C-340/87

COMMISSION v ITALY

OPINION OF MR ADVOCATE GENERAL VAN GERVEN delivered on 11 April 1989 *

Mr President, Republic. 2 Article 11 of that decree Members of the Court, provides that offices of the customs of the various customs departments at frontier posts are to remain open, where the volume of traffic justifies it, so that the inspections and formalities relating to the movement of means of transport and goods not being carried under a customs transit procedure may be performed from Monday to Friday during an uninterrupted period of at least 10 hours (and on Saturday during an unin­ 1. In this case the Commission asks the terrupted period of at least six hours). Court to declare that, by charging operators However, customs operations performed the cost of inspections and administrative during customs offices' business hours formalities carried out during part of the which are in excess of the normal working normal business hours of frontier crossing- hours of the civil service 4— and it is to this points, the Italian Republic has failed to that the Commission objects — are subject fulfil its obligations under Articles 9 and 12 to a charge corresponding to the cost of the of the EEC Treaty, the provisions of the service performed. The second provision EEC regulations which prohibit in which the Commission has in its sights is connection with the common agricultural Article 15 of the aforementioned Decree No policy charges having an effect equivalent to 254 which provides more generally that customs duties, certain agreements inspections and formalities prescribed in that concluded by the Community with decree and performed during customs non-member countries and Article 5 of offices' business hours which are in excess Directive 83/643/EEC. 1 of the normal civil service working hours are to be subject to a charge corresponding to the cost of the services performed.

3. Much confusion can be avoided if it is '1 . Member States shall see to it that: borne in mind from the outset that the Commission did not bring this action — which is directed (as has been mentioned in point 1 above) against the passing on of the costs of customs inspections to economic (a) where the volume of traffic so warrants, operators — because Italy has failed to frontier posts are open, except when traffic transpose Directive 83/643/EEC into is prohibited, so that: national law. Furthermore, the Commission has based its application only to a strictly incidental extent on that directive, since it contains no provision with regard to charging for the performance of customs 6 operations. In contrast, the Commission's action is principally based on the claim that (i) frontiers can be crossed 24 hours a day, charging for such operations conflicts with with the corresponding inspections and the prohibition of charges having an effect formalities, in the case of goods placed equivalent to import and export duties, as is under a customs transit procedure, their laid down in particular in Articles 9 and 12 means of transport and vehicles of the EEC Treaty, in a number of regu­ travelling unladen, save where frontier lations introducing a common organization inspection is necessary to prevent the of the market under the common agri­ spread of disease, 7 cultural policy and in a number of 'preferential agreements' concluded by the 8 Community with non-member countries. Therefore it is in the light of that prohibition that the Italian provisions objected to by the Commission must be (ii) inspections and formalities relating to assessed. the movement of means of transport and goods which are not being carried 6 — With one exception, that is to say Article 5(4) of the under a customs transit procedure may directive, which allows charges to be made on an excep­ tional basis. See in addition point 14, infra. be performed from Monday to Friday 7 — The Commission cites by way of example Regulation No during an uninterrupted period of at 805/68/EEC of 27 June 1968, as amended by Regulation No 425/77/EEC, Official Journal 1977, L 61, p. 1. 5 8 — The Commission cites by way of example the Agreement — The expressions 'frontier posts' or 'customs offices' are not concluded on 1 July 1973 between the Community and the definea in the directive. Kingdom of Norway, Official Journal 1973, L 171, p. 1.

4. Before coming to the heart of my inquiry or as I have just described it, I should just like to take up a two-pronged controversy which has arisen between the parties concerning the field of application of Directive 83/643/EEC. The Italian Government argues that there is a twofold limitation on (ii) an external frontier, where carriage the field of application of that directive and between Member States involves crossing a third country'. 9 — It should be observed that the confusion in question orig- inates to a large degree in the wording of the Commission's application, which is constructed on the basis of Directive 83/643/EEC rather than on the basis of the prohibition of charges having equivalent effect to customs duties Never- theless it is clear from the Commission's claim (see p 7 of the application and point 1 ittpra) that it considers the Italian practice of charging for the performance of customs formalities during part of the 'normal business hours' {that It plainly has no application to the carriage is to say, under Directive 83/643/EEC, an uninterrupted of goods between Member States and period of 10 hours from Monday to Friday) to be unlawful under various provisions prohibiting charges having an non-member countries or in other words effect equivalent to customs duties, with a provision of where the goods concerned are not yet in Directive 83/643/EEC being cited only in fourth place

OPINION OF MR VAN GERVEN — CASE 340/87

It is therefore uncontested that the Italian rules are at issue only in so far as they relate 5. The Italian Government points out in its to frontier posts, which does not prevent my conclusions that Directive 83/643/EEC as forthcoming observations with regard to amended applies only to 'frontier posts' and Articles 9 and 12 of the EEC Treaty and the not to customs offices in the interior of the other provisions of Community law prohi­ country. It infers from this that only the biting charges having an effect equivalent to Italian rules relating to frontier posts can (if at all) be declared unlawful. Consequently, 10 — I would state forthwith that I am not convinced by this Article 15 of Decree No 254 of the reasoning: even if that provision does not relate specifically President of the Republic (cited above), to frontier posts, that does not prevent its being declared to be invalid in so far as it applies to frontier posts.

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7. I shall not consider here the relevance of 'Does the Commission not consider that it the Italian arguments about the unac­ would be in the interest of speedy passage ceptable consequences which in its view across frontiers and in accordance with the result from the application of Directive objective of abolishing internal frontiers if 83/643/EEC. I would simply mention that customs transactions were to be carried out those arguments do not have a bearing in inland customs offices close to the place either on the validity of the directive or on of destination? If so, is it not anomalous if Italy's obligation to implement it. Indeed, inspections at frontier posts should be considerations relating to the economic treated more favourably than those carried implications of the implementation or effec­ out at an inland office?' tiveness of the system introduced by Directive 83/643/EEC are not relevant in 11 — Italy ROCS on to argue that to apply the directive in ihai WAy creates discrimination between goods which arc these proceedings, which are only cleared through customs at the frontier and goods which concerned with the legality of charging for arc cleared through customs in the interior In the Italian Government's view , that discrimination cannot be justified customs activities carried out during the by the difference in the situations in which the goods are business hours laid down by the directive. placed

OPINION OF MR VAN GERVEN —CASE 340/87

COMMISSION v ITALY

Unlike the Commission, which concentrated carriage of goods between Member States its argument during the written procedure and trade with non-member countries. As primarily on the Italian Government's far as intra-Community trade is concerned, argument concerning the meaning of the the fundamental scope of the prohibition of expression 'inspections and formalities', I charges having equivalent effect has been shall assess the Italian argument (and in interpreted by the Court in a purposive addition also the lawfulness of the Italian manner, that is to say it is construed in the charges) from a more general standpoint, as light of the broadest possible construction of I have already mentioned. The more general the principle of the free movement of 1 question (see point 3 supra) is whether, in goods. 4As regards trade with non-member the light of the case-law of the Court, a countries, the prohibition has been based on Member State may charge at all for other objectives, that is to say both on the inspections and formalities which it imposes requirements of the common commercial upon the transport of goods crossing its policy and on the requirements, consequent frontiers. upon the introduction of the Common Customs Tariff, of harmonization of conditions of importation from third countries (that is to say, harmonization of 15 charges).

13 — See the judgment of 13 December 1973 in Joined Cases 37 and 38/73 Sociaal Fonds voor de Diamantarbeiders v Indiamcx [1973] ECR 1609, in particular paragraphs 5 to 10. I allude of course to the case-law of the 21, in which the Court held that subsequent to the intro- duction of the Common Customs Tariff the prohibition Court from which it appears that charges or also applied to trade with non-member countries; however, levies imposed by a Member State in charges already in existence when the Common Customs Tariff came into effect could only be eliminated on the connection with goods crossing the frontier basis of decisions of the Council or the Commission, for example in provisions adopted in the framework of the can be compatible only in very exceptional common agricultural policy, of trade agreements or of situations with the prohibition of charges association arrangements with non-member countries. For the interpretation of such a provision in an association having an effect equivalent to customs agreement, see the judgment of 5 February 1976 in Case 87/75 Bresciani (1976) ECR 129, paragraphs 15 to 26 duties which is laid down in Articles 9 and 12 of the EEC Treaty. Indeed, as from its 14 — See in particular the judgments of 1 July 1969 in Case 24/68 Commission v Italy, cited above, paragraph 8, and in earliest judgments, the Court has Joined Cases 2 and 3/69 Sociaal Fonds voor de Diamantar- beiders v Brachfeld and Chougol [1969] ECR 211, para- emphasized the fundamental nature of that graphs 15 to 17. prohibition and made it plain that the 15 — Sec the judgment of 28 June 1978 in Case 70/77 exceptions to that prohibition must be Simmenthal v Amministrazione delle finanze ('Simmentbai II) [1978] ECR 1453, in particular paragraphs 21 to 27, construed strictly as regards both the with regard to that case see also point 12, infra.

11. Although the Italian Government has scarcely if at all invoked those exceptions, I shall now summarily consider them before Admittedly, Directive 83/643/EEC provides reaching the conclusion that the Italian that the Member States are to carry out Government is not entitled to apply any of their inspections and formalities during them. certain minimum business hours each day. However, that is not to say that such inspections and formalities are effected by

COMMISSION v ITALY

by the Council or the Commission is virtue of Community law. Indeed the system of the 'uniform in all the Member EEC20 Treaty has the a States'. the national customs inspections and formalities gradually to disappear, and accordingly the directive requires the national inspections (which are still permitted) to be carried out during a minimum number of hours each day: the directive therefore does not impose any (positive) obligations on the Member States in this respect, but merely prescribes a number of rules governing the carrying out of the inspections and formalities unilat­ From the above it may be seen that neither erally imposed by the Member States whose do the Italian charges satisfy the character of national measures is undim­ requirements of the second exception and inished thereby. that, irrespective as to whether they are imposed during or outside the business hours of Italian customs offices, they must be borne by public funds: if they are imposed on importers or exporters they become a charge having an effect equivalent to a customs duty (see also the following point).

OPINION OF MR VAN GERVEN — CASE 340/87

an effect equivalent to customs duties. It goes without saying that that judgment There is therefore no doubt that where a can be applied mutatis mutandis to the Member State makes the importation of inspections and formalities unilaterally goods subject to the accomplishment of imposed by the Italian Government upon certain formalities or to certain inspections, the crossing of the frontier which are at the costs associated with that arrangement 22 issue in this case. Whether those (imposed in the general interest) should be inspections and formalities are carried out paid out of public funds and may not be during or after the normal working hours of charged to exporters or importers. At this Italian civil servants appears to me to make point I would refer to the judgment of 5 absolutely no difference. February 1976 in Case 87/75 Bresciani, cited above. That judgment was concerned with an inspection which was required under Italian legislation to be carried out on imported products of animal origin. The Court held inter alia that:

21 — See in particular the judgment of 1 July 1969 in Case 24/68 Commission v Italy, cited above, in particular paragraph 11; see also the judgment of 11 October 1973 in Case 39/73 Rewe-Zentralfinanz [1973] ECR 1039 in particular paragraph 5. In the judgment of 26 February 1975 in Case 63/74 Cadsky [1975] ECR 281, it was held 14. In the final analysis it must therefore be that a charge to pay for a quality control (coupled with the concluded from the Court's case-law that grant ot certificates of inspection and the affixing of a national export stamp) was not covered by this exception- the Italian Government is also unable to rely even it such a certificate and such a stamp is capable of encouraging exports, that benefit 'relates to the general on the third exception to the prohibition of interest of all exporters, so that the individual interest of charges having an effect equivalent to each of them is so ill defined that a charge imposed in payment for this inspection cannot be regarded as customs duties. Nevertheless, that consideration for a specific benefit actually and individually issessment should be qualified, since before conferred (paragraph 8). The use of the adjectives specitic (in all the cases cited) and 'individual' (in the Directive 83/643/EEC entered into effect Cadsky judgment) signifies that it must be a question of a scecific and individualized benefit which, logically, can in tact be conferred only in response to an individual request 22 — See also the judgments of 14 December 1972 in Case by an individual importer or exporter, that is to say it 29/72 Marimex [1972] ECR 1309, and of 11 October 1973 should be of an optional nature. That principle is applied in in Case 39/73 Rewe-Zentralfinanz, cited above, in which it Article 5(4) of Directive 83/643/EEC, which will be was held that health and phytosanitary inspections, discussed further in point 14 below. respectively, are to be regarded as charges having equi­ valent effect.

there were no rules in force at Community according to which payment may be level relating to the business hours of requested only where the Member State customs offices. Consequently, the Member provides a specific service at the request of States had the power in principle to the importer or exporter. It goes without prescribe those business hours themselves, saying that in so far as the Italian rules naturally subject to the rules of the Treaty, provide for payments covering costs to be such as for instance Article 30. However, as charged during the customs offices' business a result of Article 5 of Directive hours as prescribed by the Community legis­ 83/643/EEC this situation has changed: lation they cannot be justified under that 24 henceforward the Member States must exception. provide a certain minimum period laid down by the directive for the accom­ plishment of their inspections and formalities. However, the Community legis­ lature considered (at least as regards the carriage of goods between the Member States) that Member States could invoke the third exception provided for in the case-law as far as the accomplishment of inspections and formalities outside that minimum period was concerned, by providing that if certain 15. As a result of that consideration of the conditions are met such inspections and Court's case-law the decision can therefore formalities take on the character of a service be reached that the charging by a Member provided to the importer or exporter. Hence State of fees to cover the costs of carrying Article 5(4) provides as follows: out inspections or formalities imposed by the Member State itself is incompatible with the prohibition on charges having an effect equivalent to customs duties as regards both intra-Community trade and trade with non-member countries, unless in the case of intra-Community trade such inspections are ' ... under the conditions laid down by the carried out at the express request of an indi­ Member States, the competent authorities of vidual importer or exporter outside the the Member States shall provide, if speci- minimum business hours laid down in fically requested during business hours and Directive 83/643/EEC. I therefore conclude for sound reasons, for inspections and that, in so far as they provide for the formalities to be carried out, as an charging of fees to cover the costs of exception, outside business hours, on carrying out of inspections and formalities condition that, where relevant, payment be prescribed not by Community but by made for services so rendered' (my national law during the normal business emphasis). hours (namely those laid down by Directive 83/643/EEC) of the Italian customs offices, the Italian provisions at issue are incom­ patible with Anieles 9 and 12 of the EEC Treaty and all the other provisions of

16. From the above it appears that the system of charges as provided for in the Italian legislation at issue is incompatible Secondly, it must be borne in mind that, as with Community law, irrespective of the has already been observed (point 3), correctness of the Italian Government's Directive 83/643/EEC applies only to argument, which has already been described customs formalities and inspections to which (in points 8 and 9), based on the meaning of the Member States subject the carriage the expression 'inspections and formalities' between Member States of goods which are in Directive 83/643/EEC. already in free circulation within the Member States (or are placed under a customs transit procedure). The requirements laid down by Community law with regard to the free movement of goods subject the permissibility of national legis­ lative provisions imposing such formalities Yet that argument is not completely without or inspections or both to significant limi­ relevance to this case. As has been seen (in tations ab initio. The case-law of the Court point 14), Article 5(4) of the directive leaves no room for doubt that the creation provides that in exceptional cases of a customs union does not entail only the inspections and formalities must be carried abolition of customs duties and charges out, even outside the normal business hours having equivalent effect, but also pre­ prescribed in the directive for customs supposes the elimination of any other offices, at the request of importers or impediment to the free movement of goods exporters; the Community provision within the Community, whether on the basis provides that, where appropriate, payment of prohibitions arising out of provisions of may be charged for that service. With a the Treaty or on the basis of secondary view to the uniform application of that legislation (such as, for example, Directive provision it is important, for the sake of 83/643/EEC). I would refer to the completeness, to consider the Italian judgment of 13 December 1973, in which argument and the narrow interpretation the Court held inter alia as follows:

In its judgment the Court states that Directive 83/643/EEC was designed to lay it must therefore be sufficiently compre­ down certain rules for the performance of hensive to include the abolition of all the physical inspections and administrative pecuniary, administrative or other obstacles, formalities which a Member State requires for the purpose of achieving a unified 25 to be carried out when a frontier is crossed market between the Member States . . . ' with a view to reducing waiting times at the frontiers and improving the flow of goods transport between the various Member States (paragraph 26 of the judgment). In accordance with the directive's aim of facili­ 18. The judgment of 20 September 1988 in tating frontier crossings and eliminating the Case 190/87 Moormann [1988] ECR 4689) systematic performance of expensive checks, contains a number of interesting pointers the wording of the directive must be inter­ with regard to the question. In that case the preted in such a way that it effectively Court had, in particular, to answer a assists in achieving that aim (paragraph 27). preliminary question referred by the Bundesverwaltungsgericht (Federal Admin­ istrative Court) concerning the field of application of Articles 1 and 2 of Directive 83/643/EEC. As regards the actual question which the Court had to answer, namely the mutual relationship between the terms 'inspections' and 'formalities' as they are employed in Directive 83/643/EEC, the Court held inter The main proceedings were between a alia as follows (tentative translation): Dutch importer of poultrymeat (Moormann) and the German customs administration. Moormann had complained about the practice of the German customs '(paragraph 28) . . . the term "inspections" of checking all the accompanying must be understood as covering all documents and of verifying whether the inspections of goods involving physical imported goods tallied with them. interference with them; Moormann regarded this practice as a

Conclusion

20. On the basis of the arguments set out above I propose that the Court should declare that , by charging operators with the cost of inspections and formalities ( understood in a broad sense) which are not laid down by rules of Community law during part of the normal business hours of customs offices, the Italian Republic has tailed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty and under the other provisions of Community law containing a similar prohibition on charges having an effect equivalent to customs duties. The Italian Government should be ordered to pay the costs.

26 — See the judgment of 25 November 1986 in Joined Cases 201 and 202/85 Klensch [1986] ECR 3477, in particular paragraph 21.