C-78/90

COMPAGNIE COMMERCIALE DE L'OUEST AND OTHERS

OPINION OF MR ADVOCATE GENERAL TESAURO delivered on 11 July 1991 *

Mr President, to the Agence pour les Economies d'Energie Members of the Court, (Energy Saving Agency, hereinafter referred to as 'the AEE'), a public body operating in the industrial and commercial sector under the supervision of the Minister for Energy. The present proceedings are concerned with By virtue of the national provisions then in circumstances which crop up with some force, the AEE was required to use the frequency in the case-law of the Court: financial resources resulting from the charge parafiscal charges specifically appropriated to take action designed to encourage energy to a public body in order to finance its acti­ savings and rationalize the use of insuffi­ vities. ciently exploited energy resources.

* Original language: Italian.

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OPINION OF MR TESAURO—JOINED CASES C-78/90 TO C-83/90

ciples of the Community, measures having certain, however, that Article 5 is intended equivalent effect, charges having equivalent in any event to come into play only on an effect and discriminatory internal taxation, entirely residual basis. Normally, a measure commercial monopolies and, finally, the that is incompatible with the second provisions on State aids. paragraph of Article 5 will fall within the scope of some other, more specific pres­ criptive provision of the Treaty. In such cases, it will be the special provision that must be applied and not the prohibition laid (a) The principles down by the second paragraph of Article 5. That seems precisely to be the position in the present case, since the Treaty contains specific provisions which enable a proper assessment to be made of the contested system of charges. This aspect raises few difficulties and can, I think, be disposed of quite rapidly. In the first place, it is clear that both Article 3, which identifies the fundamental activities of the Community, and Article 6, which lays down the principle of coordination of national economic policies, are prospective I therefore consider that, regardless of the in character and do not therefore ranks as problem of its direct effect, Article 5 is not provisions which lay down specific, uncon­ relevant to the present case. ditional obligations for the Member States.

They are, therefore, provisions which do (b) Measures having equivalent effect not produce direct effects for the purpose of governing a particular legal relationship.

With respect to the first reason, I would point out first of all that Article 30 is, of It is true that in its judgment in Case course, a pivotal provision amongst those C-47/88 Commission v Denmark [1990] governing the free movement of goods, and ECR 1-4509 the Court advanced the constitutes a lex generalis in relation to hypothesis that, in certain circumstances, an other specific provisions including, in internal tax not contravening Article 95 may particular, those relating to taxes and be examined in the light of Article 30. charges having equivalent effect. As the However, the case to which the judgment Court recognized in its judgment in Ianelli 2 related displayed two specific features: first, and Volpi: the tax at issue escaped the prohibition in Article 95 in that there was no domestic production whatsoever which competed with or was similar to the taxed imported product; secondly, it was necessary to establish whether, in such circumstances, the 'However wide the field of application of amount of the tax was so great as to impede Article 30 may be, it nevertheless does not the movement of goods within the include obstacles to trade covered by other Community. My view, however, is that that provisions of the Treaty. In fact, since the case is confined to its own facts. legal consequences of the application or of a possible infringement of these various provisions have to be determined having regard to their particular purpose in the context of the objectives of the Treaty, they may be of a different kind and this implies that their respective fields of application must be distinguished, except in those cases In particular, where — as in the present which may fall simultaneously within the case — there is a domestic product field of application of two or more competing with or similar to the taxed provisions of Community law. Thus, imported product, all that is necessary to obstacles which are of a fiscal nature or determine is whether or not the charge has have equivalent effect and are covered by discriminatory effects. The legality of the Articles 9 to 16 and 95 of the Treaty do not charge must therefore be assessed solely in fall within the prohibition in Article 30'. the light of Article 95 (or possibly Articles 9 and 12, as will be shown shortly), and not 2 — Case 74/76 [1977] ECR 577, paragraph 9. in the light of Article 30. Otherwise, the

latter provision would be disproportionately leads me to the conclusion that Article 30 is extended and turned into a 'master' not applicable to the present case. To better provision not fitting into the scheme of the illustrate the grounds for that conclusion it Treaty which, taking for granted the fiscal is appropriate to examine in detail the sovereignty of the Member States, laid reasoning of the Commission in particular. down special conditions, in Article 95 et The latter's observations include data seq., governing national measures concerning the fixing of prices for concerning taxation. petroleum products which illustrate the situation that obtained before and after the introduction of the contested charge. That information shows that, when the charge was introduced, the 'ex-refinery price', In that regard I cannot hide my puzzlement which is the basis on which the final price is at the approach taken by the Court in worked out, was reduced by an amount Commission v Denmark where it advances equal to the incidence of that charge. the hypothesis of the applicability of Article 30 without even addressing the problem of the possible relevance of Articles 9 and 12, that case being concerned with pecuniary charges levied on imports. However, in any event, I consider that, leaving aside the It must also be noted that that reduction in exceptional hypothesis considered in the 'ex-refinery price' represented, as is Commission v Denmark, Article 30 cannot apparent from the decrees which introduced come into play in a role subsidiary to that of the charge, nothing more than an the tax provisions of the Treaty. adjustment prompted by the fall in the price of crude oil, which in turn derived from the fall in the parity of the dollar. Nevertheless, that change in the French regulated price went 'against the trend' set by the prices of As far as the present case is concerned, I petroleum products on the international would emphasize that both the Commission markets. As emerged at the hearing, that and the appellants in the main proceedings discrepancy appears to be attributable to the agree in their contention that the contested fact that traders on the international parafiscal charge falls within the scope both markets, taking advantage of a favourable of Articles 9 and 12 and of Article 95. economic situation and not being subject to a regulated price system, chose to keep the selling prices of petroleum products unchanged (increasing their profit margins) rather than reduce prices by passing on the I think that that view — which seems in benefit of the fall in the cost of crude principle to be well founded — is a resulting from the fluctuating value of the sufficient basis for ruling out any appraisal United States dollar. of the contested charge by reference to the general provisions of Article 30 of the Treaty.

purchase prices on the international markets introduce the parafiscal charge, such (whilst the ex-refinery price on the domestic measures are fairly commonplace in French market had fallen, as has been economic situations of that kind. Rather stated, in order to take account of the fall in than allow the fall in the purchase price to the dollar parity) and at the same time they be translated into an increase in traders' saw their profit margin cut by the contested profits or a windfall for consumers, the parafiscal charge. Faced with that situation, government chose to give the benefit of the therefore, importers found it impossible to resultant savings to the revenue authorities. achieve profitable sales at the price level In those circumstances, as they have fixed by the French Government and emerged in the course of the procedure, I therefore had to reduce their imports dras­ do not see how the French Government can tically. be blamed for the adverse effect on importers. The latter bore the burden of the charge to the same extent as the domestic traders; what actually disadvantaged the importers was not the charge but rather the fact that they had to purchase products on the international market where the non-regulated price had not been cut by the Whilst taking note of this complex factual oil companies despite the weakness of the background (which ultimately is a matter to dollar. be verified by the national court), I do not think that it provides a basis for concluding that the charge in question is incompatible with Article 30. The criticism levelled at the French Government is that it fixed the price of petroleum products at too low a level for imports to be profitable. However, even if the final price was actually, during the period in question, at an insufficiently The foregoing considerations point, I think, profitable level for imports, that seems to to two conclusions. In the first place I do flow exclusively from the French not think there are any grounds for the view Government's decision to reduce the that the French Government's intervention 'ex-refinery price' to take account of the fall regarding prices created any obstacle to in dollar parity. That indeed is the reason imports, since it was limited to offsetting the given in the decrees issued by the French fluctuating parity of the dollar. Secondly, authorities and no evidence has been even if it were conceded that that was not produced in the course of the proceedings the case, it would be impossible to say that to show that the reduction in the purchase the parafiscal charge with which the price was, in point of fact, motivated by question from the national court is other factors or was in any way not concerned was incompatible with Article 30. commensurate with the currency fluctu­ What might possibly have affected imports ations recorded. was not the charge as such but rather the decision simultaneously to reduce the purchase price of the products. That is clearly the case since if, when introducing the charge, the government had decided not to reduce the purchase price fixed by the administration or had even increased it, As regards the French Government's importers would not have found themselves decision, taken at the same time, to in difficulty on the French market. It

follows that it was the decision to reduce (c) Charges having equivalent effect and the ex-refinery price that may have impeded discriminatory internal taxation imports and might possible be open to criticism in the light of Article 30. But even if it were concluded that the reduction in the purchase price constituted a measure It is therefore in relation to Articles 9 and having equivalent effect, that would have no 12 or Article 95 that the compatibility of the repercussions for the other decision, by charge at issue with Community law must which the charge was introduced. In other be appraised. words, even if Article 30 had required the French Government not to reduce the prices in the present case and to maintain them at a level sufficient to guarantee the profita It will be remembered that the charge is bility of imports, importers, whilst finding levied both on domestic products and on that they were operating under conditions imported products under procedures which more favourable to their interests, would are not discriminatory.

point. Either: the contested charge, for in activities which are beneficial to the reasons which will be examined in due domestic product on which the charge is course, did not display the required levied. neutrality in relation to imports, and therefore that situation is to be examined not by reference to Article 30 but exclu sively in the light of the other provisions of In such circumstances, the burden actually the Treaty which are specifically relevant borne by the domestic product is less than (Articles 9 and 12 or Article 95); or else the that borne by the imported product or is parafiscal charge was perfectly neutral and even nil. It is with such distortions of therefore the loss allegedly suffered in competition and trade that Articles 9 and 12 respect of imports is to be associated not and Article 95 are concerned. with the charge as such but with the specific governmental decision to reduce the ex-refinery purchase price (rather than keep it unchanged or even increase it); but, as The need to take account of the ultimate noted, the second hypothesis is beyond the use of the proceeds from the charge, for the scope of the present case, which is purpose of classifying it under the Treaty, concerned solely with reimbursement of the was first affirmed by the Court so as to charge that is considered unlawful, not with bring within the concept of charges having the price system applied to petroleum equivalent effect to a customs duty charges products. which were presented by Member States as

'It is important to take a realistic view of the economic developments involved, looking beyond the formal position, so as to ensure 'In the interpretation of the concept "charge that the law corresponds to the facts and having an effect equivalent to a customs that the objectives of the Treaty are at the duty on imports", the destination of the same time successfully pursued; on that very financial charges levied must be taken into clear assumption, this justified exempting account. In effect, when such a financial from the operation of Article 95 a charge charge or duty is intended exclusively to which, on a strictly formal view, would fall support activities which specifically profit within its ambit, in order to bring it within taxed domestic products, it can follow that the ambit of the rule in Article 13 which is a the general duty levied according to the better instrument of control when the real same criteria on the imported product and nature of the charge is viewed against the the domestic product nevertheless particular national intervention mechanism constitutes for the former a net of which it forms an integral part'. supplementary tax burden, whilst for the latter it constitutes in reality a set-off against benefits or aids previously received. That line of reasoning was followed in a number of later judgments, amongst which I shall refer only to the judgments in Steinike, 5 Cucchi, 6 Interzuccheri, 7 and Consequently, a duty within the internal Kortmann. 8 system of internal taxation applying system­ atically to domestic and imported products according to the same criteria, can never­ theless constitute a charge having an effect equivalent to customs duty on imports, The same trend was then confirmed specifi- when such contribution is intended exclu­ cially with regard to the application of sively to support activities which specifically Article 95 as well. In its judgment in benefit the taxed domestic product'. Commission v Italy, 9the Court stated:

'falling within a general system of internal taxation applying to domestic products as well as to imported products according to It must be remembered, however, that by the same criteria can constitute a charge virtue of now settled case-law, the having an effect equivalent to a customs provisions on discriminatory internal duty on imports only if it has the sole taxation and charges having equivalent purpose of financing activities for the effect cannot be applied in conjunction with specific advantage of the taxed national each other; as was stated in the judgment in product; if the taxed product and the 10 IGAV- domestic product benefiting from it are the same; and if the charges imposed on the domestic product are made good in full.'

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COMPAGNIE COMMERCIALE DE L'OUEST AND OTHERS

Thus, taking account of the total revenue circumstances, it will be for the national from the charge over the relevant period, a court to decide to what extent importers are comparison must be made between the entitled to claim reimbursement of the sums proceeds resulting from the marketing of paid. domestic petroleum products and the advantages accruing to the undertakings which marketed them as a result of the action taken for their benefit by the AEE.

(d) Article 37

(e) State aids In this second hypothesis, it is clear that the charge paid by the importers is not inherently unlawful but is unlawful solely to the extent to which it is discriminatory, that is to say where it exceeds the net burden borne by the domestic product. In such Finally, the national court asks whether the contested charge is compatible with the 13 — Cited above, in particular at page 718. rules on State aids.

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OPINION OF MR TESAURO—JOINED CASES C-78/90 TO C-83/90

2. Where a parafiscal charge is applied, in the same way, to domestic and imported products, it is necessary, in order to establish whether it is compatible with the provisions concerning charges having equivalent effect and discrimi­ natory internal taxation, for the national court to take account of the use to which the revenue from the charge is put. Where the revenue is used to finance activities which specifically benefit taxed domestic products, so as to offset entirely the burden borne by them through collection of the charge, the latter falls to be classified as a 'charge having an effect equivalent to a customs duty' within the meaning of Articles 9 and 12 of the Treaty. Where the revenue is used to finance activities which also specifically benefit products other than the taxed domestic products, so as to offset only in part the burden borne by the domestic products through collection of the charge, the latter falls to be classified as discriminatory internal taxation within the meaning of Article 95 of the Treaty.

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