C-216/01

1. Provisions of the Treaty I -13622

2. Regulation (EEC) N o 2081/92 I-13622

3. Austro-Czechoslovak agreements I -13624

4. Acts following the breakup of Czechoslovakia I -13626

III — Facts and procedure I -13627

IV — Legal analysis I -13630

— Appraisal I-13634

(b) Protection of the designation 'Bud' in the light of Articles 28 EC and 30 EC I -13636

— Arguments of the parties I -13636

— Appraisal I -13638

C. Second question I -13640

1 — Original language: Italian.

1. In the present case the Court is called 2. The questions have arisen in connection upon to answer certain questions relating with a dispute between a brewery estab- to the protection of geographical indi- lished in the Czech Republic and an Aus- cations of source for foodstuffs. In this trian commercial company selling beer context it is also necessary to decide concerning the use by the latter of the whether an international agreement on the designation 'Bud' in respect of beer from protection of geographical indications con- the United States of America even though a cluded between a Member State and a number of agreements concluded between non-member country constitutes an agree- 1976 and 1981 between the Republic of ment concluded before the date of acces- Austria and the Czechoslovak Socialist sion of the Member State to the Commu- Republic (subsequently the Czech and Slo- nity for the purposes of Article 307 EC, vak Federative Republic) (hereinafter also also as regards the effects which that referred to as 'Czechoslovakia') reserve that agreement has between the Member State designation for persons established in Cze- in question and one of the States which choslovakia.

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II — Legal background patibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude.'

A. Community law

1. Provisions of the Treaty 2. Regulation (EEC) N o 2081/92

'The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the 6. This regulation was adopted in view of date of their accession, between one or the importance of agricultural production more Member States on the one hand, and and distribution to the Community econ- one or more third countries on the other, omy (first recital) and in particular to shall not be affected by the provisions of encourage the diversification of production this Treaty. and the promotion of quality products (second recital). To that end, it establishes a framework of Community rules for pro- tected indications relating to the origin of foodstuffs which replaces pre-existing To the extent that such agreements are not national rules, provides a more uniform compatible with this Treaty, the Member State or States concerned shall take all appropriate steps to eliminate the incom- 2 — OJ 1992 L 208, p. 1.

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approach and ensures fair competition — the quality or characteristics of (seventh recital). The scope of these rules which are essentially or exclusively is limited 'to certain agricultural products due to a particular geographical and foodstuffs for which a link between e n v i r o n m e n t with its inherent product or foodstuff characteristics and natural and human factors, and geographical origin exists' (ninth recital). the production, processing and preparation of which take place in the defined geographical area;

7. As stated in the preamble, the rules (b) geographical indication: means the introduced by the regulation provide for name of a region, a specific place or, the registration of two types of protected in exceptional cases, a country, used to indications, that is to say protected desig- describe an agricultural product or a nations of origin and protected geographi- foodstuff: cal indications (10th recital). In that respect Article 2(2) states that:

9. Under Article 12, the regulation may, on agreement done at Prague on 7 June 1979 certain conditions, apply to an agricultural (hereinafter: 'the implementing agree- product or foodstuff from a third country. 3 ment') 5 and, on the other, it guarantees In any event, this is 'without prejudice to for Czech and Slovak products the exclus- international agreements' (Article 12(1)). ive use of certain Czech and Slovak desig- nations of source specified in Annex B to the implementing agreement.

12. In particular, under Article 1 of the agreement the contracting parties under- Austro-Czechoslovak agreements take to take all the necessary measures to ensure effective protection against unfair competition for indications of source, des- ignations of origin and other designations referring to the source of the agricultural 10. For the purposes of this case, an agree- and industrial products listed in the agree- ment concluded in Vienna on 11 June 1976 ment itself and in the implementing agree- between the Republic of Austria and the ment. Czechoslovak Socialist Republic on the protection of designations referring to the source of agricultural and industrial prod- ucts (hereinafter: 'the Austro-Czechoslovak agreement') is also of importance. 4 13. Under Article 2 of the abovementioned agreement,

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the abovementioned designations may also among the designations reserved exclus- contain information on the quality of the ively for Czech beers: product concerned. These particular fea- tures of the product shall be determined solely or predominantly by geographical or human influences.' 6 '-Bud

— Bud jovický pivo 14. Article 3(1) provides that:

— Bud jovický pivo — Budvar

— '... the Czechoslovak designations listed in the agreement provided for in Article 6 shall in the Republic of — Bud jovický Budvar'. Austria be reserved exclusively for Czechoslovak products.'

20. In keeping with that declaration, Con- stitutional Law N o 4/1993 of the Czech (3) Paragraph 1 is also to be applied if the Republic subsequently confirmed that designations protected under the agreement '[t]he Czech Republic assumes the rights are used in translation or with a reference and obligations... under international law to the actual source or with additions such of the Czech and Slovak Federative Repub- as "style", "type", "as produced in", lic on the date of its dissolution... .' 9 "imitation" or the like.' 7

22. The Czech brewery Budějovický Bud­ var 11 (hereinafter: 'the Budvar brewery' or simply 'Budvar'), which is established in the Bohemian city of České Bud jovice, Budweis in German 12 (Czech Republic), 19. Agreement concluded at Vienna on exports 'Budweiser Budvar' 13 beer to vari­ 11 June 1976 between the Republic of ous countries, including Austria. Austria and the Czechoslovak Socialist Republic on the protection of indications of source, designations of origin and other designations referring to the source of agricultural and industrial products, and protocol of 30 November 1977 (BGBl. N o 75/1981) 23. Rudolf Ammersin G m b H (hereinafter: 'Ammersin'), which is established in Vienna (Austria), carries on a wholesale business. It markets inter alia a beer manu­ 10 — Unofficial translation. 11 — I t s full corporate name is 'Bud jovick Budvar, národní podnik, Budweiser Budvar, National Corporation, Bud­ weiser Budvar, Entreprise Nationale' and means 'Bud Brewery of Budweis, national undertaking'. The present brewery is the result of the merger of the company 'Budweiser Brauberechtigten Bürgerliches Brauhaus', founded in Budweis in 1795, and the company 'Česky akciov pivovar v C. Budjovicích', also called 'Budvar Tschechische Aktien-Brauerei', also founded in Budweis in 1895. Following nationalisation in 1948 the two under­ takings were amalgamated into a single national under­ taking, namely 'Jihočeské pivovary', from which the present company emerged in 1966. 26. Agreement implementing the Agree­ 12 — Hereinafter: 'Budweis'. Ever since the sixteenth century a flourishing brewing industry has existed in the city of ment between the Republic of Austria and Budweis, which first belonged to the Kingdom of Bohemia and then, until 1918, to the Austro-Hungarian Empire. the Czechoslovak Socialist Republic on the 13 — Since 1795 the companies which merged to form the protection of indications of source, desig­ present Budvar brewery have produced and marketed beer bearing the indications 'Budweis', 'Budweis Bier' (in Czech nations of origin and other designations 'Bud jovické pivo', meaning 'beer of Budweis'), 'Budvar' referring to the source of agricultural and or 'Budbräu' (meaning 'Bud brewery'; in Czech the term 'var' is the equivalent of the German term 'Bräu' and industrial products (BGBl. N o 76/1981). means 'brew').

24. By act of 22 July 1999, the Budvar 26. Since the interlocutory proceedings brewery brought proceedings before the have been completed, the Handelsgericht, Handelsgericht (Commercial Court), Vienna, must now examine the substance Vienna (Austria), requesting that Ammer- of the case. sin be ordered to refrain from using, in the course of its commercial activities relating to beer or similar products, the designation 'Bud' or similar designations likely to give rise to confusion save where Budvar prod- ucts were concerned. The applicant based its application on infringement of trade 27. However, I should note that in parallel mark rights 1 5 and, in so far as is relevant proceedings against the Austrian importer here, on unlawful use of the indications of of the competing American beer, initially source protected by the 1977 Austro-Cze- before the Landgericht, Salzburg, and sub- choslovak agreement. sequently before the Oberlandesgericht, Linz, Budvar had already sought a similar injunction based on the same grounds and obtained from the court the order sought, which was finally upheld by order of the O G H of 1 February 2000. 1 6 In that order, in so far as is relevant here, the O G H held 25. The order sought was granted by the that the importation and marketing of the Handelsgericht by order of 15 October beer ' A m e r i c a n Bud' c o n s t i t u t e d an 1999, and subsequently upheld by the infringement of the Czech designation of Oberlandesgericht (Higher Regional origin 'Bud' which was protected under the Court), Vienna. Leave to appeal on a point Austro-Czechoslovak agreement, and also of law to the Oberster Gerichtshof (Su- stated that the injunction thus granted did not infringe the EC Treaty. 14 — The beer in question is produced by the American brewery Anheuser-Busch, which is established in Saint Louis. Since 1876 the Bavarian Brewery, which subsequently became Anheuser-Busch, is said to have placed on the local market a beer bearing the designation 'Budweiser' and sub- sequently also in the abbreviated form 'Bud'. As far as can be discerned, in 1911 Anheuser-Busch finally obtained from the breweries operating in Budweis at that time authorisation to use the designation on non-European 28. As it was not directly bound by the markets. Finally, in 1939 it obtained from the Czech breweries the exclusive right to use the designation judgment of the Supreme Court in these 'Budweiser' on the American market. However, after the Second World War Anheuser-Busch began exporting its proceedings and had certain doubts as to beer also to Europe (see, as regards this information, the the compatibility with Community law of order of the Austrian O G H cited in footnote 16 below and the judgment of the Swiss Federal Court of 15 February 1999, BGE 125 III, p. 193). 15 — It should be noted that the Budvar brewery registered in various countries, including Austria, various trade marks 16 — O G H , order of 1 February 2002, 4 Ob 13/00s. The text is including 'Budvar', 'Budweiser', 'Budweiser Budvar', 'Bud- to be found in Bundeskanzleramt — Rechtsinformations- weiser Budbräu', and 'Bud'. system, http://www.ris.bka.gv.at.

' 1 . Is the application of a provision of a bilateral agreement concluded between a Member State and a non-member country, under which a simple/indirect geographical indication which in the 4. D o e s t h e s e c o n d p a r a g r a p h of country of origin is the name neither of Article 307 EC oblige the Member a region nor a place nor a country is State to interpret such a bilateral agree- accorded the absolute p r o t e c t i o n , ment, concluded between that Member regardless of any misleading, of a State and a n o n - m e m b e r c o u n t r y qualified g e o g r a p h i c a l i n d i c a t i o n before the Member State's accession within the meaning of Regulation to the EU, in conformity with Com- No 2081/92 compatible with munity law as stated in Article 28 EC Article 28 EC a n d / o r Regulation and/or Regulation N o 2081/92, so that N o 2081/92, if on application of that the protection laid down therein for a provision the import of a product simple/indirect geographical indication which is lawfully put on the market which in the country of origin is the in another Member State may be pre- name neither of a region nor a place vented? nor a country comprises merely pro- tection against misleading and not the absolute protection of a qualified geo- graphical indication within the mean- ing of Regulation N o 2081/92?'

2. Does this apply also where the geo- graphical indication which in the country of origin is the name neither of a region nor a place nor a country is not understood in the country of origin 29. In the proceedings before the Court as a geographical designation for a observations were submitted by the appli- specific product, and also not as a cant and the defendant in the main pro- simple or indirect geographical indi- ceedings, the Austrian, German and French cation? Governments and the Commission.

3 1 . 1 should first point out that, in the view of Budvar, the questions referred in fact relate to the application of the agreements in force between a Member State and a non-member country. Budvar contends that therefore the Court is being asked to interpret not provisions of the Community 34. The Commission considers that the law but international agreements trans- national court is referring to the Court a posed into the national law of a Member question concerning the interpretation of State, which it does not have jurisdiction to Community law solely in order to rule out do. a possible interpretation of national law which that court does not in fact share, that is to say the interpretation placed on the Austro-Czechoslovak agreement by the O G H in the abovementioned order of 1 February 2000 (see paragraph 27 above) 3 2 . In m y v i e w , t h i s o b j e c t i o n is in accordance with which the Austro-Czech unfounded. It is true that the resolution of agreement accords absolute protection to the dispute before the national court is the designation 'Bud', regardless of whether linked to the application of the agreements or not it may give rise to a likelihood of in force between Austria and the Czech confusion.

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35. However, I consider that this objection 38. In those circumstances, I consider that of inadmissibility is likewise unfounded. there can be no doubt as to the necessity and relevance of the questions referred. Therefore, I consider that the objection is unfounded.

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(a) Protection of the designation 'Bud' in 43. In these circumstances, I do not con- the light of Regulation No 2081/92 sider that the questions referred to the Court by the national court are hypotheti- cal or abstract in nature and therefore, in my view, there is no reason to doubt the admissibility of this question.

1. Admissibility

2. Substance

4 1 . First of all, the Austrian Government observes, as a preliminary point, that this — Arguments of the parties question is inadmissible in so far as it relates to Regulation N o 2081/92, since it can in no way be inferred from the order of the national court that the designations at issue in the present case have been, or are 44. As regards the substance, only Ammer- about to be, registered for the purposes of sin, the defendant in the main proceedings, the abovementioned regulation, so that the proposes that the question be answered in question of their compatibility with those the negative since it considers that Regu- rules is purely abstract and hypothetical. lation N o 2081/92 precludes national rules such as those applicable in the present case which accord protection, regardless of the likelihood of confusion, to an indirect geographical indication and which do not make protection of that designation subject to the existence of a direct link between the product and its qualities.

46. Ammersin goes on to state that the uniform rules thus laid down by the regulation cannot coexist with national 50. Budvar primarily disputes the premises protection which is also absolute but sub- from which the national court appears to ject to less stringent conditions, since start and states that the designation 'Bud' is otherwise the purposes of the Community a 'direct' geographical indication, in that it rules, that is to say the promotion of the is an abbreviation of the name of the quality of agricultural products and fair Bohemian city of Budweis, and a 'qualified' competition within the common market, one since it is capable of conferring on the will be compromised. beer the worldwide reputation of the brew- ing tradition of this city of Budweis. In these circumstances, the Czech brewery goes on to state, Regulation N o 2081/92 does not preclude protection, by national rules, of a qualified geographical indication of a non-member country.

53. The German Government also con- siders that regulation does not, in any event, preclude protection of the indication 'Bud', regardless of whether it must be 55. I now come to the appraisal of the described as a simple geographical indi- positions set out by the parties. I note cation or whether, on the contrary, it primarily that Budvar has raised the prob- constitutes a qualified indication. In both lem of the classification of the designation cases it falls outside the scope of the 'Bud' within the meaning of the Austro- regulation. In the first case, because such Czechoslovak agreement and disputes the scope is limited to qualified geographical classification made by the national court indications; in the second, because the (see paragraph 50 above). regulation applies only to qualified indi- cations of goods from Member States and cannot be applied to designations of prod- ucts from non-member countries, except on the conditions laid down in Article 12, which, however, are not satisfied in 56. On close consideration, this classifi- relation to the Czech Republic. cation requires an interpretation of the rule by which the relevant provision of the Austro-Czechoslovak agreement was implemented in Austrian law. However, according to the established case-law, 'under the system of judicial cooperation established by Article 177 of the Treaty, the interpretation of national rules is a matter 54. Finally, the French Government also for the national courts and not for the concludes that this question should be Court of Justice', 1 9 as, moreover, it is for answered in the affirmative. In particular, these courts and not the Court of Justice to it contends that Article 12 of the regulation interpret the provisions of bilateral agree- is specifically without prejudice to an ments 'which bind Member States outside international agreement such as the Austro- the framework of Community law'. 2 0 Czechoslovak agreement. By laying down the rules on geographical indications relat- ing to products originating in non-member 19 — See, in very clear terms, Case C-37/92 Vanacker [1993] ECR I-4947, paragraph 7. countries, this provision specifically safe- 20 — See Case 130/73 Vandewegbe and Others [1973] guards international agreements and thus ECR 1329, paragraph 2.

57. Therefore, it must be held that, in 61. On that occasion the Court held pri- accordance with distribution of jurisdic- marily that, according to Article 2(2)(b), tions effected by Article 234 EC, it is Regulation N o 2081/92 'only concerns essentially for the national court to classify geographical indications in respect of the nature of the designation in question in which there is a direct link between both the light of the Austro-Czechoslovak agree- a specific quality, reputation or other char- ment, and the interpretation placed thereon acteristic of the product and its specific by that court cannot be called into question geographical origin', 2 1 and therefore it is before the Court of Justice. 'common ground that simple geographical indications of source, in the case of which, in the terms used by the national court in its question, there is no link between the characteristics of the product and its geo- graphical provenance, do not fall within 58. Therefore, here I will merely observe that definition and are not therefore pro- that, according to the actual wording of the tected under Regulation N o 2081/92'. 2 2 question referred for a preliminary ruling, That having been said, it concluded that the national court classified the designation 'there is nothing in Regulation N o 2081/92 in question as a 'simple' and 'indirect' to indicate that such geographical indi- designation, and it is on the basis of this cations of source cannot be protected under premiss that the compatibility of the rules the national legislation of a Member of the agreement in question with Regu- State', 2 3 and pointed out in particular that lation N o 2081/92 must be assessed. 'the purpose of Regulation N o 2081/92 cannot be undermined by the application, alongside that regulation, of national rules for the protection of geographical indi- cations of source which do not fall within its scope'. 24 59. That having been said, I should point out immediately that the question raised by the national court must, in my view, be answered in the affirmative since I con- sider, unlike Ammersin and in agreement with all the other parties, with whose arguments I essentially concur, that Regu- lation N o 2081/92 does not preclude main- tenance of absolute protection of a simple indication as provided for in the Austro- Czechoslovak agreement. 62. I consider that it is easy to find the answer to the question referred by the

— Arguments of the parties

63. As regards the compatibility of the 66. As the case-law of the Court has held, rules laid down in the Austro-Czechoslovak the specific purpose of protection of geo- agreement with Articles 28 EC and 30 EC, graphical indications lies in guaranteeing no one doubts that the protection of a that the use of the name of a place is geographical designation constitutes, at reserved for the producers established in least potentially, a measure having an that place, but only where the designation equivalent effect to a quantitative restric- enjoys a high reputation amongst con- tion with the meaning of Article 28 EC. On sumers. However, Ammersin goes on to account of the differences in the relevant state, the designation in question is not the national legislations such protection can name of a place and does not enjoy any hinder the importation of products which reputation amongst consumers, and there- have been placed on the market lawfully in fore protection thereof cannot be justified other Member States. under Article 30 EC.

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68. As regards the other parties, I should first point out that, in the view of Budvar, the dispute before the national court does not fall within the scope of Article 28 EC since the beer marketed by Ammersin is imported from a non-member country, namely the United States of America, and there is no connection with the intra-Com- munity trade in goods. 71. The fact that 'Bud' may constitute a 'simple' designation of source has no bear­ ing on the answer to be given to the national court. The specific purpose of protection of a geographical indication consists in preventing producers not estab­ lished in the place to which the designation refers from wrongfully exploiting the actual or even merely potential reputation of that 69. As to the substance, Budvar, the Ger­ designation to the detriment of the pro­ man and Austrian Governments, and the ducers who are established in that place. To Commission consider that the protection that end, the existence of a direct link by a Member State of a geographical between the qualities of the product and its indication such as 'Bud' is justified on origin cannot therefore be regarded as an grounds relating to the protection of indus­ essential condition of protection. trial and commercial property within the meaning of Article 30 EC despite the fact that it constitutes a possible obstacle to the 25 — Case C-3/91 Exportur [1992] ECR I-5529, paragraph 39, and Case C-87/97 Consorzio per la tutela del formaggio movement of goods between the Member Gorgonzola [1999] ECR I-1301, paragraph 20. States. 26 — Exportur, cited above, paragraphs 28, 37 and 38.

73. I now come to the appraisal of the positions which have emerged from the proceedings. I should observe as a prelimi- nary point that, as Article 23(2) EC expressly provides and as the Court has had the opportunity to confirm, the pro- hibition on quantitative restrictions in intra-Community trade provided for in Article 28 EC applies only to goods orig- 76. The main proceedings relate to the inating in Member States and to goods protection accorded by a Member State, w h i c h , a l t h o u g h o r i g i n a t i n g in n o n - namely Austria, to a geographical desig- member countries, are put into free circu- nation of a non-member country, namely lation in a Member State. 2 7 the Czech Republic, which does not enjoy uniform Community protection under the abovementioned Regulation N o 2081/92. 27 — See, inter alia, Joined Cases 51/71 to 54/71 International Fruit Company and Others [1971] ECR 1107, paragraphs 8 to 10, and Case 41/76 Donckerwolcke and Schou [1976] ECR 1921, paragraph 17. 28 — See Case 8/74 Dassonville [1974] ECR 837, paragraph 5.

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83. There is no doubt that the Austro- Czechoslovak agreement pursues an ident- ical objective, since it aims to prevent

29 — In that case it was the Convention between the French Republic and the Spanish State on the protection of 80. The Court has already had an oppor- designations of origin, indications of provenance and tunity, in Exportur, to examine the ques- names of certain products, signed in Madrid on 2 7 June 1973. tion of the compatibility with the Treaty of 30 — Exportur, cited above, paragraph 37. the protection of simple geographical des- 31 — Exportur, cited above, paragraph 37.

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87. All the parties agree that this question should be answered in the affirmative because if there is no link between the indication in question and the place of origin of the products such a measure would constitute a quantitative restriction contrary to Article 28 EC and would not be 85. I therefore propose that the Court justifiable under Article 30 EC or any other answer this question to the effect that provision. Articles 28 EC and 30 EC do not preclude the application of a bilateral agreement between a Member State and a non- member country which grants absolute protection to a geographical indication which, although it is not the name of a specific region or place of the non-member country, designates a product originating in 88. I also consider that there is no other a specific region or place in that country possible answer, since in such a situation it without, however, implying any particular is not possible to rely on the justification links between the origin of the product and relating to the protection of industrial and its qualities, provided that that designation commercial p r o p e r t y provided for in has not become generic in the country of Article 30 EC because in reality the desig- origin at the time of the entry into force of nation in question can in no way be placed the agreement or subsequently. in the category of geographical indications.

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32 — Exportur, cited above, paragraph 37. 96. In my view, it is undeniable that the 33 — Regulation No 2081/92, Article 3. designation 'Bud' is, when used in relation

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to beer, capable of evoking the Bohemian D. Third question origin of the product by associating it with the city of Budweis. It is sufficient to think of the business name of the renowned Czech brewery to be aware of that — 'Budweiser Budvar', where Budweiser is the complete (and grammatically correct) geo- graphical indication of the city of Budweis and 'Budvar' is a play on words which (a) Arguments of the parties combines the first of the syllables which make up the name of this city (Bud) with the Czech suffix 'brew' (var).

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101. The Austrian and German Govern- which the original contracting party ceased ments and the Commission observe that to exist, and 31 July 1997, the date on general international law provides for the which the succession in favour of the Czech automatic succession of States emerging Republic took place by virtue of the from the dissolution of a previous State in declaration by the Bundeskanzler. respect of the bilateral agreements con- cluded by the latter. The Austrian Govern- ment in particular emphasises that the international custom in this regard was codified in Article 34(1) of the 1978 Vienna Convention on Succession of States in 104. The defendant in the main proceed- respect of Treaties, which contains pre- ings considers that at the time Czechoslo- cisely the rule on automatic succession. 3 5 vakia was dissolved general international law did not require the automatic succes- sion of the Czech Republic in respect of the agreement between Austria and Czechoslo- vakia. Furthermore, prior to the above- mentioned declaration by the Bundesk- anzler in 1997, the practice in Austrian international relations had always followed 102. Both Budvar and the French Govern- the tabula rasa principle, that is to say the ment go on to observe that the Austro- principle whereby, in the event of the Czechoslovak agreement does not merely dissolution of a State, the agreements con- enable Austria to protect the indications for cluded by it terminate and there is no which the agreement makes provision, but succession other than under an agreement also places it under an international obli- between the new State and other original gation to do so. Therefore, the entry into contracting State (in this case Austria). force of the EC Treaty in respect of Austria does not preclude the application of this international agreement, as provided for in the first paragraph of Article 307 EC.

106. Given the circumstances of the present case, and in particular the dissolution of the Czech and Slovak Federative Republic on 1 January 1993, the rules of international law governing the fate of treaties in the 109. However, as we know, this finding event that one of the contracting parties is does not rule out the possibility that the dissolved must be established before an provisions contained in the convention in answer is given to the abovementioned question, as in general in conventions question. codifying international law, could be bind- ing even on States which have not ratified them. In the view of those who draw up and adopt such conventions, they consti- tute, to a large extent, the mere codification of general international law in force, and the convention at issue is no exception. 3 7 Therefore, the fact that Austria is not party Vienna Convention on Succession of States thereto may not be of decisive importance in respect of Treaties if it is shown that the provisions of the convention relevant to this case merely recognise pre-existing principles of inter- national law. 107. As is evident, the issue centres on the 1978 Vienna Convention on Succession of States in respect of Treaties, which has been relied on by certain parties and disputed by others.

110. Therefore, it is necessary to examine the content of these provisions to establish 108. I should note primarily that the whether they merely reflect such principles abovementioned convention only entered into force in 1996 in respect of a rather 37 — I should note that the convention is the product of draft articles drawn up within the International Law Commis- sion of the United Nations and then finalised by an ad hoc 36 — See, inter alia, Joined Cases C-364/95 and C-365/95 T. international conference convened by the UN General Port [1998] ECR I-1023, paragraph 6 1 . Assembly.

116. This view is supported primarily by the actual travaux préparatoires for the convention drawn up within the Inter- national Law Commission. In this regard I should note that the special rapporteur 113. In respect of all other cases in which a new State is formed, either as a result of its secession or dismemberment, Article 34 39 — Article 34 provides as follows: lays down a contrary rule which follows ' 1 . When a part or parts of the territory of a State separate to form one or more States, whether or not the principle of the continuity of inter- the predecessor State continues to exist: national treaty obligations and provides for (a) any treaty in force at the date of the succession of States in respect of the entire territory of the the automatic succession of the new State predecessor State continues in force in respect of each successor State so formed; (b) any treaty in force at the date of the succession of States in respect only of that part of the territory of the predecessor State which has become a successor 38 — Article 24 is worded as follows: State continues in force in respect of that successor 'A bilateral treaty which at the date of a succession of State alone. States was in force in respect of the territory to which the 2. Paragraph 1 does not apply if: succession of States relates is considered as being in force (a) the States concerned otherwise agree; or between a newly independent State and the other State (b) it appears from the treaty or is otherwise established party when: that the application of the treaty in respect of the (a) they expressly so agree; or successor State would be incompatible with the object (b) by reason of their conduct they are to be considered as and purpose of the treaty or would radically change having so agreed.' the conditions for its operation.'

42 — See, to this effect, W.E. Hall, A Treatise on International Law, A.P. Higgins Ed., Oxford, 8th Ed. 1924 (reprint 1979, p. 114 et seq.); L. Oppenheim, International Law, A Treatise, H . Lauterpacht Ed., Vol. I, London, 8th Ed. 117. I should add that the academic 1955, p. 158 et seq., in particular p. 167; Akademie der Wissenschaften der UdSSR, Völkerrecht, Hamburg 1960, opinion prevalent at the time of the codifi- p. 122 et seq. (albeit with different rules for cases of cation also tended to exclude the principle revolutionary changes, States liberated from colonial rule and for the other cases); G. Balladore Pallien, Diritto of automatic succession and as a rule gave Internazionale Pubblico, 8th Ed. Milan, 1962, p. 224 et seq.; D.P. O'Connell, State Succession in Municipal Law preference to the tabula rasa principle, and International Law, Vol. II, Cambridge, 1967, p. 88 et albeit w i t h significant exceptions in seq. (emphasising, however, the particular nature of situations of 'evolutionary independence'); T. Treves, 'La relations to particular types of agreement continuità dei trattati e i nuovi Stati indipendenti', in Comunicazioni e Studi XIII, 1969, p. 303 et seq.; O. Udokang, Succession of New States to International Treaties, Dobbs Ferry, New York 1972, pp. 412 to 415; D. Nguyen Quoc, Droit international Public, Paris 1975, 40 — See Article 21 of the draft articles in 'Fifth report on p. 4 3 1 . succession in respect of treaties by Sir Humphrey Waldock, 43 — See, to this effect, M . Sahw, International Law, 4th Ed., Special Rapporteur', Yearbook of the International Law Cambridge, 1997, p. 686 et seq.; I. Brownlie, Principles of Commission, 1972, volume II, New York, 1974, p. 39 et Public International Law, 5th Éd., Oxford, 1998, pp. 650, seq. 663; S. Rosenne, 'Automatic Treaty Succession', in 41 — See Articles 20 and 21 of the draft articles in 'International J. Klabbers, R. Lefeber, Essays on the Law of Treaties, Law Commission, 1191st meeting', Yearbook of the The Hague, 1998, p. 99; K. Doehring, Völkerrecht, International Law Commission, 1972, volume I, New Heidelberg, 1999, p. 75; B. Conforti, Diritto Inter- York, 1974, p. 272 et seq. nazionale, Naples, 2002, p. 118 et seq.

— The Czech and Slovak Republics 44 — It took a full eighteen years to obtain the fifteen ratifications necessary for the entry into force of the convention and, moreover, the dismemberment of one of the States that had ratified it, namely the former Yugosla­ via. It was precisely the declarations of succession by the States born of this dismemberment, the final one being that of Macedonia on 7 October 1996, which 'raiseď the number of ratifications, thus bringing about the entry into force of the convention. Furthermore, only seventy of the approximately one hundred and sixty States in existence at 123. Firstly, it should be noted that both that time were represented at the diplomatic conference which adopted the text thereof, and of those seventy States the States emerging from the dissolution of only twenty signed the act. the Czech and Slovak Federative Republic

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manifested, by general declarations of 126. (a) In the case of the breakup of the principle, their intention to succeed in Soviet Union, note should be taken in respect of the treaties concluded by the particular of the Alma Ata Declaration of predecessor State. The official declarations 21 December 1991 in which the States by the two Parliaments at the dawn of which had become members of the Com- independence 4 5 and the abovementioned monwealth of Independent States stated Czech constitutional law N o 4/1993 4 6 are that they would 'guarantee, in accordance explicit in this regard. with their constitutional procedures, the fulfilment of international obligations stemming from the agreements concluded by the former Union of Soviet Socialist Republics.' 4 7

4 7 — Unofficial translation. An English translation is to be found in 21 ILM (1992), p. 149. 45 — As regards the declaration of the Czech National Council, 48 — See Association de Droit International, 'Rapport prélimi- see paragraph 20 above. As regards the equivalent naire sur la succession d'États en matière de traités', cited declaration by the Slovak National Council, see Associ- above, pp. 675 and 684; also Långström, 'The Dissolution ation de Droit International, 'Rapport préliminaire sur la of the Soviet Union in the Light of the 1978 Vienna succession d'États en matière de traités', in The Inter- Convention on Succession of States in Respect of Treaties', national Law Association, Report of the Sixty-Seventh in Eisemann, Koskenniemi, La succession d'États: la Conference (Helsinki), London 1996, p. 670. codification à l'épreuve des faits, Académie de Droit 46 — See paragraph 20 above. International de la Haye, The Hague 2000, p. 773.

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131. When they gained their independence, 50 — As regards Croatia, see Article 33 of the Law of 26 July 1991 on international treaties, which makes succession in Croatia and Slovenia in particular openly respect of treaties concluded by the former Yugoslavia subject to their conformity with 'the Constitution or the supported the principle of succession in Croatian legal system', cited by Ortega Terol, op. cit., respect of Yugoslav treaties, 4 9 but they too p. 906. See also Association de droit international, 'Rapport préliminaire sur la succession d'États en matière sought to m o d e r a t e this principle in de traités', cited above, p. 685. 51 — As regards Slovenia, see Association de Droit Inter- national, 'Rapport préliminaire sur la succession d'États en matière de traités', cited above, p. 685, and Ortega Terol, op. cit., p. 905 et seq. 49 — See Article 3 of the Slovenian constitution, cited by Koskenniemi, 'Report of the Director of Studies of the 52 — See Association de Droit International, 'Rapport prélimi- English-speaking Section of the Centre', in Eisemann, naire sur la succession d'États en matière de traités', cited Koskenniemi, op. cit., p. 73, and the Declaration of above, p. 689. Independence of the Republic of Croatia, cited by Ortega 53 — See Dalton, 'National Treaty Law and Practice: United Terol, 'The Bursting of Yugoslavia: An Approach to States', in American Society of International Law, Practice Regarding State Succession', in Eisemann, Kos- National Treaty Law and Practice (edited by Leigh, kenniemi, op. cit., p. 906. Blakeslee, Ederington), Washington, 1999.

137. Firstly, as regards Italy, although Government practice appears, as a rule, to follow the principle of automatic succes- sion, 5 5 the case-law appears instead to hold that a confirmatory agreement or a unilat- 135. I should observe that the practice of eral declaration of succession on the part of the Community institutions also follows the new State is necessary, at least in this principle, as is demonstrated in par- respect of particular categories of treaty, ticular by Protocol 8 of the Association such as those relating to extradition. 5 6 Agreement between the Community and the Czech Republic on the succession of the Czech Republic in respect of the exchanges of letters between the Community and Czechoslovakia concerning transit and land transport infrastructure. 5 4 Article 1 of this protocol provides that '[t]he Community 138. Note should also be taken of the on the one hand and the Czech Republic on approach adopted by the United Kingdom the other hand assume all rights and in respect of the Czech and Slovak Repub- obligations of the Community on the one lics. The letter by which the British Prime hand and the former Czech and Slovak Minister communicated the formal recog- Federal Republic on the other hand con- nition of the two new States to the respect- tained in the aforementioned exchanges of ive Czech and Slovak Governments con- letters', having regard to the fact that, as firms the British view that the treaties the preamble notes, 'the Czech Republic concluded previously between the United

done at Rome on 18 February 1983 (GURI 3 May 1995, N o 101). Both these acts clearly presuppose that there has 54 — Europe Agreement establishing an association between the been succession in relation to the treaties which are European Communities and their Member States, of the amended or suspended. one part, and the Czech Republic, of the other part, 56 — See Corte d'appello di Roma, 17 October 1980, in Riv. dir. Protocol 8 on the succession of the Czech Republic in int. 1980, p. 882; Corte d'appello di Torino, 2 July 1993, respect of the exchanges of letters between the European Riv. dir. int. 1994, p. 197; Corte di cassazione, VI sez. Economic Community (Community) and the Czech and penale, 6 July 1995, N o 2828, Jadranko, Cass. Pen. 1996,

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K i n g d o m and C z e c h o s l o v a k i a w o u l d 140. Furthermore, I consider this to be, remain in force 'as appropriate'. 5 7 In beyond the declarations, also the extent of addition to the clear recognition of the Austrian practice, of which, however, principle of the continuation of inter- divergent interpretations have been put national treaty obligations, that clarifica- forward in this case (see paragraphs 101 tion demonstrates the intention to preserve and 103 to 104 above). a certain latitude in dealing with the matter of succession which does not involve rigid automatism.

141. It follows from the case-law of the Austrian O G H , both before and after Austria's entry into the Community, that the rejection of automatic succession — which constitutes the traditional Austrian position 5 9 and which Ammersin has 139. The practice of France and Switzer- emphasised — does not mean rejection of land is also distinguished by a cautious the principle of the continuity of inter- approach which, although taking the prin- national treaty obligations because, accord- ciple of the continuation of international ing to that case-law, there is no legal void treaty obligations as a basis, makes defini- during the period necessary to conduct tive succession subject to the positive out- negotiations on the succession and the come of negotiations to be held with the agreements continue to be applied by Aus- new State, and thus excludes any auto- tria. 6 0 matism. 5 8

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ated — but only in respect of the future — (see paragraphs 19 and 20 above) and the a trade agreement between Austria and Austrian declaration contained in the 1997 Czechoslovakia. 6 1 communication of the Bundeskanzler.

145. Therefore, the fact that Austria did not explicitly confirm that the agreement Legislative principle applicable to the pres- and the associated instruments remained in ent case force until after Austria's entry into the Community cannot, in my view, have any bearing on the application of the first paragraph of Article 307 EC to that agree- ment and the associated instruments. 143. Consequently, I consider that the examination of the practice both of the new States and of the contracting third States confirms the view set out above (paragraph 122) that a customary rule based on the principle of automatic succes- 146. I therefore propose that the Court sion has now been established, albeit with answer the third question to the effect that less rigid contents than those which follow the rules laid down in the Austro-Czecho- from Article 34 of the Vienna Convention, slovak agreement are covered by the first to the effect that it does not operate if one paragraph of Article 307 EC, and con- of the two States affected by the succession sequently prevail over any provisions to the phenomenon has expressed an intention to contrary of Community law, despite the the contrary. fact that Austria did not officially announce the succession of States in respect of the A u s t r o - C z e c h o s l o v a k a g r e e m e n t until 1997, after Austria's entry into the Com- munity.

148. The parties do not really differ on this question. Apart from the Commission, which does not adopt any position in this 152. Consequently, when placing on the regard, all the parties essentially consider provisions contained in such international that an international treaty concluded by a treaties an interpretation which is as far as Member State before its accession to the possible in conformity with Community Community must be interpreted, as far as law, the national court may not go beyond possible, in such a way as to guarantee the limits laid down by the rules of general fulfilment of the Community obligations of international law on the interpretation of the Member State concerned. However, treaties, in order not to undermine the this presupposes that the provisions of the practical effect of the first paragraph of treaty in question are ambiguous and lend Article 307 EC. In particular, a treaty themselves to being interpreted in such a provision must be primarily interpreted 'in way as to ensure conformity with the EC good faith in accordance with the ordinary Treaty. meaning to be given to the terms of the treaty in their context and in the light of its object and purpose', as Article 31 of the Vienna Convention on the Law of Treaties provides. 6 2

149. I concur fully with these observations.

153. Only if these criteria do not enable the meaning of the treaty text to be established with certainty will there be any real scope for a 'compatible' interpretation under the second paragraph of Article 307 EC. In that case, from among several possible inter- pretations of the treaty text, the contracting 150. I consider that an interpretation in Member State will have to give preference conformity with substantive Community to that which is most consistent with its law is necessary where a provision is Community obligations. applied such as the second paragraph of Article 307 EC which specifically imple- ments, in this regard, the principle of loyal 62 — Article 31(1) of the Vienna Convention on the Law of cooperation laid down in Article 10 EC. Treaties, done at Vienna on 23 May 1969.

V — Conclusion

157. In the light of the foregoing considerations I propose that the Court answer the questions referred by the Handelsgericht, Vienna, to the effect that:

(1) Regulation N o 2081/92 does not preclude the application of a bilateral agreement between a Member State and a non-member country which grants

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absolute protection to a geographical indication which, although it is not the name of a specific region or place of the non-member country, designates a product originating in a specific region or place in that country without, however, implying any particular links between the origin of the product and its qualities.

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