61968C0013
OPINION OF MR ADVOCATE-GENERAL GAND
DELIVERED ON 14 NOVEMBER 1968 (
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Mr President,
Members of the Court,
In an action between an Italian company and the Italian Ministry for Foreign Trade, which is an action for compensation for damage allegedly caused by a refusal to grant an import licence, the Corte d'Appello, Rome, is asking you to interpret Articles 30 et seq. of the EEC Treaty on the elimination of quantitative restrictions between Member States.
I
Although of course you have no jurisdiction under Article 177 to give judgment on the substance of the case, it is neither possible to proceed to an examination of the questions asked, nor to understand the scope of the observations made by the parties to the main action and by the Commission, without being aware of the facts which have given rise to this litigation, to the somewhat unsatisfactory extent to which they can be established.
The Salgoil company, whose registered office is in Milan, made a contract with a Basel undertaking ‘Rohimpag’ on 23 September 1960 for the purchase of 4000 tons of fuller's earth impregnated with fatty substances to be imported into Italy from countries of the EEC and/or of the OEEC. On 6 October, in compliance with the terms of the contract, it paid half the agreed price, namely 242000 dollars, and the first consignments of the goods arrived in Italy during this same month. It is not disputed that at these different dates the importation of the product in question was free, although, as you know, Salgoil and the Commission differ as to whether this freedom resulted from the consolidation of the decisions of the OEEC in 1955 or from an independent decision of the Italian Government. But shortly afterwards, Law No 1407 of 13 November 1960 having prohibited the importation of the product ‘except in so far as international agreements provide otherwise’ (Article 7), an order which was made the following day, published on 29 November, and which came into force on 14 December, subjected the products to the system of licences, and a circular from the Ministry of Finance dated 7 February 1961 stated that thenceforth the product could only be imported from the countries of the EEC, and only up to the amount of the global quotas established annually. The local customs office refused to grant customs clearance to the first consignments. So Salgoil took the matter to the Ministry for Foreign Trade in order to obtain an import licence. This was refused by letter dated 23 May 1961.
Salgoil then brought an action before the Tribunale Civile, Rome, for compensation for the damage which it had allegedly suffered, stating in particular that Articles 31 and 33 of the Treaty had been infringed. But that court declared that it had no jurisdiction for the following reasons. In matters concerning imports and exports, individuals do not enjoy perfect subjective rights, but a kind of conditional right, a kind of diminished right. The rules of the Treaty have not altered this situation, because they directly concern the rights and obligations of the Member States. Finally the legal situations which can arise in favour of the various nationals of the Member State are not generically different from those granted and regulated in general terms by national law.
In its appeal Salgoil argued that the articles of the Treaty on which it was relying gave subjective rights directly to the nationals of the Member States, and not merely legitimate interests. Bearing in mind the principles of the Italian legal system, this meant that the ordinary courts had jurisdiction. It was in these circumstances that the Corte d'Appello, Rome, took the view that its decision depended on how the Treaty was to be interpreted, and referred two questions to you, which are developed in the statement of reasons in its order referring the matter. The first is put in very simple terms: do the provisions of Article 30 et seq. of the Treaty, especially Article 31, also produce effects on the relationship between a Member State and its nationals?
The second question assumes that an affirmative answer has been given to the previous one. It envisagss two hypotheses, two possible positions, between which you are in short asked to choose: either the legislative provisions in question give direct and immediate protection to the private interests of the individual, which excludes any discretionary power on the part of the State, acting as a public administration, to go against this interest — or such provisions (which should be compared to Articles 36, 224 and 226 of the Treaty, whereby in certain circumstances the States retain the possibility to take protective measures making exceptions to the rules of the Treaty) have as their immediate and only object the protection of the public interests of the Member States within the Community context, and they are intended to ensure primarily, directly and solely that administrative activity conforms with these interests. It must be accepted in this case that as regards its own nationals each Member State retains the power to impose restrictions on imports and that the Treaty legislation at issue does not affect the existence of this power, but only its exercise in accordance with the law.
II
A preliminary question arises here, and the Italian Government has developed it at length both in the written procedure and at the hearing. It says that this Court only has jurisdiction under Article 1,77 of the Treaty if the case concerns something which is ‘subject to the scope of Community law’. More particularly, since Articles 31 et seq. concern the elimination of quantitative restrictions between Member States (and not quantitative restrictions relating to third countries) a national court or tribunal may only ask you questions about the meaning of these articles if it has already decided whether, on the facts, intra-Community trade, which is indeed governed by the rules of the Treaty, is involved. It is only if the answer to this question is in the affirmative that a question concerning the interpretation of the Treaty arises before the said court or tribunal. Only if this is so do you have jurisdiction to give a preliminary ruling. Yet there is no such position finding in the order of the Corte d'Appello. This order does no more than reproduce — without endorsing it — the line of argument put forward by Salgoil, according to which the goods come from Member States. Further, certain documents in the file to which the Italian Government refers are said to show that in reality the goods come, and because of their technical features could only come, from a part of the Mediterranean area outside the Community.
It seems to me that on the contrary the argument that you have no jurisdiction comes up against the principle which you have stated on several occasions, namely that within the limits set by Article 177 it is for the national courts and tribunals alone to decide whether to make a reference to you and for what reasons. It is for them alone to decide on the relevance of the questions referred to the solution of the action which is before them, and when they ask you for the meaning of a provision of Community law it is to be presumed that they consider — at the stage which an action has then reached — that the provision at issue may affect the outcome of the case. They are not required to say so expressly. Furthermore, if you were to conclude from the file of the case placed before the court in the main action that the articles at issue do not apply, you would be substituting yourselves for that court and settling in its place a point which is solely connected with the facts of the dispute. If my understanding of the submissions of the Agent of the Italian Government is correct, any reference for a preliminary ruling of the Corte Costituzionale (Constitutional Court) of that country is admissible only if the court referring the matter has first come to a decision on the facts connected with the point of law which it has submitted to the Court. This judicial principle is very close to that applied by the Constitutional Court of the Federal Republic (Beschluß des Ersten Senats of 10 November 1964, in Entscheidungen des Bundesverfassungsgerichts, 18[1965]p. 186, No 24). But such a requirement cannot be extended to the procedure under Article 177 because of the respective independence of the Community court and of the national courts and tribunals.
For all these reasons I suggest that the very general submission made by the Italian Government to the effect that the reference is inadmissible be rejected, and I come now to the first question submitted by the Corte d'Appello.
III
First question
May I remind you of the exact words: ‘Do the provisions of Article 30 et seq. of the Treaty, especially Article 31, also produce direct effects on the relationship between a Member State and its nationals?’
A —
The first difficulty here is to set limits to the question. Quantitative restrictions on imports are dealt with in Articles 30 to 33 inclusive (and in Article 35, which is not relevant to the present case), but the rules laid down differ according to whether the products concerned have been liberalized pursuant to decisions of the Council of the OEEC (Article 31) or on the contrary do not come under these decisions (Article 33). In principle all that needs to be done is to interpret whichever of these provisions covers ‘fuller's earth impregnated with fatty substances’. Unfortunately no certainty on this point is possible.
In the opinion of the Commission, this product, by virtue of Note V of Chapter XV of the former Italian Tariff, ought to have come under the non-consolidated item 141 and was therefore ‘independently liberalized’ when it was classed under heading ‘15.17 ex a — oil foots or dregs’ of the new tariff instituted in 1959 on the basis of the Brussels Nomenclature. In 1960 the Italian Government decided to withdraw the liberalization of a non-consolidated product and therefore it is only the provisions of Article 33 which could concern this product, and which call for an interpretation by you.
This argument has been energetically challenged by Salgoil during the oral procedure. It argued in particular that Note V of the old tariff concerned only fuller's earth (which is completely different from fuller's earth impregnated with fatty substances which is the subject of the present dispute). This particular product therefore comes under heading 139 ‘fixed vegetable oils, fluid or solid, crude, refined or purified, excluding any such oils meant directly or indirectly for human consumption’. This item has been unquestionably consolidated. Hence it is necessary to apply and thus to interpret Article 31.
I have only mentioned these few points of the argument to show that it remains open. The question whether a product comes under one tariff heading or another and whether its liberalization has been consolidated or not falls to be answered mainly but not exclusively by national law. It is not impossible to imagine that in some of its aspects it may call for a preliminary ruling (see by analogy Case 26/62, [1963] E.C.R. 16). However, the Corte d'Appello is not questioning you on this point, and it may well be wondered whether it has not by implication already decided the disagreement between Salgoil and the Commission when it refers to Articles 30 et seq. of the Treaty ‘especially Article 31’. However, this indication does not seem to me enough to justify my omitting to consider the other articles of the Treaty relating to quantitative restrictions.
B —
Let me say straight away that Article 30, which opens the subject, does not seem to me to produce direct effects because its wording is so very general. It has binding force only in so far as it is followed up by the following articles (‘without prejudice to the following provisions’) and it only applies within the limits laid down by these articles.
C —
It is otherwise with Article 31 which prohibits Member States from introducing new quantitative restrictions or measures having equivalent effect.
This is a standstill clause which runs parallel to that provided for in Article 12 on customs duties on imports and charges having equivalent effect. Your judgment of 5 February 1963 (Case 26/62, Van Gend en Loos, [1963] E.C.R. 1) decided that this provision, which lays down a clear and unconditional prohibition and consists of an obligation which is not qualified by any reservation whereby the States concerned may make its validity dependent on any positive act under national law, produces direct effects. The same line of reasoning may be followed here, as also with regard to Article 32 which states that quotas and measures having equivalent effect existing at the date of the entry into force of the Treaty must not be made more restrictive.
It is true that the obligation imposed by the first paragraph of Article 31 only relates because the second paragraph of the same article says so, to the degree of liberalization attained in pursuance of the decisions of the Council of the OEEC, and more precisely to the products contained in the lists which the Member States had to supply to the Commission not later than six months after the entry into force of the Treaty. But once such lists have been supplied nothing can then stop this provision having direct effect.
D —
As regards Article 33, the question is much more delicate because of the complexity of the rules which it lays down and because certain concepts to which it refers are not precise.
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Without examining in detail the machinery set up, one can agree right away with the Commission that the provisions of Article 33(4) et seq. cannot be considered by themselves to create any rights for individuals. These provisions either require a decision by the Community authorities (cases where the imports of a product have been below the level of the quota opened during two successive years) or else give Member States the right to take certain steps (taking the amount of imports liberalized by autonomous action into account in calculating the annual increase in the quotas when these are wider than the degree of liberalization attained in pursuance of the decisions of the OEEC).
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The fact that the Commission can thus intervene, taken together with the discretion left to the Member State, means that the provisions under discussion are not of an unconditional, almost automatic, nature as are rules which are directly applicable. Thus, and without going further into the facts, I am able to say that these provisions, which lay down particular rules, are in any event irrelevant to the judgment which the Italian court will have to give in the main action.
The solution is less clear as regards paragraphs (1) to (3) of Article 33 which include in particular general rules for fixing the amount of the quotas.
They provide in particular that one year after the entry into force of the Treaty bilateral quotas are to be converted into global quotas and that at the same date a certain percentage increase is to apply both to the global quotas as a whole and to the quota for each product. They also lay down the successive stages of increase ‘in accordance with the same rules and in the same proportions’. These provisions are in Article 33(1).
Article 33(2) concerns non-liberalized products for which the global quota is less than 3 % of the national production. In such a case a quota of 3 % is to be introduced, and then increased according to a specified timetable. The second subparagraph of Article 33(2) states that where there is no national production the Commission is to take a decision establishing an appropriate quota. Finally Article 33(3) provides that at the end of the 10th year each quota is to be equal to not less than 20 % of the national production.
Subject to the provisions of the second subparagraph of Article 33(2), which requires the Commission to take a decision establishing an appropriate quota when there is no national production, Article 33 places in the hands of Member States responsibility for establishing quotas and for increasing them progressively. This amounts to a duty to act, and it has been held in the case-law of the Court that such a duty may create rights in favour of individuals, on condition that the State has no discretion in framing the measure which it is required to adopt.
But here a difficulty appears. These measures are taken on the basis of arithmetical data which may be the subject of controversy. As a first example: every State is required from the start to introduce a global quota which represents, according to the Treaty, the aggregate of all bilateral quotas. But it is necessary to determine exactly what is meant by bilateral quotas. The quotas open to an exporting State are generally fixed in a trade agreement, but they may also be increased by the importing State, or originate from some other source. In the calculations which it must undertake to arrive at global quotas, is every State bound by precise and rigid rules, with no room for any escape clause? The Commission reminds us that to solve this problem, amongst others, it had to call meetings of experts, following which it made known to the Member States its position in a letter of 21 December 1958, which is not in the file, but the main lines of which may be found in its Second General Report 1958-1959 (p. 59 et seq.). It admitted that the assessment of the various additions to the basic quotas fixed in trade agreements could take place ‘in a flexible manner’, by excluding that part of the quota opened solely for exceptional reasons. This was to recognize that Member States have a certain area of discretion.
Another still more significant example is that of ‘national production’, which is the basis for fixing quotas at the rate of 3 % (Article 33 (2)). In both the written and oral procedures the Commission explained the uncertainties covered by this concept, which is more of an economic than of a legal nature, and I thought this explanation convincing. In the letter to which I have already referred, it accepted the proposition that the ratio between national production and quotas could, according to the case, be assessed in terms of quantity or of value. Should value be chosen, it suggested that a more accurate ration would be reached by taking into account the lump sum customs duties levied on the value of imported products.
What conclusion should be drawn from all this except that both as regards determining global quotas and as regards assessing national production Member States enjoy a certain discretion so that on these points at least the provisions at issue cannot be directly applicable and individuals cannot place them before the national court?
In this connexion it has been recalled that your judgment in the Molkerei-Zentrale case of 3 April last ([1968] E.C.R.) said that because Article 97 of the Treaty did not apply until legal measures involving some discretion were taken, the provisions of that article did not have direct effect. The choices with which the Member States are faced in the present case are admittedly of a different sort, but this is no reason why these choices should not have the same consequences.
However it should be emphasized that although Member States may at the start enjoy a certain area of discretion in fixing a quota, they are required to introduce it and to open it to all other Member States without discrimination. Consequently, they must increase it annually ‘in accordance with the same rules and in the same proportions’. On these various points, the obligation which falls on them is strict and unconditional. It therefore seems to me that if a State does not introduce a quota, or does not open it to all other Member States, or does not increase it in accordance with the rules laid down in the Treaty, individuals are entitled to say to the national court that on these various points a directly applicable rule has been infringed.
In short, the only provisions of Article 33(1) to (3), which are directly applicable are those which require the Member States to introduce global and non-discriminatory quotas, and to increase them progressively. The provisions relating to the calculation of the globalization of quotas and to the calculation of the national production are not directly applicable.
IV
Second question
This is only asked on the footing that the answer to the first question is in the affirmative, and it raises serious difficulties on the subject of admissibility.
It asks for clarification on the nature of the legal protection granted to the subjective position of an individual as regards the State. The Corte d'Appello has put the question in the shape of an alternative the two possibilities of which may be summed up as follows: either the individual enjoys direct and immediate protection, which excludes any discretion on the part of the State, or, on the contrary, the legislation of the Treaty has as its immediate and only aim the protection of the public interest, and it leaves the power to introduce restrictions on imports in the hands of each Member State as regards its own nationals.
Even for anyone who has but a superficial knowledge of Italian law, the wording of this question clearly reveals the distinction in the legal system of that country between subjective rights and legitimate interests, a distinction which separates the jurisdiction of courts of law from that of administrative tribunals. On these concepts, as well as on other closely related concepts, such as that of diminished rights, counsel for Salgoil as also Counsel for the Italian Republic, have supplied you with interesting and useful information.
The Corte d'Appello has refrained from asking you to give judgment on this division of jurisdiction, but it is clear that that was what it had in mind. Therefore, comparing the wording of the question to the various concepts of Italian law, counsel for the Italian Government has concluded that you have been asked a question of national law in relation to which you should decide that you have no jurisdiction.
It is a fact that you rely on the national court to choose the questions to be submitted to you, and you refuse to review the reasons for its choice. But another principle should be as carefully safeguarded. It is that your jurisdiction in matters of interpretation, must be limited to Treaty law. You cannot therefore consider the question unless you can ascribe to it some meaning, some relevance in Community law.
This is not an impossible task as the second question submitted by the Italian court in fact merely prolongs and merely renders more explicit the first question which is beyond doubt admissible. After asking you whether the provisions of Articles 30 et seq. of the Treaty produce effects on the relationship between the Member State and its nationals, you are, in reality, asked what these effects are. This, just as much as the first question, is a problem of Community law, which it is for you to solve. In doing so you should, however, beware of allowing yourselves to be drawn into the field of national law, where the Italian court has more or less olaced it.
In any event, your case-law has already shown what this legal protection granted to individuals consists in. When your judgments consider that a provision of the Treaty is directly applicable, or that it produces direct effects, they generally state that it creates individual rights which the courts of Member States must protect (for example, 5 February 1963, Van Gend, [1963] E.C.R. 1—15 July 1964, Costa, [1964] E.C.R. 585—16 June 1966, Lütticke, Rec. 1966, p. 294). This is the position whether the State is bound by a duty to act or to refrain from acting. In both cases — and indeed the following is the pre-requisite for a provision to be directly applicable — the State has no discretion. It is bound either to abstain from acting or to undertake some specific course of action; in other words its jurisdiction is shackled. As pointed out by Salgoil, there would be a real contradiction in saying that a private person enjoys direct protection and at the same time holding that the State has a discretion as to the putting into effect of the system established by the Treaty as regards that person. Thus it is the first alternative suggested by the Italian court which must be adopted.
Furthermore, since the law created in favour of persons subject to national jurisdiction by the various provisions which are directly applicable must be identical everywhere, this law cannot be affected by criteria arising under national law. Thus all directly applicable provisions ‘enter into national legal systems without the assistance of any national measure’ and ‘the Community rule must be applied with the same force in all Member States’(Molkerei-Zentrale_3 April 1968, [1968] E.C.R.). As that same judgment stated, this does not prevent national courts and tribunals from being competent to apply the most appropriate of the various measures available under national law in order to protect the individual rights conferred by Community law. Finally, the Corte d'Appello has related the provisions to be interpreted to Articles 36, 224 and 226, using the latter in support of the other alternative which is that the legal protection given to an individual is limited because the immediate object of the provisions to be interpreted is only the protection of the public interests of Member States. It will be enough to say that Articles 36, 224 and 226 all have a limited scope and cover a special situation. These are provisions authorizing exceptions, which should be interpreted strictly, and which cannot be invoked to deny the existence of rights created by other provisions of the Treaty.
In conclusion, the questions referred by the Corte d'Appello, Rome, appear to me to call for the following answers:
First question
Only the provisions of Article 31 on the one hand and of Article 33(1) to (3) on the other are directly applicable subject, so far as regards the latter, to the conditions and reservations which I have set forth.
Second question
The legal protection given to the subjective position of an individual confers on him individual rights which national courts must protect, and the State has no discretion to oppose the exercise of these rights.
Finally it is for the Corte d'Appello, Rome, to make an order as to costs.
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