CJEC, June 19, 1973, No 77-72

THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,

1. By order dated 20 November 1972, received at the court registry on 27 November 1972, the Pretore of Conegliano referred several questions, under Article 177 of the EEC Treaty, on the interpretation of Article 92 (1), Article 13 (2), Article 30 and Article 86 of the Treaty.

2. It appears from the file that, as the invoice in dispute contained, in explanation of the item "ENCC duty" (Ente Nazionale per la Cellulosa e per la Carta), the words "ENCC duty imposed on the value of the products described above coming from the federal republic of Germany", the Pretore referred these questions considering that the matter involved a financial charge levied on packaging coming from a member state on its importation into Italy.

3. The Pretore considered it necessary in particular to have replies to the questions whether the duty in dispute was to be considered as a charge having an effect equivalent to customs duties within the meaning of Article 13 (2) of the Treaty; whether the prohibition on the grant of aid, laid down by Article 92 (1) of the Treaty, was to be considered as being directly applicable; whether the collection of special duties on products imported from other member states was capable of constituting a measure having an effect equivalent to a quantitative restriction on importation, prohibited by Article 30 of the Treaty; and, finally, whether the utilization of resources coming from a duty imposed on the import of products from other member states to finance the activities of an agency governed by public law could constitute an infringement of Article 86 of the Treaty.

As to the first and second questions

4. By these questions it is asked whether the provision of Article 92 (1) of the Treaty has direct effect in the domestic legal systems of member states, so that it can be invoked before national courts.

5. For the purposes of interpretation, the first paragraph of Article 92 cannot be regarded in isolation, but must be considered within the framework of the scheme of Articles 92 to 94.

6. Whilst, for projects introducing new aids or altering existing ones, the last sentence of Article 93 (3) establishes procedural criteria which the national court can appraise, the same does not hold true for existing systems of aid referred to in Article 93 (1).

With regard to such aids, the provisions of Article 92 (1) are intended to take effect in the legal systems of member states, so that they may be invoked before national courts, where they have been put in concrete form by acts having general application provided for by Article 94 or by decisions in particular Cases envisaged by Article 93 (2).

As to the third question

7. It is asked whether the collection of a financial charge on the basis of a percentage calculated by reference to the value of the product imported from other member states constitutes an infringement of Article 13 (2) of the Treaty or any other rule of the Treaty prohibiting the application of special taxation on imports coming from other member states.

8. In the absence of accurate information relating to the objectives, nature and methods of collection of the duty in dispute, it must be stated that, in exercise of the powers conferred by Article 177, the court, having to limit itself to giving an interpretation of the provisions of community law in question, cannot consider legal acts and provisions of national law, the risk being that the reply will correspond only imperfectly to the circumstances of the Case.

9. Article 13 (1) provides that customs duties on imports applying between member states at the date of the entry into force of the Treaty, shall be progressively abolished during the transitional period in accordance with Articles 14 and 15.

Articles 14 and 15 contain the provisions necessary to this end, so that by the end of the transitional period all customs duties on imports between member states will have disappeared.

Article 13 (2) complements Article 13 (1) by enacting that charges having an effect equivalent to customs duties on imports, in force between member states, shall be progressively abolished during the transitional period.

10. Thus the provisions relating to the elimination of customs duties between member states, which form the first section of the first chapter, entitled " the customs union ", are designed to ensure that the objective set out in Article 9 of the Treaty will be realized by the end of the transitional period.

Although such provisions make certain adjustments and allowances during the transitional period, it follows from their wording that such laws and taxes must in any event be entirely abolished at the latest by the end of the said period.

11. Article 13 (2), therefore, comprises a clear and precise prohibition, as from the end of the transitional period at the latest and for all charges having an effect equivalent to customs duties, on the collecting of the said charges, which prohibition has no reservation allowing states to subject its implementation to a positive measure of domestic law or to an intervention by the institutions of the community.

This prohibition lends itself, by its very nature, to producing direct effects in the legal relations between member states and their subjects.

12. It is aimed at any tax demanded at the time of or by reason of importation and which, being imposed specifically on an imported product to the exclusion of the similar domestic product, results in the same restrictive consequences on the free movement of goods as a customs duty by altering the cost price of that product.

Even pecuniary charges intended to finance the activities of an agency governed by public law can constitute taxes having equivalent effect within the meaning of Article 13 (2) of the Treaty.

On the other hand, financial charges within a general system of internal taxation applying systematically to domestic and imported products according to the same criteria are not to be considered as charges having equivalent effect.

13. In the interpretation of the concept " charge having an effect equivalent to a customs duty on imports ", the destination of the financial charges levied must be taken into account.

In effect, when such a financial charge or duty is intended exclusively to support activities which specifically profit taxed domestic products, it can follow that the general duty levied according to the same criteria on the imported product and the domestic product nevertheless constitutes for the former a net supplementary tax burden, whilst for the latter it constitutes in reality a set-off against benefits or aids previously received.

14. Consequently, a duty within the general system of internal taxation applying systematically to domestic and imported products according to the same criteria, can nevertheless constitute a charge having an effect equivalent to customs duty on imports, when such contribution is intended exclusively to support activities which specifically benefit the taxed domestic product.

As to the fourth and fifth questions

15. As these questions are obviously complimentary, the foregoing consideration of the matter makes any examination of them superfluous.

16. The costs incurred by the government of the Italian republic and the commission of the European Communities, which have submitted observations to the court, are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.

THE COURT,

In answer to the questions referred to it by the Pretore de Conegliano, by order of that court dated 20 November 1972, hereby rules:

A duty falling within a general system of internal taxation applying systematically to national and imported products according to the same criteria can nevertheless constitute a charge having an effect equivalent to a customs duty on imports, when such duty is intended exclusively to support activities which specifically benefit the taxed domestic product.