61978C0002
OPINION OF MR ADVOCATE GENERAL REISCHL
DELIVERED ON 20 MARCH 1979 (
1
)
Mr President,
Members of the Court,
The case in which I am giving my opinion today is closely connected with the judgment of the Court of 11 July 1974 in Case 8/74 Procureur du Roi v Benoît and Gustave Dassonvilie [1974] 1 ECR 837. Those proceedings for a preliminary ruling were concerned with Article 1 of the Royal Decree No 57 of 20 December 1934 on the protection of designations of origin of spirits (Moniteur Beige of 4 January 1935) and this is also the subject-matter of the present proceedings for infringement of the Treaty. The wording of the article is as follows:
‘It is prohibited, on pain of penal sanctions, to import, sell, display for sale, have possession of or transport for the purposes of sale or delivery, spirits bearing a designation of origin duly adopted by the Belgian Government when such spirits are not accompanied by an official document certifying their right to such designation.’
In the first proceedings the Tribunal de Premier Instance of Brussels referred to the Court for a preliminary ruling the question whether a national provision prohibiting the importation of goods bearing a designation of origin where such goods are not accompanied by an official document issued by the exporting country certifying their right to such designation is to be considered as a quantitative restriction or a measure having equivalent effect within the meaning of Article 30 of the Treaty. The Court ruled that:
‘The requirement by a Member State of a certificate of authenticity which is less easily obtainable by importers of an authentic product which has been put into free circulation in a regular manner in another Member State than by importers of the same product coming directly from the country of origin constitutes a measure having an effect equivalent to a quantitative restriction as prohibited by the Treaty.’
Even before the judgment in the case of Dassonville the Commission had informed the Belgian Government of its opinion that the provision in question was capable of hindering imports of the relevant products from Member countries which were not producer countries and that the lawful objective of the Belgian authorities, namely the protection of the designation of origin of those products under Article 36 of the EEC Treaty, could be achieved as effectively by other means which would not hinder imports. In its answer of November 1974 the Belgian Government declared itself ready to harmonize its law with Community law having regard to the judgment in Dassonville.
After several fruitless discussions the Commission for a last time in October 1975 demanded that the Belgian authorities should within a period of 15 days give a satisfactory answer to various proposals of the Commission for dealing with the matter. Not until 5 March 1976, however, did the Belgian Government write saying that it would undertake certain amendments to the rules objected to.
Since, in the Commission's view, the proposals did not put an end to the infringement of the Treaty, the Commission wrote on 14 October 1976 to the Belgian Government requiring it within 15 days, which period was extended to a month, to make its position clear. Since there was no reaction to this, a reasoned opinion under Article 169 of the EEC Treaty was issued on 8 December 1976 and received on 16 December 1976, setting a period of one month for the implementation of the requisite measures.
Likewise on 8 December 1976 the Belgian Government informed the Commission, referring to the letter in which it was requested to submit its observations, that in accordance with the judgment in the case of Dassonville there would be a further easing of the Belgian system for checking designations of origin for spirits as a result of the Arrêté Ministeriel of 2 December 1976 to be published shortly in the Moniteur Belge. Moreover, it was in any event intended to repeal the Royal Decree No 57 of 20 December 1934 by a draft law, discussion of which was almost concluded in Parliament, on the control of foodstuffs and other products.
Article 1 of the newly introduced Arrêté Ministériel, which was not in fact published until 11 February 1977 in the Moniteur Belge, provides as follows:
‘The following shall be treated as accompanied at the time of customs clearance by the document provided for in Article 1 of the Royal Decree No 57 of 20 December 1934 on spirits:
1.
Spirits bearing a designation of origin and imported directly from the country of origin in containers intended for sale to consumers, provided that:
(a)
The closure of the container is automatically rendered unusable on opening and bears the name or registered trade-mark of the manufacturer;
(b)
the label on the container carries the following particulars in clearly legible print:
—
“bottled in the country of origin”;
—
the name or registered trademark and address of the manufacturer.
2.
Spirits bearing a designation of origin, other than those referred to in paragraph (1) above, imported from a Member State of the EEC, provided that they are accompanied by one of the following official documents:
(a)
the document relating to the product, issued by the authorities of the country of origin, certifiying the right to the designation of origin;
(b)
the copy or photocopy of the document referred to in subparagraph (a) above certified as a true copy of the original by the authorities of the exporting country, provided that those authorities state on the copy or the photocopy of the document of origin the quantity of spirits exported to Belgium if this differs from the quantity stated in the original document;
(c)
a document relating to the product issued by the authorities of the exporting country certifying the right to the designation of origin.’
Since, in the Commission's view, those provisions did not go beyond the proposals made in the letter from the Belgian Government of 5 March 1976, which had already then been considered insufficient, the Commission, on 28 December 1977, brought an action before the Court claiming that the Court should:
‘Declare that, by making the importation of potable spirits bearing a designation of origin and lawfully in free circulation in Member States other than the country of origin subject to more onerous conditions than those referred to in Article 1 (1) of the Arrêté Ministériel of 2 December 1976 with regard to the same products imported directly from the country of origin, the Kingdom of Belgium has failed to fulfil its obligations under Article 30 of the EEC Treaty.’
The Kingdom of Belgium stated in its defence that the Arrêté Ministériel to which the application referred had been repealed by Arrêté Ministériel of 27 February 1978, published in the Moniteur Belge of 15 April 1978, and had not been replaced, so that once again the Royal Decree No 57 of 20 December 1934 alone governed the matter. Since, however, the latter could not be regarded as a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 et seq. of the EEC Treaty, the action should be dismissed as unfounded.
The French Republic and the United Kingdom of Great Britain and Northern Ireland intervened in the proceedings in support of the Belgian Government.
When the Commission did not alter its statement of claim either in the reply or in its observations on the submissions of the two interveners, the Kingdom of Belgium contended in its rejoinder that the action should be dismissed as inadmissible or in any event as unfounded.
I —
On turning now to consider the law applicable to these facts I must first deal with the question of admissibility.
The defendant maintains that on the repeal of the Arrêté Ministériel of 2 December 1976 the action lost its substance and thus became inadmissible. Moreover, the Commission had no interest in the declaration because the Belgian rules coincide with those of the Member States which protect the particulars of origin in their territory.
Against this claim it may be said first of all that the Commission's interest in a declaration of infringement of the Treaty does not fall away simply because other Member States have rules similar to the rules in question.
Further, an action loses its purpose only if the substance completely falls away. From March 1974, however, until it delivered a reasoned opinion under the first paragraph of Article 169 of the EEC Treaty in December 1976 the Commission was continuously objecting to Article 1 of the Royal Decree No 57 of 20 December 1934, alleging that that provision was a measure having an effect equivalent to a quantitative restriction on imports within the meaning of Article 30 of the EEC Treaty since it made the importation of the particular products from States other than producer States impossible or at least more difficult by requiring a certificate which a so-called parallel importer, in contrast to an importer importing directly from the producer country, could obtain only with considerable difficulty. This view, which was confirmed by the Court in the case of Dassonville, was thus the express subject-matter of the initial procedure under Article 169 of the EEC Treaty. Only after it had delivered its reasoned opinion did the Commission learn that the Belgian Government had just adopted an Arrêté Ministériel in respect of the Royal Decree No 57 which was being challenged, according to which where certain conditions were fulfilled the particular products were to be treated as if they were accompanied by the certificate of authenticity required in the said Decree. The Arrêté Ministériel was not an independent provision but supplemental to the Royal Decree No 57 in order to harmonize the latter with the interpretation of Article 30 et seq. of the EEC Treaty given by the Court in the case of Dassonville. This is also apparent from the defendant's letter of 8 December 1976 in which it notified the applicant of the issue of the Arrêté Ministériel as if it were a transitional provision, while at the same time announcing that the Royal Decree No 57 would soon be repealed.
Article 1(1) of the Arrêté Ministériel provided that spirits imported in bottles directly from the country of origin no longer required a certificate of authenticity where the bottles carried a particular closure and a particular label. In contrast, Article 1 (2) provided that spirits bearing a designation of origin imported from a Member State other than the producer State still required certain official accompanying papers. Thus detailed rules were laid down for the basic Decree which had always been objected to, so that now by express provision and not only as a matter of practice different conditions had to be fulfilled for the importation of the same products according to whether they were direct imports or parallel imports via other Member States. The Commission was therefore merely following the dictates of logic when in its statement of claim it regarded the greater difficulty for parallel imports as expressed in the Arrêté Ministériel as a failure to fulfil the obligations under Article 30 et seq. of the EEC Treaty.
After the Arrêté Ministériel was repealed, which was after proceedings were commenced, then on any reasonable interpretation the proceedings can be directed only against the basic rules of the Royal Decree No 57. The applicant makes this moreover quite clear when in its reply it states that from the beginning it was not the Arrêté Ministériel as such which represented a violation of the Treaty but the basic Royal Decree which the Arrêté Ministériel clarified. On being questioned, the applicant's representative confirmed at the conclusion of the oral hearing that the above was the purport of the application. Such confirmation is admissible since it does not alter the substance of the application.
The application is therefore admissible.
II —
In considering whether the application is well-founded I wish first to discuss whether the provision in question is a measure having an effect equivalent to a quantitative restriction on imports and, if so, whether as such it may be justified under Article 36 of the EEC Treaty.
1.
As already mentioned, the Court has already in the case of Dassonville laid down criteria which allowed the Belgian court making the reference to decide whether Article 1 of the Royal Decree No 57 of 20 December 1934, which still today has the same wording, was or was not compatible with the provisions of Article 30 et seq. of the EEC Treaty. To that extent the legal position has not changed, since there is still no uniform Community rule guaranteeing to consumers the authenticity of designations of origin of products, with the result that the protection of designations of origin still varies from one Member State to another.
In my view, therefore, the problem which confronts us today is basically no different from the question which the Court had to decide in the reference for a preliminary ruling in the case of Dassonville. The question referred to the Court in those proceedings, as Mr Advocate General Trabucchi rightly observed in his opinion, was not the compatibility with the Treaty of the particular national provisions protecting designations of origin, but merely the lawfulness of the Belgian rule to the effect that proof that goods comply with the criteria laid down by law, even where those goods are already in free circulation in another Member State, can be adduced only by production of a certificate of origin issued by the authorities in the producer country. This is also the only question to be decided today in the present proceedings.
As you know, in the case of Dassonville the Court did not question the requirement of a certificate of origin as such, but merely cast doubt on the universal availability of such a document and gave the following ruling: ‘The requirement by a Member State of a certificate of authenticity which is less easily obtainable by importers of an authentic product which has been put into free circulation in a regular manner in another Member State than by importers of the same product coming directly from the country of origin constitutes a measures having an effect equivalent to a quantitative restriction as prohibited by the Treaty.’ According to that judgment ‘all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions’, and a similar definition is to be found for example in the following judgments: that of 30 October 1974 in Case 190/73 Officier van Justitie v J. W. J. van Haaster [1974] 2 ECR 1123; that of 23 January 1975 in Case 31/74 Filippo Galli [1975] 1 ECR 47; that of 8 July 1975 in Case 4/75 Rewe-Zentralfinanz GmbH v Landwirtschaftskammer [1975] 1 ECR 843; that of 26 February 1976 in Case 65/75 Tasca [1976] 1 ECR 291; that of 26 February 1976 in Joined Cases 88 to 90/75 SADAM [1976] 1 ECR 323, and that of 20 May 1976 in Case 104/75 De Peijper [1976] 1 ECR 613. Evidently the Court saw such a measure in Article 1 of the Royal Decree No 57.
As a result all we need consider in the present proceedings is whether the serious difficulties which were then objected to and which in fact only direct importers were in a position to overcome have been in the meantime removed or substantially lessened.
I do not need to deal with a number of issues which were put forward by the parties in the case of Dassonville and have been repeated in the present proceedings, since these arguments have already been assessed by the Court.
On the other hand, it is necessary to consider whether the liberalizing measures carried out by the Belgian Government since 1974 have made it easier for parallel importers to receive a certificate of authenticity. As we have heard, since that time importation is no longer dependent upon production of a certificate issued by the country of origin, which certificate had to bear the name and other particulars of the Belgian importer. Further, documents issued by the British authorities are recognized certifying that delivery is intended for a country other than Belgium. Finally, it is put forward that consignments of spirits bearing designations of origin are no longer rejected at the frontiers if they are not accompanied by the appropriate documents and that importers in such cases are given the opportunity to produce the certificate within a particular period.
It cannot be denied that those measures and in particular the two first-mentioned, are likely to lead to a certain liberalizing of inter-State trade. In my view, however, their deficiency lies in the fact that they are contained only in circulars sent to the Belgian customs administration. Those circulars are only a directive to the appropriate authorities as to what the administrative practice should be in respect of the application of Article 1 of the Royal Decree No 57 of 20 December 1934. They do not have the status of legal rules. Since such administrative directives can at any time be amended or annulled without formality, it seems to me that the security for a parallel importer who relies on those directives is insufficient in relation to that afforded by a change in the law.
Finally, the fact remains that an importer who does not import the foods directly from the country of origin and cannot produce a certificate of origin cannot sell the relevant products under Article 1 of the Royal Decree No 57 until he is in a position to produce a certificate of origin. As the Commission rightly points out, it makes no difference in this respect whether the goods are stopped at the frontier or remain unsold in a dealer's warehouse until the document is obtained.
Above all, however, the intermediary in another Member State who re-exports only part of the goods in question cannot reasonably be expected to part with the original of the certificate of origin. In contrast to the repealed Arrêté Ministériel of 2 December 1976, Article 17 in conjunction with Article 6 of the circular to the Belgian customs officials of 4 August 1978 again expressly stipulates that customs officials may accept only original certificates and must reject photocopies. Likewise in contrast to the repealed Arrêté Ministériel certificates of authenticity from non-producer States are no longer recognized. Obtaining the certificate of origin continues as previously, therefore, to be the main reason why it is more difficult for the parallel importer.
The Government of the United Kingdom has informed us that efforts have been made to ease this situation. Thus a dealer in a Member State wishing to re-export part of a consignment of exported goods to a third Community country may obtain a retrospective certificate for that purpose from the competent authorities in the United Kingdom on provision of documentary evidence. Further, it is said to be possible for a parallel importer himself to obtain a certificate of origin directly from HM Customs and Excise in confidence should his commercial situation so require. At the hearing the representative of the British Government did, however, explain that it was necessary to quote the serial numbers on the bottles and give sufficient particulars to enable the British customs authorities to trace the transaction. Such a document, as the representative of the Belgian Government assured us, will then be accepted by the Belgian customs authorities.
The French Government is therefore quite right to stress that even in the case of indirect imports there is no absolute obstacle to receiving a certificate of origin. According, however, to the settled case-law of the Court measures having an effect equivalent to quantitative restrictions on imports are held to exist not only where imports are rendered impossible but and where national measures make them more difficult or more onerous. Although access by a parallel importer to a certificate of authenticity from the British authorities may thereby be facilitated, the procedure described is nevertheless hardly in accord with the speedy manner in which trade is customarily conducted today. The difficult and frequently long drawn-out formalities which may be expected are likely to dissuade importers, especially the smaller ones, from importing the products in question from non-producer States. Since as heretofore it depends on the British authorities how quickly they issue such a certificate, the Belgian dealer in particular, having imported goods without being able to produce a certificate of origin, runs the risk of not being able to produce the certificate within the period allowed him by the Belgian authorities. These difficulties must also be the reason why, as we have heard from the representative of the British Government, not much use is made of the possibility described and why, as the Commission has shown, there are no parallel imports of cognac and nothing worth mentioning in the case of whisky.
To summarize, it may thus be said that, as before, the parallel importer experiences greater difficulty in obtaining a certificate of origin than the importer who imports the same product directly from the country of origin. Article 1 of the Royal Decree No 57 is therefore in this respect a measure having an effect equivalent to a quantitative restriction and as such incompatible with the Treaty. For this reason there is no cause for the Court to depart from the ruling which it gave in its judgment in Dassonville.
2.
Article 36 of the EEC Treaty, however, for the protection of the matters listed there, allows the Member States to provide for exceptions to the prohibition on quantitative restrictions and measures having equivalent effect. It is not sufficient, however, merely to refer to one of the matters listed; it must be shown that the measure taken is ‘justified’, that is that it is necessary for the protection of the matter alleged to be endangered. The second sentence of Article 36 of the EEC Treaty states in any event that such prohibitions or restrictions are not justified if they constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.
In relation to the protection of particulars of origin the Court stated the following in the case of Dassonville:
‘In the absence of a Community system guaranteeing for consumers the authenticity of a product's designation of origin, if a Member. State takes measures to prevent unfair practices in this connexion, it is however subject to the condition that these measures should be reasonable and that the means of proof required should not act as a hindrance to trade between Member States and should, in consequence, be accessible to all Community nationals.
Even without having; to examine whether or not such measures are covered by Article 36, they must not, in any case, by virtue of the principle expressed in the second sentence of that article, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.’
Trading rules constitute arbitrary discrimination or a disguised restriction on trade where, according to the words of Commission Directive No 70/50 of 22 December 1969 (Official Journal, English Special Edition 1970 (I), p. 17), ‘the restrictive effects on the free movement of goods are out of proportion to their purpose’ or ‘the same objective can be attained by other means which are less of a hindrance to trade.’
It must therefore be asked whether the objective pursued by proof of the origin of a product cannot be attained just as well by other formalities with which not only direct importers but also parallel importers can comply. It is only if there is no other effective method of protecting the particulars of origin which has a less restrictive effect on the basic freedom of the free movement of goods that the requirement of the production of a certificate of origin under Article 1 of the Royal Decree No 57 does not constitute arbitrary discrimination or a disguised restriction on trade.
Descriptions of origin (I think that all the parties are agreed on this) always identify a product which originates from a particular geographical area and which as a result of the effect of certain factors reveals special physical qualities and features which are likely to give it an individual character. Their raison d'être and the legal justification for any hindrance to trade possibly resulting therefrom lies in the objective of protecting producers from being misled and of offering consumers a guarantee of quality (cf. judgment of 20 February 1975 in Case 12/74 Commission v Federal Republic of Germany [1975] 1 ECR 181).
As we have seen in the course of the proceedings, there is no perfect means of fully attaining that objective. Nevertheless, and once again the parties seem to agree on this, the system of certificates of origin accompanying the goods offers the manufacturer a quite reasonable means of guaranteeing the age and special method of production. In the nature of things, however, the parallel importer has more difficulty in obtaining such a document than has the direct importer. Such hindrance to trade is however in any event unjustified where the said certificate is demanded of someone who cannot obtain it easily and there is no reasonable doubt regarding the regularity and genuineness of the goods.
In the Commission's view there is no such doubt at least in the case of bottles which are filled in the country of origin and have a closure which is unusable after opening. In the view of the Governments of Belgium, France and the United Kingdom, however, this system does not offer sufficient opportunity of preventing dishonest and fraudulent practices which could have adverse effects upon the consumer's health. In particular, the representative of the United Kingdom points out that seals on the bottles are less secure against fraud than documents guaranteeing the designation of origin. The Belgian representative adds that the falsification of a document in Belgium is liable to higher penalties than the mere imitation of a seal on a bottle. Finally, the representatives of all three governments refer to the problem arising from the fact that, for example, whisky is exported not only in bottles but also in barrels. Should the whisky be transferred from barrels into bottles in another Member State the sealing system proposed by the Commission could offer no sufficient guarantee since there is not the same degree of control in all countries. In contrast to spirits there is a common organization of the market in wine which guarantees similar controls in all Member States. It is only because of this that it is not necessary to require production of a certificate of origin on imports of wine in bottles. Moreover, according to the Belgian Government, even the Commission does not endorse the sealing system which it proposes, as is shown by the fact that as regards spirits imported from third countries it also requires the appropriate accompanying documents.
If in considering these submissions I may begin with the last argument, I must point out that the prohibition on measures having an effect equivalent to quantitative restrictions applies only to trade within the Community and not to trade with third countries. Since no free trade is provided for the latter, the Commission is at liberty to prescribe any appropriate means to prevent deception regarding the quality of the product. In trade within the Community, on the other hand, we have, as already mentioned, the basic principle of the free movement of goods, with the result that the only measure allowed is that which involves the least restrictive means of avoiding the danger.
Regarding the argument of the possibility of deception and the differing penalties, it seems to me appropriate, without going into factual questions such as protection against deception, to draw attention to certain matters which show us that the Kingdom of Belgium and its two supporters in the proceedings may contemplate a solution of the kind proposed by the Commission. Thus, in Article 1 (1) of the Arrêté Ministériel which has in the meantime been repealed Belgium considered it sufficient for containers directly imported from the country of origin and intended for sale to consumers to be provided with a seal which is rendered unusable on opening and to bear labels with the name and address of the producer and a statement that the product was put into the container in the country of origin. If these features are regarded as sufficient for direct imports, then it is not apparent why they cannot fulfil the same function by way of guarantee in the case of parallel imports. The Belgian Government's statement that it regards sealing in a Member State other than the producer State as insufficient amounts to recognition that that guarantee is regarded as sufficient where the bottling is effected in the place of origin. The objection of insufficient protection against deception and the difference between penalties loses further substance when the Belgian Government admits that it would agree to the system of sealing if bottling were supervised in the same way in all Member States. Finally, the representative of the French Government has confirmed that in France the system of certificates of origin for certain beverages such as cider, beer and wine has been replaced by an appropriate system for the sealing of containers and that only in the case of spirits has that system not been introduced, mainly for reasons of revenue control.
These few examples are evidence that a system which is less of a hindrance to trade would also be conceivable for Belgium, whereby an importer who does not obtain the goods directly in the country of origin is placed in a position to prove their genuineness by the described method, which appears sufficiently appropriate for such proof.
It must, however, be admitted that the Belgian Government and its supporters in the proceedings are right in thinking that the case is different where the spirits are exported in barrels, bottled in a Member country which is not the producer country and then re-exported. So long as the controls are not uniform the British Government is right to stress that the system of sealing offers no guarantee here that the content of the bottles corresponds to the content of the barrels and that in bottling the minimum requirements of hygiene have been observed. I see the only possibility of guaranteeing this as being to issue an official accompanying certificate in respect of the spirits showing that the designation of origin is genuine. There should, however, be sufficient protection for the matters referred to in Article 36 if, as provided in Article 1 (2) of the Arrêté Ministériel of 2 December 1976, apart from the original certificate of origin, photocopies or a certificate issued by the authorities of the country of despatch were accepted as evidence that the product is entitled to the designation of origin. As we have heard, only a fraction of spirits, in the case of whisky for example some 25 %, is exported in barrels.
In conclusion, it may be observed that protection of the matters referred to in Article 36 does not justify the rules contained in Article 1 of the Royal Decree No 57 of 20 December 1934 in their present form and as interpreted by administrative directives. In accordance with the established case-law of the Court it is not necessary to consider the question whether any of the matters referred to in Article 36 is at risk and if so which.
Since, however, the defendant and the Government of the United Kingdom in particular base their arguments on the protection of public health in addition to the protection of industrial and commercial property, I wish to make a final observation in respect of this. We have heard that there is no obstacle to the importation and sale in Belgium of whisky without a certificate of origin, provided that it is called simply ‘whisky’. On the other hand, the name ‘Scotch whisky’ has a qualitative character which is likely to increase its commercial value. If Belgium were of the opinion that there was a risk to public health in the case of whisky without a designation of origin it could make imports thereof difficult or even prohibit them in reliance on Article 36. Since this has not been done public health cannot be pleaded in defence of making the importation of a qualitatively more valuable product more difficult.
III —
In view of everything I propose that it should be declared that the Kingdom of Belgium has failed to fulfil its obligations under Article 30 of the EEC Treaty in that under Article 1 of the Royal Decree No 57 of20 December 1934 the importation of spirits bearing a designation of origin and in free circulation in Member States other than the country of origin is subject to conditions which are more difficult to fulfil than is the case for the direct importation of the same product from the country of origin.
(
1
)	Translated from the German.