tax credit in respect of their shares in French companies. However, that benefit is not granted to secondary establishments set up in France in the form of branches or agencies by insurance companies whose registered office is in another Member State.

The purpose of the proceedings

7 In this action under Article 169 of the EEC Treaty, the Commission is seeking to establish that the rules governing shareholders' tax credits discriminate against branches and agencies of insurance companies whose registered office is situated in

COMMISSION v FRANCE

another Member State and constitute an indirect restriction on the freedom to set up secondary establishment. The Commission has added that although it has restricted its action to the insurance sector because it has received complaints only in regard to that sector, all the Member States, and in particular France, must nonetheless draw all the appropriate conclusions from the Court's judgment, even in regard to other sectors.

8 The French Government has expressed its opposition to the Commission's enlarging the scope of the action to all companies whatever their sector of activity.

10 Since some uncertainty as to the precise subject matter of this action has become visible during the proceedings, it must once again be pointed out that the action is concerned with disparity in the treatment in regard to the shareholders' tax credit of, on the one hand, insurance companies whose registered office is in France, including subsidiaries set up in France by foreign companies, and, on the other, of branches and agencies established in France by insurance companies whose registered office is in another Member State. The action does not therefore deal generally with every difference in treatment between, on the one hand, companies as independent legal entities and, on the other, branches and agencies without separate legal personality. Finally, it must be particularly emphasized that the action does not concern differences which may exist in the rules regarding taxation applicable to branches and agencies, on the one hand, and, on the other hand, subsidiaries of companies whose registered office is in another Member State where those branches and agencies or those subsidiaries transfer to the company which owns them profits made in the undertakings carried on by them in France.

JUDGMENT OF 28. 1. 1986 — CASE 270/83

The application of Article 52 of the EEC Treaty

13 It must be stated firstly that Article 52 of the EEC Treaty embodies one of the fundamental principles of the Community and has been directly applicable in the Member States since the end of the transitional period. By virtue of that provision, freedom of establishment for nationals of one Member State on the territory of another includes the right to take up and pursue activities as self-employed persons and to set up and manage undertakings under the conditions laid down for its own nationals by the law of the country where such establishment is effected. The abolition of restrictions on freedom of establishment also applies to restrictions on

COMMISSION v FRANCE

the setting up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.

14 Article 52 is thus intended to ensure that all nationals of Member States who establish themselves in another Member State, even if that establishment is only secondary, for the purpose of pursuing activities there as a self-employed persons receive the same treatment as nationals of that State and it prohibits, as a restriction on freedom of establishment, any discrimination on grounds of nationality resulting from the legislation of the Member State.

1 5 It thus appears that the two submissions put forward by the Commission, namely that concerning discrimination in French law against branches and agencies of insurance companies established in other Member States vis-à-vis companies estab- lished in France and that concerning the restriction of the freedom of foreign insurance companies to establish branches and agencies, are closely linked. They must therefore be considered together.

18 It must first be emphasized in that regard that freedom of establishment, which Article 52 grants to nationals of another Member State and which entails their right to take up and pursue activities as self-employed persons under the conditions laid down for its own nationals by the law of the country where such establishment is effected, includes, pursuant to Article 58 of the EEC Treaty, the right of companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community to pursue their activities in the Member State concerned through a branch or agency. With regard to companies, it should be noted in this context that it is their registered office in the above-mentioned sense that serves as the connecting factor with the legal system of a particular State, like nationality in the case of natural persons. Acceptance of the proposition that the Member State in which a company seeks to establish itself may freely apply to it a different treatment solely by reason of the fact that its registered office is situated in another Member State would thus deprive that provision of all meaning.

19 Even if the possibility cannot altogether be excluded that a distinction based on the location of the registered office of a company or the place of residence of a natural person may, under certain conditions, be justified in an area such as tax law, it must be observed in this case that French tax law does not distinguish, for the purpose of determining the income liable to corporation tax, between companies having their registered office in France and branches and agencies situated in France of companies whose registered office is abroad. By virtue of Article 209 of the code général des impôts, both are liable to taxation on profits made in undertakings carried on in France, to the exclusion of profits which are made abroad or which France is entitled to tax under the terms of a double- taxation agreement.

21 Notwithstanding the French Government's argument to the contrary, the difference in treatment also cannot be justified by any advantages which branches and agencies may enjoy vis-à-vis companies and which, according to the French Government, balance out the disadvantages resulting from the failure to grant the benefit of shareholders' tax credits. Even if such advantages actually exist, they cannot justify a breach of the obligation laid down in Article 52 to accord foreign companies the same treatment in regard to shareholders' tax credits as is accorded to French companies. It is also not necessary in this context to assess the extent of the disadvantages which branches and agencies of foreign insurance companies suffer as a result of the failure to grant them the benefit of shareholders' tax credits and to consider whether those disadvantages could have any effect on their tariffs, since Article 52 prohibits all discrimination, even if only of a limited nature.

22 Furthermore, the fact that insurance companies whose registered office is situated in another Member State are at liberty to establish themselves by setting up a subsidiary in order to have the benefit of the tax credit cannot justify different treatment. The second sentence of the first paragraph of Article 52 expressly leaves traders free to choose the appropriate legal form in which to pursue their activities in another Member State and that freedom of choice must not be limited by discriminatory tax provisions.

23 In a second line of argument, the French Government seeks to demonstrate that the difference in treatment is in fact due to the particular characteristics of and the

25 Furthermore, the risk of tax avoidance cannot be relied upon in this context. Article 52 of the EEC Treaty does not permit any derogation from the funda- mental principle of freedom of establishment on such a ground. Moreover, the Court is not convinced by the calculations submitted by the French Government for the purpose of showing that if the benefit of shareholders' tax credits was granted to branches and agencies of companies whose registered offices are in other Member States, those companies would be prompted to include the shares they hold in French companies among the assets of their branches and agencies in France. Those calculations are based on the hypothesis, which finds no support in Article 158 bis of the code général des impôts, that the transfer to the place at which the company has its registered office of profits made by branches or agencies would in its turn benefit from the shareholders' tax credit; nor has the Commission sought in these proceedings to have the benefit of that tax credit extended to such cases.

COMMISSION v FRANCE

26 Finally, the French Government is wrong to contend that the difference of treatment in question is due to the double-taxation agreements. Those agreements do not deal with the cases here at issue as defined above. Moreover, the rights conferred by Article 52 of the Treaty are unconditional and a Member State cannot make respect for them subject to the contents of an agreement concluded with another Member State. In particular, that article does not permit those rights to be made subject to a condition of reciprocity imposed for the purpose of obtaining corresponding advantages in other Member States.

The Court

hereby:

(1) Declares that by not granting to the branches and agencies in France of insurance companies whose registered office is in another Member State on the same terms as apply to insurance companies whose registered office is in France the benefit of shareholders' tax credits in respect of dividends paid to such branches or agencies by French companies, the French Republic has failed to fulfil its obligations under Article 52 of the EEC Treaty;

(2) Orders the French Republic to pay the costs.

Mackenzie Stuart Everling Bahlmann Joliet

Koopmans Due Galmot Kakouris O'Higgins