# EUR-Lex - 61999J0234 - EN

Avis juridique important

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# 61999J0234

**Judgment of the Court (Sixth Chamber) of 23 April 2002. - Niels Nygård v Svineafgiftsfonden, and Ministeriet for Fødevarer, Landbrug og Fiskeri. - Reference for a preliminary ruling: Vestre Landsret - Denmark. - National levy on pigs - Charge having an equivalent effect - Internal taxation - Levy scheme authorised by the Commission as State aid compatible with the common market - Levy incompatible with provisions of the EC Treaty other than Articles 92 of the EC Treaty (now, after amendment, Article 87 EC) and 93 of the EC Treaty (now Article 88 EC) - Discretion of the national courts. - Case C-234/99. **

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European Court reports 2002 Page I-3657 *

Summary
Parties
Grounds
Decision on costs
Operative part

## Keywords

1. Tax provisions - Internal taxation - Parafiscal charge on pigs levied in respect of every animal produced in a Member State and slaughtered in that Member State or exported live which benefits those two types of production - Classification as a tax having an equivalent effect to customs duties - Excluded - Classification as an internal charge - Conditions

(EC Treaty, Arts 9, 12 and 95 (now, after amendment, Arts 23 EC, 25 EC and 90 EC))

2. State aid - Commission decision authorising a tax scheme as State aid - Obstacle to examination by national courts of compatibility with other Treaty provisions - No obstacle

(EC Treaty, Arts 92 (now, after amendment, Art. 87 EC) and 93 (now Art. 88 EC))

Summary

1. A levy charged by a body established under public law according to identical criteria on pigs produced in a Member State for slaughter on the domestic market or for live export to other Member States, the revenue from which is allocated to activities benefiting the two types of production, does not fall under the prohibition of charges having equivalent effect to customs duties on exports within the meaning of Article 9 of the Treaty (now, after amendment, Article 23 EC), Article 12 of the Treaty (now, after amendment, Article 25 EC) and Article 16 of the Treaty (repealed by the Treaty of Amsterdam). Such a levy may, however, be classified as discriminatory internal taxation prohibited by Article 95 of the Treaty (now, after amendment, Article 90 EC) if and to the extent to which the advantages deriving from the use made of its revenue compensate in part the charge imposed on pigs produced for slaughter in the Member State concerned, thereby placing at a disadvantage the production of pigs for live export to other Member States.

## Summary

( see para. 49, operative part 1 )

2. The fact that a national levy is intended to finance an aid scheme authorised by the Commission pursuant to the Treaty provisions on State aid does not preclude a national court from examining whether such a levy is compatible with other directly effective Treaty provisions.

This assessment carried out by national courts makes it possible to guarantee individuals the legal protection deriving from the direct effect of the Community law provisions and, should those provisions be infringed, to re-establish internal legality, without thereby encroaching on the central and exclusive role which Articles 92 (now, after amendment, Article 87 EC) and 93 (now Article 88 EC) of the Treaty reserve to the Commission in determining whether aid is compatible with the common market.

( see paras 62, 65, operative part 2 )

Parties

In Case C-234/99,

## Parties

REFERENCE to the Court under Article 234 EC by the Vestre Landsret (Denmark) for a preliminary ruling in the proceedings pending before that court between

Niels Nygård

and

Svineafgiftsfonden,

intervener:

Ministeriet for Fødevarer, Landbrug og Fiskeri,

on the interpretation of Article 9 of the EC Treaty (now, after amendment, Article 23 EC), Article 12 of the EC Treaty (now, after amendment, Article 25 EC), Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam), Article 93 of the EC Treaty (now Article 88 EC), and Article 95 of the EC Treaty (now, after amendment, Article 90 EC),

THE COURT (Sixth Chamber),

composed of: N. Colneric, President of the Second Chamber, acting for the President of the Sixth Chamber, C. Gulmann, R. Schintgen, V. Skouris (Rapporteur) and J.N. Cunha Rodrigues, Judges,

Advocate General: J. Mischo,

Registrar: R. Grass,

after considering the written observations submitted on behalf of:

- Mr Nygård, by M. Meyer, advokat,

- Svineafgiftsfonden, by S.T. Sørensen, advokat,

- the Danish Government, by J. Molde, acting as Agent, assisted by S.G. Jensen, advokat,

- the Commission of the European Communities, by H.P. Hartvig and E. Traversa, acting as Agents,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 10 May 2001,

gives the following

Judgment

Grounds

1 By order of 16 June 1999, received at the Court on 21 June 1999, the Vestre Landsret (Western Regional Court) referred for a preliminary ruling under Article 234 EC two questions concerning the interpretation of Article 9 of the EC Treaty (now, after amendment, Article 23 EC), Article 12 of the EC Treaty (now, after amendment, Article 25 EC), Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam), Article 93 of the EC Treaty (now Article 88 EC), and Article 95 of the EC Treaty (now, after amendment, Article 90 EC).

## Grounds

2 Those questions have arisen in a dispute between Mr Nygård, a pig breeder, and the Svineafgiftsfond (Pig Levy Fund) (the Fund) relating to recovery of the production levy payable in respect of the pigs which Mr Nygård exported live to Germany between 1 August 1992 and 1 July 1993.

The legal framework

3 Under Paragraph 6(1) of Lov No 414 om administration af Det Europæiske Fællesskabs forordninger om markedsordninger for landbrugsvarer m.v. (Law on the Administration of the European Economic Community Regulations on the Organisation of the Markets in Agricultural and other Products) of 13 June 1990 (Lovtidende 1990, p. 1365), as amended by Law No 380 of 6 June 1991 (Lovtidende 1991, p. 1499) and by Law No 265 of 6 May 1993 (Lovtidende 1993, p. 1122), (the Enabling Law), the Minister for Agriculture may lay down rules for the payment of levies on agricultural goods produced in Denmark ... The levies shall be paid into a fund for each of the sectors in which they are charged ....

4 Under Paragraph 6(3) of the Enabling Law the Minister for Agriculture shall lay down the detailed rules for payment of the public resources referred to in subparagraphs 1 and 2.

5 Paragraph 7(1) of the Enabling Law provides:

Fund revenue shall be used to finance measures for sales promotion, research and trials, product development, provision of advice, training, preventive sanitary measures, disease eradication and control, together with all other measures authorised by the Minister for Agriculture ... The resources referred to in Paragraph 6(1) must be allocated to the sectors in which they were levied.

6 The Landbrugsministeriets bekendtgørelse om afgift ved slagtning og ved eksport af svin (Decree of the Ministry of Agriculture establishing a Pig Slaughter and Export Levy), No 74 of 30 January 1992 (Decree No 74/92), which was adopted pursuant to the Enabling Law and is applicable to the facts of the case in the main proceedings, provides inter alia:

Paragraph 1

1. A production levy shall be charged for every pig - including sows, boars, store pigs and piglets - bred and slaughtered in Denmark and declared fit for human consumption following inspections carried out by the public authorities. The levy is also payable in respect of pigs slaughtered for private consumption.

2. The amount of the levy shall be DKK 7.00 for each pig having a carcass weight below or equal to 100 kg and DKK 17.50 for each pig having a carcass weight greater than 100 kg.

...

Paragraph 2

1. For pigs slaughtered in abattoirs for export, it is for the abattoir concerned to charge the levy referred to in Paragraph 1 to the supplier and to notify the Svineafgiftsfond each week ... of the number of pigs slaughtered and declared fit for consumption, in each of the two weight categories, during the previous week, and to pay to the Fund the levies due in that regard.

2. In the case of pigs slaughtered in private abattoirs, it is for the abattoir concerned to pay the levy referred to in Paragraph 1 to the Svineafgiftsfond ... no later than two weeks after slaughter. The payment card is issued by the veterinary inspector, who must notify the Svineafgiftsfond, immediately after the inspection certificate has been issued, of the number of pigs slaughtered in each weight category.

Paragraph 3

1. For every pig - including sows, boars, store pigs and piglets - bred in Denmark and exported live, the exporter shall pay a levy amounting to DKK 7.00 for each pig having a live weight below or equal to 120 kg and DKK 17.50 for each pig having a live weight greater than 120 kg.

2. The exporter shall, no later than two weeks after exportation, notify the Svineafgiftsfond ... of the exports, by stating the number of live pigs in each weight category, and pay to the Svineafgiftsfond the levies due in that regard.

The dispute in the main proceedings and the questions referred for preliminary ruling

7 Mr Nygård, a pig breeder established in Denmark, exported to Germany between 1 August 1992 and 1 July 1993 live pigs intended for abattoirs. In this connection he paid in Germany a production levy for each pig supplied to the abattoirs, pursuant to the Gesetz über die Einrichtung eines zentralen Fonds zur Absatzförderung der deutschen Land-, Forst- und Ernährungswirtschaft (German Law establishing a Central Fund for the Commercial Promotion of German Agriculture and Forestry and the German Food Industry) (the German Law on the Commercial Promotion Fund).

8 Having refused to pay the amount claimed from him, in respect of those pigs, under the production levy introduced by Paragraph 3(1) of Decree No 74/92, the Fund brought proceedings against Mr Nygård before the Retten i Skjern (District Court, Skjern) (Denmark). By decision of 31 March 1995 that court ordered him to pay the full amount of the production levy due in respect of the exported pigs, amounting to DKK 101 776.37, plus interest.

9 Mr Nygård appealed to the Vestre Landsret, arguing primarily that the levy imposed on live pigs for export constitutes in its entirety a charge having an equivalent effect to a customs duty on exports within the meaning of Articles 9, 12 and 16 of the Treaty. In the alternative, he contended that, if it is not a charge having equivalent effect, that levy constitutes discriminatory internal taxation prohibited by Article 95 of the Treaty in so far as the levy resources are allocated to activities benefiting exclusively, or to a proportionately greater degree, the breeding of pigs for slaughter on the domestic market.

10 In its order for reference, the Vestre Landsret points out that the Danish scheme of production levies, and in particular that of the production levy introduced by Decree No 74/92, was notified, in accordance with Article 93(3) of the Treaty, to the Commission, which authorised it as State aid compatible with the common market. The Vestre Landsret states that, in its examination of the activities financed by the revenue generated by those levies, the Commission took into account inter alia the fact that controls relating to quality, weighing, classification, etc. are mandatory under Community or national provisions, that research is in the interest of the entire sector and that the results are notified to the traders operating within that sector.

11 The Vestre Landsret also notes that the Fund, which forms an integral part of the public administration, is designed to reinforce the development possibilities and competitiveness of the pigmeat sector by financing, within that sector, measures such as those referred to in Paragraph 7(1) of the Enabling Law.

12 Further, the national court analyses the use made of the subsidies paid by the Fund during the 1992/1993 financial year. It draws up for this purpose an analytical table setting out the direct allocation of the subsidies between two categories of activities, namely those relating to national primary production (40% of the total subsidies) and those relating to national slaughter and subsequent processing, as well as to the sale of the derivatives of the primary product on the Danish market and export markets respectively (60% of the total subsidies). The Vestre Landsret points out, however, that these figures do not take account of any indirect effects which allocation and use of the subsidies may have had, and notes that the parties to the main proceedings have reserved to themselves the right to rectify the key to the allocation of activities when the case is being examined as to its substance before it.

13 The Vestre Landsret states that it shares the view defended before it by the Fund and by the Ministeriet for Fødevarer, Landbrug og Fiskeri (Danish Ministry of Food, Agriculture and Fisheries), which has intervened in support of the Fund, to the effect that the questions of interpretation raised by Articles 9, 12, 16 and 95 of the Treaty, which are material to the resolution of the dispute pending before it, have already been answered in the Court's existing case-law. From this the Vestre Landsret concludes that it must carry out the necessary assessment of the facts in the main proceedings in the light of the criteria laid down in that case-law.

14 The Vestre Landsret is, however, unsure whether the authorisation granted by the Commission at the conclusion of the proceedings under Article 93(3) of the Treaty precludes a national court from setting aside, even in part, a levy used to finance authorised aid on the ground that such a levy is contrary to Articles 9, 12 and 16, or Article 95, of the Treaty.

15 Finding that the Court has not yet dealt specifically with that question, the Vestre Landsret accordingly decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

I. Must Article 9 of the EC Treaty (now, after amendment, Article 23 EC), Article 12 of the EC Treaty (now, after amendment, Article 25 EC) and Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam) or Article 95 of the EC Treaty (now, after amendment, Article 90 EC) be construed as meaning that those provisions, or that provision, preclude a public body in a Member State from charging a production levy in respect of pigs bred in the Member State in question and exported live to another Member State, in the case where:

- a similar levy is charged for each pig produced in the Member State in question and sold for slaughter on the domestic market;

- the detailed rules for calculating the levy do not give rise to discrimination between the two product groups, since, when the different "weight categories" are being determined for slaughtered and live pigs, it can be assumed that compensation is provided for the average difference between "carcass weight" and "live weight", but

- the levy in respect of pigs sold for slaughter on the domestic market becomes payable when they are delivered for slaughter, whereas the levy in respect of pigs exported live becomes payable at the time of export;

- in the first case, the levy is payable by the producer, whereas in the second case it is payable by the exporter, irrespective of whether he is also the producer, and;

- the levy is not charged in respect of pigs sold live on the domestic market, and;

- part of the revenue generated by the levy is allocated to activities which, in view of their nature and immediate objectives, concern primary production of pigs in the Member State, and thus also benefit exported pigs, whereas another part of the revenue generated by the levy is allocated to activities which, in view of their nature and immediate objectives, concern only slaughtering and further processing in the Member State and the sale on the domestic and export markets of nationally processed derivatives of the primary product, and thus do not benefit exported pigs?

II. If Question I is answered in the affirmative: does it make any difference to the answer that the levy scheme was, pursuant to Article 93(3) of the EC Treaty (now Article 88(3) EC), notified to and approved by the EU Commission as being lawful State aid?

The first question

16 By its first question, the national court is asking in substance whether a levy such as that in issue in the main proceedings is capable of being a charge having equivalent effect to customs duties on exports within the meaning of Articles 9, 12 and 16 of the Treaty or of constituting discriminatory internal taxation prohibited by Article 95 of the Treaty.

17 It should be noted at the outset that, as the Court has consistently held, provisions relating to charges having equivalent effect and those relating to discriminatory internal taxation cannot be applied together, with the result that, under the system established by the Treaty, the same charge cannot belong to both categories at the same time (see, inter alia, Case C-347/95 UCAL [1997] ECR I-4911, paragraph 17, and Case C-213/96 Outokumpu [1998] ECR I-1777, paragraph 19).

18 It is thus first necessary to examine whether the levy in issue in the main proceedings falls to be classified as a charge having equivalent effect to customs duties on exports within the meaning of Articles 9, 12 and 16 of the Treaty. It may then prove necessary, in the second instance, to examine whether this levy constitutes discriminatory internal taxation prohibited by Article 95 of the Treaty.

Classification as a charge having equivalent effect

19 It is settled case-law ((see, inter alia, Case C-90/94 Haahr Petroleum [1997] ECR I-4085, paragraph 20, and Outokumpu, cited above, paragraph 20) that any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9 and 12 of the Treaty. However, such a charge may not be so characterised if it forms part of a general system of internal dues applying systematically to categories of products according to objective criteria applied without regard to the origin of the products, in which case it falls within the scope of Article 95 of the Treaty.

20 This latter case, however, presupposes that the charge is imposed on national products processed or marketed on the national market and on national products exported in an unprocessed state at the same marketing stage, and that the chargeable event is identical for both classes of products (see, by way of analogy, in regard to charges levied on national products and imported products, Joined Cases C-149/91 and C-150/91 Sanders Adour and Guyomarc'h Orthez Nutrition Animale [1992] ECR I-3899, paragraph 17, and Outokumpu, paragraph 24).

21 It also follows from the Court's case-law that, for the purposes of the legal characterisation of a charge levied on national products processed or marketed on the national market and on national products exported in an unprocessed state in accordance with identical criteria, it may be necessary to take into account the purpose for which the revenue from the charge is applied (see, by way of analogy, UCAL, cited above, paragraph 20).

22 Thus, if the revenue from such a charge is intended to finance activities for the special advantage of the taxed national products processed or marketed on the national market, 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 products processed or marketed on the national market is neutralised by the advantages which the charge is used to finance whilst the charge on the products exported in an unprocessed state constitutes a net burden (see, by way of analogy, Case 73/79 Commission v Italy [1980] ECR 1533, paragraph 15, Joined Cases C-78/90 to C-83/90 Compagnie Commerciale de l'Ouest and Others [1992] ECR I-1847, paragraph 26, and UCAL, paragraph 21).

23 It is in this regard settled case-law that if the advantages stemming from the use of the revenue from a charge forming part of a general system of internal charges applying systematically to national products processed and marketed on the national market and to products exported in an unprocessed state fully offset the burden borne by the national product processed and marketed on the national market when it is placed on the market, that charge constitutes a charge having an effect equivalent to a customs duty, contrary to Articles 9 and 12 of the Treaty (see, by way of analogy, Compagnie Commerciale de l'Ouest and Others, cited above, paragraph 27, Case C-17/91 Lornoy and Others [1992] ECR I-6523, paragraph 21, and Case C-72/92 Scharbatke [1993] ECR I-5509, paragraph 10). On the other hand, if the advantages accruing to the taxed national products processed and marketed on the national market from the use of the revenue generated by the charge offset only partially the burden borne by those products, such a charge will constitute a breach of the prohibition of discrimination laid down by Article 95 of the Treaty (see inter alia, by way of analogy, UCAL, paragraph 22).

24 In order to assess the levy in issue in the main proceedings in the light of the principles just outlined, it is first necessary to note that it is common ground that this levy forms part of a general system of taxation of Danish agricultural products covering several production levy schemes. It is also common ground that these production levy schemes have the same legal basis, namely the Enabling Law, and are intended to finance specific funds in individual sectors, the revenue from which is allocated to objectives relating to the production and marketing of Danish agricultural products.

25 Second, with regard to the requirement that the criteria governing the charging of the levy must be the same, Mr Nygård submits that the levy scheme in issue in the main proceedings is based on a fictitious identity between two separate transactions, that is to say, the supply of pigs to abattoirs on the national market and the export of live pigs. He argues in particular that, in the case of pigs intended for slaughter in Denmark, the event giving rise to taxation is the slaughter and the authorisation, issued following an inspection by the public authorities, to use the carcasses for human consumption, whereas, in the case of pigs exported live, the event giving rise to taxation is the fact of trans-frontier movement. The cases thus do not relate to the same production or marketing stage since, in the first case, the transaction giving rise to the charging of the levy is the passage to the processing stage, whereas, in the second, the relevant transaction is the withdrawal of the pigs from primary production in Denmark. Further, in the first case the levy is imposed on the producer, while in the second it is imposed on the exporter, irrespective of whether he is the producer.

26 According to Mr Nygård, the difference in the transactions giving rise to liability also has the effect that the rates of levy charged are implicitly fixed in accordance with the value of the taxable product in the case of supply for purposes of slaughter in Denmark, whereas they bear no relation to the value of the taxable product in the case of exportation. He states in this regard that the classification of the animals into two categories subject to two differing rates of taxation follows the main distinction, relevant from the point of view of slaughter, drawn between ordinary slaughter pigs, on the one hand, and sows and other pigs, known as weighted, on the other. Whereas pigs supplied for slaughter might, subject to a few exceptions, be regarded as constituting a homogenous product group, pigs exported live cover in fact several categories of products at different stages of production and serving different objectives within the production. Thus, the real value of pigs exported live lies not in the fact that they may in principle be supplied for slaughter, but rather in the fact that they may enter primary production as either raw material or production equipment.

27 Mr Nygård explains that a slaughter pig intended for the German market is heavier than that sold on the Danish market in view of the fact that the demand is different. The levy, in absolute figures, is none the less the same, regardless of the fact that the slaughter pig intended for export is more expensive than the slaughter pig intended for the domestic market by reason of the longer breeding period involved. Thus, in relation to the value of the pigs, the level of taxation is in relative terms much higher in the case of exportation than in the case of sale for slaughter on the domestic market.

28 With regard to the question of determining the transaction which constitutes the event triggering the levy in the case in the main proceedings, it should be recalled that, in its judgment in Joined Cases 36/80 and 71/80 Irish Creamery Milk Suppliers Association and Others [1981] ECR 735, at paragraph 23, the Court ruled, in regard to a tax charged, in the case of exportation of live animals for purposes other than their immediate slaughter, when the animals were exported, whereas animals not exported were exempted from it until the time of their delivery for slaughter, that the event giving rise to such a tax is the withdrawal of those animals from the national herd, whether for export or for slaughter. From this the Court concluded that a domestic duty charged on animals exported live at the time of their delivery for export does not come under the prohibition of charges having equivalent effect to customs duties on exports if it is also applied, systematically and in accordance with the same criteria, to animals not being exported at the time of their delivery for slaughter (Irish Creamery Milk Suppliers Association and Others, cited above, paragraph 24).

29 Likewise, the event giving rise to the levy here in issue in the main proceedings must be considered to be the withdrawal of the pigs from the national herd, regardless of whether that levy is charged on pigs intended for slaughter in Denmark or for live export. In both cases, therefore, the fiscal obligation arises when the animals leave the primary national production.

30 In those circumstances, no difference may be discerned in the fact that pigs exported live are taxed at the time of exportation, whereas pigs intended for slaughter on the national market are taxed at the time of supply for purposes of slaughter, as in real economic terms those two moments correspond to the same marketing stage, both operations being carried out with a view to releasing the pigs from national primary production (see, along these lines, Sanders Adour and Guyomarc'h Orthez Nutrition Animale, cited above, paragraph 18, and Outokumpu, paragraph 25).

31 Similarly, the fact that, in the case of supply for slaughter in Denmark, the levy is payable by the producer whereas, in the case of exportation, it is payable by the exporter, whether or not he is the producer, is not sufficient to justify the conclusion that, in the latter case, it is charged on the exported goods by reason of the fact that they cross a border.

32 As is clear from Paragraphs 1 to 3 of Decree No 74/92, in the case of pigs supplied for slaughter in Denmark, it is up to the abattoir in charge of the operation to collect the levy from the supplier, that is to say, the producer, and pay the levy to the Fund, whereas, in the case where pigs are exported, it is for the exporter himself to ensure payment of the levy. It is reasonable to assume that, in real economic terms, if the exporter is not also the producer, the amount of the levy will be taken into account in determining the purchase price of the animals from the producer, to whom it will thus be passed.

33 The burden of the levy in issue in the main proceedings thus rests with the primary producer, regardless of any differences which may exist at the administrative level with regard to the trader having responsibility for recovering the levy and paying it to the Fund.

34 With regard to the detailed arrangements for calculating the levy in issue in the main proceedings, while it is true that, in the case of pigs slaughtered in Denmark, the levy is calculated on the basis of the carcass weight, whereas, in that of pigs exported live, it is calculated on the basis of the live weight, the unavoidable conclusion, which is the same as that drawn by the Vestre Landsret, is that the Danish legislature adopted provisions designed to correct the difference in treatment which might have resulted therefrom between the two types of production by providing for compensation amounting to the average difference between carcass weight and live weight. Thus, according to the wording of Paragraphs 1 and 3 of Decree No 74/92, the levy, which amounts to a minimum of DKK 7 per head, is increased to DKK 17.50 for pigs slaughtered in Denmark and having a carcass weight in excess of 100 kg, but is fixed at that amount for pigs exported live only in the event of live weight in excess of 120 kg.

35 That being so, even assuming that Mr Nygård is suffering discrimination in so far as the taxation rates bear no relation to the actual value of the pigs exported live and the different objectives which those rates may serve, the fact cannot be overlooked that it follows from the very nature of a levy charged on primary production, whether that production is intended for slaughter on the national market or for live exportation, that the production stage occupied by the pigs and the purpose behind their export (slaughter or subsequent fattening) have no significance for purposes of determining the level of taxation.

36 Third, Mr Nygård argues that, because of the failure to take into consideration the fiscal situation at the time of the actual slaughter of the pigs in the country of importation, the imposition on the exported pigs of a levy such as that in issue in the main proceedings leaves them open to double taxation. He stresses in this regard that the pigs which are exported live to Germany and transferred to primary production in that Member State become in practice, pursuant to the German Law on the Commercial Promotion Fund, pigs bred in Germany, with the result that, in the event of their being subsequently slaughtered, a levy is imposed on them which corresponds to the Danish levy on pigs intended for slaughter within Denmark.

37 It must be stressed in this regard that the fact that the pigs exported live subsequently incur a levy when they are supplied for slaughter in the country of importation has no bearing on the classification of the Danish system of taxation.

38 As it stands at present, Community law does not contain any provision designed to prohibit the effects of double taxation occurring in the case of charges, such as that in issue in the main proceedings, which are governed by independent national legislation, and, while the elimination of such effects is desirable in the interests of the free movement of goods, it may none the less result only from the harmonisation of national systems (see, along these lines, Case 142/77 Larsen and Kjerulff [1978] ECR 1543, paragraphs 33 to 35, and Scharbatke, cited above, paragraphs 14 and 15).

39 Finally, with regard to the use made of the revenue generated by the levy in issue in the main proceedings, it is clear from the order for reference that the national court regards it as established that this revenue is not solely allocated to financing activities exclusively benefiting the production of pigs for slaughter on the national market, but that it is used to finance activities of more general benefit to primary production of pigs in Denmark, including, therefore, the production of pigs for live export.

40 In the light of this analysis, it must be concluded that a levy such as that here in issue in the main proceedings is not a charge having equivalent effect to customs duties on exports, with the result that its compatibility with Community law falls to be assessed under Article 95 of the Treaty.

Classification as discriminatory internal taxation

41 With regard to the classification of a levy charged on exported goods under Article 95 of the Treaty, it must first be noted that, according to the Court's case-law, that article must be interpreted as also prohibiting any tax discrimination against products intended for export to other Member States (see Larsen and Kjerulff, cited above, paragraph 27).

42 As to whether a levy such as that in issue in the main proceedings is compatible with Article 95 of the Treaty, it must be borne in mind that, as pointed out in paragraph 23 of the present judgment, such a levy, although applicable without distinction, must none the less be regarded as constituting a breach of the prohibition of discrimination laid down by Article 95 of the Treaty if the advantages accruing to the taxed national products processed and marketed on the national market from the use of the revenue generated by the charge offset only partially the burden borne by those products and thus adversely affect exported domestic products (see, by way of analogy, Case C-266/91 CELBI [1993] ECR I-4337, paragraph 14). In that case, the charge levied on the exported product, which is in principle lawful, will have to be prohibited to the extent to which it partially compensates the charge borne by the product processed or marketed on the national market and will have to be reduced proportionally (see, by way of analogy, Case 94/74 IGAV [1975] ECR 699, paragraph 13, Scharbatke, paragraph 10, and UCAL, paragraph 23).

43 According to settled case-law, it is for the national court to establish the extent of any discrimination against exported products (see, by way of analogy, Scharbatke, paragraph 11). For that purpose it must check, during a reference period, on the financial equivalence of the total amounts levied on national products processed or marketed on the domestic market in connection with the charge in question and the advantages afforded exclusively to those products (see inter alia, by way of analogy, UCAL, paragraph 25).

44 In the present case, it is clear from the order for reference that the Vestre Landsret considers it to be an established fact that 60% of the revenue generated by the levy in issue in the main proceedings is used to subsidise activities relating to slaughtering and processing on the domestic market and to the marketing of the products thus processed, which benefit solely the production of pigs for slaughter on the domestic market, while only 40% of the revenue generated by the levy is used to finance activities concerning primary production and benefiting the production of pigs both for live export and for slaughter on the domestic market.

45 The Fund and the Danish Government challenge the accuracy of the Vestre Landsret's breakdown of the figures. They argue that it is based on the mistaken premiss that the export of live pigs does not benefit from activities other than those directly linked to primary production. They submit in particular that the revenue generated by the levy in issue in the main proceedings benefits the entire Danish pig sector, without discriminating against the production of pigs exported live, in so far as it serves to finance a full range of measures which benefit in differing degrees the various traders involved in the primary production of pigmeat in Denmark. By way of example, they cite the numerous measures designed inter alia to prevent and treat animal maladies, the protection of livestock during transportation and the promotion of pigmeat sales, which are financed by the revenue of the levy in issue in the main proceedings and which also benefit exports of live pigs.

46 The Fund and the Danish Government also argue that the relationship between the activities which - according to the premiss on which the Vestre Landsret bases itself - principally concern primary production and those which principally concern slaughter, processing and marketing of pigs is in a state of continuous change according to the overall needs of the sector at any particular time. A picture taken at one single point in time and corresponding to a specific and temporally circumscribed reference period would fail to provide any meaningful indication as to the use made of production levies such as those in issue in the main proceedings. In order to determine whether exported products are suffering fiscal discrimination, the Vestre Landsret ought, on the basis of average economic considerations, to conduct an overall assessment covering a much broader reference period.

47 It must be pointed out in this regard that, so far as the facts are concerned, it is for the national court to carry out the requisite checks and to draw the necessary consequences, and it is therefore before that court that the parties to the main proceedings and the intervener must establish the facts as required.

48 Should it appear, on the basis of the principles derived from the Court's case-law, that the production of pigs for slaughter on the domestic market derives from the revenue provided by the Fund, which is the body which receives the levy in issue in the main proceedings, a benefit that is proportionately greater than the production of pigs for live export to another Member State, that levy will have to be considered to constitute discriminatory internal taxation prohibited by Article 95 of the Treaty in so far as the use made of its revenue compensates in part the charge imposed on pigs bred for slaughter on the domestic market.

49 In light of all the foregoing, the answer to the first question must be that a levy charged by a body established under public law according to identical criteria on pigs produced in a Member State for slaughter on the domestic market or for live export to other Member States, the revenue from which is allocated to activities benefiting the two types of production, does not fall under the prohibition of charges having equivalent effect to customs duties on exports within the meaning of Articles 9, 12 and 16 of the Treaty. Such a levy may, however, be classified as discriminatory internal taxation prohibited by Article 95 of the Treaty if and to the extent to which the advantages deriving from the use made of its revenue compensate in part the charge imposed on pigs produced for slaughter in the Member State concerned, thereby placing at a disadvantage the production of pigs for live export to other Member States.

The second question

50 By its second question, the national court is asking in substance whether the fact that a national levy is intended to finance an aid scheme authorised by the Commission pursuant to the Treaty provisions on State aid precludes a national court from assessing whether such a levy is compatible with other directly effective Treaty provisions.

51 It is necessary to state at the outset that, according to settled case-law, Articles 12 and 95 of the Treaty are directly effective and confer on individuals rights which national courts must protect (see, inter alia, Lornoy and Others, cited above, paragraph 24).

52 In order to reply to the question posed, it is necessary to recall the Court's case-law on the assessment of whether a charge forming part of an aid scheme is compatible with the various Treaty provisions which may cover it.

53 With regard to a parafiscal charge, such as that in issue in the main proceedings, which may fall within the scope of either Article 12 or Article 95 of the Treaty, the Court has ruled that the use to which the revenue from that charge is put, for the benefit of domestic products, may constitute State aid incompatible with the common market if the conditions for the application of Article 92 of the EC Treaty (now, after amendment, Article 87 EC) are met, this being a matter which the Commission alone is competent to determine in accordance with the procedure laid down for that purpose in Article 93 of the Treaty and subject to review by the Court (see Scharbatke, paragraphs 18 and 20).

54 The Court has also ruled that, while the procedure provided for in Articles 92 and 93 of the Treaty leaves a wide discretion to the Commission to come to a decision on the compatibility of a system of State aid with the requirements of the common market, it is clear from the general scheme of the Treaty that that procedure must never produce a result which is contrary to the specific provisions of the Treaty concerning, for example, internal taxation (Commission v Italy, cited above, paragraph 11).

55 As the Court pointed out in paragraph 8 of its judgment in Commission v Italy, while Articles 92 and 93 of the Treaty, on the one hand, and Article 95 of the Treaty, on the other, pursue the same objective, namely to ensure that the two categories of intervention on the part of a Member State, that is to say, the grant of aid, on the one hand, and the imposition of discriminatory taxation, on the other, do not distort the conditions of competition within the common market, the application of those provisions presupposes distinct conditions peculiar to the two kinds of State measure which they are intended to govern and they differ, furthermore, as to their legal consequences, particularly inasmuch as in the implementation of Articles 92 and 93, unlike Article 95, the intervention of the Commission plays a large part. From this the Court concluded that discriminatory taxation practices are not exempted from the application of Article 95 by reason of the fact that they may at the same time be described as a means of financing State aid (see Commission v Italy, paragraph 9, and Case 17/81 Pabst & Richarz [1982] ECR 1331, paragraph 22).

56 With more particular regard to the procedures allowing a charge forming part of an aid scheme to be examined from the perspective of the various Treaty provisions which may apply, the Court has ruled that the existence of the procedure provided for in Article 93 of the Treaty does not in any way prevent the compatibility of an aid scheme in relation to Community rules other than those contained in Article 92 of the Treaty from being assessed under the procedure provided for in Article 226 EC (see Case 290/83 Commission v France [1985] ECR 439, paragraph 17), as well as, in the case of directly effective provisions of the Treaty, by national courts (see, along these lines, Case 74/76 Iannelli & Volpi [1977] ECR 557, paragraph 14).

57 Admittedly, the possibility for national courts to assess the arrangements of a system of aid in the light of Treaty provisions other than those of Articles 92 and 93 presupposes that the arrangements in question can be evaluated separately, and are thus conditions or factors which, though forming part of the system of aid in question, are not necessary for the attainment of its object or for its functioning (Iannelli & Volpi, cited above, paragraph 14).

58 If that is, however, the case, there are no reasons based on the division of powers under Articles 92 and 93 of the Treaty which permit the conclusion to be drawn that, if other provisions of the Treaty which have direct effect are infringed, those provisions may not be invoked before national courts simply because the factor in question is an aspect of aid (Iannelli & Volpi, paragraph 14).

59 The Court has consistently held in this regard that it is incumbent on the national courts to safeguard the rights of individuals when faced with any disregard by national authorities of the prohibition on the implementation of aid, which is set out in the final sentence of Article 93(3) of the Treaty and is directly effective. Such disregard, if relied on by individuals and confirmed by the national courts, must lead those courts to draw from it all the consequences in accordance with their national law, without their decisions, however, implying an assessment of the compatibility of the aid with the common market, which is a matter within the exclusive competence of the Commission, subject to review by the Court (see CELBI, cited above, paragraph 23, Case C-354/90 Fédération Nationale du Commerce Extérieur des Produits Alimentaires and Syndicat National des Négociants et Transformateurs de Saumon [1991] ECR I-5505, paragraph 14, and Case C-39/94 SFEI and Others [1996] ECR I-3547, paragraphs 40 and 42).

60 Although, as follows from paragraph 41 of SFEI and Others, cited above, the national courts and the Commission fulfil complementary and separate roles within the actual system of supervision of State aid established by the Treaty, the same applies, a fortiori, where what is in issue is the examination of a parafiscal charge, intended to finance an aid scheme, in the light of Treaty provisions other than those concerning State aid, with a view to remedying, if necessary, infringements of Community law which have not been confirmed in the procedure provided for under Article 93 of the Treaty.

61 While any examination into whether an aid scheme is compatible with the common market is a matter for the Commission, regard being had to the fact that such an examination involves assessments of an economic and social nature which must be made within a Community context (see, in this regard, Case C-156/98 Germany v Commission [2000] ECR I-6857, paragraph 67), it cannot be disputed that, regarding the assessment of the manner in which the revenue generated by a domestic parafiscal charge is allocated, the national courts are best placed to collate the necessary information and to carry out the assessments required in that regard on the basis of data which should normally follow from the accounts and other documents relating to the management of the bodies which collect the levy and allocate subsidies and other benefits.

62 It thus appears that the assessment carried out in this regard by national courts makes it possible to guarantee individuals the legal protection deriving from the direct effect of the Community law provisions such as Articles 12 and 95 of the Treaty and, should those provisions be infringed, to re-establish internal legality, without thereby encroaching on the central and exclusive role which Articles 92 and 93 of the Treaty reserve to the Commission in determining whether aid is compatible with the common market.

63 Finally, it must be pointed out that in the present case, as follows from the reply to the first question submitted, the issue of the use made of the revenue generated by the levy in issue in the main proceedings may be the subject of a separate assessment in the light of the overall domestic taxation system of which that levy forms part.

64 Regard being had to all of the foregoing, authorisation of a general scheme of taxation of domestic agricultural products such as that in issue in the main proceedings, granted by the Commission pursuant to the Treaty provisions on State aid, does not in any way prevent national courts from examining whether a levy forming part of that scheme, such as that in issue in the main proceedings, is compatible with Articles 12 or 95 of the Treaty, with regard, in particular, to the use made of the revenue which it generates.

65 The answer to the second question submitted must therefore be that the fact that a national levy is intended to finance an aid scheme authorised by the Commission pursuant to the Treaty provisions on State aid does not preclude a national court from examining whether such a levy is compatible with other directly effective Treaty provisions.

Decision on costs

Costs

## Decision on costs

66 The costs incurred by the Danish 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.

Operative part

On those grounds,

## Operative part

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Vestre Landsret by order of 16 June 1999, hereby rules:

1. A levy charged by a body established under public law according to identical criteria on pigs produced in a Member State for slaughter on the domestic market or for live export to other Member States, the revenue from which is allocated to activities benefiting the two types of production, does not fall under the prohibition of charges having equivalent effect to customs duties on exports within the meaning of Article 9 of the EC Treaty (now, after amendment, Article 23 EC), Article 12 of the EC Treaty (now, after amendment, Article 25 EC) and Article 16 of the EC Treaty (repealed by the Treaty of Amsterdam). Such a levy may, however, be classified as discriminatory internal taxation prohibited by Article 95 of the EC Treaty (now, after amendment, Article 90 EC) if and to the extent to which the advantages deriving from the use made of its revenue compensate in part the charge imposed on pigs produced for slaughter in the Member State concerned, thereby placing at a disadvantage the production of pigs for live export to other Member States.

2. The fact that a national levy is intended to finance an aid scheme authorised by the Commission pursuant to the Treaty provisions on State aid does not preclude a national court from examining whether such a levy is compatible with other directly effective Treaty provisions.