CJEC, February 3, 1976, No 59-75

1 By order dated 30 June 1975, received at the Court the following 7 july, il giudice istruttore presso il tribunale di como (investigating judge at the tribunale of como) requested the Court in accordance with article 177 of the EEC treaty to give a preliminary ruling on the interpretation of article 37 (1) of the EEC treaty and the resolution of the council of 21 April 1970 concerning national monopolies of a commercial character in manufactured tobacco (jo c 50 of 28. 4.1970, p.2).

2 The national Court is concerned with the application of the Italian criminal law to facts described as constituting an infringement of the legal provisions granting an exclusive right of import to the state monopoly in manufactured tobacco.

3 The first question asks whether article 37 (1) of the treaty is to be interpreted as meaning that, with effect from 31 December 1969 (the date when the transitional period expired), the trade monopoly should have been reorganized in such a way as to eliminate even the possibility of any discrimination being practised against community exporters, with the consequential extinction, with effect from 1 January 1970, of the exclusive right to import from other member states.

4 Under article 37 (1) member states must progressively adjust any state monopolies of a commercial character so as to ensure that when the transitional period has ended No discrimination regarding the conditions under which goods are procured and marketed exists between the nationals of member states.

5 Without requiring the abolition of the said monopolies, this provision prescribes in mandatory terms that they must be adjusted in such a way as to ensure that when the transitional period has ended such discrimination shall cease to exist.

6 For the purposes of interpreting article 37 as regards the nature and scope of the adjustment prescribed it must be considered in its context in relation to the other paragraphs of the same article and in its place in the general scheme of the treaty.

7 This article comes under the title on the free movement of goods and in particular under chapter ii on the abolition of quantitative restrictions between member states.

It applies to any body through which a member state either directly or indirectly supervises, determines or appreciably influcences imports or exports between member states.

8 Furthermore, article 37 (2) refers to the obligation on all member states to refrain as from the beginning of the transitional period from introducing any new measures likely to restrict the scope of the articles dealing with the abolition of customs duties and quantitative restrictions between member states.

Article 37 (3), moreover, provides that the time-table for adjustment provided for in paragraph (1) must be harmonized with the abolition of quantitative restrictions on the same products provided for in articles 30 to 34.

9 It follows from these provisions and their structure that the obligation laid down in paragraph (1) aims at ensuring compliance with the fundamental rule of the free movement of goods throughout the common market, in particulary by the abolition of quantitative restrictions and measures having equivalent effect in trade between member states.

10 This objective would not be attained if, in a member state where a commercial monopoly exists, the free movement of goods from other member states similar to those with which the national monopoly is concerned were not ensured.

11 The council ' s resolution of 21 April 1970 on national monopolies of a commercial character in manufactured tobacco itself refers to the obligation to abolish exclusive rights to import and market manufactured tobacco.

12 The exclusive right to import manufactured products of the monopoly in question thus constitutes, in respect of community exporters, discrimination prohibited by article 37 (1).

13 The answer to the first question should therefore be that article 37 (1) of the EEC treaty must be interpreted as meaning that as from 31 December 1969 every national monopoly of a commercial character must be adjusted so as to eliminate the exclusive right to import from other member states.

14 The second question asks whether article 37 (1) of the treaty is directly applicable and whether it has created individual rights which the national judicial bodies must protect.

15 The fact that at the end of the transitional period No discrimination regarding the conditions under which goods are procured and marketed must exist between nationals of member states constitutes an obligation with a very precise objective subject to a clause postponing its operation.

16 Upon the expiry of the transitional period this obligation is No longer subject to any condition nor contingent, in its execution or in its effects, upon the introduction of any measure, either by the community or by the member states, and by its nature is capable of being relied on by nationals of member states before national Courts.

17 The third question asks whether in consequence it was possible for parties other than the monopoly, on the basis of article 37 (1) of the treaty after 1 January 1970, to import, into Italian territory products subject to the tobacco monopoly system embodied in law No 907 of 17 July 1942 and coming from community countries, subject to their paying the charges imposed on these types of product.

18 This question relates to the application of community law rather than to its interpretation and is therefore a matter for the national Court.

19 The fourth question asks whether the council resolution of 21 April 1970 can vary the effect of the provisions of article 37 (1) of the treaty and, if the answer is in the affirmative, whether it is, so far as the member states are concerned, binding in such a way as immediately to remove all restrictions on the importation of products covered by the monopoly without any need for further community legislation, thus extinguishing the exclusive rights of the tobacco monopoly.

20 Under the terms of the said resolution ' the French and Italian governments undertake to take all necessary measures for the abolition of discrimination arising out of national monopolies of a commercial nature. The abolition of exclusive rights relating to importation and wholesale marketing must be achieved by 1 January 1976 at the lates '.

21 The said resolution which basically expresses the political will of the council and the French and Italian governments to put an end to a state of affairs contravening article 37 (1), cannot engender effects which can be used against individuals.

In particular the time-scale referred to in the resolution cannot prevail over that contained in the treaty.

22 The fourth question must therefore be answered in the negative.

Costs

23 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as these proceedings are, in so far as the parties to the main proceedings are concerned, a step in the proceedings 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 giudice istruttore presso il tribunale di como by order dated 30 June 1975, hereby rules,

1. Article 37 (1) of the EEC treaty must be interpreted as meaning that as from 31 December 1969 every national monopoly of a commercial character must be adjusted so as to eliminate the exclusive right to import from other member states.

2. When the transitional period ended article 37 (1) was capable of being relied on by nationals of member states before national Courts.

4. The council resolution of 21 April 1970 does not alter the scope and the provisions of article 37 (1).