Procureur de la République de Besançon v Bouhelier and others (225/78)

Contents

In Case 225/78,REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal Correctionnel [Criminal Court], Besançon, for a preliminary ruling in the proceedings pending before that court betweenPROCUREUR DE LA RÉPUBLIQUE [Public Prosecutor], BESANÇON,andMR BOUHELIER AND OTHERSTHE COURT (Second Chamber)composed of: Lord Mackenzie Stuart, President of Chamber, P. Pescatore and A. Touffait, Judges,Advocate General: F. CapotortiRegistrar: A. Van Houttegives the following

Judgment

Facts and Issues

The facts of the case, the procedure and the observations submitted under 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

1.A system of rules has been adopted in France governing the quality inspection of certain types of watches intended for export.Law No 48-1228 of 22 July 1948 laid down the constitution of the technical centres for industry — replacing that laid down by a law of 17 November 1943. which was provisionally validated — whose purpose was the encouragement of technical progress, collaboration in improving output and in guaranteeing high standards of quality in industry Article 1 of that law provided that ‘in any sector of activity where the need appears … public utility institutions known as “technical centres for industry” may be established by decree of the Ministers for Finance, Economic Affairs, Industry and Commerce’. Article 8 of that law provides that the funds of these technical centres shall be provided principally by compulsory contributions from undertakings pursuing an activity in the sector in question.Within the framework of that law the technical centre for the watch- and clock-making industry was transformed by a joint ministerial decree of 22 April 1949 into a technical centre for industry (Cetehor), a public utility institution for whose benefit a decree of 21 September 1966 introduced a parafiscal charge calculated on the basis of the price of blanks and the price of watches and movements, whether or not intended for export.The principal task of the public utility institution in question is to guarantee the quality of the products exported by the watch- and clock-making industry. To this end it examines samples of consignments of pressed lever watches and movements of French manufacture intended for export to check that they conform with certain quality standards. As a general rule, when such examinations are carried out — and the process does not normally take more than 48 hours — no duty is imposed or charge made where the consignments meet the relevant quality standards; only where the first inspection has revealed defects of manufacture which are sufficiently serious to warrant a second test of the consignments being made are the additional costs charged to the exporters. If the inspection shows that the standards have been complied with, the standards certificate issued by Cetehor may replace the export licence required in the absence of such a certificate by virtue of two notices to exporters published in the Journal Officiel de la République Française on 30 October 1962 and 24 November 1964.

2.In proceedings in a case in which Cetehor certificates replaced the export licence in this way the Tribunal Correctionnel, Besançon, by a judgment of 19 May 1976 referred to the Court of Justice a preliminary question arising out of the fact that Claude Bouhelier, Charles Girardet and Rémy Zimmermann were accused of forging Cetehor certificates by adding a nought or another figure to the figure originally appearing thereon and of subsequently exporting from the franc area under cover of the forged standards certificates a large quantity of lever escapement watches and watch movements which had not been inspected or did not correspond to the descriptions given in the relevant certificate.The reference for a preliminary ruling was drawn up in the following form:‘The Tribunal finds that before reaching any decision in either the criminal or the civil proceedings it is necessary to refer the matter to the Court of Justice of the European Communities for a preliminary ruling in order to determine whether the words “quantitative restrictions on exports and any measures having equivalent effect” contained in Article 34 of the EEC Treaty must be understood as also applying to the legal rules of a Member State which require in respect of the export of certain goods either a licence or a standards certificate in place of such licence, where such certificate does not give rise to the imposition of a charge and may be refused if the quality does not conform to certain standards laid down by the body issuing the certificate in substitution for a licence.’By judgment of 3 February 1977 ([1977] ECR 197), the Court ruled as follows:‘The expression “quantitative restrictions on exports and any measures having equivalent effect” contained in Article 34 of the EEC Treaty must be understood as applying to rules adopted by a Member State which require in respect only of the export of certain goods either a licence or a standards certificate which is issued in place of such a licence and may be refused if the quality does not conform to certain standards laid down by the body issuing the said certificate, even if such a certificate does not give rise to the imposition of a charge.’Following that judgment the French Government published in the Journal Officiel de la République Française of 14 July 1977 a notice to exporters making it clear that standards certificates issued by Cetehor for exports of certain watches or clocks to other Member States of the European Community were no longer required, nor was the production of an export licence 02 for the same products to the same countries.Also following that judgment the public prosecutor brought the matter once more before the Tribunal Correctionnel, Besançon, and asked for the conviction of the accused Bouhelier Girardet and Zimmermann ‘for unlawful exports carried out under forged certificates to countries outside the EEC or not coming under the Treaty of Rome, on the ground that such exports were to be considered as exports of prohibited goods without a customs declaration since they were carried out under false declarations intended to evade the prohibition measures’.In their last conclusions before the Tribunal Correctionnel, Besançon, in answer to the arguments of the Direction Générale des Douanes, the accused pleaded international agreements concluded between the EEC and the countries of the European Free Trade Association, as well as agreements between the EEC and other countries of Europe, Africa, South America and the Far East. They contended that these various agreements extended the provisions of the Treaty of Rome to certain of those countries and that consequently exports to those countries were, like exports to EEC countries, not subject to the requirement of the production of an export licence or a Cetehor certificate in place of such licence.In the alternative, the accused sought a fresh reference to the Court of Justice of the European Communities for a preliminary ruling in order to determine whether the Court's judgment of 3 February 1977 must be interpreted as meaning that provisions requiring the production of a standards certificate for exports to countries which had entered into a free trade agreement with the Community were also contrary to the Community rules.By a judgment of 29 September 1978 the Tribunal Correctionnel, Besançon, discharged the accused from the prosecution in so far as it related to the offence of exporting goods to Member States of the Community by means of forged Cetehor certificates. Further, the Court once more referred to the Court of Justice for a preliminary ruling on the following questions:1. Whether its interpretation of Articles 6, 28 and 29 of the Association Agreement concluded on 9 July 1961 between the European Community and Greece allows a Member State of the EEC to require from its exporters to Greece either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;2. Whether its interpretation of the terms of the Agreement concluded on 29 June 1970 between the EEC and Spain, in particular Articles 1, 8 and 12 thereof, allows a Member State of the EEC to require from its exporters to Spain either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary discrimination or a disguised restriction on trade;3. Whether its interpretation of the terms of the Interim Agreement concluded on 22 July 1972 between the EEC and the Republic of Austria, in particular Articles 10 and 16 thereof, allows a Member State of the EEC to require from its exporters to Austria either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary discrimination or a disguised restriction on trade’.The judgment was lodged at the Court Registry on 9 October 1978.In pursuance of Article 20 of the Protocol on the Statute of the Court of Justice, the Commission of the European Communities lodged written observations.The Court, on hearing the report of the Judge-Rapporteur and the views of the Advocate General, decided to open the oral procedure without any preparatory inquiry.

II —Written observations lodged with the Court in pursuance of Article 20 of the Protocol on the Statute of the Court

The Commission of the European Communities recalls the facts, the state of the French rules, the previous judgment of the Court and the arguments of the accused, who had been discharged from the prosecution as regards the products exported by them to Member States of the EEC but who were still being prosecuted for exports carried out by means of forged certificates to non-member countries, certain of which have concluded international agreements with the EEC.First of all the Commission puts forward some general considerations. It recalls that the judgment given by the Court of Justice in the first case on 3 February 1977 (which has been quoted above) concerns trade between Member States in pursuance of the fundamental principle of freedom of movement of goods within the Common Market. This case-law is not transferable to the system of trade with non-member countries. This was the Court's decision in three judgments of 15 June 1976 (Case 51/75, [1976] ECR 811, paragraph 17; Case 86/75, [1976] ECR 871, paragraph 17; and Case 96/75, [1976] ECR 913, paragraph 10) where it ruled that … ‘the provisions of the Treaty on commercial policy do not, in Article 110 et seq., lay down any obligation on the part of the Member States to extend to trade with third countries the binding principles governing the free movement of goods between Member States and in particular the prohibition of measures having an effect equivalent to quantitative restrictions’. In fact the application of quantitative restrictions or measures having equivalent effect forms pan of the methods adopted under the common commercial policy in trade with non-member countries. Thus the sense of the words used in the measures relating to the common commercial policy as against non-member countries may be very different from the meaning of the same words used in the Treaty for use within the Community as was stated by Mr Advocate General Warner in his opinion on Case 51/75, which has been referred to above. This is particularly true in the case of international agreements concluded by the Community with certain non-member countries where it is in the ‘spirit, the general scheme and the wording’ (judgment in Case 87/75 of 5 February 1976, [1976] ECR 129) of the actual provisions of these agreements that the rules applicable in terms of the particular purpose and of the rule of reciprocity characterizing such agreements must be sought. These agreements, which come under international law, use a concept of customs union which is less elaborate than that which corresponds to the intra-Community customs union as is proved by the definition given in Article XXIV paragraph 8 (a) of the General Agreement on Tariffs and Trade (GAIT) which permits restrictions based, inter alia, on quality control (Article XI). In its relations with non-member countries the Community has already expressly maintained or adopted measures involving quantitative restrictions. The provisions of the various agreements which are the subject of the questions put by the Tribunal Correctionnel, Besançon, must accordingly be examined in order to assess the scope of the prohibition of quantitative restrictions on export which they contain.According to the Commission, Article 28 (1) of the Agreement establishing an Association between the European Economic Community and Greece, signed on 9 July 1961 (Official Journal, English Special Edition, second Series, I (1), p. 4) made it possible for the obligation to abolish quantitative restrictions on exports to be implemented before the end of the transitional period laid down in Article 6 of the said agreement, that is to say, before 1 November 1974. No such provisions was however adopted before that date and accordingly none was in force at the time of the facts of which the defendants in the main proceedings are accused.As regards the agreement concluded with Spain on 29 June 1970 (Official Journal, English Special Edition, Second Series, I (1), p. 269) it provides for the establishment of a free trade area between the Community and Spain; this is in the first stage of realization; the obligations arising from Annexes I and II to the agreement and Article 12 thereof do not introduce any prohibition on quantitative restrictions which are capable of preventing rules similar to those whose application is requested in the main proceedings from taking effect.As regards the Interim Agreement concluded on 22 July 1972 between the Community and Austria (Journal Officiel, 29 September 1972, L 223, p. 1) which came into force on 2 October 1972, it expired on 20 December 1972, the date on which the free trade agreement which the Community signed on 22 July 1972 with Austria entered into force (Official Journal, English Special Edition, 1972 (31 December), p. 3). This second agreement, in particular Article 7, contains no provision prohibiting quantitative restrictions on exports or measures having equivalent effect, which corresponds to the normal content of an agreement creating a free trade area. The interim agreement, which was a transitional measure, could not contain any more than the free trade agreement, which was concluded on the same day but which entered into force at a later date. The most that can be found there is a ‘standstill’ obligation (Article 10) prohibiting the introduction of new restrictions.From its consideration of the agreements referred to by the Tribunal Correctionnel, Besançon, the Commission concludes that they do not call in question the application of the disputed French rules and it asks that the Court should rule as follows:1. In the absence of a decision of the Council of Association within the meaning of Article 29 of the association agreement between the Community and Greece, that agreement did not prohibit, before the expiration of the transitional period, that is to say until 31 October 1974, the maintenance of national measures having an effect equivalent to quantitative restrictions on exports such as those which are the subject of the main proceedings.2. The free trade area agreement concluded by the Community with Spain contains no obligation for the contracting parties to abolish quantitative restrictions on exports or measures having an effect equivalent to such quantitative restrictions.3. The interim agreement concluded by the Community with Austria on 25 September 1972 contains no obligation for the contracting parties to abolish quantitative restrictions on exports or measures having an effect equivalent to such restrictions.’

III —Oral procedure

At the sitting on 7 June 1979 oral argument was presented by the Commission of the European Communities, represented by Jean Amphoux, a member of its Legal Department.The Advocate General delivered his opinion at the hearing on 5 July 1979.

Decision

1By a judgment of 29 September 1978, which was received at the Court Registry on 9 October 1978, the Tribunal Correctionnel [Criminal Court], Besançon, submitted to the Court of Justice, pursuant to Article 177 of the EEC Treaty, several questions on the interpretation of three agreements or conventions concluded between the European Community and Greece, Spain and Austria. These questions arose in the context of criminal proceedings for forgery and uttering of forged documents and infringements of customs legislation against Mr Bouhelier and others. That judgment follows an earlier judgment of 19 May 1976 by the same court, concerning the same accused and the same charges, which was based on the following facts:

2The French Law No 48-1228 of 22 July 1948 laid down the constitution of technical centres for industry whose main object was to ensure high standards of quality in industry, and a Ministerial Decree of 22 April 1949, adopted pursuant to that law, set up a technical centre for industry — a public utility institution — called Cetehor, the main task of which is to control the quality of lever-escapement watches and watch movements intended for export. Two notices to exporters from the Ministry of Finance and Economic Affairs, dated 30 October 1962 and 24 November 1964, require a licence for the export of such watches and watch movements except for articles accompanied by a standards certificate issued by Cetehor, which then replaces the export licence.

3During 1972 the accused Bouhelier and others forged inspection certificates issued by Cetehor and, under cover of those forged documents, exported lever-escapement watches to other Member States.

4Accordingly the judgment of 19 May 1976 submitted to the Court of Justice a reference for a preliminary ruling on the interpretation of Article 34 of the Treaty, and the Court, by a judgment of 3 February 1977 ([1977] ECR 197) ruled:‘The expression “quantitative restrictions on exports and any measures having equivalent effect” contained in Article 34 of the EEC Treaty must be understood as applying to rules adopted by a Member State which require in respect only of the export of certain goods either a licence or a standards certificate which is issued in place of such licence and may be refused if the quality does not conform to certain standards laid down by the body issuing the said certificate, even if such certificate does not give rise to the imposition of a charge.’

5Following that judgment, the Tribunal Correctionnel, Besançon, by a judgment of 29 September 1978 discharged the accused on the counts of forgery and uttering forged certificates for the purpose of exports to Member States of the EEC, but as the accused were also charged with the same offences in relation to exports of watches and watch movements to Greece, Spain and Austria — non-member countries linked to the Community by agreements — the national court submitted three questions to the Court of Justice:1. Whether its interpretation of Articles 6, 28 and 29 of the Association Agreement concluded on 9 July 1961 between the European Community and Greece allows a Member State of the EEC to require from its exporters to Greece either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;2. Whether its interpretation of the terms of the Agreement concluded on 29 June 1970 between the EEC and Spain, in particular Articles 1, 8 and 12 thereof, allows a Member State of the EEC to require from its exporters to Spain either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary discrimination or a disguised restriction on trade;3. Whether its interpretation of the terms of the Interim Agreement concluded on 22 July 1972 between the EEC and the Republic of Austria, in particular Articles 10 and 16 thereof, allows a Member State of the EEC to require from its exporters to Austria either an export licence or a certificate in place thereof, where such certificate does not give rise to the imposition of a charge and may be refused only if the quality of the goods does not conform to the standards laid down by the body issuing the certificate;And, in particular, whether or not the requirement of such certificate constitutes a means of arbitrary discrimination or a disguised restriction on trade’.

6With regard to those questions, it must be emphasized that the view adopted by the Court in its judgment of 3 February 1977 concerns intra-Community relations, the characteristic feature of which is a complete liberalization of trade, as a result of the abolition of all obstacles to imports and exports. Those provisions cannot as such be transposed to relations with non-member countries. The question of abolishing quantitative restrictions and measures having equivalent effect in relations with the three non-member countries referred to by the national court — Greece, Spain and Austria — must be considered in the light of the agreements in force between the Community and the States in question. As those provisions are not identical, the case of exports to each of those countries must be examined separately.

7Article 28 (1) of the Agreement establishing an Association between the EEC and Greece on 9 July 1961 (Official Journal, English Special Edition, Second Series, I (1) p. 4) provides that ‘quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between the Contracting Parties’. The wording of that provision is similar to that of Article 34 (1) of the Treaty.

8However, it should be noted that, by virtue of the second subparagraph of Article 28 (1), that provision was not implemented until the end of the transitional period provided for in Article 6 of the agreement, that is to say after 1 November 1974. Therefore it did not take effect until the end of that period. It could only have taken effect earlier as a result of a recommendation of the Council of Association, adopted in accordance with Article 29 of the agreement; in the absence of such a recommendation, until 1 November 1974, and hence at the material time, there was no obligation on the Community and its Member States to abolish, as regards trade with Greece, controls of the type which the defendants in the main action are accused of infringing.

9The object of the Agreement between the Community and Spain concluded on 29 June 1970 (Official Journal, English Special Edition, Second Series, 1 (1), p. 269) is the progressive elimination of obstacles to the main body of trade between the Contracting Parties. Article 12 of that agreement provides that the provisions of the said agreement ‘shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade’.

10Article 12 of the agreement does not concern quality controls such as those involved in the case before the national court. Therefore that provision is not applicable to this case. Moreover it should be noted that the agreement does not contain any provision relating to the prohibition of quantitative restrictions on exports, or of measures having equivalent effect. In those circumstances, the agreement does not impose any obligation on the Community or its Member States as regards the abolition of such measures.

11Finally, the Interim Agreement concluded on 22 July 1972 between the Community and Austria (Journal Officiel, 29 September 1972, L 223, p. 1) which came into force on 2 October 1972 cannot be invoked to call in question the application of the disputed French rules with regard to exports of watches to Austria. In fact, Article 10 of that Interim Agreement prohibits further quantitative restrictions, which does not oblige the Parties to abolish the existing restrictions.Moreover, Article 16 of the said agreement, the content and wording of which correspond to Article 12, quoted above, of the agreement concluded with Spain, must be interpreted in the same spirit as that agreement as set out above.

Costs

12The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.

Operative part

On those grounds,THE COURT (Second Chamber),in answer to the questions referred to it by the Tribunal Correctionnel, Besançon, by a judgment of 29 September 1978, hereby rules: The application during 1972 of the rules of a Member State requiring for the export of certain goods to non-member countries a licence or alternatively a standards certificate, which may be refused if the quality is not in accordance with certain provisions laid down by the authority issuing the certificate and which does not give rise to the imposition of any charge, was not incompatible with the Agreement establishing an Association between the Community and Greece concluded on 9 July 1961, or with the Agreement between the Community and Spain concluded on 29 June 1970, or with the Interim Agreement concluded between the Community and Austria on 22 July 1972.

Delivered in open court in Luxembourg on 11 October 1979.