C-37/73
Grade B
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Not the law itself: Judgment
Address https://gelex.eu/eli/EU/judgment/61973J0037@1973-12-13/en
In Joined Cases 37 and 38/73 Reference to the Court of Justice under Article 177 of the EEC Treaty by the Arbeidsrechtbank of Antwerp for a preliminary ruling in the actions pending before that Court between SOCIAAL FONDS VOOR DE DIAMANTARBEIDERS, of Antwerp, and N. V. INDIAMEX, of Antwerp (Case 37/73), and ASSOCIATION DE FAIT DE BELDER, of Antwerp, and its partners J. W. L. and R. De Belder (Case 38/73), on the interpretation of the provisions of the EEC Treaty and of Regulation No 950/68 of the Council (OJ 1968, L 172) implementing the Common Customs Tariff as from 1 July 1968, concerning the application by the Member States, after that date, of charges having an effect equivalent to customs duties on goods imported directly from third countries, THE COURT composed of: R. Lecourt, President, M. Sørensen, President of Chamber, R. Monaco (Rapporteur), J. Mertens de Wilmars, H. Kutscher, C. Ó Dálaigh and A. J. Mackenzie Stuart, Judges, Advocate-General: J. P. Warner Registrar: A. Van Houtte gives the following
JUDGMENT
Issues of fact and of law The facts of the case, the subject matter of the request and the views of the parties may be summarized as follows:
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sec_1 I —
Facts and procedure
1. The Belgian Law of 12 April 1960, creating a Social Fund for diamond workers, was supplemented, pursuant to the Law of 28 July 1962, by an Article 2a, which laid down, at paragraphs 1 and 2, that: Any person who imports rough diamonds shall be liable to payment of a contribution to the Social Fund in order that it may fulfil the task with which it has been entrusted under Article 2 … The amount of the contribution due from such persons shall be equal to 1/3 % of the value of the diamonds imported by them. Importers of rough diamonds proposed a number of exceptions in relation to this legislation claiming, inter alia, that payments made to the Fund should be considered as charges having an effect equivalent to customs duty as prohibited by the Treaty, and the Court of Justice was requested to give a preliminary ruling on just such a problem in Joined Cases 2 and 3/69, decided by the Judgment of 1 July 1969 (Rec. 1969). In consequence of this Judgment, the Belgian legislature adopted the following provisions by the Law of 13 April 1971, amending the Law of 12 April 1960: Article 1 Article 2a of the Law of 12 April 1960 … shall be interpreted to mean that there shall be exemption from the contribution when the grant of such exemption arises from the international obligations of Belgium. Article 2a (2) Further, the King shall decree the measures necessary to bring the obligation for the payment of a contribution into conformity with the international obligations of Belgium. Finally, Article 3 of the Royal Decree of 26 April 1971, enacted in application of the law of 13 April 1971, provides for the following, inter alia: The contribution … shall not be payable on imports of rough diamonds from Member States of the European Economic Community or from countries in association with that Community. The company N.V. Indiamex (hereinafter referred to as Indiamex), and the association de fait De Belder and its partners J. W. L. and R. De Belder (hereinafter referred to as De Belder), importers of rough diamonds from third countries, maintained before the Arbeidsrechtbank of Antwerp that, after the coming into force of the Common Customs Tariff (CCT) (1 July 1968), the levying of a contribution on imports of rough diamonds must be considered incompatible with the objectives of the Treaty and of Regulation No 950/68 of the Council implementing the CCT, since, as from that date, national charges having an effect equivalent to customs duties are also prohibited for goods which are imported directly from third countries, which are not associated with the Community. The Social Fund for diamond workers (hereinafter referred to as the Fund) challenged this argument, submitting, inter alia, that nationals of the Member States cannot substantiate the existence of any incompatibility with the Treaty unless the Commission, acting under Articles 155 and 169 of the Treaty, has established the existence of a serious obstacle to the working of the customs union and of the Common Customs Tariff, and has intervened in this connection. Having regard to the abovementioned legislative provisions and to the Community rules, and having taken account of the abovementioned case law of the Court of Justice in Judgment 2 and 3/69, the Arbeidsrechtbank of Antwerp decided, by judgments of 23 February 1973, registered at the Court on 7 March 1973, to suspend the proceedings in the two cases before it and refer the following questions to the Court, pursuant to Article 177 of the Treaty:
1.
1. Does the EEC Treaty or Regulation No 950/68 of the Council of 28 June 1968, on the Common Customs Tariff, impose restrictions upon the freedom of Members States to introduce or maintain, after 1 July 1968, charges having an effect equivalent to customs duties on goods imported directly from third countries?
2. Must it be considered that, after 1 July 1968, charges having an effect equivalent to customs duties levied on goods imported directly from third countries are always and in all circumstances contrary to the provisions or the objectives of the EEC Treaty or the Common Customs Tariff? Or are they so only in certain circumstances? Or is it so only in respect of certain charges having equivalent effect, but in all circumstances? Or is it the case only in respect of certain charges having equivalent effect, but only in certain circumstances?
3. If, after 1 July 1968, a Member State maintains a charge which existed previously and which, having an effect equivalent to a customs duty, is levied on goods imported directly from third countries, must this be considered a modification of or an addition to the CCT within the meaning of the Judgments of the Court of Justice of 18 February 1970 in Case 40/69 (Bollmann), and of 18 June 1970 in Case 74/69 (Krohn)?
4. Were the Member States permitted to maintain charges having an effect equivalent to customs duties, existing at the time of entry into force of the CCT, or did the latter impose on the Member States an obligation to eliminate those charges?
5. Does the obligation, if any, to abolish those charges depend on an intervention by the Commission of the EEC under Articles 155 and 169 of the Treaty?
6. Does the obligation, if any, to abolish those charges depend on establishing that there is a disturbance (and possibly a serious disturbance) in the functioning of the CCT?
7. Does the establishing of such a disturbance fall within the exclusive jurisdiction of the Commission of the EEC (Article 29 of the Treaty)?
8. Can the limitations which (according to point 2 in the operative part in the Judgment of the Court of Justice of 1 July 1969 in Cases 2 and 3/69 — Sociaal Fonds voor de Diamantarbeiders v Chougol and Brachfeld)may be imposed on the Member States for the purpose of attaining the objectives of the CCT result only from an act of the competent institutions of the EEC, or can such limitations also result from the very objectives of the Treaty and the CCT?
2. Indiamex, represented by A. Le Paige, De Belder, represented by J. Dyck, the Fund, represented by G. Impens, and the Commission of the European Communities, represented by its legal adviser A. Abate, submitted written observations in accordance with Article 20 of the Protocol on the Statute of the Court of Justice. After hearing the report of the Judge-Rapporteur and the opinion of the Advocate-General, the Court decided to open the oral procedure without any preparatory enquiry.
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Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice
The Fund describes the form and objectives of the contribution in question, under Belgian law, emphasizing the underlying reasons for this contribution and for the national legislation concerned therewith, reasons which in its view are wholly social. It recalls that the problem raised by levying this charge has already been considered by the Court of Justice in a Judgment given on 1 July 1969 (Cases 2 and 3/69). Having set out the conclusions which in its view may be drawn from this Judgment and which define the Court's position with regard to the subject, the Fund goes on to examine various aspects of the problem in the light of Community Law.
sec_1 A —
Observations submitted by the Fund
The Fund notes that from the point of view of the Treaty the elimination of customs duties between the Member States and the establishment of the Common Customs Tariff are two quite distinct objectives. Many rules relating to the elimination of customs duties between Member States do not automatically apply to the establishment of the CCT. In particular, with regard to the levying of charges having an effect equivalent to customs duties, the Fund believes that it appears from the Judgment of the Court in Joined Cases 2 and 3/69 that, although such charges are prohibited in the context of intra-Community trade, they may legitimately be levied in trade with third countries. For the period following the entry into force of the CCT, the principle of the legality of these charges is conditional (subject to such limitations as may be imposed for the attainment of the objectives of the Common Customs Tariff), but the findings of the Court on this matter are not binding. The Judgment clearly indicates that the provisions which impose on the Member States precise, well-defined obligations, which do not require, for their implementation, any further intervention by the national authorities (Paragraph 22) are the prohibitory provisions of Articles 9 and 12 of the Treaty, and do not include those relating to the establishment of the CCT. It is the former provisions which directly create rights on behalf of those who come within their ambit, not the latter, which moreover do not fulfil any of the conditions which, according to the Court, are necessary for the existence of a self-executing rule.
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(a) Distinction between the rules of the Treaty relating to the customs union
According to the Fund, it is evident from Article 3 (b) of the Treaty that the CCT and commercial policy are intrinsically bound together. The problems raised by charges having equivalent effect, within the context of the CCT, should therefore, in relation to imports from third countries, be examined in the light of the common commercial policy, the implementation of which was entrusted by the Treaty to the Council and the Commission. Moreover, that is why Articles 18 to 29 inclusive of the Treaty contain no prohibition in principle in relation to charges having equivalent effect. The latter are only prohibited where the relevant Community institutions consider them to be incompatible with the successful operation of the CCT and the common commercial policy. Furthermore, the CCT is not a rigid scale of tariffs, but rather a flexible system which, inter alia, can be used by the Community as a political weapon in tariff negotiations with third countries.
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(b) The CCT and commercial policy
The Fund notes that the implementation of the customs union is linked not only to the establishment of the CCT, but also to a number of legal rules based on the internal customs law of the Member States, the objective of which is to ensure the application and successful operation of the CCT. Since this customs law is not the same in each Member State, the problem of its harmonization arises. But this cannot be achieved without the intervention of the Council and of the Commission, which are empowered to define and develop the common commercial policy.
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(c) The CCT and national legislation for its implementation
The Fund further maintains that in view of difficulties which might affect the establishment of the CCT, Articles 18 to 29 inclusive of the Treaty entrusted the Commission with special tasks and with a power of supervision (Article 155) and of intervention. Such intervention must not take place unless disturbances in the economic life of the Community or in the operation of the CCT reach a certain degree of gravity. The hypothesis according to which any disturbance, however small, is contrary to the objectives of the Treaty, is clearly contradicted by Articles 25, 26 and 29 of the Treaty. Moreover, as soon as the Commission takes notice that a Member State has failed to fulfil one of its obligations under the Treaty, it is bound to act against such failure, pursuant to Article 169 of the Treaty. The outcome of all these rules, according to the Fund, is that charges having an effect equivalent to customs duties applied to goods imported directly from third countries cannot be held to be illegal unless the Commission has first ascertained that the rule with regard to the free movement of goods imported into free circulation within a Member State is not of itself capable of counteracting the disruptive effects of such national measures which are prejudicial to the implementation of the CCT. As a general rule, if national charges having equivalent effect are not, in principle, prohibited, it is nevertheless not in accordance with the successful operation of the Tariff or with the objectives of the Treaty that a Member State should increase charges already in force or introduce new ones, with a view, for example, to arresting a decrease in the national tariff required by the progressive implementation of the CCT. At all events, the problem of the existence of a disturbance is a factual problem, the solution to which must be sought in the light of each case as it arises and not in the context of these proceedings, the sole objective of which is the interpretation of Community law. Moreover, the solution to this problem is linked to a certain number of facts which can be ascertained neither by the parties nor by national courts. Only the Commission or, if need be, the Member States are empowered to submit such a question to the Court.
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(d) The establishment of the CCT
The Fund notes that although it is true that the CCT is the subject of a Council regulation and that regulations are, according to Article 189 of the Treaty, directly applicable, confusion must be avoided, in relation to the self-executing character of rules of Community law, between two different concepts: the rules of the Treaty, on the one hand, and those of regulations, on the other. The problem as to the direct applicability of rules of Community law can arise only at the level of the provisions of the Treaty. In fact, no provision of the Treaty concerning the establishment of the CCT fulfils the conditions which would allow it to be described as self-executing. Articles 18 to 29 inclusive do not lay down any prohibition, in the context of charges having equivalent effect, such as those set out in Article 12, which is concerned only with intra-Community trade. There is therefore no question of considering these provisions as self-executing. Moreover, neither the text of Regulation No 950/68 nor the preamble thereto contains provisions which would allow a prohibition on principle of charges having equivalent effect to be deduced. Regulation No 950/68 is concerned solely with customs duties. Moreover, it would not be true to say that this Regulation is the act containing the CCT, since Regulation No 950/68 is only one of numerous regulations adopted up to the present time by the Council for the implementation of the CCT. The conclusions drawn by Indiamex and De Belder from the case law of the Court concerning the jurisdiction of the Member States in matters arising out of Community regulations must be understood in the light of the foregoing comments.
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(e) Regulation No 950/68 of the Council
The Fund recalls that, unlike the provisions of the section devoted to the elimination of customs duties between Member States, in the section concerned with the setting up of the common customs tariff the Treaty does not prohibit the imposition of charges having equivalent effect upon goods imported directly from third countries, and therefore concludes that the authors of the Treaty did not consider, in principle, that such charges are contrary to the objectives of the Treaty. The obligation incumbent upon the Member States under Article 5, paragraph 2, of the Treaty, to abstain from any measure which would jeopardize these objectives, is to be defined with special reference to the principle — already confirmed by the Court — according to which the extent of such obligation, in each case as it arises, depends upon the provisions of the Treaty at issue or upon such rules as may be discerned from its general structure. Moreover, although the CCT is an instrument intended to facilitate the implementation of a common commercial policy, a certain number of exceptions was envisaged, in accordance with the objectives of the Treaty. Accordingly, it is illogical to state that all charges having equivalent effect, however minor their importance in monetary terms, are contrary to the fundamental nature of the Community and the objectives of the Treaty. Not only must the disturbance be serious, but it must also be viewed in a context wider than that of the CCT. In these proceedings it has by no means been shown that the contribution at issue would result in a real disturbance of this kind (cf. statistical data given in the Fund's written observations). On numerous occasions the Fund refers to an opinion, annexed to the written observations, given by G. Van Hecke, professor at the Catholic University of Louvain. Having related the facts behind the proceedings and examined the general problem raised by the imposition of national charges having equivalent effect upon goods imported directly from third countries, this opinion contains the following conclusions on each of the questions referred:
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(f) The objectives of the Treaty
1. The EEC Treaty and Regulation No 950/68 do not, in principle, deprive the Member States of their power to introduce or to maintain charges having equivalent effect. Member States are at liberty to introduce or to maintain a charge having equivalent effect, insofar as this liberty is compatible with the Community's commercial policy.
2. Charges having an effect equivalent to a customs duty levied on products imported directly from third countries are not incompatible with the CCT, since they do not form part of tariff law. However, in certain circumstances, they may be contrary to the objectives of the Treaty.
3. The Member States may neither modify nor supplement the customs law as it appears in the CCT. A charge having an effect equivalent to a customs duty, levied on goods imported from third countries, does not however modify the CCT and adds nothing thereto. The CCT in fact forms part of tariff law, whereas the above mentioned charge is the product of customs legislation.
4. Since charges having equivalent effect are the product of customs legislation, the solution to the problem that they raise is linked to a harmonization of such legislation. This harmonization involves a wide selection of legislative provisions, and requires the implementation of Articles 100 to 102 of the Treaty. In the absence of harmonization it is difficult to see which provisions involve an obligation on the part of the Member States to abolish charges having equivalent effect.
5. If the charges in question are contrary to an objective of the Treaty it is necessary for the Commission to intervene to abolish them. However, no such intervention is necessary if the charges infringe a provision expressly prohibiting them, or if they are applied by way of a misuse of powers.
6. The abolition of charges having equivalent effect applied to trade with third countries is not dependent upon establishing that there is a disturbance of the operation of the CCT, since the obligation to abolish such charges may equally arise from circumstances other than such disturbance.
7. The Commission alone has jurisdiction to establish the existence of a disturbance in the context of the common commercial policy and to undertake the necessary measures to this end.
8. The objectives of the CCT form part of the objectives of the Treaty. Such limitations as may be imposed on the Member States for the attaining of these objectives derive from the powers of the Community Institutions.
Indiamex and De Belder, who submitted identical statements, observe that these statements were drawn up in conformity with a consultation given by M. Walbroek, professor at the University of Brussels and director of legal research at the Institute of European Studies. They emphasize, firstly, that although the Judgment of the Court of Justice in Cases 2 and 3/69 holds that the levying of a contribution on rough diamonds imported from third countries is compatible with the Treaty during the period preceeding the entry into force of the CCT, on the other hand, as regards the period following the entry into force of the CCT, that Judgment points to the difficulties which could face the Community if a Member State takes unilateral action in adopting or maintaining national measures by which it applies financial charges other than customs duties to goods imported directly from third countries. Having briefly recalled the principles underlying the operation of the common market, seen also in the light of Article 9 of the Treaty, Indiamex and De Belder analyse these principles and conclude that once the free movement of goods within the Community has been secured and the Common Customs Tariff implemented, the application by the Member States of charges having equivalent effect on imports from third countries would involve not only deflections of trade and an increase in import costs, but also a disturbance of the balance of power as between the Member States and the Institutions of the Community, as established by the Treaty. When the Judgment of the Court of Justice in Cases 2 and 3/69 is also taken into account, it is alleged that the unilateral action on the part of a Member State in levying, after the entry into force of the CCT, of financial charges other than a customs duty on imports from third countries is, in principle, incompatible with the successful functioning of the customs union. Furthermore, the fact must not be overlooked that since Regulation No 950/68 is directly applicable, the Member States are prohibited, in the absence of any provisions to the contrary, from adopting measures affecting the scope of that Regulation. Accordingly, national measures providing for charges on imports from third countries other than those laid down by the CCT are contrary to the Treaty, by reason of the fact that they amend the scope of Regulation No 950/68. Moreover, the possibility granted to the Member States to apply charges having an effect equivalent to customs duties infringes the requirement of a uniform application of the Common Customs Tariff with regard to third countries, and thus jeopardizes the harmonious functioning of the customs union. Clearly, a State which does not respect this requirement contravenes the provisions of Article 5, paragraph 2, of the Treaty, since the harmonious functioning of the customs union is one of those objectives which the Member States must respect. Furthermore, the prohibition contained in that Article is addressed to all national authorities, including judicial bodies. It is clear, precise and unconditional, and allows the Member States no exercise of discretion. It is pointless to maintain that the problem as to the operation of the Common Customs Tariff is a problem of fact, coming under the exclusive jurisdictions of the Commission or the Member States and that therefore it cannot be examined by national courts. On the contrary, the latter are perfectly entitled to examine whether an internal legal measure is likely to jeopardize the uniform application of the CCT and to conflict with the objectives pursued by the latter. Accordingly, interested parties are empowered to claim, directly before their national courts, that a charge having equivalent effect applied to goods imported directly from a third country is incompatible with the Treaty. Moreover, the self-executing character of such a prohibition results not only from the abovementioned Article 5, paragraph 2, but also from the nature of Regulation No 950/68. The fact that the Common Customs Tariff instituted by that Regulation did not come into being automatically but only as the result of complex operations, in which the Community Institutions played an important role, and that it may be made the subject of amendments or of certain exceptions pursuant to Articles 25, 26 and 28 of the Treaty is no obstacle to its direct applicability. Finally, Indiamex and De Belder challenge the contention that the allegedly minimal amount of the charge in question could justify it in relation to the Treaty. The Court of Justice has in fact recognized, in Cases 2 and 3/69, that the insignificance of a charge having equivalent effect cannot be a factor which would allow that charge to be legitimized in the context of trade relations between the Member States: there is no reason why such should not also be the case for relations with third countries. In the light of these comments, Indiamex and De Belder propose that the following answers be given to the national court:
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Observations submitted by Indiamex and De Belder
1. Not only Articles 18 to 29 of the Treaty but also Regulation No 950/68 of 28 June 1968, concerning the CCT, limit the Member States' power to maintain or introduce, as from 1 July 1968, charges having an effect equivalent to customs duties on goods imported directly from third countries.
2. Apart from cases where the application of such charges is explicitly allowed by a decision duly taken by the Community, all charges of this nature levied on goods imported directly from third countries must, as from 1 July 1968, be considered, under all circumstances, as being incompatible with the objectives of the Treaty establishing the European Economic Community and the CCT. The fact that the charge may be insignificant is not sufficient to render it compatible with those objectives.
3. The fact that a Member State maintains, as from 1 July 1968, a charge having an effect equivalent to a customs duty, applied to goods imported directly from third countries and introduced before that date, constitutes a measure whose object is to modify the scope of the CCT and to supplement its content.
4. The entry into force of the CCT created, in respect of the Member States, the obligation to eliminate all charges having an effect equivalent to customs duties existing at that date.
5. This obligation does not involve any intervention by the Commission under Articles 155 and 169 of the Treaty.
6. The obligation depends neither on establishing that there is a disturbance, nor a fortiori a serious disturbance in the operation of the CCT. The latter is disturbed by the very fact of levying a charge having equivalent effect on goods imported directly from third countries.
7. The establishing of such a disturbance — which is not however a precondition for the elimination of the charge — may be affected not only by the Commission, but also by national courts, insofar as they consider it expedient.
8. The limitations which may be imposed on the Member States in attaining the objectives of the Common Customs Tariff, according to point 2 of the operative part of the Judgment of the Court of Justice in Joined Cases 2 and 3/69, are those which result from the very objectives of the Treaty and of the CCT, and are not dependent on any intervention on the part of the Community.
The Commission, in a detailed examination of the various items of legislation which apply in this case, outlines the role played by charges, especially national charges, having an effect equivalent to a customs duty within the context of the principles governing: trade arrangements within the Community, trade arrangements with third countries, Regulation No 950/68 of the Council and its ambit.
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Observations submitted by the Commission
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1. As for trade arrangements within the Community, the Commission points out that these are based on the concept of customs union, which is to be achieved in two different stages: that of the elimination of intra-Community customs barriers and the setting up of a Common Customs Tariff (tariff union), and that of the adoption of a complete common customs legislation (customs union). As regards the elimination of customs barriers between Member States, the Commission notes that Articles 9, 12, 13 and 16, prohibiting national charges having equivalent effect in trade between Member States, makes no mention of trade with third countries. Moreover, Article 10 is based on the principle that such charges are applied to goods imported directly from third countries. As regards the customs union, the Commission remarks that it is not yet complete, with the result that complete uniformity as between the customs procedures applied to imports from third countries has not been achieved. It is the purpose of Community customs procedures to ensure the uniform application of the Common Customs Tariff, but since the requisite harmonization of national customs legislation has not yet been effected, the uniform application of the CCT has been impeded. In conclusion, the tariff union is limited by the degree of elaboration and development of the customs union.
2. As for trade arrangements with third countries, the Commission examines principally the following: measures of agricultural policy, association agreements (Article 238), as well as agreements and measures based on Articles 111 and 113.
2.
(a) In relation to agricultural policy the Commission notes that the common organizations of the markets, established by agricultural regulations and based upon a single market, a single price system, an intervention system and a single system for trade at the external frontier of the Community, including the imposition of import levies and the granting of export refunds, do not allow for the levying of national charges having an effect equivalent to a customs duty on goods imported directly from third countries.
(b) As for agreements and measures based upon Articles 238, 111 and 113 of the Treaty, the Commission distinguishes association agreements (Article 238) based upon a customs union between the parties to the agreements, from agreements which, at least up to the present time, do not create such a union. Logically, the former have in view the elimination of all obstacles to the free movement of goods, including charges having an effect equivalent to customs duties, quantitative restrictions or measures having an effect equivalent to such restrictions. The other agreements, apart from the fact that they do not create a customs union, are not uniform. In those agreements the prohibition upon charges having equivalent effect is the result of negotiations, between the parties and is based upon contractural obligations. Having examined several measures for the coordination of trade relations between the Member States as well as certain agreements with third countries (Article 111) and having analysed the regulations establishing a common system for imports from third countries, adopted after 1 January 1970, as well as trade agreements concluded with third countries (Article 113), the Commission observes that, within the framework of measures concerning the coordination of trade relations between the Member States, the Community has not solved the problem of the levying of national charges having equivalent effect upon goods imported directly from third countries. The same is true with regard to the regulations on commercial policy (for example, Regulations Nos 1025/70 and 109/70) adopted after 1 January 1970; that the prohibition upon charges having equivalent effect was instituted at the time that certain trade arrangements with third countries were defined. These arrangements are either applicable erga omnes, or contractual. In the first case, the prohibition is contained in agricultural regulations and, in the other cases, it derives from obligations assumed in the context of association or trade agreements. The prohibition contained in these agreements applies equally to national charges already in existence and to possible Community charges.
3. Finally, as for Regulation No 950/68 of the Council and its ambit, the Commission notes that the Common Customs Tariff instituted by that Regulation is concerned only with customs duties as such and remains silent on the subject of national charges having an effect equivalent to a customs duty. In order to solve the problem of the levying of such charges, the objectives of the Treaty and, in particular, the objectives of the tariff union and of the customs union must be examined. Regulation No 950/68 does not appear to go beyond the achievement of the customs union, that is to say the standardization of customs duties, including customs duties of a fiscal nature. Common protection, which is indispensible to the uniform application of the CCT to imports from third countries, is not in fact all-embracing in this Regulation to the point of including apart from customs duties, charges having equivalent effect. The uniform application of the CCT is not therefore an automatic result of that Regulation, but requires continual intervention by the Community institutions. Such uniform application, like the complete system of rules for trade with third countries, can result only from the implementation of the customs union. However, since such a union has not yet been achieved, the uniform application of the CCT and the complete system of rules for trade have not yet been achieved. Although, at the present time, complete uniformity of application of the CCT has not been achieved and is not possible, the attitude of the Community with regard to national charges having an effect equivalent to a customs duty applied to goods imported directly from third countries must not be thought to be passive. Firstly, the Member States are not allowed to raise the level of charges in force as at 1 January 1970, or to introduce new ones. The obligation on the Member States to respect this standstill in relation to such charges is a consequence of the close relationship which exists between the actions of the Community in the context of the customs union on the one hand and commercial policy on the other, in which fields the national authorities are not involved. Secondly, the distinction should be drawn between national charges having equivalent effect, which do not counteract the objectives of the Treaties and can therefore be maintained by the Member States in anticipation of Community rules, and national charges which do counteract those objectives and are accordingly prohibited. The charges in issue in these proceedings may be classed with those in the first group mentioned above. Insofar as the provisions of the Treaty infringed by charges having equivalent effect are directly applicable, no intervention by the Commission is necessary in order to safeguard the rights of individuals. The Commission concludes with a summary of its observations, as follows: The parties to the main action and the Commission of the European Communities made their oral observations at the hearing on 19 September 1973. By decision of 4 October 1973, the Court, having heard the report of the Judge-Rapporteur and the opinion of the Advocate-General, dismissed a request submitted by the defendant parties to the main action on 2 October 1973 that the oral procedure be reopened. The Advocate-General presented his opinion at the hearing on 11 October 1973. The Court decided to join the two cases for the purposes of judgment.
3.
1. The provisions of the Treaty do not expressly prohibit national charges having equivalent effect levied on goods imported directly from third countries. The problem of their compatibility with the provisions of the Treaty is solved neither by reference to measures adopted in relation to the coordination of the trade relations of Member States (Article 111), nor to Regulation No 1025/70 establishing common rules for imports from third countries (Article 113), nor to Regulation No 950/68. Items of Community customs legislation adopted after 1 July 1968 mention the concept of charges having equivalent effect, which covers not only possible Community charges but also national charges of that nature.
2. Regulation No 950/68 does not go beyond the tariff union. Tariff protection under this Regulation is common and uniform with regard to anything in the nature of customs duties, but does not appear to include charges having equivalent effect. The uniform application of the Common Customs Tariff is subordinated to the achievement of the customs union and to the implementation of a complete common commercial policy.
3. The Member States have continued, even after 1 July 1968, to levy charges having equivalent effect upon goods imported directly from third countries. In the absence of any general community rules, the prohibition of such charges can only arise from acts adopted by the Community in the exercise of its powers.
4. Although they hinder international trade, national charges having equivalent effect which do not counteract the objectives of the Treaty may be maintained in anticipation of Community rules. It is nevertheless intended that they be eliminated or transformed into Community measures, within the framework of the common commercial policy.
5. Member States may, in principle, maintain such charges as remain. They are not however empowered to increase them or to introduce new ones after the end of the transitional period, that is to say as from 1 January 1970, since the Commission has exclusive jurisdiction in this field, pursuant to Article 113 of the Treaty.
6. To accept that all national charges having equivalent effect applied to imports from third countries are prohibited, and that this prohibition results implicitly from the objectives of the Treaty or of Regulation No 950/68, would mean that the Community has pursued or is pursuing, with respect to third countries, a more liberal commercial policy than that pursued by those countries with regard to the Community, and would deny the Community the means of obtaining the same advantages from third countries, which apply charges having equivalent effect to goods imported from the Community.
Grounds of judgment
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1 By judgments of 23 February 1973, registered at the Court on 7 March 1973, the Arbeidsrechtbank of Antwerp referred several questions under Article 177 of the EEC Treaty on the interpretation of certain provisions of the Treaty and of Regulation No 950/68 of the Council of 28 June 1968 (OJ 1968, L 172) on the establishment of the Common Customs Tariff.
2 It appears from the dossiers that these questions were raised in the context of an action concerning the levying of a charge on the import of rough diamonds coming directly from third countries, that charge being made for purposes of a social nature.
3 The essential purpose of the questions referred is to have it made known whether, and to what extent, the Member States may introduce or maintain, after 1 July 1968, charges having an effect equivalent to customs duties, levied on goods imported directly from third countries, and under what conditions they may be required to eliminate them.
4 The application of such charges in this case is dependant upon the trade arrangements with third countries, instituted at Article 3 (b) of the Treaty, and especially upon the principles governing the customs union, such as those set out at Article 9.
5 The customs union, which is one of the foundations of the Community, involves, on the one hand, the elimination of customs duties between the Member States and of all charges having equivalent effect.
6 The elimination of such charges is designed to promote the free movement of goods within the Community.
7 It must therefore be sufficiently comprehensive to include the abolition of all pecuniary, administrative or other obstacles, for the purpose of achieving a unified market between the Member States.
8 On the other hand, the customs union involves the establishment of a single customs tariff for the whole Community, as envisaged at Articles 18 to 29 of the Treaty.
9 This common tariff is intended to achieve an equalization of customs charges levied at the frontiers of the Community on products imported from third countries, in order to avoid any deflection of trade in relations with those countries and any distortion of free internal circulation or of competitive conditions.
10 Although, unlike the first Section of the Chapter of the Treaty relating to the customs union (Articles 12 to 17), Section 2 of the same Chapter (Articles 18 to 29) makes no mention of charges having an effect equivalent to customs duties, this omission does not mean that such charges may be maintained, still less introduced.
11 In answering the question as to the application of such charges in trade with third countries, account must be taken both of the requirements resulting from the establishment of the Common Customs Tariff, and of those resulting from a common commercial policy, within the meaning of Articles 110 to 116 of the Treaty, which, according to the abovementioned Article 3 (b), regulates trade arrangements with third countries.
12 The Common Customs Tariff was introduced, for the Community as originally constituted, by Regulation No 950/68 of the Council, which came into force on 1 July 1968.
13 Although that Regulation does not expressly allow for the elimination or equalization of charges other than customs duties as such, it is nevertheless clear from its objective that under it Member States are prohibited from amending, by means of charges supplementing such duties, the level of protection as defined by the Common Customs Tariff.
14 Even if they are not protective in character the existence of such charges may be irreconcilable with the requirements of a common commercial policy.
15 According to Article 113 (1) of the Treaty, the common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalization, export policy and measures to protect trade.
16 The definition of these uniform principles involves, as does the common tariff itself, the elimination of national disparities, whether in the field of taxation or of commerce, affecting trade with third countries.
17 It is for the Commission or the Council to evaluate these requirements in each case both as regards the establishment of the Common Customs Tariff and the adoption of the commercial policy.
18 It follows therefore that subsequent to the introduction of the Common Customs Tariff all Member States are prohibited from introducing, on a unilateral basis, any new charges or from raising the level of those already in force.
19 As regards charges already in existence, prior evaluation by the Community authorities is necessary in order to establish their incompatability with the Treaty and the obligation to eliminate them.
20 It follows that such charges may only be considered to be incompatible with Community law pursuant to provisions adopted by the Community.
21 Therefore a prohibition upon charges of that nature is the result in particular of provisions, which are not in issue here, adopted in the context of the common agricultural policy, of trade agreements concluded by the Community and of association arrangements existing between the Community and certain states.
22 Accordingly, the questions referred should be answered to the effect that the Member States may not, subsequent to the establishment of the Common Customs Tariff, introduce, in a unilateral manner, new charges on goods imported directly from third countries or raise the level of those in existence at that time.
23 As regards charges already in existence, the introduction of the common commercial policy must involve the elimination of all national disparities, whether in the field of taxation or of commerce, which regulate trade with third countries.
24 Since the adoption of this common commercial policy falls within the exclusive jurisdiction of the Community, the equalization of charges other than customs duties as such for all the Member States or their elimination is dependant upon an intervention by the Community.
25 Accordingly, the reduction or elimination of existing charges on goods imported directly from third countries is a matter for the institutions of the Community.
Costs
sec_1
26 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, insofar as the parties to the main action are concerned, a step in the action pending before a national court, the decision on costs is a matter for that court.
On those grounds, Upon reading the pleadings;Upon hearing the report of the Judge-Rapporteur;Upon hearing the observations of Indiamex, De Belder and its partners J. W. L. and R. De Belder, the Sociaal Fonds voor de Diamantarbeiders and the Commission of the European Communities;Upon hearing the opinion of the Advocate-General;Having regard to the Treaty establishing the European Economic Community, especially Articles 3, 9 to 29, 110 to 116, 177 and 238;Having regard to Regulation No 950/68 of the Council of 28 June 1968 on the establishment of the Common Customs Tariff (OJ L 172, 1968);Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20;Having regard to the rules of procedure of the Court of Justice of the European Communities; THE COURT in answer to the question referred to it by the Arbeidsrechtbank of Antwerp, pursuant to the judgments given by that Court on 23 February 1973, hereby rules:
1. The Member States may not, subsequent to the establishment of the Common Customs Tariff, introduce, in a unilateral manner, new charges on goods imported directly from third countries or raise the level of those in existence at that time.
2. The reduction or elimination of existing charges on goods imported directly from third countries is a matter for the institutions of the Community.
Lecourt Sørensen Monaco Mertens de Wilmars Kutscher Ó Dálaigh Mackenzie Stuart Delivered in open court in Luxembourg on 13 December 1973. A. Van Houtte Registrar R. Lecourt President