CJEC, February 26, 1980, No 94-79

1 By an order of 10 may 1979, which was received at the Court on 14 June 1979, the Gerechtshof (regional Court of appeal), Amsterdam, economische kamer (economic chamber), referred to the Court of justice for a preliminary ruling, pursuant to article 177 of the EEC treaty, two questions on the interpretation of articles 30 to 47 inclusive of the EEC treaty and of regulation (EEC) No 234-68 of the council of 27 February 1968 on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage (official journal, English special edition 1968 (i), p. 26).

2 The questions were raised during the hearing of an appeal by a merchant, having his place of business at Andijk, against his conviction by the economische politierechter (magistrate in economic matters) of the arrondissementsrechtbank (district Court), alkmaar, for having sold between may and June 1975 in the commune of Andijk, or at least in the netherlands, several lots of chrysanthemum cuttings, without being affiliated to the Nederlandse Algemene Keuringsdienst voor Siergewassen (the Netherlands general inspection service for ornamental plants), hereinafter referred to as ''the NAKS. ''And having therefore been in breach of the provisions of the zaaizaad- en plantgoedwet (law on seed for sowing and stock for plant propagation) and also of the decree of 6 October 1966, the aansluitingsbesluit NAKS. (decree on affiliation to the Netherlands general inspection service for ornamental plants), adopted in implementation of that law. The file shows that the trader in question had bought the products which are the subject-matter of the criminal proceedings from producers who are affiliated to the NAKS.

3 Article 87 (1) of the law on seed for sowing and stock for plant propagation provides that ''it may be decided in relation to any cultivated plant... That the production, keeping, cultivation for purposes other than its utilization in a person's own undertaking, as well as the marketing, resale, importation and offering for export of material for propagation, or engaging in such activities by way of trade shall be confined exclusively to persons affiliated to a supervisory body designated for that plant... ''. Article 88 of the said law relating to supervisory bodies provides, in the case of a member's failing to fulfil the obligation imposed on him by virtue of the rules or general instructions in force, for the application of penal sanctions including placing him under supervision or temporarily suspending his membership. As far as chrysanthemum plants are more particularly concerned article 1 (1) (a) of the above-mentioned decree of 5 April 1967 repeats the prohibition laid down by the provisions of the said law by reserving the marketing, sale, importation, exportation and offering for export of material for the propagation of these plants to persons who are affiliated to a supervisory body. This body, in this case the above-mentioned NAKS, was approved by the minister of agriculture and fisheries on 22 December 1967. Article 26 of its rules provides that one of the organs of the supervisory body, called the raad van Beroep (appeals board), the composition and functioning of which are governed by special rules of procedure and the judgments whereof are in the nature of an opinion binding on the members to whom they are addressed, shall have jurisdiction to hear appeals by a member against decisions other than those relating to the approval of material for propagation by one of the supervisory body's own organs.

4 It is in the light of these national rules that the national Court has referred to the Court for a preliminary ruling the following questions:

''1. Must articles 30 to 47 inclusive of the EEC treaty and regulation (EEC) No 234-68 of the council of 27 February 1968 on the establishment of a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage (official journal, English special edition 1968 (i), p. 26), as subsequently amended, in particular article 10 (1) thereof, be interpreted as meaning that the following are wholly incompatible therewith: rules such as those contained in article 87 of the zaaizaad- en plantgoedwet in conjunction with the aansluitingsbesluit NAKS., which rules, in the light of the history of the law, are primarily intended to guarantee the high quality of the material for cultivation put on the market and pursuant to which rules anyone who is not affiliated to the stichting Nederlandse Algemene Keuringsdienst voor Siergewassen is prohibited from putting on the market, reselling, importing, exporting and offering for export by way of trade in the Netherlands, material for cultivation of chrysanthemums (chrysanthemum morifolium ram.) Such as chrysanthemum cuttings irrespective of whether the material for cultivation satisfies the quality requirements laid down by the said stichting?

2. If articles 30 to 47 inclusive referred to above and the aforesaid council regulation are to be interpreted as meaning that the rules referred to in question 1 are not - or not wholly - incompatible therewith, do those provisions of community law allow of rules such as those described in question 1, whereby for, in particular, dealers in chrysanthemum cuttings, affiliation to the said stichting is, pursuant to its rules and in conjunction with the provisions of articles 87 and 90 of the zaaizaad- en plantgoedwet, confined to those who accept that decisions of the appeals board of the stichting on rulings affecting them made by a body of the stichting, which do not relate to the approval of material for propagation, have the character of a binding decision which, under Netherlands law, precludes the right of appeal to the civil Courts in proceedings in which the Courts have unlimited jurisdiction?

''

5 Although the Court is not competent in the context of a reference to it for a preliminary ruling under article 177 of the EEC treaty to rule whether national legal rules are compatible with provisions of community law, it does on the other hand have jurisdiction to provide the national Court with all the factors relating to interpretation under community law which enable that Court to decide whether those national rules are compatible with the community rules mentioned. Therefore the questions referred to the Court should be regarded as designed primarily to ascertain whether articles 30 to 47 inclusive of the treaty and regulation (EEC) No 234-68 of the council of 27 February 1968 preclude a member state from adopting, in the sector of seed for sowing and plants and more particularly of material for propagation, a series of rules of the kind described by the national Court, reserving the marketing, sale, importation, exportation or offering for export of the said material solely to persons who are affiliated to a specific supervisory body.

6 It is an established fact that the products at issue are ''plants ''within the meaning of subheading 06.02 d of the common customs tariff. Since they are therefore products falling within chapter 6 of the common customs tariff they are governed, as provided for in article 1 of regulation (EEC) No 234-68 of the council of 27 February 1968, by the common organization of the market established by that regulation. As the Court has held in its case-law - judgment of 30 October 1974 in case 190-73 officier van Justitie v j.w.j. van Haaster (1974) ecr 1123 and judgment of 23 January 1975 in case 51-74 p. J. van der Hulst's zonen v Produktschap voor Siergewassen (1975) ecr 79 - regulation No 234-68 has established a common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage falling within chapter 6 of the common customs tariff which, according to article 1 of the said regulation, shall comprise ''common quality standards and a trading system ''. The third recital in the preamble to that regulation indicates that the system of quality standards for products or product groups governed by the common organization of the market introduced in accordance with the procedure laid down in article 43 (2) of the treaty should inter alia ''have the effect of... Promoting commercial relations on the basis of genuine competition ''and the second paragraph of article 3 of the regulation forbids dealings in these products or product groups only if they are not in accordance with the above-mentioned quality standards.

7 As far as the ''trading system ''is concerned the eighth recital in the preamble to the regulation states that ''the common organization of the market involves the removal at the internal frontiers of the community of all obstacles to the free movement of the goods in question ''and for this reason regards the provisions of the treaty removing tariff and trade barriers to intra-community trade and, in particular, articles 30 and 34 relating to the elimination of quantitative restrictions on imports and exports and all measures having equivalent effect as forming an integral part of the common organization of the markets in question. In order to attain these objectives article 10 prohibits ''in the internal trade of the community ''among obstacles to the free movement of goods, ''any quantitative restriction or measure having equivalent effect ''and only allows, under certain conditions, a temporary derogation from this prohibition in the case of products falling within tariff headings Nos 06.02 a i, 06.02 b and 06.02 c ii, to the exclusion therefore of those products, such as the ones in this case, which fall within tariff heading 06.02 d.

8 So it follows from the general scheme of regulation No 234-68 that as far as trade within the community is concerned the common organization of the market in the products in question is based on commercial transactions and is opposed to any national rule which could hinder directly or indirectly, actually or potentially, intra-community trade.

9 For this reason any national provisions or practices which could modify the patterns of imports and exports by not allowing producers to market the products concerned freely are incompatible with the common organization of the market established by regulation No 234-68. Any national rules and regulations such as those at issue in this case which make the freedom of traders to market, resell, import and export or offer for export the material for plant propagation in question conditional on their being affiliated to a public body or a body approved by an official authority such as the NAKS which was referred to by the national Court, would definitely be incompatible with that common organization. Such a restriction on freedom of commercial transactions contravenes article 10 of regulation No 234-68 which lays down the principle of an open market, upon which the common organization of the market in question is based, and moreover does not satisfy the requirement of genuine and effective competition, since by reason of its general application to products offered for sale by persons who are not affiliated it in fact even eliminates from the market those products which are of satisfactory quality.

10 For these reasons the answer to the first question must be that national rules of the kind referred to by the national Court whereby a member state, directly or through the intermediary of bodies established or approved by an official authority, reserves exclusively to persons affiliated to such bodies the right to market, resell, import, export and offer for export material for plant propagation such as chrysamthemum plants which are covered by the common organization of the market in live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage established by regulation (EEC) No 234-68 of the council of 27 February 1968 (official journal, English special edition 1968 (i), p. 26) and forbids persons who are not so affiliated to market, resell, import, export and offer for export such products, whatever their quality may be, is incompatible with the said regulation and also with articles 30 and 34 of the EEC treaty.

11 Having regard to the answer given to the first question there is no need to consider the second question.

Costs

12 The costs incurred by the government of the kingdom of the Netherlands and 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 proceedings pending before the national Court, the decision on costs is a matter for that Court.

On those grounds,

The Court,

In answer to the questions referred to it by the Gerechtshof, Amsterdam, by an order of 10 may 1979, hereby rules: