61977C0148
OPINION OF MR ADVOCATE GENERAL CAPOTORTI
DELIVERED ON 4 JULY 1978 (
1
)
Mr President,
Members of the Court,
1.
The monopoly in spirits in the Federal Republic of Germany (which is based on the Law of 8 April 1922 as last amended by the Law of 2 March 1974) has already led to the submission of a number of requests to the Court of Justice for preliminary rulings, principally concerning the interpretation of Article 37 of the EEC Treaty. I refer to the judgment of 16 December 1970 in Case 13/70, Cinzano ([1970] ECR 1089), that of 17 February 1976 in Case 45/75, RE WE ([1976] ÉCR 181) and that of 17 February 1976 in Case 91/75, Miritz ([1976] ECR 217).
This action also stems from a case which, in German domestic law, falls within the scope of the law on spirits; however, this case is distinguished from those I have just referred to by certain new aspects.
The private party concerned is the undertaking Hansen & Balle of Flensburg which, for its business in manufacturing spirits intended for human consumption, in 1974 imported into Germany considerable quantities of alcoholic products from French overseas departments and from non-member countries. The Hauptzollamt (Principal Customs Office) Hensburg requested the undertaking Hansen & Balle to pay on these importations the charge prescribed as monopoly equalization duty in Article 151 (1) of the said Law of 8 April 1922 and subsequently dismissed the undertaking's application for the lower rate of tax applicable, under Article 79 (2) of that Law, to certain home-produced alcohol. This gave rise to the dispute now pending before the Finanzgericht Hamburg.
In order to clarify the terminology in this case it seems to me desirable to explain in greater deuil the tax arrangements established under the said German Law on the spirits monopoly. That Law provides that spirits produced in Germany shall be subject to two excise duties: one on spirits covered by the monopoly arrangements (and called ‘Branntweinsteuer’ tax on spirits)): the other on spirits which do not require to be delivered to the monopoly (‘Branntweinaufschlag’ (spirits surcharge)).
During the relevant period in the case before the Court the Branntweinsteuer amounted to DM 1500 per hectolitre of alcohol. The basic pnces of the spirits, those paid by the Monopoly Administration to national producers, were fixed at DM 214 per hectolitre of alcohol; the selling prices were fixed at DM 1790 per hectolitre, which includes, in addition to the basic pnce, the duty and the costs incurred by the monopoly in the purchase and resale of the product. The Branntweinaufschlag, calculated on the basis of the difference between the selling price and the basic price of the alcohol covered by the monopoly less the average amount (DM 23 per hectolitre) of the costs which the Monopoly Administration was able to save by reason of the fact that the product was not delivered to it, amounted in the same period to DM 1553 per hectolitre of alcohol.
In certain specified cases, however, a reduced rate of the Branntweinaufschlag, within the meaning of the said Article 79 (2), is applied. Three classes of distillery in particular enjoy these advantages: distilleries which are permitted to make periodical payments of taxes, those subjected to permanent supervision by the tax authorities in respect of their products, which must be kept under seal, and those which have an annual production not exceeding four hectolitres of alcohol and, finally, fruit-co-operative distilleries in respect of spirits produced subject to conditions laid down in a licence. The amount of the reduction in tax may vary according to the raw material used to produce the spirit (stone-fruit, berries or gentian roots, etc.); it should be noted, however, that in the period in question the lowest level of the Branntweinaufschlag was DM 1210.60 per hectolitre of spirit.
Spirits imponed into Germany, however, are subject, under the said Article 151, to a ‘Monopolausgleich’ (monopoly equalization duty) which is also in the nature of an excise duty. According to Article 152 (1) of the Laws on the Spirits Monopoly in the version in force at the relevant time the monopoly equalization duty corresponded to the difference between the selling price of the spirits and their basic price: it thus amounted to DM 1576.
As I have already indicated, the Hansen & Balle undertaking claims that the Community arrangements (and in particular Article 95 of the EEC Treaty) do not permit Member States to charge on imported goods a monopoly equalization duty in excess of the lowest rate of the duty on home-produced spirits. The German customs authorities have nevertheless claimed payment of a duty of DM 1500 per hectolitre corresponding to the normal rate which, according to information supplied by the German Government, is applied to some 95 % of spirits produced in Germany for human consumption.
By an order of 24 October 1977 the Finanzgericht Hamburg has submitted five preliminary questions to the Court of Justice pursuant to Article 177 of the EEC Treaty. In order to avoid repeating the questions, which are set out in the report for the hearing, I shall merely point out that:
(a)
the first question raises the problem whether Article 95 of the EEC Treaty applies to circumstances such as those in the present case which concern the treatment for tax purposes of goods imported into the Community from French overseas departments, having regard to the fact that Article 227 (2) of that Treaty provides for the application to such departments of the provisions relating to the free movement of goods but makes no mention of the tax provisions contained in Tide I, Chapter 2, of Pan Three of the Treaty;
(b)
in the second question the national court asks whether it may be inferred from Article 37 of the EEC Treaty (or from Article 95 in the event of an affirmative answer to the first question) that, with regard to excise duties on products imponed from Member States or from French overseas departments, the rate of duty to be applied is the lowest imposed on national products, even if that rate is granted only ‘for specific social reasons’;
(c)
the third question asks whether the reduction in taxation on certain domestic products must be classified as a Sute aid within the meaning of Articles 92 to 94 of the EEC Treaty; and the Court is asked in the alternative what criterion distinguishes State aids from more favourable tax treatment for national products;
(d)
the fourth question concerns the imposition of heavier excise duties on goods imported from non-member countries than on goods from Member Sutes or from French overseas departments; the court asks whether in circumstances of this nature the duty may be classified as a charge having an effect equivalent to a customs duty within the meaning of Article 9 of the EEC Treaty;
(e)
finally, the national court further asks, in the eventuality of an affirmative reply to the foregoing question, whether the imposition of a heavier charge on goods coming from non-member countries than the charge on products imported from Member States or French overseas departments must be considered as prohibited under Articles 9 and 189 of the EEC Treaty and under Regulation No 950/68.
2.
I feel that a thorough analysis of the problems concerned in the first and second questions may be facilitated by a different approach. Let us accept as our point of departure that Article 37, inasmuch as it is included in the tide of the EEC Treaty concerning the free movement of goods, certainly applies to the French overseas departments within the meaning of Article 227 (2) of the Treaty. Having established that point, I consider that it must first be sealed whether a case of tax discrimination related to the existence of a commercial monopoly comes within the particular scope of Article 37 (1) after the end of the transitional period. Secondly we must consider whether a case of this nature may be regarded as falling under Anide 95 even if the alleged tax discrimination concerns goods imported from French overseas departments rather than from Member States. Thirdly it must be established whether, for the purposes of Anides 37 and 95, products imported from Member States or from French overseas departments must receive the more favourable tax treatment accorded to domestic products even if, for special reasons, such treatment is limited to a restricted number of cases.
As we know, Article 37 (1) provides that Member States ‘shall progressively adjust any Sute monopolies of a commercial character so as to ensure that when the transitional period has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States’.
The Commission considers that this article constitutes a provision whose scope is limited in time; at the end of the transitional period its particular function was exhausted. At the most it may be relied upon before national courts in requests for the abolition of any exclusive rights of importation, exportation or marketing still remaining in force; however, in all other contexts reference must in future be made to the general provisions in the Treaty concerning the elimination of customs duties, quantitative restrictions and charges having equivalent effen (Articles 12, 30 and 34) and the prohibition against tax discrimination between imported products and domestic products (Anide 95).
It seems to me that the Court of Justice, in the decisions cited at the beginning of my opinion, has conferred a wider interpretation on the scope and present effects of Article 37. In the judgment in Case 13/70, Cutiano, it was emphasized that ‘the application of Anide 37 is not limited to imports or exports which are directly subject to the monopoly but covers all measures which are connected with its existence and affect trade between Member States in certain products, whether or not subject to the monopoly’. Proceeding from this statement the Court of Justice considered whether a tax measure applied to a product, a constituent pan of which was subject to the monopoly, was compatible with Anide 37 (1) and (2). The judgment of the Court in Case 45/75, REWE, emphasized that Anide 37 coven all measures which are connected with the existence of a monopoly and affect trade between Member States in certain products, mentioning specifically any ‘charges which would result in discrimination against imported products as compared with national products coming under the monopoly’ (paragraph 26). The judgment in Case 91/75, Miritz, adopts an identical view. Both judgments have emphasized that Article 37 (1) sets out a prohibition against any discrimination whatever between the nationals of the Member States regarding the conditions under which goods are procured and marketed; in the judgment in the REWE case it was stated that when the transitional period has expired the duty laid down in Article 37 (1) ‘is no longer subject to any condition, nor can its performance or effects be subject to the adoption of any measure either by the Community or by the Member States, and, by its very nature, it is capable of confering on those concerned individual rights which national couru mun protect’ (paragraph 24). In this respect the judgment in the REWE case followed the precedent adopted in the judgment of 3 February 1976 in Case 59/75, Manghera ([1976] ECR 91).
It accordingly seems to me that it is possible to infer from the case-law of the Court of justice two considerations which are important for the purposes of the present case: that the prohibition against discrimination regarding the conditions under which goods are procured and marketed contained in Article 37 (1) also affects discriminatory taxation whereby national products covered by a monopoly receive more favourable treatment than products imported from other Member States; and that this prohibition has direct efect, creating individual rights for persons subject to the Community order after the end of the transitional period. In the light of this case-law, then, it may be deduced that the principal obiective pursued in Anide 37 (1) is not to require the Member States progressively to adjust any monopolies of a commercial character but rather to eliminate any discrimination connected with the existence of monopolies (the former objective being in fan an aspect of the latter). Next, as regards the objection that other provisions of the Treaty, in particular the said Articles 12, 30, 34 and 95, can be considered sufficient to ensure that there is no discrimination regarding the conditions under which goods are procured and marketed, the reply may be made that such provisions are general in scope whilst Article 37 constitutes the sedes materiæ in the matter of commercial monopolies. The fact that this anide touches on the scope of other anides does not mean that they cannot have effect together, especially as the scope of the wording adopted in Article 37 may well prove to be effectively wider. Furthermore the Court has already stated in the REWE judgment to which I have already referred: ‘The fact that a national measure complies with the requirements of Article 95 does not imply that it is valid in relation to other provisions of the Treaty, such as Article 37’; and it was further stated (paragraph 27): ‘Both Article 95 and Anide 37 of the Treaty are infringed if the charge imposed on the imponed product is different from that imposed on the similar domestic product which is directly or indirectly covered by the monopoly’. It appears to me that those words constitute an authoritative confirmation that it is possible for Anide 37 to be applied in conjunction with Anide 95.
Finally circumstances such as those outlined by the court making the reference, in which there is a charge connected with monopoly arrangements (‘Monopolausgleich’) and in which the question is whether this is in the nature of discrimination contrary to Community law, appear to me susceptible of appraisal in the light of Article 37 (1), even after the end of the transitional period. Nevertheless I feel unable to concur with the view put forward by Mr Advocate General Reischl in his opinion in Case 45/75, REWE ([1976] ECR 202) where he maintained that it was pointless to devote time to the interpretation of Article 95 inasmuch as ‘Article 37 is the sole criterion for judging monopoly charges and monopoly equalization, since Anide 37 is the lex specialis in relation to Article 95’. In my view it is preferable to take account also of Article 95, the general provision concerning tax discrimination, as the Court of Justice in fact did in its judgment in the REWE case.
3.
The application of Article 95 to the present case, which concerns goods imponed from a French overseas department seems questionable in that the said first subparagraph of Anide 227 (2) does not include the tax provisions (Chapter 2 of Title I of Pan Three of the Treaty) in its list of the provisions of the Treaty applicable to such departments whilst it does contain the entire title on the free movement of goods, including the chapter immediately preceding the chapter on tax provisions (competition rules).
The second subparagraph of Article 227 (2) then states that ‘The conditions under which the other provisions of this Treaty are to apply shall be determined, within two years of the entry into force of this Treaty, by decisions of the Council, acting unanimously on a proposal from the Commision’. However the Council has not yet adopted any decision concerning the application of the tax provisions of the Treaty to the French overseas departments.
With regard to this second subparagraph of that article the following interpretation might be advanced: namely that the Council had two years within which to determine the conditions under which the provisions of the Treaty which were not included in the above list were to apply and on the expiry of that period the Treaty became applicable in its entirety. Nevertheless for such an interpretation to be accepted it would not be sufficient to confer a narrow interpretation on the words ‘the conditions [under which the … provisions of this Treaty] are to apply’; it would be necessary to be able on the basis of Article 227 (2) to infer that in principie the Treaty in its entirety was applicable to the French overseas departments, subject to a period of grace amounting at the most to two years within which to determine the conditions under which the provisions not included in the list in the first subparagraph were to apply. A point in favour of this argument might be discerned in the fan that Article 227 (1) provides for the application of the Treaty ‘to … the French Republic’ which certainly includes both the metropolitan departments and the overseas departments (Articles 6, 74 and 76 of the French Constitution refer, for example, to the ‘overseas territories of the Republic’). It should however be noted that it has been the practice of the Council (and of the Commission) to continue the exercise of the powers conferred under the second subparagraph of Article 227 (2) even after the expiry of the transitional period and up to last year: I recall in particular the Council Decision of 14 June 1971 applying Anide 51 to the French overseas departments, the Council Decision of 8 November 1971 applying Anides 123 to 127 of the Treaty to those territories and Council Reguladon No 1795/76 of 20 July 1976 concerning the application of Article 40 (4) of the Treaty to the French overseas departments, with regard only to the Guidance Section of the European Agricultural Guidance and Guarantee Fund. This practice shows that such powers were exercised both with a view to arranging gradually for the application of given provisions of the Treaty (or of given provisions of secondary legislation) and in order to govern the conditions under which they should be applied. Ultimately this appears to me the most accurate interpretation of the powers conferred upon the Council under Article 226 (2): an interpretation which leaves to the Community executive power to select which provisions of the Treaty must be applied to the French overseas departments. With regard to the time-limit of two years prescribed in the said anide, I consider it difficult to regard this as the end of a period after which the Council lost the power conferred upon it since no such restrictive view has been taken of the general provision in Article 8 (7) to the effen that the expiry of the transitional period shall constitute ‘the latest date by which all the rules laid down must enter into force and all the measures required for establishing the Common Market must be implemented’.
At this point it might seem that there is justification for the view advanced in dus case by the Commission to the effen that Article 95 does not apply to the French overseas departments. Nevertheless dose consideration should be given to the opposite point of view which the German Government has put forward, on the basis of the connexion between Article 37 and Article 95: the German Government considers in fact that Anide 37, which clearly applies to the said departments, ‘repeats in this connexion the general prohibition against discrimination through tax measures with regard to the treatment applied to the importation of products which are covered by a national monopoly’.
In this connexion I should like to observe that the idea of including, on the basis of Anide 37, a tax provision in the category of provisions applicable to the French overseas departments is at first sight at variance with the view adopted in the case-law of the Court of Justice to the effect that in principle it is impossible for situations covered by Article 95 to be governed at the same time by the rules applicable to the free movement of goods (I refer in this connexion to my opinion, delivered on 6 June 1978 in Case 142/7, Larsen). However, the clear and necessary distinction between the proper scope of Article 95 (prohibition of discriminatory internal taxation) and that of Articles 9, 12, 13 and 16 (considered from the point of view of charges having an effect equivalent to customs duties) does not preclude the possibility that the function of Article 95 may be complementary to that of the provisions contained in Tide I of the Treaty. The Court of Justice had occasion to emphasize this point in its judgment of 1 July 1969 in Case 24/68, Commission v Republic of Italy ([1969] ECR 193) where it stated that Article 95 ‘is intended to fill in any breaches which a fiscal measure might open in the prohibitions laid down’ — that is, in the prohibitions specified in Article 9 (paragraph 5) On the other hand, whilst Arode 37 is placed in the chapter concerning the elimination of quantitative restrictions, it is worded in such a wav as to produce effects outside that sphere. This is shown both by the reference in Article 37 (2) to the articles dealing with the abolition of customs duties, and the wording employed in paragraph (1) (the requirement that there shall be ‘no discrimination regarding the conditions under which goods are procured and marketed … between nationals of Member States’) to which, as I have noted above, the Court of Justice has given a wide interpretation.
Ultimately, then, Article 37, the only anide in the Treaty of Rome concerning monopolies of a commercial nature, must be understood as a special provision, logically connected both with the rules on the free movement of goods and with the provision prohibiting all discriminatory internal taxation. For that reason, regardless of the problem of the present validity of Article 37, it may be held that, when the authors of the Treaty laid down that this article should be applied from the outset to the French overseas departments, by implication they also rendered applicable Article 95 as a provision complementary to Anide 37, with a view to the abolition of all discriminatory effects produced in matten of taxation by monopolies of a commercial nature.
It is further necessary to point out a strange and anomalous result which would follow from accepting the Commission's view that Article 37 was in force only during the transitional period and that Article 95 does not apply to the French overseas departments. There is no doubt that, since Article 37 is one of the provisions which have been declared applicable to such territories, a tax measure connected with a national monopoly and discriminating against goods imported from the above-mentioned departments would have to be regarded as incompatible with that article and therefore unlawful if it were adopted during the transitional period. On the other hand if the same measure were introduced after the end of the transitional period it would escape both the prohibition in Article 37, which, according to the Commission, is no longer in force, and that in Article 95 which, again according to the Commission, does not extend to the territories in question. Thus, contrary to the logic of tne Community system, the ending of the transitional period would have had an adverse effect in the sphere in question, detracting from the scope of the principle of non-discrimination and having a detrimental influence on the free movement of goods.
The Commission has finally observed that the application of the rule in Article 95 to the French overseas departments fails to take account of the actual conditions prevailing since such departments are subject to a fiscal system which to some extent differs from the system in force in the metropolitan territory. The first point to be made against this is that, according to the above argument, that rule would apply only to the tax arrangements connected with monopolies. In any case it must also be emphasized that in the course of the present proceedings the French Government itself has maintained that Article 95 is applicable to the overseas departments, thereby showing by implication that it is prepared to an accordingly even in the absence of a decision of the Council, with regard infer alia to the application of its own tax legislation in those territories.
On the basis of all these considerations I consider that the question of tax discrimination at issue here, which is connected with the existence of a commercial monopoly and concerns goods imponed from French overseas departments, must be appraised in the light of Article 95 as well as of Article 37 of the Treaty of Rome. This means that, in assessing the weight to be accorded to the provision on nondiscriminatory tax treatment, the case-law of the Court of Justice developed in connexion with Article 95 may be applied even though the present proceedings are distinguished by the connexion between the tax arrangement and the monopoly.
4.
We must now consider in the light of the principle of non-discrimination in tax matters which is to be inferred from Articles 95 and 37 of the Treaty of Rome whether it is possible to impose on goods imported into the Community from French overseas departments excise duties, in connexion with a monopoly, which are heavier than the minimum rate of the same duty imposed on corresponding domestic products or their substitutes where the minimum rate is applied only to a small percentage of domestic production and is granted for special reasons of a social nature.
The judgment of the Court of Justice of 22 June 1976 in Case 127/75, Bobit ([1976] ECR 1080) shows that Article 95 does not restrict the freedom of each Member Sute to establish the system of taxation which it considers the most suitable in relation to each product, provided that this does not have the effen of subjecting the imported product to a charge to tax higher than that of the similar domestic product. If that condition is complied with it is quite possible for taxation to be based on charges varying in terms of objective factors peculiar to the situation of the undertakings upon which the charge is imposed. No discrimination exists where the actual opportunity is available for the imponed products, on the same basis as the corresponding domestic product, to benefit from the right to enjoy given tax advantages. I should add that a comparison between imported products and domestic products does not necessarily imply that they are identical; if no products identical to the imported goods are manufactured in the importing Sute a valid basis for comparison can also be established through similar products which may be substituted for the imported products and accordingly are in direct competition with them. This may also be interred from the provision in the second paragraph of Article 95 prohibiting Member States from imposing on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.
The representative of the German Government has stated that the producen of other Member States, including the overseas territories to which the provisions of the Treaty on the free movement of goods apply, are entitled to benefit from the relevant system of differentiated taxation on spirits. However Hansen & Balle has objected that the conditions prescribed by German legislation on spirits for benefiting from lower excise duties cannot, either in law or in fact, be met by undertakings situated outside the Federal Republic. And indeed it appears extremely difficult, if not completely impossible, for distilleries operating outside the geographical area covered by the monopoly in question to comply with requirements consisting in permitting continual supervision by the tax authorities on the products which must be kept under seal (the check prescribed for the so-called ‘Verschlußbrennereien’) or in qualifying for the lump-sum payment of taxes (as in the case of the ‘Abfindungsbrennereien’) or finally in obtaining the licence, which 15 required in the case of frun-cooperative distilleries, to produce specified quantities of spirits and in the provision of subsequent proof that the permitted quantity has not been exceeded
It is naturally for the court dealing with the substance of the case to verify whether in fact the system in question makes it impossible, or at any rate excessively difficult, for small-scale foreign producen to benefit from the more advantageous tax system. If this were so the system of excise duties in question would be largely discriminatory and at variance with the principles embodied in Article 37 (1) and in the first paragraph of Article 95 of the Treaty of Rome.
The fact that only a small pan of the German production of alcohol enjoys the more advantageous rate does not prevent the above-mentioned system from being regarded as discriminatory. In this context it is appropriate to refer again to the judgment of 17 February 1976 in the REWE case in deciding which the Court of Justice stated inter alia that the first paragraph of Article 95 is infringed where the taxation on a domestic product and on an imported product are calculated on the basis of different criteria ‘which lead, if only in certain cases, to higher taxation being imposed on the imported product’ (paragraph 15). Furthermore it is likewise impossible to accord weight to the allegation that the objectives pursued through the system of selective taxation are of a social nature. This has been conceded by the representative of the Government of the Federal Republic of Germany himself in the observations submitted in the course of these proceedings.
5.
I shall now tum to consider the third question whereby the German court asks whether tax arrangements which are relaxed for national products can be classified as State aids referred to in Articles 92 to 94 of the EEC Treaty or by what criteria such aids are to be distinguished from internal taxation whose compatibility whith the Treaty must be assessed in the light of the principles embodied in Article 95 and where appropriate, with regard to monopolies, in Article 37.
There is no doubt that the reservation of favourable tax treatment for certain categories of undertakings as distina from the generality of producen in the sector may constitute an aid within the meaning of Article 92. The concept of ‘Sute aid’ is in fact very wide and covers not only cases in which the Sute gives to certain undertakings money, goods or services on especially favourable conditions, but also cases in which the Sute waives all or some of its rights to its own revenue from taxes, for the benefit of certain undertakings. If it is accepted that a system of excise duties at a reduced rate, such as the system in question, is of a discriminatory nature by reason of the above-mentioned characteristics it appears capable of distorting competition within the Common Market and of affecting trade between Member States. It accordingly falls within the scope of Article 92 (1).
Moreover it does not appear that the benefits provided under the system in question can fall into one of the categories of aids directly permitted under Article 92 (2). A decision by the Community authorities would therefore be necessary for the benefits to constitute lawful aids.
With regard finally to the criterion distinguishing aids consisting in reductions in taxes and the discriminatory charges dealt with in Article 95 I note that the system of aids granted by Sutes contained in the chapter on the rules on competition has special features which differ both from the rules regarding the free movement of goods and from the tax provisions in the Treaty. Such aids, which are reserved as a rule for national undertakings, are by their nature discriminatory; however, since such aids may be permitted under Articles 92 to 94, in my view a simultaneous appraisal of them in the light of the general prohibition of discrimination in matters of taxation is precluded. Finally the fan that it is possible to derogate from the prohibition contained in Article 92 (1) means that that provision, unlike Article 95, cannot be considered as a source of individual rights for the persons concerned until it has been ‘put in concrete form by acts having general application provided for by Article 94 or by decisions in particular cases envisaged by Article 93 (2)’ (judgment of 19 June 1973 in Case 77/72, Capolongo [1973] ECR 611).
6.
In the fourth question the German court assumes that the taxation imposed on goods imponed from Member States and from the French overseas departments may not exceed the minimum rates imposed upon identical, similar or interchangeable domestic products and proceeds to consider the case of importations from countries outside the Community, asking whether the concept of a charge having an effen equivalent to customs dudes (Article 9 of the EEC Treaty) also coven excise duties on products imported from third countries where such dudes are heavier than those imposed on identical, similar or interchangeable goods coming from Member States or from the abovementioned territories.
In this connexion it is sufficient to point out that Article 9 concerns intra-Community trade and lays down the prohibition between the Member States of customs duties on imports and exports and of all charges having an equivalent effen; accordingly that article does not apply to imports from third countries.
It may be added that the discriminatory application of internal taxation, resulting from the fan that imported products cannot in fan qualify for the advantageous rates applied to restricted categories of domestic products, can in no wise be assimilated to a charge having an effen equivalent to a customs duty.
Such an assimilation is precluded inter alia by the clear distinction which the Court of Justice has drawn in its decisions between the ambit of provisions prohibiting charges having an effen equivalent to customs duties and the proper scope of tax provisions (I refer to the judgment of 18 June 1975 in Case 94/74 IGAV [1975] ECR 699 and that of 22 March 1977 in Case 78/76 Stetnike [1977] ECR 595).
In order to rem am consistent with this view it is thus necessary to hold that a tax arrangement such as the one in question cannot be appraised in terms of criteria other than those contained in Anides 37 and 95. Nevertheless those provisions are not applicable for the benefit of third countries. The limitations which those provisions entail on the fiscal sovereignty of the Member States operate with reference only to intra-Communiry trade.
I accordingly consider that, in the present sute of Community law, the Member States may apply to products coming from non-member countries a system of internal taxation which is of a discriminatory nature in the sense which has been described above.
7.
In view of the negative answer to the fourth question I shall not deal with the fifth which was submitted in case an affirmative answer was given to the fourth.
I accordingly suggest that the Court of Justice should give the following reply to the preliminary questions submitted by the Finanzgericht Hamburg by its order of 24 October 1977, which was received on 7 December 1977:
(1)
The fiscal treatment, in relation to a commercial monopoly existing in a Member Sute, of products imported from French overseas departments must comply with the principles established by Article 37 (1) and by Article 95 of the EEC Treaty.
(2)
A system of selective taxation connected with the operation of a monopoly, which benefits particular categories of domestic products on the basis of characteristics peculiar to the national sector in question, constitutes discrimination which is prohibited both by Article 37 and by Article 95 of the EEC Treaty, regardless of the proportion of the domestic production affected and of the social nature of the objectives pursued. The position described above exists where the conditions for qualifying for reduced rates of taxation, whilst drafted in general terms, can only with difficulty be complied with by undertakings established in other countries, either because such conditions are laid down in terms of a system of production which is peculiar to the national undertakings or because they presuppose the existence of a particular relationship with the monopoly of the importing Sute which national undertakings alone can establish.
(3)
A reduction in taxation in favour of particular undertakings constitutes Sute aid which falls under the provisions of Articles 92 to 94 of the EEC Treaty.
(4)
Measures imposing internal taxation which falls more heavily on products imported from non-member countries than on corresponding categories of domestic products do not come within the prohibition on charges having an effect equivalent to customs dudes set out in Article 9 of the EEC Treaty.
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1
)	Translated from the Italian