Opinion of Mr Advocate General Geelhoed delivered on 22 February 2001. - Commission of the European Communities v Ireland. - Free movement of goods - Precious metals - Compulsory hallmark. - Case C-30/99.



European Court reports 2001 Page I-04619



Opinion of the Advocate-General

I - Introduction

1. In this case, the Commission requests the Court to rule against Ireland for failure to fulfil its obligations under Article 30 of the EC Treaty (now, after amendment, Article 28 EC). The Commission criticises Ireland on the ground that its national legislation on guaranteeing the standard of fineness of precious metal in articles made of silver, gold or platinum constitutes a measure of equivalent effect prohibited under Article 30 of the Treaty. Its criticism focuses in particular on the standards of fineness of precious metals permitted by Ireland and on the related conditions governing hallmarks. The Commission's complaints relate further to the compulsory registration of sponsors' marks affixed by the responsible maker, worker or dealer, the approval of hallmarks for articles of precious metal marketed in Ireland, and to the differences in provisions applicable to imported and national products of the same type.

2. The Court has already, in its judgments in Robertson and Houtwipper, set out the conditions under which the Member State of importation may subject articles of precious metal to renewed controls and hallmarking requirements, where the goods in question are already in lawful circulation within the Community. The Commission's heads of complaint must in particular be assessed in the light of that case-law of the Court.

II - The legal framework

A - National legislation

3. All Member States of the European Union have legislation governing the marks to be struck on articles made from precious metals. National legislative provisions impose, in particular, an obligation concerning the striking of hallmarks, which must indicate the standard of fineness of the precious metal in an article (the amount of precious metal used). The Irish legislation and rules relevant in the present case consist of a number of provisions:

- the Hallmarking Act 1981 (the Act). This is the Irish statute which lays down the general legislative framework for guaranteeing the standard of fineness of precious metal contained in articles made of silver, gold and platinum;

- the 1983 Hallmarking (Irish Standards of Fineness) Regulations and the 1990 Hallmarking (Irish Standards of Fineness) (Amendment) Regulations (the 1983 and 1990 Standards of Fineness Regulations). These provisions set out the approved standards of fineness in Ireland for goods made of the precious metals gold, silver and platinum. The standards, expressed in parts per thousand of the total mass, are:

- for gold: 916.6, 833, 750, 585, 417 and 375 (corresponding respectively to 22, 20, 18, 14, 10 and 9 carats);

- for silver: 925 and 958.4;

- for platinum: 950;

- the 1983 Hallmarking (Approved Hallmarks) Regulations and the 1990 Hallmarking (Approved Hallmarks) (Amendment) Regulations (the 1983 and 1990 Approved Hallmarks Regulations). These set out the hallmarks that are authorised in Ireland.

4. Articles made of precious metals must bear an approved hallmark. Under section 2 of the Act, an approved hallmark means:

(1) a mark lawfully struck by the Assay Master, whether before or after the commencement of the Act, under the law for the time being in force;

(2) a mark lawfully struck in an assay office in the United Kingdom before 21 February 1927;

(3) an international hallmark, that is to say, a mark prescribed by regulations under section 3 of the Act as recognised by the Government or the Minister responsible under a treaty or international convention to which Ireland is a party and which relates to precious metals and is lawfully struck by the Assay Master or in a country other than Ireland.

According to Regulation 7 of the 1983 Approved Hallmarks Regulations, an international hallmark is a mark notified in accordance with the Convention on the Control and Marking of Articles of Precious Metals (the Vienna Convention). Section 4(2) of the Act provides that articles which bear such an international hallmark and which conform to the Irish standards of fineness do not require further hallmarking in Ireland.

5. Regulation 5 of the 1983 Approved Hallmarks Regulations prescribes the following three marks as approved hallmarks to be applied to all articles of precious metal other than imported articles to which an international hallmark has already been applied:

(1) the appropriate mark used by the Dublin Assay Office (Assay Office mark). The content of this mark differs for articles produced in Ireland and for imported articles not already bearing an international hallmark;

(2) a mark denoting the relevant standard of fineness and applied in the Dublin Assay Office (fineness marks);

(3) a mark or letter denoting the year of manufacture of the article or the year of hallmarking of the article and (in any event) applied in the Dublin Assay Office.

6. Section 3(2) of the Act provides that regulations may prescribe different marks for articles of precious metal manufactured in the State and for imported articles. For the hallmarking of articles of gold, there is a difference of 10 carats in the hallmarks to be affixed as between articles manufactured in Ireland and articles that are imported (Regulation 4 of the 1990 Approved Hallmarks Regulations). In the case of articles made of platinum, the standard of fineness is indicated by a letter in the hallmark of articles manufactured in Ireland, whereas it is indicated in parts per thousand on the hallmark of imported articles, with the exception of articles covered by the Vienna Convention (Regulation 4 of the 1983 Approved Hallmarks Regulations).

7. According to section 9(1) of the Act, articles of precious metal submitted to the Assay Master to be struck with an approved hallmark must also be struck with a distinctive mark, known as the sponsor's mark. This mark indicates the responsible maker, worker of or dealer in such articles (section 1 of the Act). The Assay Master and the sponsor may make arrangements for the sponsor's mark to be struck by the Assay Master (section 9(2) of the Act). The sponsor's mark must be registered with the Wardens and Commonalty of Goldsmiths of the City of Dublin, known as the Company (section 9(3) of the Act). Registration is valid for a period of 10 years from the date of registration and may be renewed every 10 years (section 9(4) of the Act).

8. It appears from the documents in the case that Ireland is at present in the process of reviewing its legislation on precious metals and has to that end already drawn up a number of specific draft rules. The proposed amendments relate, in particular, to permitted standards of fineness, sponsors' marks, recognition of foreign assay offices, and discriminatory rules. However, this legislation is not yet in force and cannot be taken into consideration in this case for the purpose of reaching a final conclusion.

B - Community law

9. In 1993 the European Commission submitted a proposal for a Council directive on articles of precious metal, which was replaced in 1994 by an amended proposal. The proposed directive provides for harmonisation of standards of fineness of articles made of precious metal and the related hallmarks with a view to removing barriers to intra-Community trade and ensuring free movement of articles of precious metal and fair trading within the Community. The draft directive states that articles of precious metal must satisfy the essential requirements set out in its annexes. It provides that Member States may not, with regard to the indication of the standard of fineness, prohibit, restrict or hinder the placing on the market of articles of precious metal that meet the harmonised marking requirements.

10. At the hearing, counsel for the European Commission stated that discussions within the Council were at an impasse. A common position has not yet been reached. The documents in the case contain an unpublished, revised version of the draft directive dated 22 April 1996.

III - The procedure and action

11. In response to several complaints by undertakings involved in the importation and marketing of articles made from precious metals in a number of Member States, the Commission initiated an analysis of the compatibility of the applicable national legislation with Article 30 of the Treaty. By letter of 28 June 1993, the Commission put Ireland on formal notice pursuant to the procedure laid down in Article 169 of the EC Treaty (now Article 226 EC). As it was not satisfied with Ireland's reply, the Commission issued a reasoned opinion on 11 November 1996. In its reply of 3 April 1997 the Irish Government disputed the contention that its existing legislation was contrary to Article 30 of the Treaty. Various contacts followed between the Commission's services and the Irish authorities, with particular regard to Irish proposals for amending the national legislation, especially with a view to extending recognition of foreign standards of fineness for precious metals. This correspondence did not, however, lead to a result that was satisfactory to the Commission. It therefore decided to institute proceedings against Ireland before the Court, lodging its application with the Registry on 5 February 1999.

12. The Commission claims that the Court should:

- declare that:

1. by prohibiting the marketing in Ireland, with the description and indication of fineness which they bear in their country of origin, of articles made from precious metals (gold, silver or platinum) lawfully manufactured and marketed in other Member States but not complying with the Irish provisions concerning standards of fineness, or by obliging importers of such articles to replace their hallmarks with those for the appropriate lower official Irish standard of fineness;

2. by requiring articles made from precious metals (gold, silver or platinum) imported from another Member State, and marketed in Ireland, to bear a sponsor's mark indicative of the maker, worker of or dealer in such articles, registered by the Company which appoints the Assay Master by which these articles are intended to be struck with the approved hallmark, when these articles already bear a sponsor's mark conforming to the legislation of the Member State of origin;

3. by requiring articles made from precious metals (gold, silver or platinum) imported from another Member State, and marketed in Ireland, which have been lawfully struck in another Member State with a hallmark stamped by a body which offers guarantees of independence, and which offers appropriate information to consumers, to bear an approved hallmark struck by the Assay Master which is appointed by the Wardens and Commonalty of Goldsmiths of the City of Dublin;

4. by establishing differences between approved hallmarks struck on articles manufactured in Ireland and those hallmarks of the same type struck on articles imported from other Member States,

Ireland has failed to fulfil its obligations under Article 30 of the Treaty;

- order Ireland to pay the costs.

13. The Irish Government contends that the Court should:

- declare that, by establishing differences between approved hallmarks struck on articles manufactured in Ireland and those hallmarks of the same type struck on articles imported from other Member States, Ireland has failed to fulfil its obligations under Article 30 of the Treaty;

- dismiss the remainder of the application;

- order the Commission to pay the costs.

14. The United Kingdom, which has intervened in this case, submits that the Court should dismiss the application in so far as it seeks a declaration that hallmarks struck by a manufacturer itself are equivalent to hallmarks struck by an independent body.

15. During the hearing on 7 December 2000 the Commission and the Irish Government clarified their respective positions.

IV - The Court's case-law concerning hallmarks on articles of precious metals and Article 30 of the Treaty

16. The Commission's application is based on the principles laid down by the Court in its judgments in Robertson and Houtwipper. The Irish Government does not as such question that case-law. The dispute centres on the application of that case-law to specific sections of the Irish legislation. Before I address the heads of complaint and arguments of the parties and reach a conclusion in the dispute, I shall therefore first set out the most important elements of those two judgments of the Court.

17. The judgments in Robertson and Houtwipper are both preliminary rulings in criminal proceedings. Robertson involved the Belgian rules on the hallmarking of silver-plated articles such as cutlery. Houtwipper was concerned with the Netherlands Law on guaranteed standards for precious metals (the Waarborgwet), which prohibited trade in articles of precious metal which did not bear a hallmark struck by an independent body and indicating the standard of fineness of the precious metal. The Court ruled in both cases that the requirement that articles of precious metal imported from other Member States, in which they were lawfully traded and hallmarked in accordance with the legislation of those States, be stamped with an additional hallmark in the Member State of importation rendered imports more difficult and more costly. A national rule of this kind was, the Court held, a measure having equivalent effect to a quantitative restriction and was in principle prohibited under Article 30 of the Treaty. It required action by an importer, the payment of fees to the supervising authority and led to delays in the marketing of the products, thereby increasing the costs of the products.

18. None the less, in the absence of Community harmonisation and pursuant to the Cassis de Dijon case-law, such a rule can be justified. The obligation on an importer to ensure that a hallmark indicating the standard of fineness is struck on articles of precious metal in principle guarantees effective protection for consumers and promotes fair trading. Indeed, since the consumer is not in a position to determine by eye or by touch the exact degree of purity of an article made of precious metal, he may, in the absence of a hallmark, easily be misled when purchasing such an article.

19. A Member State cannot, however, require a fresh hallmark to be struck on products imported from another Member State in which they have been lawfully marketed and hallmarked in accordance with the legislation of that State where the information provided by that hallmark ... is equivalent to that prescribed by the Member State of importation and intelligible to consumers of that State. In that event the dictates of the free movement of goods take priority over the public-interest objective.

20. In Houtwipper, the Court also laid down the condition that not only must the hallmark in the Member State of origin be struck in accordance with the requirements of national legislation but the hallmarking must also be carried out by an assay office which ensures that the hallmark functions as a guarantee. That will be the case where the hallmark is struck by an independent body in the Member State of exportation.

21. The assessment of facts necessary to determine whether the information provided by the hallmarks is or is not equivalent was left in those two preliminary rulings to the determination of the respective national courts. The Court, in Houtwipper, also left it to the national court to examine whether the articles of precious metal imported from other Member States were hallmarked by independent bodies. The Court added that the guarantees need not be exactly the same as those required by the legislation of the Member State of importation.

V - Views of the parties and analysis of the application

A - The complaint relating to standards of fineness

(1) The view of the Commission

22. The Commission's first head of complaint is essentially that the Irish provisions on standards of fineness, together with the hallmarking requirement, constitute a prohibited measure having equivalent effect within the meaning of Article 30 of the Treaty, as construed in the judgment in Dassonville and in those in Robertson and Houtwipper.

23. Articles made of precious metal which have been lawfully manufactured and marketed in other Member States may, indeed, not be marketed in Ireland with the description and indication of the standards of fineness which they bear in their country of origin if those standards of fineness do not comply with Irish requirements. They cannot be imported and described as gold, silver or platinum articles unless the hallmarks are replaced with those corresponding to the appropriate lower official Irish standard. While it is true that the Irish legislation may, on the basis of Houtwipper, be motivated by considerations of consumer protection and fair trading, the Court has also stated that within the system of the common market such interests must be assured by mutual respect for the fair and traditional practices in the different Member States.

24. The Commission further contends on the basis of the Robertson and Houtwipper judgments that a hallmark lawfully stamped on articles of precious metal in the Member State of origin and indicating the nominal fineness in parts per thousand would provide the consumer with equivalent information, even though the levels of fineness differ from those laid down in the Irish legislation. Regarding the intelligibility of the information provided by the hallmark, the Commission considers that the means exist to inform the consumer fully of the meaning and significance of non-Irish standards of fineness. The Commission suggests the attachment of a suitable label to articles of precious metal, notices in display windows, and markings in catalogues, on order forms or on invoices supplied to buyers. The Commission stresses that these information requirements are additional to the necessary presence of a hallmark. It does not regard labelling as a substitute for hallmarking.

25. On the basis of this reasoning, the Commission concludes that articles of precious metal that are lawfully manufactured and marketed in the Community but with standards of fineness differing from the official Irish system should be marketable in Ireland bearing their original hallmarks. In this regard, the content of the foreign hallmarks may be brought to consumers' attention using the above methods.

26. Subsequent to its reasoned opinion, the Commission, on 12 October 1998, received from the Irish authorities a draft set of amending regulations concerning standards of fineness. Under that draft, the recognised standards of fineness for gold were to be extended through the addition of 990 and 999 parts per thousand to the existing standards. In the case of silver, the existing standards were to be added to by those of 800 and 999 parts per thousand. Standards for platinum were to be extended by the addition of the standards of 850, 900 and 999 parts per thousand. These proposals were designed to bring the official Irish standards into line with those contained in the April 1996 version of the draft directive.

27. The Commission is prepared to accept this amendment to the Irish legislation. The draft directive, as it stands at present, is based on recognition of the standards that are most frequent within the Community. The Commission accepts that a surfeit of standards could confuse consumers, even if additional information measures were to be adopted. A limitation on the number of recognised standards to those most commonly used and applied within the Community could be justified as a proportionate means of protecting consumers and ensuring the fairness of commercial transactions. However, the amendments to the existing legislation are not yet in force and for that reason Ireland remains in default with its present rules.

(2) Analysis

28. According to settled case-law, any measure enacted by a Member State that is capable of hindering, directly or indirectly, actually or potentially, intra-Community trade constitutes a restriction on such trade within the meaning of Article 30 of the Treaty. The prohibition of the marketing of articles of precious metal imported from elsewhere in the Community which do not satisfy the Irish requirements constitutes a classic example of a barrier to trade.

29. The Irish rules essentially distinguish three categories of articles made of precious metal imported from other Member States. The first group consists of articles of precious metal covered by the Vienna Convention and having a nominal standard of fineness that is in accordance with the official Irish standards under the 1983 and 1990 Standards of Fineness Regulations. Articles coming within this category can, without further requirement, be traded on the Irish market. The second group consists of articles from Member States which have ratified the Vienna Convention but whose official standards do not correspond to the standards prescribed in Ireland. These articles must be restamped in accordance with the appropriate lower Irish standard. The final category consists of articles of precious metal imported from Member States which have not ratified the Vienna Convention. Irrespective of whether or not these articles have been hallmarked in their country of origin, they must be checked and restamped in Ireland, where appropriate with the next lowest Irish standard being affixed to the mark.

30. This rule actually creates two types of barriers to trade.

31. First, articles of precious metal brought on to the market elsewhere in the Community - for instance with the standards of 333, 500, 800, 840, 990 and 999 parts per thousand for gold, 850, 900 and 999 parts per thousand for platinum, and 800 parts per thousand for silver, standards which are normal in commercial practice - cannot lawfully be imported into Ireland, even though stamped with original hallmarks. Articles of precious metal coming within the second and third categories which have been manufactured and marketed in another Member State in accordance with the legislation there in force, and which have been lawfully hallmarked in that Member State, must be stamped with a new hallmark when imported into Ireland. This operation results in extra costs for the importer, thereby rendering imports more difficult and more expensive.

32. Second, these articles with unofficial standards may be sold in Ireland only once the original hallmark has been removed and replaced by an official Irish hallmark indicating the nominal standard of fineness which is closest below the actual standard. This means, for instance, that an article of precious metal with an actual gold fineness of 800 parts per thousand will be hallmarked in Ireland with the nominal standard of 750. Because of this downward adjustment the higher value of the article will not be evident on the market. In Houtwipper, the Court - rightly - noted that fraud through small changes in the quantity of precious metal may have a very great impact on a manufacturer's profit margin. Conversely, a slight downward adjustment may also have an appreciable effect on the profit margin.

33. I now wish to address the Irish Government's invocation of the need to protect the public interest. There is no issue as to the competence of Ireland to make the sale of imported articles made of precious metal subject to the presence of a hallmark that provides Irish consumers with intelligible information on standards of fineness. The Commission does not dispute the fact that the purpose served by the Irish legislation is to protect consumers and to promote fair trading. The essence of the Commission's complaint is that the Irish legislation does not include a rule for recognition of hallmarks lawfully struck elsewhere in the Community, even though such hallmarks offer equivalent information to consumers.

34. That complaint is, in my view, well founded. Infringements of the free movement of goods cannot be justified if they go further than is necessary. The judgments in Robertson and Houtwipper made it clear that restamping of imported goods is unnecessary if the hallmark was lawfully struck in the Member State of origin under the supervision of an independent body and provides information that is equivalent to that contained on the hallmark of the Member State of importation. If those conditions are met, the hallmark will in principle provide a sufficient guarantee for the consumer. A hallmark that is struck in accordance with the legislation of the Member State of origin and refers to standards of fineness in parts per thousand will, under normal circumstances, be adequate to enable a reasonably well informed Irish consumer to assess its value. In his Opinion in Houtwipper, Advocate General Gulmann rightly pointed out that the indication of the standard of fineness in parts per thousand must be intelligible to consumers irrespective of whether that standard happens to be used in their own country. Indeed, the vast majority of Member States use the indication of parts per thousand, and that indication is also applied in Ireland itself. It may thus be assumed that Irish consumers are familiar with this system of indication.

35. Further, this position of principle does, in my opinion, take account of the economic requirements of the consumer who cannot determine the exact standard of fineness of articles made of precious metal by merely looking at or touching them. The hallmark serves to provide the consumer with a sufficiently accurate knowledge of the nature and quality of the product and to distinguish it from other products with which it might be confused. The Commission agrees that the Irish legislation limits the recognition of officially permitted standards to those which occur most frequently in the Community. In order to avoid any risks to the consumer which might continue to exist, the Irish legislature finally has the power to prescribe additional information requirements which are less restrictive of the free movement within the Community of articles made from precious metals.

36. The Irish Government's defence against this complaint is unconvincing. From the procedural point of view, it submits that the Commission must prove that the absence of an express mutual acceptance clause does in fact give rise to a restriction on intra-Community trade in articles made of precious metal. The Irish Government claims that the Commission has not even established that intra-Community trade may be adversely affected by the legislation in question. It further submits that the Commission has not adduced evidence that the hallmarks on articles of precious metal in certain Member States are in fact equivalent to the official Irish standards. Ireland also contends that the Act does not exclude recognition of the equivalence of hallmarks struck elsewhere.

37. I would point out in this regard that, in proceedings for failure to fulfil an obligation under Article 226 EC, it is for the Commission, in its capacity as applicant, to prove the allegation that the obligation has not been fulfilled and to place before the Court the information needed to enable it to determine whether that obligation has not been fulfilled. The Commission must therefore establish that the disputed measure comes under the prohibitory rule. In its application the Commission argued convincingly why the Irish rules may impede trade between Member States within the meaning of Article 30 of the Treaty. It may do so in abstracto, without indicating precisely the specific cases in which an infringement has occurred and even without a specific instance having actually occurred. It is then for the Member State to establish that the measure can be justified, and that a particular measure is necessary and proportionate to achieve the public-interest objective invoked. That is a fortiori so where the Commission, in its application, has put forward a sufficiently convincing argument, as in the present case, to support its contention that the disputed barrier to trade is unjustified.

38. The Commission submits that a hallmark with the nominal standard of fineness of a precious metal indicated in parts per thousand provides consumers with equivalent information. It contends that the Irish legislation does not feature any requirement that hallmarks of the precious-metal articles in question, imported from other Member States, should be recognised as equivalent. Ireland, it argues, must therefore demonstrate that the provisions governing precious metals are necessary and proportionate for attaining the public-interest objectives.

39. Ireland has, in my opinion, failed to adduce that evidence. Nowhere in its legislation does it appear that equivalent hallmarks on imported goods which do not meet the official Irish requirements will be recognised. The submission that goods with foreign hallmarks which do indeed comply with the standards of fineness recognised in Ireland can be imported without double hallmarking does not in any way whatever detract from the fact that for many articles this barrier, which is at any rate potential, does in fact exist. The pending Irish draft rules for amending the 1983 and 1990 Standards of Fineness Regulations, which provide for express recognition of standards of fineness stamped elsewhere, have still not been adopted.

40. Nor is it possible to accept the contention that the rules, as they applied at the time when the reasoned opinion was issued, did not prohibit the Irish authorities from recognising equivalence. It was argued that the competent Minister already had such a power under section 2 of the Act. During the hearing, however, counsel for the Irish Government was forced to concede that Ireland cannot recognise any hallmark on precious metal from a Member State with different standards of fineness without first of all amending the existing legislation. The power which the Minister may have to make mutual acceptance possible in individual cases by means of special regulations is insufficient to satisfy the obligations arising under Article 30 of the Treaty.

41. Equally little credence, in my opinion, can be attached to the other arguments put forward by the Irish Government in support of its contention that the Court should declare the Commission's first head of complaint to be unfounded.

42. The Irish Government finds the Commission's reference, in its application, to the judgments in Miro and Bonfait out of place on the ground that the principles to be derived from those judgments are inapplicable to the facts of the present case.

43. That contention is untenable. As the Commission has pointed out, the purpose of the reference to those judgments in its application was simply to stress that the Irish legislation must respect the principle of mutual acceptance. That fundamental principle also forms the basis of the Robertson and Houtwipper judgments and applies in principle to all legal measures affecting the free movement of goods between Member States within the meaning of Article 30 of the Treaty.

44. The Irish Government also expresses the view that what is regarded as fair and traditional practice in one Member State need not necessarily be so regarded in another. According to the Cassis de Dijon judgment, it argues, Member States may, if there is justification on grounds of public interest, prohibit the marketing of imported goods even if they comply with the fair and long-standing practices in another Member State.

45. The Commission does not, however, deny that the Irish legislation is designed to protect the public interest. That said, the Irish rules are too restrictive and consequently disproportionate vis-à-vis the intended objectives. The fact that the draft directive sets a limit to the number of standards and that the Commission has in the interim permitted a limitation on the number of standards to be recognised even with regard to Ireland does not alter the fact that the provisions still in force in Ireland are disproportionate.

46. Finally, the Irish Government has pointed to the effective consumer protection and fair trading which are guaranteed by the presence of the Irish hallmark. Irish consumers could, were it not for that hallmark, be misled as to the exact composition of the precious metal. By its nature, labelling could not, it claims, provide consumers with the same guarantee as indelible and inseparable hallmarks.

47. These arguments are based on a misconstruction of the Commission's action. The competence of Ireland to make it compulsory for imported articles of precious metals to bear a hallmark has never been in dispute. On the contrary, the Commission stresses the great importance which it attaches to the hallmark's significance as a source of information. Labelling cannot be regarded as being an alternative to a hallmark but rather as a possible supplement thereto. It is incorrect to claim that the obligation to provide information would be diluted through possible supplementary labelling inasmuch as the obligation to feature an indelible and inseparable hallmark is not affected.

48. The foregoing leads me to conclude that the Irish provisions governing standards of fineness of precious metals give rise to what are at any rate potentially serious obstacles to intra-Community trade. There are no sufficient grounds of justification inasmuch as the means employed are not proportionate to the public-interest objectives which they seek to attain.

B - The complaint relating to the sponsor's mark

(1) The view of the Commission

49. Section 9 of the Act requires that imported articles of precious metal must, in addition to the approved hallmark, also be struck with a mark indicating the responsible maker, worker or dealer (the sponsor's mark). The sponsor's mark must be registered with the Company. This rule makes the marketing in Ireland of articles of precious metal that have been lawfully manufactured and marketed in the Community dependent on the articles' bearing the mark of a dealer who is registered in Ireland. Both in the case where use is made, at the time of registration, of an importer who is already established in Ireland, and in the case where a maker, worker or dealer established in another Member State himself ensures the registration of his mark in Ireland, there is, so the Commission argues, a measure having equivalent effect to a restriction on trade under Article 30 of the Treaty.

50. According to the Commission, the Irish rules on sponsors' marks cannot be justified by mandatory requirements relating to consumer protection or fair trading. Such requirements, the Commission submits, may be taken into consideration only in relation to measures that are indistinctly applicable. Even if these issues of public interest were to be taken into consideration, it would still be necessary for Ireland to establish a direct relationship between the measure and the public-interest objective. Such a measure would also have to be proportionate, in the sense of there not being any possible alternatives which would be less restrictive of trade and which would permit the same objective to be attained.

51. The Irish authorities have submitted that the purpose of the sponsor's mark is to make it possible to trace the person responsible for the article of precious metal, whether that be the maker, worker or dealer. Identification of that person must be possible, since the system of control would otherwise be ineffective.

52. The Commission does not dispute the fact that it is desirable that the person responsible for marketing an article of precious metal should be identifiable. However, an obligation that his mark be registered in Ireland is not necessary for that purpose. If such imported articles feature the mark of the person responsible struck in accordance with the legislation of the Member State of origin, it will be possible to identify that person without any need to carry out additional formalities in Ireland. When the goods are imported into Ireland, the Irish authorities will at all times be able to demand proof that the responsible party is in fact registered in another Member State. In exceptional circumstances it should be possible to impose additional formalities in order to ensure that the control system remains effective. There is, however, according to the Commission, no justification for a systematic registration of a sponsor's mark as a precondition for the marketing of goods manufactured elsewhere in the Community.

53. The Irish Government has declared that it is prepared to amend the provision in section 9(1) of the Act so that articles of precious metal which feature a responsible party's mark struck in accordance with the legislation of another Member State may be imported into Ireland, on condition that that other Member State declares that the mark has in fact been registered there. The Commission, however, has not yet received any information to suggest that the Irish rules have in fact been amended in a manner which it would regard as satisfactory.

(2) Analysis

54. The Commission has convincingly demonstrated that the rule on sponsors' marks is a measure having equivalent effect to a quantitative restriction within the meaning of Article 30 of the Treaty. Section 9 of the Act has in any event the effect that imported articles of precious metal are systematically subject to prior national registration with the Company. According to consistent case-law, compulsory registration of a product or the trader responsible as a precondition for marketing products in the Member State of importation may by its very nature constitute a barrier to trade.

55. In Robertson, the Court recognised that the obligation on the part of the manufacturer or importer to stamp articles of precious metal with a hallmark indicating the manufacturer of the particular article is in principle capable of affording effective protection to consumers and of promoting fair trading. The mark makes it possible for the purchaser of the article to identify the manufacturer. As in the case of the indication on the hallmark of the standard of fineness of precious metals, there is here no longer any need for protection where the mark lawfully struck in the Member State of origin provides intelligible information on the identity of the responsible party that is equivalent to that provided by the hallmark prescribed in the Member State of importation. The Commission is correct in pointing out that the Irish rules make it completely impossible, in the event of equivalent information, to avoid double registration in the Member State of origin and in that of importation. This absolute impossibility constitutes an infringement of the principle of proportionality, thereby rendering the rule incompatible with Article 30 of the Treaty.

56. Ireland's defence has failed to persuade me of the need to impose such a stringent precondition on manufacturers of and traders in imported articles made of precious metal.

57. The Irish Government points out that the obligation to have a sponsor's mark registered with the Company does not apply to all imported articles made of precious metal. If such articles bear an international hallmark and conform to the Irish standards of fineness, a sponsor's mark is not required under section 4(2) of the Act and the Vienna Convention. Nor is there any obligation on the sponsor to be an Irish national, to reside in Ireland, to nominate a representative in Ireland or to maintain a branch office there. The class of persons who can register a mark is, it argues, practically unlimited. Nor need the sponsor's mark be struck in Ireland. In most cases, it is struck on the articles by the makers, workers or dealers themselves prior to being presented for assay to the Assay Master. Further, no extra costs are involved where the Assay Master strikes the sponsor's mark while affixing the hallmark.

58. Although these arguments may to some extent reduce the restrictive effects which the measure may have on trade, they do not remove the fundamental objection. An importer or manufacturer of articles of precious metal which have been lawfully stamped with a hallmark elsewhere in the Community may be faced in Ireland with the obligation to have a similar mark struck there for a second time or to register it, even though the identify of the person responsible for the article may easily be established by means of the mark struck in the Member State of origin.

59. Only if the exception in section 4(2) of the Act is satisfied will it be possible to avoid compulsory registration. I would note in this connection that this exception has, by virtue of the cumulative preconditions, a limited scope. The article concerned must originate in a Member State that is a Party to the Vienna Convention and, in particular, the precious metal which it contains must have a standard of fineness that is recognised in Ireland. Otherwise, the Irish legislation does not even offer traders the opportunity of demonstrating that the marks already on the goods to be marketed by them in Ireland satisfy the guarantees of identity.

60. The Irish Government is also unable to agree with the Commission's view that the Irish rules discriminate against imported goods. It submits that, with the exception of the rule on international hallmarks, the same requirement applies irrespective of the origin of the article of precious metal. The fact that articles imported from other Member States already have a manufacturer's mark is, according to the Irish Government, irrelevant, a fortiori because the obligation applies only to articles of precious metal which do not offer guarantees equivalent to those of the Irish mark. The Commission, it contends, has failed to prove that all articles of precious metal imported from other Member States provide an equivalent guarantee to that under the provisions which apply in Ireland, particularly with regard to the sponsor's mark.

61. It is, however, clear that the Irish rules place articles of precious metal which have already been stamped with a manufacturer's mark in accordance with the legislation of the Member State of origin, and which do not come under the derogating arrangements, at a disadvantage in comparison with articles of precious metal that have been manufactured and marketed in Ireland. Imported goods may still be subject to a second obligation to be stamped with a sponsor's mark. I have already noted in regard to the burden of proof resting on the Commission that the latter does not, within the context of proceedings for failure to fulfil obligations, have to demonstrate that the legislation of other Member States offers equivalent guarantees. It is sufficient if it establishes clearly to the Court that no provision has been made in Irish legislation for recognition of the marks of responsible parties which offer equivalent guarantees.

62. The Commission has, furthermore, indicated that the Irish legislature does indeed recognise the equivalence of articles of precious metal which satisfy the provisions of Article 5 of the Vienna Convention. That provision lays down a mechanism whereby the authorised assay offices of countries that are parties to the Vienna Convention may provide one another with information. However, official registers of sponsors' marks also exist in those Member States which have not ratified the Vienna Convention. If the Irish legislature considers that consumer protection and fair trading are adequately guaranteed by the system of the Vienna Convention, there is, as the Commission correctly points out, no need whatever to deny equivalence when articles of precious metal offering a similar guarantee are imported from Member States which are not parties to that Convention. That guarantee, the parties seem to agree, must at least relate to the name of the sponsor, an abbreviation of that name or a symbol, and the requirement that the name in question be registered so that it is possible, on consulting the register, to establish the identity of the party responsible for marketing the article. Those minimum guarantees are also imposed in the Vienna Convention.

63. The Irish Government submits further that the Commission is prepared to accept that in extreme cases, particularly where there is a threat of confusion, additional formalities may be imposed in order to ensure that the control system remains effective. This acceptance, so its argument runs, implies that the Commission regards an a priori system of control as being compatible with the Treaty provisions on the free movement of goods.

64. That position is, however, untenable. The possibility of adopting ancillary measures in extreme cases does not mean that a specific a priori control is justified. Indeed, the Irish legislation makes no provision for a mechanism under which the equivalence of the guarantee of identity can be recognised in individual cases.

65. The Irish Government has also argued in this connection that a system such as that suggested by the Commission would be no less disruptive of the free movement of goods than is the current Irish system of sponsors' marks. The Commission disputes that assertion on the ground that it should be possible to establish a network for the exchange of information between Member States enabling rapid verification to be made as to whether a mark has been registered and who the person responsible is. The competent authorities in the Member States should, for instance, be in a position to exchange copies of official registers.

66. It is, indeed, not at all clear why such a system cannot be set up. In his Opinion in Houtwipper, Advocate General Gulmann correctly pointed out that Member States have a positive duty to strive conscientiously to achieve mutual recognition of reliable hallmarks. The fundamental principles of the Treaty relating to the free movement of goods, in conjunction with the principle of bona fide compliance with Treaty obligations under Article 5 of the EC Treaty (now Article 10 EC), impose a duty to act diligently not only on the Member State of importation. In my opinion, this duty also applies to the authorities of the Member State of exportation, which are obliged to provide an adequate response to any request for information made by the independent administrative authorities of the Member State of importation.

67. I accordingly conclude on this point that, in view of the fact that the Irish legislation makes no provision for recognition of guarantees regarding imported articles of precious metal that have been provided in the Member State of origin, Ireland has failed to meet its obligations under Article 30 of the Treaty.

C - The complaint concerning the obligation to bear an approved hallmark

(1) The view of the Commission

68. Articles of precious metal that are marketed in Ireland must bear an approved hallmark. Under sections 2 and 4(1) of the Act, an approved hallmark is to be understood as being either a hallmark struck by the Assay Master in accordance with Irish legislation or an international hallmark, or both. Imported articles of precious metal that have been lawfully manufactured and marketed in the Community and do not bear an international hallmark are therefore subject to the requirement that they be struck by the Assay Master with an approved hallmark, in accordance with the Irish provisions.

69. The Commission accepts that this mandatory approval is in the interests of consumers and fair trading. However, it also takes the view that, pursuant to the judgment in Houtwipper and on the basis of Article 30 of the Treaty, there can be no grounds for prohibiting the marketing of articles of precious metal which have already been stamped with a reliable hallmark by an independent body in the country of origin. An independent assay office which stamps assay marks in accordance with the legislation of the country of origin must be regarded as providing the same guarantees of independence. Although Ireland is free to maintain a system of a priori State control in regard to national production, its legislation ought to provide for separate rules in respect of articles lawfully imported from other Member States in which the responsible authorities offer adequate guarantees.

70. During the pre-litigation procedure, Ireland stated that it was prepared to amend its legislation so as to provide a clause for reciprocal recognition of hallmarks struck in other Member States by independent bodies and offering equivalent guarantees. However, the amendments to which the Irish Government referred have not as yet been adopted, let alone entered into force, and the Commission has for that reason maintained its head of complaint.

(2) Analysis

71. It is first of all necessary to dwell on the scope of this section of the application. The Commission has expressly stated during the proceedings that its action does not extend to the question of whether hallmarking by a manufacturer offers equivalent guarantees to hallmarking by an independent body. That issue was addressed in a separate infringement procedure which was instituted by the Commission against Ireland and has in the meantime been concluded. The intervention by the United Kingdom Government in the present case does not therefore serve any purpose.

72. This complaint relates to the reciprocal recognition of controls within the Community. In view of the foregoing, my assessment of this matter may be brief.

73. The prohibition in Article 30 of the Treaty unquestionably applies in a situation where an article made of precious metal has been stamped with a hallmark in one Member State, and is then subjected once more to a control in the Member State of importation. Double controls, in the country of exportation and in that of importation, are, on the basis of that provision, unjustified if the results of the controls carried out in the Member State of origin satisfy the norms of the Member State of importation. As has already been stated in point 20 above, the Court expressly ruled in Houtwipper that a hallmark fulfils its guarantee function if it has been struck by an independent body in the Member State of exportation.

74. There is consequently no justification for arguing that the guarantee function of a hallmark can be ensured only if the mark is struck by the competent authorities of the Member State of importation. The Irish rules require that in all cases articles of precious metal bear a mark struck by the Assay Master pursuant to Irish legislative provisions unless the imported articles of precious metal are stamped with an international hallmark. In other words, the Irish legislation refuses to recognise legal acts of an administrative nature carried out elsewhere in the Community. That legislation is consequently stricter than allowed by the judgment in Houtwipper and runs counter to the requirements of proportionality. The Commission's plea in law must therefore be declared to be well founded.

D - The complaint alleging discriminatory provisions

(1) The view of the Commission

75. In conclusion, the Commission charges Ireland with infringing Article 30 of the Treaty by maintaining differences between hallmarks struck on articles manufactured in Ireland and hallmarks of the same type struck on articles imported from other Member States. Section 3(2) of the Act, it argues, provides the legal foundation for this discriminatory treatment. On the basis of that provision separate rules for national and imported articles are laid down in Regulation 4 of the 1983 Approved Hallmarks Regulations (differing hallmarks for platinum), in Regulation 5 of the 1983 Approved Hallmarks Regulations (differing Assay Office marks), and in Regulation 4 of the 1990 Approved Hallmarks Regulations (differing hallmarks for gold of 10 carats). The Commission submits that these rules amount indirectly to an obligatory origin marking requirement by which consumers can distinguish national from imported products. The importation of goods originating in other Member States is thereby rendered difficult and, by reason of their discriminatory nature, these rules cannot be justified by mandatory requirements of consumer protection or fair trading.

(2) Analysis

76. The Commission's charge has not been substantively challenged. Ireland has intimated its intention to bring an end to the differences and states that draft legislation for that purpose is in the process of being adopted. Member States are indeed not entitled to impose mandatory requirements for hallmarks which result in identifiable differences between national products and imported products. Such measures by the authorities which are purely protectionist in nature have therefore no place in an internal market.

VI - Conclusion

77. On the basis of the foregoing, I propose that the Court should:

(a) declare that:

- by prohibiting the marketing in Ireland, with the description and indication of fineness which they bear in their country of origin, of articles made from precious metals (gold, silver or platinum) lawfully manufactured and marketed in other Member States but not complying with the Irish provisions concerning standards of fineness, or by obliging importers of such articles to replace their hallmarks with those for the next lowest official Irish standard of fineness;

- by requiring articles made from precious metals (gold, silver or platinum) imported from another Member State, and marketed in Ireland, to bear a sponsor's mark indicative of the maker, worker or dealer responsible for such articles, registered by the body which appoints the Assay Master by which those articles are intended to be struck with the approved hallmark, when those articles already bear the mark of the responsible party in accordance with the legislation of the Member State of origin;

- by requiring articles made from precious metals (gold, silver or platinum) imported from another Member State, and marketed in Ireland, which have been lawfully struck in another Member State with a hallmark stamped by a body which offers guarantees of independence, and which offers appropriate information to consumers, to bear an approved hallmark struck by the Assay Master appointed by the Wardens and Commonalty of Goldsmiths of the City of Dublin;

- by establishing differences between hallmarks for articles manufactured in Ireland and those for articles of the same type imported from other Member States,

Ireland has failed to fulfil its obligations under Article 30 of the EC Treaty;

(b) order Ireland to pay the costs pursuant to Article 69(2) of the Rules of Procedure.