CJEC, February 8, 1983, No 124-81

THE COURT

1 By an application lodged at the court registry on 22 may 1981 the Commission of the European Communities brought an action under article 169 of the eec treaty for a declaration that the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under article 30 of the eec treaty by placing restrictions on the importation of milk and cream treated by the uht process and on the sale of those products in its territory.

2 The ' ' ultra heat treated ' ' process, whereby the product is retained at a temperature considerably in excess of 100* centigrade for a short time, enables milk so treated to be kept for several months at room temperature, provided that, directly after that treatment, it is aseptically packed in hermetically-sealed containers.

3 The application specifically relates to a series of legislative provisions intended to regulate in the different parts of the united kingdom the importation, packing and sale of milk and dairy products treated by that process. The combined effect of those provisions may be summarized as follows:

(i) Uht milk and cream may be imported into england, wales, northern ireland and scotland only with the authorization of the competent authority evidenced by an import licence. That stipulation does not, however, apply to uht milk and cream originating in ireland and imported directly into northern ireland.

(ii) Uht milk (whether domestic or imported) may be marketed in england, wales and scotland only by approved dairies or distributors holding a dealer ' s licence. That licence requires the operator to pack the milk in a dairy approved by the competent local authority.

(iii) Since the adoption of new regulations dealing with milk and cream in northern ireland (sr 1981 nos 233 and 234) uht milk and cream may only be offered for sale in northern ireland if produced in accordance with the requirements in force in that province. Before those regulations came into force on 31 july 1981, all sales of uht milk and cream were prohibited in northern ireland.

4 The commission considers that the measures applied by the united kingdom constitute measures having an effect equivalent to restrictions on imports prohibited by article 30 and not justified under article 36 of the treaty.

The admissibility of the commission ' s conclusions

5 In its application the commission sought a declaration that the united kingdom had failed to fulfil its obligations under article 30 solely in respect of the provisions applicable on 7 november 1980, the date of the reasoned opinion addressed to the united kingdom pursuant to article 169 of the treaty. However, after that date the law was changed in northern ireland by the regulations of 1981 (sr 1981 nos 233 and 234) made on 10 july 1981 and brought into force on 31 july 1981. The effect of those regulations was to substitute for a total prohibition on the sale of uht milk and cream in northern ireland a system under which such sales are permitted only if the said products have been produced in accordance with the requirements of the regulations in force in northern ireland. In its reply the commission requested that its applications for a declaration be extended to cover those new regulations. The admissibility of that request must be examined.

6 As the court held in case 232-78 (commission v france (1979) ecr 2729), even though article 42 of the rules of procedure allows fresh issues to be raised in certain circumstances a party may not alter the actual subject-matter of the dispute during the proceedings. Consequently, the substance of the application must be examined solely with reference to the conclusions contained in the application instituting the proceedings. Furthermore, in the context of proceedings brought by the commission under article 169 of the treaty, the letter addressed by the commission to the member state inviting it to submit its observations and then the reasoned opinion issued by the commission delimit the subject-matter of the dispute, which cannot thereafter be extended. In fact the opportunity for the state concerned to be able to submit its observations, even if it chooses not to avail itself thereof, constitutes an essential guarantee intended by the treaty, adherence to which is an essential formal requirement of the procedure under article 169.

7 It follows that the amended conclusions submitted by the commission in its reply relating to the regulations adopted in 1981 in respect of northern ireland are inadmissible. However, since the commission did not expressly abandon its previous conclusions, these are admissible in support of its application under article 169 in so far as they are directed against the regulations in force in northern ireland on the date of the reasoned opinion.

The substance of the application

1. The contested provisions in general

8 The united kingdom contends that in the absence of common rules it is for the member states to regulate all matters relating to the production and marketing of milk on their own territory and that therefore the contested national provisions relating to uht milk and cream do not fall within the purview of article 30 of the treaty. That contention must be rejected. The absence of common rules or of harmonizing directives relating to the production or marketing of a product is not sufficient to prevent that product from falling within the scope of the prohibition laid down in article 30 of the treaty. The prohibition of measures having an effect equivalent to quantitative restrictions in fact applies to all trading rules of member states capable of hindering, whether directly or indirectly, actually or potentially, intra-community trade.

2. The requirement of a specific import licence

9 The court has already held that article 30 precludes the application to intra-community trade of national provisions which require, even as a pure formality, import licences or any other similar procedure.

10 The united kingdom states that there is much flexibility in the grant of such import licences. However, the court has consistently held (cf. Judgments of 24 january 1978 in case 82-77 van tiggele (1978) ecr 25 and 19 february 1981 in case 130-80 keldermann (1981) ecr 527) that provisions caught by the prohibition laid down in article 30 of the eec treaty do not escape that prohibition simply because the competent authority enjoys a discretionary power in the application of those provisions. Freedom of movement is a right whose enjoyment may not be dependent upon a discretionary power or on a concession granted by the national authorities.

11 It follows from the foregoing that the system of import licences operated by the united kingdom constitutes a restriction on imports prohibited by article 30 of the treaty.

12 However, those provisions, whilst constituting measures having an effect equivalent to quantitative restrictions, must be examined to see whether they are permissible under article 36 of the treaty, which provides that the provisions of article 30 shall not preclude prohibitions or restrictions on imports justified on grounds, inter alia, of the protection of health and life of humans or animals.

13 That article constitutes a derogation from the fundamental principle of the free movement of goods and must therefore be interpreted in such a way as not to extend its effects further than is necessary for the protection of the interests which it seeks to safeguard.

14 According to the commission, it is clear from the decisions of the court that an import licence is in any event contrary to article 30 of the treaty and cannot be saved by the exception contained in article 36. To that it must be said that, whilst the requirement of a licence, even as a formality, is contrary to article 30 of the treaty, it does not necessarily follow that a measure of that kind may in no case be justified under article 36. The justification claimed by the united kingdom must therefore be examined.

15 In that connection the united kingdom states, first, that the system of specific import licences which it operates enables it to impose conditions as to the heat treatment of imported milk varying according to the disease status of the exporting country (heat treatment at a higher or lower temperature according to the time which has elapsed since the last outbreak of foot-and-mouth disease). The united kingdom also stresses that cattle infected with foot-and-mouth disease may yield infected milk before the outward symptoms of the disease become evident and before the outbreak is discovered by the health authorities. In such a case the import licences would be granted in the normal way and the milk, having undergone a treatment insufficient to inactivate the virus, might already be in transit or actually imported into the united kingdom before the disease had been identified. It is therefore necessary, in the united kingdom ' s view, that its authorities should be able, as soon as they are informed of the situation by the exporting country, to trace the infected consignments and to destroy them before they reach the market. According to the united kingdom, only a system of specific licences enabling consignments of imported milk to be identified and traced meets that requirement.

16 Whilst the protection of the health of animals is one of the matters justifying the application of article 36, it must none the less be ascertained whether the machinery employed in the present case by the united kingdom constitutes a measure which is disproportionate in relation to the objective pursued, on the ground that the same result may be achieved by means of less restrictive measures, or whether, on the other hand, regard being had to the technical constraints already mentioned, such a system is necessary and hence justified under article 36.

17 It may be conceded, in that respect, that information of an administrative nature or concerning health obtained by the united kingdom authorities when processing applications for licences lodged by importers is undeniably of assistance in achieving the above-mentioned objective of protecting animal health, if that information is centralized and utilized appropriately by the competent authorities.

18 Even though the united kingdom maintained at the hearing that current administrative practice permits licences to be issued promptly and automatically, a system requiring the issue of an administrative authorization necessarily involves the exercise of a certain degree of discretion and creates legal uncertainty for traders. It results in an impediment to intra-community trade which, in the present case, could be eliminated without prejudice to the effectiveness of the protection of animal health and without increasing the administrative or financial burden imposed by the pursuit of that objective. That result could be achieved if the united kingdom authorities abandoned the practice of issuing licences and confined themselves to obtaining the information which is of use to them, for example, by means of declarations signed by the importers, accompanied if necessary by the appropriate certificates.

19 It follows from the foregoing considerations that in the present case the requirement of import licences, which is incompatible with article 30 of the treaty, is not saved by the exception contained in article 36.

3. The system of dealers ' licences and the requirement that imported uht milk be packed on premises within the united kingdom

20 It is not disputed that the regulations examined above, which require uht milk imported into the united kingdom to be packed on premises within the united kingdom, make it necessary to treat that milk again, since it is technically impossible to open the packs and then repack the milk without causing it to lose the characteristics of ' ' ultra heat treated ' ' milk.

21 Therefore, the need to subject that product to a second heat treatment causes delays in the marketing cycle, involves the importer in considerable expense and, moreover, is likely to lower the organoleptic qualities of the milk. In fact, the requirement of re-treatment and repacking constitutes, owing to its economic effects, the equivalent of a total prohibition on imports, as the united kingdom has expressly acknowledged. The united kingdom is therefore wrong in its submission that the contested provisions, supposedly applying without distinction to domestic and imported products, have no discriminatory effect and, for that reason, escape the application of article 30 of the treaty.

22 The court therefore finds that the system of dealers ' licences operated by the united kingdom constitutes a measure having an effect equivalent to a quantitative restriction prohibited by article 30 of the treaty.

23 The united kingdom claims however, that in the present state of community law such a prohibition is the only effective means of protecting the health of consumers and is therefore justified under article 36.

24 The united kingdom bases its view essentially on the disparities in the laws of the member states relating to the production and treatment of uht milk, on the varying degree of application of those different laws and on the impossibility of its exercising control over the production cycle of uht milk in the other member states from collection at the farm to packing and distribution. However, it asserts that such control is indispensable for ensuring that the milk obtained is free of any bacterial or virus infection.

25 Those arguments cannot be upheld. In the first place, it is clear from the evidence before the court, and in particular from the commission ' s replies to the questions asked by the court, that the alleged disparities in the laws of the member states are in truth limited. In fact, by virtue of the various laws, regulations and administrative practices, the production of uht milk is carried on in the different member states in accordance with very similar rules. Those rules prescribe: on the one hand, heat treatment carried out under comparable conditions of temperature and for very brief periods and, on the other hand, aseptic packing in sterile, hermetically-sealed containers.

26 Secondly, an analysis of the scientific and technical documents submitted by the parties for the court ' s examination demonstrates that uht milk is produced in the different member states with machines manufactured by a very small number of firms in accordance with comparable technical characteristics and that the milk, having undergone identical controls, is of similar quality from the point of view of health.

27 Thirdly, the very characteristics of uht milk, which may be kept for long periods at normal temperatures, obviate the need for control over the whole production cycle of such milk if the necessary precautions are taken at the time of the heat treatment.

28 Under those circumstances, the united kingdom, in its concern to protect the health of humans, could ensure safeguards equivalent to those which it has prescribed for its domestic production of uht milk, without having recourse to the measures adopted, which amount to a total prohibition on imports.

29 To that end, the united kingdom would be entitled to lay down the objective conditions which it considers ought to be observed as regards the quality of the milk before treatment and as regards the methods of treating and packing uht milk of whatever origin offered for sale on its territory. The united kingdom could also stipulate that imported uht milk must satisfy the requirements thus laid down, whilst however taking care not to go beyond that which is strictly necessary for the protection of the health of the consumer. It would be able to ensure that such requirements are satisfied by requesting importers to produce certificates issued for the purpose by the competent authorities of the exporting member states.

30 As the french government correctly stated in its intervention in support of the commission ' s application, the court has consistently held (cf. Judgment of 20. 5. 1976 in case 104-75 de peijper (1976) ecr 613 and 8. 11. 1979 in case 251-78 denkavit (1979) ecr 3369) that, where cooperation between the authorities of the member states makes it possible to facilitate and simplify frontier checks, the authorities responsible for health inspections must ascertain whether the substantiating documents issued within the framework of that cooperation raise a presumption that the imported goods comply with the requirements of domestic health legislation thus enabling the checks carried out upon importation to be simplified. The court considers that in the case of uht milk the conditions are satisfied for there to be a presumption of accuracy in favour of the statements contained in such documents.

31 That necessary cooperation does not, however, preclude the united kingdom authorities from carrying out controls by means of samples to ensure observance of the standards which it has laid down, or from preventing the entry of consignments found not to conform with those standards.

32 Finally, it must be noted that united kingdom has accepted imports on to its territory of uht cream and flavoured uht milk without requiring a second treatment, whereas, according to its own argument, those products theoretically represented the same risks to the health of humans, whatever the quantities imported. It has not been shown that public health in the united kingdom has been affected in the slightest by such imports.

33 It follows from the foregoing considerations that the system of dealers ' licences constitutes an impediment to the free movement of dairy produce which is disproportionate in relation to the objective pursued and is not therefore justified under article 36 of the treaty.

4. The total prohibition on the sale of uht milk and cream in northern ireland until 31 july 1981

34 The legislation in question entails a complete prohibition on imports for sale and hence constitutes a restriction on trade prohibited by article 30 of the treaty.

35 It has neither been shown nor even alleged that those provisions were adopted out of a concern for the protection of public health. Therefore, they cannot be justified under article 36 of the treaty.

36 The court concludes therefore that by adopting the various aforementioned provisions relating to the importation, packing and marketing of uht milk the united kingdom failed to fulfil its obligations under articles 30 and 36 of the eec treaty.

Costs

37 Article 69 (2) of the rules of procedure provides that the unsuccessful party shall be ordered to pay the costs if they have been asked for in the successful party ' s pleading. Since the united kingdom has failed in its submissions it must be ordered to pay the costs.

On those grounds,

The court

Hereby:

1. Declares the commission ' s conclusions to be inadmissible in so far as they relate to the new legislation applicable in northern ireland with effect from 31 july 1981 (sr 1981 nos 233 and 234);

2. Declares that, by prescribing a system of prior individual licences for imports on to its territory of milk and cream which have undergone ' ' ultra heat treatment ' ' on the territory of other member states, the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under article 30 of the eec treaty;

3. Declares that, by making the distribution in england, wales and scotland of uht milk imported from other member states subject to a system involving a second heat treatment and the repacking of the milk, the united kingdom has failed to fulfil its obligations under article 30 of the eec teaty;

4. Declares that, by prohibiting all sales of uht milk or cream in northern ireland until the adoption of the new regulations on milk in 1981 (sr 1981 nos 233 and 234), the united kingdom failed to fulfil its obligations under article 30 of the eec treaty;

5. Orders the united kingdom to pay the costs.