Communication from the Commission concerning the consequences of the judgment given by the Court of Justice on 20 February 1979 in Case 120/78 ("Cassis de Dijon")

The following is the text of a letter which has been sent to the Member States ; the European Parliament and the Council have also been notified of it.

In the Commission's Communication of 6 November 1978 on "Safeguarding free trade within the Community", it was emphasized that the free movement of goods is being affected by a growing number of restrictive measures.

The judgment delivered by the Court of Justice on 20 February 1979 in Case 120/78 (the "Cassis de Dijon" case), and recently reaffirmed in the judgment of 26 June 1980 in Case 788/79, has given the Commission some interpretative guidance enabling it to monitor more strictly the application of the Treaty rules on the free movement of goods, particularly Articles 30 to 36 of the EEC Treaty.

The Court gives a very general definition of the barriers to free trade which are prohibited by the provisions of Article 30 et seq. of the EEC Treaty. These are taken to include "any national measure capable of hindering, directly or indirectly, actually or potentially, intra-Community trade".

In its judgment of 20 February 1979 the Court indicates the scope of this definition as it applies to technical and commercial rules.

Any product lawfully produced and marketed in one Member State must, in principle, be admitted to the market of any other Member State.

Technical and commercial rules, even those equally applicable to national and imported products, may create barriers to trade only where those rules are necessary to satisfy mandatory requirements and to serve a purpose which is in the general interest and for which they are an essential guarantee. This purpose must be such as to take precedence over the requirements of the free movement of goods, which constitutes one of the fundamental rules of the Community.

The conclusions in terms of policy which the Commission draws from this new guidance are set out below. - Whereas Member States may, with respect to domestic products and in the absence of relevant Community provisions, regulate the terms on which such products are marketed, the case is different for products imported from other Member States.

Any product imported from another Member State must in principle be admitted to the territory of the importing Member State if it has been lawfully produced, that is, conforms to rules and processes of manufacture that are customarily and traditionally accepted in the exporting country, and is marketed in the territory of the latter.

This principle implies that Member States, when drawing up commercial or technical rules liable to affect the free movement of goods, may not take an exclusively national viewpoint and take account only of requirements confined to domestic products. The proper functioning of the common market demands that each Member State also give consideration to the legitimate requirements of the other Member States.

- Only under very strict conditions does the Court accept exceptions to this principle ; barriers to trade resulting from differences between commercial and technical rules are only admissible: - if the rules are necessary, that is appropriate and not excessive, in order to satisfy mandatory requirements (public health, protection of consumers or the environment, the fairness of commercial transactions, etc.);

- if the rules serve a purpose in the general interest which is compelling enough to justify an exception to a fundamental rule of the Treaty such as the free movement of goods;

- if the rules are essential for such a purpose to be attained, i.e. are the means which are the most appropriate and at the same time least hinder trade.

The Court's interpretation has induced the Commission to set out a number of guidelines.

- The principles deduced by the Court imply that a Member State may not in principle prohibit the sale in its territory of a product lawfully produced and marketed in another Member State even if the product is produced according to technical or quality requirements which differ from those imposed on its domestic products. Where a product "suitably and satisfactorily" fulfils the legitimate objective of a Member State's own rules (public safety, protection of the consumer or the environment, etc.), the importing country cannot justify prohibiting its sale in its territory by claiming that the way it fulfils the objective is different from that imposed on domestic products.

In such a case, an absolute prohibition of sale could not be considered "necessary" to satisfy a "mandatory requirement" because it would not be an "essential guarantee" in the sense defined in the Court's judgment.

The Commission will therefore have to tackle a whole body of commercial rules which lay down that products manufactured and marketed in one Member State must fulfil technical or qualitative conditions in order to be admitted to the market of another and specifically in all cases where the trade barriers occasioned by such rules are inadmissible according to the very strict criteria set out by the Court.

The Commission is referring in particular to rules covering the composition, designation, presentation and packaging of products as well as rules requiring compliance with certain technical standards.

- The Commission's work of harmonization will henceforth have to be directed mainly at national laws having an impact on the functioning of the common market where barriers to trade to be removed arise from national provisions which are admissible under the criteria set by the Court.

The Commission will be concentrating on sectors deserving priority because of their economic relevance to the creation of a single internal market.

To forestall later difficulties, the Commission will be informing Member States of potential objections, under the terms of Community law, to provisions they may be considering introducing which come to the attention of the Commission.

It will be producing suggestions soon on the procedures to be followed in such cases.

The Commission is confident that this approach will secure greater freedom of trade for the Community's manufacturers, so strengthening the industrial base of the Community, while meeting the expectations of consumers.