CJEC, July 12, 1977, No 89-76

1 The Commission lodged an application on 17 September 1976 under article 169 of the EEC treaty for a declaration that the kingdom of the Netherlands by charging fees for the phytosanitary inspection of plants and certain products of plant origin has failed to fulfil its obligations under the treaty and, in particular, to comply with the prohibition of charges having an effect equivalent to customs duties on exports in articles 9, 12 and 16 of the treaty.

2 The kingdom of the Netherlands charges a fee for phytosanitary inspections on the export to the other member states and to third countries of plants and certain products of plant origin on the basis of articles 3 (c) and 7 of the royal decree of 24 September 1951 laying down new rules for the phytosanitary service (Nederlandse staatscourant No 191).

3 The Commission takes the view that the levying of these fees charged only on products intended for export from the member state in question when they cross the frontier and not on domestic products marketed in that state would amount to levying a charge having an effect equivalent to a customs duty on exports which is prohibited under the provisions of articles 9, 12 and 16 of the treaty as interpreted by the case-law of the Court and in particular in its judgment of 14 December 1972 in case 29-72, S.p.a. Marimex v Italian finance administration (1972) ii ECR1309 and in its judgment of 11 October 1973 in case 39-73, Rewe-zentralfinanze GmbH v direktor der Landwirtschaftskammer Westfalen-Lippe (1973) ii ECR 1039.

4 The Netherlands government submits in its defence that the fees are intended to cover the costs of the inspections carried out at the time of issue of the phytosanitary certificates provided for by the international plant protection convention, concluded in Rome on 6 December 1951 (United Nations, treaty series, 1952, vol. 150, No 1963).

5 The issue of these certificates far from being an obstacle to trade, makes intra-community trade easier by providing the exporter with a guarantee that there will be no obstacle to his imports into the country of destination.

6 Since the inspections are not carried out and the corresponding certificates are not issued unless the exporter makes the necessary application, there is no legal obligation to pay the charges in question so that in this case the rule laid down by the Court that the levying of pecuniary charges must be unilateral and obligatory would not be complied with.

7 In this connexion the Commission however submits that, since in international trade it is absolutely necessary for exporters to have phytosanitary certificates, the requirements of the importing country in fact compel them to protect their exports by a certificate issued in the exporting country, so that they could not avoid paying the fee charged by the Netherlands state.

8 The certificates with the issue of which the fee in this case is connected comply with the international plant protection convention of 6 December 1951 to which all member states are parties.

9 The purpose of this convention as stated in article i thereof is to secure common and effective action to prevent the introduction and spread of pests and diseases of plants and plant products and to adopt appropriate legislative, technical and administrative measures for this purpose, inter alia, by setting up in each state an official plant protection organization.

10 As provided for in article v of this convention each contracting government shall make arrangements for the issue of phytosanitary certificates to accord with the plant protection regulations of other contracting governments and in conformity with the provisions of the convention.

11 The purpose of these certificates in international trade is to encourage the free import of plants into the country of destination by carrying out inspections in the country of origin of the products in question.

12 This convention therefore performs within its sphere of application a function similar to that of the public health and phytosanitary measures adopted within the community such as Council directive no 64-432-EEC of 26 June 1964 (oj English special edition, 1963-1964, p.164) - which was the subject-matter of the judgment of the Court in case 46-76, w. J. G. Bauhuis v the Netherlands state (1977) ECR 5 - and Council directive No 77-93 of 21 December 1976 on protective measures against the introduction into member states of harmful organisms of plants or plant products (oj l 26, 1977, p.20) issued after the Commission lodged its application at the Court.

13 Thus the simultaneous application of the convention of 6 December 1951 by all the member states allowed phytosanitary inspections by the importing country to be switched to the exporting country and in this way encouraged the replacement of protective measures at the frontier by a system of inspections which is recognized on a reciprocal basis by the states and is founded on the issue of phytosanitary certificates, so as to reduce duplication of inspections at the frontier.

14 It is therefore apparent that in this case the issue is not one of measures adopted unilaterally by the kingdom of the Netherlands solely in its national interest but of inspection organized on a similar basis in all the member states as parties to the convention of 6 December 1951.

15 Consequently these inspections do not seem to be unilateral measures hindering trade but rather operations designed to encourage the free movement of goods for the purpose of overcoming the obstacles which the inspections of imports envisaged by article 36 of the treaty may place in the way of this free movement.

16 In these circumstances the fees charged for such inspections cannot be regarded as charges having an effect equivalent to customs duties, provided that their amount does not exceed the actual cost of the operations in respect of which they are charged.

17 However as it is only the question of principle whether the fees at issue are compatible with community law and not the question of their amount which has been referred to the Court for a ruling the condition set out in the previous paragraph need not be considered in this case.

18 Although it thus appears that under the rules relating to the free movement of goods within the community no objection can in principle be raised against charging the fees at issue, the practices adopted in this connexion by the various member states show that there can be different ways of dealing with the financing of phytosanitary inspections ; either the whole or part of the cost thereof is defrayed out of public funds or it is passed on to the trade by charging fees corresponding to the cost of the inspections carried out.

19 It is therefore necessary to stress that the present judgment cannot restrict the freedom of the community institutions to adopt in future any measures which may be necessary for the standardization of the procedure for the financing of the inspections in question and that from the point of view of any such standardization this judgment cannot confer on the kingdom of the Netherlands the right to maintain its present system.

20 It follows from the foregoing that, subject to this reservation, the application lodged by the Commission against the kingdom of the Netherlands must be dismissed.

Costs

21 Under article 69 (2) of the rules of procedure the unsuccessful party shall be ordered to pay the costs.

22 However, under paragraph (3) of this article the Court may, where the circumstances are exceptional, order that the parties bear their own costs in whole or in part.

23 It is apparent from the pleadings and the surrounding circumstances of this case that in the absence of any specific provisions of the treaty or secondary legislation the question whether the fees at issue are compatible with community law gave rise to justifiable doubts.

24 In these circumstances it appears to be reasonable that each party bears its own costs.

On those grounds

The Court

Hereby:

1. Dismisses the application;

2. Orders each party to bear its own costs.