C-447/99

JUDGMENT OF 4. 7. 2001 — CASE C-447/99

JUDGMENT OF THE COURT (Second Chamber) 4 July 2001 *

In Case C-447/99,

Commission of the European Communities, represented by F. Benyon and S. Dragone, acting as Agents, with an address for service in Luxembourg,

applicant,

v

force Law No 537 of 24 December 1993, as amended by Law No 662 of 23 December 1996, and which provides for different departure taxes according to whether the flight in question is domestic or intra-Community, the Italian Republic has failed to fulfil its obligations under the combined provisions of Article 59 of the EC Treaty (now, after amendment, Article 49 EC) and Article 3(1) of Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes (OJ 1992 L 240, p. 8),

THE COURT (Second Chamber),

composed of: V. Skouris (Rapporteur), President of the Chamber, R. Schintgen and N. Colneric, Judges,

Advocate General: S. Alber, Registrar: R. Grass,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 6 March 2001,

The Community legislation

2 It is apparent from the first and second recitals in the preamble to Regulation No 2408/92 that its purpose is to lay down, in accordance with Article 8a of the I - 5210

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EC Treaty (now, after amendment, Article 18 EC), an air transport policy with a view to the progressive establishment of the internal market, which comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured.

3 Article 3(1) of Regulation No 2408/92 provides that:

'subject to [the] regulation, Community air carriers shall be permitted by the Member State(s) concerned to exercise traffic rights on routes within the Community.'

'The departure tax for passengers on international flights, provided for by Article 5 of Law No 324 of 5 May 1976, as amended, is hereby increased from ITL 15 154 to ITL 15 500.

The departure tax for passengers on domestic flights, provided for by Article 2 of Law No 316 of 2 October 1991, is hereby increased from ITL 5 919 to ITL 7 000.'

The precontentious procedure

6 By letter of formal notice of 23 December 1996, the Commission informed the Italian Republic that the distinction made by Article 5 of Law No 324 of 5 May 1976, as amended, between the departure tax for passengers travelling between I - 5212

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Italy and other Member States and that for passengers on domestic Italian flights was incompatible with the principle of the freedom to provide services enshrined in Articles 59 and 62 of the EC Treaty (the latter article was repealed by the Treaty of Amsterdam), with Regulation No 2408/92 and with the freedom granted by Article 8a of the Treaty to every citizen of the Union to move within the territory of the Member States.

10 The Italian Government does not dispute the Commission's complaint, but states that new national provisions are being prepared and that they will remove the distinction between intra-Community and domestic flights in so far as concerns departure tax, thus removing the grounds for complaint.

Findings of the Court

1 1 It must observed at the outset that, as the Court held at paragraph 32 of its judgment in Case C-361/98 Italy v Commission [2001] ECR I-385, the purpose of Regulation No 2408/92 is, amongst other things, to define the conditions for applying in the air transport sector the principle of the freedom to provide services which is enshrined, in particular, in Articles 59 and 61 (now Article 51 EC) of the EC Treaty, so that all matters of market access are dealt with in the same regulation.

12 Next, it must be borne in mind that the freedom enshrined in Article 59 precludes the application of any national legislation which has the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State (Case C-381/93 Commission v France [1994] ECR I-5145, paragraph 17). I - 5214

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1 3 Lastly, it must be remembered that, according to settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion (see, in particular, Case C-147/00 Commission v France [2001] ECR I-2387, paragraph 26).

On those grounds,

THE COURT (Second Chamber)

hereby:

1. Declares that, by maintaining in force Article 3 of the Decreto Ministeriale of 13 August 1998, which brings into force Law No 537 of 24 December 1993, as amended by Law No 662 of 23 December 1996, and which provides for different departure taxes according to whether the flight in question is domestic or intra-Community, the Italian Republic has failed to fulfil its obligations under Article 59 of the EC Treaty (now, after amendment, Article 49 EC) and Article 3(1) of Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes;

2. Orders the Italian Republic to pay the costs.

Skouris Schintgen Colneric