C-124/95

OPINION OF MR JACOBS — CASE C-124/95

OPINION OF ADVOCATE GENERAL JACOBS delivered on 24 September 1996

1. The present case is one of three cases by the Council on a Member State's policy referred to the Court concerning the imple­ concerning payments for permitted exports. mentation of economic sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro) in the context of the war in the former Yugoslavia. 1 Those sanctions included a ban on all exports, with the exception of certain essential commodities Legal background such as medical supplies, and a financial embargo. Centro-Com is an Italian company which was permitted to export certain medi­ cal products to the Republics of Serbia and Montenegro. Payments for those exports were to be made from an account held by the National Bank of Yugoslavia with Bar­ 2. In the course of the war in the former clays Bank (London). Centro-Com did not Yugoslavia the Security Council of the however receive full payment because of a United Nations adopted a number of resolu­ change in the United Kingdom's policy on tions requiring U N member States to take releasing Serbian funds: because of new various embargo measures and other sanc­ information suggesting abuse of the system tions. 2 In Resolution 757 (1992), adopted on of export permits the United Kingdom Gov­ 30 May 1992, the Security Council con­ ernment decided to impose the requirement demned the failure of the authorities in the that such exports be made from the United Federal Republic of Yugoslavia (Serbia and Kingdom, with a view to ensuring the effec­ Montenegro) to take effective measures to tiveness of the sanctions. In proceedings fulfil the requirements of Resolution 752 before the English courts Centro-Com chal­ (1992) demanding an end to the fighting in lenges that change in policy, partly on the Bosnia and Herzegovina. It consequently basis of Community law. The questions adopted a trade embargo and a financial referred to this Court concern the effect of embargo. the Community's common commercial policy and the sanctions regulations adopted

Security Council decided, in so far as mate­ Yugoslavia (Serbia and Montenegro) or to rial: any commercial, industrial or public utility undertaking in the Federal Republic of Yugoslavia (Serbia and Montenegro), any funds or any other financial or economic resources and shall prevent their nationals 'that all States shall prevent: and any persons within their territories from removing from their territories or otherwise making available to those authorities or to any such undertaking any such funds or resources and from remitting any other funds to persons or bodies within the Fed­ eral Republic of Yugoslavia (Serbia and Montenegro), except payments exclusively for strictly medical or humanitarian purposes and foodstuffs'. (c) The sale or supply by their nationals or from their territories or using their flag vessels or aircraft of any commodities or products, whether or not originating in their territories, but not including sup­ plies intended strictly for medical pur­ poses and foodstuffs notified to the Committee established pursuant to Resolution 724 (1991), to any person or body in the Federal Republic of Yugo­ slavia (Serbia and Montenegro) or to any 5. As can be seen paragraph 4(c) requires person or body for the purposes of any notification to the Committee established business carried on in or operated from pursuant to Resolution 724 (1991) in the case the Federal Republic of Yugoslavia (Ser­ of permitted medical supplies. The general bia and Montenegro), and any activities tasks of that Committee were set out in by their nationals or in their territories paragraph 5(b) of that resolution, which was which promote or are calculated to pro­ adopted on 15 December 1991. There the mote such sale or supply of such com­ Security Council: modities or products'.

(iii) To consider any information brought to its attention by States concerning viola­ 8. The preamble of the Sanctions Regulation tions of the embargo, and in that con­ refers to the dramatic developments in text to make recommendations to the Bosnia-Herzegovina and to the intervention Council on ways of increasing the effec­ of the Republics of Serbia and Montenegro tiveness of the embargo; in the internal affairs of the Republic of 5 Bosnia-Herzegovina. It states that the Community and its Member States, meeting within the framework of political coopera­ tion, have decided that measures have to be taken to dissuade the Republics of Serbia and

(iv) To recommend appropriate measures in response to violations of the general and 3 — Sec M. P. Scharf and J. L. Dorosin, 'Interpreting U N sanc­ complete embargo on all deliveries of tions: the rulings and role of the Yugoslavia Sanctions Com­ mittee', Brookfyn Journal of International Law (1993), pp. weapons and military equipment to 771 to 827. Yugoslavia and provide information on 4 — OJ 1992 L 151, p. 4 and OJ 1992 L 205, p. 2 respectively. The amendments broaden the permitted exports so as to a regular basis to the Secretary-General include commodities and products for essential humanitarian need, thereby implementing Resolution 760 (1992) of for general distribution to Member 18 June 1992. States'. 5 — See recitals one to six of the preamble.

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Montenegro from further violating the integ­ (c) any activity whose object or effect it is to rity and security of the Republic of Bosnia- promote, directly or indirectly, the trans­ Herzegovina and to induce them to cooper­ actions mentioned under ... (b); ate in the restoration of peace and dialogue in the region. 6 It subsequently refers to Resolution 757 (1992), establishing an econ­ omic embargo, and concludes that the Com­ munity's economic relations with the Republics of Serbia and Montenegro must be halted. 7 It states that the Community and its Member States have agreed to have recourse to a Community instrument, inter alia in order to ensure a uniform implementation throughout the Community 'of certain of these measures'. 8 The Sanctions Regulation was based on Article 113 of the Treaty. Article 2

(c) any activity whose object or effect it is to on exports. Council Regulation (EEC) N o promote, directly or indirectly, the trans­ 2603/69 of 20 December 1969 establishing actions mentioned under (a) ... ; common rules for exports (hereafter 'the 9 Export Regulation') sets out a 'Basic prin­ ciple' in Article 1:

'The exportation of products from the Euro­ pean Economic Community to third coun­ Article 3 tries shall be free, that is to say, they shall not be subject to any quantitative restriction, with the exception of those restrictions which are applied in conformity with the provisions of this Regulation.'

Exports to the Republics of Serbia and Mon­ tenegro of commodities and products for strictly medical purposes or for essential humanitarian need as well as foodstuffs shall be subject to a prior export authorization to be issued by the competent authorities of the 12. Article 11 of the Export Regulation pro­ Member States. vides:

'Without prejudice to other Community provisions, this Regulation shall not preclude the adoption or application by a Member State of quantitative restrictions on exports on grounds of public morality, public policy or public security; the protection of health 10. The Sanctions Regulation contains no and life of humans, animals or plants; the explicit provisions on the financial embargo protection of national treasures possessing or on payments for permitted exports. artistic, historic or archaeological value, or the protection of industrial and commercial property.'

11. In the present case there is also argument 9 — OJ, English Special Edition 1969 (II), p. 590, as last amended by Council Regulation (EEC) No 3918/91, OJ 1991 L 372, concerning the Community's general rules p. 31.

14. The Order does not itself state any of the principles upon which the Treasury would act in deciding whether to grant per­ mission for any such funds to be removed (b) make any change in the persons to from the United Kingdom. Those principles whose credit any sum is to stand or were made clear on behalf of the Treasury by to whose order any gold, securities a Bank of England notice dated 8 June 1992. or investments are to be held, where Paragraph 10 of that notice, in its version in

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force at the time of the facts, states, in so far Between 15 October 1992 and 6 January as material: 1993 Centro-Com exported all 15 consign- ments of goods from Italy to Montenegro, via the Italian customs control at Trieste.

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about abuse of the system of permissions United Kingdom in payment for the export granted by the U N Yugoslavia Sanctions of goods of any description to Serbia from Committee for goods to be supplied to Ser­ any country other than the United King­ bia and Montenegro. There were persistent dom.' reports from the Sanctions Assistance Mis­ sion in Hungary of mis-description of goods and of the unreliability of documents issued, or apparently issued, by the U N Yugoslavia Sanctions Committee. The Mission com­ mented that the system was impossible to The same change of policy was described.in control effectively at the border. Moreover, a further supplement to the Bank of England in the previous three months there had been notice of 8 June 1992, 1 1issued on 26 April a very considerable increase in the use of 1993. A main reason for the change was funds held in the United Kingdom for pay­ stated to be that the Department of Trade ment for goods exported, with U N approval, and Industry could apply tight controls over from other countries to Serbia. The United goods exported from the United Kingdom, Kingdom Government also became aware of so as to ensure that those goods actually similar concerns in other countries about the matched the documents relating to them. It inadequacy of the sanctions. France had was made clear on behalf of the Bank of apparently introduced a policy prohibiting England in the proceedings before the completely the release of frozen funds to pay English courts that the Bank did not con­ for any exports to Serbia. sider that Centro-Com itself had been responsible for any breach of sanctions.

Article 7 of the Treaty (now Article 6) and (2) (a) the goods have been formally Article 30 of the Treaty. The Divisional approved as intended strictly for Court refused Centro-Com's application in medical purposes by the United 12 its judgment of 6 September 1993, and Nations Sanctions Committee Centro-Com appealed against that judgment pursuant to U N Security Coun­ to the Court of Appeal. The Court of cil Resolution 757; Appeal also rejected Centro-Com's argu­ ments based on Articles 7 and 30 of the Treaty, but as regards the arguments based on the Community's common commercial policy and on the Sanctions Regulation the Court of Appeal felt that it was not confi­ (b) they have been exported pursu­ dent to decide itself on some of the issues ant to a prior export authoriza­ raised. It referred to the Court the following tion issued by the competent questions: authorities of Member State Β pursuant to Regulation 1432/92;

(3) the national measures permit the '1. Is it compatible with the common com­ release of funds in payment for mercial policy of the Community and, the export of such goods from in particular, Article 113 of the Treaty Member State A itself where the and Council Regulation (EEC) export authorization referred to at N o 1432/92 ... for Member State A to paragraph 2(b) above has been adopt national measures which prohibit issued by the competent authorities the release of funds located in Member of Member State A; and State A but belonging to a person in Serbia or Montenegro in circumstances where:

(4) Member State A has decided that the adoption of such national measures is necessary or expedient for enabling U N Security Council Resolution 757 to be effectively applied? (1) release of the funds is sought to pay a national of Member State Β for goods exported by him from Mem­ ber State Β to Serbia or Montene­ gro; 2. Is the answer to Question 1 affected by the provisions of Article 234 of the E C 12 — See [1994] 1 CMLR 109. Treaty?'

22. Even if the regulation left the Member 20. By its first question the Court of Appeal States competent to implement U N sanc­ essentially asks whether the United King­ tions beyond the limits of its provisions, that dom's change in policy with respect to the competence should always be exercised by release of funds in payment for permitted the Member States in such a way as not to exports to Serbia and Montenegro, as contradict the basic aims and purposes of the described above, is compatible with the regulation, nor to affect its uniform applica­ Community's commercial policy, including tion, nor to affect any other provisions of the Sanctions Regulation. As this question Community law or any right stemming raises some difficult and novel issues, it may therefrom. Centro-Com takes the view that be convenient to set out first the main argu­ the disputed policy change does contradict ments submitted to the Court on this ques­ Article 113 of the Treaty and the Sanctions tion. Regulation. The fact that the financial embargo, provided for in paragraph 5 of Resolution 757 (1992), 15 was not expressly reproduced in the regulation cannot be viewed as a recognition of competence of the Member States in that respect. Centro-Com claims that the subject-matter of paragraph 5 has been dealt with in the Sanctions Regu­ 21. Centro-Com refers to the Court's case- lation by the catch-all clause in Article 1(c), law on the exclusive competence of the which prohibits 'any activity whose object Community in the field of commercial or effect it is to promote, directly or indi­ policy, 13 and points out that Article 113 is to rectly, the transactions mentioned under (a) be construed widely. 1 4 The Sanctions Regu­ or (b) ...'. lation put into effect a common commercial policy for exports to Serbia and Montenegro. Centro-Com acknowledges that that regu­ lation was adopted in a specific political and foreign policy context, but that cannot, in its view, alter the very nature of the measures 23. Centro-Com further argues that, under the Community was called on to adopt. The Community law, the right to trade with for­ Community exercised its exclusive compe­ eign entities is nothing other than a specific tence over trade matters, and no further aspect of a fundamental right to economic freedom. In so far as the Sanctions Regu­ lation permitted certain exports it created an 13 — Opinion 1/75 [1975] ECR 1355, at 1363 to 1365; Case individual right to trade. Centro-Com 41/76 Donckerwolcke ν Procureur de la République [1976] ECR 1921, paragraph 32 of the judgment; Case 174/84 Bulk Oil ν Sun International [1986] ECR 559, paragraph 31 of the judgment. 14 — Opinion 1/78 [1979] ECR 2871, paragraph 45. 15 — Cited at paragraph 4.

25. The Italian Government takes the view that national provisions concerning pay- ments for exports directly affect commercial 26. The Dutch Government takes the view transactions and therefore come within the that, because the Sanctions Regulation does scope of the common commercial policy. not concern financial services, the Member The Sanctions Regulation, which was based States retained competence to lay down rules on Article 113 of the Treaty, must be imple- regarding the provision of financial services mented in a uniform manner. If the goods to the Republics of Serbia and Montenegro. have been acknowledged to be intended for However, national competences must be strictly medical purposes by the U N Yugo- exercised in accordance with the rules of slavia Sanctions Committee (Article 2(a) of Community law. The requirement that per- the regulation) and if the competent auth- mitted exports be made from the United ority of a Member State has granted an Kingdom disadvantages exporters established export authorization, the export prohibition in other Member States, in so far as payment laid down in Article 1(b) of the regulation is through funds held in the United Kingdom not applicable. The Member States may not is provided for. The disadvantage is increased unilaterally introduce conditions other than by the fact that London is a major financial those in the regulation for the purpose of market-place. Such difference in treatment

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16 — OJ 1981 L 144, p. 1. 17 — [1994] ECR I-5267, paragraph 51.

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regulation did set up a system for the autho- United Kingdom can demonstrate that the rization of permitted exports, by requiring objective of the unilateral measure was not that the U N Yugoslavia Sanctions Commit- met by the Community measures that such a tee approve the export and that the compe- unilateral measure might be justified. The tent Member State issue an export licence. Commission notes that in the present case The establishment of those two conditions there is no suggestion that competent Mem- ensured a harmonized approach to the appli- ber States were issuing export licences on an cation of the exceptions permitted by Reso- improper basis or that this aspect of the sys- lution 757 (1992). In the Commission's view, tem was not functioning properly. The Com- there is a clear link between the possibility of mission also refers to the possibilities of effecting exports within the excepted catego- mutual assistance and exchange of infor- ries and the possibility of receiving payments mation between the competent authorities. in respect of such exports. The possibility of receiving payment is, in fact, ancillary to the possibility of exporting.

18 — See Case 72/83 Campus Oil [1984] ECR 2727, paragraph 27 33. The United Kingdom contends that the of the judgment; see also Case 35/76 Simmenthal [1976] disputed change in policy is compatible with ECR 1871; Case C-2/82 Delhaize Frères ν Belgian State [1983] ECR 2973. the common commercial policy and with the

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Sanctions Regulation. It advances three main States must of course comply with any mea­ arguments in support of its position, each of sures adopted under those provisions, the which it claims to be conclusive. adoption of such measures does not have the effect of removing national competence in the field to which the measures relate.

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37. Thirdly, the United Kingdom argues that were needed for such measures, it can and the disputed measures are not incompatible must be implied. It is unthinkable that the with the common commercial policy. It first Community would have left the Member considers the Export Regulation, and ques- States without the power to comply with tions whether a restriction on the release of their obligations to give full effect to the assets held in a UK bank account could pos- resolution. sibly constitute a quantitative restriction on exports as prohibited by Article 1 of the Export Regulation. Even if that restriction were to constitute such a quantitative restric- tion, it would fall within the derogation con- tained in Article 11 of the regulation. The United Kingdom refers to my Opinions in Richardt, 20 and in Werner and Leif er,21 39. I will now examine in turn the various where I considered that the Member States issues raised by the first question. I will had a large measure of freedom in relation to address those issues against the backdrop of such issues as public security and the protec- the United Kingdom's three main arguments: tion of health and life of humans. Resolution the argument on national competence in the 757 (1992), together with the findings of the field of foreign and security policy, the scope Court of Appeal in the present case, provide of the common commercial policy and the the clearest possible evidence that the actions impact of the Sanctions Regulation and the of the United Kingdom authorities were jus- Export Regulation. tified by considerations of public security and the health and life of humans.

accordance with the rules of Community 41. I will analyse the concept of a restriction law. The application of those rules cannot be on exports, and in particular whether the dis­ evaded by a mere reference to considerations puted measures are covered by that concept, of a foreign or security policy nature. That is below. At this juncture it must however be confirmed by the Court's judgments in emphasized that, according to the Court, the Werner and Leifer. Those cases concerned sole fact that a measure serves a foreign or restrictions on exports of so-called dual-use security policy objective does not mean that goods in application of German legislation it cannot come within the scope of the com­ which had a clear security policy dimension. mon commercial policy. That position seems The Court was asked whether Article 113 of fully justified to me. Many measures of com­ the Treaty and the Community's legislation mercial policy may have a more general for­ on exports precluded such restrictions. The eign or security policy dimension. When for Court referred to the requirement of a non- example the Community concludes a trade restrictive interpretation of the concept of agreement with Russia, it is obvious that that common commercial policy, and stated agreement cannot be dissociated from the that: 2 2 broader political context of the relations between the European Union, its Member States, and Russia.

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dimension. The introduction of Article 228a 44. I conclude that the fact that the Member does not indicate that the Community could States retain competence in the field of for­ not previously (as it did) impose economic eign and security policy is of no assistance in sanctions on the basis of Article 113 of the answering the question whether the disputed Treaty. The opposite appears to be the case. measures adopted by the United Kingdom Article 228a codified a firmly established are compatible with the common commercial practice, clearly designed to be further devel­ policy. oped, and now given a more specific Treaty basis.

The common commercial policy and pay­ ments

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were to receive an affirmative answer, the 48. At the level of Community legislation it disputed measures would be permissible would appear that the basic instruments of only if they were specifically authorized by the common commercial policy are largely the Community. A range of different views silent on the question of payments for were expressed on the issue. At one end of imports or exports. The Export Regulation the spectrum is the Italian Government's does not refer to payments, and Council position that national provisions concerning Regulation (EEC) N o 288/82 of 5 February payments for exports directly affect commer­ 1982 on common rules for imports, 2 6 appli­ cial transactions and therefore come within cable at the material time, merely provides at the scope of the common commercial policy. Article 21 that it shall not preclude 'special At the other end is the United Kingdom's formalities concerning foreign exchange'. position that restrictions on the release or movement of assets do not fall within the scope of the common commercial policy.

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be noted that paragraph 5 of the resolution refer to cooperation with the International exempts 'payments exclusively for strictly Monetary Fund. Article XV(4) provides that medical or humanitarian purposes and food- 'Contracting Parties shall not, by exchange stuffs', a provision which was not included action, frustrate the intent of the provisions in the Sanctions Regulation. of this Agreement'. Further, there is Arti- cle XII on quantitative restrictions for balance-of-payments purposes. Although those provisions illustrate the obvious link between trade and measures affecting pay- ments, they do not directly address the liber- alization of payments.

50. Similarly, it would appear that measures concerning financial transactions have also been excluded from other embargo measures adopted by the Community under Article 113 of the Treaty. 28

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commercial policy to be effective (the prin­ 55. Before I turn to examine the scope of the ciple of effectiveness or effet utile) may for Sanctions Regulation and of the Export example impose limits on the powers of the Regulation with a view to resolving that Member States to regulate payments. If there issue, I should however point out that the were a Community regulation stating that all position has changed since the entry into imports into the Community from China force of the Treaty on European Union. At were free, a national rule providing that no present, payments between Member States payments should be made to Chinese citi­ and third countries are covered by Article zens or companies would obviously interfere 73b(2) of the EC Treaty, which provides with the proper functioning of that regu­ that: lation. Such a national rule could be regarded as a restriction on imports, incompatible with the regulation.

'Within the framework of the provisions set out in this Chapter, all restrictions on pay­ ments between Member States and between Member States and third countries shall be prohibited.'

56. External payments are also mentioned in Article 73g of the Treaty, which provides:

58. Article 1(b) of the Sanctions Regulation prohibits exports to the Republics of Serbia and Montenegro. Article 2(a) states that that prohibition shall not apply to the export of certain categories of products, and Article 2(c) exempts any activity whose object or The Council may, acting by a qualified effect it is to promote such exports. Those majority on a proposal from the Commis- provisions do not state in so many words sion, decide that the Member State con- that those exports are free. However, as the cerned shall amend or abolish such measures. Commission argues in its written observa- The President of the Council shall inform tions, the exception made in Article 2(a) the European Parliament of any such implies that those exports are governed by decision taken by the Council.' the Community's general rules on exports, laid down in the Export Regulation. Clearly, the prohibition of exports to the Republics of Serbia and Montenegro derogated from the rules of the Export Regulation, in par- ticular Article 1 which provides that exporta- tion from the Community to third countries shall be free. In so far as that prohibition does not apply to certain categories of exports, the rules of the Export Regulation must continue to apply.

57. For the purpose of the present case, however, I do not think that anything can be inferred from those provisions. The fact that there are now explicit provisions on pay- ments does not exclude that, before the entry into force of those provisions, payments were to some extent covered by the common commercial policy. It certainly does not exclude the possibility that Community leg- 59. Article 1 of the Export Regulation speci- islation adopted in the framework of the fies that free exportation means that prod- common commercial policy may have ucts 'shall not be subject to any quantitative imposed limits on national measures con- restriction, with the exception of those cerning payments for imports from or restrictions which are applied in conformity exports to third countries. with the provisions of this Regulation'. The

60. Article 1 was interpreted by the Court in 61. The Court found support for that inter­ Werner and Leifer. 3 1 In those cases the ques­ pretation in Article XI of the GATT, which tion arose whether national measures requir­ refers in its first paragraph to ‘prohibitions ing a licence for the exportation of certain or restrictions other than duties, taxes or products fell within the scope of Article 1. other charges, whether made effective The Court rejected the German Govern­ through quotas, import or export licences or ment's view that Article 1 prohibits only other measures'. quantitative restrictions on exports and not measures having equivalent effect. The fact that Article 34 of the Treaty, concerning free movement of goods within the Community, distinguishes between quantitative restric­ tions on exports and measures having equivalent effect, was considered not to be relevant for the interpretation of the Export Regulation. The Court stated that in the 62. In my Opinion in those cases I similarly interpretation of the regulation it was neces­ took the view that, even if it is arguable that sary to consider not only its wording but Article 1 does not apply to all measures hav­ also the context in which it occurs and the ing equivalent effect, it must certainly be objectives of the rules of which it is part. The regarded as prohibiting measures whose Court considered that: 3 2 effect is tantamount to a total ban on specific categories of exports. 3 3

‘A regulation based on Article 113 of the Treaty, whose objective is to implement the principle of free exportation at Community 63. I am not however convinced that in Werner and Leifer the Court intended to 31 — Cited at note 21, paragraphs 17 to 23 of the judgment in Werner, paragraphs 18 to 24 of the judgment in Leifer. 32 — Sec paragraph 22 of the judgment in Werner and paragraph 23 of the judgment in Leifer. 33 — See paragraph 31 of the Opinion.

adopt a broad interpretation of Article 1 of imports and exports, and derogations are not the Export Regulation. In particular, I do not to be interpreted extensively. think that the broad notion of measures hav­ ing equivalent effect which is the cornerstone of the Court's case-law on the free move­ ment of goods within the Community should be extended to exports to third coun­ tries. Article 1 refers only to quantitative restrictions, and does not mention measures having equivalent effect. If the objective of the Regulation were to eliminate all barriers on exports to third countries in a manner similar to the removal of barriers to intra- Community trade, the least one would expect is an explicit reference to the concept 64. However, even on a narrow interpreta­ of measures having equivalent effect. It is tion of the rule of free exportation it is clear moreover obvious that the elimination of in my view that it covers certain restrictions barriers to intra-Community trade serves to on payments. As we have seen, Centro-Com establish an internal market, and that the submits that the right to trade with foreign Export Regulation does not have the aim of entities is nothing other than a specific aspect extending the internal market to third coun­ of a fundamental right to economic freedom. tries. In that respect a parallel may be drawn While I am not persuaded that there is a fun­ with cases such as Polydor ν Harlequin damental right to export, the Sanctions Record Shops, 34 where the Court empha­ Regulation and the Export Regulation, sized that the prohibition of measures having directly applicable as they are in the Member equivalent effect to quantitative restrictions States, do create rights and obligations for on imports, included in free trade agreements individuals. From the perspective of those concluded between the Community and rights a restriction on payments for exports third countries, is not to be interpreted as can, and should, be regarded as a restriction broadly as Article 30 of the Treaty. Since the on exports as such, as I will demonstrate. Export Regulation does not aim to establish an internal market or even a free trade area, and since it does not mention the concept of measures having equivalent effect, it is clear in my view that a broad interpretation of the prohibition of quantitative restrictions is not called for. Such a broad interpretation seems particularly inapposite in the context of the embargo against the Republics of Serbia and Montenegro. Here the permission to export is an exception to the general prohibition of 65. It is questionable whether the right to export is a fundamental right. 35 It is not contained in the Treaty as such (although

66. In any event, on the above interpretation of the relationship between the Sanctions Regulation and the Export Regulation those regulations did create, for the benefit of 67. That does not mean that all measures nationals and companies of the Member which may affect the receipt by exporters in States, the right to export permitted supplies the Community of payments for exports are to the Republics of Serbia and Montenegro, prohibited by the rule of free exportation. under the conditions laid down in the Sanc­ The position is the same here as with restric­ tions Regulation. Such exports were, pro­ tions on the supply of goods: only actual vided that the procedure laid down in Article restrictions are prohibited. In respect of pay­ 2(a) and Article 3 of the Sanctions Regu­ ments, what the Court stated in Werner and lation was followed, 'free' in terms of Article Leifer as regards measures of equivalent 1 of the Export Regulation. From the per­ effect could be restated as follows: spective of individuals and companies seek­ ing to benefit from that freedom to export, it is clear that such a freedom has to encompass payments. The Commission has stated that payments are ancillary to export transac­ tions. Even that expression, however, is not

'A regulation based on Article 113 of the 36 — Sec Case C-280/93 Germany ν Council [1994] ECR 1-4973, paragraph 78 of the judgment. Treaty, whose objective is to implement the

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'If the exemption authority system is to con- tinue [on the] present scale then urgent 69. The question then arises whether the reconsideration of the method of control is policy can be justified on the basis of Article required. An accountable document provid- 11 of the Export Regulation, which refers to ing a clear audit trail should be introduced public security and the protection of the along the lines of the E. C. licensing sys- health and life of humans. In general I am tems.' 37 inclined to agree with the Commission's analogy with harmonization of national leg- islation aimed at furthering the free move- 37 — See the judgment of the Divisional Court, cited at note 12, ment of goods within the Community, and paragraph 8.

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38 — Case C-5/94, judgment of 23 May 1996. 39 — OJ 1974 L 316, p. 10. 40 — Paragraphs 19 and 20 of the judgment. 41 — Cited at note 21, paragraph 33 of the judgment.

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OPINION OF MR JACOBS — CASE C-124/95

U N Yugoslavia Sanctions Committee and its the first question is affected by the provi­ export authorization from the Italian sions of Article 234 of the Treaty. In issue is authorities before that change. And it also the first paragraph of Article 234, which pro­ exported the goods well before the Treasury vides that: took the disputed decision. In those circum­ stances, which are not contested and which are implied in the question referred by the Court of Appeal, the refusal to grant the applications to release funds for payment to Centro-Com could not in any way serve the 'The rights and obligations arising from aim of preventing circumvention of the sanc­ agreements concluded before the entry into tions through the system of export permits. force of this Treaty between one or more If there was justification for the change in Member States on the one hand, and one or policy, it was limited to exports made after more third countries on the other, shall not the announcement of that change. Only for be affected by the provisions of this Treaty.' such exports could it be argued that the new policy might improve the effectiveness of the sanctions by combating the abuse of the sys­ tem of export permits. Where all relevant events, including the actual exports and the lodging of the applications for the release of funds, took place before the change in policy 74. It is settled case-law that: 4 2 was announced, the objective of an effective implementation of the export ban could not be served by a decision not to release funds.

may be deprived of effect by an earlier inter­ ensure an effective implementation of Reso­ national agreement, it is necessary to exam­ lution 757 (1992). ine whether that agreement imposes on the Member State concerned obligations whose performance may still be required by non- member States which are parties to it, and that in proceedings for a preliminary ruling it is not for this Court but for the national court to determine which obligations are imposed by an earlier agreement on the Member State concerned and to ascertain 77. Centro-Com, the Commission, the Ital­ their ambit so as to be able to determine the ian Government and the Belgian Govern­ extent to which they thwart application of ment argue that there is no conflict between the relevant provisions of Community law. 4 3 the relevant provisions of Community law and Resolution 757 (1992). They point out that the Community regulation was adopted precisely to give effect to the resolution, and that both have the same effect, namely to authorize the export of products for humani­ tarian purposes. In my view, it is difficult to see how there could be a conflict in the par­ ticular circumstances of the present case, where the export had not only been autho­ rized but had also been effected before the 76. The United Kingdom argues that in the measures were adopted. According to the present case it is required by the Charter of Court's case-law, however, it is for the refer­ the United Nations to ensure an effective ring court to decide this issue. It should do implementation of the measures adopted by so, of course, in the light of the interpreta­ the Security Council under Chapter VII of tion to be given to the relevant provisions of the Charter, in particular Resolution 757 Community law, in particular the Sanctions (1992). Article 25 of the Charter provides Regulation and the Export Regulation. that the Members of the United Nations agree to accept and carry out the decisions of the Security Council, and Article 103 pro­ vides that, in the event of a conflict between the obligations of the Members of the United Nations under the Charter and their obligations under any other international agreement, their obligations under the Char­ ter shall prevail. In the United Kingdom's 78. The appropriate reply to the second view, its decision to change the policy on the question is that measures such as those in release of Serb funds in payment for permit­ issue in the present case are compatible with ted exports was required by those provi­ Community law only if they are necessary in sions, because that decision was necessary to order for the Member State concerned to comply with obligations towards non- member States laid down in an agreement concluded prior to entry into force of the 43 — Evans Medical and Macfarlan Smith, paragraphs 28 and 29 of the judgment. Treaty or to accession by that Member State.

(b) the Member State has decided that the adoption of such measures is neces- sary or expedient for enabling United Nations Security Council Resolu- tion 757 (1992) to be effectively applied;

(c) release of the funds is sought to pay a national of another Member State for goods exported by him from that Member State to the Republics of Serbia and Montenegro;

(d) the goods have been formally approved as intended strictly for medical purposes by the United Nations Sanctions Committee pursuant to United Nations Security Council Resolution 757 (1992), and they have been exported pursuant to a prior export authorization issued by the competent

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THE QUEEN, EX PARTE CENTRO-COM ν HM TREASURY AND BANK OF ENGLAND

authorities of the Member State of exportation pursuant to Regulation N o 1432/92; and