C-324/93

5. Article 2(1) provides that all the measures of control provided for under the Conven­ tion apply to the narcotic drugs listed in Schedule I. Under Article 19 of the Conven-

3. Diamorphine is a narcotic drug within the meaning of the Single Convention on Nar­ cotic Drugs concluded in New York on 1 — 520 UNTS 204. A German translation of the Convention, as amended by the Protocol of 25 March 1972, is printed in the Bundesgesetzblatt (Federal Official Journal) 1977 II, p . 111. 2 — Second recital in the preamble to the Convention. 3 — Third and fourth recitals in the preamble. * Original language: German. 4 — See the fifth and sixth recitals in the preamble.

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tion these measures of control include, in the (b)The quantity used, within the limit of the first instance, the duty of the Contracting relevant estimate, for the manufacture of Parties to furnish to the International Nar­ other drugs, of preparations in Schedule cotics Control Board in Vienna annual esti­ III, and of substances not covered by this mates 'for each of their territories'. Those Convention; estimates must include the quantities of drugs to be consumed the following year for medical or scientific purposes or utilized for the manufacture of other drugs or prepara­ tions. Stocks of drugs to be held as at (c) The quantity exported; 31 December of the year to which the esti­ mates relate must also be indicated.

(d)The quantity added to the stock for the purpose of bringing that stock up to the level specified in the relevant estimate; and Diamorphine is listed in both Schedule I and Schedule IV to the Convention.

constitute a single territory for the purposes 10. The Contracting Parties, which number of Articles 19, 20, 21 and 31.' more than 130, include all the Member States of the Communities. The United Kingdom ratified the Convention on 2 September 1964 (thus prior to its accession to the Euro­ pean Communities).

11. In the United Kingdom the Secretary of 9. Article 2(5) of the Convention provides State for the Home Department ('the Secre­ the following additional measures of control tary of State') has primary responsibility for for the particularly dangerous drugs listed in complying with the duties arising under the Schedule IV: Convention. The Misuse of Drugs Act 1971 prohibits the importation of diamor- phine unless permitted by the Secretary of State.

Macfarlan Smith Limited ('MSL') is at 'It is considered that there is no incompati­ present the only licensed manufacturer in the bility between the ... Convention ... and United Kingdom of raw diamorphine in Articles 30 and 36 of the Treaty of Rome. powder form, which forms the basis for the Article 2(5) of the 1961 Convention permits, manufacture of the finished product. As the but does not require, Parties to restrict product is used in only a limited number of imports. Parties are given powers under other countries, MSL is also the principal Article 2(5) to prohibit importation where in manufacturer world-wide. Evans is MSL's their opinion the prevailing conditions in most important customer for this product. their countries render it the most appropriate means of protecting the public health and welfare. Article 36 [of the EC Treaty] pro­ vides that prohibition or restrictions on imports may be justified on grounds of the protection of health and life of humans. ...

14. In two letters of 17 August 1992 the Sec­ retary of State informed the solicitors of MSL and Evans that after thorough consid­ eration he had concluded that there were no proper grounds on which he could refuse an application by Generics (UK) Limited The issue of security in transit has accord­ ('Generics') to import a consignment of ingly been carefully considered ... diamorphine from the Netherlands. Generics specializes in the manufacture and marketing of generic pharmaceutical preparations and has subsidiaries in a number of European countries, including the Netherlands.

'1 . Upon the true construction of Articles 30, 36 and 234 of the EEC Treaty, is a Member State entitled to refuse to issue a licence, required by the law of that Member State, to import from another Member State narcotic drugs either originating in or in free circulation in the second Member State on the ground 15. Evans and MSL thereupon brought an that action before the Queen's Bench Division of the High Court in which they contested both the import licence granted to Generics and the general decision expressed by that (a) the provisions of Articles 30 to licence to reverse the policy previously fol­ 36 are inapplicable to trade in nar­ lowed with regard to imports of narcotic cotic drugs within the meaning or drugs. The applicants argued that the Secre­ ambit of the Single Convention on tary of State had, in his decision, incorrectly Narcotic Drugs concluded at New proceeded on the assumption that the previ­ York on 30 March 1961; ous policy had been in breach of Commu­ nity law and in particular that the import ban had been unlawful under Article 30 of the EC Treaty and could not be justified and/or under Article 36. They take the view that, pursuant to Article 234 of the EC Treaty, Article 30 does not apply to trade in narcotic drugs within the meaning of the Convention. (b) compliance with the Convention Even if the Secretary of State had none the would in practice require the arbi­ less been correct to base his decision on the trary allocation of quotas between view that Articles 30 and 36 of the EC imports and local manufacturers; Treaty were applicable, they argue, he should and/or that the system of controls not have taken that decision without first laid down by the Convention determining whether the proposed tendering would otherwise be less effective; scheme was feasible and compatible with the Convention, as well as whether and, if so, how that scheme could ensure that the health authorities would have regular supplies of and/or diamorphine.

it to declare itself a "single terri­ ground that those questions are 'hypotheti­ tory" under Article 43 of the Single cal'. It points out that, in its Questions 1(a) Convention and several Member to 1(c), the national court seeks to ascertain States that manufacture narcotic whether a Member State is entitled generally drugs prohibit their importation) or in specific circumstances to refuse a the importation of narcotic drugs licence to import narcotic drugs from other from another Member State would Member States. However, as the Commis­ threaten the viability of a sole sion points out, the issue in the proceedings licensed manufacturer of those before the High Court relates to the grant of drugs in the Member State, and that a licence, not to its refusal. So far as the the reliability of supply of those Commission is concerned, it is established drugs for essential medical purposes that under Article 36 restrictions are permis­ in that Member State would be sible in intra-Community trade in narcotic jeopardized? drugs and that there may in certain circum­ stances even be justification for refusing import or export licences. However, in view of the variety of the circumstances in ques­ tion and the importance of the interests involved, the Commission argues that it is 2. On the proper interpretation of Council undesirable that the Court should express a Directive 77/62 of 21 December 1976, view on the problem in the present case. OJ 1977 L 13, p. 1, as amended, is a Question 2 in the reference, it goes on to public authority, when charged with the submit, is even more hypothetical since it task of purchasing essential pain- concerns the purchase of diamorphine by the relieving drugs for medical use, entitled competent health authorities, whereas the to take into account the need for reli­ actual case relates to a decision by the Secre­ ability and continuity of supply when tary of State to allow the importation of that awarding contracts for the supply of narcotic substance. For that reason, the such drugs?' Commission argues, the Court should also not reply to that question.

18. The Court of Justice has consistently the reference. In my opinion, there are for held that the procedure for preliminary rul­ that reason no grounds on which to argue ings under Article 177 of the EC Treaty is an that this question is hypothetical in nature. instrument for cooperation between the Court of Justice and national courts. In the context of this cooperation, it is for the national court to decide whether it requires a preliminary ruling by the Court of Justice in order to reach its own decision. If the national court decides to make a reference and the questions submitted concern the 20. It is, moreover, worth noting that the interpretation of Community law, the Court Commission also proposes to the Court is, in principle, bound to give a ruling. How­ replies to the High Court's questions even ever, the task assigned to the Court in the though it takes the view that those questions context of this procedure — as the Commis­ are hypothetical and for that reason need not sion has also pointed out in its observations be answered. The Commission proposes that — is not that of 'delivering opinions on gen­ the Court's reply to the questions should be 6 eral or hypothetical questions'. that neither Articles 30 to 36 of the EC Treaty nor Article 234 prevent a national authority from authorizing imports of nar­ cotic drugs from another Member State. Counsel for MSL correctly pointed out at 19. In Question 1(a) of its reference the the hearing that this neither answers the national court wishes to determine whether question submitted nor enables the national Articles 30 to 36 of the EC Treaty are appli­ court to answer it. Counsel for the United cable to trade in narcotic drugs. As has been Kingdom expressed the same view very suc­ pointed out by MSL in its observations and cinctly when he stated that the Commission as is also apparent from the order for refer­ was proposing that the Court be of assis­ ence of the High Court, MSL and Evans are tance to the national court by replying to a relying in the main proceedings on the argu­ question which no-one had asked with an ment that they are entitled under national answer to which no-one could take excep­ law to ensure that the Secretary of State tion. should take his decision regarding the appli­ cation by Generics on a proper legal and fac­ tual basis. In taking his decision, the Secre­ tary of State proceeded on the basis that Articles 30 to 36 of the EC Treaty are appli­ cable in the present case. If this assumption is incorrect, his decision will have been taken on an incorrect legal basis and may, if neces­ 21. The Commission is, admittedly, correct sary, be set aside by the national court. For to point out that the legal assessment of the purposes of the decision to be taken by intra-Community trade in narcotic drugs the High Court, therefore, direct significance raises very difficult problems. The Commu­ attaches to the answer to the first question in nity legislature has clearly not yet found any satisfactory solution for these problems. Such difficulties, however, should not pre­ vent the Court from performing the duty 6 — Judgment in Case C-83/91 Meiticke [1992] ECR1-4871, paragraphs 22 to 25. imposed on it by Article 177 of the EC

Treaty to support national courts in the reso­ so long as it is not clear whether the subject- lution of legal proceedings pending before matter of that evidence is material to the them by interpreting provisions of Commu­ proceedings. Given the significance of the nity law. These difficulties consequently do fundamental question raised in Question 1(a) not affect the duty of the Court to reply to regarding the applicability of Articles 30 to the questions submitted to the extent to 36 to the lawful trade in narcotic drugs, an which it is possible for it to do so and cannot issue on which the Court of Justice has not also affect the admissibility of the particular hitherto had occasion to rule, the decision of question submitted. the High Court to seek a preliminary ruling from the Court of Justice at what is still an early stage in the proceedings is also per­ fectly understandable. As the Court has rec­ ognized, it is for the national court to deter­ mine in the light of the particular circumstances of each case both the need for 22. As the High Court explains in its order a preliminary ruling in order to enable it to for reference, Questions 1(b) and 1(c) con­ deliver judgment and the relevance of the 7 tain assumptions of fact by MSL and Evans questions which it submits to the Court . that are as yet unsubstantiated. Those ques­ On those grounds I take the view that Ques­ tions do not, however, request the Court to tion 1(c) is admissible even if the assump­ rule on the existence of the facts assumed. As tions of fact on which it is based (that the counsel for MSL has pointed out, the High granting of an import licence would threaten Court is, on the contrary, seeking in this the viability of the domestic manufacturer regard an answer to the question whether the and thereby jeopardize security of supplies) legal aspects contained in those questions are are not yet substantiated. at all relevant from the perspective of Com­ munity law. Counsel for the United King­ dom expressed a similar view. If the two questions were to be answered in the nega­ tive, it would not be necessary for the High Court to examine in any further detail the assumptions of fact set out in them. If, on the other hand, the Court were to decide that a Member State is in certain cases enti­ tled to prohibit imports of narcotic drugs from other Member States, the High Court The same, however, does not in my view would have to examine whether that was the apply to Question 1(b), which consists of position in the proceedings before it. two parts. In the first place it asks whether a Member State can prohibit the importation of narcotic drugs from another Member State if compliance with the Convention would result in the arbitrary allocation of quotas between importers and domestic manufacturers. Secondly, the question asks 23. There is, in my view, little in principle to object to in the course adopted by the High Court. It serves the interests of procedural 7 — Sec in particular the judgment in Case C-127/92 Endcrby economy to postpone the talcing of evidence [1993] ECR I-5535, paragraph 10.

Applicability of Articles 30 to 36 24. Question 2 in the reference concerns the interpretation of Community-law provisions on the award of public-supply contracts. It is evident that this has its basis in the view expressed by the Secretary of State in his let­ ters of 17 August 1992, to the effect that the importance of ensuring that the United Kingdom would have secure supplies of diamorphine could be taken into account in General the context of an invitation to tender. How­ ever, it is common ground that this invitation to tender ultimately proved not to be fea­ sible. It may for that reason be quite properly asked what purpose Question 2 serves. The High Court has provided no clarification on this point in its order for reference. More­ over, no further information is to be gleaned 26. It is appropriate at the outset of this from the statements of the parties involved examination to bear in mind that the ques­ in the procedure before the Court. In those tion of the applicability of Articles 30 to circumstances I share the Commission's view 36 of the EC Treaty concerns only the lawful that the Court should not examine this ques­ trade in narcotic drugs, that is to say trade in tion. In case the Court might decide other­ products derived from those substances wise, however, I shall of course also examine which are intended for medical and scientific the problem raised by this question. use. There can be no doubt as to the need to

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combat unlawful trade in narcotic drugs and this legal position is in conformity with the the associated dangers. This applies both to provisions of the Convention. The Court 8 the Member States and to the Community. accordingly reached the conclusion that no customs debt could arise upon the importa­ tion of drugs Otherwise than through eco­ nomic channels strictly controlled by the competent authorities for use for medical 1 and scientific purposes.' 4

29. However, it is still necessary to consider what consequences for the application of 8 — See, for instance, Article K.l(9) of the Treaty on European Union, which declares police cooperation for the purposes Articles 30 to 36 follow from the first para­ of preventing and combatting unlawful drug trafficking to be a matter 'of common interest'. graph of Article 234 of the EC Treaty. That 9 — Judgments in Case 50/80 Horváth [1981] ECR 385, Case paragraph provides that the 'rights and obli- 221/81 Wolf [1982] ECR 3681 and Case 2-10/81 Einberger [1982] ECR 3699. 10 — Judgment in Case 291/82 Einberger [1984] ECR 1177. 11 — Judgments in Case 269/86 Mol [1988] ECR 3627 and Case 289/86 Happy Family [1988] ECR 3655. 13 — Paragraph 9 of each judgment (cited above in footnote 9). 12 — Paragraph 8 of each judgment (cited above in footnote 9). 14 — Paragraph 16 of each judgment (cited above in footnote 9).

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30. As the Court has already held on several occasions, the purpose of the first paragraph of Article 234 is to lay down, in accordance with the principles of international law, 17 31. Generics, however, argues that Article that the application of the Treaty does not 234 is immaterial to this case since only trade affect the duty of the Member State con­ between two Member States is affected. The cerned to respect the rights of non-member case concerns importation of diamorphine countries under a prior agreement and to from the Netherlands into the United King­ perform its obligations thereunder. 18 dom; non-member countries are not affected Applied to the present case, this means that by this transaction. Ireland has expressed the United Kingdom is entitled to meet its similar views. The French Government, too, obligations towards non-member countries argues in its observations that the first para­ arising under the Convention and to respect graph of Article 234 does not allow a Mem­ the rights which the Convention confers on ber State to depart from the provisions of the non-member countries. In so far as the appli­ EC Treaty in intra-Community trade. The existence of the Convention, so the argument runs, thus does not stand in the way of the application of Articles 30 to 36. 15 — Corresponding provisions are to be found in Article 5 of the Act concerning the Accession of Greece and in Article 5 of the Act concerning the Accession of Spain and Portu­ gal. 16 — The same applies to Denmark, Greece, Portugal and Spain, which also ratified the Convention prior to their accession to the Communities. 17 — See Article 30 of the Vienna Convention on the Law of Treaties. 18 — Judgment in Case 10/61 Commission v Italy [1962] ECR1, 32. In this regard, both Generics and the at page 11; judgment in Case 812/79 Burgoa [1980] ECR 2787, paragraph 8. French Government rely on the judgment of

However, MSL correctly points out that this applies only if the rights of non-member countries are not affected. That point is con­ 33. It is thus first necessary to consider firmed by the case-law of the Court. Thus, whether the Convention forms the basis of in a decision delivered in 1988, the prece­ obligations imposed on the Member States dence of the EC Treaty over an agreement vis-à-vis non-member countries or creates concluded prior to its entry into force was rights which non-member countries may made subject to the proviso that, 'as in the enforce against Member States. To put it present case, the rights of non-member another way, the question is whether the 21 countries are not involved'. As early as its Convention merely creates bilateral obliga­ first decision on Article 234 the Court stated tions as between the particular Contracting that the manner in which customs duties Parties or multilateral obligations between all were regulated between the Member States Parties which are signatories to it. 25 This, of could not be criticized by third countries if course, requires an interpretation of the this 'does not interfere with the rights held Convention, which — as I shall explain in by third countries under agreements still in greater detail •—• is a matter for the national 22 force.' No particular significance should court making the reference. However, I therefore be attached to the absence of a cor­ believe that the Court of Justice can itself responding proviso in the Conegate judg­ ment; this may well be explicable on the ground that the Court was satisfied in that case that the relevant conventions did not 23 — The relevant conventions in that case were the Geneva Convention of 1923 for the Suppression of Traffic in confer on non-member countries any rights Obscene Publications and the Universal Postal Conven­ tions, which the Court had already considered in its judg­ which could have been infringed through the ment in Case 34/79 Henn and Darby [1979] ECR 3795. The Court had ruled in that case that the application of Article 30 et seq. was compatible with those conventions (paragraph 26). 24 — Under that provision two or more of the parties to a mul­ 19 — Judgment in Case 121/85 Conegate [1986] ECR 1007. tilateral treaty may conclude an agreement to modify the treaty as between themselves alone. However, one of the 20 — Judgment in Conegate (cited above in footnote 19), para­ conditions for this is that such modification 'docs not affect graph 25. the enjoyment by the other parties of their rights under the 21 — Judgment in Case 286/86 Dcscrbais [1988] ECR 4907, para­ treaty'. graph 18. 25 — Sec, with regard to this distinction, tile Opinion of Advo­ 22 — Judgment in Case 10/61 Commission v Italy, cited above in cate GeneralWarncr in Case 34/79 Henn and Darby, cited footnote 18, at page 11. above, at page 3833.

34. The first paragraph of Article 234, how­ ever, will be relevant only if there is an inconsistency between such an agreement with non-member countries and Community The preamble itself, which speaks of the law. The agreement in question must there­ need for coordinated and universal measures fore require a particular course of action against the abuse of narcotic drugs, indicates which Community law prohibits or prohibit that this interpretation alone has regard to a course of action which Community law the objectives of the Convention. The view requires to be taken. If one wishes to ascer­ that the duties to monitor the trade in nar­ tain whether there is such a conflict, it will cotic drugs laid down by the Convention are first be necessary to determine the content of intended not only to protect the Contracting the particular convention, on the one hand, Parties directly concerned is confirmed also and that of Community law, on the other. by the simple consideration that the dangers resulting from breach of the Convention may affect all Contracting Parties: for instance, if a consignment of narcotics from the territory of one Contracting State intended for a recipient in another Contract­ ing State ends up in illegal trade because 35. The Court is of course in a position to both Contracting Parties have omitted to interpret the relevant provisions of Commu­ apply the control measures imposed by the nity law and determine their content. On the Convention on trade with each other, this other hand, however, it is unclear whether will jeopardize not only people living in each the Court is empowered, in the context of a of those States but also the other Contract­ reference for a preliminary ruling, to inter­ ing Parties. Finally, it should be pointed out pret an international convention such as that that Article 43(2) of the Convention makes it in the present case. possible for members of a customs union to reduce the inconveniences and obstacles to international trade associated with the appli­ cation of the Convention's control system 27 — The International Narcotics Control Board in Vienna expressed this in the following terms in a letter of by submitting the notification provided for 11 August 1981 to the United Kingdom which has been submitted by MSL: 'If, for economic reasons, States wish to reduce the inconveniences and obstacles which a control system, applied in conformity with the universal treaties, causes in international trade, they might seek to unify their systems. The universal treaties themselves point in this direction since Article 43 of the 1961 Single Convention 26 — See in particular the judgment in the Deserbais case (cited envisages the case of a customs union ...'. above in footnote 21), in the passage referred to.

'It appears from a comparison of the forego­ ing considerations with the provisions of the Conventions to which the House of Lords refers that the observance by the United This interpretation strikes me as the most Kingdom of those international Conventions appropriate to fit the conclusion drawn by is not likely to result in a conflict with the the Court from the above paragraph of this provisions relating to the free movement of judgment. The Court held that 'in so far as a goods if account is taken of the exception Member State avails itself of the reservation made by Article 36 in regard to any prohibi­ relating to the protection of public morality 31 tions on imports based on grounds of public provided for in Article 36 of the Treaty', 29 morality.' the provisions of Article 234 did not pre­ clude a Member State from fulfilling the obligations arising from the relevant interna­ tional agreements. During the oral procedure before the Court, counsel for MSL not inap­ propriately compared this passage to an oracular utterance ('a thoroughly Delphic ruling'). Since the first paragraph of Article 234 itself allows a Member State to fulfil its 37. The German version of this passage obligations under an earlier convention, this ('daß ... keine Widersprüche ... entstehen statement by the Court would seem to make können') would suggest that the Court had no proper sense. The apparent contradiction conclusively decided that the obligations disappears if one applies the interpretation arising under the conventions in question were compatible with Community law. However, if one considers the version of the 30 — 'It appears ... that the observance ... of those international Conventions is not likely to result in a conflict ...'. See also the French version, according to which the observance of the international conventions 'n'est pas susceptible de créer 28 — Sec footnote 23 above. un conflit ...' (emphasis added in each case). 29 — Judgment in Henn and Darby (cited above in footnote 23), 31 — Judgment in Henn and Darby (cited above in footnote 23), paragraph 26. paragraph 27.

'However, it falls to the national court, and not to the Court of Justice in the context of a preliminary ruling, to ascertain, with a view to determining the extent to which those obligations constitute an obstacle to the application of Article 5 of the directive, what are the obligations thus imposed on the Member States concerned by an earlier inter­ national agreement and whether the national provisions in question are designed to imple­ 34 38. The Court has expressed itself with con­ ment those obligations.' siderably more clarity in a number of recent decisions on the question of competence regarding the interpretation of such agree­ 32 33 ments. The Levy and Minne cases both involved the question whether specific national provisions governing night-work The Court expressed itself in similar terms in 35 for women were contrary to the principle of its judgment in the Levy case. equal treatment of men and women laid down in Article 5 of Directive 76/207/EEC. The question arose in both cases as to whether the national provisions could be jus­ tified on the ground that they had been 39. It follows clearly from these decisions adopted in order to comply with obligations that in the view of the Court of Justice the imposed on the Member States under an interpretation of international agreements at agreement within the meaning of the first paragraph of Article 234 (a convention of the International Labour Organization). The 34 — Paragraph 18 of the judgment in Minne, cited above in Court first held that courts of the Member footnote 33. States were not entitled to apply national law 35 — Paragraph 21 of the judgment in Case C-158/91 Levy (cited above in footnote 32): 'However, it is not for the Court of Justice in the context of a preliminary ruling to determine the obligations imposed on the Member State in question by an earlier international agreement and to specify its parameters in such a way as to determine the extent to 32 — Judgment in Case C-158/91 Levy [1993] ECR I-4287. which those obligations constitute an obstacle to the appli­ 33 — Judgment in Case C-13/93 Minne [1994] ECR I-371. cation of Article 5 of the directive.'

40. In its written observations, MSL argues that the need to ensure the uniform applica­ tion of Community law makes it necessary that the Court should interpret the Conven­ tion. That argument should not be accepted. Admittedly, the Court has already decided on the basis of a similar argument that it is empowered, in the context of Article 177 proceedings, to interpret the GATT — an agreement concluded by the Member States with non-member countries prior to 41. MSL also suggests in its written observa­ 36 the entry into force of the EC Treaty. tions that it may now be possible to treat the Apart from the fact that this judgment has Convention as part of Community law and 37 been the subject of criticism — in my thus capable of interpretation by the Court. opinion, justifiably so — it should be During the oral procedure before the Court, pointed out that the legal principles of that however, counsel for MSL modified this sug­ case are not applicable by analogy to the gestion. In my opinion, this argument need present case. It is common knowledge that not be considered any further. While it has the Community has taken the place of the acceded to the 1988 Convention, the Com­ Member States for the purpose of fulfilling munity has not done so with regard to the obligations under the GATT. That assertion 1961 Convention, which is the one under cannot be made with regard to the conven­ consideration here. The fact that the Com­ tion under consideration in the present case. munity accepts and supports the objectives True, MSL correctly points out that the of that Convention does not in itself make Community and all the Member States have that Convention part of Community law and signed the United Nations Convention therefore does not empower the Court to against Illicit Trade in Narcotic Drugs and interpret it in the context of Article 177 pro­ ceedings.

In the present case, in my opinion, there can scarcely be any doubt that compliance with the obligations imposed on Member States under the Convention cannot result in a con­ flict with Community law. I shall set this out in detail below in an alternative submission. However, it should be pointed out that there is no full agreement between the parties involved in this case as to the interpretation of the Convention. MSL contends that it fol­ lows from Article 21(1) of the Convention that a Member State may not allow imports The reference by counsel for the United if requirements can be met by domestic manu­ Kingdom to the Court's judgment in Hurd v facturers. The Portuguese Government takes 41 Jones does not affect this. That case a similar view. Generics, along with Ireland involved the interpretation of a rule of Com­ and the United Kingdom, does not accept munity law which referred to specific inter­ that argument. In its order for reference the national agreements. High Court has not set out clearly its own interpretation of the Convention, with the result that it cannot be ruled out that it may go along with the stance taken by Portugal 39 — Opinion in Case 812/79 Burgoa, cited above in footnote 18, at p. 2817. and MSL. In the light of this the view should 40 — An example of such a situation is, however, provided by the stand that, in the context of Article 177 pro­ facts which gave rise to the judgment in Case 181/80 Arbe- laiz-Emazabd [1981] ECK. 2961 (see paragraph 11 of the ceedings, the interpretation of the Conven­ judgment). tion is a matter for the national court. 41 — Judgment in Case 44/84 Hurd v Jones [1986] ECR 29.

46. This also represents an appropriate Moreover, Treaty-infringement proceedings answer to Question 1(b) in the reference. So can be brought under Article 169 or Article far as the question of the effectiveness of the 170 in cases where a Member State fails to system of control established by the Con­ comply with Community law without being vention is concerned, it should be pointed entitled to do so by the first paragraph of out that, in my view, this cannot be a case in Article 234. In proceedings of this kind, the which a State has any great leeway: the Court would have to consider whether the Member State in question is obliged to conduct of the Member State is justified implement the measures of control pre­ under Article 234 and, if necessary, to deter­ scribed by the Convention. If that is made mine whether the Member State's interpreta­ impossible by the application of Articles tion of the particular agreement in question 30 to 36 of the EC Treaty, those articles is correct. It was thus scarcely coincidental would have to give way to that extent. If this that the Court of Justice, in its judgments in is not the case, the Community provisions the Levy and Minne cases, discussed above, will be applicable.

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49. It would, however, be a mistake to focus 47. If the Court should, however, conclude exclusively on Article 30 in the examination that it can itself address the question in the to be carried out here. That provision is present case as to whether compliance with inseparably linked to Article 36, which per­ obligations under the Convention is compat­ mits certain derogations from the prohibi­ ible with the application of Articles 30 to tion under Article 30. In its judgment in 42 36 of the EC Treaty, the following consider­ Henn and Darby, the Court made it clear ations, which I add here in the form of an that an overall view is here required: as men­ alternative submission, ought in my view to tioned above, the Court held in that judg­ be taken into account. ment that there was not likely to be any con­ flict between the relevant international conventions and the provisions relating to the free movement of goods 'if account is taken of the exception made by Article 36 in regard to any prohibitions on imports based 43 on grounds of public morality.' Thus, if 48. The Convention makes lawful trade in the restrictions or prohibitions of imports narcotic drugs subject to strict controls. resulting from the Convention in the present Contracting Parties are required to submit case could also be justified on the basis of annual estimates of their consumption of Article 36, there would be no inconsistency narcotic drugs (Article 19 of the Conven­ tion). In simple terms, quantities manufac­ tured and imported may not exceed the amount consumed in the particular State or 42 — Cited above in footnote 23. territory or exported therefrom (Article 21). 43 — See the quotation in point 36 above.

51. Under Article 36 of the EC Treaty 53. In any event, a contradiction could arise restrictions and bans on imports can be jus­ only where the limits set in Article 36 are tified on grounds of, inter alia, the protec­ exceeded. It is common knowledge that tion of health. With the exception of MSL, under the second sentence of Article 36 pro­ all the parties involved in the proceedings hibitions of trade are not permitted if they before the Court take the view that the mea­ constitute a 'means of arbitrary discrimina­ sures required under the Convention can tion' or a 'disguised restriction' on trade also be based on Article 36 of the EC Treaty. between Member States. In my opinion, however, such a situation cannot arise in the present case.

44 — See, for instance, the judgment of the Court in Case 382/87 Buet [1989] ECR 1235, paragraphs 10 and 11. 45 — Judgment of the Court in Case 103/84 Commission v Italy [1986] ECR 1759, paragraph 22. 46 — See point 40 above.

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56. MSL takes the view that the grant of a licence for imports would have the result that specific quotas would have to be allo­ cated to domestic manufacturers and import­ ers. Such a quota system, it argues, would, however, be incompatible with Articles 30 to 55. MSL and the Portuguese Government 36, particularly since it would lead to an argue that it follows from Article 21(1) of arbitrary allocation of the quantities in ques­ the Convention that a State is obliged to tion. prohibit imports if the output of domestic manufacturers is sufficient to meet require­ ments. To my way of thinking, such an obli­ gation can no longer be based on Article 36 of the EC Treaty, with the result that a conflict would arise in that regard between the Convention and the provisions of Com­ It would indeed be very difficult, if not com­ munity law. The question, however, is aca­ pletely impossible, for a State to keep within demic, since in my opinion the Convention the maxima laid down in Article 21 and not does not impose any such duty. Article 21(1) refers to both domestic production and 49 — In the following sense: if one assumes that there is domestic production, the quantity of imports which might be autho­ rized will at most amount to the difference between con­ sumption (plus exports) and domestic production. If no 47 — United Nations (Publisher), Commentary on the Single such difference exists (because of a correspondingly high Convention on Narcotic Drugs, 1961, New York, 1973. domestic production), no imports will be authorized. 48 — Note 2 on Article 1(1)(y) in the Commentary (cited above 50 — Cited in the Commentary (see footnote 47), Note 10 on in footnote 47). Article 29(1).

Furthermore, such allocation of quotas need not — contrary to MSL's contention — take place in a manner which is arbitrary and for that reason contrary to Article 36. There is nothing to argue against the application, when these quotas are being allocated, of objective criteria relating to factors such as price or guarantee of regular supplies by the company in question.

In my view it is not necessary to examine in any greater detail the question whether the granting of an import licence makes it diffi­ cult for a Contracting Party to furnish accu­ rate estimates under Article 19. Suffice it to 57. Nor will the effectiveness of the Con­ note that the Convention does not prohibit vention's system of control be jeopardized imports. If such imports did in fact make the through the granting of a licence for imports. submission of estimates more difficult, those Admittedly, the Commentary does mention difficulties would result from the Conven­ that it may be advisable or even essential for tion itself.

51 — Commentary (cited in footnote 47), Genera! Comment 52 — Commentary (cited in footnote 47), General Comment 3 on Article 21. 4 on Article 21; Note 4 on Article 31(3).

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A case of disguised discrimination (and thus 53 — Commentary (cited above in footnote 47), Note 4 on Arti­ cle 2(5). This is a general principle for the interpretation of no longer covered by Article 36) would, for international agreements (see Article 31 of the Vienna Con­ vention on the Law of Treaties), the binding nature of instance, exist where a Member State allowed which has also been recognized by the Court of Justice (see, domestic operators to manufacture or trade for example, the judgment in Case C-312/91 Metalsa [1993] ECB. I-3751, paragraph 12). in a drug listed in Schedule IV to the Con-

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63. The present case, however, concerns a separate question, namely whether the provi­ 61. MSL has argued that the granting of an sions of the Convention are compatible with import licence infringes the general obliga­ the application of the Treaty rules on the free tions of the Contracting Parties, set out in movement of goods. In the light of the above Article 4 of the Convention, to give effect to examination, this question ought to be the Convention and, in accordance with its terms, to limit exclusively to medical and sci­ entific purposes the production, manufac­ ture, export, import, distribution of, trade in, 54 — See point 33 above and the letter quoted from in footnote 27. use and possession of drugs. MSL has, how­ 55 — The Commentary makes it clear that, despite the wording ever, failed to demonstrate what actually ('may'), notification is necessary under Article 43(2) in order to secure the desired results (Commentary (cited constitutes this infringement. above in footnote 47), Note 13 on Article 1(1)(y)).

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65. In Question 1(c) of its reference the High Court seeks to ascertain whether a 68. There can in my view be no question but Member State can refuse to issue a licence that the continuity of supplies of drags for the importation of narcotic drugs from essential for medical purposes is a matter of another Member State if such importation great importance. A Member State is for that would threaten the viability of the sole reason entitled to take account of that point licensed manufacturer in the Member State when deciding whether to grant a licence for concerned and jeopardize the reliability of the importation of narcotic drags. It cannot supplies of those drugs for essential medical purposes in that Member State. By that ques­ tion the High Court appears to be seeking an interpretation of Article 36 and thus pro­ 56 — See points 62 and 63 above.

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69. It cannot be ruled out that a Member State may even be entitled on the basis of the above consideration to prohibit the importa­ 71. By its final question the High Court tion of a narcotic drug in individual cases. seeks to ascertain whether the public author­ However, the United Kingdom correctly ity responsible for purchasing essential pain- points out that such cases will be very much relieving drugs for medical use is entitled to the exception. Article 36 allows restrictions take into account the need for reliability and on trade only if there are no other less continuity of supply when awarding the cor­ restrictive ways in which to secure the responding contracts within the framework desired objective. For that reason it is neces­ of a tendering procedure for public-supply sary to point to these limits when answering contracts. The order for reference mentions the questions submitted in the reference. In in this connection Council Directive this regard, it goes without saying that Arti­ 77/62/EEC of 21 December 1976 coordinat­ cle 36 merely allows a Member State to ing procedures for the award of public sup­ 60 ply contracts, 'as amended'. This directive (which was amended on several occasions) was repealed by Article 33 of Council Direc­ 57 — Judgment in Case 72/83 Campus Oil Limitēti and Others v tive 93/36/EEC of 14 June 1993 coordinating Minister for Industry and Energy and Others [1984] ECR 2727. procedures for the award of public supply 58 — Judgment in Campus Oil, cited above in footnote 57, para­ graph 51. 59 — See, for instance, the judgment in Case 118/86 Openbaar Ministeńe v Nertsvoederfabrick Nederland [1987] ECR 3883, paragraph 15. 60 — OJ 1977 L 13, p. 1.

In contrast to the view taken by the Portu­ guese Government, however, it seems to me beyond doubt that the supply of narcotic drugs is not covered by that provision. The 72. With the exception of MSL and the facts of this case demonstrate that the manu­ French Government, all the parties involved facture of diamorphine is not the subject of in the present proceedings take the view that exclusive rights. the criterion of reliability and continuity of supply may be considered within the context of Directive 77/62. According to MSL, this is not one of the criteria for the award of con­ tracts within the meaning of Article 25 of the directive. That provision applies to all 'open' and 'restricted' procedures within the mean­ ing of Article 4(1) and (2) of the directive. It is for that reason first necessary to consider whether those procedures may be applicable 74. The French Government argues that the in the present case. supply of narcotic drugs need not be made the subject of a tendering procedure by rea­ son of Article 6(1)(g) of Directive 77/62. Article 6(1)(g) provides that the procedures referred to in Article 4(1) and (2) need not be applied if the supplies in question 'are declared secret or when their delivery must be accompanied by special security measures 73. The Portuguese Government has its in accordance with the provisions laid down doubts on this point and refers to Article by law, regulation or administrative action in a 6(1)(b) of Directive 77/62. This provision force in the Member State concerned, or states that the procedures referred to in Arti­ when the protection of the basic interests of cle 4(1) and (2) need not be applied 'when, that State's security so requires'. As the 64 result of a subsequent amendment to

75. If, on the other hand, it is assumed that the directive is applicable, the question will arise as to whether the criterion of reliability and continuity of supplies can be taken into consideration under Article 25 of Directive 77/62. As MSL correctly points out, the directive draws a distinction between the requirements as to technical suitability of 77. That argument cannot be accepted. relevant operators (Articles 21 to 24) and the Admittedly, it seems to me doubtful whether criteria for the award of contracts (Article one can claim that this criterion is actually 25). This is already clear from Article 17(1) contained within one of the criteria expressly of Directive 77/62. mentioned in Article 25, as has been argued by the United Kingdom (which takes the

65 — According to the similar provision in Article 2(1)(b) of Directive 93/36, the directive docs not apply in such cases. 68 — Sec also Article 26(1) of Directive 93/36 to the same effect. 66 — Ninth recital in the preamble to Directive 77/62. 69 — Judgment in Case 31/87 Beentjes [1988] ECR 4635, para­ 67 — Eleventh recital in the preamble to Directive 93/36. graph 19.

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79. I accordingly propose that the questions submitted by the High Court should be answered as follows:

1. Articles 30 to 36 of the EC Treaty apply to lawful trade in narcotic drugs within the meaning of the 1961 Single Convention on Narcotic Drugs. How­ ever, in so far as this would make it impossible for the Member State con­ cerned, even in the light of the possibilities opened up by Article 36 of the EC Treaty, to comply with the obligations imposed on it by the Single Conven­ tion, the first paragraph of Article 234 of the EC Treaty allows that Member State to comply with its obligations under that Convention if it acceded to the

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Convention before the entry into force of the EC Treaty or prior to its own accession to the Community.

2. Article 36 of the EC Treaty allows a Member State exceptionally to give pref­ erence to domestic production over imports from other Member States if that is the only way in which reliable supplies of narcotic drugs for essential medi­ cal purposes can be guaranteed in that Member State.