CJEC, July 1, 1969, No 2-69

The court

1 By judgment of 24 december 1968, received at the court registry on 16 january 1969, the vrederechter of the second canton of antwerp referred to the court, under article 177 of the treaty establishing the eec, several questions concerning the interpretation of articles 9, 12, 13, 18 and 95 of the eec treaty.

2/4 With the exception of question no 5(c), the purpose of these questions is essentially to clarify the concept of a charge having an effect equivalent to a customs duty, referred to in articles 9 and 12 of the eec treaty, and the scope of the prohibition laid down therein. The same purpose is present in the references made to articles 18, 37 and 95 with a view to comparing and distinguishing articles 9 and 12. These questions must therefore be considered in their entirety.

5/6 According to article 9, the community shall be based upon a customs union founded upon the prohibition between member states of customs duties and of " all charges having equivalent effect ", and the adoption of a common customs tariff in their relations with third countries. Article 12 prohibits the introduction of " new customs duties on imports...or any charges having equivalent effect ".

7/10 The position of these articles at the beginning of that part of the treaty reserved for the " foundations of the community ", article 9 being the first provision appearing at the very beginning of the title dealing with the " free movement of goods " and article 12 heading the section on the " elimination of customs duties between member states ", is sufficient to show the fundamental role of the prohibitions laid down therein. The importance of these prohibitions is such that, in order to prevent their circumvention by means of various customs and fiscal measures, the treaty was intended to prevent any possible failure in their implementation. Article 17 therefore specifies that the prohibitions in article 9 shall also apply to customs duties of a fiscal nature. Article 95, which appears both in that part of the treaty which deals with the " policy of the community " and in the chapter on " tax provisions ", is intended to fill in any breaches which a fiscal measure might open in the prohibitions laid down, by prohibiting the imposition on imported products of internal taxation in excess of that imposed on domestic products.

11/14 In prohibiting the imposition of customs duties, the treaty does not distinguish between goods according to whether or not they enter into competition with the products of the importing country. Thus, the purpose of the abolition of customs barriers is not merely to eliminate their protective nature, as the treaty sought on the contrary to give general scope and effect to the rule on the elimination of customs duties and charges having equivalent effect in order to ensure the free movement of goods. It follows from the system as a whole and from the general and absolute nature of the prohibition of any customs duty applicable to goods moving between member states that customs duties are prohibited independently of any consideration of the purpose for which they were introduced and the destination of the revenue obtained therefrom. The justification for this prohibition is based on the fact that any pecuniary charge - however small - imposed on goods by reason of the fact that they cross a frontier constitutes an obstacle to the movement of such goods.

15/18 The extension of the prohibition of customs duties to charges having equivalent effect is intended to supplement the prohibition against obstacles to trade created by such duties by increasing its efficiency. The use of these two complementary concepts thus tends, in trade between member states, to avoid the imposition of any pecuniary charge on goods circulating within the community by virtue of the fact that they cross a national frontier. Thus, in order to ascribe to a charge an effect equivalent to a customs duty, it is important to consider this effect in the light of the objectives of the treaty, in the parts, titles and chapters in which articles 9 and 12 are to be found, particularly in relation to the free movement of goods. Consequently, any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of articles 9 and 12 of the treaty, even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect or if the product on which the charge is imposed is not in competition with any domestic product.

19/21 It follows from all the provisions referred to and from their relationship with the other provisions of the treaty that the prohibition of new customs duties or charges having equivalent effect, linked to the principle of the free movement of goods, constitutes a fundamental rule which, without prejudice to the other provisions of the treaty, does not permit of any exceptions. In this respect, it follows from articles 95 et seq. That the concept of a charge having equivalent effect does not include taxation which is imposed in the same way within a state on similar or comparable domestic products, or at least which falls, in the absence of such products, within the framework of general internal taxation, or which is intended to compensate for such internal taxation within the limits laid down by the treaty. Although it is not impossible that in certain circumstances a specific service actually rendered may form the consideration for a possible proportional payment for the service in question, this may only apply in specific cases which cannot lead to the circumvention of the provisions of articles 9 and 12 of the treaty.

22/23 The provisions of the treaty laying down the abovementioned prohibitions impose precise and clearly-defined obligations on member states which do not require any subsequent intervention by community or national authorities for their implementation. For this reason, these provisions directly confer rights on individuals concerned.

24/26 In prohibiting the application of any new pecuniary charge to goods circulating within the community when they cross a frontier, the treaty does not distinguish between the nationals of the various member states. In fact the treaty prohibits any pecuniary charge on imports and exports between member states, irrespective of the nationality of the traders who might be placed at a disadvantage by such measures. Thus, in applying these provisions, there is no justifications for a distinction to be made according to whether the measures in question adversely affect certain member states and their nationals, or all the citizens of the community, or only the nationals of the member state which was responsible for the measures in question.

27 Question 5(c) submitted by the vrederechter of the second canton of antwerp asks whether a new charge on imports from all foreign countries is always prohibited as incompatible with the treaty on the ground that it would form an obstacle to the establishment of the common customs tariff.

28/32 As regards trade with third countries, the treaty contains no express provisions similar to those which prohibit the imposition of charges having an effect equivalent to customs duties in trade between member states. The existence of pecuniary charges other than customs duties in the strict sense which, before the establishment of the common customs tariff, were imposed by a member state at the time of the importation into its territory of goods coming directly from third countries, was not likely to act as an obstacle to the alignment of the customs tariffs of each member state with the rates of the common customs tariff. It is true that the objectives sought by the uniform application of the common customs tariff by all member states in the relations with third countries might be hindered by the unilateral adoption or retention of such measures by a member state, especially where the principle of the free movement of goods in free circulation in a member state would be insufficient to correct the effects of such national measures. In such circumstances, the question might arise whether the treaty imposes limits on the freedom of states to adopt or to maintain measures which might adversely affect the operation of the common customs tariff. However, such a question can only arise in respect of the period after the introduction of the common customs tariff.

The costs incurred by the commission of the european communities and the government of the kingdom of belgium, which have both 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, in the nature of a step in the action pending before the vrederechter, antwerp, the decision as to costs is a matter for that court.

The court

In answer to the questions referred to it by the vrederechter, antwerp, by judgment of that court dated 24 december 1968, hereby rules:

1. The concept of a charge having equivalent effect referred to in articles 9 and 12 of the eec treaty includes any pecuniary charge, other than a customs duty in the strict sense, imposed on goods circulating within the community by reason of the fact that they cross a frontier, in so far as such a charge is not permitted by a specific provision of the treaty;

2. Without prejudice to any limitations which might be imposed in order to attain the objectives of the common customs tariff, pecuniary charges other than customs duties in the strict sense applied by a member state before the introduction of that tariff on goods imported directly from third countries are not, according to the treaty, incompatible with the requirements concerning the gradual alignment of national customs tariffs on the common external tariff.