C-234/99

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4. Paragraph 7(1) of Law No 414 of payable in respect of pigs slaughtered for 13 June 1990 provides that: private consumption.

2. The amount of the levy shall be 'Fund revenue shall be used to finance DKK 7.00 for each pig having a carcass measures for sales promotion, research and weight below or equal to 100 kg and trials, product development, provision of DKK 17.50 for each pig having a carcass advice, training, preventive sanitary meas- weight greater than 100 kg. ures, disease eradication and control, together with all other measures authorised by the Minister for Agriculture. The rev- enue shall also be applied to cover expen- diture for inspecting the use thereof. The resources referred to in Paragraph 6(1) must be allocated to the sectors in which they were levied.'

Paragraph 2

5. Pursuant to Law No 414 of 13 June 1990, the Minister for Agriculture adopted Decree No 74 of 30 January 1992, under which Mr Nygård's exports were made subject to the levy. That decree provides in 1. For pigs slaughtered in abattoirs for particular as follows: export, it is for the abattoir concerned to charge the levy referred to in Paragraph 1 to the supplier and to notify the Svineaf- giftsfond each week... of the number of pigs slaughtered and declared fit for consump- tion, in each of the two weight categories, during the previous week, and to pay to the 'Paragraph 1 Fund the levies due in that regard.

1. For every pig — including sows, boars, store pigs and piglets — bred in Denmark 8. Mr Nygård submitted the same argu- and exported live, the exporter shall pay a ments on his appeal to the Vestre Landsret levy amounting to DKK 7.00 for each pig (Western Regional Court) (Denmark). having a live weight below or equal to Essentially, he argues in the first instance 120 kg and DKK 17.50 for each pig having that the levy demanded from him should be a live weight greater than 120 kg. classified as a charge having equivalent effect to a duty on exports, which is prohibited by Article 9 of the EC Treaty (now, after amendment, Article 23 EC) and the subsequent articles, and, in the alter- native, that, if it is not a charge having equivalent effect, the levy constitutes dis- 2. The exporter shall, no later than two criminatory internal taxation prohibited by weeks after exportation, notify the Svineaf- Article 95 of the EC Treaty (now, after giftsfond... of the exports, by stating the amendment, Article 90 EC), which, the number of live pigs in each weight cat- case-law of the Court has established, egory, and pay to the Svineafgiftsfond the applies to imported products as well as to levies due in that regard.' those which are exported. 2

6. Being a State aid, the whole of this levy 9. He also takes the view that the fact that scheme to raise funds to improve the the disputed levy is part of a system of aid products of the Danish pig industry was notified to the Commission under Article 93 of the EC Treaty (now 2 — Judgments in Case 51/74 Van der Hulst [1975] ECR 79, Article 88 EC) and was authorised by the paragraphs 34 and 35, in Case 46/76 Baubuis [1977] ECR 5, paragraph 25, and in Case 142/77 Larsen and Kjerulff latter. [1978] ECR 1543, paragraphs 20 to 27.

11. The questions which the Vestre Land- sret puts are as follows: — the levy in respect of pigs sold for slaughter on the domestic market becomes payable when they are delivered for slaughter, whereas '1. Must Article 9 of the EC Treaty (now, the levy in respect of pigs exported after amendment, Article 23 EC), live becomes payable at the time of Article 12 of the EC Treaty (now, after export; amendment, Article 25 EC) and Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam) or Article 95 of the EC Treaty (now, after amendment, Article 90 EC) be con- strued as meaning that those provi- sions, or that provision, preclude a public body in a Member State from — in the first case, the levy is payable charging a production levy in respect of by the producer, whereas in the pigs bred in the Member State in second case it is payable by the question and exported live to another exporter, irrespective of whether Member State, in the case where: he is also the producer, and;

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— the levy is not charged in respect of scheme concerned, that the national court pigs sold live on the domestic is fully acquainted with the method of market, and; analysis used by the Court for identifying the nature of a national charge for the purposes of either Article 9 et seq. or Article 95 of the EC Treaty.

15. Thus, since the national court has taken the trouble to establish carefully the char- 12. These questions in fact show, in the acteristics of the levy regarding which it details which they give regarding the levy seeks to determine whether it is permissible

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under Community law, the division of The first question powers between this Court and the national courts as laid down in Article 177 of the EC Treaty (now Article 234 EC) requires this Court to draft its response in the light of the matters which the national court 18. The Court has consistently held that, considers to have been established. 3 for the purpose of applying the Treaty, a tax cannot at the same time fall within the category of charges having equivalent effect and within that of internal taxation. 4

19. In intra-Community trade, the prohib- 16. If the parties to the main proceedings ition on charges having equivalent effect, are minded to challenge the analysis of the whether on imports or exports, is absolute national court, they are indeed free to do in the sense that, where a charge is of this so, using the national avenues of appeal type, its collection is quite simply pro- open to them, but this Court is not the hibited, whereas, for internal taxation, the proper place to pursue such a challenge. prohibition on collection relates only to that part of the tax which is discriminatory or protective; I shall therefore begin by examining whether the present case involves a charge having equivalent effect upon exports.

17. That point having been made, I can now move directly to examine the first 20. Firstly, it must be borne in mind that question, stating first of all that I shall very the Court has consistently held that: largely be guided by the Commission's observations, which I consider of great value, since — among the abundance of case-law relating to charges having equiv- alent effect and to internal taxation — they highlight the judgments given in those cases in which the specific circumstances 'any pecuniary charge, however small and lend themselves to a comparison with the whatever its designation and mode of Danish levy scheme submitted for examin- application, which is imposed unilaterally ation here. on domestic or foreign goods by reason of

23. If we now examine the disputed levy exclusively in the light of the criteria upheld 22. That is why the judgment in Case by those judgments, we have to note that its 24/68 states: nature is not immediately evident. Indeed, although it appears that the levy charged at the time of export has its counterpart in that charged on pigs delivered for slaughter on the Danish market, and we might thus consider that there is in Denmark a general 'it follows from Article 95 et seq. that the system of internal taxes levied on the concept of a charge having equivalent effect products of pig rearing, it is not evident does not include taxation which is imposed that this system applies in identical manner in the same way within a State on similar or to exported products and to products comparable domestic products, or at least intended for national consumption or for falls, in the absence of such products, further processing within Denmark. within the framework of general internal

6 — See paragraph 11. 5 — Case 24/68 Commission v Italy [1969] ECR 193, para- 7 — Case 132/78 Denkauit Loire [1979] ECR 1923. graph 9. 8 — See paragraph 8.

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24. Pigs delivered for slaughter in Denmark 28. The case-law of the Court gives an are subject to the levy only if, when unambiguous answer to this difficult ques- slaughtered and presented as carcasses, tion: in its judgment in Joined Cases 36/80 they are passed as fit for human consump- and 71/80, 9the Court held that a national tion, whereas exported pigs are subject to charge on livestock when delivered for the levy systematically, whether or not they export is not subject to the prohibition of are for slaughter and, if they are, without charges having equivalent effect to customs regard for the criterion of being declared fit duties on exports if it is applied system- for human consumption. atically and in accordance with the same criteria to non-exported products at the time of their delivery for slaughter.

conclusively upheld the approach being multiply ad infinitum the categories to be advocated here. 10 distinguished for charging purposes in order to create perfect equality in the burden of the levy regardless of the com- mercial policies pursued by those paying the levies.

31. If the view is taken on this basis that the Danish levy is payable on all pigs at the same marketing stage, the other points made by Mr Nygård do not justify rejecting 34. Likewise, while it is indeed unfortunate the classification as internal taxation. for Mr Nygård that the pigs which he exports are subsequently — when slaugh- tered in the importing Member State — liable to a charge of the same type, the case-law clearly and very logically pre- cludes any account being taken of such a charge for the purpose of determining the nature of the charge to which he is liable in 32. The Danish rules do avoid discrimi- Denmark. 11 nation as regards the amount of the charge, which depends on the weight category into which an animal falls, by means of an offset, for animals exported live, of the inevitable difference between a live animal and a carcass. 35. The same economic approach adopted in the case-law leads to the inference that it is in fact always the producer who will bear the weight of the charge since, whichever trader is legally liable, the selling price of an animal withdrawn from the national herd or — to take an expression used by 33. While Mr Nygård maintains that he the parties to the main proceedings — none the less suffers discrimination in so far removed from primary production will as he exports many animals of low weight obviously take account of the charges which will be fattened after export, levied when it is so withdrawn. whereas, in most cases, animals slaughtered in Denmark come within a much higher weight range, this difference in treatment results from his own economic decisions and not from any deliberately discrimina- tory structure of the Danish regulations, 36. Before classification as a charge having which cannot, in my view, be required to equivalent effect is rejected, however, a final test remains to be applied. The Court

39. However, although we must accept 42. From the information provided in the that the levy submitted for examination order for reference, the Fund supported by does count as internal taxation, this does the levy uses 40% of its budget for not mean that its collection is exempt from activities benefiting primary production, that is to say, all pigs produced within Denmark, and 60% of the budget for 12 — Case C-266/91 CELBI [1993] ECR I-4337, paragraph 19. activities relating to slaughter, to process-

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ing of the carcasses produced by Danish discriminatory nature of an internal charge slaughterhouses and to the promotion of does not have the effect of purely and sales, on both domestic and export mar- simply prohibiting its collection. kets, of pig meat and of processed products made from pigs slaughtered in Denmark.

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of the Treaty concerning, for example, 51. If authorisation by the Commission is internal taxation' and concludes that 'an 'immaterial' in regard to the lawfulness of authorisation by the Commission of a the levy, does it also make no difference as system of aids financed by charges cannot regards the powers of the national court? "protect" an infringement of Article 95 by those charges'.

52. In other words, does the national court, when faced with a national charge or tax, have authority to halt implementation even 48. I can only endorse that conclusion. if, in so doing, it halts the effects within the Since the economic operator derives direct national legal system of a Commission from the Treaty the right not to be subject decision authorising the system of aid, to a charge having equivalent effect or to including the financing thereof by levying discriminatory internal taxation, it is not that charge? In so doing, will it not necess- clear how the Commission can deprive him arily be adopting the same decision as if it of that right, on the ground that the charge were declaring the Commission decision or taxation is part of a system of aid on invalid? And does the national court have which it makes a favourable ruling as a authority to do so in the light of the whole. In no way does Article 93 of the principles laid down in Foto-Frost? 14 Treaty empower the Commission to restrict the effects of Article 9 et seq. or Article 95 of the Treaty.

53. I feel that this question merits consider- ation. Of course, for the question actually to arise, the Commission decision authoris- 49. The answer to the national court ing the national system of aid must relate to should therefore be that, since we are financing of the system. But that is indeed concerned with the lawfulness under Com- the case here, according to the Danish munity law of a charge having equivalent Government, which refers on this point to effect or of discriminatory internal tax- the letter of 28 October 1991 (SG ation, it is in fact 'immaterial' whether this (91)D/20129) sent to it by the Commission, forms part of a levy scheme notified to and and the question put by the Vestre Landsret authorised by the Commission pursuant to is indeed based on this assumption. Article 93 of the Treaty.

57. The Foto-Frost judgment is in fact based on, inter alia, the presumption of validity attaching to acts of the institutions, reserving to the Court of Justice the power to declare such acts invalid. 55. The case-law merely affirms that the same charge may fall within the scope of Article 9 et seq. or of Article 95 of the Treaty and at the same time be part of a system of aids as referred to in Article 92 of the Treaty and that it may therefore be examined under both aspects. 58. Is there a difference between a situation where a national court entertains doubts regarding a Commission decision which authorises not only the payment of aid but also the manner in which it is financed and 56. The national court will of course not a situation in which the national court is itself declare the Commission decision uncertain whether a Commission decision invalid, because it will be annulling an act requiring post-clearance recovery is valid? under national law, or at least halting its Should the Foto-Frost principles effects, either entirely •— if this is a charge expounded in connection with the latter having equivalent effect •—• or partially — situation not also apply to the former? I feel if it is taxation covered by Article 95 of the there is no point objecting that the national Treaty. But, in order to do this, the national court must be able to disregard the Com- court will have to overcome the obstacle of mission's authorisation in circumstances the authorisation given under Article 93 of like these, where the economic operator is the Treaty, and that is based on the fact invoking a Treaty article with direct effect, that, from the Commission's viewpoint, for we would then also have to accept that, there is no incompatibility with the com- where an individual is challenging a mon market. The national court will be national measure taken in application of a negating the effect of the authorisation regulation that he claims infringes the given by the Commission to the Member general principles of Community law, the State to levy a given charge and use it to national court should be able itself to finance a specific activity. Intellectually, declare that regulation to be invalid. moreover, given the primacy of Commu- Unless — and I dare not imagine this — nity law which unquestionably attaches to we were to hold that Article 95 of the

59. In fact, two solutions are open to us. 63. On the other hand, this would have the major drawback of upholding a fiction, because it would involve the pretence that the question facing the national court was entirely unrelated to any question of valid- ity of a Community measure. 60. Either we hold that strict limits should be imposed on the scope of the Foto-Frost principles, so that, in a situation such as that of the present case, where the national court is not required to make its own ruling on the validity of a measure of secondary law, that court is not required to make a 64. Personally, therefore, I prefer the sec- reference to the Court of Justice to be able ond solution; admittedly, it is stringent, but to halt the effects of that measure de facto. it is consistent with the Foto-Frost judg- ment and the demands which underlie it, and I believe that the national courts would fully understand it, as is shown by the fact that, although the Vestre Landsret had the answer to the first of its questions, it none the less made a reference to the Court of 61. Alternatively, we may hold that the Justice, because it was fully aware of the reasons stated in Foto-Frost for denying the implications of the second. national court any jurisdiction to rule that a measure of secondary law is invalid apply also in the present situation, inasmuch as a declaration that the national levy infringes Community law necessarily — if only implicitly — conveys a declaration that the authorisation to charge it, given by 65. In all events, this solution has the the Commission using the procedure in advantage — which I see as crucial — of Article 93 of the Treaty, is unlawful. avoiding the problems which could not fail to arise sooner or later if the power to consider whether an individual aspect of an authorised system of State aid can be allowed under the rules of the Treaty were exercised by any court other than the court 62. The benefit of the first solution would empowered to rule on the validity of the be that it does not require the national authorisation given by the Commission to court to refer to the Court of Justice the Member State to apply that system.

NYGÅRD

(2) The fact that a national levy is part of a system of aid authorised by the Commission under the rules on State aid is immaterial in regard to the applicability to that levy of the prohibitions laid down in Article 9 et seq. and Article 95 of the Treaty. However, where a national court takes the view that any of those prohibitions applies to a levy that has been so authorised, it is for that court to make a reference to the Court of Justice using the procedure in Article 177 of the EC Treaty (now Article 234 EC) in order that the latter may determine whether such application is well founded.

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