61965C0052
OPINION OF MR ADVOCATE-GENERAL ROEMER
DELIVERED ON 4 MAY 1966 (
1
)
Mr President,
Members of the Court,
The subject-matter of these proceedings, upon which I give my opinion today, is mainly the interpretation of Articles 13 and 14 of the EEC Treaty, more precisely the definition of the expression ‘charges having an effect equivalent to customs duties’ (hereinafter referred to in its abridged form as: ‘charges having equivalent effect’). The Court has already in an earlier case (Joined Cases 2 and 3/62) had to construe this expression in connexion with a charge which was levied in Belgium and Luxembourg on the granting of import licences for gingerbread. Now this expression is once more disputed and in the two following sets of circumstances.
Case 52/65
Trade in sheep for slaughter and mutton (for which so far no common organization of the markets has been set up) is subject in the Federal Republic of Germany under the Gesetz über den Verkehr mit Vieh und Fleisch of 25 April 1951 (Bundesgesetzblatt I, 272) to a national marketing organization. In accordance with this law the Federal Minister for Food, Agriculture and Forests determines each year in his annual national plan for food supplies what quantities of a particular product are available from the home market and how much must be imported to meet the demand for it. In accordance with this plan invitations to tender for importation are organized. The Einfuhr- und Vorratsstelle für Schlachtvieh, Fleisch und Fleischerzeugnisse, an organization subject to public law (which is under the authority of the Federal Minister for Food, Agriculture and Forests who has power to issue directions to it) is made responsible for imports. The respective importers have to offer the products in question to it for sale. If it does not exercise its right to purchase the goods, they cannot be sold or used in any way on the domestic market. If, on the other hand, the Einfuhr- und Vorratsstelle does exercise its right to buy the products, it can acquire the goods either through a storage contract or, also by means of a contract, by formally taking delivery of them from the importer and then redelivering them to him make them available for the domestic market, in which case it has the right to impose certain conditions (for example as to the time when and the place where the products are to be utilized). In this case it is important to note that under paragraph 21 of the Vieh- und Fleischgesetz the Einfuhr- und Vorratsstelle is entitled, in order to cover the administrative costs connected with the procedure for dealing with the imports, to levy charges of up to 0.40 DM per 100 kg of the products which importers have to offer for sale to the Einfuhrstelle. On the basis of paragraph 21 a scale of charges was issued on 3 September 1951 (Bundesanzeiger No 178, 1951) under which the rates to be actually applied per 100 kg of sheep for slaughter and mutton were fixed at 0.15 DM and 0.25 DM respectively.
The Commission regards this charge as a charge having equivalent effect within the meaning of Article 13 of the EEC Treaty which as such has to be abolished during the transitional period. It therefore issued on 16 June 1965 a directive (published in the Official Journal 1965, p. 2074) in which it gave instructions for the progressive abolition of the said charge, the first sixty per cent thereof by 1 January 1966 and then the balance at the latest by the date when customs duties between Member States are abolished. The Federal Government challenges the legality of this directive and therefore asks in its first application that it be annulled.
Case 55/65
The facts in Case 55/65 are similar. This case is concerned with the operations of the Außenhandelsstelle für Erzeugnisse, Ernäherung und Landwirtschaft (since the Law of 24 August 1965 called ‘Bundesamt für Ernährung und Forstwirtschaft’), that is to say, of a Federal High Authority set up under a Law of 17 December 1951, which undertakes important duties in connexion with the import and export of agricultural products. In particular it is the central licensing authority for the import and export of agricultural products which have not yet been liberalized (the main products concerned are certain animal feedingstuffs, sheep and mutton, fish, vegetable oils and fats, sugar and seeds, cut flowers, wine, various kinds of fruit and vegetables as well as preserved fruit and vegetables). To the extent to which import licences have to be granted having regard to the progress made in liberalizing products, the Außenhandelsstelle is entitled on the strength of the Law of 17 December 1951 to levy charges to cover the administrative costs arising out of the different operations which it carries out in this connexion. Under this Law a scale of charges was issued on 22 August 1955 (Bundesanzeiger, No 163, 1955 — subsequently amended several times), determining the rate to begin with at 0.2 % (in the case of some products 0.02 %) of the value of the total amount of the products for which the import licence was issued. Subsequently, that is to say, with effect from 1 April 1958, these rates were reduced to 0.15 % and 0.015 % respectively. The Commission also regards these charges, to the extent to which they relate to the importation of agricultural products and foodstuffs subject to licence originating in other Member States, as charges having equivalent effect, the abolition of which it demands in a second directive of 28 July 1965 (Official Journal 1965, p. 2437) in the same way as it did in the case of the before-mentioned charges of the Einfuhr- und Vorratsstelle relating to meat. In keeping with the view which it has taken in principle in these cases the Federal Government also regards this directive as illegal and asks in its second application that it be annulled. As the arguments of the parties in each case were almost identical the Court ordered on 7 February 1966 that for the purpose of the procedure and of its final judgment the two cases should be joined. The examinations which I now undertake apply therefore — except when the contrary is apparent — both to the charges levied by the Einfuhr- und Vorratsstelle and to those levied by the Außenhandelsstelle as well as to the Commission's directives relating to them.
Legal consideration
The legal evaluation of the matter submitted to us for examination is relatively easy to understand, because there are only two submissions. That being the case I will proceed with my examination and first establish whether the Commission has correctly interpreted the concept of charges having an equivalent effect contained in Article 13 of the EEC Treaty, in order after I have done that to consider whether the Commission has committed an infringement of the Treaty or a misuse of powers, on the ground that it has not made regulations covering similar cases of charges having equivalent effect in all the Member States.
I — Interpretation of the concept of charges having equivalent effect
In the first place the applicant government takes the view that the Commission wrongly interpreted the concept of ‘charges having equivalent effect’ and for this reason reached the untenable conclusion that in accordance with Article 13 of the EEC Treaty the charges levied until now by the Einfuhr- und Vorratsstelle and the Außenhandels-stelle had to be abolished. The applicant's view can be summarized in its essentials (I will examine particulars of it later) as follows: in order to resolve the question whether any charge is a charge having equivalent effect it is wrong only to focus one's attention on the fact that it is a financial charge levied unilaterally on imported products. The reasons for and the objectives of the charge must also be considered. The most important characteristic of a customs duty is that its aim is either the protection of domestic products or (in the case of fiscal duties) the raising of revenue to defray general state expenditure. In contrast, the administrative charges in the present case are to be regarded only as the consideration which, in the context of the special import regulations, must be given by importers for making use of the services of the administration. Further, the scale of the charges shows that they are not likely to have any effect at all on international trade or to raise any significant amount of revenue for the state.
Before I examine the questions raised by this argument it must be made clear that the applicant government itself does not regard the contested directive in Case 55/65 as being completely illegal, to the extent to which its evaluation depends upon the concept of charges having equivalent effect. It concedes that under German law charges are still levied on the issue of import licences for some products which can be imported without payment of customs duty, although there can no longer be any justification for this according to the principles of the Treaty. Therefore their abolition must be recognized as being necessary.
The applicant only defends those charges which are payable on the issue of import licences for products which are still not liberalized (that is to say, whenever the removal of a barrier on imports is necessary in a particular case), such as for instance the charges levied by the Einfuhr- und Vorratsstelle, since in this connexion, so far as the products in Case 52/65 are concerned, there continues to be a national market organization, which also restricts free trade between Member States and which during the procedure for granting licences carries out special investigations. It is only in respect of these charges that we have therefore to consider whether they comply with the criteria applicable to charges having equivalent effect. It could appear remarkable on the face of it that the interpretation of the concept of charges having equivalent effect could be called in question after the Court has already endeavoured to lay down a general definition in Joined Cases 2 and 3/62. We have seen during the proceedings in this case however that the parties cannot agree on the way in which that judgment should be interpreted, and that they place rather different emphasis on the reasons upon which the judgment is based.
The Commission relies mainly on a comprehensive interpretation, given by the Court when examining the substance of the application at the end of the first section which reads ‘It follows from all these factors that a charge having equivalent effect… whatever it is called and whatever its mode of application, may be regarded as a duty imposed unilaterally either at the time of importation or subsequently, and which, if imposed specifically upon a product imported from a Member State to the exclusion of a similar domestic product, has, by altering its price, the same effect upon the free movement of products as a customs duty’ (Rec. 1962, p. 828). The applicant, on the other hand, places special emphasis on certain passages in the preceding considerations, which state that by means of the concept of charges having equivalent effect evasion of the prohibition contained in Articles 9 and 12 of the Treaty is prevented, and which mention that the intention of the parties to the Treaty is ‘to prohibit not only measures which obviously take the form of the classic customs duty but also all those which, presented under other names or introduced by the indirect means of other procedures, would lead to the same discriminatory or protective results as customs duties’ (Rec. 1962, p. 827).
By presenting its argument in this way the applicant government clearly intends to deduce from this judgment that it is also necessary in examining whether a charge has equivalent effect to pay attention to the aims and objectives of a charge levied by a Member State. However, this disagreement on the construction of the expression does not seem to me to be very productive. Even if the Commission's interpretation, namely that the Court only has to establish that the duty was imposed unilaterally on imported goods, were to be regarded as correct, we could not in considering that judgment overlook the fact that the problems in this case are very different. In the decided case the Court had to consider charges of a large amount expressly intended to be protective, because they were introduced ostensibly to offset disadvantages in the field of competition. The Court on the other hand did not have to consider the problem of administrative charges, which the Commission itself concedes are not in principle intended to be protective. It is a fundametal rule that the decisions of the Court must be interpreted with reference to the specific facts of the particular case, even when attempts are made to elicit from the grounds of the particular decision a definition of apparently general application. We must not therefore assume that the present dispute has been decisively prejudged by Joined Cases 2 and 3/62, so that its outcome depends entirely on the interpretation of the judgment delivered in those cases. On the contrary, we are free to consider the quite separate type of problem which has arisen in this case, independently of Joined Cases 2 and 3/62, only with reference to the provisions and aims of the Treaty.
In doing so we need not at any rate pause to consider whether the disputed administrative fees are in fact ‘charges’, because the applicant has itself conceded that they are by express reference to the general legal terminology common to all Member States. So the decision turns on the interpretation of the words ‘charges having equivalent effect.’ The normal effect of customs duties nowadays (we do not have to consider in our examination such exceptional phenomena as prohibitory duties) is to protect domestic production and in the second place — in the case of fiscal duties — to raise a substantial amount of revenue for the state. This being the case, it is reasonable to require that charges having an equivalent effect should have similar effects and in particular to take the view that these effects can only be established if, judged by the amount collected, they produce a tax charge equal to the average of customs duties.
However the applicant's argument is not to be understood in this way. In addition the Commission has proved to us that such a view cannot be objectively maintained. It is plain beyond all doubt that in certain cases even administrative charges levied in conformity with the principle that costs must be covered can amount to a considerable sum when the volume of imports is small (for example in a small country) and the administrative set-up is extensive (officials, equipment, buildings) or when there is an accumulation of several charges with reference to a specific product. On the other hand, it is clear that certain customs duty rates are relatively low in Member States and for example amount to only a fraction of one per cent. However, even those customs duties having such a low rate must be abolished under the Treaty, because it does not lay down any upper limit, any more than it does for taxation dealt with in Article 95. Therefore the modest amount of the administrative charges (and this is the applicant's opinion) can perhaps be regarded as some evidence that they do not have equivalent effect, that is to say, it can be of use in ascertaining the object of a charge, provided that under the principles of the Treaty it is relevant to define its purposes. In order to resolve this question the parties have relied inter alia on various international agreements in order to draw conclusions for the interpretation of the Treaty from a comparison with the wording which they use. I regard their endeavours however as having scarcely any value, to the extent to which they have in mind a customs agreement entered into within the framework of the Council in Brussels for cooperation in the field of customs duty with the object of facilitating the importation of goods to be displayed or used at exhibitions, fairs and conventions or other similar organizations, and in which administrative charges not exceeding the cost of providing these services were exempted from the prohibition against the introduction of customs duties and other charges and taxes'. This form of agreement came into being after the entry into force of the EEC Treaty (8 June 1961). It must be treated as belonging to a quite different set of circumstances, which in my opinion makes it impossible to regard its wording as being representative of the customs terminology of the Community. A comparison with GATT, which is put forward by both parties for the purpose of supporting their interpretations, cannot be rated any higher as an aid in construing the definition. Under GATT (Article II, 2, C) administrative charges to cover costs arising out of exporting or importing are permitted, that is to say, they are not included in the limitation of the rate of customs duties and other import charges. The Commission deduces from this fact and the fact that the EEC Treaty does not provide a corresponding exception for administrative charges, although the authors of the Treaty had GATT in mind, that such charges under the EEC Treaty are covered by the general obligation to abolish progressively duties imposed unilaterally on imports. This view is supported also by the fact that the EEC Treaty, by establishing a customs union and a uniform trade area, goes very much farther than GATT. The applicant on the other hand regards an interpretation by analogy as appropriate, that is to say, that it is legitimate to apply the same principles to the EEC Treaty as are applicable to GATT on the ground that the wording used in GATT has frequently been incorporated in the Treaty, with the result that the explanations and definitions in GATT are valid for the interpretation of the EEC Treaty. This argument is all the more relevant, because GATT refers in general to charges and duties, which are levied at the time of and in connexion with importation, with the result that it was particularly necessary to except expressly administrative charges, whereas the EEC Treaty is concerned with the equivalent effects of charges and therefore the use of this wording meant that administrative charges need not be mentioned.
In the light of this somewhat unprofitable disagreement on interpretation I prefer to refer back directly to the principles and requirements of the EEC Treaty to ascertain which interpretation of Article 13 proves to be the most suitable under the system of the Treaty considered as a whole.
The crucial question, which I intend to consider without paying too much attention to legal doctrine, is whether the Commission's rule that foreign imported products may not be more heavily taxed than similar products on the domestic market so that there can be no increase in their price and no discrimination against them can justifiably be regarded as a principle of the Treaty.
The applicant submits first of all that the application of such a principle as the determinative guide line for interpreting Article 13, having regard to the dissimilarity between the procedures which were often adopted for the checking of foreign and domestic goods, must lead to considerable difficulties. This is in fact evident if it is borne in mind for example that domestic production may be checked by means of a general supervision of factories whilst foreign goods as such have to be checked when they cross the frontier. It is true that this argument cannot be decisive, because in dealing with the subject-matter of this dispute difficulties of delimitation and interpretation can obviously under no circumstances be completely avoided, even if the applicant's argument is accepted. On the other hand greater weight must be given to the argument that it would be very surprising if the authors of the Treaty did not incorporate in the Treaty the principle which the Commission regards as being correct, assuming that it appeared to it to be the very embodiment of the concept of charges having equivalent effect, by using the words chosen by the Commission. If Articles 12 and 13 contain, instead of such a general prohibition against discrimination, only a prohibition of charges having equivalent effect, this can only mean that the latter prohibition must be given a narrower meaning than the one attributed to it by the Commission.
In this connexion by far the most significant fact as far as I am concerned is that the Community institutions themselves (the Council and the Commission) in a related field under the Treaty, and the Commission in connexion with Article 13, are willing to restrict to some extent the application of the principle which has just been defined so that its validity could be called in question. So far as the free movement of persons under the Treaty is concerned, the Community measures taken up till now (Directive of the Council of 25 February 1964 abolishing restrictions on travel and residence for nationals of Member States within the Community in the field of the freedom of establishment and the free movement of services and the Directive of the Council of 25 March 1964 abolishing restrictions on travel and residence for workers in Member States and members of their family within the Community) expressly permit the levy of administrative charges for the granting of residence permits, passports of identity certificates, provided only that they do not exceed the costs incurred by the administration for these purposes. Nationals do not need such residence permits and therefore no administrative charges are incurred by them. The result is that in this field it is permissible to levy charges unilaterally on foreign workers. These charges are obviously not regarded as unfair discrimination against foreign workers within the meaning of Article 52 and the following Articles of the Treaty, because the Community institutions have raised no objections against the maintenance of these charges after the expiration of the applicable time-limit in the general programme for the abolition of restrictions on the freedom of establishment of 18 December 1961. This can only be explained by treating the financial charges by way of set-off levied on the interested parties for special tasks undertaken by the administration as admissible administrative charges which do not conflict with the principle of equality of treatment. It is not illogical for the applicant to argue that if the charges levied in the case of the free movement of persons are admissible then the charges levied in the case of the free movement of goods cannot be regarded as discriminatory, provided that the same criteria are followed.
The Commission offers us another argument in connexion with the free movement of goods. In its view it is also permissible to levy special charges for customs clearance effected at night or on Sundays and public holidays and for the use of bonded warehouses and experts. In fact, it is clear that the levying of such charges cannot be dispensed with — and the reasons for it appear to be understandable without any further explanation being necessary — because otherwise the traffic in goods crossing the frontiers outside the normal times for their clearance by customs would increase and provision for the additional expenditure thereby incurred would have to be made in national budgets. It cannot be denied that in these cases as well a charge is levied on foreign goods which is not levied on similar national goods (according to the applicant this fact must be decisive). This finding is still valid, even if it is conceded that the importer, who has to pay the charges, obtains in exchange the benefit of a personal advantage. Therefore the Commission admits that in certain cases the price of foreign products is increased unilaterally, and that thus different financial charges are levied thereby constituting an exception to the principle in which it has described as being essential for the interpretation of the concept of ‘charges having equivalent effect.’ It seems to me that these two examples support in particular the view that when we consider the definition of the concept with which we are concerned attention must not be focused exclusively on its objective effects, because the problem can only be dealt with in a way which is in accordance with the facts and relevant, if its examination includes a consideration of its object, that is to say, if the reasons for and aims of a charge are considered (which, moreover, is also required for the retention of certain quantitative restrictions on imports under Article 36 of the Treaty). The arguments put forward make it abundantly clear that even under the EEC Treaty certain administrative charges at least are admissible, (not all as the applicant concedes) and as such cannot come within the concept of charges having equivalent effect. Therefore only the one crucial question of the necessary delimitation of the definition has to be answered, a question which is not easy to resolve, but the answer to which shows that the views of the Commission and the applicant are not so far apart as they seem to be at first sight.
The basic principle (as the Court emphasized in Joined Cases 2 and 3/62) which must be adhered to is that every exception to the obligation to eliminate charges imposed unilaterally on foreign goods must be strictly defined. It seems to me, however, that the applicant's proposition that only those payments to the administration are to be regarded as not coming within the concept of charges having equivalent effect which were made for genuine consideration complies with this requirement. Following the Commission's view that customs clearance at night is a departure from normal customs practice, the lifting of import restrictions in a particular case, which occurs with non-liberalized goods of the kind with which we are concerned or when national market organizations with import restrictions are retained, is to be regarded as such consideration. In this case also a departure from the normal situation, namely that imports are not restricted, occurs when a particular importer after all the investigations, which, as the pleadings show, have to be carried out by the Einfuhr- und Vorratsstelle and by the Außenhandelsstelle, is granted a licence to import goods. The fact that, before granting such a licence, matters which are in the public interest are considered in accordance with the basic regulations, can in this case be no more decisive than in the case of movement of persons when, before a residence permit is granted, an investigation of questions of public security and public policy be carried out. It must be recognized that similarly a genuine service is given by the administration — I mention this in passing as the decision does not turn on this point — in the cases arising under Article 36 of the Treaty, that is to say, when it has to be ascertained whether restrictions on imports should be maintained in the interest of public morality, public policy, public health etc. A final but important argument in favour of the existence of this service is that we have an analogy to this case in the way in which the Council and the Commission deal with the movement of persons, which is to be regarded so to speak as an authentic (but also reasonable) interpretation of the relevant provisions of the Treaty.
I am unable, contrary to the opinion of the Commission, to agree that the view which has been put forward in this case creates the risk of an unrestricted extension of administrative charges. All the examples which it has mentioned of checks of imports carried out for statistical purposes, to comply with provisions for standardization, to check customs declarations during customs clearances or for exchange control purposes are, upon a strict construction, no more to be regarded as genuine services given by the administration than the levying of customs duties, indirect taxes or the considerations which have to be taken into account on the automatic grant of import licences, whether minimum prices are to be maintained or protective measures have to be taken and finally the requirement that a bond be given or the calculation of levies in advance in the case of imports in the framework of common market organizations. In these examples there is no genuine service given by the administration because no obstacles to importation are removed or because the administration does not proceed to raise any import charges, that is to say, it is not the administration's aim to call upon the importer to make any payment:—I also do not see that there is any danger, if this view is adopted, that administrative charges will be retained to any great extent after the expiration of the transitional period, in particular as we are primarily concerned with charges relating to import regulations, which in the opinion of the Federal Government must be abolished when these regulations lapse. Finally it cannot either be assumed that the charges which remain in force, having regard to their level, are likely to restrict the flow of goods to any serious extent. As the applicant correctly assumes, the principle that expenses must be covered is well grounded in law and the adequacy of the administrative charges guarantees that they do not in general lead to an effective increase in the price of the imported goods. We therefore come to the conclusion in our case relating to the charges of the Einfuhr- und Vorratsstelle and the Außenhandels-stelle that they are genuine administrative charges within the meaning of the before-mentioned definition and as such do not fall within the concept of charges having an equivalent effect. The Commission has unlawfully ordered their abolition. The contested directive must therefore be annulled on the ground that it infringes Article 13 of the Treaty in so far as it concerns goods which have not been liberalized.
II — Infringement of Articles 13 and 14 of the Treaty, misuse of powers
In case the administrative charges, contrary to the view of the applicant and to the view which I have just put forward, are held to be charges having equivalent effect, which means that their abolition can be called for under the Treaty, the applicant has submitted that the Commission infringed the first principles of the Treaty when it issued its instructions for their abolition and in particular the principle of equality of treatment. It submits in addition that when the contested directive was drawn up it was influenced by factors which were not relevant.
This complaint is based essentially on the fact that the two directives were issued within a period of about one and a half months and also on the fact that with the directive of 16 June 1965 only two further directives and with the directive of 28 July 1965 only one other directive was sent to the Italian Government, whereas the Commission has not so far issued any directive in other cases which have to be dealt with in a similar way (these cases — so far as we know — were a charge for affixing customs seals under an Italian law of 1 December 1956, a charge for customs clearances under a French regulation of 13 December 1958 and stamp duty on customs receipts under a French law of 1960).
To the extent to which an additional general claim is made that there are other cases of administrative charges to be considered, which were levied in other Member States on imports, it cannot be considered, because it has not been substantiated in the application. We cannot rectify this omission by granting the applicant's request to the Court for production by the Commission of all the relevant measures; we can only proceed on the basis that the applicant itself with the help of its departments was able to set in motion the necessary enquiries and by so doing to include in its application the necessary particulars in support of its claim. With regard to the reference to different dates when the disputed directives were issued there are two points of view which must be distinguished. The applicant believes that it can discern a connexion between the issue of the first directive (relating to the abolition of the administrative charges levied by the Einfuhr- und Vorratsstelle) and certain differences of opinion between it and the Commission during the application for a preliminary ruling in Case 10/65. It appears to it to be a remarkable coincidence that after this difference of opinion on the question of charges having equivalent effect in the oral procedure of 18 May 1965 and shortly after the opinion of the Advocate-General was given on 3 June 1965 the first of the two contested directives was issued on 16 June 1965, that is to say, before the judgment was delivered (8 July 1965). I would like however to assume that there is no cause to conclude from the relationship of these two dates to each other that the directive might have been issued for reasons unconnected with the facts or to make any further effort to clarify a presumption on these lines. The charge which was the main subject matter of Case 10/65 was a charge levied by the administration on the grant of import licences and at that time was not regarded as being legally comparable in every way with the charge covered by the contested directives. Moreover the preliminary ruling had to be delivered with reference to Article 95 of the Treaty, but not with reference to the meaning of charges having equivalent effect under Article 13. Finally — and this could be the determining factor — I do not see how the Commission by issuing the contested directive could have intended to exercise a more far-reaching and enduring influence on the decision of the Court in Case 10/65 than it did by the position which it adopted during this case. Even if it is accepted that there is a certain technical similarity between the administrative charges upon which the Court had to adjudicate in Case 10/65 and the charge dealt with in the directive, I cannot for that reason accept the fact that Case 10/65 was at that time pending as a convincing reason for the issue of the contested directive. With regard to the fact that the directives were issued on different dates (it is known that both take effect on 1 January 1966, that is to say, at the same time) this argument can only apply to the directive of 28 July 1965, supported perhaps by the fact that the Federal Government had a period shorter by about one and a half months within which to deal with its subject-matter. On this point the immediate objection can certainly be raised that the postponement is for a relatively short period of time which is a consideration of hardly any importance for the evaluation of the legal issues. It must moreover be acknowledged that a postponement of the issue of the second directive having regard to the imminence at that time of the ruling in Case 10/65 and to the similarity of the charges in that case and in the directives can in the circumstances be fully justified. In my opinion therefore there is nothing in the directives as such which damages the Commission's case. Another complaint of a predominantly formal nature appears to have just as little importance. In this complaint the submission is made that the Commission failed to discuss in detail with Member States all the relevant material collected with the help of a circular letter to them and by this method to form an objective view of the nature of the charges having equivalent effect. On 27 May 1964 it merely heard the views of representatives of the Federal Republic on certain German charges and then at the end of the discussion left the impression that it no longer had any objections to the point of view of the Federal Government. It is without any doubt desirable and convenient when dealing with such a difficult question as the definition of charges having equivalent effect to enable Member States to participate to the fullest possible extent in the preparatory studies. On the other hand according to the Treaty the Commission is under no duty to do more than arrange the consultations which it took into consideration before issuing the contested directives. For this reason the complaint of infringement of an essential procedural requirement falls to the ground. To the extent to which the complaint is made that its behaviour during the discussion of 27 May 1964 amounts to venire contra factum proprium what in fact is at issue is not only whether there was any agreement as the applicant alleges on the legal evaluation of the charges which were discussed. The predominant determining factor is that any such agreement had no legal effect, because it clearly could not have been legally binding as the persons taking part in the discussion did not have the authority to enter into an agreement.
On the other hand another submission is of much more importance, namely the complaint that the Commission in dealing with charges having equivalent effect has been selective, that in spite of the existence of similar situations in France and Italy it did not send those Member States any or any comprehensive directives. In fact, as the Federal Government stresses, the principle could be inferred from the provisions of the Treaty relating to customs duties that their abolition must proceed in a consistent manner so far as the time-table and the percentage reductions are concerned, so that the customs union is established uniformly for all Member States. This emerges from Article 14 of the Treaty: such a principle must however be regarded as the implied basis stipulated for every customs union. As the abolition of charges having equivalent effect in Article 13 takes place by reference to the principles laid down in Article 14, it is only right that the abolition of all of them should proceed in the same way. It is therefore the principal duty of the Commission, when it exercises its power to determine the time-table for the abolition of charges having equivalent effect, to aim at applying it uniformly to all Member States and to all similar charges having equivalent effect. It therefore appears in fact to have been guilty of an infringement of an essential procedural requirement by refraining for the time being from ordering the removal of certain charges having equivalent effect in France and Italy, which also have the characteristics of administrative charges. The question whether this conclusion (I must emphasize that it is an alternative conclusion) can be upheld can of course only be ascertained after the reasons put forward by the Commission in support of it have been examined.
Its most important argument runs on these lines, that it divided the charges into two groups, one for charges levied only on individual products and another comprising charges levied on all imports. The German charges were included in the first group which had been the subject-matter beforehand of a series of directives, whilst certain French and Italian charges belonged to the second group. The effects of the charges in the first group could be offset by fixing the exchange rate so as to take account of the whole of the import and export prices to a lesser extent than the effects of the charges in the second group. Therefore the abolition of the second group of duties proved to be more urgent having regard to their influence on the conditions of competition. This explanation is only on the face of it plausible. The Federal Government submits on this point that the second of the contested directives at least deals with charges for all agricultural products, that is to say, a very wide range of goods, so that the question can justifiably be asked whether these charges should not have been included in the second of the two groups established by the Commission. It does not then appear to be a convincing argument that the charges in the second group have a more limited effect on the conditions of competition and are supposed to impede trade to a lesser extent than those in the first group. As the Federal Government emphasizes, it is reasonable to assume that the opposite view is correct, because all imports are subject to the charges in the first group and the lower the rate of customs duties on trade between states the greater effect they will have. As they are formally an appendage to the list of customs duties it must have appeared to be a matter of special urgency to call first of all for their abolition. The Commission's theory of exchange rates, which was developed in one single sentence without any detailed explanation, is not in my opinion an effective argument compared with this very reasonable view. With regard to the disputed German charges in this case, according to the view of the Federal Government the Commission's theory has no validity, because the amount of the charges is so small that it cannot be reflected at all in exchange rates. In my opinion a further and more detailed discussion of this problem (in respect of which the applicant even asked for an expert's report) is unnecessary, because with regard to the time factor there has been no occasion to deal with such charges having equivalent effect in a different way. If the Commission, as it pleaded without being challenged, has since 1960 been engaged in the recording, classification and evaluation of charges having equivalent effect, it can be assumed that in 1960 it was in the position to settle this problem in a uniform manner for all charges regarded as administrative charges and for all the Member States. The conclusion can therefore be reached that, having regard to all the facts which weigh against the Commission, it has failed to provide an adequate justification of its discriminatory treatment of these charges.
I cannot find in particular any justification of its behaviour in the fact that these two applications have been brought. We recall that the Commission stated that it had already prepared directives relating to other cases of charges having equivalent effect but, having regard to the principle of legal certainty, then deferred their issue until a definition of the concept at issue be given in the applications which are now pending. It cannot on this ground avoid being accused of discriminatory behaviour, because it unilaterally saddled the Member States to which it had already sent directives with the risk of legal uncertainty and then with the task of endeavouring to extract an exact definition of the disputed concept by means of a test case before the Court. I should also not like to admit without any challenge the Commission's objection that it was only later that it took the decision to postpone the other directives and that administrative law does not recognize the concept of retroactive misuse of powers. The Court need only take note of the fact that the Commission deliberately refrained from issuing the directives which it claims it had prepared. This can only be interpreted as an attempt to embark first of all on some test cases and to base its policy with regard to the other directives on their outcome. However in my opinion that amounts to an unlawful exercise of its discretionary power at the time of the issue of the contested directives. Finally it is impossible to accept the Commission's objection that the applicant does not in fact allege a violation of the prohibition against discrimination but is attempting to avoid the duty imposed upon it by the Treaty by means of the plea, which is not part of the law of the European Community, of non-execution of the Treaty. If the applicant takes the view that the Commission should have dealt with the abolition of customs duties by other Member States, it must remember that it can bring an action for failure to act under Article 175. There could in any case be a plea that the Treaty had not been executed in relation to other Member States to the extent to which they introduced charges having an equivalent effect after the entry into force of the Treaty, because they are covered by Article 12 which is directly applicable. However the charges which were in existence when the Treaty entered into force are subject to the rule that the Commission must determine the time-table for their abolition. Consequently it is essential for the Commission to take the necessary steps to perform this special duty under the Treaty. However with regard to the action taken by the Commission we have no choice but to assert that it disregarded fundamental principles under the Treaty, for example the principle that the customs union must be introduced in a uniform manner. Compliance with this principle of uniformity does not naturally depend upon a comparison of the type of products to which charges having equivalent effect in Member States apply, but rather — as we have shown — on the fact that the directives calling for the abolition of charges having equivalent effect should refer to all products which are similar. If the duties imposed upon the Commission are understood in this way, the proper remedy in the event of a discriminatory exercise of the power to issue directives conferred by Article 13 is an application for annulment and not an action for failure to act. This becomes abundantly clear if it is realized that in an action for failure to act absolute equality of treatment of all Member States cannot in the circumstances be achieved. The applicant is called upon to take the first measures for the abolition of charges having equivalent effect with effect from 1 January 1966. The applicant could not achieve the same result for other Member States by adopting the procedure for failure to act immediately after service upon it of the directives affecting it, if account is taken of the time-limits for an application for failure to act and for the subsequent legal proceedings and also of the need to allow the Commission and then the other Member States a reasonable time to comply with the judgment. But in this case it is precisely nondiscrimination in time which assumes a particular importance. In my opinion there is no need to re-emphasize that to force on the Federal Republic of Germany the rôle of an applicant in a test case before the Court and of complainant as against the other Member States must be regarded as a heavy and discriminatory burden. Therefore the contested directives must be found to be illegal on the ground that they infringe the fundamental principles of the Treaty which include the uniform application of customs provisions to all Member States, even if their legality has not already been called in question with reference to the definition of the concept of charges having equivalent effect.
III — Summary
After all these arguments my opinion is as follows:
Applications 52 and 55/65 of the Federal Government lodged with the Court are admissible and well founded. The contested directives of 16 June 1965 and 28 July 1965 must be annulled. According to Article 69 (2) of the Rules of Procedure the Commission must bear the costs.
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