C-177/95

Legal background

'all States shall detain pending investigation all vessels, freight vehicles, rolling stock, air- craft and cargoes found in their territories 2. In the course of the war in the former and suspected of having violated or being in Yugoslavia the Security Council of the violation of resolutions 713 (1991), 757 (1992), 787 (1992) or the present resolution, and that, upon a determination that they * Original language: English. 1 — See Case C-84/95 Bosphorus v Minister for Transport, Energy and Communications, Ireland and the Attorney General, judgment of 30 July1996; Case C-124/95 The Queen v 2 — See also my Opinion of 30 April 1996 in Bosphorus, and my H. M. Treasury and Bank of England ex parte Centro-Com Opinion of 24 September 1996 in Centro-Com, both cited in and Case C-162/96 Racke, both pending. note 1.

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O P I N I O N OF MR JACOBS — CASE C-177/95

have been in violation, such vessels, freight 4 Regulation'), and Decision 93/235/ECSC vehicles, rolling stock and aircraft shall be of the Representatives of the Governments impounded and, where appropriate, they and of the Member States meeting within the their cargoes may be forfeit to the detaining Council of 26 April 1993 concerning trade State'. between the European Coal and Steel Com­ munity and the Federal Republic of Yugosla­ via (Serbia and Montenegro) (hereafter 'the 5 Decision').

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EBONY MARITIME AND LOTEN NAVIGATION v PREFETTO DELLA PROVINCIA DI BRINDISI AND OTHERS

7. The preamble refers to the situation in the having transited through, the Federal former Yugoslavia, particularly in Bosnia- Republic of Yugoslavia (Serbia and Mon- Herzegovina; to the role played by the Fed- tenegro); eral Republic of Yugoslavia (Serbia and Montenegro); and to the various resolutions of the Security Council. It states that:

(b) the export to, or the transit through, the Federal Republic of Yugoslavia (Serbia and Montenegro) of all commodities and products originating in, coming from, or 'the Community and its Member States have having transited through the Commu- agreed to have recourse to a Community nity; instrument, inter alia, in order to ensure a uniform implementation throughout the Community of certain of these measures'.

(c) the entry into the territorial sea of the Federal Republic of Yugoslavia (Serbia and Montenegro) by all commercial traf- 8. Most of the provisions of the Regulation fic; substantially reproduce the various embargo measures contained in the abovementioned Security Council resolutions. Articles 1(1), 9, 10 and 11 are relevant to the present case: (d) any activity the object or effect of which is, directly or indirectly, to promote the transactions mentioned under (a), (b) or (c);

'Article 1

Article 10 10. The legislation adopted in Italy in imple- mentation of the abovementioned Commu- nity provisions is contained essentially, so far as is relevant to the present proceedings, Each Member State shall determine the sanc- in Article 2(2) and 2(3)(b) of Decree-Law tions to be imposed where the provisions of N o 144 of 15 May 1993, converted into Law this [Regulation] are infringed. N o 230 of 16 July 1993. 7

Where it has been ascertained that vessels, freight vehicles, rolling stock, aircraft and 11. According to those provisions, means cargoes have violated this Regulation, they of transport suspected of infringing the may be forfeited to the Member State whose embargo may be stopped and inspected for competent authorities have impounded or the purpose of inquiries by the customs detained them. authorities. Where such inspections disclose a breach of the abovementioned Community provisions, the competent authority is to order confiscation of the goods to which the embargo applies. Where the means of trans- Article 11 port is not flying the Italian flag and does not belong to a person of Italian nationality, the competent authority is also to impound the means of transport, giving immediate notice thereof, through the Ministry of For- This Regulation shall apply within the terri- eign Affairs, to the Consulate for the coun- tory of the Community, including its air try concerned so that the latter may take the space and in any aircraft or vessel under the jurisdiction of a Member State, and to any person elsewhere who is a national of a 7 — Gazzetta Ufficiale della Repubblica Italiana No 166 of Member State and any body elsewhere 17July 1993.

12. The facts may be summarized as follows. The Lido II is a tanker flying the Maltese flag; it is owned by Loten Navigation Com­ pany Limited, a Maltese company. It appears that in the course of April 1994 the vessel left the Tunisian port of La Skhira bound for Rij eka, Croatia, with a cargo comprising 13. Following inspections and checks, partly petroleum products (24 434 tonnes of examination of the documents and records 'dirty gasoiľ), intended for the purchaser produced by the shipowner and the cargo- Monteshell, in Trieste, and partly motor owner and reports from the relevant techni­ spirit (27 413 tonnes of 'premium mogas'), cal authorities, the Prefetto (Prefect) of Brin­ still awaiting a purchaser, to be found in disi decided to arrest the vessel and to Gibraltar in accordance with commercial and confiscate its cargo, in implementation of the maritime practice. The cargo was owned, or sanctions laid down by Italian law for breach partly owned, by Ebony Maritime SA, a of the embargo. In its written observations Liberian company. O n entering the Adriatic, the Italian Government states that the the Lido II was diverted by NATO/WEU authorities of Montenegro made several rep­ forces to the 'waiting area' in the port of resentations to the Italian embassy in Bel­ Brindisi in order to be inspected for the pur­ grade, requesting the release of the Lido II pose of monitoring observance of the and its cargo, said to be of vital interest for embargo. N o irregularities having been Montenegro. At the hearing, however, the

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OPINION OF MR JACOBS — CASE C-177/95

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EBONY MARITIME AND LOTEN NAVIGATION v PREFETTO DELLA PROVINCIA DI BRINDISI AND OTHERS

15. Observations have been submitted by Article 11 of the Regulation which provides the applicants and by Italy, France, the that the Regulation applies within the terri- United Kingdom and the Commission, all of tory of the Community and in any aircraft which were also represented at the hearing. or vessel under the jurisdiction of a Member State, and to any person elsewhere who is a national of a Member State and any body elsewhere which is incorporated or consti- tuted under the law of a Member State. As was established in the main proceedings, both Ebony Maritime and Loten Navigation Preliminary issues Company are non-Community companies, and the vessel Lido II flies the flag of Malta. At the time when it was taken over by the N A T O / W E U forces, moreover, the ship was in international waters, and it has not been suggested by the referring court that any Community nationals or companies were 16. Before addressing the questions raised involved in the alleged violation of the Regu- by the Consiglio di Stato I must consider lation. The United Kingdom argues that the two preliminary issues. Regulation applies only to the following cases: (i) within the territorial waters of the Member States; (ii) to ships under the juris- diction of a Member State; (iii) to individuals who are nationals of a Member State; and (iv) to companies incorporated or consti- tuted under the law of a Member State. 17. First, as the Commission points out, the Accordingly, it does not apply in the circum- Decision does not appear to apply to the stances of the present case. In my view, facts of the present case. It has not been sug- although the order for reference does not gested that the Lido II transported any raise that issue, it is necessary to consider it products other than petroleum, and trade in in order to assist the referring court to petroleum is covered by the EC Treaty, not resolve the dispute before it. by the ECSC Treaty. In what follows I will therefore only consider the Regulation; the Decision is, in any event, identically worded.

the occasion of the first inspection in the to be destined for other places. In para- port of Brindisi, in violation of the Regu- graph 19 the Security Council: lation; it points out that the cargo was par- tially destined for a Community company, namely Monteshell in Trieste; and it submits that the alleged violation is covered by Article l(l)(b) of the Regulation, which pro- hibits exports to the Federal Republic of Yugoslavia (Serbia and Montenegro) of all commodities and products originating in, 'Reminds States of the importance of strict coming from, or having transited through enforcement of measures imposed under the Community. Those observations are Chapter VII of the Charter, and calls upon however partly based on facts and provisions them to bring proceedings against persons not referred to in the order for reference. At and entities violating the measures imposed the hearing the Commission confirmed that, by resolutions 713 (1991), 757 (1992), 787 in its view, the Regulation applies. (1992) and the present resolution and to impose appropriate penalties'.

By paragraph 25, cited above, 8 all States were required to detain, among other things, all vessels found in their territories and sus- pected of having violated the embargo.

22. Article 11 provides that the Regulation 25. If the view were .taken that Member shall apply 'within the territory of the Com- States could not apply the Regulation in munity'. In the present case that is precisely cases such as the present, there is a serious how the Regulation is being applied: it is risk that they would be unable to enforce the being applied by the Italian authorities United Nations sanctions. If Member States within their territory. And again in accord- determined, as required by Article 10, the ance with Article 11, the Regulation is being penalties to be imposed for infringement of applied to a ship 'under the jurisdiction of a the Regulation, they might be unable to Member State'; and there is no suggestion impose those penalties where a ship handed that the ship was improperly brought within over to their authorities did not fly the flag the Member State's jurisdiction. The effect of of a Member State. It does not seem to me Article 11 is not, therefore, to limit the field that that can be regarded as the intended of application of the Regulation; it makes the effect of the Regulation. field of application coterminous with the jurisdiction of Member States under interna- tional law.

29. In the first and second questions the 'In the event of a conflict between the obli- referring court essentially asks whether gations of the Members of the United Article 1(1 )(c) and (d) of the Regulation must Nations under the present Charter and their be interpreted as meaning that only actual obligations under any other international entry into the territorial sea of the Federal agreement, their obligations under the Republic of Yugoslavia (Serbia and Mon- present Charter shall prevail.' tenegro) by commercial traffic is prohibited, or, alternatively, as meaning that the prohibi- tion also applies where there is sufficient rea- son to believe that a ship is on course for that sea for the purposes of commercial traf- fic. Since the sanctions against the Federal Republic of Yugoslavia (Serbia and Mon- tenegro) contained in the resolutions were clearly intended to be applied as broadly as possible, their implementation must prevail over the principle of the freedom of the high seas. 30. I have already noted that the Regulation must be interpreted in the light of the Secu- rity Council resolutions which it aims to implement, in particular Resolution 820 (1993). The text itself of paragraph 28 of that Resolution is of no more assistance than the text of Article 1(1 )(c) of the Regulation, 28. I therefore conclude that the Regulation because it is similarly worded: 'to prohibit all applies in the circumstances of the present commercial traffic from entering the territo- case. I would add that, if the Regulation did rial sea of the Federal Republic of Yugoslavia

(Serbia and Montenegro) ...'. From the text artificial to distinguish between actual entry and context of those provisions it is none the into the Yugoslav territorial sea and conduct less clear that the prohibition in issue is not by a ship which reveals a clear intention to limited to actual entry into the Yugoslav ter- enter the sea. That is particularly true in the ritorial sea. light of the objectives of the Resolution and the Regulation. As already noted, the Reso- lution was intended to be applied as broadly as possible. Its aim was to strengthen the embargo against the Federal Republic of Yugoslavia (Serbia and Montenegro). In my Opinion in Bosphorus I have emphasized the 31. Both the Resolution and the Regulation strong public interest at stake, and the Court prohibit the entry of commercial traffic into did likewise in its judgment. 12 For the the Yugoslav territorial sea. That prohibition embargo to be effective it was considered requires that actual entry does not occur. For indispensable to prevent all commercial traf- the prohibition to be effective, it is therefore fic from entering the Yugoslav territorial necessary to prevent commercial traffic from sea. 13 To prevent violations, it must be pos- entering the sea. It follows that, for the pur- sible to penalize attempted as well as actual poses of enforcement of the prohibition, the violations. Penalizing only the latter would Resolution and the Regulation require the have far less deterrent effect. It seems obvi- arrest of ships when it is clear that they are ous that the embargo would be far less effec- heading for the Yugoslav territorial sea. tive if penalties could be imposed only on There appears to be no doubt that that was so in the case of the Lido II. ships which had already entered the Yugo- slav territorial sea: once commercial traffic had entered that sea it would become far more difficult and hazardous to enforce the embargo. Although the N A T O / W E U forces were given the right of pursuit within those waters, 14 such pursuit was liable to lead to clashes with forces of the Federal Republic 32. Ebony Maritime and Loten Navigation of Yugoslavia (Serbia and Montenegro). The Company, however, distinguish between the enforcement of the embargo and the imposi- prohibition in issue must therefore be inter- tion of penalties for actual violations. They preted as covering conduct by a ship which take the view that enforcement is possible in reveals a clear intention to enter the Yugoslav all cases where a breach can be prevented, territorial sea for the purpose of commercial but that penalties may be imposed only in traffic. As the French Government points circumstances where a violation is estab- out, any other interpretation would deprive lished. the provisions of their effectiveness. I con- clude that attempts to violate the embargo

36. I therefore conclude that the appropriate reply to the first and second questions is that Article 1(1 )(c) and Article 1(1 )(d) of the 34. That interpretation is reinforced by Regulation not only prohibit actual entry by Article 1(1 )(d) of the Regulation, which pro- commercial traffic into the territorial sea of hibits any activity the object or effect of the Federal Republic of Yugoslavia (Serbia which is, directly or indirectly, to promote and Montenegro), but also apply where there the transactions mentioned under, among is sufficient reason to believe that a vessel is other provisions, Article 1(1 )(c). I take the on course for that sea for the purposes of view that on the basis of that provision it commercial traffic. would be possible to take action against ships intending to transport goods to the Federal Republic of Yugoslavia (Serbia and Montenegro) even if they were still in a port some distance from the Republic, if it were established that the ship was on course for 37. The issues raised by the first and second Yugoslav territorial waters for the purposes questions are however also related to the of commercial traffic, and hence that there third question, to which I now turn. was an attempt to violate the embargo.

The third question

35. In the present case Loten Navigation Company and Ebony Maritime argue that the Lido II was forced to change its course 38. In its third question the Consiglio di towards the Montenegro coast because of Stato asks whether a domestic provision force majeure. Article 2(f) of the Regulation which prescribes, in the event of breach of excludes cases of force majeure from the pro- any of the provisions contained in Article 1 hibition of entry into the Yugoslav territorial of the Regulation, confiscation of the cargo sea. However, the Consiglio di Stato appears carried by any of the means of transport to take the view that the question of force indicated in the second paragraph of majeure does not arise in the proceedings Article 10 of the Regulation is compatible

39. The third question appears to be partly inspired by what is clearly an error in the 41. The Court has had occasion to consider Italian version of the Regulation. In contrast the penalty of confiscation of goods in the with the versions in all the other languages, context of national controls on the export of that version does not mention cargoes in the strategic goods. In Richardt 17 the question second paragraph of Article 10. However, arose whether non-compliance with a the Italian implementing legislation does pre- national restriction on the intra-Community scribe, in line with the other versions of the transit of goods, aimed at protecting the Regulation, and indeed in line with para- external security of a Member State, could be graph 25 of the Resolution, confiscation of sanctioned by confiscation of such goods. cargoes which have violated the embargo. The Court drew attention to the principle of Since the Regulation must be interpreted in proportionality, stating that: 18 the light of all the language versions, 16 the answer to the third question is straightfor- ward: confiscation of the cargo is compatible with the Regulation. The principle of legality in penal matters (nullum crimen, nulla poena sine lege) is obviously not in issue here, because the Italian implementing legislation 'it is for the national court to determine expressly provides for confiscation. And whether the system established complies since the Resolution, the Regulation and the with the principle of proportionality, taking Italian legislation are similarly worded, it is account of all the elements of each case, such not necessary to consider, as have some of as the nature of the goods capable of endan-

For that purpose, whilst the choice of penal- ties remains within their discretion, they must ensure in particular that infringements of Community law are penalized under con- 43. There can be no doubt that the principle ditions, both procedural and substantive, of proportionality has to be observed in which are analogous to those applicable to cases such as the present, and that the com- infringements of national law of a similar petent national authorities have to take the nature and importance and which, in any above criteria into account. However, in event, make the penalty effective, propor- contrast with the above cases, in which the tionate and dissuasive.' national legislation in issue was enacted by way of derogation from the Community rules, the confiscation decided in the present 21 — Case 68/88 [1989] ECR 2965, paragraphs 23 and 24 of the judgment. See also Case C-326/88 Hansen [1990] ECR case is a penalty for infringement of rules of I-2911, paragraph 17; Case C-7/90 Vandevenne and Others Community law, laid down in the Regu- [1991] ECR I-4371, paragraph 11; Case C-382/92 Commis- sion v United Kingdom [1994] ECR I-2435, paragraph 55; lation. In those circumstances there are Case C-383/92 Commission v United Kingdom [1994] ECR 1-2479, paragraph 40; Case C-36/94 Siesse v Director da Alfândega de Alcântara [1995] ECR I-3573, paragraph 20; Joined Cases C-58/95, C-75/95, C-112/95, C-119/95, C-123/95, C-135/95, C-140/95, C-141/95, C-154/95 and C-157/95 Galloni and Others, judgment of 12 September 19 — Case C-83/94 [1995] ECR 1-3231, paragraph 39 of the 1996, [1996} ECR I-4345, paragraph 14 and Case C-341/94 judgment. André Allain and Steel Trading France, judgment of 20 — At paragraph 40. 26 September 1996, [1996] ECR I-4631, paragraph 24.

48. It is for the referring court, in the light 46. It is not clear from the order for refer- of those considerations, to decide whether ence whether that account of Italian legisla- the confiscation of the cargo of the Lido II tion is correct. In any event, a system of was appropriate. There is clearly however no strict criminal liability is not as a matter of reason to suppose, in response to the third principle incompatible with Community law. question, that a provision of national law In Hansen 24 the Court accepted that such a prescribing confiscation is itself incompatible with the Regulation.

22 — Cited in note 1, paragraph 26 of the judgment. 23 — Opinion 2/94 [1996] ECR I-1759, paragraphs 32 and 33. 24 — Cited in note 21, paragraph 19 of the judgment. See also the 25 — OJ, English Special Edition 1969 (I), p. 170. Opinion of Advocate General Van Gerven, paragraphs 11 26 — See my Opinion in Bosphorus, cited in note 1, para- to 15. graphs 54 to 68.

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Conclusion

49. Accordingly the questions referred by the Consiglio di Stato should in my opinion be answered as follows: