C-212/88

'Do the requirements of the French legis­ lation and rules concerning the importation Facts into France of textile goods coming from non-member countries and put into free circulation in one of the Member States of the EEC which, on the one hand, oblige importers of such goods in France to obtain 2. The national court has described the an import licence in advance and, on other facts in the case pending before it as hand, define the statements which, subject follows: Mr Levy and Mr Bazini, the to the penalties provided for in Article 414 appellants, were convicted on 23 December of the French Customs Code, must be 1985 by the tribunal de grand instance included in declarations in respect of (Regional Court), Paris, of lodging false imports into France, constitute quantitative declarations as to origin with a view to restrictions prohibited by Article 30 of the circumventing a ban on imports, contrary to EEC Treaty by virtue of the general prin­ Article 426(2) and (3) and Article 414 of the ciples of Community law as they stand at French Customs Code. The appellants were present?' sentenced to a suspended term of imprisonment of three months and to the payment to the customs authorities, which had intervened in the proceedings as a civil party, of twice the sum of FF 3 998 357, As is clear from the facts which I shall once by way of confiscation of the goods summarize below, this question must be and once by way of a fine. That conviction understood as follows: stemmed from 22 declarations relating to the importation of articles of clothing for men, women and children, lodged with the French customs office at Le Bourget between 8 March 1976 and 23 May 1977. 'Must Article 30 of the EEC Treaty be The value of those goods for customs interpreted as precluding national legislation purposes was FF 3 998 357 and they were

The question submitted for a preliminary ruling and the arguments of the parties 4. The French Government bases its reasoning on a decision which was in force at the material time, in 1976 and 1977, namely Commission Decision 71/202/EEC of 12 May 1971, as amended by Decision 73/55/EEC of 9 March 1973. 1 It cites 3. Observations were submitted to the Article 1 of the decision which is as follows : Court by the French Government and by the Commission. The French Government concludes that, in the first place, the importation of textile products originating in non-member countries which have been put into free circulation in another Member '1 . Member States are hereby empowered State could be made conditional on the to make the importation of products orig­ issue of an import licence and that, inating in third countries and put into free secondly, persons responsible for making circulation in other Member States subject false declarations as to origin could be to the granting of an import authorization sentenced to the penalties prescribed by where : Article 414 of the French Customs Code when inaccurate or incomplete declarations had been made deliberately and with intent to deceive.

(i) the importation into the Member State in question of such products directly from the third country concerned is subject, in conformity with the Treaty, The Commission comes to a different to quantitative restrictions or to conclusion. It maintains that a distinction voluntary restraint on the part of the must be drawn between supervisory third country concerned under a trade measures, on the one hand, and protective agreement with the Member State in measures which a Member State has been question; and authorized to adopt by the Commission, on the other. Where a Member State has been 1 — Published in OJ, English Special Edition 1971 (I), p. 343, authorized merely to monitor trade flows, it and OJ 1973, L 80, p. 22, respectively.

2 — On common rules for imports (OJ 1974, L 159, p. I) According to the French Government, it is Annex I is entitled 'Common list of liberalized products' clear from that provision that at the material 3 — Article 414 prescribes, in particular, a term of imprisonment not exceeding three months, confiscation of time a Member State could make imports of the goods involved in the fraud and a fine of between one products originating in non-member and three times the value of those goods, for any act of smuggling and any undeclared imports or exports where countries but put into free circulation in those infringements relate to goods which are prohibited or subject to a higher rate of tax for the purposes of the another Member State conditional on the customs code. The meaning of undeclared imports or issue of an import licence provided that the exports of prohibited goods is defined, in particular, in Article 426. According to paragraph 2 of that article, a direct importation of the products in false declaration is one which has the purpose or effect of circumventing the application of the prohibitions and, question from the non-member countries according to paragraph 3, it encompasses false declarations concerned was itself subject in the first relating to the type, the value or the origin of the goods or the designation of the real addressee or the real consignor Member State to quantitative restrictions or where those infringements have been committed using to trade agreements on voluntary restraint, false, inaccurate, incomplete or inapplicable documents. According to Article 38(1), any goods whose importation in accordance with the Treaty. or exportation is prohibited in any way or subjected (in particular) to restrictions or quality standards are regarded as prohibited. Article 38(2) provides that where the importation or exportation is permitted only on submission of an authorization, licence, certificate and so on, the

judgment of 15 December 1976 in Case between two situations: on the one hand, 41/76 Donckerwolcke. 5 In particular, the the monitoring of intra-Community trade, French Government states that this case which the Member States are authorized in involves an intent to deceive and, in other general terms to carry out by Article 1 of words, the absence of good faith, with the that decision and, on the other, the result that it would be disproportionate to protective measures which a Member State impose the lighter penalties under Article may apply only on the basis of the 410 which are to apply only to omissions Commission's specific and express author­ made in good faith. The French ization. Government contends that, in a case such as this, it is quite justified to apply the heavier penalties prescribed by Article 414, namely a suspended term of imprisonment and a fine equivalent to twice the value for customs purposes. According to the Commission, the legal position differs substantially according to whether supervisory or protective measures are involved. In the context of supervisory measures, a Member State is entitled, as described in Article 1 of the aforesaid 5. The Commission's reasoning is as decision, to require 'import authorization' follows : its point of departure is the Court's specifying the origin of the goods as known judgment of 15 December 1971 in Joined to the importer; any penalties attaching to Cases 51 to 54/71, International Fruit false declarations should in any event not be Company, in which the Court held that as high as the penalties imposed in the event Community law precludes the application to of 'prohibited imports'; in particular, confis­ intra-Community trade of a national cation of the goods, as imposed in this case provision which requires, even purely as a on the basis of Article 414 of the French formality, import or export licences. 6That Customs Code, is a disproportionate penalty principle is connected with Article 9(2) of and, consequently, it is incompatible with the Treaty, as the Court also acknowledged the Treaty. The Commission bases that in its judgment of 15 December 1976 in argument primarily on paragraphs 36 to 38 Case 41/76 Donckerwolcke. 7 of the Court's judgment in Donckerwolcke.

Assessment situation in which that was not the case in respect of those goods. In order to determine which of those two possibilities is applicable, the national court will have to ascertain whether France was authorized by 6. In order to answer the question the Commission on the basis of Article 115 submitted to the Court for a preliminary to adopt protective measures during the ruling it is necessary, in my view, to take as period in question in respect of the a basis the fundamental principle contained particular goods in question originating in a in Article 9(2) in conjunction with Article 30 specific non-member country. Of the auth­ of the EEC Treaty. 8This means at the same orizations mentioned by the Commission in time that any derogations from the principle its observations, three may have been of the free movement of goods, which is applicable to the goods in question, albeit applicable both to goods put into free circu­ during certain limited periods and exclu­ lation in another Member State and to sively in respect of goods originating in 10 goods produced in the Community itself, South Korea. must be given a strict interpretation. 9

In a situation of that kind, the Member State is entitled to exclude from free circu­ I shall therefore continue to distinguish lation goods from the country of origin between two situations: on the one hand, a referred to in the authorization and to keep situation in which, at the time of the importation of the goods in question into 10 — Decision 76/839/EEC of 9 September 1976 (OJ 1976, France, that Member State was authorized L 304, p. 29), Decision 77/762/EEC of 30 March 1977 to derogate from the principle of the free (OJ 1977, L 314, p. 33) and Decision 77/482/EEC of 27 May 1977 (OJ 1977, L 198, p 30) Decision 76/926/EEC movement of goods, and on the other, a of 10 November 1976 (OJ 1976. L 364, p. 8) and Decision 77/362/EEC of 3 March 1977 (OJ 1977, L 138, p 29) relate to tariff headings for goods which, according to the 8 — Sec paragraphs 17 and 18 of the judgment in Doncker- French Government's observations, were not packed in the wolcke, cited infootnote 5. boxes in question.

9 — Sec paragraph 29 of the Court's judgment in Doncker- 11 — Sec the Court's judgment of 8 April 1976 in Case 29/75 wolcke. Sec also the Court's earlier judgments of 23 Kaufhof[1976] ECR 443, paragraph 6, and the judgments November 1971 in Case 62/70 Bock [1971] ECR 897. of 5 March 1986 in Cases 59/84 and 242/84 Tezi I and paragraph 14. and of 8 April 1976 in Case 29/75 Kaufhof Tezi II [1986] ECR 916 and 933, paragraphs 43, and 51 [1976] ECR 431, paragraph 5. and 52

OPINION OF MR VAN GERVEN — CASE 212/88

12 enforce compliance therewith. general terms, that is to say without the goods being identified, an import author ization as a condition for importation from another Member State and of requiring, as a condition for the issue of that import If that reasoning is applied to the point of authorization, that the necessary infor law now before the Court, it would seem to mation such as the origin of the goods to be be in conformity with the Court's case-law imported should be specified. Such a possi

8. I now turn to the situation in which the restrictions in external trade and in respect Commission has not issued a (valid) auth of which deflections of trade are to be orization for the adoption of protective feared). measures excluding the goods in question from freedom of movement. In a situation of this kind, a Member State can at most be allowed to monitor trade within the Community. The Court's judgment in Donckerwolcke and the Opinion of Mr Advocate General Capotorti in that case raise doubts regarding the compatibility with the Treaty of Article Two questions must be answered at this 14

CRIMINAL PROCEEDINGS AGAINST LEVY

In the judgment in Donckerwolcke, as subsequently lights of the facts, the essential feature of 17 reaffirmed, is quite clear in that regard. Article 1 which is relevant in these proceedings is the obligation to state the origin of the product in the event of importation. It is clear from the Court's 16 case-law that the Member States may The grounds of the judgment to which require an importer to declare where the reference is made are as follows: goods in question first originated even in the case of goods put into free circulation in another Member State and covered by a Community movement certificate.

Thirdly, it limited the possibilities of delaying by a few extra days the issue of import documents until the Commission has taken a decision on the request for auth- orization to adopt protective measures (Article 3(4)). On 22 July 1987, the Commission adopted Decision 'In this respect seizure of the goods or any 87/433/EEC (OJ 1987, L 238, p. 26), whereby it made a number of new adjustments based, in particular, on the pecuniary penalty fixed according to the Tezi judgments cited in footnote 11 value of the goods would certainly be 16 -— Sec Donckerwolcke, citedin footnote 5, paragraphs 33 to 35 of the judgment, and the Court's judgments of 30 November 1977 in Case 52/77 Cayrol v Rivoira [1977] 17 — See also the judgment citedin footnote 16 in Case 52/77 ECR 2261, paragraphs 34 to 36, and of 28 March 1979 in Cayrol v Rivoira, paragraphs 34 to 39, and the judgment of Case 179/78 Rivoira [1979] ECR 1147, paragraphs 16 28 March 1979 in Case 179/78 «Rivoira [1979] ECR 1147, and 17 paragraph 18

On the basis of that unequivocal case-law, there can be no doubt that the Treaty precludes the application to intra- Nor do the considerations set out in the Community trade of a disproportionately preceding paragraph in any way detract strict criminal penalty — whether imprison­ from the possibility open to the Member ment, confiscation or else a fine of an States of prohibiting and penalizing, within amount which depends on the value of the the limits set by the principle of propor­ goods — in order to ensure compliance with tionality, false declarations as to the origin 18 a purely administrative obligation. And that of products offered for sale to consumers. is what is involved here, namely an obli­ However, that is not at issue in the question gation imposed with a view to monitoring submitted by the national court which is intra-Community movements of goods to concerned with a false declaration of origin declare where goods in free circulation first made by an importer to the customs auth­ originated, that is to say goods in respect of orities.

Conclusion

12. In the light of the foregoing observations, I suggest that the Court answer the question submitted by the national court in the following manner :

18 — Sec the Court's judgment of 25 April 1985 in Case 207/83 Commission v United Kingdom [1985] ECR 1201, paragraph 21.

CRIMINAL PROCEEDINGS AGAINST LEVY

'With regard to goods in respect of which during the period in question specific authorization had been given by the Commission to derogate from the principle of the free movement of goods, it was permissible for a Member State, within the field of application of the Commission's specific authorization and on the conditions laid down therein, to prevent the importation of those goods even though they had already been put into free circulation in another Member State. In those circumstances, false declarations as to the origin of those goods could be made subject to severe penalties such as the confiscation of the goods and/or fines of the same value.