Contents
In Case 138/77REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundesverwaltungsgericht (Federal Administrative Court) for a preliminary ruling in the action pending before that court betweenFIRMA HERMANN LUDWIGandFREE AND HANSEATIC CITY OF HAMBURGTHE COURTcomposed of: H. Kutscher, President, M. Sørensen and G. Bosco (Presidents of Chambers), A. M. Donner, J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe and A. Touffait, Judges,Advocate General: J.-P. WarnerRegistrar: A. Van Houttegives the following
Judgment
Facts and Issues
The decision making the reference and the written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
I —Facts and procedure
As stated in Article 1 thereof, Regulation (EEC) No 806/68 of the Council of 27 June 1968 on the common organization of the market in beef and veal (Official Journal, English Special Edition 1968 (I), p. 187) covers inter alia prepared or preserved bovine meat coming within subheading 16.02 B III (b) 1 of the Common Customs Tariff. Article 20 (2) of the regulation in the following terms prohibits Member States from levying charges having an effect equivalent to customs duties on imports of those products from third countries:‘Save as otherwise provided in this regulation or where derogation therefrom is decided by the Council, acting in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission, the following shall be prohibited:— the levying of any charge having effect equivalent to a customs duty;— the application of any quantitative restriction or measure having effect, subject to the provisions of the Protocol on the Grand Duchy of Luxembourg.’In June 1974 the transpon undertaking H. Ludwig, the appellant in the main action, imported into the Federal Republic of Germany a consignment of 14400 kg. of beef goulash in tins, from Hungary, accompanied by an official Hungarian veterinary certificate. Pursuant to German provisions laid down by law and regulation, those imports were subjected to a health inspection which gave rise to the imposition of a charge of DM 576 by the city of Hamburg, the respondent in the main action.Taking the view that this was a charge having an effect equivalent to a customs duty, the levying of which is prohibited by the aforementioned Article 20 (2), the appellant in the main action sought reimbursement of the amount paid before the competent courts of the Federal Republic of Germany.By a judgment of 10 April 1975, the Verwaltungsgericht Hamburg (Hamburg Administrative Court) dismissed that application, on the grounds that, having regard to Article 26 of Directive No 72/462 of 12 December 1972 (Official Journal, English Special Edition, 1972 (31 December); Journal Officiel L 302, 31 December 1972) on health and veterinary inspection problems upon importation of bovine animals and swine and fresh meat from third countries, the German provisions laid down by law and regulation which authorize the imposition of the charge (the Fleischbeschaugesetz, Law on the inspection of meat, and the Auslandfleischbeschaugebühren-Verordnung, Regulation on charges for the inspection of imported meat) are compatible with Community law. It held that although that directive, which governs health inspections for the animals and meat to which it refers expressly and which — particularly in Article 26 — authorizes Member States to impose charges in that connexion, does not refer to imports of preserved meat, it should however be applied by analogy in the present case, in particular as regards Articles 24 and 26. Otherwise importers of prepared meat from abroad would be placed in a more favourable position than those who import fresh meat and process it within the national territory.The appellant in the main action lodged a Sprungrevision (direct appeal on a point of law) to the Bundesverwaltungsgericht (Federal Administrative Court), and by an order of 16 September 1977 that court referred the following question to the Court of Justice for a preliminary ruling:‘Are Article 12 (1), (7) and (8) and Articles 23, 24 and 26 of Council Directive No 72/462/EEC of 12 December 1972 (Official Journal, English Special Edition, 1972 (31 December); Journal Officiel L 302, p. 28) applicable by analogy to the importation of prepared meat, with the result that the Member States are entitled or obliged to carry out health inspections and may impose charges for such inspections?.’The order making the reference was registered at the Court Registry on 16 November 1977. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, the appellant in the main action, the respondent in the main action and the Commission submitted written observations. After hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.
II —Written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC
Observations of the appellant in the main action
The appellant in the main action first points out that the preserved meat imported from Hungary underwent in that country a health inspection offering every guarantee and resulting in the issue of a certificate, and then submits that there are two parts to the question raised. In fact the issue is whether the Member States, by application by analogy of the provisions of Directive No 72/462, are, on the one hand, entitled or obliged to carry out health inspections and, on the other, entitled to impose charges for such inspections.It is submitted that, having regard to Article 36 of the Treaty, the first part of the question should be answered in the affirmative, but that the answer is different for the question of the costs relating to such inspections.Article 17 (2) of Regulation No 121/67 of the Council on the common organization of the market in pigmeat (Official Journal, English Special Edition, 1967, p. 46) and Article 20 (2) of Regulation No 805/68 of the Council on the common organization of the market in beef and veal (Official Journal, English Special Edition, 1968 (I), p. 187), which apply to preserved meat under Article 1 of each of those regulations, prohibit Member States in trade with third countries from levying any customs duty or charge having equivalent effect, save as otherwise provided in those regulations or where derogation therefrom is decided by the Council, acting in accordance with the voting procedure laid down in Article 43 (2) of the Treaty on a proposal from the Commission.Although charges having an effect equivalent to customs duties are prohibited in principle, the Council made a derogation from that prohibition in Articles 12, 23, 24 and 26 of Directive No 72/462 in so far as the health inspections provided for by that directive are concerned. The question raised by the Bundesverwaltungsgericht is designed to ascertain whether the authorization to impose charges in Articles 12, 23, 24 and 26 can be extended by analogy to health inspections of meat — in particular preserved meat — not expressly provided for by the directive.The appellant in the main action considers that application by analogy of the provisions cited to preserved meat is contrary both to the terms of the directive and to the intention of the legislature. The title of the directive mentions the importation of fresh meat, which Article 2 (0) of the directive defines as ‘meat which has not undergone any preserving process’. As Regulations Nos 121/67 and 805/68 on the organization of the market apply, for their part, to preserved meat, it would have been a simple matter for the legislature also to refer to preserved meat in Directive No 72/462, which it precisely refrained from doing. Moreover, Annex B to the directive, concerning slaughterhouses, packaging of fresh cut meat and so on, does not contain any provision relating to the equipping of meat-preserving factories or to the preserving of meat.Furthermore, application by analogy cannot be allowed because the principle of the free movement of goods is one of the essential principles of the EEC Treaty and can be displaced only by an exception, which moreover must be interpreted restrictively (see the judgment of the Court of 12 February 1974, Case 152/73, Sotgiu [1974] ECR 153; and the judgment of the Court of 21 June 1974, Case 2/74, Reyners [1974] ECR 631).
Observations of the respondent in the main action
In the submission of the respondent in the main action, the question referred to the Court of Justice is of particular importance to the Länder (states of the Federal Republic) and the local authorities, as the implementation of the Federal laws concerning health inspections upon importation and the levying of charges comes under the jurisdiction of the Länder and the local authorities by virtue of Article 83 of the Grundgesetz (Basic Law). The respondent in the main action argues that the budgetary sovereignty of the Länder would be called in question if the Court of Justice held that the charge at issue is incompatible with Community law, and states that the Bundesverwaltungsgericht has reserved the right to refer the matter to the Bundesverfassungsgericht (Federal Constitutional Court) for examination of the compatibility of Article 20 (2) of Regulation No 805/68 with the German Grundgesetz.The respondent in the main action proposes to consider the question raised in two separate parts:(A) It will first consider whether the charges imposed in respect of health inspections in imports of preserves from third countries are still to be described as charges having equivalent effect, and it will propose that that question should be answered in the negative;(B) Then, in the event that those charges do have to be classified as charges having equivalent effect, it will consider whether they are justified because they come within the exemption from prohibition provided in Article 20 (2) of Regulation No 805/68.
(A)Do the charges at issue constitute charges having an effect equivalent to a customs duty?
The respondent in the main action states that, in accordance with the case-law of the Court of Justice, the Bundesverwaltungsgericht held that although charges imposed in respect of health controls on imports of meat from third countries generally constitute charges having an effect equivalent to customs duties, there are three cases, according to that case-law, in which the position is different, namely:— If the charge represents the consideration for a service actually provided for the importer; or— If the charge relates to a general system of internal taxation applied systematically in accordance with the same criteria to domestic and imported products alike; or, finally,— If the charge is imposed in respect of health inspections which are required to be carried out by a provision of Community law.Although the Bundesverwaltungsgericht has already held that the charges at issue do not come within either of the first two cases, and although its question essentially concerns the third case, the respondent in the main action considers that it should submit observations on each of the three cases mentioned.
I —Consideration for a service actually provided
The Bundesverwaltungsgericht's finding that health inspections are carried out not in the interest of the importer but in the public interest is incorrect because it is too broadly stated. It cannot be denied that the inspection is at the very least carried out in the importer's own interest as well.
II —Charges relating to a general system of internal taxation
The respondent in the main action argues that, in holding that a financial charge on imported goods comes within a general system of internal taxation only if it is levied on them at the same suge of production as that at which it is levied on domestic products, the Bundesverwaltungsgericht misunderstood the import of the judgment of the Court of 5 February 1976 in Case 87/75 (Bresciani [1976] ECR 129), the 11th paragraph of the decision in which reads as follows:‘(…) unless those charges and the duty in question are applied according to the same criteria and at the same suge of production (…).’It is argued a contrario from that paragraph that the charge levied upon importation comes within a system of internal taxation where the charges are levied either according to the same criteria or at the same suge of production.The national court also overesumated the scope of the requirement that charges on domestic and imported products should be similar in that it confused similarity and identity and required that the bases of calculation for the charge should be identical for imported goods and domestic products. Such an interpretation is contrary to the principle of equality, which the Court recognized, in its judgment of 19 October 1977 (Joined Cases 117/76 and 16/77, Ruckdeschel and Diamalt [1977] ECR 1753), as constituting an unwritten principle of Community law according to which fundamentally similar situations must not arbitrarily be treated differently, but fundamentally different situations must also not arbitrarily be treated on a footing of equality. To stipulate, as a condition for regarding the health inspection charges at issue as part of a general system of internal taxation, that inspections on the manufacture of preserves within a Member State and inspections on imported tins of preserves should take place at the same stage, is to subject fundamentally different situations to the same treatment.
III —Charges imposed by Community law
(B)At all events the charges at issue come within the exception provided in Article 20 (2) of Regulation No 805/68
The foregoing observations by the respondent in the main action were based on the assumption that the charge imposed does not constitute a charge having equivalent effect. If the Court of Justice held to the contrary, the question raised could be interpreted as meaning that the Bundesverwaltungsgericht wishes to ascertain whether it is possible to apply by analogy only such provisions as relate to the cost of inspections (Articles 12 (8), 23 (4) and 26 of Directive No 72/462).Citing the Commission's observations in Case 21/75, Schnieder [1975] ECR 911 (judgment of 9 July 1975), the respondent in the main action argues that the said provisions are an exception to the prohibition laid down in Article 20 (2) of Regulation No 805/68. It is submitted that in the present case that exception is applicable by analogy to prepared meat from third countries for the following reasons.It is possible to infer from the provisions relating to the cost of inspections a principle of Community law according to which if public health controls upon importation are carried out in the public interest, the financing of the expenses connected with them must be borne not by the budgets of the public institutions but by the shipper or importer. Secondly, the prohibition enacted by the combined provisions of Article 24 of Regulation No 805/68 and Article 92 et seq. of the EEC Treaty concerning aid would be infringed if the public health inspection of prepared meat from third countries, unlike the arrangements applicable to all meat imported in other forms, were to be carried out at the expense of the public authorities.Citing, so far as relevant, the questions referred by the Pretore d'Alessandria in Case 70/77, Simmenthal, concerning the compatibility of certain provisions of Directive No 72/462 with superior rules of Community law in view of the fan that the costs of health inspections have not been standardized, and referring to its foregoing observations and to paragraphs 35 and 36 of the Decision of the Court of 25 January 1977 (Case 46/76, Bauhuis loc. cit.), the respondent in the main action concludes that the provisions of the directive relating to the cost of health inspection are compatible with Community law.In conclusion the respondent in the main anion proposes the following answer to the question referred by the Bundesverwaltungsgericht :‘Article 12 (1), (7) and (8), Article 23, Article 24 and Article 26 of Directive No 72/462/EEC are to be applied by analogy to prepared meat from third countries, with the consequence that Member States were entitled to carry out health controls upon importation until 31 December 1976 and are obliged to do so as from that date, and that both before and after 31 December 1976 they are empowered to impose charges in so far as such charges do not exceed the actual costs of the inspections.’
Observations of the Commission
The Commission gives a summary of the provisions of national law and Community law applicable and then observes that German public health and veterinary law comes within the concurrent legislative power of the Federation and the Lander. It points out, first, that preserved meat manufactured in German territory undergoes foodstuffs inspection by sampling without fees or charges. The fresh meat used, whether imported or slaughtered in domestic territory, has first undergone public health inspection. On the other hand, imported preserved meat is regarded as meat subject to official inspection and is liable to fees and charges. After it has been imported, such preserved meat undergoes foodstuffs inspection in the same way as identical domestic products. The Commission points out, secondly, that from the point of view of Community law preserved meat comes under Regulation No 805/68 on the common organization of the market in beef and veal, Article 20 (2) of which prohibits the levying of any charge having equivalent effect on the inspection of meat from third countries, save as otherwise provided in the Regulation itself or where derogation from the regulation is decided by the Council.The Commission then emphasizes that while the various common organizations of the market cover all kinds of meat, fresh or prepared, the harmonization of the health inspections on animals and meat coming within those organizations has only been partially attained. In particular, so far as products imported from third countries are concerned, only Directive No 72/462 has been issued and it relates only to domestic bovine animals and swine and fresh meat of domestic animals of the following species: bovine animals, swine, sheep and goats and solipeds (Article 1 (1)) but not therefore to preserved meat. Although the inspections provided for in Articles 12 and 23 to 26 of that directive are not yet wholly applicable since various implementing measures which should have been adopted at the Community level have not yet been taken, the Commission is of the opinion that to the extent to which it is necessary to consider the charges levied for the inspections as charges having an effect equivalent to customs duties, Articles 12 (8), 23 (4) and 26 of Directive No 72/462 in any case constitute a derogation within the meaning of Article 20 (2) of Regulation No 805/68 from the prohibition on levying charges having equivalent effect laid down by that same provision. Although that derogation is contained in a directive the Commission takes the view that it fulfils the conditions of the procedure laid down in Article 43 (2) of the EEC Treaty.Therefore the imposition of charges by the competent national authorities is not an infringement of a superior provision of Community law, since the Treaty itself contains no absolute prohibition on the imposition of charges equivalent to customs duties in relation to third countries and since in adopting Directive No 72/462 the Council used its powers validly when it ordered standard inspections upon importation of certain goods and when it provided that the costs arising therefrom should be borne by the business circles concerned.Going on to consider the question referred for a preliminary ruling, the Commission observes that since products are concerned which do not come directly under the provisions of Directive No 72/462, the latter's rules on costs could at most be considered to apply by analogy. Such an application by analogy should not be rejected on the sole ground that the arrangements for defraying the costs were not yet applicable at the date of the importation in question (June 1974) and that even at present they still cannot be applied in their entirety. In fact, regardless of that problem, those provisions render specific a guiding legislative concept of the Community legislature which aims to make the costs of the public health measures applied uniformly on the basis of Community law payable by the traders concerned. Moreover, the scope of such rules with regard to economic policy, and more particularly competition policy, is incontestable. It is in fact probable that future rules will contain a solution to the problem of costs which is in accordance with the present approach. For that reason, the Verwaltungsgericht Hamburg rightly spoke, in its judgment of 10 April 1975, of the ‘anticipation’ of future Community legislation. However, that finding by the Verwaltungsgericht Hamburg clearly shows up the problems which application by analogy raises in the area of public law and in that of respect for fundamental rights.The Commission claims, first, that since the provisions in question come within tax law their content must be subject to strict requirements for the due protection of interested parties and that therefore application by analogy is prohibited for that very reason. Legal certainty would be jeopardized if the substantive field of application of a tax law, having once been laid down in detail, were to be given a wide interpretation. However, in the present case the category of goods to which Directive No 72/462 applies and the authorization to levy charges relating thereto are clearly delimited.The Commission then draws attention to the close relationship established by the directive between the inspections and the responsibility for the costs involved therein. To apply the provisions on costs by analogy would amount to applying the inspections by analogy; but such an application by analogy of the inspections provided for fresh meat to preserved meat is prohibited in substance. On the other hand nothing in the system applied until now by Community law in the field of preventive public health measures enables the conclusion to be drawn that national inspections caried out on goods from third countries without authorization from Community law must be subject to a charge levied on the importer.The interdependence between the inspections and the responsibility for the costs shows that the function of case-law cannot be to ‘encroach upon’ the task entrusted to the Community legislature with regard to harmonization by filling the lacunae therein by judicial process. In its case-law, the Court of Justice has always emphasized most strongly the importance of fundamental rights in the Community. According to the Commission, the fact that Community law must uphold these rights prohibits the extension in this case of the application of the compulsory levying of charges for public health inspections carried out on imports from third countries to goods other than those listed in the directive.The Commission concludes from the foregoing that it is necessary to reply in the negative to the question referred to the Court.
III —Oral procedure
At the public hearing on 18 April 1978 oral argument was presented by the appellant in the main action, represented by B. Festge of the Hamburg Bar, the respondent in the main action, represented by P. Wendt, also of the Hamburg Bar, and the Commission of the European Communities, represented by its Agent, Mr Beschel.The Commission of the European Communities answered certain questions concerning the application of Directive No 72/462.The Advocate General delivered his opinion at the hearing on 2 May 1978.After examining certain documents which the Commission had mentioned during the oral procedure and which it lodged after the oral procedure had been closed, counsel for the respondent in the main action asked the Court in a letter of 29 May 1978 to consider whether it would be advisable to reopen the oral procedure ‘in case the Court of Justice should wish to take account of those documents in order to reach its decision’.During the oral procedure, the Commission had commented upon those documents in support of its observations concerning the extent to which Directive No 72/462 had been implemented, and the respondent in the main action had replied on that point.The documents produced do not introduce any fresh evidence in relation to that which was known at the end of the written procedure, in particular following the questions asked by the Court of Justice and the answers which were given to them.After hearing the views of the Advocate General and finding in the Deliberation Room on 7 June 1978 that all the evidence necessary for it to give an answer to the question referred to it in this case was in its possession, the Court decided that it was not necessary to reopen the oral procedure.
Decision
Costs
Operative part
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