CELEX: 61991CJ0144
Parafiscal charges
Compulsory contributions to a Fund for Animal Health and Livestock Production

Grounds
1 By two orders of 3 May 1991 in the same terms, received at the Court on 28 May 1991, the Rechtbank van Eerste Aanleg, Brussels, referred to the Court for a preliminary ruling under Article 177 of the of the EEC Treaty a number of questions on the interpretation of Articles 12, 92 and 95 of the EEC Treaty.
2 Those questions were raised in proceedings between certain undertakings trading in pigmeat and the Belgian State concerning the legality of a compulsory contribution levied in Belgium upon the slaughter or export of beef cattle, calves and pigs, for the benefit of a "Fonds de la santé et de la production des animaux" (Fund for Animal Health and Livestock Production, hereinafter "the Fund").
3 The Belgian Law of 24 March 1987 on animal health (Moniteur Belge of 17 April 1987) is intended, according to Article 2 thereof, "to combat animal disease in order to promote public health and the economic welfare of livestock farmers".
4 Article 32(2) of that Law provides as follows:
"A 'Fund for Animal Health and Livestock Production' , hereinafter 'the Fund' , shall be set up in the Ministry of Agriculture. The purpose of the Fund shall be to contribute towards the financing of compensation, allowances and other benefits for combating animal disease and improving the hygiene, health and quality of animals and animal products.
The Fund shall be financed by:
(1) Compulsory contributions from natural and legal persons who raise, process, transport, handle, sell or trade in animals;
...".
5 The same article provides that the amount of the compulsory contributions, the procedures for their collection and the penalties for non-payment are to be laid down by royal decree.
6 The ninth subparagraph of that article provides that:
"If the compulsory contribution is collected from persons who process, transport, handle, sell or trade in animals, it shall, on every transaction, be passed back up to the stage of the producer ...".
7 Pursuant to that Law, the Royal Decree of 11 December 1987 (Moniteur Belge of 23 December 1987), which entered into force on 1 January 1988, fixes the amount of the compulsory contribution per head of beef cattle, calf and pig slaughtered or exported to be paid into the Fund by the slaughterhouses or exporters.
8 Under Article 4(1) of that decree, "the compulsory contributions imposed on slaughterhouses and exporters are to be recovered by them from the supplier of the animals who, if appropriate, shall recover them from the seller up to the stage of the producer". Article 4(2) provides that the contribution in question is to be shown separately on the invoice of the slaughterhouse or exporter. The decree further provides that, in the event of non-payment of the contributions after two reminders have been issued, the slaughterer or exporter concerned is to pay double the amount due.
9 It is apparent from the documents before the Court that the plaintiffs in the main proceedings are Belgian undertakings which import pigs from other Member States for slaughter in Belgium. After being formally called on by the Belgian administration to pay their contributions, they applied to the Rechtbank van Eerste Aanleg, Brussels, for an injunction restraining the Belgian State from levying contributions on imported animals, claiming that the abovementioned Law of 24 March 1987 and the Royal Decree of 11 December 1987 were incompatible with Articles 92 and 95 of the Treaty. The contributions in question were also levied on pigs imported into Belgium, whereas the Fund' s resources were used solely for the benefit of Belgian producers.
10 In those circumstances, the Rechtbank van Eerste Aanleg, Brussels, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
"(a) Must the EEC Treaty, and in particular Articles 92 and 95 thereof, and the applicable Community regulations and directives, be interpreted as meaning that a Member State is prohibited from introducing a compulsory contribution for the support of a 'Fund for Animal Health and Livestock Production' ° in order to finance compensation, allowances and other benefits with a view to combating animal disease and improving the hygiene, health and quality of animals and animal products ° first of all by imposing on slaughterhouses in the Member State for every slaughtered pig a compulsory contribution, which under the legislation is to be passed back in every sales transaction to the stage of the producer ° which may and does mean that the contribution is charged to importers of pigs from another Member State ° and secondly by imposing on every exporter of pigs the same contribution, which may also be passed back in every sales transaction to the stage of the producer?
(b) If the first question is answered in the affirmative, should such a contribution ° given the purpose for which it is imposed, as described above ° be regarded either as a charge having equivalent effect, a charge and/or financial assistance for activities which exclusively benefit the domestic product concerned, and is it consequently prohibited?
(c) If the second question is answered in the affirmative, may an individual rely on the unlawful nature of this practice directly before a national court?"
11 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the national legislation at issue and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
12 In its questions, the national court seeks essentially to determine whether Articles 12 et seq., 92 and 95 of the Treaty preclude the introduction of a compulsory contribution which constitutes a parafiscal charge levied on domestic and imported products alike, in accordance with the same collection procedures, and paid into a fund which operates solely for the benefit of domestic production. It also asks whether those provisions have direct effect.
13 In order to answer those questions, Articles 12 et seq. and 95 of the Treaty should be considered first, followed by Article 92.
Articles 12 et seq. and 95 of the Treaty
14 Since the Treaty provisions concerning charges having equivalent effect and those concerning discriminatory internal taxation cannot be applied concurrently (see the judgments in Case 94/74 IGAV v ENCC [1975] ECR 699 and Joined Cases C-149/91 and C-150/91 Sanders [1992] ECR I-3899), it is necessary to determine the precise scope of each of those provisions.
15 Articles 12 and 13 of the Treaty prohibit customs duties on imports and exports in trade between the Member States and charges having equivalent effect. With regard to customs duties and charges having equivalent effect on imports, the Court has stated (judgments in Case 77/72 Capolongo [1973] ECR 611, Compagnie Commerciale de l' Ouest and Sanders, cited above) that in principle that prohibition covers all charges levied at the time of or by reason of importation, which are imposed specifically on an imported product but not on a similar domestic product. It has also held that pecuniary charges intended to finance the activities of an agency governed by public law can constitute charges having equivalent effect.
16 In the same judgments, the Court stated that, in interpreting the term "charge having an effect equivalent to a customs duty on imports", it might be necessary to take account of the use to which the pecuniary charges levied are put. When such a pecuniary charge or duty is intended exclusively to support activities which specifically benefit taxed domestic products, the result may be that the general duty levied, according to the same criteria, on the imported product and the domestic product nevertheless constitutes for one of them a net additional financial burden, whilst for the other it constitutes in reality a set-off against benefits or aid previously received. Consequently, a duty imposed under a general system of internal taxation applying systematically to domestic and imported products according to the same criteria can nevertheless constitute a charge having an effect equivalent to customs duties on imports when the revenue from that contribution is intended exclusively to support activities which specifically benefit the taxed domestic products.
17 Article 95 prohibits Member States from directly or indirectly imposing on the products of other Member States any internal taxation in excess of that imposed on similar domestic products or of such a nature as to afford protection to other domestic products. The applicability of the provision in question therefore depends on whether or not the internal taxation measure is discriminatory or protective (judgment in Compagnie Commerciale de l' Ouest, cited above, paragraph 25).
18 Where a charge is imposed on domestic and imported products according to the same criteria, the Court has consistently held that it may be necessary to take into account the purpose to which the revenue from the charge is put. Thus, if the revenue from such a charge is intended to finance activities for the special advantage of the taxed domestic product, it may follow that the charge imposed on the basis of the same criteria nevertheless constitutes discriminatory taxation in so far as the fiscal burden on the domestic products is neutralized by the advantages which the charge is used to finance, whilst the charge on the imported product constitutes a net burden (judgments in Case 73/79 Commission v Italy [1980] ECR 1533, paragraph 15, and in Compagnie Commerciale de l' Ouest, cited above, paragraph 26).
19 It follows from the foregoing considerations that if the advantages stemming from the use of the proceeds of the contribution in question fully offset the burden borne by the domestic product when it is placed on the market, that contribution constitutes a charge having an effect equivalent to customs duties, contrary to Article 12 et seq. of the Treaty. If those advantages only partly offset the burden borne by domestic products, the charge in question is subject to Article 95 of the Treaty. In the latter case, the charge would be incompatible with Article 95 of the Treaty and is therefore prohibited to the extent to which it discriminates against imported products, that is to say to the extent to which it partially offsets the burden borne by the taxed domestic product (see, most recently, the judgment in Sanders, cited above).
20 It is for the national court to determine whether the burden borne by the domestic product is wholly or partly offset by the use of the revenue from the charge in question (judgment in Compagnie Commerciale de l' Ouest, cited above, paragraph 28).
21 In view of the foregoing, it must be stated in reply to the national court that a compulsory contribution constituting a parafiscal charge, applied under the same conditions as regards its collection to both domestic and imported products, the revenue from which is used for the benefit of domestic products only, so that the advantages accruing from it wholly offset the burden borne by those products, constitutes a charge having an effect equivalent to customs duties prohibited by Article 12 of the Treaty. If those advantages only partly offset the burden borne by domestic products, such a charge constitutes discriminatory taxation prohibited by Article 95 of the Treaty.
22 Finally, the Court has consistently held that Articles 12, 13 and 95 of the Treaty have direct effect and create individual rights which the national courts must protect (judgments in Case 26/62 Van Gend & Loos [1963] ECR 1, in Capolongo, cited above, and in Case 74/76 Iannelli v Meroni [1977] ECR 557).
Article 92 et seq. of the Treaty
23 The national court asks whether a parafiscal charge of the kind at issue is compatible with the Treaty provisions on State aid.
24 Although the parafiscal charge in question may be prohibited either by Articles 12 and 13 or by Article 95 of the Treaty, the use to which the revenue from that charge is put, for the benefit of domestic products, may nevertheless constitute State aid incompatible with the common market, if the conditions for the application of Article 92 of the Treaty, as interpreted by the Court in previous decisions, are met (judgments in Compagnie Commerciale de l' Ouest and Others and in Sanders, cited above).
25 However, the Court has consistently held that the incompatibility of State aid with the common market is neither absolute nor unconditional. The intention of the Treaty, in providing through Article 93 for aid to be kept under constant review and supervised by the Commission, is that the finding that an aid may be incompatible with the common market is to be determined, subject to review by the Court, by means of an appropriate procedure which it is the Commission' s responsibility to set in motion. Individuals cannot therefore simply, on the basis of Article 92 alone, challenge the compatibility of an aid with Community law before the national courts or ask them to decide as the main or a subsidiary issue on any incompatibility (judgments in Iannelli, cited above, in Case 78/76 Steinike and Weinlig [1977] ECR 595, in Compagnie Commerciale de l' Ouest and in Sanders, both cited above).
26 Nevertheless, it is for the national courts to uphold the rights of the persons concerned in the event of a possible breach by the national authorities of the prohibition on putting aid into effect in the last sentence of Article 93(3) of the Treaty which has direct effect. Where such a breach is invoked by individuals who may rely thereon and is established by the national courts, the latter must take all the consequential measures under national law as regards both the validity of decisions giving effect to aid measures and the recovery of the financial support granted. When national courts take a decision in this connection, they do not decide on the compatibility of the aid measures with the common market, the final assessment of which is the exclusive responsibility of the Commission, subject to review by the Court of Justice (judgments in Case C-354/90 Fédération Nationale du Commerce Extérieur [1991] ECR I-5505 and in Sanders, cited above).
27 It is also for the national courts to uphold the rights of those concerned, by drawing all the inferences, in accordance with their national law, as regards the validity of measures implementing the aid in question and the recovery of the financial support granted, where the Commission finds by a decision adopted under Article 93(2) of the Treaty that a measure granting aid is incompatible with the common market (judgment in Steinike and Weinlig, cited above).
28 It must therefore be stated in reply to the national court that a parafiscal charge of the kind at issue in the main proceedings may, depending on how the revenue from it is used, constitute State aid incompatible with the common market if the conditions for the application of Article 92 of the Treaty are met, that being a matter for the Commission to determine in accordance with the procedure laid down for that purpose in Article 93 of the Treaty. In that respect, regard must also be had to the jurisdiction of the national courts where, in introducing the charge, the Member State concerned failed to comply with its obligations under Article 93(3) of the Treaty, and where a Commission decision under Article 93(2) of the Treaty has found the levying of the charge as a method of financing State aid to be incompatible with the common market.
Decision on costs
Costs
29 The costs incurred by the Italian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Sixth Chamber),
in answer to the questions referred to it by the Rechtbank van Eerste Aanleg, Brussels, by orders of 3 May 1991, hereby rules:
1. A compulsory contribution constituting a parafiscal charge, applied under the same conditions as regards its collection to both domestic and imported products, the revenue from which is used for the benefit of domestic products only, so that the advantages accruing from it wholly offset the burden borne by those products, constitutes a charge having an effect equivalent to customs duties prohibited by Article 12 of the Treaty. If those advantages only partly offset the burden borne by domestic products, such a charge constitutes discriminatory taxation prohibited by Article 95 of the Treaty.
2. Articles 12, 13 and 95 of the Treaty create for individuals rights which the national courts must protect.
3. A parafiscal charge of the kind at issue in the main proceedings may, depending on how the revenue from it is used, constitute State aid incompatible with the common market if the conditions for the application of Article 92 of the Treaty are met, that being a matter for the Commission to determine in accordance with the procedure laid down for that purpose in Article 93 of the Treaty. In that respect, regard must also be had to the jurisdiction of the national courts where, in introducing the charge, the Member State concerned failed to comply with its obligations under Article 93(3) of the Treaty, and where a Commission decision under Article 93(2) of the Treaty has found the levying of the charge as a method of financing State aid to be incompatible with the common market.