C-193/85

Mr President, in Articles 9 and 12 of the EEC Treaty. It Members of the Court, contends that that prohibition is applicable because bananas are not cultivated in Italy (a claim which, however, is factually 1· A — Upon the abolition of the State incorrect, as we have been informed) and monopoly with regard to the transportation because such taxes are not levied on other by sea and the industrial processing of varieties of fruit which are grown in Italy. bananas and trade in bananas a tax was However, if the tax were to be regarded as introduced in Italy with effect from 1 internal taxation within the meaning of January 1965 on fresh and dried bananas Article 95 of the EEC Treaty it would, in and banana meal by Law No 986 of 9 Co-Frutta's view, be contrary to at least the October 1964. Initially set at LIT 70 per second paragraph of Article 95, since it kilogram in the case of fresh and dried must be assumed that other products, bananas, since 1982 it has been LIT 525 per partially or potentially in competition with kilogram (LIT 1 500 per kilogram of banana bananas, are afforded indirect protection by meal). The tax is collected by the customs the tax on bananas. That is so, it maintains, authorities on importation (import volume because Article 95 applies not only to goods in 1985: 357 500 tonnes); as far as bananas originating in other Member States but also produced in Italy are concerned (according to goods which are in free circulation in to the Italian Government, domestic another Member State. production amounted to 100 tonnes in 1985 and to as much as 120 tonnes in previous years), the tax becomes due on sale by the 4. Lastly, Co-Frutta points to the fact that producer and is collected by the local Colombia is a party to the General revenue authorities. Agreement on Tariffs and Trade (GATT), and argues that the contested tax is incom­ patible with Article III of the GATT, which 2. That tax was applied when Cooperativa deals with national treatment of internal Co-Frutta Sri, hereinafter referred to as taxation and prohibits tax applied so as to 'Co-Frutta', the plaintiff in the main afford protection to like domestic products. proceedings in which the request was made for a preliminary ruling, imported into Italy between August and November 1982 5. The Amministrazione delle Finanze dello bananas from Colombia (which were in free Stato (State Finance Administration) circulation in the Benelux countries). In contends that the tax on bananas cannot be Co-Frutta's view that was unlawful, and it regarded as a charge having equivalent brought an action for the repayment of the effect to a customs duty: the tax is levied on tax. consumption and not on importation, and is therefore a consumer tax independent of the origin of the goods and hence an internal tax within the meaning of Article 95 of the 3. Co-Frutta bases its claim primarily on the EEC Treaty. However, there can be no prohibition of charges having equivalent question of an infringement of Article 95, effect to customs duties which is laid down since that provision covers solely goods of * Translated from the German.

(2) Must a charge of that kind be regarded 8. (a) Co-Frutta considers in that instead as internal taxation within the regard — this is now clear — that what is meaning of Article 95 of the EEC involved is a charge equivalent in effect to a Treaty in view of the fact that, as its customs duty; it points to the fact that, name indicates, it is imposed on the according to the definitions in the case-law consumption of the goods in question of the Court, it is not necessary for there to and not on the importation thereof, be discrimination between identical even if it is in fact collected when the products; the products in question must goods are cleared through customs and simply be similar. It considers that view to is imposed only on bananas and not on be confirmed by statements in a note of 11 any other kind of fruit? April 1972 of the Italian Permanent Repre­ sentation concerning the nature of the former banana monopoly (in which (3) If it is to be regarded as internal reference is made to protecting home- taxation, is the charge in question produced fruit, which might be threatened contrary to the second paragraph of by competition from bananas) and by the Article 95 and as such prohibited, fact that it was after the abolition of the inasmuch as its purpose is to protect banana monopoly that the consumer tax other fruit, in particular all home­ was introduced, which is four times as high grown fruit? as the customs duty and amounts to 80% of

CO-FRUTTA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

the value of the bananas (also after the consumer taxes are also charged on coffee abolition of the monopoly import quotas and cocoa (and, moreover, also on spirits, were set for bananas and recourse was made beer, sugar, sweeteners, oils and to Article 115 of the Treaty). margarines) and by the fact that Italy does not import a large number of tropical products in significant quantities.

10. For its part, the Italian Govemtnent considers that the tax cannot be regarded as a charge having an effect equivalent to a 14. There has been a plain movement away customs duty. The decisive factor in that from this approach in later cases. In the regard is that the tax also applies to domes­ judgment in Case 24/68 3it was emphasized tically produced bananas — which do that the discriminatory or protective effect is exist — and that the resulting revenue is not not the decisive factor (which is obvious used for a specific purpose (that is to say, to since it is also material in connection with benefit domestic production) but to finance Article 95). It has also been made clear that the activities of the State generally. it does not depend on the fact that only imports are taxed; instead, a charge having an effect equivalent to a customs duty may be involved even where domestic products 11. In the result, the Commission also took are also taxed but the proceeds of the tax that view. Admittedly, it considered that it have the purpose of 'financing activities for was not a simple matter to classify the tax the specific advantage of the taxed domestic since it applied to only a few tropical products. However, in the end it never­ 1 — Judgment of 14 December 1962 in Joined Cases 2 and theless came down in favour of the 3/62 Commwion v Grand Duchy of Luxembourg and Kingdom ofBelgium [1962] ECR 425, at p. 432. application of Article 95 and the view that 2 — Judgment of 4 April 1968 in Case 20/67 Firma Kunstmühle the tax on bananas was part of the Italian Tivoli v Hauptzollamt Würzburg [1968] ECR 199, at p. system of consumer taxes. It was persuaded 205. 3 — Judgment of 1 July 1969 in Case 24/68 Commission v to take that view by the fact that such Italian Republic [1969] ECR 193, at p. 201.

15. Accordingly, for the purposes of distin­ guishing between charges having an effect equivalent to customs duties and internal taxes, ever greater emphasis has been placed 17. (c) Having regard to those decisions of upon whether the charge applies to whole the Court and the arguments put forward classes of domestic or foreign products by the Italian Government, it was asked in which are all in the same position (judgment the course of the oral proceedings what was in Case 78/76, cited above, paragraph 30) the actual extent of the taxation on Italian- or, as is made clear by the judgments in produced bananas, that is to say, figures were 6 7 sought for the relevant tax revenue with a Case 90/79 and in Case 158/82, whether it forms part of a general system of internal view to revealing the existence and signif­ dues applied systematically in accordance icance of the purported taxation of domestic with the same criteria to both national production. Unfortunately, a satisfactory products and imported or exported answer was not received; all that was forth­ products. coming was data on Italian banana production, which is very low (as I mentioned at the beginning of this Opinion), and the remark that the amount of tax revenue can easily be calculated on the basis of Article 3 of Decree-Law No 688 of 30 September 1982. 16. That was held to apply in Case 90/79 (which concerned a French levy,on repro­ graphic machines imposed on the use of reprography) manifestly because the levy in question was borne by a range of very different machines classified under various customs headings. In contrast, in Case 18. (aa) There would be a certain amount 158/82 (concerning a charge for the health of justification for concluding (since the inspection carried out on groundnuts and Italian Government has not yet exercised groundnut products upon importation into the right which it reserved in its reply to Denmark) the claim that the contested obtain and produce further information) charge was an internal tax was rejected on that it has not been proved to the Court that a consumer tax is also charged on Italian- 4 — Judgment of 18 June 1975 in Case 94/74 Industria Gomma produced bananas and therefore that that Articoli Vari, IGAV vEnte Nazionale per la Cellulosa e perpart of the relevant legislation is of no la Carta, ENOC, [1975] ECR 699, paragraph 15/17 at p. 710. practical significance. It should not be 5 — Judgment of 22 March 1977 in Case 78/76 Firma Steimke excessively difficult in practice to determine una Weinlig v Federal Republic of Germany [1977] ECR 595, at p. 613. the revenue which may result from the 6 — Judgment of 3 February 1981 in Case 90/79 Commission v taxation of Italian bananas and provide the French Republic [1981] ECR 283, at p. 301. Court with a picture, at least based on a 7 — Judgment of 9 November 1983 in Case 158/82 Commission year, within a reasonable time. v Kingdom ofDenmark [1983] ECR 3573, at p. 3586.

23. Consequently, even if the tax were applied to Italian bananas — which, as we 21. The aforementioned judgment in Case have seen, is extremely doubtful — its aim 90/79 concerning the French levy on repro­ remains a matter of commercial policy, since graphic machines is of particular relevance the ratio of home-produced to imported since it makes it clear that the origin and aim bananas is 1:3 600. Furthermore, the tax is of the tax arrangements have an important not charged on production since it does not role to play in the assessment (in that case it become due until sale by the producer. transpired that the tax arrangements in Consequently, it does not affect products question had their origin in the breach made which are never put on sale, and that is in the protection of copyright by the liable to reduce even further the significance increase in the use of reprography and were of the fact that Italian bananas are liable to the tax. Even if the tax is actually charged 8 — Judgment of 20 March 1984 in Case 314/82 Commissionv Kingdom of Belgium [1984] ECR 1543, paragraph 11, at p. on Italian bananas that does not alter, on the basis of the economic approach adopted

OPINION OF MR LENZ —CASE 193/85

29. (a) As far as the material scope of 25. It is significant — quite apart from the Article 95 is concerned, the Italian fact that the taxes on coffee and cocoa are Government considers that Article 95 covers manifestly traditional consumer taxes — that only goods which originated in another bananas are the sole product in the category Member State and not goods which are of exotic fruit to be subject to the tax. That simply in free circulation in another makes it difficult in practice to consider that Member State. That view is also taken by the taxation of whole groups or classes of the Commission, which argues that Article products is involved and to take the view 95 does not apply to bananas from that the tax on bananas is part of a general non-member countries but only to bananas system of internal dues. from Member States which are producers of bananas.

26. (d) In the light of all the foregoing it should therefore be held with regard to 30. Co-Frutta, on the other hand, considers Questions 1 and 2 that the contested Italian that Article 95 also covers goods which are tax on bananas should not be assessed in the merely in free circulation in other Member light of Article 95 (even if it is also charged States. It bases that view on the relationship on Italian bananas) but should be classed as which, it maintains, exists between Article 9 a charge having an effect equivalent to a et seq., Article 30 and Article 95 and on the customs duty, which necessitates its being fact, emphasized by the Court in its

CO-FRUTTA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

31. As regards the second aspect now under consideration, the Italian Government 35. It is especially relevant in that argues that the first paragraph of Article 95 connection — as the Court has also is inapplicable to the tax on bananas because emphasized — that Article 95 is not bananas and domestic fruit not subject to applicable to imports from non-member the consumer tax are not complete countries (I refer to the judgment in Case 10 substitutes for each other as far as the 20/67 and the judgment in Case 148/77, consumer is concerned and therefore are in which it was held that, for trade with not similar within the meaning of Article 95. non-member countries, and as far as It refers in this connection to the rules of internal taxation is concerned, the Treaty the common organization of the market in does not include any rule similar to that laid fruit and vegetables as laid down in Regu­ down by Article 95; instead such relations lation No 1035/72 (Official Journal, are governed by the arrangements laid English Special Edition 1972 (II), p. 437) down by international agreement). Conse­ and to the fact that bananas fall under a quently, Article 95 restricts only to a limited separate heading in Chapter 8 of the extent the fiscal sovereignty of the Member Common Customs Tariff. States in order to favour intra-Community trade (as Mr Advocate General Capotorti pointed out in his Opinion in Case 148/77). However, that could occur, thus nullifying 32. It considers that the second paragraph the freedom existing under the Treaty of Article 95 is also inapplicable, on vis-à-vis non-member countries, if Article the ground that the tax on bananas does 95 were to be applied to goods which are not favour Italian fruit only but also fruit imported via other Member States having from other Member States. On the other been in free circulation there. hand, the Commission considers — like Co-Frutta — that bananas are definitely capable of satisfying the same needs as domestic fruit (apples, pears, peaches, plums, apricots, cherries, oranges, 36. Finally, the wording of the first mandarins) and therefore can be regarded paragraph of'Article 95 ('products of other as being similar. As a result, it is contrary to Member States') supports that contention, the second paragraph of Article 95 to as does Article 9 (2), which, significantly, charge a tax solely on bananas and, in that provides that only certain parts of the manner, to protect other fruit from Treaty are to apply to goods in free circu­ undesired competition. lation. That is further supported by the view that the intention of Article 95 — as it appears from its position in the Treaty — is 33. (b) In my view, the fourth question, to secure undistorted competition in the which now must logically be dealt with first, common market (to ensure free movement can only be answered in the way advocated of goods between the Member States in by the Italian Government and the normal conditions of competition, as is Commission. stated in paragraph 10 of the Court's

39. 3. The only outstanding question now is the fifth, which refers to Article III of the 42. (b) As far as that issue is concerned, it General Agreement on Tariffs and Trade must first be pointed out that the (GATT). That question seeks to ascertain Community has been substituted for the whether a charge which is contrary to Member States as regards fulfilment of the Article 95 in so far as it is levied on obligations imposed by the GATT, as a products of the Member States is also result of the entry into force of the contrary to Article III of the GATT in so Common Customs Tariff with effect from far as it is levied on products originating in the territory of contracting parties to that 1 July 1968 (as is stated in the judgment agreement. in Joined Cases 267 to 269/81 11). Accordingly, since that date GATT commitments have also constituted Community obligations. Hence the GATT 40. (a) In that regard the Italian should receive uniform application Government observes that reliance cannot throughout the Community. It follows that be placed on the GATT in this case for the Court must have jurisdiction to two reasons. Firstly, it is not capable of conferring rights on individuals (a view II — Judgment of the Court of 16 March 1983 in Joined Cases shared by the Commission as regards Article 267 to 269/81 Amministrazione delle Finanze dello Stato v Società Petrolifèra italiana SpA (SPI) and SpA Michelin III), and secondly Article III applies to Italiana (SAMI) [1983] ECR 801.

CO-FRUTTA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

43. According to the case-law of the Court 44. Those considerations plainly also apply the first question to be asked when assessing to Article III of the GATT. It must the compatibility of national provisions with therefore also be held with regard to that the GATT is whether the relevant GATT provision — as the Italian Government and provision is capable of conferring rights on the Commission have argued — that it can individuals. Consequently, it is not possible no more confer rights on individuals than to avoid the question by considering the Articles II and XI, which were the subject interpretation of the relevant GATT of earlier cases of the Court. It follows that provisions (in this case Article III) directly. Article III cannot be used as a criterion for As the Court is aware, this question has assessing the lawfulness of the Italian already arisen in past cases before the Court consumer tax on bananas. It is therefore with regard to various GATT provisions unnecessary to analyse its scope in detail and it has always been answered in the and consider whether it does in fact apply negative. That conclusion has been reached only to like products which are in direct primarily on the basis of considerations competition with each other and whether it pertaining to the general scheme of GATT is narrower than the second paragraph of (see paragraph 23 of the judgment in Joined Article 95 of the EEC Treaty.

C — In the light of the foregoing I propose that the questions put by the Tribunale di Milano should be answered in the following terms:

46. Article 95 applies only to products from other Member States and not to products from non-member countries which are in free circulation within the Community.

Question 5

47. Article III of the GATT confers no rights on individuals which can be invoked in proceedings before national courts for the purposes of checking the compati­ bility of national provisions with that provision. Accordingly, there is no need to interpret the substance of that provision or to determine its precise scope (as regards the products concerned).