II —Observations submitted under Article 20 of the Statute of the Court
The observations submitted under Article 20 of the Statute of the Court may be summarized as follows:The applicant in the main action maintains that the aims of the Sociaal Fonds voor de Diamantarbeiders are purely social, as is clearly shown by the parliamentary studies which preceded the adoption of the Law in question. If, contrary to the general rule in matters of Fonds de securite d'existence,note the Social Fund is not maintained by contributions calculated on the basis of the salaries received by its beneficiaries, then to lay responsibility for the contribution on the importers of diamonds which are to be cut in Belgium will ensure that the whole of the diamond is taken into consideration in the calculation of contributions on the basis of its real value, as the charges are divided equitably between the distributor and the undertaking which works the diamond.The choice of this system is also justified by reason of the structure of the Belgian diamond industry, which makes the application of a system of contributions calculated on the basis of salaries difficult. Moreover, the appropriateness of this choice is a matter to be considered by the Belgian legislature alone. Further, the applicant in the main action maintains that the contribution is only calculated on the goods to be worked by the Belgian diamond industry, with the result that goods to be reshipped and goods in transit are never included in the calculation. As the importers of unworked diamonds, the undertakings which work the diamonds and the workers in the diamond industry are the successive links in a single economic chain, the concept of interdependence on which the social legislation is based is a reason for the importer also to contribute to the improvement in the social position of the workers employed in the diamond industry.In addition, the social tuna recalls that on 29 February 1968 the President of the Commission of the European Communities had addressed a letter to the Belgian Minister for Foreign Affairs followed, on 20 January 1969, by a reasoned opinion within the meaning of Article 169 of the Treaty, requesting the Belgian Government to eliminate from the legislation in question the contradiction with Article 7 of the Treaty, which results from the fact that only imports of unworked diamonds from the Netherlands were exempt from the abovementioned contribution. The Commission proposed an alternative which was either to exempt imports of unworked diamonds from every Member State, or, on the contrary, to abolish the exemption in favour of the Netherlands alone. Whilst it observes that, by reason of the localization of the diamond industry, it seems very unlikely that exchange agreements exist between the Belgian industries and those of Member States other than the Netherlands, the plaintiff in the main action considers that Belgium will comply with this request by extending the exemption to imports effected within the context of the exchange agreements between the Belgian diamond industry and that of those Member States.It follows from the concept which is the basis of the exemptions provided for by the Law in question that unworked diamonds are not taken into consideration for the imposition of the charge in question merely by reason of their importation, as the exemptions are specifically based on the fact that the diamond imports to which they apply do not add to the volume of the manufacturing operations. It is, first of all, technically impossible to cut an unworked diamond of a value of less than BF 300 per carat and, secondly, diamonds imported from the Netherlands within the context of the exchange agreement concluded between the Belgian and Netherlands diamond industries are merely substituted for those Belgian diamonds exported to the Netherlands under the terms of that agreement, such diamonds having already been included earlier in the basis of calculation of the contribution in dispute.The plaintiff in the main action then refers to the preliminary studies of the EEC Treaty in order to support its statement that that Treaty does not intend to exempt goods put into free circulation from all taxes or charges, but only requires such goods to receive the same treatment, so that trade is not disturbed by protective intervention in one or other Member State.The Treaty does not require all the factors which influence the cost price of the goods to be identical in every Member State. When such differences are likely to hinder the proper functioning of the Common Market, the Commission may implement the procedures provided for in Articles 100 et seq. of the Treaty. It is clear that the legislation concerning the Social Fund does not discriminate in any way between Belgian diamonds and foreign diamonds since the Belgian diamond trade and industry are neither protected nor favoured in relation to competition from abroad.The contributions payable to the Social Fund can in no case be described as charges, and thus cannot be included in the prohibition contained in Articles 9 and 12 of the Treaty which deliberately used the term ‘charges having equivalent effect’ to replace the formula ‘any measure having equivalent effect’ which was originally suggested. In order to establish whether one is dealing with a charge having equivalent effect, it is necessary to verify whether the charge in question is discriminatory or protective in effect and whether, as a result, it affects competition between the Member States. In the opinion of the plaintiff in the main action this follows from the case-law of the Court.In addition, it follows from Article 95 of the Treaty, considered in conjunction with Articles 9, 12 and 13, that it is only where the charges are in excess of those which are imposed directly or indirectly on domestic products that they may have an effect equivalent to that of a customs duty. The two defendants in the main action submitted a single statement of case, in which they set out the facts which led to the enactment of the Law in dispute and the factual situation surrounding the Belgian importation, processing and trade in unworked and industrial diamonds.The defendants submit statistics, the purpose of which is to show, inter alia, the economic importance of this sphere of activity and the effect of the charge in dispute on the Antwerp market. According to the statistics drawn up for 1968, imports of unworked diamonds amounted to BF 11748000000, of which BF 4138000000 were re-exported in the same form. Imports of industrial diamonds were in the order of BF 2951000000, while exports attained BF 2950000000. The major part of these transactions concerns diamonds of a value in excess of BF 300 per carat which were, as a result, subject to the charge.On imports of unworked diamonds in 1968, the tax of 1/3 % amounts to BF 39160000. The incidence of the charge on industrial diamonds is put at BF 8660000. The aggregate total amount of the charge imposed on the various sorts of diamonds exported from Belgium to the other countries of the EEC amounts to BF 5400000.As regards industrial diamonds in particular, the defendants in the main action maintained that this branch of the industry has no connexion with the activities of the diamond workers and that this fact brings out to an even greater degree the anomaly of a law the effect of which is to render purchasers of diamonds throughout the Community liable to bear the burden of the social security benefits accorded to Belgian diamond workers. If this assessment were continued the commercial activity in question might move towards another country of the EEC, in particular towards the Netherlands.As regards the points of law raised by the question of the Vrederechter, Antwerp, the defendants in the main action refer to an opinion of two professors of law of the University of Brussels, the text of which they submitted in a schedule to their statements of case.As regards Articles 9 and 12 of the EEC Treaty, the authors of this opinion maintain that these general provisions must not be interpreted in the light of Article 37, the subject of which is quite specific.They do not accept the idea that a charge imposed by reason and on the occasion of importation might only have an effect equivalent to that of a customs duty on condition that the products in question are in competition with domestic products. They consider that the Treaty wished to remove not only protection of the domestic industry, but all obstacles to trade. This purpose corresponds to a fundamental objective of the Common Market, namely the institution of a system ensuring that competition in that market is not distorted. As a result, it is incorrect to consider that the effect of a charge payable by reason of importation is not equivalent to that of a customs duty by reason of the fact that it is not intended to protect domestic production.As regards the question whether a contribution may be considered to be a charge having equivalent effect even when it is not defined as a tax and is not imposed for the benefit of the Treasury, the abovementioned opinion refers to the judgment of the Court in Joined Cases 52 and 55/65 (Federal Republic of Germany v Commission), according to which the equivalence of a charge to a customs duty must be assessed by considering its effects in the light of the objectives of the Treaty, without having regard to the purpose for which it was introduced by the State, nor the detailed rules laid down for its application.In order to define the concept of internal taxation referred to in Article 95 of the Treaty, it can first be observed that by virtue of an internationally acknowledged principle States do not lay the burden of such charges on foreign consumers and that the exporter has the right to a refund of the taxes imposed on the goods during earlier transport. It follows from the case-law of the Court that a compulsory contribution cannot be put in the same category as the internal taxation referred to in Article 95 where such charge — as is the case of the contribution in dispute — is not in tended to place the products imported in a comparable fiscal position to that of the other categories of products, whatever their origin, is not levied within the context of legislation concerning turnover tax but constitutes a specific charge on imported products, and is not refunded when the products are re-exported, either in an unworked state or after being worked.The abovementioned consultants consider that the limitations on the freedom of action of Member States as regards the imposition of charges having equivalent effect in their relations with third countries arise out of Articles 18 to 28 of the Treaty concerning the common customs tariff, independently of the implementation of Articles 110 et seq. concerning the common commercial policy.However, in this instance these limits do not appear to have been exceeded. More generally, this opinion maintains that a charge, although without protective effects, may very well distort conditions of competition in the Common Market, as does the charge in question. The procedure provided for in Article 101 to eliminate distortions of competition is only a secondary procedure to be applied in cases in which no other provision of the Treaty is applicable. In this instance, the abovementioned effects must be eliminated by application of the prohibition provided for in Article 12 of the Treaty.Moreover, the charge in question is even protective in effect as regards domestic consumers, as it imposes a burden on all the consumers of the Community for the benefit of certain employers established in just one country of the EEC. Finally, the opinion refers to the case-law of the Court which shows Articles 12 and 37(2) and the first paragraph of Article 95 to be directly applicable.The Commission of the European Communities observes that the charge in question may be classified as part of the very large sector known as quasi-taxation (‘parafiscalite’). Experience shows that, in order to assess a charge of this type in the light of Community law, a general consideration of the charge is insufficient and that each one must be studied in detail in terms of its own nature and taking into account all relevant factors. Consequently, in this matter it is necessary to avoid any general conclusion capable of being extended to other charges which may, at first sight, appear to be closely related to that which gave rise to the main action, but as regards which it is necessary, both in fact and in law, to take other factors into account.As regards Article 12, the Commission observes that in order to determine whether a charge is to be regarded as having an effect equivalent to a customs duty, it is necessary to consider such effect in the light of the objectives of the Treaty and in particular in relation to the free movement of goods, without the need to enquire into either the designation or mode of application of the charge, the objectives which the State concerned hopes to achieve in imposing it, or the intended use of the sums raised. However, the mere fact that it results in an obstacle to imports is not sufficient for a charge or taxation to be regarded as prohibited by Articles 9 and 12 of the Treaty.As regards Article 95, the Commission observes that in the absence of the production of similar goods in the importing country (Cases 27/67 and 31/67), the case-law of the Court concerning certain taxation on imports does not directly refer to Articles 9 and 12 and the prohibition contained therein on the imposition of charges having equivalent effect. This case-law attributed great importance to the fact that the taxation concerned in these cases fell within a general charge imposed without distinction on all categories of products both domestic and imported. For this reason, the principles thus laid down may not be applied without further con-8 sideration to taxation of the type concerned in this instance, which constitutes special taxation imposed on a particular product. The power of Member States to impose special internal taxation cannot be contested on the basis of the Treaty as Article 95, whilst laying down limits on the exercise of this power, expressly refers to internal taxation ‘of any kind’. In the absence of similar domestic products the distinction between a special charge on imports and internal taxation has no significance in relation to the objectives of the Treaty. Internal taxation which is imposed solely on imports where no domestic product exists is still not compatible with the Treaty, as is shown by the judgment of the Court in Case 31/67 which lays down limits on the freedom of Member States to fix the level of the rates of such taxation.As regards Article 18 of the Treaty, the Commission observes that it is not an obstacle to the imposition, within the limits laid down by the Treaty, of internal taxation on imports of products from other Member States, as such internal taxation is not likely to conflict with the establishment of a common customs tariff.In the opinion of the Commission it does not appear possible to draw conclusions from Article 37 regarding the concept of a charge having equivalent effect.As regards the relationship between Articles 9 and 12, on the one hand, and Article 95, on the other, the Commission observes that the prohibitions set out in the first two articles cannot be regarded as more absolute in nature than those appearing in Article 95. According to the latter provision, in the absence of a domestic product a charge on an imported product must be considered to constitute internal taxation which is lawful to the extent to which its amount remains within the general framework of taxation of the Member State in question.As regards the respective positions of Belgian importers and importers in other Member States, the Commission maintains that the position of these two groups is the same as regards the Belgian market, as the obligation to pay the charge in dispute as regards sales in the market applies uniformly to them all. On the other hand, a difference exists when a Belgian importer wishes to resell his goods in another Member State, since he has no right to the refund of the charge which he paid on the import of the goods into Belgium. However, the Commission maintains that as regards exports from a Member State the principle of equality of treatment within the spirit of the Treaty is not so strict that Member States are bound to refund certain taxation.Finally, as regards the difference in treatment which the Law in question involves to the detriment of Belgian diamond importers in relation to undertakings which work diamonds in Belgium and those in other Member States, the Commission observes that in fiscal and social matters the legislation of Member States still differs greatly and that no conclusion regarding the interpretation of Articles 9 and 12 can be drawn from the differences in treatment which result therefrom.The Government of the Kingdom of Belgium observes that according to Belgian law customs duties are included in the concept of taxes. Contributions to social security cannot be confused with this concept, even where they are fixed and charged in the same way as certain categories of taxes.It emerges from the preliminary studies of the EEC Treaty that Articles 12 et seq. do not refer simply to any measure taken by a Member State the actual effects of which are equivalent to those of a customs duty. By using the concept of a charge having equivalent effect the authors of the Treaty wished to avoid certain Member States' taking advantage of a domestic interpretation of the concept of customs duties in order to circumvent the real objectives of the Treaty.Thus, the abovementioned concept only includes charges which complement customs duties and which are only imposed on goods coming from abroad to the exclusion of similar goods produced within the country. Even if a charge shows the characteristics of a tax it cannot be considered as having an effect equivalent to that of a customs duty unless it is more unfavourable to the imported product than to the correspond domestic product.In the absence of a similar domestic product it is impossible to maintain that such a charge is protective in nature and that that charge imposed on imported products cannot lead to a distortion of competition between Member States.As regards the charge in dispute in particular, the Belgian Government maintains that it is only intended to lay on importers of unworked diamonds the burden of financing a fund the purpose of which is to obtain social benefits for diamond workers because it is those importers who draw an indirect benefit from the activity of such workers.This system is also justified by reason of the practical difficulties which the calculation of the contribution on the basis of salaries presupposes.Finally, the Belgian Government observes that the Commission of the European Communities has not considered the contribution in dispute to constitute a charge having an effect equivalent to a customs duty as, in its letter of 29 February 1968 addressed to the Belgian Government, it considers the possibility of abolishing the exemption granted in favour of the Netherlands alone which it considers to contradict Article 7 of the EEC Treaty; this means that in principle there is nothing to prevent the contributions being charged on the import of unworked diamonds from Member States.
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.