ddrg/super_eurlex huggingface dataset:
Case C-381/01

Commission of the European Communities

v

Italian Republic

(Failure of a Member State to fulfil obligations – Directive 77/388/EEC – VAT – Article 11(A)(1)(a) – Basis of assessment – Subsidy directly linked to the price – Regulation (EC) No 603/95 – Aid granted in the dried fodder sector)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Basis of assessment – Supply of goods and services – Subsidies directly linked to the price – Meaning – Aid granted in the dried fodder sector – Exclusion – National scheme failing to levy value added tax on that aid – Whether permissible

(Council Directive 77/388, Art. 11(A)(1)(a))

Article 11(A)(1)(a) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, is intended to subject the full value of goods or services to VAT by providing that the basis of assessment comprises subsidies directly linked to the price of the transaction in question, paid to taxable persons. A Member State which does not levy the tax on aid paid under Regulation No 603/95 on the common organisation of the market in dried fodder does not fail to fulfil its obligations under that provision.

‘Subsidies linked directly to the price’ include only subsidies which constitute the whole or part of the consideration for a supply of goods or services and which are paid by a third party to the seller or supplier.

The conditions for the aid at issue to be subject to VAT are not met in respect of the sale by a processing undertaking, after drying, of fodder purchased from producers of green fodder, since, in such a case, the aid is not paid specifically to a processing undertaking to enable it to supply dried fodder to a purchaser at a price which is lower than on the world market. Nor are those conditions met as regards the special-order contracts concluded by such an undertaking with a producer of green fodder, as the aid which the processing undertaking receives is not paid for its benefit in such a case and that undertaking merely functions as an intermediary between the body which distributes the aid and the fodder producer.

(see paras 27-28, 32-33, 37, 39, 43, 46)
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Actions for failure to fulfil obligations ? Examination of merits by the Court ? Situation to be taken into consideration ? Situation at the end of the period laid down in the reasoned opinion

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43-47, 49 et disp.)
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1. Free movement of goods — Quantitative restrictions — Measures having equivalent effect — Articles 28 EC to 30 EC — Scope — Goods in transit through a Member State and intended for a non-member country — Included — (Arts 28 EC to 30 EC)

2. Free movement of goods — Quantitative restrictions — Measures having equivalent effect — National legislation providing for a procedure for detention by the customs authorities, at the time of intra-Community transit, of goods suspected of infringement of trade mark, lawfully manufactured in a Member State and intended for a non-member country — Justification — Protection of industrial and commercial property — None — Transit not forming part of the specific subject-matter of the trade marks — (Arts 28 EC and 30 EC)

Summary

1. Goods lawfully manufactured in one Member State in transit within another Member State come within the scope of Articles 28 EC to 30 EC even if they are intended for a non-member country. The Customs Union established by the Treaty necessarily implies that the free movement of goods between Member States should be ensured. That freedom could not itself be complete if it were possible for Member States to impede or interfere in any way with the movement of goods in transit so that it is necessary, as a consequence of the Customs Union and in the mutual interest of the Member States, to acknowledge the existence of a general principle of freedom of transit of goods within the Community.

see para. 18, 20

2. Article 28 EC is to be interpreted as precluding the implementation, by the customs authorities of a Member State, pursuant to a legislative measure of that Member State concerning intellectual property and on the ground of suspected infringement of trade mark, of procedures for detention of goods lawfully manufactured in another Member State and intended, following their transit through the territory of the first Member State, to be placed on the market in a non-member country.

A measure of detention under customs control which delays the movement of goods and may block their movement completely, has the effect of restricting the free movement of goods and therefore constitutes an obstacle to that freedom.

Such a measure cannot be justified on the ground of protection of industrial and commercial property within the meaning of Article 30 EC since that transit does not involve any marketing of the goods in question and is therefore not liable to infringe the specific subject-matter of the trade mark.

see paras 21, 24, 27, 29-30, operative part
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1. Freedom to provide services – Community postal services – Directive 97/67 – Services reserved for universal service providers – Exclusion of self-provision as defined by the directive – National legislation subjecting self-provision to additional conditions – Not permissible

(Directive 97/67 of the European Parliament and of the Council, Art. 7)

2. Freedom to provide services – Community postal services – Directive 97/67 – Scope – Money order services – Excluded – Option for Member States to regulate those services

(Directive 97/67 of the European Parliament and of the Council)

Summary

1. Article 7 of Directive 97/67 on the common rules for the development of the internal market of Community postal services and the improvement of quality of service, which sets out the different services which may be reserved for universal service providers, read in the light of recital 21 thereof, must be interpreted as meaning that it does not permit self-provision, which Member States are not entitled to reserve to universal service providers and which is defined by recital 21 as the ‘provision of postal services by the natural or legal person who is the originator of the mail, or collection and routing of these items by a third party acting solely on behalf of that person’, to be made subject to the following additional conditions:

– the receiver must be the same person as the sender;

– the services must not be provided to third parties in the course of commercial or business activity of the service provider;

– the services must not be provided by the mailbag system or other similar methods; and

– such operations must not disrupt the services reserved to the universal service provider.

If it is accepted that the Member States are free to impose additional conditions on the definition of self-provision, and thereby limit the situations which are covered by it, they would have the option of extending the services reserved for the universal service provider, which would go against the purpose of the directive.

(see paras 21, 23-26, operative part 1)

2. Money order services, which consist in making payments through the public postal network to natural or legal persons on behalf of and on the order of others, are not within the scope of Directive 97/67 on the common rules for the development of the internal market of Community postal services and the improvement of quality of service.

The fact that Article 7 of that directive, which sets out the different services which may be reserved for universal service providers, does not mention money orders among those services, is not decisive and the Member States therefore remain free to regulate the financial services which may be provided by the universal postal service providers.

(see paras 21, 33-34, operative part 2)
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1. Actions for failure to fulfil obligations – Non-compliance with a Commission decision finding State aid incompatible with the common market – Pleas in defence – Absolute impossibility of implementation

(Art. 88(2) EC)

2. State aid – Commission decision finding aid to be incompatible with the common market – Difficulties in implementation – Obligation on the Commission and the Member State to cooperate in seeking a solution consistent with the Treaty

(Arts 10 EC and 88(2) EC)

3. Actions for failure to fulfil obligations – Failure to comply with a Commission decision finding State aid incompatible with the common market – Obligation to recover the aid granted – Reference period – Period fixed by the decision failure to implement which is denied or, subsequently, by the Commission

(Art. 88(2), second subpara., EC)

Summary

1. The only defence available to a Member State in opposing an infringement action by the Commission under Article 88(2) EC is to plead that it was absolutely impossible for it to implement the decision properly.

(see para. 16)

2. A Member State which, in giving effect to a Commission decision on State aid, encounters unforeseen and unforeseeable difficulties or becomes aware of consequences overlooked by the Commission, may submit those problems to the Commission for consideration, together with proposals for suitable amendments to the decision in question. In such cases, the Commission and the Member State must, by virtue of the rule imposing on the Member States and the Community institutions a duty of genuine cooperation which underlies, in particular, Article 10 EC, work together in good faith with a view to overcoming the difficulties whilst fully observing the Treaty provisions and, in particular, the provisions on aid.

(see para. 17)

3. Because the second subparagraph of Article 88(2) EC does not provide for a pre-litigation phase, in contrast to Article 226 EC, and therefore the Commission does not issue a reasoned opinion allowing Member States a certain period within which to comply with its decision, when the second subparagraph of Article 88(2) EC is applied the reference period can only be that provided for in the decision failure to implement which is denied or, where appropriate, that subsequently fixed by the Commission.

(see para. 24)
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State aid – Power of the Council to authorise aid by way of derogation in view of exceptional circumstances – Conditions for exercise – Application to the Council by the Member State concerned before a decision by the Commission declaring the aid incompatible with the common market and taking of a decision within a period of three months – Limit – Thwarting of a previous decision by the Commission

(Arts 87 EC, 88 EC and 89 EC)

Summary

The intention of the EC Treaty, in providing through Article 88 EC for aid to be kept under constant review and supervised by the Commission, is that the finding that aid may be incompatible with the common market is to be arrived at, subject to review by the Community judicature, by means of an appropriate procedure which it is the Commission’s responsibility to set in motion. Articles 87 EC and 88 EC thus reserve a central role for the Commission in determining whether aid is incompatible.

As is clear from its very wording, the third subparagraph of Article 88(2) EC covers an exceptional case. In fact, the Council, acting unanimously, ‘on application by a Member State’, may decide that aid which that State is granting or intends to grant must be regarded as compatible with the common market ‘in derogation from the provisions of Article 87 or from the regulations provided for in Article 89’, if such a decision is justified by ‘exceptional circumstances’.

The power conferred upon the Council by the third subparagraph of Article 88(2) EC being therefore clearly exceptional in character, the further provisions in the third and fourth subparagraphs of Article 88(2), whereby, on the one hand, application to the Council by a Member State suspends examination in progress at the Commission for a period of three months, and, on the other, in the absence of a decision by the Council within that period, the Commission is to give a ruling, undeniably indicate that, where that period has expired, the Council is no longer competent to adopt a decision under that third subparagraph in relation to the aid concerned. The taking of decisions the operative parts of which might prove contradictory is thereby avoided.

Consequently, if the Member State concerned has made no application to the Council under the third subparagraph of Article 88(2) EC before the Commission declares the aid in question incompatible with the common market and thereby closes the procedure referred to in the first subparagraph of Article 88(2), the Council is no longer authorised to exercise the exceptional power conferred upon it by the third subparagraph in order to declare such aid compatible with the common market.

Nor can the Council thwart the effectiveness of such a decision by declaring compatible with the common market, in accordance with that provision, an aid designed to compensate the beneficiaries of the unlawful aid declared incompatible with the common market for the repayments they are required to make pursuant to that decision.

(see paras 29-33, 45)
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1. State aid – Prohibition – Derogations – Aid to shipbuilding – Directive 90/684 – Aid for East German shipyards – Criteria governing derogations – Aim of reducing excess capacity – Aim applicable to the means of production and not production itself – Commission’s discretion

(Council Directives 90/684, Art. 10a(2)(a), and 92/68)

2. Appeals – Pleas in law – Plea against a ground of the judgment not necessary to support the operative part – Plea inoperative

Summary

1. For the application of Directive 90/684 on aid to shipbuilding and Directive 92/68 amending Directive 90/684, it cannot be deduced from the aim of reducing ‘excess capacity’, which applies to the means of production which the shipyards are likely to use and not to their production itself, that a capacity restriction laid down in the decisions taken on the basis of those directives implies of itself a restriction on production.

Since the Community legislature had thus refrained from laying down itself in Directive 90/684 how the notion of capacity of shipyards was to be defined and the means by which the reduction in their excess capacity was to be achieved, the Commission had a certain measure of discretion in setting the conditions to which the proposed aid was to be subject in order to ensure that it remained compatible with the common market within the framework of the derogation scheme put into place by that directive in favour of the shipyards and did not prejudice the aim of reducing excess capacity set out in Article 10a of the directive.

However, it was for the Commission to state those conditions clearly and unequivocally.

(see paras 38, 40-41)

2. In the context of an appeal, a plea in law raised against a superfluous ground in a judgment of the Court of First Instance, the operative part of which is sufficiently founded in law on other grounds, must be rejected.

(see para. 49)
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Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Direct insurance other than life assurance – Directive 92/49 – Freedom to set rates – Bonus-malus system not resulting in the direct setting of premium rates by the State – Permissible

(Council Directive 92/49)

Summary

A bonus-malus system applicable to motor insurance contracts which, while having effects on changes in the amount of premiums, does not, however, result in the direct setting of premium rates by the State since insurance undertakings remain free to set the amount of the basic premium cannot be equated with a system of approving premium rates that is contrary to the principle of freedom to set rates laid down by Directive 92/49 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239 and 88/357.

Full harmonisation in the field of non-life insurance rates precluding any national measure liable to have effects on rates cannot be presumed in the absence of a clearly expressed intention to this effect on the part of the Community legislature.

(see paras 23-24)
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International agreements – EEC-Turkey Association Agreement – Association Council established by the EEC-Turkey Association Agreement – Decision on the freedom of movement of workers – Family unity – Members of the family of a Turkish worker duly registered as belonging to the labour force of a Member State – Concept – Stepson under 21 years of age or dependant – Covered

(Decision No 1/80 of the EEC-Turkey Association Council, Art. 7, first para.)

Summary

The first paragraph of Article 7 of Decision No 1/80 of the EEC-Turkey Association Council is to be interpreted as meaning that a stepson who is under the age of 21 years or is a dependant of a Turkish worker duly registered as belonging to the labour force of a Member State is a member of the family of that worker, for the purposes of that provision, and enjoys the rights conferred on him by that decision, provided that he has been duly authorised to join that worker in the host Member State.

(see para. 48, operative part)
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Approximation of laws – Telecommunications sector – Application of open network provision (ONP) to voice telephony and on universal service for telecommunications – Directive 98/10 – Obligation on Member States to provide for itemised billing – Legislation providing for billing which lists charges only according to the type of charge – Not permissible

(Directive 98/10 of the European Parliament and of the Council, Art. 14(2))

Summary

A Member State fails to fulfil its obligations under Article 14(2) of Directive 98/10 on the application of open network provision (ONP) to voice telephony and on universal service for telecommunications in a competitive environment, by opting for billing which lists charges only according to the type of telephone charge and, consequently, is not sufficiently detailed to ensure effective verification and control by the consumer, as required by that provision.

Although that provision does not specifically indicate what information is required to appear on standard itemised bills, the directive lays down a minimum level of information which is dictated by the need to allow subscribers to verify and control the charges incurred in using the fixed public telephone network. However, a billing system which shows only the number of calls, the total number of tariff units used and the corresponding total price does not allow such verification and such control to be achieved.

(see paras 16, 19, 24, operative part)
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Citizenship of the European Union – Right to move and reside freely in the territory of the Member States – Directive 90/364 – Minor who is a national of a Member State, is covered by sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor and who is that minor’s primary carer – Right of residence, both for the minor and for the parent, in another Member State – Conditions for the minor to gain nationality – Not relevant

(Art. 18 EC; Council Directive 90/364)

Summary

Article 18 EC and Council Directive 90/364 on the right of residence confer on a young minor who is a national of a Member State, is covered by appropriate sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor not to become a burden on the public finances of the host Member State, a right to reside for an indefinite period in that State. In such circumstances, those same provisions allow a parent who is that minor’s primary carer to reside with the child in the host Member State.

In that respect, the condition concerning the sufficiency of resources laid down in Directive 90/364 cannot be interpreted as meaning that the minor must possess those resources personally and may not use for that purpose those of a family member. Such an interpretation would add to that condition a requirement as to the origin of the resources which, not being necessary for the attainment of the objective pursued, namely the protection of the public finances of the Member States, would constitute a disproportionate interference with the exercise of the fundamental right of freedom of movement and of residence upheld by Article 18 EC.

In addition, the application of the Community provisions at issue cannot be refused to the persons concerned on the ground that the parent who is the primary carer has created, by means of a stay in a Member State, a situation in which the child expected would be able to acquire the nationality of another Member State in order thereafter to secure for the child and for him or herself a long-term right to reside. Under international law, it is for each Member State, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality and it is not permissible for a Member State to restrict the effects of the grant of the nationality of another Member State by imposing an additional condition for recognition of that nationality with a view to the exercise of the fundamental freedoms provided for in the Treaty.

(see paras 33, 36-37, 39, 47, operative part)
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Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation systematically making the marketing of foodstuffs to which vitamins or mineral salts have been added subject to there being a nutritional need in the population – Not permissible – Justification – Protection of public health – None – Infringement of the principle of proportionality

(EC Treaty, Arts 30 and 36 (now, after amendment, Arts 28 EC and 30 EC))

Summary

A Member State which applies an administrative practice under which foodstuffs for everyday consumption fortified with vitamin A (in the form of retinoids), vitamin D, folic acid, selenium, copper or zinc which are lawfully produced or marketed in other Member States may be marketed on its territory, when they are neither substitution products nor reconstituted foodstuffs within the meaning of the national legislation, only if that enrichment meets a nutritional need in the population of that Member State and, in addition, without ascertaining whether those fortified foodstuffs might be a substitute for foodstuffs already marketed for which the addition of those nutrients is mandatory, fails to fulfil its obligations under Article 30 of the EC Treaty (now, after amendment, Article 28 EC).

Community law does not preclude legislation of a Member State prohibiting in accordance with the precautionary principle, save for prior authorisation, the marketing of foodstuffs when nutrients other than those whose addition is lawful under that legislation have been added thereto, because it is for the Member States, in the absence of harmonisation and to the extent that uncertainties continue to exist in the current state of scientific research, to decide on their intended level of protection of human health and life; that discretion must, however, be exercised in accordance with the principle of proportionality. Furthermore, it is for the national authorities to show in each case, in the light of national nutritional habits and in the light of the results of international scientific research, that their rules are necessary to safeguard public health and, in particular, that the marketing of the products in question poses a real risk for public health.

In those circumstances, the systematic prohibition on the marketing of fortified foodstuffs, as it results from the administrative practice in the Member State concerned, does not enable Community law to be observed in regard to the identification and assessment of a real risk for public health, which requires a detailed assessment, case by case, of the effects which the addition of the minerals and vitamins in question could entail.

(see paras 42, 44, 46-47, 63, 70, operative part)