Case C‑477/14

Pillbox 38 (UK) Ltd

v

Secretary of State for Health

(Request for a preliminary ruling from the High Court of Justice (England & Wales), Queen’s Bench Division (Administrative Court))

‛Reference for a preliminary ruling — Approximation of laws — Directive 2014/40/EU — Article 20 — Electronic cigarettes and refill containers — Validity — Principle of equal treatment — Principles of proportionality and legal certainty — Principle of subsidiarity — Charter of Fundamental Rights of the European Union — Articles 16 and 17’

Summary — Judgment of the Court (Second Chamber), 4 May 2016

Approximation of laws — Manufacture, presentation and sale of tobacco and related products — Directive 2014/40 — Electronic cigarettes — Obligation to submit data on an annual basis to the competent authorities in relation to a product — No infringement of the principles of proportionality and of legal certainty

Approximation of laws — Manufacture, presentation and sale of tobacco and related products — Directive 2014/40 — Electronic cigarettes — Cross‑border distance selling — Whether the Member States can prohibit that means of marketing or authorise it by imposing common rules — No infringement of the principle of proportionality

Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Request for interpretation of an EU measure of general application not having been the subject of implementing measures under national law — Admissibility of the action before the national court — Included

See the text of the decision. (see paras 15, 16)

It cannot validly be asserted that a claim before a national court for judicial review of the ‘intention and/or obligation’ of a Member State to implement a directive, in the context of which a request for a preliminary ruling has been made concerning the validity of that directive, is a means of circumventing the system of remedies established by the FEU Treaty. The opportunity open to individuals to plead the invalidity of an EU act of general application before national courts is not conditional upon that act actually having been the subject of implementing measures adopted pursuant to national law. In that respect, it is sufficient if the national court is called upon to hear a genuine dispute in which the question of the validity of such an act is raised indirectly. (see paras 18, 19)

It follows from the spirit of cooperation which must prevail in the operation of the preliminary reference procedure that it is essential that the national court sets out in its order for reference the precise reasons why it considers a reply to its questions concerning the interpretation or validity of certain provisions of EU law to be necessary to enable it to give judgment. It is therefore important that the national court should set out, in particular, the precise reasons which led it to question the validity of certain provisions of EU law and set out the grounds of invalidity which, consequently, appear to it capable of being upheld. Such a requirement also arises under Article 94(c) of the Rules of Procedure of the Court. Furthermore, the information provided in orders for reference not only enables the Court to give useful answers but also serves to ensure that the governments of the Member States and other interested persons are given an opportunity to submit observations in accordance with Article 23 of the Statute of the Court of Justice. It follows that, in a request for a preliminary ruling, the Court will examine the validity of an EU act or certain provisions thereof only in the light of the grounds of invalidity set out in the order for reference. (see paras 24-27)

Article 20 of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products cannot be regarded as being invalid on the ground that it infringes the principles of equal treatment and free competition in that it reserves for electronic cigarettes less favourable treatment than that to which tobacco products are subject, even though electronic cigarettes are less harmful than tobacco products. Electronic cigarettes are not in the same situation as tobacco products. First, the elements included in their respective composition are significantly different in several respects. Secondly, the pattern of consumption of electronic cigarettes is also substantially different from the pattern of consumption of tobacco products. Thirdly, unlike tobacco products, electronic cigarettes are relatively new products, whose risks to human health still need to be clarified. Therefore, by submitting those cigarettes to a separate legal regime which is, moreover, less strict than the one applicable to tobacco products, the EU legislature cannot be said to have infringed the principles of equal treatment and of free competition. (see paras 34, 37, 40-45)

See the text of the decision. (see para. 35)

See the text of the decision. (see paras 48, 49)

The specific legal regime laid down in Article 20 of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products is compatible with the principles of proportionality and legal certainty. Since the effects of electronic cigarettes on human health are a source of controversy internationally and scientific evidence for the effectiveness of electronic nicotine delivery systems as a method for quitting tobacco smoking is limited and does not allow conclusions to be reached, the EU legislature had to take account of the precautionary principle. In that regard, in deciding to devote specific rules to the placing on the market of electronic cigarettes and refill containers, the EU legislature intended (i) to ensure the smooth functioning of the internal market as regards those products, taking as a base a high level of protection of human health, especially for young people, and (ii) to meet the obligations of the Union under the World Health Organisation Framework Convention on Tobacco Control. By acting as such, the EU legislature did not manifestly infringe the limits of its discretion in the matter. It is true that the measures chosen by the EU legislature pursuant to Article 20 of Directive 2014/40 were not included among those which had been initially intended by the Commission in its proposal for a directive and were therefore not the subject of the impact assessment. However, such an impact assessment is not binding on either the Parliament or the Council. Consequently, the EU legislature remains free to adopt measures other than those which were the subject of an impact assessment. Therefore, the mere fact that it adopted a different and, as the case may be, more onerous measure than the measures envisaged by the Commission in the impact assessment is not such as to demonstrate that it manifestly exceeded the limits of what was necessary in order to achieve the stated objective. (see paras 51, 53, 55, 61, 64, 65)

See the text of the decision. (see para. 55)

The obligation to notify that an electronic cigarette has been placed on the market, laid down in Article 20(2) of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products, does not infringe the principles of proportionality and legal certainty. In accordance with recital 36 of Directive 2014/40, that obligation seeks to enable Member States to carry out their surveillance and control tasks. Such an approach is justified, in addition, by the requirements linked to the precautionary principle, and by the invitation to the Parties to the World Health Organisation Framework Convention on Tobacco Control to fully monitor the use of electronic nicotine delivery systems and electronic non-nicotine delivery systems. As for the question whether that obligation does not go beyond what is necessary to achieve that objective, it should be noted, first, that an alternative measure, namely the setting, at EU level, of common standards applicable to electronic cigarettes and refill containers, does not seem, at this stage, to be a possible measure, since the development of such standards presupposes as a matter of course the existence of sufficiently substantive data concerning the product at issue, which the EU legislature did not have at its disposal at the time of the adoption of Directive 2014/40. Second, the six-month period laid down in the first subparagraph of Article 20(2) of that directive seeks to give the competent authorities sufficient time to examine all of the data which the manufacturers and importers have submitted to them. Moreover, the obligation to provide information on the nicotine doses and uptake when consumed under normal or reasonably foreseeable conditions, pursuant to point (d) of the second subparagraph of Article 20(2) of the directive, is sufficiently precise, since the information to be provided is clearly not information on the individual nicotine dose and uptake of specific consumers but the minimum, average and maximum levels normally expected from smoking an electronic cigarette. In addition, it is open to the EU legislature to have recourse to a general legal framework which is, if necessary, to be made more precise at a later date. In the present case, it is precisely the Commission which must adopt, pursuant to Article 20(13) of Directive 2014/40, implementing acts laying down, inter alia, a common format for the notification provided for in paragraph 2 of that article. In those circumstances, it cannot be held that the EU legislature has infringed the principle of legal certainty. (see paras 70-73, 76-79)

Regarding nicotine‑containing liquid packaged in refill containers for electronic cigarettes, so far as concerns whether the requirements laid down in Article 20(3)(a), (b) and (f) of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products are appropriate to attain the objective of that directive which is, in accordance with Article 1 thereof, to facilitate the smooth functioning of the internal market for tobacco and related products, taking as a base a high level of protection of health, especially for young people, it must be held that the rules harmonising the composition of electronic cigarettes and refill containers are by their very nature appropriate for the purpose of removing the obstacles to the free movement of those goods. Similarly, the requirements set out in Article 20(3)(a) and (b) of Directive 2014/40 make it possible to limit the risks linked to exposure to nicotine. In addition, the requirements set out in Article 20(3)(a) and (b) of Directive 2014/40 make it possible to limit the risks linked to exposure to nicotine. Therefore, they are also appropriate for ensuring a high level of protection of human health. Moreover, the placing on the market of electronic cigarettes the liquid in which contains more than 20 mg/ml of nicotine is not prohibited under EU law. As is apparent from the second subparagraph of Article 20(1) of Directive 2014/40, read in the light of recital 36 of that directive, such products may, depending on the circumstances, be placed on the market within the European Union under the conditions and according to the procedures laid down by Directives 2001/83 on the Community code relating to medicinal products for human use and 93/42 concerning medical devices. In providing for such a possibility, the EU legislature took into account the need, for some consumers, on account of their state of dependence or their habits, to use, as an aid to quit smoking, electronic cigarettes containing a nicotine concentration which is higher than that allowed by Article 20(3)(b) of Directive 2014/40. Accordingly, the EU legislature balanced the various interests by taking several factors into account and without exceeding the limits of its broad discretion. Consequently, it is not apparent that, by adopting Article 20(3)(a) and (b) of Directive 2014/40, the EU legislature acted arbitrarily or manifestly exceeded the limits of what was appropriate and necessary in order to achieve the objective which it pursued. Furthermore, read in the light of the objective stated in recital 39 of Directive 2014/40, Article 20(3)(f) of that directive defines with sufficient clarity the result to be achieved, namely that each inhalation releases the same quantity of nicotine under identical conditions of use, including the strength of the inhalation. The fact that that provision does not prescribe any specific method or process for the purposes of the fulfilment of that requirement does not mean, however, that it infringes the principle of legal certainty. In the absence of any legislation in this connection at Union level, it is for the Member States or, depending on the circumstances, for the manufacturers themselves to choose a reliable method capable of ensuring compliance with that requirement. (see paras 84-86, 94-97, 100, 101)

It is not disproportionate to require, in Article 20(4)(a) of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products, that the unit packages of electronic cigarettes and refill containers contain a separate leaflet. First, the number and nature of some of the information which has to be set out in a separate leaflet, such as the information relating to contra-indications, warnings for specific risk groups and possible adverse effects, are such that it seems unlikely that the information can be set out in a sufficiently visible and legible way on the packaging alone, particularly as the packaging must include, pursuant to Article 20(4)(b) of Directive 2014/40, the list of all ingredients contained in that product and the health warnings required. Secondly, a leaflet separate from the packaging of the product and including that information enables consumers to have that information at their disposal even after having thrown that packaging away. (see paras 103-105)

It is not apparent that, by adopting Article 20(5) of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products, the EU legislature manifestly exceeded the limits of what is appropriate and necessary in order to achieve the objective pursued by that directive. The prohibition on commercial communications and sponsorship for electronic cigarettes and their refill containers, set out in Article 20(5) of Directive 2014/40, is appropriate to ensure that a uniform regime for the trade in electronic cigarettes within the internal market is applied, while ensuring a high level of protection of human health, taking account of the uncertainties surrounding that product and the requirements stemming from the precautionary principle. It is apparent from recital 43 of the directive that disparities between national laws and practices on advertising and sponsorship concerning electronic cigarettes hinder the free movement of goods and the freedom to provide services and create an appreciable risk of distortion of competition. In the absence of measures adopted at Union level, those disparities are likely to increase over the coming years, also taking into account the rapid expansion of the market for electronic cigarettes and refill containers. Moreover, Article 20(5) of Directive 2014/40 means that consumers — not least young people who are particularly sensitive to advertising — are confronted with fewer commercial inducements to purchase and consume electronic cigarettes with the result that they are less exposed to the identified or potential risks to human health to which those products could give rise. Furthermore, the fact that tobacco products have been able to benefit for many years from advertising campaigns cannot under any circumstances constitute a reason requiring the EU legislature to allow such campaigns also for electronic cigarettes. On the contrary, as soon as it became aware of serious scientific information alleging the existence of potential risks to human health to which a relatively new product on the market might give rise, the EU legislature was required to act in accordance with the precautionary principle in the second sentence of Article 35 of the Charter of Fundamental Rights of the European Union, Article 9 TFEU and Articles 114(3) TFEU and 168(1) TFEU which require it to ensure a high level of protection of human health in the definition and implementation of all Union policies and activities. (see paras 111-113, 115, 116)

It is not apparent that the rule laid down in Article 20(6) of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products goes manifestly beyond what is appropriate and necessary to achieve the objective pursued by that directive. That provision, which provides that the possibility laid down in Article 18 of Directive 2014/40 for Member States to prohibit cross-border distance sales of tobacco products to consumers is to apply to cross-border distance sales of electronic cigarettes and refill containers, seeks to enable the Member States to ensure that the rules on conformity laid down by Directive 2014/40 in relation to electronic cigarettes and refill containers are not circumvented, whilst taking as a basis a high level of human health protection, particularly for young people. An EU measure adopted on the basis of Article 114 TFEU may incorporate provisions seeking to ensure that requirements aimed at improving the conditions for the functioning of the internal market are not circumvented. By allowing the Member States to prohibit the cross-border distance sales of electronic cigarettes and refill containers and by imposing certain common rules on the Member States which do not prohibit those sales, the measures laid down in Article 20(6) of Directive 2014/40 are appropriate for the purpose of achieving the objective pursued. As regards whether those measures are strictly necessary, it should be noted that that provision does not impose a prohibition on the cross-border sale of electronic cigarettes and refill containers, but leaves it to the discretion of the Member States to prohibit such sales or to allow them under certain conditions. Article 20(6) of Directive 2014/40 thus enables the Member States to adapt their action on the basis of relevant scientific advances and the development of the relevant market. (see paras 119, 122-126, 128)

See the text of the decision. (see paras 130)

Article 20(7) of Directive 2014/40 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products, which obliges manufacturers and importers of electronic cigarettes and refill containers to submit each year, to the competent authorities of the Member States, certain data enabling those authorities to monitor the development of the market, does not infringe the principles of proportionality and legal certainty. That obligation is not disproportionate solely because manufacturers and importers of tobacco products are not subject to any similar obligation, since, unlike tobacco producers, for which the competent authorities already have detailed information on account of their long-standing presence on the market and the scientific studies of which they were the subject, the placing on the market of electronic cigarettes and refill containers could, and indeed should, be the subject of increased monitoring because of the novelty of those products and the uncertainties regarding the risks to human health borne by their consumers. Moreover, the data which the manufacturers and importers of electronic cigarettes and refill containers must provide under Article 20(7) of Directive 2014/40 directly relate to their business activities, with the result that they are better placed to provide those data. In addition, since those data are clearly of relevance for the development of the trade strategies of the manufacturers and importers of those products, it seems probable that they are frequently collected by them. It does not appear, therefore, that that obligation imposes on those manufacturers and importers a manifestly excessive burden. Moreover, as regards the clarity regarding the contours of the obligation to provide information on the preferences of the various consumer groups referred to in Article 20(7)(ii) of Directive 2014/40, it must be found that it is not necessary for a legislative act itself to provide details of a technical nature, such as, inter alia, the definition of the methodology which it is necessary to apply in order to collect any such data and, moreover, in the absence of any legislation in this connection at Union level, it is for the Member States to choose a reliable method for the enforcement of the relevant obligations. (see paras 132, 136, 137, 139, 140)

See the text of the decision. (see paras 144, 147, 148)