Judgment of the Court of 3 February 1982. - Kommanditgesellschaft in Firma Gebrüder Glunz v Hauptzollamt Hamburg-Waltershof. - Reference for a preliminary ruling: Finanzgericht Hamburg - Germany. - Common customs tariff - Specific duty. - Case 248/80.



European Court reports 1982 Page 00197



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

COMMON CUSTOMS TARIFF - CUSTOMS DUTIES - SPECIFIC DUTIES EXPRESSED IN UNITS OF ACCOUNT - CONVERSION INTO THE CURRENCY OF THE IMPORTING MEMBER STATE - APPLICATION OF THE RATE OF EXCHANGE CORRESPONDING TO THE PARITY NOTIFIED TO THE INTERNATIONAL MONETARY FUND - GENERAL RULE C.3 - VALIDITY - REDUCTION OF CUSTOMS DUTIES TO THE AMOUNT PAYABLE IN THE CASE OF IMPORTATION INTO THE MEMBER STATE HAVING THE WEAKEST CURRENCY - NOT PERMISSIBLE

( REGULATION NO 950/68 OF THE COUNCIL , AS AMENDED BY COUNCIL REGULATION NO 2500/77 , GENERAL RULE C.3 )

Summary

CONSIDERATION OF GENERAL RULE C.3 IN PART I , SECTION I , OF THE ANNEX TO COUNCIL REGULATION NO 2500/77 HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT ITS VALIDITY . THE RULE MUST BE APPLIED IN SUCH A WAY THAT IN THE CASE OF AN IMPORTATION INTO A MEMBER STATE HAVING A STRONG CURRENCY CUSTOMS DUTIES EXPRESSED IN UNITS OF ACCOUNT MUST BE CONVERTED , IN CONFORMITY WITH THE RULE , INTO THE NATIONAL CURRENCY OF THE MEMBER STATE WHERE THE IMPORTATION TOOK PLACE AND MUST NOT BE LIMITED TO THE AMOUNT WHICH WOULD HAVE BEEN CHARGED IN THE CASE OF IMPORTATION INTO THE MEMBER STATE HAVING THE WEAKEST CURRENCY .

Parties

IN CASE 248/80

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT ( FINANCE COURT ) HAMBURG FOR A PRELIMINARY RULING IN THE CASE PENDING BEFORE THAT COURT BETWEEN

KOMMANDITGESELLSCHAFT IN FIRMA GEBRUDER GLUNZ ( GLUNZ BROTHERS , LIMITED PARTNERSHIP ), HAMBURG ,

AND

HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) HAMBURG-WALTERSHOF

Subject of the case

UPON THE VALIDITY OF GENERAL RULE C.3 FOR THE INTERPRETATION OF THE COMMON CUSTOMS TARIFF AS SET OUT IN COUNCIL REGULATION NO 2500/77 OF 7 NOVEMBER 1977 AMENDING REGULATION NO 950/68 ON THE COMMON CUSTOMS TARIFF ( OFFICIAL JOURNAL 1977 , L 289 , P . 1 ),

Grounds

1 BY AN ORDER DATED 15 OCTOBER 1980 , WHICH WAS RECEIVED AT THE COURT ON 6 NOVEMBER 1980 , THE FINANZGERICHT ( FINANCE COURT ) HAMBURG REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION CONCERNING THE INTERPRETATION , THE VALIDITY AND , IF VALID , THE SCOPE OF GENERAL RULE C.3 IN PART I , SECTION I , OF REGULATION ( EEC ) NO 950/68 OF THE COUNCIL OF 28 JUNE 1968 ON THE COMMON CUSTOMS TARIFF ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 275 ), AS AMENDED BY COUNCIL REGULATION ( EEC ) NO 2500/77 OF 7 NOVEMBER 1977 ( OFFICIAL JOURNAL 1977 L 289 , P . 1 ).

2 THAT QUESTION AROSE IN THE COURSE OF PROCEEDINGS BETWEEN GEBRUDER GLUNZ , THE PLAINTIFF IN THE MAIN PROCEEDINGS , AND THE GERMAN CUSTOMS AUTHORITY CONCERNING THE CUSTOMS CLASSIFICATION AND THE AMOUNT OF CUSTOMS DUTY TO BE CHARGED ON THE IMPORTATION IN AUGUST 1978 OF A CONSIGNMENT OF SMALL CERAMIC FIGURES THE FOREARMS OF WHICH HAD THE SHAPE OF A CANDLESTICK . THE PLAINTIFF IN THE MAIN PROCEEDINGS DECLARED THOSE FIGURES AS COMING UNDER TARIFF HEADING 97.05 OF THE COMMON CUSTOMS TARIFF WHICH INCLUDES ' ' CHRISTMAS TREE DECORATIONS AND SIMILAR ARTICLES FOR CHRISTMAS FESTIVITIES ' ' AND ATTRACTS AN AD VALOREM DUTY OF 10% .

3 ALTHOUGH THE COMPETENT AUTHORITIES ACCEPTED THAT CLASSIFICATION INITIALLY , THEY LATER REVIEWED THE POSITION AND DECIDED THAT THE GOODS CAME UNDER TARIFF SUBHEADING 69.13 B COMPRISING ' ' PORCELAIN STATUETTES ' ' . GOODS FALLING WITHIN THAT SUBHEADING ATTRACT AN AD VALOREM DUTY OF 11% BUT A SPECIFIC MINIMUM DUTY APPLIES , EQUIVALENT AT THE TIME TO 70 UNITS OF ACCOUNT PER 100 KG GROSS . THE CUSTOMS AUTHORITY APPLIED THAT SPECIFIC DUTY AND CALCULATED THE AMOUNT IN GERMAN MARKS IN ACCORDANCE WITH THE AFORESAID GENERAL RULE C.3 , WHICH INCREASED THE CUSTOMS DUTY TO DM 72 045.49 .

4 THAT PROVISION , IN ITS 1968 VERSION , PROVIDES :

' ' THE UNIT OF ACCOUNT ( U.A .) BY REFERENCE TO WHICH CERTAIN SPECIFIC CUSTOMS DUTIES ARE EXPRESSED OR THE SCOPE OF CERTAIN HEADINGS OR SUBHEADINGS IS DEFINED HAS A VALUE OF 0.88867088 GRAMS OF FINE GOLD . THE EXCHANGE RATE TO BE USED IN CONVERTING THE UNIT OF ACCOUNT INTO BELGIAN FRANCS , DUTCH GUILDERS , FRENCH FRANCS , GERMAN MARKS , ITALIAN LIRE OR LUXEMBOURG FRANCS SHALL BE THAT CORRESPONDING TO THE PAR VALUE COMMUNICATED TO AND RECOGNIZED BY THE INTERNATIONAL MONETARY FUND IN RESPECT OF THESE CURRENCIES . ' '

5 THE PLAINTIFF IN THE MAIN PROCEEDINGS DISPUTED THAT CHARGE AND BROUGHT PROCEEDINGS BEFORE THE FINANZGERICHT HAMBURG . IN ITS MAIN HEAD OF CLAIM IT CONTESTED THE CUSTOMS CLASSIFICATION WHICH HAD BEEN DECIDED UPON . IN THE ALTERNATIVE , IT CLAIMED THAT , IF IT WAS CORRECT TO APPLY TO IT THE SPECIFIC DUTY PRESCRIBED IN SUBHEADING 69.13 B , THE SUM EXPRESSED IN UNITS OF ACCOUNT COULD NOT BE CONVERTED PURSUANT TO GENERAL RULE C.3 SET OUT ABOVE BUT THAT THE DUTY OUGHT TO BE CALCULATED IN SUCH A WAY THAT , REGARD BEING HAD TO THE PAR VALUES OF THE CURRENCIES OF THE VARIOUS MEMBER STATES , THE AMOUNT PAYABLE BY IT IN GERMANY WOULD NOT EXCEED THE AMOUNT WHICH IT WOULD HAVE HAD TO PAY IF IT HAD LANDED THE GOODS AND ENTERED THEM FOR CUSTOMS CLEARANCE IN A PORT OF A MEMBER STATE HAVING A WEAK CURRENCY . IT TAKES THE VIEW THAT GENERAL RULE C.3 SHOULD BE INTERPRETED IN THAT WAY BECAUSE OTHERWISE ITS APPLICATION WOULD ENTAIL DIFFERING RATES OF DUTY DEPENDING UPON THE COUNTRY OF IMPORTATION AND THE RULE WOULD THEREFORE BE DISCRIMINATORY AND INCOMPATIBLE WITH THE PRINCIPLE OF EQUALITY . THE METHOD OF CALCULATION ADVOCATED BY THE PLAINTIFF IN THE MAIN PROCEEDINGS WOULD REDUCE THE AMOUNT PAYABLE FROM DM 72 045.49 TO DM 29 432.30 .

6 IN THE ORDER MAKING THE REFERENCE THE NATIONAL COURT STATED THAT IT HAD COME TO THE CONCLUSION THAT THE RELEVANT TARIFF HEADING WAS INDEED 69.13 B ( PORCELAIN STATUETTES ) AND THAT THE SPECIFIC DUTY WAS APPLICABLE .

7 THE NATIONAL COURT CONSIDERED , HOWEVER , THAT THE ISSUE RELATING TO THE CALCULATION OF THE AMOUNT OF DUTY BY CONVERSION OF THE UNITS OF ACCOUNT INTO NATIONAL CURRENCY RAISED A PROBLEM RELATING TO THE INTERPRETATION AND VALIDITY OF THE CONTESTED PROVISION AND THEREFORE REQUESTED THE COURT TO GIVE A PRELIMINARY RULING ON A QUESTION WORDED AS FOLLOWS :

' ' IS GENERAL RULE C.3 IN PART I , SECTION I , OF THE ANNEX TO COUNCIL REGULATION ( EEC ) NO 2500/77 OF 7 NOVEMBER 1977 IN ITS APPLICATION TO TARIFF HEADING 69.13 B OF THE COMMON CUSTOMS TARIFF INVALID IN SO FAR AS , IN THE CASE OF THE INPORTATION OF GOODS INTO A MEMBER STATE WITH A STRONG CURRENCY , IT WOULD LEAD TO A HIGHER INCIDENCE OF CUSTOMS DUTY THAN IN THE CASE OF IMPORTATION INTO THE MEMBER STATE WHOSE CURRENCY HAS MOST DEPRECIATED IN RELATION TO THE PARITY NOTIFIED TO THE INTERNATIONAL MONETARY FUND , OR IS THE SAID RULE TO BE INTERPRETED IN SUCH A WAY THAT CUSTOMS DUTY IS TO BE CHARGED ONLY ON THE LEVEL AT WHICH IT WOULD HAVE BEEN CHARGED IN THE CASE OF IMPORTATION INTO THE MEMBER STATE WITH THE WEAKEST CURRENCY?

' '

8 IN THE GROUNDS UPON WHICH THE ORDER WAS BASED THE FINANZGERICHT STATED THAT THE APPLICATION OF GENERAL RULE C.3 TO THE IMPORTED GOODS IN QUESTION RESULTED IN THE FEDERAL REPUBLIC OF GERMANY IN A CHARGE TO CUSTOMS DUTY OF DM 72 045.49 , WHILST IF THE SAME GOODS WERE IMPORTED INTO ITALY THE INCIDENCE OF CUSTOMS DUTY WOULD BE THE EQUIVALENT IN LIRE TO DM 29 432.30 . IT CONSIDERED THAT SUCH A DIFFERENCE IN THE INCIDENCE OF CUSTOMS DUTY ACCORDING TO THE MEMBER STATE IN WHICH THE IMPORTATION TOOK PLACE WAS INCOMPATIBLE WITH THE FUNDAMENTAL CONCEPTION OF THE CUSTOMS UNION . THE DIFFERING INCIDENCE OF CUSTOMS DUTY CONSTITUTES DISCRIMINATION IN BREACH OF THE GENERAL PRINCIPLE OF EQUALITY . THE PRINCIPLE OF EQUALITY REQUIRES THAT THE SYSTEM OF DUTIES WHICH ARE CONTRIBUTED TO THE COMMUNITY BUDGET MUST BE SO ARRANGED AS TO CONSTITUTE A UNIFORM , THAT IS TO SAY AN EQUAL , BURDEN ON ALL PERSONS WHO FALL WITHIN THE CONDITIONS SPECIFIED IN THE COMMUNITY PROVISIONS FOR THE CHARGING OF SUCH DUTIES . THE FINANZGERICHT RAISED THE QUESTION WHETHER THE DIFFICULTIES ENCOUNTERED IN IMPLEMENTING A NEW COMMUNITY SYSTEM FOR CONVERTING SPECIFIC DUTIES INTO NATIONAL CURRENCIES , WHICH WAS NOT CARRIED OUT UNTIL NOVEMBER 1978 , COULD PROVIDE ANY JUSTIFICATION FOR THE FAILURE IN THE MEANTIME TO MAKE THE NECESSARY ADJUSTMENTS TO THE EXCHANGE RATES , IN PARTICULAR AS REGARDS SPECIFIC DUTIES .

9 IN ORDER TO REPLY TO THE QUESTION RAISED IT IS FIRST NECESSARY TO RECALL THAT THE COMMON CUSTOMS TARIFF WAS INITIALLY ADOPTED BY REGULATION NO 950/68 OF THE COUNCIL OF 28 JUNE 1968 . THE PREAMBLE TO THAT REGULATION STATED THAT , PURSUANT TO THE COUNCIL DECISION OF 26 JULY 1966 ( JOURNAL OFFICIEL 1966 , 165 , P . 2971 ), THE MEMBER STATES WERE TO APPLY THE COMMON CUSTOMS TARIFF FROM 1 JULY 1968 TO IMPORTS FROM NON-MEMBER COUNTRIES OF GOODS OTHER THAN THOSE SPECIFIED IN ANNEX II TO THE TREATY .

10 THE COMMON CUSTOMS TARIFF INCLUDES AD VALOREM DUTIES AND SPECIFIC OR MINIMUM CUSTOMS DUTIES CHARGEABLE UNDER CERTAIN HEADINGS OR SUBHEADING . AS REGARDS AD VALOREM CUSTOMS DUTIES , REGULATION ( EEC ) NO 803/68 OF THE COUNCIL OF 27 JUNE 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 170 ) ESTABLISHED RULES FOR THE VALUATION OF GOODS FOR CUSTOMS PURPOSES IN ORDER TO ENSURE THAT THE VALUE FOR CUSTOMS PURPOSES IS DETERMINED IN A UNIFORM MANNER IN MEMBER STATES SO THAT THE LEVEL OF PROTECTION GIVEN BY THE COMMON CUSTOMS TARIFF IS THE SAME THROUGHOUT THE COMMUNITY AND ANY DEFLECTION OF TRADE AND ACTIVITIES AND ANY DISTORTION OF COMPETITION WHICH MIGHT ARISE FROM DIFFERENCES BETWEEN NATIONAL PROVISIONS IS THEREBY PREVENTED , AND THAT EQUAL TREATMENT OF IMPORTERS AS REGARDS THE COLLECTION OF COMMON CUSTOMS TARIFF DUTIES IS ENSURED . SPECIFIC DUTIES ARE EXPRESSED IN UNITS OF ACCOUNT . GENERAL RULE C.3 STATES THAT THE EXCHANGE RATES TO BE USED IN CONVERTING THE UNIT OF ACCOUNT INTO NATIONAL CURRENCIES SHALL BE THOSE CORRESPONDING TO THE PAR VALUE COMMUNICATED TO THE INTERNATIONAL MONETARY FUND IN RESPECT OF THESE CURRENCIES . REGULATION NO 950/68 WAS ADOPTED IN THE CONTEXT OF THE SYSTEM OF FIXED PARITIES IN FORCE AT THAT TIME , SO THAT GENERAL RULE C.3 WAS INTENDED TO ENSURE THE UNIFORM APPLICATION OF SPECIFIC CUSTOMS DUTIES IN ALL MEMBER STATES AND FOR SEVERAL YEARS IT DID INDEED HAVE SUCH AN EFFECT . OVER THE YEARS THAT REGULATION HAS HAD TO BE SUPPLEMENTED AND ADAPTED BY A SERIES OF SUBSEQUENT REGULATIONS BUT GENERAL RULE C.3 HAS NOT BEEN ALTERED .

11 HOWEVER , FROM 1971 THE SYSTEM OF FIXED PARITIES BASED ON REFERENCE TO GOLD CEASED TO BE WHOLLY WORKABLE . SUBSEQUENT MONETARY DEVELOPMENTS LED TO APPRECIABLE ALTERATIONS IN THE ACTUAL EXCHANGE RATES COMPARED TO THE OFFICIAL PARITIES IN RELATIONS BETWEEN THE MEMBER STATES . AS A RESULT , THE UNIT OF ACCOUNT USED IN THE COMMON CUSTOMS TARIFF BEGAN TO RELATE LESS AND LESS TO ECONOMIC REALITY . IT WAS , HOWEVER , NOT UNTIL 1974 THAT MONETARY DEVELOPMENTS PRODUCED APPRECIABLE AND CLEARLY DISCERNIBLE INEQUALITIES IN THE APPLICATION OF CUSTOMS REGULATIONS .

12 IN DECEMBER 1971 CENTRAL RATES TOGETHER WITH NEW POINTS OF REFERENCE WERE FIXED IN WASHINGTON BY THE SMITHSONIAN AGREEMENT . BUT AS A RESULT OF THE RISE IN OIL PRICES IN 1973 THE SYSTEM COLLAPSED . UNDER THE AEGIS OF THE INTERNATIONAL MONETARY FUND EFFORTS TO REFORM THE MONETARY SYSTEM WERE VERY SOON UNDERTAKEN . HOWEVER , IT WAS NOT UNTIL 1 APRIL 1978 THAT THEY WERE COMPLETED . IT WAS ONLY AT THAT TIME THAT THE AMENDMENT TO THE ARTICLES OF THE INTERNATIONAL MONETARY FUND ENTERED INTO FORCE AND IT WAS ONLY IN THAT WAY THAT THE INTERNATIONAL MONETARY SYSTEM FOUND A NEW POINT OF REFERENCE , NAMELY THE NEW SPECIAL DRAWING RIGHTS .

13 FROM 1975 THE COMMISSION AND THE COUNCIL PREPARED THE WAY FOR THE PROGRESSIVE INTRODUCTION OF A NEW UNIT OF ACCOUNT BASED ON A ' ' BASKET ' ' OF CURRENCIES . IN OCTOBER 1976 THE COMMISSION SUBMITTED TO THE COUNCIL A PROPOSAL FOR A REGULATION ON THE EUROPEAN UNIT OF ACCOUNT ( EUA ). THAT PROPOSAL , WHICH WAS BASED MAINLY ON ARTICLES 209 AND 235 OF THE TREATY , WAS SENT TO THE PARLIAMENT AND THE COURT OF AUDITORS FOR CONSULTATION . IT WAS NOT UNTIL NOVEMBER 1978 THAT THE COUNCIL ADOPTED REGULATION ( EEC ) NO 2800/78 ( OFFICIAL JOURNAL 1978 L 335 , P . 1 ) WHICH INTRODUCED A NEW SYSTEM OF CONVERSION FOR CALCULATING SPECIFIC CUSTOMS DUTIES .

14 BETWEEN 1968 AND 1978 THE COUNCIL ANNUALLY ADOPTED A COMMON CUSTOMS TARIFF WITH CERTAIN AMENDMENTS , OF WHICH THE ONLY ONE AFFECTING GENERAL RULE C.3 CONCERNED THE ADDITION AT THE END OF 1972 OF A REFERENCE TO THE NATIONAL CURRENCIES OF THE NEW MEMBER STATES AT THE TIME OF THE ACCESSION OF DENMARK , IRELAND AND THE UNITED KINGDOM AS FROM 1 JANUARY 1973 .

15 THE QUESTION RAISED DIVIDES INTO TWO PARTS : THE FIRST PART RELATES TO THE VALIDITY OF GENERAL RULE C.3 , THE OTHER TO ITS INTERPRETATION . IT IS NECESSARY TO DEAL WITH THE SECOND PART FIRST SINCE THE VALIDITY OF THE PROVISION IS ONLY CHALLENGED IF THE INTERPRETATION ADVOCATED IS REJECTED .

THE INTERPRETATION OF GENERAL RULE C.3

16 THE COURT IS ASKED WHETHER THE PROVISION IN QUESTION MAY BE INTERPRETED , IN THE LIGHT OF THE CIRCUMSTANCES SET FORTH ABOVE , IN SUCH A WAY THAT , IN ORDER TO DETERMINE THE LEVEL OF THE SPECIFIC DUTIES THROUGHOUT THE COMMUNITY , ACCOUNT SHOULD BE TAKEN ONLY OF THE RELATIONSHIP WHICH GENERAL RULE C.3 HAS MAINTAINED AS REGARDS THE WEAKEST CURRENCY , AT THE TIME THE ITALIAN LIRA , WHILST IN THE OTHER MEMBER STATES SPECIFIC DUTIES SHOULD BE CALCULATED BY CONVERTING AT THE REAL EXCHANGE RATE THE AMOUNT THUS DETERMINED FROM ITALIAN LIRE INTO THE RELEVANT NATIONAL CURRENCY .

17 WHILST IT IS OF FUNDAMENTAL IMPORTANCE FOR THE FREE MOVEMENT OF GOODS AND THE ESTABLISHMENT OF THE CUSTOMS UNION THAT A COMMON CUSTOMS TARIFF BE ADOPTED LAYING DOWN UNIFORM RATES OF DUTY ON THE ENTRY OF GOODS INTO THE COMMUNITY IRRESPECTIVE OF THE GEOGRAPHICAL LOCATION OF THEIR POINT OF ENTRY , THE INTERPRETATION ADVOCATED CANNOT BE ACCEPTED .

18 IT IS APPARENT FROM THE VERY WORDING OF GENERAL RULE C.3 , WHICH CONTAINS EXPRESS REFERENCES TO SIX ( LATER NINE ) SPECIFIC CURRENCIES , THAT THE RULE CANNOT BE INTERPRETED IN SUCH A WAY THAT ALL THOSE CURRENCIES MAY NONE THE LESS BE DISCARDED WITH THE EXCEPTION OF THAT CURRENCY WHICH AT ANY GIVEN MOMENT RESULTS IN THE SMALLEST AMOUNT OF DUTY .

19 MOREOVER , SUCH AN INTERPRETATION DOES STILL LESS JUSTICE TO THE FISCAL AND ECONOMIC OBJECTIVES OF THE COMMON CUSTOMS TARIFF THAN THE INTERPRETATION RESULTING FROM A LITERAL READING OF GENERAL RULE C.3 . THE INTERPRETATION WHICH IS ADVOCATED , FIXING THE DUTIES AT THE LOWEST LEVEL , RISKS HAVING ENTIRELY NEGATIVE EFFECTS ON A CERTAIN NUMBER OF ECONOMIC SECTORS IN THE COMMUNITY , THE LEVEL OF DUTIES HAVING BEEN CALCULATED WITH PARTICULAR REGARD TO THOSE ECONOMIC NECESSITIES . THE INTERPRETATION ADVOCATED WOULD HAVE THE EFFECT OF REDUCING , TO AN EXTENT NOT JUSTIFIED ON ECONOMIC GROUNDS , SPECIFIC DUTIES FIXED ORIGINALLY AT A LEVEL GIVING COMPETING COMMUNITY PRODUCTS A PARTICULAR DEGREE OF PROTECTION , AND THUS WOULD REDUCE THE DESIRED LEVEL OF PROTECTION .

20 THE INTERPRETATION ADVOCATED CANNOT THEREFORE BE ACCEPTED .

THE VALIDITY OF GENERAL RULE C.3

21 ACCORDING TO THE APPLICANT , THE PROVISION IS NOT AUTOMATICALLY INVALIDATED BY THE EXISTENCE OF DIVERGENCES WHICH HAVE GRADUALLY WIDENED BETWEEN THE EXCHANGE RATES LAID DOWN IN GENERAL RULE C.3 AND THE REAL EXCHANGE RATES . IT IS ARGUED THAT , BY NOT PROMPTLY CORRECTING THE DIVERGENCES FOUND TO HAVE ARISEN , AS SOON AS THEY REACHED CERTAIN PROPORTIONS , THE COUNCIL FAILED TO OBSERVE THE PRINCIPLES WHICH ARE AT THE HEART OF THE CUSTOMS UNION AND THE GENERAL PRINCIPLE OF EQUALITY OF TREATMENT .

22 AT THE PRESENT STAGE OF INTEGRATION , WHERE MEMBER STATES ESSENTIALLY RETAIN THEIR POWERS IN MONETARY MATTERS , RECOURSE TO THE MECHANISM OF SPECIFIC DUTIES IN THE COMMON CUSTOMS TARIFF WILL INEVITABLY LEAD TO CERTAIN DIFFERENCES IN THE INCIDENCE OF THE DUTIES CHARGED .

23 IT IS CONCEIVABLE THAT IF THE COUNCIL DELIBERATELY MAINTAINED MONETARY SITUATIONS INCOMPATIBLE WITH THE CUSTOMS UNION AND THE PRINCIPLE OF EQUALITY OF TREATMENT , IT WOULD BE IN BREACH OF THE PRINCIPLES INVOKED BY THE APPLICANT IF IT WERE ESTABLISHED THAT THE MEANS OF FINDING A BALANCED SOLUTION WERE WITHIN ITS POWER .

24 IT IS NOT CLEAR FROM THE EVIDENCE BEFORE THE COURT THAT SUCH A PROPOSITION CAN BE ESTABLISHED IN RESPECT OF THE PERIOD FROM 1974 TO 1978 , A PERIOD CHARACTERIZED BY UNCERTAINTIES AS TO SUBSEQUENT MONETARY DEVELOPMENTS . IN THOSE CIRCUMSTANCES , THE RELUCTANCE OF THE COUNCIL TO ADAPT COMMUNITY PROVISIONS TO THE NEW SITUATION MAY BE EXPLAINED BY THE DIFFICULTY IN LAYING DOWN , NOT ONLY IN THE SPHERE OF CUSTOMS BUT ALSO IN OTHER SPHERES , CRITERIA ENABLING STABLE RATES OF EXCHANGE TO BE FIXED .

25 IT SHOULD BE REMEMBERD THAT NEARLY SEVEN YEARS WERE REQUIRED BEFORE IT WAS POSSIBLE TO REFORM THE BRETTON WOODS MONETARY SYSTEM ON 1 APRIL 1978 , AND THAT IN VIEW OF THE GATT RULES ANY UNILATERAL CHANGE BY THE COMMUNITY OF THE MONETARY PARITIES TO BE USED IN CONVERTING SPECIFIC CUSTOMS DUTIES RISKED CREATING DIFFICULTIES WITH THE COMMUNITY ' S TRADING PARTNERS , IN THE ABSENCE OF NEW PARITIES ESTABLISHED WITHIN THE INTERNATIONAL MONETARY FUND .

26 IN THOSE CIRCUMSTANCES , IT DOES NOT APPEAR THAT , BY AWAITING THE CONCLUSION OF THE NEGOTIATIONS WITHIN THE INTERNATIONAL MONETARY FUND IN 1978 BEFORE AMENDING GENERAL RULE C.3 , THE COUNCIL WAS IN BREACH OF THE TREATY . IT FOLLOWS THAT THE FIRST PART OF THE QUESTION MUST ALSO BE ANSWERED IN THE NEGATIVE .

27 THEREFORE THE ANSWER TO THE QUESTION RAISED BY THE FINANZGERICHT HAMBURG MUST BE THAT CONSIDERATION OF GENERAL RULE C.3 IN PART I , SECTION I , OF THE ANNEX TO COUNCIL REGULATION NO 2500/77 OF 7 NOVEMBER 1977 HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT ITS VALIDITY , AND THE RULE MUST BE APPLIED IN SUCH A WAY THAT IN THE CASE OF AN IMPORTATION INTO A MEMBER STATE HAVING A STRONG CURRENCY , CUSTOMS DUTIES EXPRESSED IN UNITS OF ACCOUNT MUST BE CONVERTED , IN CONFORMITY WITH THE RULE , INTO THE NATIONAL CURRENCY OF THE MEMBER STATE WHERE THE IMPORTATION TOOK PLACE AND MUST NOT BE LIMITED TO THE AMOUNT WHICH WOULD HAVE BEEN CHARGED IN THE CASE OF IMPORTATION INTO THE MEMBER STATE HAVING THE WEAKEST CURRENCY .

Decision on costs

COSTS

28 THE COSTS INCURRED BY THE COUNCIL OF THE EUROPEAN COMMUNITIES AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED WRITTEN OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT ,

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE FINANZGERICHT HAMBURG BY ORDER OF 15 OCTOBER 1980 , HEREBY RULES :

CONSIDERATION OF GENERAL RULE C.3 IN PART I , SECTION I , OF THE ANNEX TO COUNCIL REGULATION ( EEC ) NO 2500/77 OF 7 NOVEMBER 1977 ( OFFICIAL JOURNAL 1977 , L 289 , P . 1 ) HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT ITS VALIDITY , AND THE RULE MUST BE APPLIED IN SUCH A WAY THAT IN THE CASE OF AN IMPORTATION INTO A MEMBER STATE HAVING A STRONG CURRENCY CUSTOMS DUTIES EXPRESSED IN UNITS OF ACCOUNT MUST BE CONVERTED , IN CONFORMITY WITH THE RULE , INTO THE NATIONAL CURRENCY OF THE MEMBER STATE WHERE THE IMPORTATION TOOK PLACE AND MUST NOT BE LIMITED TO THE AMOUNT WHICH WOULD HAVE BEEN CHARGED IN THE CASE OF IMPORTATION INTO THE MEMBER STATE HAVING THE WEAKEST CURRENCY .