Arrêt de la Cour


**Case C-355/00**


**Freskot AE
v
Elliniko Dimosio**


(Reference for a preliminary ruling from the Diikitiko Protodikio Thessalonikis)
«(Common agricultural policy – Free movement of goods – Freedom to provide services – State aid – Special contribution in favour of an agricultural insurance organisation)»

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| | | | | --- | | Opinion of Advocate General Stix-Hackl delivered on 14 November 2002 | | I - 0000 | |
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| | | | | --- | | Judgment of the Court (Fifth Chamber), 22 May 2003 | | I - 0000 | |
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Summary of the Judgment

*1..
: Agriculture – Common organisation of the markets – Poultrymeat – Compulsory national insurance scheme against natural risks – Whether permissible – Conditions

(Council Regulation No 2777/75)*

*2..
: Tax provisions – Internal taxation – Parafiscal charge uniformly applied to all national production in a particular sector to finance uniform protection against
  natural risks – Classification as a charge having equivalent effect to a customs duty – Excluded – Applicability of Article 95 of the Treaty (now, after amendment, Article 90 EC) – Excluded

(EC Treaty, Arts 9, 12 and 95 (now, after amendment, Arts 23, 25 and 90 EC) and Art 16 (repealed by Treaty of Amsterdam))*

*3..
: Freedom to provide services – Services – Meaning – Benefits provided under a compulsory insurance scheme – Excluded – Conditions

(EC Treaty, Art. 59 (now, after amendment, Art. 49 EC) and Art. 60 (now Art. 50 EC))*

*4..
: Competition – Community law – Undertaking – Meaning – Body responsible for providing compulsory insurance – Excluded – Conditions

(EC Treaty, Art. 92 (now, after amendment, Art. 87 EC))*

1.
A scheme for the compulsory insurance of agricultural undertakings against natural risks cannot in principle give use to objection
from the point of view of the requirements of the common market organisation of the market in poultrymeat. Whilst the purpose
of that scheme, namely to protect agricultural undertakings against natural risks, does not serve any of the specific objectives
of that common market organisation, it is, however, covered by the aims of the common agricultural policy to which Article
20 of Regulation No 2777/75 on the common organisation of the market in poultrymeat refers, in particular, those set out in
Article 39(1)(a) and (b) of the Treaty (now Article 33(1)(a) and (b) EC). Nevertheless, it cannot be excluded that the financial charge which the contribution to be paid into that scheme represents
might give rise to barriers to trade between the Member States. It is for the national court to decide whether there is any
evidence on the markets in question that the contribution does, in fact, have such an effect. The relatively small amount
of the contribution and the fact that the charge it represents is, at least to some extent, compensated for by the benefits
granted in the event of damage under the compulsory insurance scheme and that, because of that, farmers do not have to obtain
insurance against such risks from private insurers, in so far as such insurance is available, or to take other steps to protect
themselves, also indicates that the contribution has a neutral effect on trade, whilst its indeterminate duration indicates
the opposite. see paras 23-24, 28-33, operative part 1

2.
A contribution, which forms part of a general system of taxation which, in principle, is applied uniformly, in particular
in respect of the rate and chargeable event thereof, to national agricultural products alone, whether they are intended for
the domestic market or for export, and which is used to fund a public body responsible for the prevention of, and compensation
for, damage caused to national agricultural holdings by natural risks is not charged on the product solely because it crosses
the border as such, and consequently cannot be classified as a charge having equivalent effect to a customs duty on exports
within the meaning of Articles 9 and 12 of the Treaty (now, after amendment, Articles 23 EC and 25 EC) and Article 16 of the
Treaty (repealed by the Treaty of Amsterdam). Furthermore, Article 95 of the Treaty (now, after amendment, Article 90 EC)
does not apply to such a contribution since the export of a taxed product does not constitute the chargeable event giving
rise to the levying of the contribution, the contribution cannot be considered to be discriminatory since it applies equally
to domestic agricultural products processed or marketed on the national market and to those intended for export, and the revenue
from it is available equally to all agricultural holdings. see paras 41-43, 46-47, operative part 2

3.
The concept of
services within the meaning of Article 60 of the Treaty (now Article 50 EC) implies that they are ordinarily provided for remuneration.
The essential characteristic of remuneration lies in the fact that it constitutes consideration for the service in question,
and is normally agreed upon between the provider and the recipient of the service. Consequently, benefits provided under a compulsory insurance scheme for farmers against natural risks cannot be classified
as services within the meaning of Articles 59 (now, after amendment, Article 49 EC) and 60 of the Treaty where the contribution
paid by the assured is essentially in the nature of a charge imposed by the legislature and it is levied by the tax authority
and the characteristics of that charge, including its rate, are also determined by the legislature. Therefore those services
do not fall within the scope of Directive 73/239 on the coordination of laws, regulations and administrative provisions relating
to the taking-up and pursuit of the business of direct insurance other than life assurance, the scope of which, as regards
the concept of services, is no wider than that of Articles 59 and 60 of the Treaty. However, in so far as that compulsory insurance scheme covers insurable natural risks it may constitute a restriction on the
freedom of insurance companies established in other Member States who wish to offer services covering such risks to provide
services within the meaning of those Treaty provisions. It is for the referring court to determine whether that scheme is
in fact justified by social policy objectives and to examine in particular whether the cover provided by that compulsory insurance
scheme is proportionate to those objectives. see paras 54-55, 57, 59-60, 63, 73-74, operative part 3

4.
The social purpose of a compulsory insurance scheme is not, in itself, sufficient to preclude the activity of an insurer from
being classified as an economic activity for the purposes of the Treaty provisions on competition. However, where the benefits
and the contribution, which are the two essential elements of that scheme, are set by the national legislature, the insurance
activity in question is not an economic activity within the meaning of the Treaty provisions on competition and that, in particular,
that insurer is not an undertaking within the meaning of Article 92 of the Treaty (now, after amendment, Article 87 EC).
see paras 77-79, 88, operative part 4


JUDGMENT OF THE COURT (Fifth Chamber) 22 May 2003 [(1)](#Footnote1)


((Common agricultural policy – Free movement of goods – Freedom to provide services – State aid – Special contribution in favour of an agricultural insurance organisation))In Case C-355/00,REFERENCE to the Court under Article 234 EC by the Diikitiko Protodikio Thessalonikis (Greece) for a preliminary ruling in
the proceedings pending before that court between**Freskot AE**

and

**Elliniko Dimosio,**on the interpretation of Articles 30 and 38 of the EC Treaty (now, after amendment, Articles 28 EC and 32 EC), Article 39
of the EC Treaty (now Article 33 EC), Articles 40 and 59 of the EC Treaty (now, after amendment, Articles 34 EC and 49 EC),
Article 60 of the EC Treaty (now Article 50 EC) and Article 92 of the EC Treaty (now, after amendment, Article 87 EC), and
First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions
relating to the taking-up and pursuit of the business of direct insurance other than life assurance (OJ 1973 L 228, p. 3),
as amended by Second Council Directive 88/357/EEC of 22 June 1988 (OJ 1988 L 172, p. 1),


THE COURT (Fifth Chamber),,


composed of: M. Wathelet, President of the Chamber, C.W.A. Timmermans (Rapporteur), D.A.O. Edward, P. Jann and S. von Bahr, Judges,Advocate General: C. Stix-Hackl,
Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

─
the Greek Government, by I. Chalkias and C. Tsiavou, acting as Agents,

─
the Commission of the European Communities, by M. Condou-Durande and C. Tufvesson, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Greek Government and the Commission at the hearing on 7 March 2002,

after hearing the Opinion of the Advocate General at the sitting on 14 November 2002,

gives the following


### Judgment


1
By order of 31 July 2000, received at the Court on 26 September 2000, the Diikitiko Protodikio Thessalonikis (Administrative
Court of First Instance, Thessaloniki) referred under Article 234 EC a question for a preliminary ruling on the interpretation
of Articles 30 and 38 of the EC Treaty (now, after amendment, Articles 28 EC and 32 EC), Article 39 of the EC Treaty (now
Article 33 EC), Articles 40 and 59 of the EC Treaty (now, after amendment, Articles 34 EC and 49 EC), Article 60 of the EC
Treaty (now Article 50 EC) and Article 92 of the EC Treaty (now, after amendment, Article 87 EC), and First Council Directive
73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up
and pursuit of the business of direct insurance other than life assurance (OJ 1973 L 228, p. 3), as amended by Second Council
Directive 88/357/EEC of 22 June 1988 (OJ 1988 L 172, p. 1,
Directive 73/239).

2
That question was raised in proceedings between Freskot AE (
Freskot), a poultry producer, and the Greek State for the recovery of the special insurance contribution due for the fourth quarter
of 1993 and for 1994 in respect of purchases made by Freskot of poultry and vegetable products derived from Greek agriculture.**: The law**Community law

3
Article 1(1) of Directive 73/239 provides that: This Directive concerns the taking-up and pursuit of the self-employed activity of direct insurance, including the provision
of assistance referred to in paragraph 2, carried on by undertakings which are established in the territory of a Member State
or which wish to become established there.

4
Article 2 of Directive 73/239 provides: This Directive does not apply to:

1.
The following kinds of insurance: ...

(d)
Insurance forming part of a statutory system of social security; ....National law

5
Law 1790/1988 concerning the organisation and operation of the Greek organisation for agricultural insurance, and other provisions
(FEK A' 134,
the 1988 Law) provides
*inter alia* : Article 1

1.
An organisation promoting the public interest called the Greek organisation for agricultural insurance (ELGA), a private legal
person wholly owned by the State, is hereby established.

2.
The ELGA shall have its headquarters in Athens and be supervised by the Minister of Agriculture, in accordance with the provisions
of this Law.Article 2

1.
The ELGA has the object of organising and implementing programmes of proactive protection and insuring the production and
assets of agricultural enterprises.

2.
For the purposes of this Law
insurance means the protection by insurance and the proactive protection of the agricultural production and vegetable, animal and real
property assets of farmers and of plant, and buildings in their agricultural enterprises, ... from natural risks. ...Article 3

1.
More specifically, insurance with the ELGA shall include:

(a)
compulsory insurance against damage which is caused to production from systematic cultivation, to the vegetable, animal and
real property assets of farmers, and to the buildings and plant of their agricultural enterprises. ...

(b)
proactive protection of vegetable assets and vegetable production. ...Article 4

1.
Natural or legal persons who own or operate agricultural, stock-breeding, poultry, apicultural, fishing, aquacultural or other
related undertakings shall be subject to insurance under Article 3 ... ...Article 5The resources of the ELGA are:

1.


(a)
income from a special insurance contribution ... ...

2.
All the detailed rules necessary for the application of this article shall be adopted by decision of the Minister of Agriculture.

6
Law No 2040/1992 determining the competence of the Ministry of Agriculture and legal entities charged with supervision, and
other provisions (FEK A' 70) inserted Article 5a in the 1988 Law. That provision states as follows:

1.
The following domestic agricultural products and by-products shall be subject to the special insurance contribution in favour
of the ELGA:

(a)
products of vegetable or animal origin or originating from fishing; ...

3.
The special insurance contribution is set at 2% for products of vegetable origin and 0.5% for products of animal origin or
originating from aquaculture or fishing. Those percentages shall be calculated on the basis of the value of the products.
...

7.
Subject to paragraphs 12 and 13 of this article, the special insurance contribution shall be paid to the competent tax authority
by persons statutorily liable thereto within the time-limits laid down in Article 30(2) of the Tax Code. ...

8.
The persons liable to pay the special insurance contribution to [the competent tax authority] are, subject to paragraphs 12
and 13 of this article, those who, in accordance with the Tax Code, are obliged to issue purchase and sales invoices for agricultural
products. ...

14.
The ELGA's income from the special insurance contribution levied by the tax authority shall be entered in the State budget
as State income and shall appear under a dedicated heading for income. Such income shall be paid to the ELGA from the budget
of the Ministry of Agriculture by a transfer of funds in the same amount each year following a proposal to that ministry by
the ELGA.**The facts in the main proceedings and the question referred for a preliminary ruling**

7
Freskot, a limited company under Greek law having its principal place of business in Thessaloniki, has as the object of its
business the production and sale of poultry intended for wholesale on the domestic market and the slaughter of poultry on
behalf of third parties in return for payment.

8
Whilst carrying out a check, an officer of the Dimosia Ekonomiki Iperisia (the tax authority) of Thessaloniki ascertained
that, during the 1993 tax year, Freskot had purchased agricultural products both of animal (poultry) and vegetable origin
subject to the special insurance contribution payable to ELGA under the 1988 Law (
the contribution), but that in the fourth quarter of 1993 that company had not paid the contribution due in respect of those purchases.

9
By an assessment for 1993 and 1994, dated 20 January 1997, the head of the Thessaloniki tax authority requested Freskot to
pay the amount of the unpaid contribution for the fourth quarter of 1993, the unpaid contribution for 1994 and a surcharge
for misdeclaration or failure to make a declaration for those tax years.

10
Freskot applied to the Diikitiko Protodikio Thessalonikis for annulment of that assessment on the basis that the provisions
of the 1988 Law upon the basis of which the contribution is levied are in direct conflict with primary and secondary Community
law, in particular Article 30 of the Treaty, Articles 34 and 36 of the EC Treaty (now, after amendment, Articles 29 EC and
30 EC), Articles 38, 39, 40 and 59 of the Treaty, Articles 85, 86 and 90 of the EC Treaty (now Articles 81 EC, 82 EC and 86
EC) and Article 92 of the Treaty, as well as Directive 73/239.

11
More particularly, Freskot submits that, in so far as it concerns poultry production, the contribution is contrary to the
objectives of the common agricultural policy set out in Articles 38 and 39 of the Treaty and the relevant common organisation
of the market. It submits that that contribution deprives Greek producers and sellers of poultry of the chance to sell freely,
both within Greece and in other Member States, on the terms laid down by the applicable Community rules. It further considers
that that contribution constitutes a measure having equivalent effect to a quantitative restriction prohibited by Article
30 of the Treaty because it has a detrimental effect on exports by Greek producers and favours producers outside Greece, both
within the Community and in non-Member States. Finally, Freskot submits that the monopolistic system of compulsory insurance
with ELGA, as established by the 1988 Law, is contrary to the principle of the freedom to provide services and the legislative
and administrative provisions relating to direct insurance.

12
In those circumstances, the Diikitiko Protodikio Thessalonikis stayed the proceedings and referred the following question
to the Court of Justice for a preliminary ruling: Is the imposition of the insurance contribution referred to in the grounds of the judgment, to which domestic agricultural
products and by-products of vegetable or animal origin or originating from fishing are subject, and which is levied and paid
as income to the competent tax authority, given the objective which it pursues, namely organising and implementing programmes
of proactive protection and insurance for the production and assets of agricultural holdings, contrary to the provisions of
Community law concerning the free movement of goods (Article 28), the common agricultural policy (Articles 38, 39 and 40),
the freedom to provide services (Articles 59 and 60), permitted State aid (Article 92) and the provisions of First Council
Directive 73/239/EEC of 24 July 1973?**The question referred for a preliminary ruling**

13
By its question, the referring court asks essentially whether Community law on the common agricultural policy, the free movement
of goods, the freedom to provide services and State aid precludes a quasi-fiscal charge established by a Member State, such
as the contribution, which is levied on sales and purchases of domestic agricultural products and the revenue from which is
used to fund a public body responsible for the prevention of, and compensation for, damage caused to agricultural holdings
in that State by natural risks.The common agricultural policyObservations submitted to the Court

14
The Greek Government and the Commission submit that the contribution, introduced as part of the compulsory insurance scheme
which it is used to finance, is compatible both with the Treaty provisions on the common agricultural policy and with Regulation
(EEC) No 2777/75 of the Council of 29 October 1975 on the common organisation of the market in poultrymeat (OJ 1975 L 282,
p. 77), as amended by Council Regulation (EEC) No 1235/89 of 3 May 1989 (OJ 1989 L 128, p. 29,
Regulation No 2777/75), applicable to the agricultural products at issue in the main proceedings.

15
The Greek Government and the Commission submit in particular in that regard that the contribution does not derogate from Regulation
No 2777/75 since it does not include specific provisions on agricultural insurance against natural risks.

16
According to the Greek Government the compulsory insurance scheme in question also has no significant effect on pricing levels
or on the mechanisms established by that regulation having regard, in particular, to the negligible amount of the contribution.
Such a scheme can have no effect on trade between Member States and even supports the operation of the common organisation
of the market in question since it is in the interests of farmers.

17
The Commission submits that there is no evidence in the file to support the conclusion that the contribution undermines the
common organisation of the market established by Regulation No 2777/75. The contribution does not affect the mechanisms provided
for by that regulation which are intended to adapt supply to the requirements of the market. Nor does it distort trade in
poultrymeat between the Community and third countries. In particular, there is no evidence to suggest that, because of the
imposition of the contribution, imported products are substituted for domestic products where purchasing decisions are made.
However, if that were the case, the contribution would be contrary to the regulation. In any event, it is for the referring
court to determine whether this is the case.Reply of the Court

18
It is not in dispute that the agricultural products at issue in the main proceedings are covered by a common organisation
of the market, namely that for poultrymeat, governed by Regulation No 2777/75.

19
Where there is a regulation on the common organisation of the market in a given sector, the Member States are, according to
settled case-law, under an obligation to refrain from taking any measures which might undermine or create exceptions to it
(see, as regards the common organisation of the market for poultrymeat, Case 111/76
*Van den Hazel* [1977] ECR 901, paragraph 13, and as regards other sectors,
*inter alia* , Case C-456/00
*France* v
*Commission* [2002] ECR I-11949, paragraph 31, and Case C-462/01
*Hammarsten* [2003] ECR I-781, paragraph 30).

20
Regulation No 2777/75 makes no reference either way as to the compatibility of national provisions, such as those at issue
in the main proceedings on the compulsory insurance of agricultural holdings against natural risks, with the common organisation
of the market for poultrymeat. Consideration must therefore be given to the question whether the existence of such a national
scheme, including the contribution, is such as to undermine the aims and objects of that common organisation (see,
*inter alia* , Case 51/74
*Van der Hulst* [1975] ECR 79, paragraphs 26 to 28).

21
The common organisation of the market in poultrymeat is based on a set of measures designed to stabilise the market and ensure
fair prices without recourse to intervention measures of the kind provided for in other agricultural markets.

22
Regulation No 2777/75 essentially lays down, first, provisions enabling certain Community measures to be adopted in order
that supply may be adjusted to market requirements (see, to that effect, Joined Cases 47/83 and 48/83
*Pluimveeslachterijen Midden-Nederland and* *Van Miert* [1984] ECR 1984 1721, paragraph 17) and, second, provisions establishing a single trading system at the external frontiers
of the Community, designed to avoid disturbances to Community production caused by low prices charged for products from non-Member
States both on the Community market and on other markets.

23
From the point of view of the requirements of the common organisation of the market in poultrymeat there can be no objection
in principle to the compulsory insurance scheme at issue in the main proceedings, including the contribution.

24
The purpose of that scheme, namely to protect agricultural holdings against natural risks, does not serve any of the specific
objectives of that common organisation as set out at paragraphs 21 and 22 of the present judgment. However, the purpose of
the national scheme is covered by the aims of the common agricultural policy to which Article 20 of Regulation No 2777/75
refers, in particular the aims set out in Article 39(1)(a) and (b) of the Treaty.

25
Increasing productivity and ensuring a fair standard of living for the agricultural community, which are amongst the aims
pursued by that Treaty article, imply,
*a fortiori* , the aim pursued by the compulsory insurance scheme at issue in the main proceedings, consisting of the protection of agricultural
holdings against natural risks which are of particular importance for them, above all because the availability of cover from
insurance companies appears, at least to some extent, to be uncertain.

26
Furthermore, it follows both from the overall scheme of Regulation No 2777/75 and from its provisions, in particular Article
2, that that regulation makes a considered economic policy choice to rely essentially on market forces to attain the desired
balance. Accordingly, as regards trade between Member States, the organisation of the market in poultrymeat is based upon
freedom of commercial transactions under conditions of genuine competition (see, to that effect,
*Van den Hazel* , cited above, paragraphs 16 and 18).

27
It is therefore necessary to determine whether free trade between Member States is likely to be restricted by national rules
such as the contribution (see to that effect,
*inter alia* ,
*Pluimveeslachterijen Midden-Nederland and* *Van Miert* , cited above, paragraph 28).

28
It cannot be excluded that the financial charge which that contribution represents does have such an effect on intra-Community
trade.

29
That is because the advantage enjoyed by products originating in other Member States or in non-Member States over Greek products
as a result of the fact that only the latter are subject to the contribution might, by reason of the increase in the price
of Greek products alone, engender a certain degree of substitution of products originating in other Member States or of products
imported from non-Member States for domestic products, both on the Greek market and on that of other Member States.

30
It is, however, for the national court to decide whether there is any evidence on the markets in question that the contribution
does, in fact, have such an effect, the Court being able to identify certain features of Community law to facilitate such
a decision (see, to that effect, in respect of a common organisation of the market of a type different from that laid down
by Regulation No 2777/75,
*inter alia* , Joined Cases 36/80 and 71/80
*Irish Creamery Milk Suppliers Association* [1981] ECR 735, paragraph 19).

31
In that context, the relatively small amount of the contribution, at least for the products of animal origin at issue in the
main proceedings, is one factor showing that it has a neutral effect on trade, whilst its indeterminate duration indicates
the opposite (see to that effect,
*inter alia* ,
*Irish Creamery Milk Suppliers Association* , cited above, paragraph 20, and Case C-235/90
*Aliments Morvan* [1991] ECR I-5419, paragraphs 10 and 11).

32
The fact that the charge represented by the contribution is, at least to some extent, compensated for by the benefits granted
by the ELGA in the event of damage under the compulsory insurance scheme and that, because of that, farmers do not have to
obtain insurance against such risks from private insurers, in so far as such insurance is available, or to take other steps
to protect themselves, also indicates that the contribution has a neutral effect on trade.

33
In the light of the foregoing, the answer to the question referred as regards Community law on the common agricultural policy
must be that:

─
the Treaty provisions on the common agricultural policy and Regulation No 2777/75 do not preclude a quasi-fiscal charge established
by a Member State, such as a contribution levied on sales and purchases of domestic agricultural products which fall within
the common organisation for the market in poultrymeat, the revenue from which is used to fund a public body responsible for
the prevention of, and compensation for, damage caused to agricultural holdings by natural risks in that State;

─
those provisions and that regulation do preclude such a quasi-fiscal charge however where it is such as to undermine the aims
and objects of the common organisation of the market in question and, in particular, where it does in fact restrict intra-Community
trade;

─
it is for the national court to decide whether the contribution does in fact have that effect.

The free movement of goodsObservations submitted to the Court

34
The Greek Government examines the compatibility of the contribution with the provisions on the free movement of goods laid
down by Articles 9, 10, 12 and 95 of the EC Treaty (now, after amendment, Articles 23 EC, 24 EC, 25 EC and 90 EC).

35
According to that government, the contribution cannot be described as a charge having equivalent effect to a customs duty
within the meaning of Articles 9 and 12 of the Treaty since it does not apply to imports but is an integral part of a general
system of internal taxes which are systematically charged under the same conditions on all domestic products.

36
The contribution must therefore be assessed in the light of Article 95 of the Treaty. It is compatible with that provision
in that, first, it does not apply to imports and therefore constitutes in that regard, at most, reverse discrimination not
open to criticism and, second, it applies equally to sales of domestic products intended for export and to sales of those
intended for the domestic market.

37
The Commission submits that the contribution does not conflict with the Treaty provisions on the free movement of goods because
it covers all domestic products but applies neither to imported products nor exclusively to exported products. It follows
that it does not constitute an obstacle to trade between Member States even if it is potentially less favourable to domestic
production than to that originating in other Member States.Reply of the Court

38
As a preliminary point, the Treaty provisions prohibiting quantitative restrictions or measures having equivalent effect are
an integral part of the common organisation of the market for poultrymeat (see, to that effect, Case 83/78
*Pigs Marketing Board* [1978] ECR 2347, paragraph 55). The assessment of the contribution in the light of those provisions has already been carried
out in the course of considering the principle of free trade included in that common organisation of the market (see paragraphs
27 to 33 of the present judgment).

39
As regards the Treaty provisions concerning charges having equivalent effect to customs duties (Articles 9 and 12 of the Treaty
and Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam)) and those relating to discriminatory internal taxation
(Article 95 of the Treaty), it should be noted that those provisions cannot be applied together, so that the same charge cannot,
under the system established by the Treaty, belong to both those categories at the same time (see,
*inter alia* , Case C-234/99
*Nygård* [2002] ECR I-3657, paragraph 17, and the case-law cited therein, and Case C-101/00
*Tulliasiamies and Siilin* [2002] ECR I-7487, paragraph 115).

40
It is not in dispute that the contribution applies only to domestic products and not to imported products. It is therefore
necessary to determine, first, whether it amounts to a charge having equivalent effect to a customs duty on exports within
the meaning of Articles 9, 12 and 16 of the Treaty. If not, it will then be necessary to consider whether the contribution
constitutes a discriminatory internal taxation prohibited by Article 95 of the Treaty.

41
The contribution cannot be classified as a charge having equivalent effect to a customs duty on exports within the meaning
of Articles 9, 12 and 16 of the Treaty.

42
The contribution is not charged on the product solely because it crosses the border as such. That factor constitutes the
essential feature of a charge having an effect equivalent to a customs duty which distinguishes it from an internal tax within
the meaning of Article 95 of the Treaty (see, to that effect,
*inter alia* , Joined Cases C-441/98 and C-442/98
*Michaïlidis* [2000] ECR I-7145, paragraph 22, and the case-law cited therein).

43
Instead, the contribution forms part of a general system of taxation which, in principle, is applied uniformly, in particular
in respect of the rate and chargeable event thereof, to Greek agricultural products alone, whether they are intended for the
domestic market or for export, and which is used to fund a public body responsible for the prevention of, and compensation
for, damage caused to Greek agricultural holdings by natural risks (see, to that effect,
*Nygård* , cited above, paragraph 24).

44
Further, there is nothing in the file sent to the Court by the referring court which gives rise to doubt that the allocation
of the revenue from the contribution to finance the benefits for which ELGA is responsible is of equal benefit both to domestic
agricultural products intended for processing or marketing on the domestic market and to those intended for export (see, to
that effect,
*Nygård* , cited above, paragraph 39). It is a measure for the protection of domestic agricultural production as such.

45
With regard to Article 95 of the Treaty, it must be noted that that provision must be interpreted as also prohibiting any
tax discrimination against products intended for export to other Member States (see Case 142/77
*Larsen and Kjerulff* [1978] ECR 1543, paragraph 27, and
*Nygård* , cited above, paragraph 41).

46
It should be noted however that in the main proceedings the export of the product does not constitute the chargeable event
giving rise to the levying of the contribution within the context of the system of internal taxation in question. It follows
that Article 95 of the Treaty does not apply in the present case (see, to that effect,
*Larsen and Kjerulff* , cited above, paragraph 24).

47
Moreover, and in any event, it is apparent from the file that the contribution cannot be considered to be discriminatory since,
as was stated at paragraphs 43 and 44 of the present judgment, it applies equally to domestic agricultural products processed
or marketed on the national market and to those intended for export, and the revenue from it is available equally to all agricultural
holdings (see, to that effect,
*Nygård* , cited above, paragraph 42).

48
In the light of the foregoing, the answer to the question must be that Community law on the free movement of goods, in particular
Articles 9, 12, 16 and 95 of the Treaty does not preclude a quasi-fiscal charge such as the contribution.The freedom to provide servicesObservations submitted to the Court

49
The Greek Government submits that the benefits provided by ELGA under the compulsory insurance scheme are not normally provided
for remuneration within the meaning of Article 60 of the Treaty and do not, therefore, fall within the scope of the Treaty
provisions on the freedom to provide services. They are in fact social security benefits primarily financed from public funds.
Accordingly, the benefits also do not fall within the scope of Directive 73/239.

50
The Commission submits that provision of the benefits does not have the technical characteristics of insurance business within
the meaning of Directive 73/239 in particular. Furthermore, they are not economic in nature or for profit and therefore do
not fall within the Treaty provisions on the freedom to provide services.Reply of the Court

51
A preliminary point to be made is that the question referred with regard to the Treaty provisions on the freedom to provide
services covers two aspects. First, whether the benefits provided by ELGA fall within the scope of Directive 73/239 and,
second, whether the compulsory insurance scheme at issue in the main proceedings constitutes a restriction of the freedom
of insurers established in other Member States to provide services.

52
As regards the first part of the question, it is necessary to determine whether the benefits provided by ELGA under the compulsory
insurance scheme at issue in the main proceedings, in particular the payment of compensation in the event of damage caused
by natural risks, do in fact fall within the scope of the freedom to provide services within the meaning of Articles 59 and
60 of the Treaty, in order to be able to determine whether those benefits fall within the scope of Directive 73/239.

53
Even if those benefits did fall within the field of social security, as the Greek Government submits, that is not sufficient
to preclude application of Articles 59 and 60 of the Treaty (see to that effect,
*inter alia* , Case C-157/99
*Smits and Peerbooms* [2001] ECR I-5473, paragraph 54 and the case-law cited therein).

54
Furthermore, the concept of
services within the meaning of Article 60 of the Treaty implies that they are ordinarily provided for remuneration.

55
The Court has already held that the essential characteristic of remuneration lies in the fact that it constitutes consideration
for the service in question, and is normally agreed upon between the provider and the recipient of the service (see Case 263/86
*Humbel and Edel* [1988] ECR 5365, paragraph 17, and Case C-109/92
*Wirth* [1993] ECR I-6447, paragraph 15).

56
In the present case, it is clear that the payment of the contribution by the Greek farmers does not constitute economic consideration
for the benefits provided by ELGA under the compulsory insurance scheme.

57
The contribution is essentially in the nature of a charge imposed by the legislature and it is levied by the tax authority.
The characteristics of that charge, including its rate, are also determined by the legislature. It is for the competent
ministers to decide any variation of the rate.

58
Similarly, the rate and detailed rules governing the benefits provided by ELGA under the compulsory insurance scheme are framed
by the national legislature in such a way as to apply equally to all operators.

59
Consequently, benefits such as those provided by ELGA under the compulsory insurance scheme cannot be classified as services
within the meaning of Articles 59 and 60 of the Treaty.

60
As a result they also do not fall within the scope of Directive 73/239, which, as regards the concept of services, is no wider
than that of Articles 59 and 60 of the Treaty.

61
Independently of the question whether the benefits provided by ELGA may be classified as
services within the meaning of those Treaty provisions, the second question is whether the implementation of the compulsory insurance
scheme in which ELGA participates is, in itself, such as to constitute a restriction of the freedom of insurers, established
in other Member States and wishing to offer their insurance services against the risks in question, or some of them, on the
Greek market, to provide services.

62
It is true that there appears to be some doubt, at least in respect of certain risks covered by the compulsory insurance scheme,
whether these are insurable with private insurers since the profitability of such insurance business is uncertain. Moreover,
the documents in the file sent to the Court appear to show that the national compulsory insurance scheme makes provision for
minimum cover and that, therefore, the operators concerned are at liberty to enter into additional contracts of insurance
with companies established both in Greece and in other Member States.

63
However, in so far as that compulsory insurance scheme also covers insurable natural risks, it might constitute a restriction
of the freedom of insurance companies established in other Member States, who wish to offer contracts of insurance covering
such risks in Greece, to provide services, in that it hinders or renders less attractive, or even prevents, directly or indirectly,
the exercise of that freedom (see to that effect,
*inter alia* , Case C-67/98
*Zenatti* [1999] ECR I-7289, paragraphs 26 and 27, and Case C-294/00
*Gräbner* [2002] ECR I-6515, paragraph 38 and the case-law cited therein).

64
Furthermore, it is useful to note in that context that, in the notice entitled
Community Guidelines for State aid in the agriculture sector, published in the
*Official Journal of the European Communities* of 1 February 2000 (OJ 2000 C 28, p. 2), the Commission stated that several Member States have set up aid schemes designed
to encourage farmers to obtain insurance cover, schemes which imply that at least some of those risks are insurable, but that
such aids constitute a restriction on the operation of the internal market for insurance services, particularly if the possibility
of providing insurance cover is limited to a single company or group of companies or if a condition of the aid is that the
insurance contract has to be taken out with a company established in the Member State concerned (see sections 11.5.1 and 11.5.3
of that notice).

65
Therefore, it is necessary to examine whether such a restriction of the freedom to provide services can be justified under
Community law.

66
The compulsory insurance scheme at issue in the main proceedings essentially pursues an objective of social policy.

67
Given that the rate of the contribution is fixed independently of the risk facing each farm and that, in general, the national
legislature sets a uniform rate both for the contributions paid and the benefits granted, the scheme seeks to ensure an adequate
level of cover for all agricultural holdings, including those at greater risk of damage from natural risks.

68
As the Greek Government has pointed out, the social policy objective pursued by such a compulsory insurance scheme is further
confirmed by its historic origins as a component of the general system of social security for farmers and by the fact that
it covers in particular risks in respect of which it appears
*a priori* uncertain whether insurance cover with private insurers is in fact available, even though it is particularly important that
agricultural holdings are covered against such risks.

69
In those circumstances, any restriction of the freedom to provide services which may ensue from the compulsory insurance scheme
at issue in the main proceedings may be justified on the ground of overriding public interest relating to a social policy
objective.

70
As regards the proportionality of that compulsory insurance scheme, it appears from the documents in the file that the compulsory
insurance scheme with ELGA provides a minimum level of cover and that Greek farmers are, therefore, at liberty to supplement
it by taking out additional policies, assuming that these are available on the market. That fact argues in favour of the
proportionality of the compulsory insurance scheme at issue in the main proceedings.

71
However, as the Commission has rightly pointed out, it is necessary to examine whether the cover provided by the compulsory
insurance scheme is proportionate. In particular, it is necessary to examine whether the financing of ELGA and, therefore,
its primarily social objective would be compromised if Greek farmers were allowed to take out insurance policies with private
insurers in respect of certain risks covered by the compulsory insurance scheme and were exempt from paying the contribution
to a corresponding extent.

72
However, the Court does not have sufficient information to be able to carry out such an investigation.

73
In those circumstances, it is for the referring court to determine, on the basis of all the information available to it, whether
the compulsory insurance scheme at issue in the main proceedings is proportionate in the light of the social objective of
that scheme.

74
In the light of the foregoing, the answer to the question referred must be that:

─
benefits such as those provided by ELGA under the compulsory insurance scheme against natural risks do not fall within the
scope of either Articles 59 and 60 of the Treaty or Directive 73/239;

─
such a compulsory insurance scheme may, however, constitute a restriction on the freedom of insurance companies established
in other Member States, who wish to offer services covering such risks in Greece, to provide services, within the meaning
of those Treaty provisions. It is for the referring court to determine whether that scheme is in fact justified by social
policy objectives and to examine, in particular, whether the cover provided by that compulsory insurance scheme is proportionate
to those objectives.

The Treaty provisions on State aidObservations submitted to the Court

75
The Greek Government and the Commission submit essentially that ELGA cannot be classified as an undertaking for the purposes
of the Treaty provisions relating to competition since the function delegated to it is based on the principle of national
solidarity and does not constitute an economic activity.Reply of the Court

76
In order to determine whether ELGA, as the recipient of the contribution, may be regarded as an
undertaking within the meaning of Article 92 of the Treaty it must be noted that the function allocated to that body under the compulsory
insurance scheme at issue in the main proceedings is exercised in the context of the essentially social objective pursued
by that scheme (see paragraphs 66 to 68 of the present judgment).

77
It is true that the social purpose of that compulsory insurance scheme is not, in itself, sufficient to preclude ELGA's activity
from being classified as an economic activity for the purposes of the Treaty provisions on competition (see,
*inter alia* , Joined Cases C-180/98 to C-184/98
*Pavlov and Others* [2000] ECR I-6451, paragraph 118, and Case C-218/00
*Cisal* [2002] ECR I-691, paragraph 37).

78
As is apparent from paragraphs 56 to 58 of the present judgment, the benefits and the contribution, which are the two essential
elements of that scheme, are set by the national legislature (see on that subject,
*inter alia* ,
*Cisal* , cited above, paragraphs 43 and 44). The contribution is essentially in the nature of a charge imposed by the State. It
is also the State which determines the characteristics of that charge, including the rate. Similarly, the nature and level
of the benefits provided by ELGA are set by the national legislature.

79
It follows that the insurance activity carried out by ELGA is not an economic activity within the meaning of the Treaty provisions
on competition and that, in particular, that body is not an undertaking within the meaning of Article 92 of the Treaty.

80
However, the question arises, independently of whether the compulsory insurance scheme at issue in the main proceedings is
compatible with the Treaty provisions on State aid as regards ELGA's activity as the recipient of the contribution, as to
whether the benefits provided by that body to Greek agricultural holdings as compulsory insurance against natural risks may
be classified as
State aid within the meaning of Article 92(1) of the Treaty.

81
The first point to note in that regard is that the national legislation at issue in the main proceedings clearly establishes
that the benefits provided by ELGA are granted through State resources and are imputable to the State within the meaning of
the Court's case-law (see,
*inter alia* , Case C-482/99
*France* v
*Commission* [2002] ECR I-4397, paragraph 24).

82
Consequently, it is necessary in the second place to answer the question whether, and if so to what extent, the ELGA compulsory
insurance scheme constitutes an economic benefit for the operators covered thereunder.

83
According to the Court's case-law, in particular measures which, in various forms, mitigate the charges which are normally
included in the budget of an undertaking and which, without therefore being subsidies in the strict meaning of the word, are
similar in character and have the same effect, are considered to constitute aid (see,
*inter alia* , Case C-200/97
*Ecotrade* [1998] ECR I-7907, paragraph 34, and Case C-75/97
*Belgium* v
*Commission* [1999] ECR I-3671, paragraph 23).

84
Accordingly, it is necessary to answer the question whether, and if so to what extent, in the absence of compulsory cover,
Greek agricultural holdings should have, and indeed could have obtained insurance cover from private insurers or taken other
steps in order adequately to protect themselves against the consequences of natural risks for their farms and, second, to
what extent the contribution corresponds to the actual economic cost of the benefits provided by ELGA under the compulsory
insurance scheme, if indeed such a cost can be calculated.

85
The third question posed is whether such benefits, assuming that they constitute an advantage for the recipients, satisfy
the condition of selectivity under Article 92(1) of the Treaty (see,
*inter alia* , Case C-143/99
*Adria-Wien Pipeline and Wietersdorfer & Peggauer Zementwerke* [2001] ECR I-8365, paragraph 41).

86
The scope of the compulsory insurance scheme at issue in the main proceedings may, depending on the circumstances, be justified
in the light of the nature or general scheme of the system of benefits provided by ELGA, in so far as it appears from the
documents in the file that that scheme is intended to offer a minimum of protection to agricultural holdings against the natural
risks to which they are, as such, particularly exposed (see to that effect,
*inter alia* ,
*Adria-Wien Pipeline and Wietersdorfer & Peggauer Zementwerke* , cited above, paragraph 42, and Case C-351/98
*Spain* v
*Commission* [2002] ECR I-8031, paragraphs 42 and 43).

87
However, the Court is clearly not sufficiently apprised of the relevant points of fact and law needed in order to be able
to answer the part of the question concerning the potential classification of the benefits granted by ELGA under the compulsory
insurance scheme against natural risks as State aid, particularly in relation to the points referred to in paragraphs 82 and
85 of the present judgment. In those circumstances, no answer can be given to that part of the question.

88
In the light of all the foregoing, the answer to the question referred must be that the term
undertaking within the meaning of Article 92 of the Treaty does not cover a body such as ELGA in respect of its activities under the
compulsory insurance scheme against natural risks. **Costs**

89
The costs incurred by the Greek Government and by the Commission, 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.

On those grounds,

THE COURT (Fifth Chamber),
in answer to the question referred to it by the Diikitiko Protodikio Thessalonikis by order of 31 July 2000, hereby rules:**1.
The EC Treaty provisions on the common agricultural policy and Regulation (EEC) No 2777/75 of the Council of 29 October 1975
on the common organisation of the market in poultrymeat, as amended by Council Regulation (EEC) No 1235/89 of 3 May 1989,
do not preclude a quasi-fiscal charge established by a Member State, such as a special insurance contribution levied on sales
and purchases of domestic agricultural products which fall within the common organisation for the market in poultrymeat, the
revenue from which is used to fund a public body responsible for the prevention of, and compensation for, damage caused to
agricultural holdings by natural risks in that State. Those Treaty provisions and Regulation No 2777/75, as amended by Regulation No 1235/89, do preclude such a quasi-fiscal charge
however where it is such as to undermine the aims and objects of the common organisation of the market in question and, in
particular, where it does in fact restrict intra-Community trade. **It is for the national court to decide whether the contribution does in fact have that effect.**

2.
**Community law on the free movement of goods, in particular Articles 9 and 12 of the EC Treaty (now, after amendment, Articles
23 EC and 25 EC), Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam) and Article 95 of the EC Treaty (now,
after amendment, Article 90 EC), does not preclude a contribution such as that referred to in paragraph 1 of the operative
part of the present judgment.**

3.
**Benefits such as those provided by the Organismos Ellenikon Georgikon Asfaliseon (ELGA) under the compulsory insurance scheme
against natural risks do not fall within the scope of either Article 59 of the EC Treaty (now, after amendment, Article 49
EC) and Article 60 of the EC Treaty (now Article 50 EC) or First Council Directive 73/239/EEC of 24 July 1973 on the coordination
of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance
other than life assurance, as amended by Second Council Directive 88/357/EEC of 22 June 1988.** **Such a compulsory insurance scheme may, however, constitute a restriction on the freedom of insurance companies established
in other Member States, who wish to offer services covering such risks in Greece, to provide services, within the meaning
of those Treaty provisions. It is for the referring court to determine whether that scheme is in fact justified by social
policy objectives and to examine, in particular, whether the cover provided by that compulsory insurance scheme is proportionate
to those objectives.**

4.
**The term
undertaking within the meaning of Article 92 of the EC Treaty (now, after amendment, Article 87 EC) does not cover a body such as the
Organismos Ellenikon Georgikon Asfaliseon (ELGA) in respect of its activities under the compulsory insurance scheme against
natural risks.****

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| Wathelet | Timmermans | Edward |
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| Jann | von Bahr | |
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Delivered in open court in Luxembourg on 22 May 2003.

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| --- | --- |
| R. Grass | M. Wathelet |

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| --- | --- |
| Registrar | President of the Fifth Chamber |

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[1](#Footref1) –
: Language of the case: Greek.