C-341/94

Steel Trading France SARL, as a party liable at civil law,

on the consequences to be drawn, following the unification of the Federal Repub- lic of Germany and the German Democratic Republic, for trade in goods between the territory of the former German Democratic Republic and the rest of the Com- munity's customs territory with regard to the possible reclassification of facts for the purpose of imposing penalties,

T H E C O U R T (Sixth Chamber),

composed of: C. N . Kakouris, President of the Chamber, P. J. G. Kapteyn and H . Ragnemalm (Rapporteur), Judges,

* Language of the case: French.

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after hearing the oral observations of Mr Allain, represented by Gilbert Senusson, of the Paris Bar, the French Government, represented by Philippe Martinet, and the Commission, represented by Michel Nolin, at the hearing on 25 January 1996,

after hearing the Opinion of the Advocate General at the sitting on 7 March 1996,

gives the following

Judgment

1 By judgment of 20 December 1994, received at the Court on 30 December 1994, the Cour d'Appel (Court of Appeal), Paris, referred for a preliminary ruling under Article 177 of the EC Treaty a question concerning the consequences to be drawn,

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6 Following the lodging of an appeal on a point of law by Mr Allain and Steel Trading, the Criminal Chamber of the French Cour de Cassation (Court of Cassation), by judgment of 2 June 1993, set aside and quashed in its entirety the judgment of the Cour d'Appel, Rennes, on the ground that:

'At the time when the customs proceedings were instituted, the Community pro- visions relating, inter alia, to the free movement of goods within the customs ter- ritory of the EEC and to the prohibition of all restrictive measures or measures having equivalent effect had, by virtue of the accession of the G D R to the FRG by the Treaty of 31 August 1990, which was effective from 3 October 1990, become applicable within the territory of the regions of East Germany.

By ruling as it did, without examining, even of its own motion, whether by the effect of those more favourable Community provisions, which were immediately applicable, on the proceedings in course, the legal basis of the charge in respect of the prohibited nature of the goods was altered and, if so, whether the facts were open to a different assessment, particularly that referred to in Article 410(2)(a) of the Customs Code, the Cour d'Appel failed to comply with those provisions.'

7 Paragraphs (1) and (2)(a) of Article 410 of the French Customs Code provides as follows:

'Does the accession of the German Democratic Republic to the Federal Republic of Germany, which appears, by reason of the retroactive effect of the more lenient new legislation, to have had the consequence of rendering inoperative the criminal proceedings brought under domestic French law against André Allain for the importation of prohibited goods, preclude, in the light of the resultant Community customs provisions, a reclassification of the facts under national law, in particular reclassification as a false declaration of goods, as argued by the French customs authorities, or does it, as the defence contends, entitle those authorities only to require payment of the duties avoided, without any other financial implications?'

Admissibility

9 The French Government has expressed doubts as to the admissibility of the ques- tion submitted by the Cour d'Appel, Paris, inasmuch as that appeal court appears to be asking this Court to examine the conditions under which the Cour de Cas- sation, in a leading case, accepted application of the principle of the retroactivity of the more favourable penal legislation concerning customs matters, in the particular case of the unification of the Federal Republic of Germany and the German Dem- ocratic Republic.

10 According to the French Government, the Court of Justice would in that case be required to interpret rules of national law, namely, in this case, a principle which the French Conseil Constitutionnel (Constitutional Council), in Decision N o 81-127-DC of 19 and 20 January 1981, recognized as having constitutional status on the basis of Article 8 of the Declaration of the Rights of Man and of the Citizen of 26 August 1789, and which has been transcribed into Article 112-1 of the new Penal Code.

1 4 In 1977, the Commission drew up, on the basis of Articles 74 and 86 of the ECSC Treaty, Recommendation 77/328/ECSC of 15 April 1977 relating to protection against imports which constitute or threaten to constitute a serious danger to pro­ duction in the common market of similar or directly competitive products (OJ 1977 L 114, p. 4) and, on the basis of Article 74 of the ECSC Treaty, Recommen­ dation 77/330/ECSC of 15 April 1977 to the Governments of the Member States of the Community establishing Community surveillance in respect of the impor­ tation into the Community of certain iron and steel products covered by the

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Treaty establishing the European Coal and Steel Community, originating in third countries (OJ 1977 L 114, p. 15).

15 The fourth and fifth recitals in the preamble to Recommendation 77/330 stated that 'detailed preparation of the forward programmes requires the most accurate possible knowledge of import intentions ... care must also be taken to see that the imports [or] the conditions under which they are effected do not threaten to cause serious injury to Community production'. The seventh recital in the preamble to Recommendation 77/330 stated that 'it is therefore in the Community's interest that the importation into the Community of certain iron and steel products orig- inating in third countries should temporarily be made subject to the presentation of an import document meeting uniform criteria'.

16 At the material time, the German Democratic Republic was regarded as a third country for the purpose of trade in goods coming under the ECSC Treaty with Member States other than the Federal Republic of Germany. The recommenda- tions in force relating to Community surveillance were Commission Recommen- dation N o 41/85/ECSC of 4 January 1985 on Community surveillance in respect of the importation of certain iron and steel products covered by the ECSC Treaty and originating in certain non-member countries other than Spain (OJ 1985 L 7, p. 5) and subsequently Commission Recommendation N o 3658/85/ECSC of 23 December 1985 on Community surveillance in respect of the importation of certain iron and steel products covered by the ECSC Treaty and originating in cer- tain non-member countries (OJ 1985 L 348, p. 32).

20 Imports of the products in question from that country were subject to a special surveillance regime, by means of import licences, in accordance with the notices to importers of certain iron and steel products originating in and coming from the German Democratic Republic, issued by the Ministry of Industrial Redeployment and Foreign Trade (JORF of 29 December 1984, p. 12168, and of 5 March 1986, p. 3452).

21 It should be pointed out in this regard that the Community rules on surveillance of imports of certain iron and steel products originating in certain non-member countries at present in force still include an obligation on the importer to declare the country of origin and the country of consignment of the goods imported (see Article 2 of Commission Regulation (EC) N o 2914/95 of 18 December 1995 intro- ducing prior Community surveillance of imports of certain iron and steel products covered by the ECSC and EC Treaties originating in certain third countries (OJ 1995 L 305, p. 23)).

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22 However, neither Recommendations N o s 41/85 and 3658/85 nor Regulation N o 2914/95 set out specific penalties for breaches of their provisions.

23 The third paragraph of Article 14 of the ECSC Treaty provides that 'Recommen­ dations shall be binding as to the aims to be pursued but shall leave the choice of the appropriate methods for achieving these aims to those to whom the recom­ mendations are addressed'. Although that provision leaves Member States free to choose the ways and means of implementing a recommendation, that freedom does not affect the obligation imposed on all the Member States to which the recom­ mendation is addressed to adopt, in their national legal systems, all the measures necessary to ensure that the recommendation is fully effective, in accordance with the objective which it pursues (see, to that effect, Case 14/83 Von Colson and Kamann ν Land Nordrhein-Westfalen [1984] E C R 1891 (concerning directives), paragraph 15).

27 Furthermore, the Commission takes the view that, with effect from 1 January 1993 and the establishment of the internal market, those formalities were abol- ished, thereby excluding any possibility for a Member State to require production of a declaration of origin of Community products when such products are imported into its territory. Consequently, it is for the national court to consider what effect this change, in conjunction with the inclusion in the customs territory of the Community of the territory of the former German Democratic Republic and having regard to the requirements of the free movement of goods and the internal market, may have had on a reclassification, for the purpose of imposing penalties, of facts occurring prior to accession. At the hearing, the French Govern- ment supported this position.

28 However, it must be stressed that the extension of the Community customs terri- tory due to the unification of a Member State or to the accession of new Member States constitutes a new material fact which does not have the effect of releasing Member States from their obligation to take all appropriate measures for guaran- teeing the operation and efficacity of the Community law applicable at the material time.

29 Consequently, such an extension does not have the effect of precluding national courts from penalizing breaches of Community legislation on conditions, both procedural and substantive, which are analogous to those applicable to infringe- ments of national law of a similar nature and importance and which, in any event, make the penalty effective, proportionate and dissuasive.

T H E C O U R T (Sixth Chamber),

in answer to the question referred to it by the Cour d'Appel, Paris, by judgment of 20 December 1994, hereby rules:

The Community customs provisions, applicable following the unification of the Federal Republic of Germany and the German Democratic Republic, do not preclude a reclassification of facts under national law with a view to penalizing breaches of the Community legislation applicable at the material time.

Kakouris Kapteyn Ragnemalm

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