C-209/97

2. The establishment of the correct legal Legal framework basis of the contested measure is not merely a matter of form. The legal basis serves to define the procedure to be followed in that particular context as regards both the role of the institutions taking part in the legis-

* Original language: Italian. 3. On 13 March 1997 the Council adopted 1 — OJ 1997 L 82, p. 1. Council Regulation (EC) No 515/97 on

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mutual assistance between the administra- adopted by virtue thereof; ... effective tive authorities of the Member States and cooperation in this field strengthens the cooperation between the latter and the protection of the financial interests of the Commission to ensure the correct applica- Community'. tion of the law on customs and agricultural matters (hereinafter referred to as 'the regulation'). Article 52 of the regulation expressly repeals Council Regulation (EEC) No 1468/81 of 19 May 198 12 bearing the same title and adopted on the legal basis of Articles 43 and 235 of the EEC Treaty.

5. Certain points in the preamble to the regulation are important in this connection. The first recital states that 'combating fraud in the context of the customs union The 12th recital states that 'with a view and the common agricultural policy calls to securing the rapid and systematic for close cooperation between the admin- exchange of information forwarded to the istrative authorities responsible in each Commission, there is a need to set up a Member State for the application of provi- computerised customs information system sions adopted in those fields; ... it also calls at Community level; ... in that context for appropriate cooperation between these sensitive data concerning frauds and irre- national authorities and the Commission, gularities in the customs and agricultural which is responsible for ensuring the appli- domains should be stored in a central cation of the Treaty and the provisions database accessible to the Member States, while ensuring that the confidential nature of the information exchanged, in particular data of a personal nature, is respected; ... 2 — OJ 1981 L 144, p. 1, amended by Council Regulation (EEC) No 945/87 of 30 March 1987. given the justifiable sensitivity of the issue,

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there should be clear and transparent rules with each other and with the Commission to protect the freedom of the individual'. in order to ensure compliance with that The next recital adds that 'customs autho- legislation within the framework of a rities have daily to apply both Community Community system'. and non-Community provisions; ... it is therefore desirable to have available a single infrastructure for applying these provisions'.

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7. The operation and organisation of the review. Those factors include in particular CIS are governed by Articles 24 to 42. The the aim and content of the measure. 3It is CIS is to consist of a central database necessary, therefore, to consider whether accessible via terminals in each Member the intended aims and the content of the State and at the Commission. The system is regulation, are such as to justify invoking to comprise exclusively data, including Article 235 which, it is clear from the terms personal data, necessary to fulfil its aim as in which it is couched, is a residual stated in Article 23. Direct access to such provision. It may therefore be used as the data is to be reserved exclusively for the legal basis for a measure only where no national authorities designated by each other provision of the Treaty gives the Member State and the departments desig- Community institutions the necessary nated by the Commission (Article 29(1)). power to adopt it. 4 Personal data included in the database is to be protected under national legislation or internal rules applicable to the Commis- sion, 'guaranteeing the protection of the rights and freedoms of individuals' (Arti- cle 34(1)).

form of harmonisation of legislation, at Member States, is limited simply to coordi- least in the domain of personal-data pro- nating the activities of the national admin- tection, and that it is intended to ensure the istrative authorities. In any case, even if proper functioning of the internal market. recourse to Article 235 were to be consid- ered necessary for the establishment of the CIS, the correct legal base would, never- theless be Article 100a as recourse to several legal bases is precluded if one of them provides for the use of the coopera- tion rather than the consultation proce- dure. The Commission concludes by requesting the Court to annul the contested regulation on the ground that it is in breach of essential procedural requirements. This opinion is shared by the Parliament which observes that the contested regulation is intended to approximate national legisla- tion, adding that the CIS is not an inde- pendent body but simply an instrument at 10. To be more precise the Commission the service of the Community, so that its submits that the regulation is intended to establishment should not have affected the ensure the correct application of customs choice of legal basis. and agricultural legislation and therefore, by definition, the proper functioning of the internal market, hence the need to have recourse to Article 100a of the Treaty. The Commission adds that the fight against fraud, and therefore the protection of the financial interests of the Community, is not an independent objective but follows from the establishment of the customs union. As regards the content of the regulation, the Commission submits that it comprises two parts: first the improvement of mutual assistance between Member States, and second, the establishment of the CIS. In its view recourse to Article 235 is not justified in either case: as regards the first part, it argues that this is a matter of harmonising the Member States' legislation on mutual assistance between the admini- strative authorities to ensure the correct application of the law on customs and agricultural matters; as regards the CIS, the 11. For its part, the Council observes that Commission submits that the operation the contested regulation has as its objective and use of the system require harmonised the establishment of a legally independent action by the Member States, while the role body at Community level. It maintains that of the Commission, although it is a partner a comparison between that regulation and in the system on the same footing as the the previous one, Regulation No 1468/81,

which it replaced shows that it was inten- establishment of the CIS is the most ded to re-draft the text, with a single important part of the contested regulation. objective for the entire system, namely to protect the financial interests of the Com- munity. Moreover, it claims, that objective is referred to specifically in Article 209a of the Treaty, introduced by the Single Eur- opean Act, although in its present form it does not confer the necessary powers on the Community institutions to achieve such an objective. Hence the need to invoke Arti- cle 235 of the Treaty. The Council states that the protection of the financial interests of the Community does not follow from the establishment of the customs union but constitutes an independent objective. This is confirmed by the position in the Treaty of Article 209a, not among the provisions on customs union but among the financial provisions. On the content of the regula- tion, the Council maintains that it creates 12. I believe that the submissions of the an entire new system for the protection of Council and France are correct. Indeed, as the financial interests of the Community, regards the objectives of the regulation, it is based on the coordinated activities of the clear from the preamble (first and twentieth national administrative authorities and the recitals) that the entire system established Commission and also on the functioning of by the regulation is intended to promote the CIS infrastructure. It is therefore an the protection of the financial interests of independent Community body, the estab- the Community. In the system of the Treaty, lishment of which, the Council claims, goes that objective is completely independent of beyond simply harmonising national legis- the functioning of the customs union and lation; hence the need to invoke Arti- therefore of the internal market. It is cle 235 of the Treaty. As regards the sufficient here to consider the position in provisions for the protection of personal the Treaty of Article 109a: it is in Title II data, the Council contends that they do not (Financial Provisions) in Part Five of the constitute a separate part of the regulation, Treaty (Institutions of the Community) and and do not pursue separate objectives but not in Chapter 1 of Title I in Part Three, on are linked to the general system of which the customs union. The protection of the they form a part. The French Republic, financial interests of the Community is intervening in support of the Council, therefore a horizontal objective which, observes that the purpose of the regulation through the regulation in issue, is pursued is not the approximation of legislation but specifically in the area of the fight against fraud in customs and agricultural matters. the fight against fraud in the context of Moreover, the fact that the protection of customs and agriculture, and that the the financial interests of the Community is an independent objective, quite distinct from the operation of the customs union, is borne out by the legislative practice prior to the regulation and in particular by the

adoption of other 'horizontal' regulations regulation which has as its objective the which have Article 235 as their legal protection of the financial interests of the basis. 5 Community and which affects market con- ditions only indirectly. Therefore, even if it were to be held that the regulation also serves internal market objectives, inasmuch as it coordinates action by national admin- istrations to ensure correct application of customs and agricultural regulations, those objectives are merely ancillary in relation to the main objective of the regulation, with the result that Article 100a cannot consti- tute the proper legal basis for its adoption. 7 The objective of protecting the financial interests of the Community is dealt with While it is true that cooperation between specifically in Article 209a which, however, the administrative authorities of the Mem- in the form at present in force,8 while it ber States, and between them and the does set out the aims to be achieved, does Commission, may be conducive to the not confer the necessary powers of action proper functioning of the internal market, on the Community institutions, hence the the link is nevertheless entirely indirect and need to invoke Article 235. as such cannot justify recourse to a provi- sion, Article 100a, which concerns instead measures which have as their object the establishment and functioning of the inter-

5 — See Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities' financial interests (OJ 1995 L 312, p. 1), and 7 — Judgment in Case C-271/94 Parliament v Council, cited Council Regulation (Euratom, EC) No 2185/96 of above, paragraph 32. 11 November 1996 concerning on-the-spot checks and 8 — The text of Article 209a (now Article 280 EC) is, in fact, inspections carried out by the Commission in order to amended by the Treaty of Amsterdam, which adds two new protect the European Communities' financial interests paragraphs (4 and 5). The first states that the Council, against fraud and other irregularities (OJ 1996 L 292, p. 2). acting in accordance with the co-decision procedure and 6—Judgment in Case C-70/88 Parliament v Council [1991] after consulting the Court of Auditors, 'shall adopt the ECR I-4529, paragraph 17; judgment in Case C-155/91 necessary measures in the fields of the prevention of and Commission v Council, cited above, paragraph 19, and fight against fraud affecting the financial interests of the Opinion of Advocate General Tesauro, point 4, where he Community with a view to affording effective and equiva- states that 'Article 100a should be regarded as relevant for lent protection in the Member States.

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tives set out above. The text lays down a 15. Finally, as regards the provisions of the complex system for the prevention and regulation on the protection of personal prosecution of breaches of Community data within the framework of the rules on customs and agricultural regulations. This the functioning of the CIS, suffice it to say system is based, on the one hand, on that the text of the regulation does not cooperation between the administrative include any harmonisation of national authorities of the Member States and legislation in this area. In a context where between those authorities and the Commis- the operation of the administrative system sion in accordance with the detailed rules for ensuring compliance with agricultural laid down in the regulation; and on the and customs legislation might pose risks to other, on an infrastructure essential for this the freedoms of individuals, the regulation purpose, the CIS, which is set up specifi- requests the CIS partners (the Member cally to assist the activities both of the States and the Commission) to adopt national administrations and the Commis- measures 'guaranteeing the protection of sion. The Commission's role in the general the rights and freedoms of individuals with system is far from marginal, as may be seen regard to the processing of personal data' from a number of provisions in the regula- (Article 34). As regards the use of such tion (Articles 23(3) and (4), 29, 30 etc.). Furthermore, in Title IV, the regulation sets data, the regulation requires CIS partners out rules governing relations with third to observe certain rules concerning in countries, indicating the conditions and particular the individuals' right of access detailed rules for joint action by the to the data contained in the CIS. Clearly national administrative authorities, the these rules, although directly applicable, Commission and the administrative autho- are ancillary measures essential to the rities of the third countries in question proper functioning of a system from which (Article 19 et seq.). they cannot be separated for the purpose of determining independently whether their legal basis is correct. 9

— order the Commission to pay the Council's costs;

— order each of the interveners to bear its own costs.

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