Judgment of the Court of 26 October 1982. - Hauptzollamt Mainz v C.A. Kupferberg & Cie KG a.A.. - Reference for a preliminary ruling: Bundesfinanzhof - Germany. - Free trade agreements - Tax discrimination. - Case 104/81.



European Court reports 1982 Page 03641

Spanish special edition Page 01097

Swedish special edition Page 00531

Finnish special edition Page 00555



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - AGREEMENTS ON FREE TRADE - PERFORMANCE BY THE COMMUNITY INSTITUTIONS AND THE MEMBER STATES

( EEC TREATY , ART . 228 ( 2 ))

2 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - COMMUNITY NATURE - UNIFORM APPLICATION BY THE COMMUNITY INSTITUTIONS AND THE MEMBER STATES

( EEC TREATY , ART . 228 ( 2 ))

3 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC - DIRECT EFFECT - CONDITIONS - CRITERIA

( EEC TREATY , ART . 228 )

4 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - DIRECT EFFECT - DIRECT EFFECT ACKNOWLEDGED BY THE COURTS OF ONLY ONE OF THE CONTRACTING PARTIES - PRINCIPLE OF RECIPROCITY - BREACH - ABSENCE

( EEC TREATY , ART . 228 )

5 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - ESTABLISHMENT OF AN INSTITUTIONAL FRAMEWORK FOR THE PURPOSE OF IMPLEMENTING AN AGREEMENT - JUDICIAL APPLICATION OF THE AGREEMENT NOT EXCLUDED

( EEC TREATY , ART . 228 )

6 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - DIRECT EFFECT - SAFEGUARD CLAUSES - NO EFFECT - CONDITIONS

( EEC TREATY , ART . 228 )

7 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC - RULE AGAINST TAX DISCRIMINATION IN RESPECT OF IMPORTED PRODUCTS - DIRECT EFFECT

( EEC-PORTUGAL AGREEMENT OF 22 JULY 1972 , ART . 21 , PARA . ( 1 ))

8 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC - EEC TREATY - DISTINCT OBJECTIVES - RULE AGAINST TAX DISCRIMINATION IN RESPECT OF IMPORTED PRODUCTS - INTERPRETATION GIVEN BY THE COURT OF ARTICLE 95 OF THE EEC TREATY - TRANSPOSITION TO THE SYSTEM OF THE AGREEMENT - NONE

( EEC TREATY , ART . 95 ; EEC-PORTUGAL AGREEMENT OF 22 JULY 1972 , ART . 21 , PARA . ( 1 ))

9 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC - RULE AGAINST TAX DISCRIMINATION IN RESPECT OF IMPORTED PRODUCTS - TAX REDUCTION ALLOWED BY THE IMPORTING MEMBER STATE - NOT APPLICABLE TO PRODUCTS ORIGINATING FROM PORTUGAL - NO SIMILAR NATIONAL PRODUCTS IN FACT ENJOYING THE BENEFIT OF THE REDUCTION - DISCRIMINATION - NONE

( EEC-PORTUGAL AGREEMENT OF 22 JULY 1972 , ART . 21 , PARA . ( 1 ))

10 . INTERNATIONAL AGREEMENTS - AGREEMENTS WITH THE COMMUNITY - AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC - RULE AGAINST TAX DISCRIMINATION IN RESPECT OF IMPORTED PRODUCTS - SIMILAR PRODUCT - COMMUNITY CONCEPT - CRITERIA OF ASSESSMENT

( EEC-PORTUGAL AGREEMENT OF 22 JULY 1972 , ART . 21 , PARA . ( 1 ))

Summary

1 . THE MEASURES NEEDED TO IMPLEMENT THE PROVISIONS OF AN AGREEMENT CONCLUDED BY THE COMMUNITY ARE TO BE ADOPTED , ACCORDING TO THE STATE OF COMMUNITY LAW FOR THE TIME BEING IN THE AREAS AFFECTED BY THE PROVISIONS OF THE AGREEMENT , EITHER BY THE COMMUNITY INSTITUTIONS OR BY THE MEMBER STATES . THAT IS PARTICULARLY TRUE OF AGREEMENTS SUCH AS THOSE CONCERNING FREE TRADE WHERE THE OBLIGATIONS ENTERED INTO EXTEND TO MANY AREAS OF A VERY DIVERSE NATURE .

2 . SINCE , ACCORDING TO ARTICLE 228 ( 2 ) OF THE TREATY , THE MEMBER STATES ARE BOUND , IN THE SAME MANNER AS THE INSTITUTIONS OF THE COMMUNITY , BY THE INTERNATIONAL AGREEMENTS WHICH THE LATTER ARE EMPOWERED TO CONCLUDE , THEY FULFIL , IN ENSURING RESPECT FOR COMMITMENTS ARISING FROM AN AGREEMENT CONCLUDED BY THE COMMUNITY INSTITUTIONS , AN OBLIGATION NOT ONLY IN RELATION TO THE NON-MEMBER COUNTRY CONCERNED BUT ALSO AND ABOVE ALL IN RELATION TO THE COMMUNITY WHICH HAS ASSUMED RESPONSIBILITY FOR THE DUE PERFORMANCE OF THE AGREEMENT . THAT IS WHY THE PROVISIONS OF SUCH AN AGREEMENT FORM AN INTEGRAL PART OF THE COMMUNITY LEGAL SYSTEM .

IT FOLLOWS FROM THE COMMUNITY NATURE OF SUCH PROVISIONS THAT THEIR EFFECT IN THE COMMUNITY MAY NOT BE ALLOWED TO VARY ACCORDING TO WHETHER THEIR APPLICATION IS IN PRACTICE THE RESPONSIBILITY OF THE COMMUNITY INSTITUTIONS OR OF THE MEMBER STATES AND , IN THE LATTER CASE , ACCORDING TO THE EFFECTS IN THE INTERNAL LEGAL ORDER OF EACH MEMBER STATE WHICH THE LAW OF THAT STATE ASSIGNS TO INTERNATIONAL AGREEMENTS CONCLUDED BY IT . THEREFORE IT IS FOR THE COURT , WITHIN THE FRAMEWORK OF ITS JURISDICTION IN INTERPRETING THE PROVISIONS OF AGREEMENTS , TO ENSURE THEIR UNIFORM APPLICATION THROUGHOUT THE COMMUNITY .

3 . NEITHER THE NATURE NOR THE STRUCTURE OF THE AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC MAY PREVENT A TRADER FROM RELYING ON ONE OF ITS PROVISIONS BEFORE A COURT IN THE COMMUNITY , ESPECIALLY AS THE ANSWER TO THE QUESTION WHETHER SUCH A STIPULATION IS UNCONDITIONAL AND SUFFICIENTLY PRECISE TO HAVE DIRECT EFFECT PRESUPPOSES AN ANALYSIS OF THE PROVISION IN THE LIGHT OF THE OBJECT AND PURPOSE OF THE AGREEMENT AND OF ITS CONTEXT .

4 . ACCORDING TO THE GENERAL RULES OF INTERNATIONAL LAW THERE MUST BE BONA FIDE PERFORMANCE OF EVERY AGREEMENT . ALTHOUGH EACH CONTRACTING PARTY IS RESPONSIBLE FOR EXECUTING FULLY THE COMMITMENTS WHICH IT HAS UNDERTAKEN IT IS NEVERTHELESS FREE TO DETERMINE THE LEGAL MEANS APPROPRIATE FOR ATTAINING THAT END IN ITS LEGAL SYSTEM UNLESS THE AGREEMENT , INTERPRETED IN THE LIGHT OF ITS SUBJECT-MATTER AND PURPOSE , ITSELF SPECIFIES THOSE MEANS . SUBJECT TO THAT RESERVATION THE FACT THAT THE COURTS OF ONE OF THE PARTIES TO AN INTERNATIONAL AGREEMENT CONCLUDED BY THE COMMUNITY CONSIDER THAT CERTAIN OF THE STIPULATIONS IN THE AGREEMENT ARE OF DIRECT APPLICATION WHEREAS THE COURTS OF THE OTHER PARTY DO NOT RECOGNIZE SUCH DIRECT APPLICATION IS NOT IN ITSELF SUCH AS TO CONSTITUTE A LACK OF RECIPROCITY IN THE IMPLEMENTATION OF THE AGREEMENT .

5 . THE MERE FACT THAT AN AGREEMENT CONCLUDED BY THE COMMUNITY HAS ESTABLISHED A SPECIAL INSTITUTIONAL FRAMEWORK FOR CONSULTATIONS AND NEGOTIATIONS BETWEEN THE CONTRACTING PARTIES IN RELATION TO THE IMPLEMENTATION OF THE AGREEMENT IS NOT IN ITSELF SUFFICIENT TO EXCLUDE ALL JUDICIAL APPLICATION OF IT .

6 . APART FROM SPECIFIC SITUATIONS WHICH MAY INVOLVE THEIR APPLICATION , THE EXISTENCE OF SAFEGUARD CLAUSES WHICH ENABLE THE CONTRACTING PARTIES TO DEROGATE FROM CERTAIN PROVISIONS OF AN INTERNATIONAL AGREEMENT CONCLUDED BY THE COMMUNITY IS NOT SUFFICIENT IN ITSELF TO AFFECT THE DIRECT APPLICABILITY WHICH MAY ATTACH TO CERTAIN STIPULATIONS IN THE AGREEMENT .

7 . THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC IMPOSES ON THE CONTRACTING PARTIES AN UNCONDITIONAL RULE AGAINST DISCRIMINATION IN MATTERS OF TAXATION , WHICH IS DEPENDENT ONLY ON A FINDING THAT THE PRODUCTS AFFECTED BY A PARTICULAR SYSTEM OF TAXATION ARE OF LIKE NATURE , AND THE LIMITS OF WHICH ARE THE DIRECT CONSEQUENCE OF THE PURPOSE OF THE AGREEMENT . AS SUCH THIS PROVISION MAY BE APPLIED BY A COURT AND THUS PRODUCE DIRECT EFFECTS THROUGHOUT THE COMMUNITY .

8 . ALTHOUGH ARTICLE 21 OF THE AGREEMENT BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC ON FREE TRADE AND ARTICLE 95 OF THE EEC TREATY HAVE THE SAME OBJECT INASMUCH AS THEY AIM AT THE ELIMINATION OF TAX DISCRIMINATION , BOTH PROVISIONS , WHICH ARE MOREOVER WORDED DIFFERENTLY , MUST HOWEVER BE CONSIDERED AND INTERPRETED IN THEIR OWN CONTEXT .

SINCE THE EEC TREATY AND THE AGREEMENT ON FREE TRADE PURSUE DIFFERENT OBJECTIVES , IT FOLLOWS THAT THE INTERPRETATION GIVEN TO ARTICLE 95 OF THE TREATY CANNOT BE APPLIED BY WAY OF SIMPLE ANALOGY TO THE AGREEMENT ON FREE TRADE .

THE FIRST PARAGRAPH OF ARTICLE 11 MUST THEREFORE BE INTERPRETED ACCORDING TO ITS TERMS AND IN THE LIGHT OF THE OBJECTIVE WHICH IT PURSUES IN THE SYSTEM OF FREE TRADE ESTABLISHED BY THE AGREEMENT .

9 . THERE IS NO DISCRIMINATION WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND THE PORTUGUESE REPUBLIC WHERE A MEMBER STATE DOES NOT APPLY TO PRODUCTS ORIGINATING IN PORTUGAL A TAX REDUCTION PROVIDED FOR CERTAIN CLASSES OF PRODUCERS OR KINDS OF PRODUCTS IF THERE IS NO LIKE PRODUCT ON THE MARKET OF THE MEMBER STATE CONCERNED WHICH HAS IN FACT BENEFITED FROM SUCH REDUCTION .

10 . FOR THE PURPOSES OF ITS APPLICATION IN THE COMMUNITY THE CONCEPT OF SIMILARITY CONTAINED IN THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE EEC AND PORTUGAL IS ONE OF COMMUNITY LAW WHICH MUST BE INTERPRETED UNIFORMLY AND IT IS FOR THE COURT TO ENSURE THAT THIS IS THE CASE .

IN VIEW OF THE PURPOSE OF THAT PROVISION PRODUCTS WHICH DIFFER INTER SE BOTH AS REGARDS THE METHOD OF THEIR MANUFACTURE AND THEIR CHARACTERISTICS MAY NOT BE REGARDED AS LIKE PRODUCTS WITHIN THE MEANING OF THE SAID PROVISION . IT FOLLOWS THAT LIQUEUR WINES FORTIFIED WITH SPIRITS ON THE ONE HAND AND WINES RESULTING FROM NATURAL FERMENTATION ON THE OTHER MAY NOT BE REGARDED AS LIKE PRODUCTS WITHIN THE MEANING OF THE PROVISION AT ISSUE .

Parties

IN CASE 104/81

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE BUNDESFINANZHOF FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

HAUPTZOLLAMT MAINZ

AND

C . A . KUPFERBERG & CIE . KG A . A ., MAINZ ,

Subject of the case

ON THE INTERPRETATION OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT MADE ON 22 JULY 1972 BETWEEN THE EEC AND THE PORTUGUESE REPUBLIC ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION ( 31 DECEMBER ) L 301 , P . 166 ) AND ARTICLE 95 OF THE EEC TREATY ,

Grounds

1 BY ORDER OF 24 MARCH 1981 , RECEIVED AT THE COURT ON 29 APRIL 1981 , THE BUNDESFINANZHOF ( FEDERAL FINANCE COURT ) REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A NUMBER OF QUESTIONS ON THE INTERPRETATION OF ARTICLE 95 OF THE TREATY AND THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE PORTUGUESE REPUBLIC WHICH WAS SIGNED AT BRUSSELS ON 22 JULY 1972 AND CONCLUDED AND ADOPTED ON BEHALF OF THE COMMUNITY BY REGULATION NO 2844/72 OF THE COUNCIL OF 19 DECEMBER 1972 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( 31 DECEMBER ), L 301 , P . 165 ).

2 THE MAIN PROCEEDINGS ARE BETWEEN A GERMAN IMPORTER AND THE HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) MAINZ ON THE QUESTION OF THE RATE OF THE DUTY KNOWN AS ' ' MONOPOLY EQUALIZATION DUTY ' ' ( MONOPOLAUSGLEICH ) WHICH WAS APPLIED ON THE RELEASE FOR FREE CIRCULATION , ON 26 AUGUST 1976 , OF A CONSIGNMENT OF PORT WINES FROM PORTUGAL .

3 MONOPOLY EQUALIZATION DUTY IS LEVIED UNDER PARAGRAPH 151 ( 1 ) OF THE BRANNTWEINMONOPOLGESETZ ( LAW ON THE MONOPOLY IN SPIRITS ) ON IMPORTED SPIRITS AND SPIRITUOUS PRODUCTS .

4 ACCORDING TO PARAGRAPH 151 ( 3 ) ( PARAGRAPH 151 ( 2 ) AT THE TIME WHEN THE GOODS IN QUESTION WERE RELEASED FOR FREE CIRCULATION ) LIQUEUR WINES WITH AN ALCOHOL CONTENT OF MORE THAN 14% BY VOLUME ARE AMONG THE PRODUCTS WHICH ARE TO BE CONSIDERED AS SPIRITUOUS PRODUCTS . PARAGRAPH 152 , POINT 2 , OF THAT LAW PROVIDES THAT MONOPOLY EQUALIZATION DUTY IS TO BE CALCULATED IN RESPECT OF SUCH WINES ACCORDING TO THE QUANTITY OF ALCOHOL IN EXCESS OF THE AFORESAID AMOUNT .

5 THE MONOPOLY EQUALIZATION DUTY CORRESPONDS TO THE SPIRITS SURCHARGE ( BRANNTWEINAUFSCHLAG ) LEVIED UNDER PARAGRAPH 73 OF THE BRANNTWEINMONOPOLGESETZ ON NATIONAL SPIRITS EXEMPT FROM THE OBLIGATION OF DELIVERY TO THE MONOPOLY . PARAGRAPH 79 ( 2 ) HOWEVER , PROVIDES FOR A REDUCTION OF 21% IN THE SURCHARGE ON SPIRITS PRODUCED IN LIMITED QUANTITIES BY CERTAIN DISTILLERIES . THEY INCLUDED , AT THE MATERIAL TIME , FRUIT FARM COOPERATIVE DISTILLERIES WHICH ONLY PRODUCED A MAXIMUM OF THREE HECTOLITRES PER MEMBER FROM THE FRUIT OF THEIR OWN HARVEST .

6 PURSUANT TO THE AFORESAID PARAGRAPHS 151 AND 152 THE HAUPTZOLLAMT MAINZ LEVIED ON THE IMPORTATION IN QUESTION THE SUM OF DM 18 103.80 PER HECTOLITRE OF WINE-SPIRIT . THE IMPORTER BROUGHT AN ACTION AGAINST THAT DECISION BEFORE THE FINANZGERICHT RHEINLAND-PFALZ ( FINANCE COURT , RHINELAND-PALATINATE ) WHICH VARIED THE DECISION BY REDUCING THE MONOPOLY EQUALIZATION DUTY ON THE BASIS OF PARAGRAPH 79 ( 2 ) OF THE BRANNTWEINMONOPOLGESETZ AND THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL WHICH READS AS FOLLOWS :

' ' THE CONTRACTING PARTIES SHALL REFRAIN FROM ANY MEASURE OR PRACTICE OF AN INTERNAL FISCAL NATURE ESTABLISHING , WHETHER DIRECTLY OR INDIRECTLY , DISCRIMINATION BETWEEN THE PRODUCTS OF ONE CONTRACTING PARTY AND LIKE PRODUCTS ORIGINATING IN THE TERRITORY OF THE OTHER CONTRACTING PARTY . ' '

IN DOING SO THE FINANZGERICHT TREATED THE IMPORTED PORT WINES IN THE SAME WAY AS IT WOULD HAVE TREATED DOMESTIC LIQUEUR WINES IF THERE HAD BEEN ADDED TO THE LATTER SPIRITS FROM FRUIT FARM COOPERATIVE DISTILLERIES PRODUCED WITHIN THE AFORESAID LIMITS .

7 THE HAUPTZOLLAMT MAINZ APPEALED ON A POINT OF LAW TO THE BUNDESFINANZHOF WHICH REFERRED THE FOLLOWING QUESTIONS TO THE COURT :

1 . IS THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY AND THE PORTUGUESE REPUBLIC OF 22 JULY 1972 , ADOPTED AND PUBLISHED BY REGULATION ( EEC ) NO 2844/72 OF THE COUNCIL OF 19 DECEMBER 1972 , DIRECTLY APPLICABLE LAW AND DOES IT GIVE RIGHTS TO INDIVIDUAL COMMON MARKET CITIZENS? IF SO , DOES IT CONTAIN A PROHIBITION OF DISCRIMINATION IN LIKE TERMS TO THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY AND DOES IT ALSO APPLY TO THE IMPORTATION OF PORT WINES?

2.IF QUESTION ( 1 ) IS ANSWERED IN THE AFFIRMATIVE :

( A ) IS THERE DISCRIMINATION , WITHIN THE MEANING OF THE PROHIBITION OF DISCRIMINATION CONTAINED IN THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY OR THE FIRST PARAGRAPH OF ARTICLE 21 OF THE EEC- PORTUGAL AGREEMENT , IF UNDER NATIONAL TAX PROVISIONS IT IS POSSIBLE PURELY AS A MATTER OF LEGAL THEORY FOR SIMILAR DOMESTIC PRODUCTS TO BE TREATED MORE FAVOURABLY ( POTENTIAL DISCRIMINATION ), OR DOES DISCRIMINATION WITHIN THE MEANING OF THOSE PROVISIONS EXIST ONLY IF IN AN ACTUAL TAX COMPARISON SIMILAR DOMESTIC PRODUCTS ARE IN PRACTICE FOUND TO BE TREATED MORE FAVOURABLY FROM THE POINT OF VIEW OF TAX?

( B)DOES ARTICLE 95 OF THE EEC TREATY OR THE FIRST PARAGRAPH OF ARTICLE 21 OF THE EEC-PORTUGAL AGREEMENT REQUIRE A PRODUCT FROM ANOTHER MEMBER STATE OR PORTUGAL , WHICH ON IMPORTATION IS TAXED AT THE SAME RATE AS A DIRECTLY SIMILAR DOMESTIC PRODUCT , TO BE TAXED AT THE LOWER RATE OF TAXATION WHICH NATIONAL LAW IMPOSES ON ANOTHER PRODUCT WHICH IS EQUALLY TO BE REGARDED AS SIMILAR , WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY , TO THE IMPORTED PRODUCT?

FIRST QUESTION

8 THE FIRST QUESTION HAS THREE PARTS THE FIRST OF WHICH RELATES TO THE DIRECT APPLICABILITY OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT . IN THE EVENT OF AN ANSWER IN THE AFFIRMATIVE THE SECOND PART RAISES THE QUESTION WHETHER THE PROVISION IS ANALOGOUS IN SCOPE TO THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY AND IN THE THIRD PART OF THE QUESTION IT IS ASKED WHETHER THE PROVISION ALSO APPLIES TO THE IMPORTATION OF PORT WINES .

FIRST PART OF THE QUESTION

9 IN THE FIRST PLACE THE BUNDESFINANZHOF WISHES TO KNOW WHETHER THE GERMAN IMPORTER MAY RELY ON THE SAID ARTICLE 21 BEFORE THE GERMAN COURT IN THE PROCEEDINGS WHICH IT HAS BROUGHT AGAINST THE DECISION OF THE TAX AUTHORITIES .

10 IN THE OBSERVATIONS WHICH THEY HAVE SUBMITTED TO THE COURT , THE GOVERNMENTS OF THE KINGDOM OF DENMARK , THE FEDERAL REPUBLIC OF GERMANY , THE FRENCH REPUBLIC AND THE UNITED KINGDOM HAVE LAID THE MOST STRESS ON THE QUESTION WHETHER A PROVISION WHICH IS PART OF ONE OF THE FREE-TRADE AGREEMENTS MADE BY THE COMMUNITY WITH THE MEMBER COUNTRIES OF THE EUROPEAN FREE TRADE ASSOCIATION IS IN PRINCIPLE CAPABLE OF HAVING DIRECT EFFECT IN THE MEMBER STATES OF THE COMMUNITY .

11 THE TREATY ESTABLISHING THE COMMUNITY HAS CONFERRED UPON THE INSTITUTIONS THE POWER NOT ONLY OF ADOPTING MEASURES APPLICABLE IN THE COMMUNITY BUT ALSO OF MAKING AGREEMENTS WITH NON-MEMBER COUNTRIES AND INTERNATIONAL ORGANIZATIONS IN ACCORDANCE WITH THE PROVISIONS OF THE TREATY . ACCORDING TO ARTICLE 228 ( 2 ) THESE AGREEMENTS ARE BINDING ON THE INSTITUTIONS OF THE COMMUNITY AND ON MEMBER STATES . CONSEQUENTLY , IT IS INCUMBENT UPON THE COMMUNITY INSTITUTIONS , AS WELL AS UPON THE MEMBER STATES , TO ENSURE COMPLIANCE WITH THE OBLIGATIONS ARISING FROM SUCH AGREEMENTS .

12 THE MEASURES NEEDED TO IMPLEMENT THE PROVISIONS OF AN AGREEMENT CONCLUDED BY THE COMMUNITY ARE TO BE ADOPTED , ACCORDING TO THE STATE OF COMMUNITY LAW FOR THE TIME BEING IN THE AREAS AFFECTED BY THE PROVISIONS OF THE AGREEMENT , EITHER BY THE COMMUNITY INSTITUTIONS OR BY THE MEMBER STATES . THAT IS PARTICULARLY TRUE OF AGREEMENTS SUCH AS THOSE CONCERNING FREE TRADE WHERE THE OBLIGATIONS ENTERED INTO EXTEND TO MANY AREAS OF A VERY DIVERSE NATURE .

13 IN ENSURING RESPECT FOR COMMITMENTS ARISING FROM AN AGREEMENT CONCLUDED BY THE COMMUNITY INSTITUTIONS THE MEMBER STATES FULFIL AN OBLIGATION NOT ONLY IN RELATION TO THE NON-MEMBER COUNTRY CONCERNED BUT ALSO AND ABOVE ALL IN RELATION TO THE COMMUNITY WHICH HAS ASSUMED RESPONSIBILITY FOR THE DUE PERFORMANCE OF THE AGREEMENT . THAT IS WHY THE PROVISIONS OF SUCH AN AGREEMENT , AS THE COURT HAS ALREADY STATED IN ITS JUDGMENT OF 30 APRIL 1974 IN CASE 181/73 HAEGEMAN ( 1974 ) ECR 449 , FORM AN INTEGRAL PART OF THE COMMUNITY LEGAL SYSTEM .

14 IT FOLLOWS FROM THE COMMUNITY NATURE OF SUCH PROVISIONS THAT THEIR EFFECT IN THE COMMUNITY MAY NOT BE ALLOWED TO VARY ACCORDING TO WHETHER THEIR APPLICATION IS IN PRACTICE THE RESPONSIBILITY OF THE COMMUNITY INSTITUTIONS OR OF THE MEMBER STATES AND , IN THE LATTER CASE , ACCORDING TO THE EFFECTS IN THE INTERNAL LEGAL ORDER OF EACH MEMBER STATE WHICH THE LAW OF THAT STATE ASSIGNS TO INTERNATIONAL AGREEMENTS CONCLUDED BY IT . THEREFORE IT IS FOR THE COURT , WITHIN THE FRAMEWORK OF ITS JURISDICTION IN INTERPRETING THE PROVISIONS OF AGREEMENTS , TO ENSURE THEIR UNIFORM APPLICATION THROUGHOUT THE COMMUNITY .

15 THE GOVERNMENTS WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT DO NOT DENY THE COMMUNITY NATURE OF THE PROVISIONS OF AGREEMENTS CONCLUDED BY THE COMMUNITY . THEY CONTEND , HOWEVER , THAT THE GENERALLY RECOGNIZED CRITERIA FOR DETERMINING THE EFFECTS OF PROVISIONS OF A PURELY COMMUNITY ORIGIN MAY NOT BE APPLIED TO PROVISIONS OF A FREE-TRADE AGREEMENT CONCLUDED BY THE COMMUNITY WITH A NON-MEMBER COUNTRY .

16 IN THAT RESPECT THE GOVERNMENTS BASE THEIR ARGUMENTS IN PARTICULAR ON THE DISTRIBUTION OF POWERS IN REGARD TO THE EXTERNAL RELATIONS OF THE COMMUNITY , THE PRINCIPAL OF RECIPROCITY GOVERNING THE APPLICATION OF FREE-TRADE AGREEMENTS , THE INSTITUTIONAL FRAMEWORK ESTABLISHED BY SUCH AGREEMENTS IN ORDER TO SETTLE DIFFERENCES BETWEEN THE CONTRACTING PARTIES AND SAFEGUARD CLAUSES ALLOWING THE PARTIES TO DEROGATE FROM THE AGREEMENTS .

17 IT IS TRUE THAT THE EFFECTS WITHIN THE COMMUNITY OF PROVISIONS OF AN AGREEMENT CONCLUDED BY THE COMMUNITY WITH A NON-MEMBER COUNTRY MAY NOT BE DETERMINED WITHOUT TAKING ACCOUNT OF THE INTERNATIONAL ORIGIN OF THE PROVISIONS IN QUESTION . IN CONFORMITY WITH THE PRINCIPLES OF PUBLIC INTERNATIONAL LAW COMMUNITY INSTITUTIONS WHICH HAVE POWER TO NEGOTIATE AND CONCLUDE AN AGREEMENT WITH A NON-MEMBER COUNTRY ARE FREE TO AGREE WITH THAT COUNTRY WHAT EFFECT THE PROVISIONS OF THE AGREEMENT ARE TO HAVE IN THE INTERNAL LEGAL ORDER OF THE CONTRACTING PARTIES . ONLY IF THAT QUESTION HAS NOT BEEN SETTLED BY THE AGREEMENT DOES IT FALL FOR DECISION BY THE COURTS HAVING JURISDICTION IN THE MATTER , AND IN PARTICULAR BY THE COURT OF JUSTICE WITHIN THE FRAMEWORK OF ITS JURISDICTION UNDER THE TREATY , IN THE SAME MANNER AS ANY QUESTION OF INTERPRETATION RELATING TO THE APPLICATION OF THE AGREEMENT IN THE COMMUNITY .

18 ACCORDING TO THE GENERAL RULES OF INTERNATIONAL LAW THERE MUST BE BONA FIDE PERFORMANCE OF EVERY AGREEMENT . ALTHOUGH EACH CONTRACTING PARTY IS RESPONSIBLE FOR EXECUTING FULLY THE COMMITMENTS WHICH IT HAS UNDERTAKEN IT IS NEVERTHELESS FREE TO DETERMINE THE LEGAL MEANS APPROPRIATE FOR ATTAINING THAT END IN ITS LEGAL SYSTEM UNLESS THE AGREEMENT , INTERPRETED IN THE LIGHT OF ITS SUBJECT-MATTER AND PURPOSE , ITSELF SPECIFIES THOSE MEANS . SUBJECT TO THAT RESERVATION THE FACT THAT THE COURTS OF ONE OF THE PARTIES CONSIDER THAT CERTAIN OF THE STIPULATIONS IN THE AGREEMENT ARE OF DIRECT APPLICATION WHEREAS THE COURTS OF THE OTHER PARTY DO NOT RECOGNIZE SUCH DIRECT APPLICATION IS NOT IN ITSELF SUCH AS TO CONSTITUTE A LACK OF RECIPROCITY IN THE IMPLEMENTATION OF THE AGREEMENT .

19 AS THE GOVERNMENTS HAVE EMPHASIZED , THE FREE-TRADE AGREEMENTS PROVIDE FOR JOINT COMMITTEES RESPONSIBLE FOR THE ADMINISTRATION OF THE AGREEMENTS AND FOR THEIR PROPER IMPLEMENTATION . TO THAT END THEY MAY MAKE RECOMMENDATIONS AND , IN THE CASES EXPRESSLY PROVIDED FOR BY THE AGREEMENT IN QUESTION , TAKE DECISIONS .

20 THE MERE FACT THAT THE CONTRACTING PARTIES HAVE ESTABLISHED A SPECIAL INSTITUTIONAL FRAMEWORK FOR CONSULTATIONS AND NEGOTIATIONS INTER SE IN RELATION TO THE IMPLEMENTATION OF THE AGREEMENT IS NOT IN ITSELF SUFFICIENT TO EXCLUDE ALL JUDICIAL APPLICATION OF THAT AGREEMENT . THE FACT THAT A COURT OF ONE OF THE PARTIES APPLIES TO A SPECIFIC CASE BEFORE IT A PROVISION OF THE AGREEMENT INVOLVING AN UNCONDITIONAL AND PRECISE OBLIGATION AND THEREFORE NOT REQUIRING ANY PRIOR INTERVENTION ON THE PART OF THE JOINT COMMITTEE DOES NOT ADVERSELY AFFECT THE POWERS THAT THE AGREEMENT CONFERS ON THAT COMMITTEE .

21 AS REGARDS THE SAFEGUARD CLAUSES WHICH ENABLE THE PARTIES TO DEROGATE FROM CERTAIN PROVISIONS OF THE AGREEMENT IT SHOULD BE OBSERVED THAT THEY APPLY ONLY IN SPECIFIC CIRCUMSTANCES AND AS A GENERAL RULE AFTER CONSIDERATION WITHIN THE JOINT COMMITTEE IN THE PRESENCE OF BOTH PARTIES . APART FROM SPECIFIC SITUATIONS WHICH MAY INVOLVE THEIR APPLICATION , THE EXISTENCE OF SUCH CLAUSES , WHICH , MOREOVER , DO NOT AFFECT THE PROVISIONS PROHIBITING TAX DISCRIMINATION , IS NOT SUFFICIENT IN ITSELF TO AFFECT THE DIRECT APPLICABILITY WHICH MAY ATTACH TO CERTAIN STIPULATIONS IN THE AGREEMENT .

22 IT FOLLOWS FROM ALL THE FOREGOING CONSIDERATIONS THAT NEITHER THE NATURE NOR THE STRUCTURE OF THE AGREEMENT CONCLUDED WITH PORTUGAL MAY PREVENT A TRADER FROM RELYING ON THE PROVISIONS OF THE SAID AGREEMENT BEFORE A COURT IN THE COMMUNITY .

23 NEVERTHELESS THE QUESTION WHETHER SUCH A STIPULATION IS UNCONDITIONAL AND SUFFICIENTLY PRECISE TO HAVE DIRECT EFFECT MUST BE CONSIDERED IN THE CONTEXT OF THE AGREEMENT OF WHICH IT FORMS PART . IN ORDER TO REPLY TO THE QUESTION ON THE DIRECT EFFECT OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL IT IS NECESSARY TO ANALYSE THE PROVISION IN THE LIGHT OF BOTH THE OBJECT AND PURPOSE OF THE AGREEMENT AND OF ITS CONTEXT .

24 THE PURPOSE OF THE AGREEMENT IS TO CREATE A SYSTEM OF FREE TRADE IN WHICH RULES RESTRICTING COMMERCE ARE ELIMINATED IN RESPECT OF VIRTUALLY ALL TRADE IN PRODUCTS ORIGINATING IN THE TERRITORY OF THE PARTIES , IN PARTICULAR BY ABOLISHING CUSTOMS DUTIES AND CHARGES HAVING EQUIVALENT EFFECT AND ELIMINATING QUANTITATIVE RESTRICTIONS AND MEASURES HAVING EQUIVALENT EFFECT .

25 SEEN IN THAT CONTEXT THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT SEEKS TO PREVENT THE LIBERALIZATION OF THE TRADE IN GOODS THROUGH THE ABOLITION OF CUSTOMS DUTIES AND CHARGES HAVING EQUIVALENT EFFECT AND QUANTITATIVE RESTRICTIONS AND MEASURES HAVING EQUIVALENT EFFECT FROM BEING RENDERED NUGATORY BY FISCAL PRACTICES OF THE CONTRACTING PARTIES . THAT WOULD BE SO IF THE PRODUCT IMPORTED OF ONE PARTY WERE TAXED MORE HEAVILY THAN THE SIMILAR DOMESTIC PRODUCTS WHICH IT ENCOUNTERS ON THE MARKET OF THE OTHER PARTY .

26 IT APPEARS FROM THE FOREGOING THAT THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT IMPOSES ON THE CONTRACTING PARTIES AN UNCONDITIONAL RULE AGAINST DISCRIMINATION IN MATTERS OF TAXATION , WHICH IS DEPENDENT ONLY ON A FINDING THAT THE PRODUCTS AFFECTED BY A PARTICULAR SYSTEM OF TAXATION ARE OF LIKE NATURE , AND THE LIMITS OF WHICH ARE THE DIRECT CONSEQUENCE OF THE PURPOSE OF THE AGREEMENT . AS SUCH THIS PROVISION MAY BE APPLIED BY A COURT AND THUS PRODUCE DIRECT EFFECTS THROUGHOUT THE COMMUNITY .

27 THE FIRST PART OF THE FIRST QUESTION SHOULD THEREFORE BE ANSWERED TO THE EFFECT THAT THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL IS DIRECTLY APPLICABLE AND CAPABLE OF CONFERRING UPON INDIVIDUAL TRADERS RIGHTS WHICH THE COURTS MUST PROTECT .

SECOND PART OF THE QUESTION

28 IN THE EVENT OF AN ANSWER IN THE AFFIRMATIVE TO THE PART OF THE QUESTION CONCERNING THE DIRECT EFFECT OF THE PROVISION AT ISSUE THE BUNDESFINANZHOF ASKS FURTHER WHETHER THAT PROVISION CONTAINS A PROHIBIT OF DISCRIMINATION ANALOGOUS TO THAT LAID DOWN IN THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY .

29 IN THAT RESPECT IT MUST BE OBSERVED THAT ALTHOUGH ARTICLE 21 OF THE AGREEMENT AND ARTICLE 95 OF THE EEC TREATY HAVE THE SAME OBJECT INASMUCH AS THEY AIM AT THE ELIMINATION OF TAX DISCRIMINATION , BOTH PROVISIONS , WHICH ARE MOREOVER WORDED DIFFERENTLY , MUST HOWEVER BE CONSIDERED AND INTERPRETED IN THEIR OWN CONTEXT .

30 AS THE COURT HAS ALREADY STATED IN ITS JUDGMENT OF 9 FEBRUARY 1982 IN CASE 270/80 POLYDOR (( 1982 ) ECR 329 ), THE EEC TREATY AND THE AGREEMENT ON FREE TRADE PURSUE DIFFERENT OBJECTIVES . IT FOLLOWS THAT THE INTERPRETATIONS GIVEN TO ARTICLE 95 OF THE TREATY CANNOT BE APPLIED BY WAY OF SIMPLE ANALOGY TO THE AGREEMENT ON FREE TRADE .

31 THE SECOND PART OF THE QUESTION MUST THEREFORE BE ANSWERED TO THE EFFECT THAT THE FIRST PARAGRAPH OF ARTICLE 21 MUST BE INTERPRETED ACCORDING TO ITS TERMS AND IN THE LIGHT OF THE OBJECTIVE WHICH IT PURSUES IN THE SYSTEM OF FREE TRADE ESTABLISHED BY THE AGREEMENT .

THIRD PART OF THE QUESTION

32 FINALLY THE BUNDESFINANZHOF RAISES THE QUESTION WHETHER THE RULE AGAINST TAX DISCRIMINATION CONTAINED IN ARTICLE 21 OF THE AGREEMENT ALSO APPLIES TO THE IMPORTATION OF PORT WINES .

33 ARTICLE 2 OF THE AGREEMENT PROVIDES THAT IT APPLIES TO PRODUCTS ORIGINATING IN THE COMMUNITY OR IN PORTUGAL :

' ' ( I ) WHICH FALL WITHIN CHAPTERS 25 TO 99 OF THE BRUSSELS NOMENCLATURE , EXCLUDING THE PRODUCTS LISTED IN ANNEX I ;

( II)WHICH ARE SPECIFIED IN PROTOCOLS NOS 2 AND 8 , WITH DUE REGARD TO THE ARRANGEMENTS PROVIDED FOR IN THOSE PROTOCOLS . ' '

34 PORT WINES ARE MENTIONED IN ARTICLE 4 OF PROTOCOL NO 8 RELATING TO THE RULES APPLICABLE TO CERTAIN AGRICULTURAL PRODUCTS . ARTICLE 4 PROVIDES THAT DUTIES ON IMPORTS INTO THE COMMUNITY OF THE PRODUCTS LISTED THEREIN AND ORIGINATING IN PORTUGAL ARE TO BE REDUCED IN THE PROPORTIONS AND WITHIN THE LIMITS OF THE TARIFF QUOTA INDICATED FOR EACH OF THEM .

35 IT IS APPARENT FROM THOSE PROVISIONS THAT THE AGREEMENT APPLIES TO PORT WINES SUBJECT TO CERTAIN LIMITATIONS REGARDING THE ABOLITION OF CUSTOMS DUTIES . ON THE OTHER HAND THE ARRANGEMENTS LAID DOWN IN THE PROTOCOL IN NO WAY AFFECT THE PROHIBITION OF TAX DISCRIMINATION CONTAINED IN THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT .

36 THE LAST PART OF THE FIRST QUESTION MUST THEREFORE BE ANSWERED TO THE EFFECT THAT THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL ALSO APPLIES TO THE IMPORTATION OF PORT WINES .

SECOND QUESTION

37 IN THIS QUESTION THE BUNDESFINANZHOF SEEKS TO OBTAIN THE CRITERIA FOR INTERPRETATION WHICH IT NEEDS IN ORDER TO BE ABLE TO DECIDE WHETHER THE TAX TREATMENT TO WHICH THE NATIONAL AUTHORITIES HAVE SUBJECTED IMPORTED PORT WINES IS CONTRARY TO THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL . IN ORDER TO ANSWER THAT QUESTION IT IS NECESSARY TO COMPARE THE PROVISION AS IT HAS BEEN INTERPRETED ABOVE WITH THE FACTS AS THEY APPEAR IN THE ORDER MAKING THE REFERENCE .

38 QUESTION 2 ( A ) ESSENTIALLY ASKS WHETHER THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT ALLOWS THE FEDERAL REPUBLIC OF GERMANY TO APPLY TO SPIRITS ADDED TO PORT WINES THE TAX ON SPIRITS AT THE FULL RATE OR WHETHER THAT PROVISION REQUIRES THE MEMBER STATE TO APPLY THE REDUCED RATE OF TAX WHICH PARAGRAPH 79 ( 2 ) OF THE BRANNTWEINMONOPOLGESETZ PROVIDED FOR ALCOHOL PRODUCED BY FRUIT FARM COOPERATIVE DISTILLERIES WITHIN THE LIMITS OF THEIR RIGHTS TO DISTIL .

39 THE PARTICULARS IN THE ORDER MAKING REFERENCE DO NOT SHOW WHETHER OR NOT THE ALCOHOL ADDED TO THE IMPORTED PORT WINES WAS PRODUCED IN CONDITIONS COMPARABLE TO THOSE ON WHICH THE REDUCTION IN THE SPIRITS SURCHARGE GRANTED TO FRUIT FARM COOPERATIVE DISTILLERIES DEPENDED . ON THE OTHER HAND IT IS APPARENT FROM THOSE PARTICULARS THAT THE FRUIT FARM COOPERATIVE DISTILLERIES REFERRED TO BY THE NATIONAL LAW DO NOT PRODUCE ALCOHOL SUITABLE FOR ADDING TO LIQUEUR WINES .

40 IT THUS APPEARS THAT THERE WAS NO DOMESTIC ALCOHOL ON THE MARKET OF THE FEDERAL REPUBLIC OF GERMANY SUITABLE FOR ADDING TO WINE TO PRODUCE A LIQUEUR WINE WHICH WAS SIMILAR TO PORT WINE AND WHICH COULD HAVE QUALIFIED FOR THE TAX REDUCTION PROVIDED FOR FRUIT FARM COOPERATIVE DISTILLERIES .

41 IN THOSE CIRCUMSTANCES THE FACT THAT THE SAID REDUCTION IS NOT APPLIED TO PORT WINES IS NOT SUCH AS TO HAVE AN ADVERSE EFFECT UPON THE LIBERALIZATION OF TRADE BETWEEN THE COMMUNITY AND PORTUGAL REFERRED TO IN THE AGREEMENT . HAVING REGARD TO THE OBJECT OF THE AGREEMENT , THE PURELY THEORETICAL HYPOTHESIS THAT HAD THE SAME PRODUCT BEEN MANUFACTURED IN THE FEDERAL REPUBLIC OF GERMANY IN SPECIAL CONDITIONS IT WOULD HAVE BEEN ENTITLED TO THE TAX REDUCTION IS NOT SUFFICIENT TO ESTABLISH AN OBLIGATION TO GRANT THAT REDUCTION TO THE IMPORTED PRODUCT .

42 QUESTION 2 ( A ) MUST THEREFORE BE ANSWERED TO THE EFFECT THAT THERE IS NO DISCRIMINATION WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL WHERE A MEMBER STATE DOES NOT APPLY TO PRODUCTS ORIGINATING IN PORTUGAL A TAX REDUCTION PROVIDED FOR CERTAIN CLASSES OF PRODUCERS OR KINDS OF PRODUCTS IF THERE IS NO LIKE PRODUCT ON THE MARKET OF THE MEMBER STATE CONCERNED WHICH HAS IN FACT BENEFITED FROM SUCH REDUCTION .

43 QUESTION 2 ( B ) ASKS WHETHER THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL MUST BE INTERPRETED AS REQUIRING THE CONCEPT OF LIKE PRODUCTS TO COVER NOT ONLY PRODUCTS ' ' DIRECTLY ' ' SIMILAR BUT ALSO OTHER PRODUCTS WHICH ARE TO BE CONSIDERED AS ' ' EQUALLY SIMILAR ' ' .

44 IT IS APPARENT FROM THE ORDER MAKING THE REFERENCE THAT THE BUNDESFINANZHOF HAS PUT THAT QUESTION ON THE ASSUMPTION THAT PORT WINES MAY RESSEMBLE NOT ONLY OTHER LIQUEUR WINES BUT ALSO WINES OF A SPECIAL KIND OF A HIGH ALCOHOL CONTENT RESULTING FROM NATURAL FERMENTATION WHICH , IN THE FEDERAL REPUBLIC OF GERMANY , ARE NOT SUBJECT TO ANY TAX .

45 IN THAT RESPECT IT MUST BE EMPHASIZED THAT FOR THE PURPOSES OF ITS APPLICATION IN THE COMMUNITY THE CONCEPT OF SIMILARITY CONTAINED IN THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL IS ONE OF COMMUNITY LAW WHICH MUST BE INTERPRETED UNIFORMLY AND IT IS FOR THE COURT TO ENSURE THAT THIS IS THE CASE .

46 IN VIEW OF THE PURPOSE OF THAT PROVISION AS DESCRIBED ABOVE PRODUCTS WHICH DIFFER INTER SE BOTH AS REGARDS THE METHOD OF THEIR MANUFACTURE AND THEIR CHARACTERISTICS MAY NOT BE REGARDED AS LIKE PRODUCTS WITHIN THE MEANING OF THE SAID PROVISION . IT FOLLOWS THAT LIQUEUR WINES FORTIFIED WITH SPIRITS ON THE ONE HAND AND WINES RESULTING FROM NATURAL FERMENTATION ON THE OTHER MAY NOT BE REGARDED AS LIKE PRODUCTS WITHIN THE MEANING OF THE PROVISION AT ISSUE .

47 QUESTION 2 ( B ) MUST THEREFORE BE ANSWERED TO THE EFFECT THAT PRODUCTS WHICH DIFFER INTER SE BOTH AS REGARDS THE METHOD OF THEIR MANUFACTURE AND THEIR CHARACTERISTICS MAY NOT BE REGARDED AS LIKE PRODUCTS WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT .

Decision on costs

COSTS

48 THE COSTS INCURRED BY THE GOVERNMENTS OF THE KINGDOM OF DENMARK , THE FEDERAL REPUBLIC OF GERMANY , THE FRENCH REPUBLIC AND THE UNITED KINGDOM AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION 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 BUNDESFINANZHOF BY ORDER OF 24 MARCH 1981 , HEREBY RULES :

1 . THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL IS DIRECTLY APPLICABLE AND CAPABLE OF CONFERRING ON INDIVIDUAL TRADERS RIGHTS WHICH THE COURTS MUST PROTECT .

2.IT MUST BE INTERPRETED ACCORDING TO ITS WORDING AND IN THE LIGHT OF THE OBJECTIVE WHICH IT HAS IN THE CONTEXT OF THE SYSTEM OF FREE TRADE ESTABLISHED BY THE AGREEMENT .

3.THE PROVISION ALSO APPLIES TO THE IMPORTATION OF PORT WINES .

4.IT MUST BE INTERPRETED AS FOLLOWS :

( A ) THERE IS NO DISCRIMINATION WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 21 OF THE AGREEMENT BETWEEN THE COMMUNITY AND PORTUGAL WHERE A MEMBER STATE DOES NOT APPLY TO PRODUCTS ORIGINATING IN PORTUGAL A TAX REDUCTION PROVIDED FOR CERTAIN CLASSES OF PRODUCERS OR KINDS OF PRODUCTS IF THERE IS NO LIKE PRODUCT ON THE MARKET OF THE MEMBER STATE CONCERNED WHICH HAS IN FACT BENEFITED FROM SUCH REDUCTION .

( B)PRODUCTS WHICH DIFFER BOTH AS REGARDS THE METHOD OF THEIR MANUFACTURE AND THEIR CHARACTERISTICS MAY NOT BE REGARDED AS LIKE PRODUCTS .