2.

Article 36 of the EEC Treaty, however, for the protection of the matters listed there, allows the Member States to provide for exceptions to the prohibition on quantitative restrictions and measures having equivalent effect. It is not sufficient, however, merely to refer to one of the matters listed; it must be shown that the measure taken is ‘justified’, that is that it is necessary for the protection of the matter alleged to be endangered. The second sentence of Article 36 of the EEC Treaty states in any event that such prohibitions or restrictions are not justified if they constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. In relation to the protection of particulars of origin the Court stated the following in the case of Dassonville: ‘In the absence of a Community system guaranteeing for consumers the authenticity of a product's designation of origin, if a Member. State takes measures to prevent unfair practices in this connexion, it is however subject to the condition that these measures should be reasonable and that the means of proof required should not act as a hindrance to trade between Member States and should, in consequence, be accessible to all Community nationals. Even without having; to examine whether or not such measures are covered by Article 36, they must not, in any case, by virtue of the principle expressed in the second sentence of that article, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.’ Trading rules constitute arbitrary discrimination or a disguised restriction on trade where, according to the words of Commission Directive No 70/50 of 22 December 1969 (Official Journal, English Special Edition 1970 (I), p. 17), ‘the restrictive effects on the free movement of goods are out of proportion to their purpose’ or ‘the same objective can be attained by other means which are less of a hindrance to trade.’ It must therefore be asked whether the objective pursued by proof of the origin of a product cannot be attained just as well by other formalities with which not only direct importers but also parallel importers can comply. It is only if there is no other effective method of protecting the particulars of origin which has a less restrictive effect on the basic freedom of the free movement of goods that the requirement of the production of a certificate of origin under Article 1 of the Royal Decree No 57 does not constitute arbitrary discrimination or a disguised restriction on trade. Descriptions of origin (I think that all the parties are agreed on this) always identify a product which originates from a particular geographical area and which as a result of the effect of certain factors reveals special physical qualities and features which are likely to give it an individual character. Their raison d'être and the legal justification for any hindrance to trade possibly resulting therefrom lies in the objective of protecting producers from being misled and of offering consumers a guarantee of quality (cf. judgment of 20 February 1975 in Case 12/74 Commission v Federal Republic of Germany [1975] 1 ECR 181). As we have seen in the course of the proceedings, there is no perfect means of fully attaining that objective. Nevertheless, and once again the parties seem to agree on this, the system of certificates of origin accompanying the goods offers the manufacturer a quite reasonable means of guaranteeing the age and special method of production. In the nature of things, however, the parallel importer has more difficulty in obtaining such a document than has the direct importer. Such hindrance to trade is however in any event unjustified where the said certificate is demanded of someone who cannot obtain it easily and there is no reasonable doubt regarding the regularity and genuineness of the goods. In the Commission's view there is no such doubt at least in the case of bottles which are filled in the country of origin and have a closure which is unusable after opening. In the view of the Governments of Belgium, France and the United Kingdom, however, this system does not offer sufficient opportunity of preventing dishonest and fraudulent practices which could have adverse effects upon the consumer's health. In particular, the representative of the United Kingdom points out that seals on the bottles are less secure against fraud than documents guaranteeing the designation of origin. The Belgian representative adds that the falsification of a document in Belgium is liable to higher penalties than the mere imitation of a seal on a bottle. Finally, the representatives of all three governments refer to the problem arising from the fact that, for example, whisky is exported not only in bottles but also in barrels. Should the whisky be transferred from barrels into bottles in another Member State the sealing system proposed by the Commission could offer no sufficient guarantee since there is not the same degree of control in all countries. In contrast to spirits there is a common organization of the market in wine which guarantees similar controls in all Member States. It is only because of this that it is not necessary to require production of a certificate of origin on imports of wine in bottles. Moreover, according to the Belgian Government, even the Commission does not endorse the sealing system which it proposes, as is shown by the fact that as regards spirits imported from third countries it also requires the appropriate accompanying documents. If in considering these submissions I may begin with the last argument, I must point out that the prohibition on measures having an effect equivalent to quantitative restrictions applies only to trade within the Community and not to trade with third countries. Since no free trade is provided for the latter, the Commission is at liberty to prescribe any appropriate means to prevent deception regarding the quality of the product. In trade within the Community, on the other hand, we have, as already mentioned, the basic principle of the free movement of goods, with the result that the only measure allowed is that which involves the least restrictive means of avoiding the danger. Regarding the argument of the possibility of deception and the differing penalties, it seems to me appropriate, without going into factual questions such as protection against deception, to draw attention to certain matters which show us that the Kingdom of Belgium and its two supporters in the proceedings may contemplate a solution of the kind proposed by the Commission. Thus, in Article 1 (1) of the Arrêté Ministériel which has in the meantime been repealed Belgium considered it sufficient for containers directly imported from the country of origin and intended for sale to consumers to be provided with a seal which is rendered unusable on opening and to bear labels with the name and address of the producer and a statement that the product was put into the container in the country of origin. If these features are regarded as sufficient for direct imports, then it is not apparent why they cannot fulfil the same function by way of guarantee in the case of parallel imports. The Belgian Government's statement that it regards sealing in a Member State other than the producer State as insufficient amounts to recognition that that guarantee is regarded as sufficient where the bottling is effected in the place of origin. The objection of insufficient protection against deception and the difference between penalties loses further substance when the Belgian Government admits that it would agree to the system of sealing if bottling were supervised in the same way in all Member States. Finally, the representative of the French Government has confirmed that in France the system of certificates of origin for certain beverages such as cider, beer and wine has been replaced by an appropriate system for the sealing of containers and that only in the case of spirits has that system not been introduced, mainly for reasons of revenue control. These few examples are evidence that a system which is less of a hindrance to trade would also be conceivable for Belgium, whereby an importer who does not obtain the goods directly in the country of origin is placed in a position to prove their genuineness by the described method, which appears sufficiently appropriate for such proof. It must, however, be admitted that the Belgian Government and its supporters in the proceedings are right in thinking that the case is different where the spirits are exported in barrels, bottled in a Member country which is not the producer country and then re-exported. So long as the controls are not uniform the British Government is right to stress that the system of sealing offers no guarantee here that the content of the bottles corresponds to the content of the barrels and that in bottling the minimum requirements of hygiene have been observed. I see the only possibility of guaranteeing this as being to issue an official accompanying certificate in respect of the spirits showing that the designation of origin is genuine. There should, however, be sufficient protection for the matters referred to in Article 36 if, as provided in Article 1 (2) of the Arrêté Ministériel of 2 December 1976, apart from the original certificate of origin, photocopies or a certificate issued by the authorities of the country of despatch were accepted as evidence that the product is entitled to the designation of origin. As we have heard, only a fraction of spirits, in the case of whisky for example some 25 %, is exported in barrels. In conclusion, it may be observed that protection of the matters referred to in Article 36 does not justify the rules contained in Article 1 of the Royal Decree No 57 of 20 December 1934 in their present form and as interpreted by administrative directives. In accordance with the established case-law of the Court it is not necessary to consider the question whether any of the matters referred to in Article 36 is at risk and if so which. Since, however, the defendant and the Government of the United Kingdom in particular base their arguments on the protection of public health in addition to the protection of industrial and commercial property, I wish to make a final observation in respect of this. We have heard that there is no obstacle to the importation and sale in Belgium of whisky without a certificate of origin, provided that it is called simply ‘whisky’. On the other hand, the name ‘Scotch whisky’ has a qualitative character which is likely to increase its commercial value. If Belgium were of the opinion that there was a risk to public health in the case of whisky without a designation of origin it could make imports thereof difficult or even prohibit them in reliance on Article 36. Since this has not been done public health cannot be pleaded in defence of making the importation of a qualitatively more valuable product more difficult.