CJEC, July 7, 1981, No 158-80

THE COURT

The said regulation contains exhaustive rules on the exemption from duty of goods contained in the personal luggage of travellers. On 1 january 1976 power to legislate in matters covered by the common customs tariff passed to the community. According to article 28 of the treaty only the council may authorize the grant of an exemption from customs duty where member states are concerned. In so far as such authorizations do not exist the common tariff applies uniformly in its entirety throughout the whole of the community and no power exists to grant exemptions from customs duties by means of unilateral national measures. It follows that in so far as the german order relating to travellers'luggage provides for exemptions from customs duties which are not laid down by decisions of the council within the framework of the common customs tariff such national measures are void as being in breach of article 28 of the treaty.

Since community regulations apply in national territory the national courts must of their own motion take account of the fact that laws and regulations adopted by the member states in infringement of such a regulation are invalid (judgment of 17 may 1972 in case 93-71 leonesio (1972) ecr 287).

Regulation no 3023-77 is void because it infringes the basic rights to freedom to pursue an occupation and to develop the personality and to equality of treatment. Freedom to pursue an occupation forms part of the right to free choice of employment, which is protected as a basic right in the community. With regard to the trade of wholesalers and retailers of foodstuffs, such freedom of choice includes the right to determine the range of goods and to fix selling prices. Regulation no 3023-77 infringes that liberty which is protected as a basic right.

In order to be able to compete with the goods sold on the ships operating'' butter-buying cruises'' goods must be sold at a price much lower than the purchase price. As this is not feasible the exemption contained in regulation no 3023-77 necessarily means that the plaintiff Rewe-Markt Steffen must cease selling the goods listed in article 1 (2) of the regulation. Furthermore the quantities which qualify for the exemptions are so large that the plaintiff Rewe-Handelsgesellschaft Nord is compelled to restrict considerably this range of goods.

The fundamental right of developing the personality, that is to say the right of pursuing a trade without interference from the public authorities of the community, which is capable of causing distorition of competition, is infringed. The actual principle infringed is that of the equality of treatment of goods crossing the customs frontier of the community. Regulation no 3023-77 confers upon member states only the right to grant or withhold an exemption from import duties. Thus the community legislature itself makes possible treatment which is different in the various member states and which accordingly is not uniform in its application to goods crossing the customs frontier of the community from non-member countries. Regulation no 3023-77 infringes the fundamental right to equality of treatment since a specified category of national undertakings, shipowners whose vessels take part in butter-buying cruises, obtains favourable treatment.

Directive no 69-169 must be interpreted to mean that the exemption from turnover tax and excise duty for which it makes provision applies only to goods contained in the personal luggage of travellers coming from the customs territory of a non-member country or of a member state where they are in free circulation for customs purposes.

Directive no 69-169 is directly applicable on the national territory and accordingly all laws and regulations of the member states which are contrary to the provisions contained in that directive are rendered invalid. The national courts must accordingly of their own motion take account of that invalidity in proceedings instituted by a trader whose rights have thereby been infringed.

The german government concurs in the view of the finanzgericht to the effect that the exemption from customs duties provided for by regulation no 1544-69 may be relied upon only by travellers coming from non-member countries. The same applies to directive no 69-169. On voyages of the kind referred to, travellers accordingly may not rely upon either the exemption from customs duties laid down in regulation no 1544-69 or the exemption from turnover tax and excise duty referred to in directive no 69-169.

However, there is no requirement that, in order to qualify for duty-free importation, the goods should come from a non-member country or indeed that they should have been in free circulation there. On the contrary it is perfectly possible for them to have come from the customs territory of the community but to have been obtained in a tax-free shop or during a voyage in a ship or flight in an aircraft.

The community rules on tax and customs exemptions are not exhaustive and the member states are therefore entitled to enact supplementary provisions. The legal basis for regulation no 1544-69 is article 28 of the treaty which confers upon the community power to settle all matters relating to the application of the common customs tariff, including power to enact exemptions from customs duties. In so far as the community has adopted rules the member states may not adopt measures of their own which are at variance with the community rules.

Within the framework of customs legislation there are still numerous areas not covered by community law which accordingly remain subject to rules made by the member states. The system of customs exemptions is one of those areas, as exhaustive community legislation in that matter has not yet been adopted.

Directive no 69-169 is based on article 99 of the treaty which provides for the gradual harmonization of the legislation of the various member states concerning turnover taxes, excise duties and other forms of indirect taxation, thereby reserving to the member states power to legislate in the fields not covered by community law. Accordingly article 14 (2), taken in conjunction with article 14 (1) (d) of the sixth directive on the harmonization of turnover taxes (sixth council directive of 17 may 1977 on the harmonization of the laws of the member states relating to turnover taxes - common system of value added tax: uniform basis of assessment, official journal 1977, l 145, p. 1), provides that until the entry into force of community rules, member states may maintain derogations covering the final importations of goods qualifying for exemption from customs duties otherwise than as provided for in the common customs tariff.

Regulation no 1818-75 is based on article 43 and 235 of the treaty. These two articles do not confer exclusive powers on the community but leave the member states free to adopt supplementary rules or provisions of their own in so far as community law has not laid down definitive rules in the matter.

The community rules now applicable to the importation free of duties, taxes and levies of goods contained in the personal luggage of travellers are not exhaustive, leaving certain omissions which the member states are empowered to make good. In both tax law and customs law the commission submitted in 1972, that is after the adoption of directive no 69-169 and of regulation no 1544-69, proposals for the adoption of community rules which shows that the commission itself considers that these fields are not yet covered by community law.

The german government claims that imports effected in the sphere of the intra-community movement of travellers simply give rise to the grant of what is known as the'' non-member country exemptions'' if the traveller has begun his journey in a part of the territory of another member state in which turnover tax and/or excise duty are not chargeable on goods consumed within that territory and if he is able to establish that the goods transported in his luggage have been acquired subject to the general conditions governing taxation on the domestic market of a member state and do not qualify for any refund (articles 2 (4) and 4 (4) of directive no 69-169). This principle, which applies to the intra-community movement of travellers from one member state to another must also apply - perhaps a fortiori - if travellers, on excursions, or cruises to the ports of another member state, bring back goods acquired duty-free on board during transit in international waters or in the zone situated between the territorial frontier and the maritime customs frontier of the member state where the voyage terminates. The zone between the maritime frontier of the german territory and the maritime customs frontier under german law does not form part of the zone in which turnover tax and excise duty are imposed; it therefore falls within the definition laid down in the second indent of article 2 (4) and of the second indent of article 4 (4) of directive no 69-169.

The government of the united kingdom does not wish to express any views on the question whether the true construction and effect of the regulations and directives in issue in this case are to render incompatible with community law the various reliefs from the application of the common customs tariff which are permitted by the customs authorities of the federal republic of germany, as complained of by the plaintiffs. The united kingdom starts from the premise that the regulations containing the common customs tariff and the exceptions to it involved in this case are directly applicable in member states and capable of conferring rights on individuals which national courts must protect. The problem with which the united kingdom is concerned is whether they are capable of conferring rights on individuals in the circumstances of the plaintiffs. Their grievance is merely that others have been granted relief beyond what community law authorizes and their claim is rather intended to ensure that other persons have their obligations enforced.

According to the united kingdom the failure by a member state adequately to enforce a particular provision of communitiy law against other persons within its jurisdiction may in certain cases constitute a certain infringement for which the proper remedy lies in appropriate action in the community sphere by one of the organs of the community or by another member state. It is not an infringement for which community law as such affords a remedy to the private citizen through an action in his national courts. However much he may be materially prejudiced by it, no right that has been directly conferred on him by community law has been violated. This is not to say, however, that there can be no circumstances in which he has a remedy in his national courts. It may be that the invalidity of the action (or inaction) of his national authorities which is a consequence of its incompatibility with community law does give rise, if certain conditions are satisfied, to a right of action on his part and does entitle him to certain remedies. But whether that is so, and what those conditions are, and what those remedies may be, are all matters which are to be decided by the national court in accordance with national law. In the united kingdom the law relating to the right of a citizen to compel public authorities to act to enforce the law or for a declaratory judgment as to the duty to enforce it depends on his ability to show a special interest in the subject-matter beyond that of the public generally.

With regard to the second part of the order which concerns turnover tax and excise duty, what is at issue is a directive and not directly applicable regulations. Nevertheless the united kingdom submits that the considerations set out with regard to regulations apply with equal force where the instrument in question is a directive.

It is for the member states to implement directives choosing their own form and method for doing so. Directives are addressed to member states and clearly cannot bind individuals directly or a fortiori enable an individual to compel by a private action in the courts of a member state, the enforcement on other individuals of a law which ex hypothesi does not yet exist.

The government of the united kingdom submits that the court has frequently recognized that directives, if they are sufficiently precise, may be directly effective to enable a citizen to invoke their provisions against a defaulting member state endeavouring to enforce against him personally inconsistent national measures (judgment of 5 april 1979 in case 148-78, pubblico ministero v ratti, (1979) ecr 1629, judgment of 23 november 1977 in case 38-77, enka bv. V inspecteur der invoerrechten en accijnzen, (1977) ecr 2203). That is, however, a very different matter from endeavouring by private action to compel a member state to remedy its default generally. According to the united kingdom such a general remedy is available only to the commission under article 169 of the treaty.

The commission observes that regulation no 1544-69 does not deal with the origin or status under customs law of goods qualifying for favourable treatment but article 1 (1) of regulation no 1544-69, as amended by regulation no 3061-78 expressly lays down that the exemption from customs duties is restricted to'' travellers coming from third countries''. This view is supported by the seventh recital in the preamble to regulation no 3061-78. Finally, the second recital in the preamble to regulation no 3023-77 expressly declares that regulation no 1544-69 does not apply to goods imported following a voyage from a member state on a ship which has not called at a port within the customs territory of a non-member country. Accordingly the mere fact of leaving the customs territory of the community which, on the german littoral, usually coincides with the line of the coast, and the subsequent return to the same territory cannot be considered as constituting a voyage to a non-member country.

The commission raises the question whether it is sufficient for the sovereign territory of a non-member country to have been entered by sea and for the ship by which the return into the customs territory of the community is effected to have passed through the coastal waters of a country which is not a member of the community. In that case the commission considers that, purely theoretically, contact has been made with a non-member country in the course of the voyage but it takes the view that the meaning and the objective of regulation no 1544-69 require that the exemption from customs should likewise not apply in such circumstances.

If the possibility of making purchases in a non-member country during a voyage does not exist from the outset there is no reason to grant on arrival the exemptions from customs duties laid down by regulation no 1544-69 as, according to the commission, such exemptions are granted precisely to permit travellers to import from a non-member country small quantities of travel souvenirs or goods intended to be consumed in the course of the journey or shortly afterwards without paying taxes and without having to comply with complicated formalities. Likewise it does not suffice for a ship to make a symbolic call at the port of a non-member country in the course of which it is impossible to land and to make purchases. Such a case is likewise not covered by regulation no 1544-69.

In order to qualify for the exemption under regulation no 1544-69 a traveller must have stayed for a certain time in a non-member country and in the course of that stay have had an actual opportunity to purchase goods there. If there is such an opportunity regulation no 1544-69 must be applicable even where the one and only objective of the voyage is to make purchases in the non-member country.

The commission maintains that the origin and status of the goods are of no importance and that the only relevant factor is the occasion on which they have been imported. In fact from a practical point of view it is often difficult to determine where the goods have in fact been bought. The simplification of customs formalities for small quantities of goods would be rendered largely illusory if customs officers were required to check where and in what circumstances goods have been acquired.

Furthermore article 2 (1) of directive no 69-169, which governs exemptions from taxation in international travel within the community, specifically emphasizes the fact that the goods in question must be in free circulation and must have been acquired subject to the general rules governing taxation on the domestic market of one of the member states. It might be concluded from the parallel situation of exemptions in customs matters and those in tax matters that the community legislature must have been fully aware of the problem of the origin and status of the goods and that it was not its intention to take a decision concerning the origin and status of the goods, but only as to the place of departure of the travellers. It would be absurd not to impose any duty on goods when they are imported from the non-member country of origin and to require, when they are imported through another non-member country, that they should have been placed in free circulation there in accordance with customs law.

The foregoing prompts the commission to interpret regulation no 1544-69 to mean that the exemption from duty for which it provides applies only to travellers coming from a non-member country, who may possibly have made a stay there permitting them to purchase goods. The point is not to establish whether the goods brought in on entry to the community were purchased in that country or indeed whether the arrangements on free circulation of the non-member country in question applied to them.

Regulation no 1544-69 governs exhaustively customs exemptions for goods in the personal luggage of travellers. The member states are thus prohibited from independently granting exemption from duty in such cases beyond the scope of that regulation.

Article 28 of the treaty states that the council is to decide on'' any autonomous alteration or suspension of duties in the common customs tariff''. The exemptions from customs duty in connexion with travel, such as is at issue here, also forms part of such alterations or suspensions. The member states accordingly have no powers in this field. Under article 113 of the treaty the community also has exclusive powers with regard to alterations or suspensions laid down within the framework of treaties concluded with non-member countries. With regard to the exemptions from agricultural levies and other charges provided for under the agricultural policy the community alone is competent under article 43 of the treaty, in conjunction with the organizations of the agricultural markets. There cannot therefore in any case be any national provisions in this field.

As to the fourth question of the finanzgericht the commission considers that if regulation no 3023-77 were to be considered as constituting definitive provisions certain factors would indicate that it was invalid. In fact that regulation affects the uniform nature of the validity of the common customs tariff when imports are effected on the occasion of journeys made by certain means of transport although there is no substantive reason which justifies that permanent exception. The provisions of the common customs tariff must be applicable uniformly at the external frontiers of the customs territory of the community regardless of the means of transport used by travellers.

Regulation no 3023-77 constitutes discrimination between consumers in breach of article 40 (3) of the treaty because it permits the consumers of a member state who live near the coast to purchase agricultural products at prices which are often based on the prices of the world market whilst other consumers are required to pay the higher prices resulting from the common agricultural policy.

The court has declared that the general principle of equality of treatment forms an integral part of community law (judgments of 19 october 1977 in joined cases 117-76 and 16-77, ruckdeschel and others v hauptzollamt hamburg, (1977) ecr 1753 and in joined cases 124-76 and 20-77, s.a. Moulins et huileries de pont-a-mousson and others v office national interprofessionnel des cereales (1977) ecr 1795). For that reason the commission considers that it would be strange to favour certain forms of selling agricultural products (sales on ships) whilst refusing to grant the same advantages in respect of other forms of sale (retail trade on the continent).

However, regulation no 3023-77 can constitute only a transitional solution and represents a first step in the definitive elimination of certain abnormal situations which date back to the period before the common customs tariff came fully into force, whilst avoiding adverse economic effects for the persons concerned. The commission has emphasized this in its declarations in the minutes of the council when the regulations were adopted by the council. Accordingly regulation no 3023-77 is still justified at present as a transitional solution which makes it possible to avoid adverse economic effects for certain persons.

With regard to the third question of the finanzgericht concerning the rights of individuals the commission considers that it is drafted in too general terms. It should be limited against the background of the main action, that is to say a reply is necessary only where any rights which may arise for individuals under the customs tariff of the community are concerned. The finanzgericht's question amounts in fact to asking whether the provisions of the common customs tariff, and in particular those prescribing the collection of certain customs duties on importation into the community, make available to traders whose activities are protected by such duties, a right to require the national authorities in fact to apply import duties prescribed in the common customs tariff and whether, if necessary, they may rely on that right in proceedings before the national courts.

The commission considers that this is the first time the court of justice has had to consider so unusual a case in which the plaintiffs request the national authorities to apply tax measures to third parties who, according to the plaintiffs, have hitherto been favoured by the national authorities in breach of community law. The exceptional nature of the situation is further emphasized by the fact that the adverse effects for the plaintiffs do not stem from the fact that third parties (the travellers) are favoured but indeed indirectly from the fact that the exemptions granted to travellers take the form of competitive advantages for the competitors of the plaintiffs, that is to say the sellers of certain goods on board ship. It is accordingly necessary to consider whether the provisions of the common customs tariff confer personal rights on the plaintiffs. The commission states that in most cases the court of justice has related the question of the personal rights of individuals under community law to the question of its direct effect. Where a provision of community law is sufficiently clear and precise and when consequently it does not leave any margin of discretion either to the community institutions or to the member states as to its application that provision is regarded by the court of justice as having direct effect in the legal systems of the member states. It follows in general that individuals upon whom such provisions confer rights may rely upon those provisions before the national courts in order to enforce their personal rights flowing from the said provisions (judgment of 17 may 1972 in case 93-71, leonesio, (1972) ecr 287, judgment of 19 december 1968 in case 13-68, salgoil, (1968) ecr 453 and the judgment of 17 december 1969 in case 33-70, sace, (1970) ecr 1213). However, such provisions must in fact have as their objective the protection of the interests of persons or undertakings (judgment of 22 january 1976 in case 60-75, russo v aima, (1976) ecr 45).

There is no doubt that the tariffs imposed by the common customs tariff are sufficiently clear and precise and that they consequently have direct effect in the legal systems of the member states. However, the duties provided for under the common customs tariff are exclusively protective duties which in general shield only the economy or certain sectors of activity within the community and they were not intended to protect the existence of particular undertakings. Traders in their capacity as individuals or particular undertakings are not protected by customs duties.

In order to recognize that this point of view is correct the commission considers that it is sufficient to examine the consequences of a procedural nature if a right of such scope were granted to individuals. The recognition of a personal right to have the prescribed customs duties applied would mean that individuals could request a national court, in proceedings concerning failure by the member states to comply with the treaty, to give judgment not only in cases directly concerning them but also in cases of entirely general scope. The legal system laid down by the treaty prescribes that only the court of justice has jurisdiction in connexion with an infringement of the treaty by a member state and then only on the application of the commission or of another member state. That consideration prompts the commission to refuse to recognize a personal right of the kind referred to in the question.

That does not mean, however, that in such cases individuals do not have any rights. The order for reference shows that the national law fully authorizes a claim that rights have been infringed by unlawful conduct of the authorities in breach of community law or by invalid national laws. In order to make such a claim individuals do not require a personal right based on community law. As the court has already stated, community law does not require in all cases that complete protection should be available before the national courts (judgment of 6 may 1980 in case 152-79, lee v minister for agriculture, (1980) ecr 1495). The principal point is that the effectiveness of community law must not be fundamentally jeopardized (judgment of 21 january 1976 in case 60-75, russo v aima, (1976) ecr 45).

With regard to the fifth question, according to the case-law of the court of justice the national authorities are bound to apply a provision of community law so long as it has not been declared invalid by the court of justice (judgment of 13 february 1979 in case 101-78, granaria v hoofdproduktschap, (1979) ecr 623).

The commission maintains that in this connexion rights against the national authorities cannot be based on the fundamental rights which are also recognized in community law since the basic rights in community law are clearly applicable only against the community institutions and not against the national authorities even where the latter are carrying out duties which have been entrusted to them by the community.

With regard to the second part of the order for reference concerning the turnover tax and excise duty the commission considers that the reply should be that articles 1 and 2 of directive no 69-169 are to be interpreted as meaning that the exemption from turnover tax and excise duty therein provided for applies only to goods in the personal luggage of travellers coming from a non-member country or from another member state perhaps after crossing the high seas but not in the case of entry from the high seas alone. If entry is effected from another member state, possibly after crossing the high seas or a non-member country, there is an additional condition for granting the exemption, namely that the goods should have been in free circulation in the member state in pursuance of articles 9 and 10 of the treaty and must have been acquired subject to the general rules governing taxation on the domestic market of one of the member states.

The commission maintains that directive no 69-169 contains exhaustive rules on exemptions from turnover tax and excise duty on goods carried in the personal luggage of travellers in international travel. The member states are not entitled to grant other exemptions of this nature in international traffic. Directive no 69-169 does not provide any right for individuals to require that the authorities of a member state should collect taxes in cases in which the directive does not provide for any exemption from turnover tax and excise duty. If a member state does not require travellers, on importing goods into its territory, to pay the taxes normally prescribed there may be a breach of community law if and in so far as community law provides that the collection of these taxes is mandatory. Directive no 69-169 and the sixth directive on value-added tax impose such an obligation on member states. Nevertheless private persons do not have a right corresponding to that obligation of the member states that the taxes shall in fact be collected. In fact the national legal systems do not make provision for a right on the part of individuals to require that other individuals shall in fact pay their taxes, nor does community law provide any right of this nature.

With regard to regulation no 1544-69 on customs duties, the council considers that a distinction must be drawn between the persons who import the goods and the goods imported. With regard to the persons, they must be travellers entering the community from a non-member country. With regard to the goods imported by travellers coming from a non-member country, regulation no 1544-69 does not require that they should come from the customs territory of a non-member country or even that they should have been placed in free circulation for customs purposes in that country. It does not matter whether the goods from a member state or from a non-member country.

Directive no 69-169 is largely identical as to its structure and content with regulation no 1544-69: in both cases the exemptions in question relate to the movement of travellers across a frontier. The considerations which the council sets out with regard to regulation no 1544-69 are accordingly applicable to directive no 69-169.

On the question whether regulation no 3023-77 is void because it is in breach of a superior rule of community law the council refers to the reply which it gave on 19 july 1978 to written question no 1316-77 by mr notenboom, a member of the assembly, who asked inter alia:

''2. What political, economic and legal justifications can the council adduce to support the provisions of regulation (eec) no 3023-77... ?

''

The council gave the following reply to that question:

''2. The council considers that, bearing in mind the aim of putting an end to abuses, it gave due consideration in regulation (eec) no 3023-77 to the political, economic and legal aspects of the problems presented and thus endeavoured, in a limited and non-definitive manner:

- to take account of the consequences of such measures for economic activity and employment in certain regions of the community bordering on third countries and subject to competition from the latter in the same sectors of activity;

- to avoid unfavourable economic effects both on community products and on products imported from third countries and released to the market in the community, and any distortion of competition between traders and discrimination between community consumers, particularly with regard to agricultural products, of which there is a surplus in the community;

- to establish equal conditions of competition for community agricultural products and for these same products coming from third countries, when sold on board ship;

- to protect the community's budgetary interests by restricting the granting of the exemptions authorized under the regulation to very small quantities and specific products and by merely making these arrangements optional for the member states.''

(Official journal 1978, c 199, p. 17).

Regulation no 3023-77 is not in breach of the principle of equality or the prohibition of discrimination. First of all with regard to consumers anyone may go on the cruises in question and thus take advantage of the exceptional provisions if the member state has exercised the power to grant the exemption from import taxes, as in the case of the federal republic of germany. The right to go on such trips is not reserved either in law or in fact to the residents of the coastal regions from which the ships sail. A large number of travellers come from places far from the coast, from all over north germany. It is clear that all discrimination on ground of nationality in relation to nationals of other member states (article 7 of the treaty) is also excluded.

The council maintains that the butter-buying cruises do not constitute a breach of the rule of equality in competition. In 1976 the shipowners organizing day-trips in the baltic commissioned professor juergensen of hamburg to draw up a report on the organization, consequences and analysis of that traffic. That report, which is dated 24 february 1977, was thus drawn up before the adoption of regulation no 3023-77. It shows that in 1976 an average of 4.5% of the pass engers came to the ships on foot, 20.7% by motor-car, 73.6% by motor-coach and 1.2% by train. The report calculated the loss of earnings sustained by retailers in the foodstuffs branch in the'' relevant districts and towns'' of schleswig-holstein, from flensburg to lubeck via kiel, at 0.3% of their turnover or, in the case of tobacco retailers, at 1.1%. According to the report that branch of the trade could afford to bear such losses.

In the opinion of the council sales on ships affect the retail and wholesale trade in the coastal regions only to a very small degree. That effect is contained'' within reasonable limits''. For example, if sales of butter were less, on the other hand the extension of the season in the holiday resorts on the baltic, the purchasing power of the sailors, who are now employed all the year round, and that of the sales-staff on board the ships and even the fresh food needed for such ships constitute a certain compensation.

Likewise there has been no breach of the principle of proportionality. The means chosen are well adapted to the situation. The exceptional arrangements are applied only to very limited quantities.

Other considerations concerning the economy as a whole militate in favour of the arrangements in question: the day-trips assist in prolonging the tourist season, which furthermore is relatively short, on the german baltic coast. Such trips counter the tendency of travellers to leave these regions, which do not enjoy such a favourable geographical position; furthermore they play a part in maintaining and creating employment. Without such day-trips most of the ships in question would have to be laid up with the crew laid off for six months in the off-season. It is estimated that the number of persons working throughout the year on board the ships amounts to roughly 1 000. To this must be added persons employed by the coach companies, undertakings fitting out the ships and shipyards.

The council considers that there are probably several questions to consider together, of which sales on board ship is one. It refers to the tax-free shops at airports and the victualling of ships (and international trains).

With regard to the tax-free shops it has not yet been possible to adopt community rules, despite a number of attempts. It is sufficient to point out that the european assembly declared, in the course of its sitting on 18 april 1980, in its opinion on the proposal submitted by the commission to the council for a fifth directive on the harmonization of provisions laid down by law, regulation or administrative action relating to the rules governing turnover tax and excise duty applicable in international travel, that it requested

''The commission to report to it on the problems connected with tax-free shops and on the desirability of abolishing them in respect of travel between member states'' (point 8 of the resolution embodying the opinion, official journal 1980, c 117, p. 83).

This case concerns a'' third party'' that is a person who has only a secondary concern whether or not a member state applies the community provisions in favour of the person directly concerned; there may be a reaction affecting a third party, which is why the finanzgericht submits the question whether protection will be afforded by the courts.

The council suggests that the court of justice should reply in the negative to the questions concerning the protection of legal rights. The treaty provides sufficient remedies for the protection of legal rights. The possibility of submitting a question for a preliminary ruling under article 177 of the treaty is sufficient in this connexion. Furthermore the provisions of the second paragraph of article 173, the third paragraph of article 175 and article 184 of the treaty show that an individual has only a limited right to challenge generally-applicable provisions of community law. None of this implies any reduction in legal protection since the means available under national law, in conjunction with article 177 of the treaty, together with the claim for damages provided for under the second paragraph of article 215 provide remedies which remain fully available.

III - oral procedure

Rewe-Handelsgesellschaft Nord mbH and Rewe-Markt Steffen, kiel, represented by gert meier, chief legal adviser to rewe-zentral ag, the government of the federal republic of germany, represented by a. Deringer, rechtsanwalt, cologne, the french government, represented by h. Marty-gauquie, acting as agent, the commission of the european communities, represented by jorn sack, a member of its legal department, acting as agent, and by the council of the european communities, represented by bernhard schloh, its legal adviser, acting as agent, presented oral argument at the sitting on 4 february 1981.

The advocate general delivered his opinion at the sitting on 18 march 1981.

Decision

2 These questions were submitted in the course of proceedings between a wholesaler and a retailer established in the federal republic of germany on the one hand and the hauptzollamt (principal customs office) kiel, on the other, and raised the issue whether the'' butter-buying cruises'' run by various shipping companies from ports on the baltic coast are in breach of community law.

3 The'' butter-buying cruises'' cross the maritime customs zone into the territorial waters or on to the high seas outside german territory. During the cruise passengers on the ships have the opportunity to buy goods such as spirits, butter, meat, tobacco, perfume and other products. Within certain limits no tax is charged on the importation of the goods at the german frontier. The'' butter-buying cruises'' are of considerable commercial importance to the undertakings which organize them.

4 The first plaintiff in the main action is a wholesaler whose head office is near kiel in the federal republic of germany. It markets, inter alia, the same products as those sold during the cruises. Its customers, one of whom is the second plaintiff in the main action, are retailers established in the region of the baltic coast.

5 The order for reference shows that the applicants argued before the finanzgericht that the effect of these cruises is to withdraw a large part of the purchasing power of the inhabitants of the baltic coast from the local retail and wholesale businesses and to redistribute it amongst the shipping companies which arrange such cruises. The fact that these undertakings are able to sell goods tax-free or subsidized gives them a considerable competitive advantage which leads to distortion of competition.

6 The plaintiffs originally asked the finanzgericht to declare that the defendant must stop permitting the goods concerned to clear customs free of tax. They subsequently requested the finanzgericht to order the defendant not to apply to passengers, when they cross the customs frontier, the exemption in respect of goods acquired by them tax-free or subsidized on'' butter-buying cruises''.

7 The finanzgericht, before which the dispute was brought, submitted the following questions to the court of justice for a preliminary ruling:

''Customs duty

1. Is regulation (eec) no 1544-69 of the council of 23 july 1969, as last amended by council regulation (eec) no 3061-78 of 19 december 1978, to be interpreted as meaning that the exemption from customs duties mentioned therein applies only to goods which come from the customs territory of a non-member country and additionally as the case may be to goods which are in free circulation in that country for the purposes of customs law, or is it sufficient for the goods to have originated in member states and to have been imported by sea across the maritime customs border or the frontier of the national territory of the respective member state?

2. Does regulation (eec) no 1544-69 of the council, as last amended by council regulation (eec) no 3061-78, where appropriate read in conjunction with article 28 of the eec treaty - save in the case of the goods covered by council regulation (eec) no 3023-77 of 20 december 1977 - contain exhaustive rules for the exemption from customs duties of goods in travellers'personal luggage or may member states independently grant exemption from customs duties going beyond the scope of regulation (eec) no 1544-69 save in the case of the goods covered by regulation (eec) no 3023-77?

3. Does a breach of a community regulation give directly applicable rights to a person whose rights have been adversely affected by provisions laid down by the law or administrative action of a member state or the implementation thereof which are inconsistent with the provisions of that regulation so that he may bring an action before a national court for the application of measures contravening community law to be discontinued or for the provisions of community law to be complied with?

4. Is council regulation (eec) no 3023-77 invalid because it is in breach of a superior rule of community law (for example, the principle of equality, the prohibition of discrimination, freedom of competition, the principle of proportionality)?