CJEC, 2nd chamber, October 7, 1985, No 199-84

The court (second chamber)

1 By an order of 13 july 1984, which was received at the court on 6 august 1984, the corte suprema di cassazione referred to the court for a preliminary ruling under article 177 of the eec treaty a question on the interpretation of council regulation no 3225-82 of 23 november 1982 opening, allocating and providing for the administration of a community tariff quota for frozen beef and veal falling within subheading 02.01 a ii (b) of the common customs tariff (1983) (official journal 1982, l 340, p. 4). The purpose of the question is to enable the italian court to ascertain whether the exportation to another member state of frozen beef and veal originating in a non-member country is compatible with the aforesaid regulation.

2 The question was raised in the context of criminal proceedings brought by the Procuratore della Repubblica against t. Migliorini, an employee of magazzini generali di verona, italy, in his capacity as the custodian of the goods in question, and t. T. Fischl, director of soicarni spa, whose registered office is in milan, (hereinafter referred to jointly as ' the accused ') on the ground that they had attempted to export to the federal republic of germany frozen beef and veal which had been imported from czechoslovakia and which formed part of the share of a community tariff quota allocated to italy for 1983. The community quota was opened in compliance with an undertaking given by the community in 1962 within the framework of the general agreement on tariffs and trade (gatt).

3 Article 1 of regulation no 3225-82 opened a community tariff quota for frozen beef and veal totalling 50 000 tonnes for 1983 and fixed the common customs tariff duty at 20%. However, no provision was made for the charging of a levy under the common organization of the market. Article 2 stated that the quota was to be divided into two parts, of which italy was allocated 9 658 and 4 757 tonnes respectively. Article 3 required member states to take all appropriate steps to guarantee all persons concerned, established within their territories, free access to the quota shares allocated to them. According to the second recital in the preamble to the regulation, the allocation of the quota between the member states should be proportionate to their requirements ' in order to arrive at a fair allocation between the member states '.

4 When the goods in question were imported into italy all duties applicable to imports from a non-member country were paid by the importer. However, when the accused sought to re-export the goods to germany the italian customs authorities seized them because they considered that the accused had attempted improperly to use them for purposes other than those for which their importation had been permitted, since they could only be used to meet the requirements of italy and therefore could not be exported. The seizure was subsequently confirmed by the Procuratore della Repubblica, verona, who considered that the exportation of the goods constituted the offence of smuggling. After the tribunale di verona (district court, verona) had revoked the seizure, the Procuratore della Repubblica appealed to the corte suprema di cassazione and ordered the goods to be seized once more on the ground of aggravated fraud to the detriment of the italian state and the eec (article 640 (1) of the italian criminal code). After the second seizure had been confirmed by the tribunale di verona the accused likewise appealed to the corte suprema di cassazione.

5 The corte suprema di cassazione states that, in order for it to give judgment, it is necessary to determine the interpretation to be given to regulation no 3225-82 in so far as it provides that the fair allocation of the quota between the member states is to be proportionate to their requirements and the choice of a management system for the quota share of a member state is left to each state, so that it may ensure an allocation which is appropriate from an economic viewpoint (fourth recital in the preamble to the regulation). According to the corte suprema di cassazione, it is necessary to determine in the first place what is meant by the statement that the quota should be allocated by reference to the requirements of each state and, in particular, whether that constitutes a reference to the use of the meat in satisfaction of the requirements of domestic consumption or whether it refers to all economic uses of the product of whatever type. Secondly, the corte suprema di cassazione considers that, in the absence of any express provision prohibiting the re-exportation of the imported goods, it is necessary to establish whether such a prohibition may be inferred from the system of equitable allocation of the quota between the member states.

6 For those reasons the corte suprema di cassazione considered it necessary to refer the following question to the court for a preliminary ruling:

' In so far as regulation (eec) no 3225-82 provided for the allocation of the tariff quota among the member states according to their requirements determined on the basis of the criteria laid down therein, was it intended to refer to the use of the meat imported from a non-member country for consumption and trade only within the importing country, without any possibility of re-exportation of the meat to another country in the community?

'

7 In essence the question seeks to ascertain whether regulation no 3225-82, given the fact that it sought to ensure that the community tariff quota was allocated in proportion to the requirements of each member state and left to each member state the choice of a management system for its quota share, so that it might ensure an allocation which was appropriate from an economic viewpoint, should be interpreted as authorizing the member state to adopt measures to prevent, restrict or affect the re-exportation of goods which were properly imported within the framework of that quota.

8 The accused contend that the fact that regulation no 3226-82 does not state the purpose of the allocation of the quota shows that there is no restriction with regard to the use of the meat. They rely on the second recital in the preamble to the regulation in concluding that the reference to the requirements of the member states merely constitutes a technical criterion for the application of the quota. It follows from the principles set out in articles 39 and 40 of the eec treaty that the national legislature should not intervene in such a manner as to influence the free determination of market prices. Finally, the export restriction constitutes a manifest infringement of community law and is contrary to the whole community philosophy.

9 The italian government considers that the purpose of the national legislation is to avoid any inequality as regards access to stocks of meat imported into the community under exemption from payment of the relevant levy. Where meat is imported solely in order to put it into free circulation in a member state but with the intention to despatch it directly for whatever use outside that state, the meat cannot be regarded as intended to satisfy the requirements of the state into which it was imported rather than those of the country into whose economic system the meat is immediately and effectively introduced by the re-exportation. Such action would also give rise to the aforementioned inequalities. The italian government relies on article 3 (1) of regulation no 3225-82, in conjunction with article 44 (1) (a) of commission regulation (eec) no 3183-80 of 3 december 1983 laying down common detailed rules for the application of the system of import and export licences and advance fixing certificates for agricultural products (official journal 1980, l 338, p. 1), to dismiss the idea that a trader is free to use an import licence in order to import goods intended ultimately for some member state other than the state whose quota share the consignment in question belongs to. The latter provision provides that an import licence is valid only in the issuing member state. The italian government concludes, on the basis of the aforementioned considerations, that the correspondence between the national quota share and the requirements of each member state forms an intrinsic part of the spirit and purpose of the quota and implies that the different national quota shares are to be used to satisfy the domestic requirements of each member state.

10 Finally, the italian government accepts that the application of regulation no 3225-82 may in no circumstances have the effect of prohibiting the re-exportation of the goods in question. It merely affects the right to benefit from customs duty exemptions where the exportation is shown to be inconsistent with the use of the goods in the manner laid down by the regulation.

11 The belgian government also refers to article 44 (1) (a) of regulation no 3183-80 but states that that provision, like regulation no 3225-82, does not lay down any restriction on re-exportation. It interprets the concept of ' persons concerned ' in the same manner as was suggested by the commission in its observations in an earlier case (judgment of 23 january 1980 in case 35-79 grosoli spa v ministry of foreign trade (1980) ecr 177), namely as encompassing ' all the natural and legal persons established within the territory of a member state who obtain or arrange customs clearance for frozen beef and veal for consumption on that territory '. The term ' consumption ' is clearly intended to mean more than merely putting the goods into free circulation. Consequently, all other taxes applicable to the goods must be paid. It follows that there is no basis on which to prohibit exportation from one member state to one or more others. Finally, a member state has no right to add a condition or prohibition which is not expressly provided for by regulation no 3225-82.

12 According to the commission, goods imported into a member state under a community tariff quota granted on the basis of the general agreement on tariffs and trade and apportioned between the member states according to specific criteria may be re-exported to another member state. From the court ' s judgments in previous cases the commission concludes, in the first place, that, in the absence of formal community provisions, the member states who receive an allocation may not regulate the use to which the meat imported under the system in question is put. Secondly, the concept of ' persons concerned ' has a wide scope and is not confined to ' importers '. The allocation of the community tariff quota between the member states is merely a realistic method of administration allowing traders to benefit from the tariff concession through the intermediary of the national administration.

13 From a more general point of view, the commission considers that in no case is it possible for a community regulation to expressly prohibit the re-exportation of meat to another member state, since that would be contrary to the principle of the free movement of goods and, in particular, to article 34 of the eec treaty, which applies not only to products originating in the community but also to products which originate in a non-member country and which are in free circulation in the community.

14 In order to reply to the question put to the court it must be pointed out in the first place that the court has already stated on numerous occasions that the abolition of restrictions on trade between member states constitutes a fundamental principle of the common market applicable to all goods, with the result that exceptions, which in any event must be strictly construed, must be clearly laid down (see the judgment of 20 april 1978 in joined cases 80 and 81-77 societe les commissionnaires reunis sarl v receveur des douanes (1978) ecr 927 and the cases referred to therein).

15 With regard more precisely to the tariff quotas which are negotiated by the community on the basis of the powers conferred on it by the treaty in matters of tariff and commercial policy and which are opened within the framework of gatt, it must be noted that council regulation no 3225-82, like the preceding regulations, expressly describes the quota as a ' community ' quota. It follows that the quota shares allocated to the member states have the same characteristics.

16 The second recital in the preamble to regulation no 3225-82 states that ' a system of utilization of the community tariff quota, based on an allocation between the member states concerned, would... Appear consistent with the commmunity nature of the quota '. It also follows from that recital that the purpose of the allocation carried out in proportion to the requirements of each member state is solely to arrive at a fair allocation between the traders concerned in the member states and, in particular, to secure equal and continuous access to the quota for all persons concerned within the community regardless of the nature or aim of their activities.

17 In that connection it is also appropriate to recall previous judgments in which the court has held, in the first place, that the fact that the management of the quota shares is left to the member states, which may apportion them in accordance with their own administrative provisions, does not authorize them to adopt measures intended to regulate the use to which the quantities allocated to them are put, and, in the second place, that the powers thus conferred on the member states do not extend beyond the technical and procedural rights designed to ensure compliance with the general terms of the quota and the principle of equal treatment for those entitled to take advantage of it (judgments of 12 december 1973 in case 131-73 grosoli v ministry of foreign trade (1973) ecr 1555, and of 13 october 1982 in joined cases 213 to 215-81 norddeutsches vieh- und fleischkontor v bundesanstalt fur landwirtschaftliche marktordnung (1982) ecr 3583). It follows that only undertakings established in the member states concerned are entitled to import goods within the framework of the quota on the basis of the import licence, which, consequently, is valid only in the issuing member state (article 44 (1) of regulation no 3183-80). However, that territorial limitation on the validity of the licence has no effect on intra-community trade in the goods.

18 It must also be emphasized that the court has already had occasion to hold that, whilst division of a global tariff quota into national quotas may be compatible with the treaty, that is subject to the express condition that it does not hinder the free movement of the goods forming part of the quota after they have been admitted to free circulation in the territory of one of the member states (judgment of 13 december 1983 in case 218-82 commission v council (1983) ecr 4063).

19 With regard to the italian government ' s opinion that, although the regulation in question cannot have the effect of prohibiting re-exportation, it none the less renders the goods subject to customs duties where they are removed from the member state on whose quota they were imported into the community, it must be stated that any provision or measure of a member state which affects the community nature of a quota is contrary to one of the principal aims of the common market, namely the free movement of goods. According to article 9 (2) of the eec treaty, the elimination of restrictions on intra-community trade also applies to products coming from a non-member country which are in free circulation in a member state.

20 It follows from the foregoing considerations that the reply to the question referred to the court by the corte suprema di cassazione must be that regulation no 3225-82 is intended to ensure that the allocation of the community tariff quota is effected in proportion to the requirements of the member states and must be interpreted as meaning that the community quota must be allocated equitably amongst the persons concerned in each member state, but it does not authorize the member states to adopt measures intended to prevent, restrict or affect the re-exportation of goods which have been properly imported under that quota and which are consequently in free circulation in a member state.

Costs

21 The costs incurred by the governments of the italian republic and the kingdom of belgium and by the commission of the european communities, which have submitted observations to the court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action before the corte suprema di cassazione, the decision on costs is a matter for that court.

On those grounds,

The court (second chamber),

In answer to the question referred to it by the corte suprema di cassazione, by an order of 13 july 1984, hereby rules:

Regulation no 3225-82 is intended to ensure that the allocation of the community tariff quota is effected in proportion to the requirements of the member states and must be interpreted as meaning that the community quota must be allocated equitably amongst the persons concerned in each member state, but it does not authorize the member states to adopt measures intended to prevent, restrict or affect the re-exportation of goods which have been properly imported under that quota and which are consequently in free circulation in a member state.