Judgment of the Court of 11 November 1981. - Criminal proceedings against Guerrino Casati. - Reference for a preliminary ruling: Tribunale civile e penale di Bolzano - Italy. - Free movement of capital - National control requirements. - Case 203/80.



European Court reports 1981 Page 02595

Swedish special edition Page 00211

Finnish special edition Page 00217

Spanish special edition Page 00681



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . FREE MOVEMENT OF CAPITAL - IMPLEMENTATION - CRITERIA - ASSESSMENT OF THE REQUIREMENTS OF THE COMMON MARKET - POWERS OF THE COUNCIL

( EEC TREATY , ARTS . 67 ( 1 ) AND 69 )

2 . FREE MOVEMENT OF CAPITAL - PROVISIONS OF THE TREATY - ARTICLE 67 ( 1 ) - DIRECT EFFECT - ABSENCE - RESTRICTIONS ON THE EXPORTATION OF BANK NOTES - WHETHER PERMISSIBLE

( EEC TREATY , ARTS . 67 ( 1 ) AND 69 )

3 . FREE MOVEMENT OF CAPITAL - MOVEMENTS OF CAPITAL WHICH HAVE NOT BEEN LIBERALIZED - RECOURSE TO THE SAFEGUARD CLAUSE IN ARTICLE 73 OF THE TREATY - NONE

( EEC TREATY , ART . 73 )

4 . FREE MOVEMENT OF CAPITAL - PROVISIONS OF THE TREATY - ARTICLE 71 , FIRST PARAGRAPH - DIRECT EFFECT - ABSENCE

( EEC TREATY , ART . 71 , FIRST PARAGRAPH )

5 . BALANCE OF PAYMENTS - LIBERALIZATION OF PAYMENTS - TRANSFERS RELATING TO INVISIBLE TRANSACTION - RE-EXPORTATION OF BANK NOTES - EXCLUSION

( EEC TREATY , ART . 106 ( 3 ))

6 . BALANCE OF PAYMENTS - LIBERALIZATION OF PAYMENTS - PAYMENTS RELATING TO COMMERCIAL TRANSACTIONS - AUTHORIZATION TO TRANSFER BANK NOTES - OBLIGATION ON THE PART OF THE MEMBER STATES - ABSENCE

( EEC TREATY , ART . 106 ( 1 ) AND ( 2 ))

7 . FREE MOVEMENT OF CAPITAL - MOVEMENTS OF CAPITAL AND TRANSFERS OF CURRENCY WHICH HAVE NOT BEEN LIBERALIZED - CONTROL MEASURES ADOPTED BY MEMBER STATES - CRIMINAL PENALTIES - WHETHER PERMISSIBLE

( EEC TREATY , ARTS . 67 AND 106 )

Summary

1 . ARTICLE 67 ( 1 ) OF THE EEC TREATY DIFFERS FROM THE PROVISIONS ON THE FREE MOVEMENT OF GOODS , PERSONS AND SERVICES IN THE SENSE THAT THERE IS AN OBLIGATION TO LIBERALIZE CAPITAL MOVEMENTS ONLY ' ' TO THE EXTENT NECESSARY TO ENSURE THE PROPER FUNCTIONING OF THE COMMON MARKET ' ' . THE SCOPE OF THAT RESTRICTION , WHICH REMAINED IN FORCE AFTER THE EXPIRY OF THE TRANSITIONAL PERIOD , VARIES IN TIME AND DEPENDS ON AN ASSESSMENT OF THE REQUIREMENTS OF THE COMMON MARKET AND ON AN APPRAISAL OF BOTH THE ADVANTAGES AND RISKS WHICH LIBERALIZATION MIGHT ENTAIL FOR THE LATTER , HAVING REGARD TO THE STAGE IT HAS REACHED AND , IN PARTICULAR , TO THE LEVEL OF INTEGRATION ATTAINED IN MATTERS IN RESPECT OF WHICH CAPITAL MOVEMENTS ARE PARTICULARLY SIGNIFICANT .

SUCH AN ASSESSMENT IS , FIRST AND FOREMOST , A MATTER FOR THE COUNCIL , IN ACCORDANCE WITH THE PROCEDURE PROVIDED FOR BY ARTICLE 69 .

2 . ARTICLE 67 ( 1 ) OF THE TREATY MUST BE INTERPRETED AS MEANING THAT RESTRICTION ON THE EXPORTATION OF BANK NOTES MAY NOT BE REGARDED AS ABOLISHED AS FROM THE EXPIRY OF THE TRANSITIONAL PERIOD , IRRESPECTIVE OF THE PROVISIONS OF ARTICLE 69 .

3 . FAILURE TO HAVE RECOURSE TO THE SAFEGUARD PROCEDURES PROVIDED FOR BY ARTICLE 73 IN REGARD TO RESTRICTIONS IMPOSED ON CAPITAL MOVEMENTS WHICH THE MEMBER STATE CONCERNED IS NOT OBLIGED TO LIBERALIZE UNDER THE RULES OF COMMUNITY LAW DOES NOT CONSTITUTE AN INFRINGEMENT OF THE EEC TREATY .

4 . THE FIRST PARAGRAPH OF ARTICLE 71 OF THE TREATY DOES NOT IMPOSE ON THE MEMBER STATES AN UNCONDITIONAL OBLIGATION CAPABLE OF BEING RELIED UPON BY INDIVIDUALS .

5 . ARTICLE 106 ( 3 ) OF THE TREATY IS INAPPLICABLE TO THE RE-EXPORTATION OF A SUM OF MONEY PREVIOUSLY IMPORTED WITH A VIEW TO MAKING PURCHASES OF A COMMERCIAL NATURE IF SUCH PURCHASES HAVE NOT IN FACT BEEN EFFECTED .

6 . THE FIRST TWO PARAGRAPHS OF ARTICLE 106 OF THE TREATY ARE DESIGNED TO ENSURE THE FREE MOVEMENT OF GOODS IN PRACTICE BY AUTHORIZING ALL THE TRANSFERS OF CURRENCY NECESSARY TO ACHIEVE THAT AIM . HOWEVER , THOSE PROVISIONS DO NOT REQUIRE THE MEMBER STATES TO AUTHORIZE THE IMPORTATION AND EXPORTATION OF BANK NOTES FOR THE PERFORMANCE OF COMMERCIAL TRANSACTIONS , IF SUCH TRANSFERS ARE NOT NECESSARY FOR THE FREE MOVEMENT OF GOODS . IN CONNEXION WITH COMMERCIAL TRANSACTIONS , THAT METHOD OF TRANSFER WHICH , MOREOVER , IS NOT IN CONFORMITY WITH STANDARD PRACTICE , CANNOT BE REGARDED AS NECESSARY TO ENSURE SUCH FREE MOVEMENT .

7 . WITH REGARD TO MOVEMENTS OF CAPITAL AND TRANSFERS OF CURRENCY WHICH THE MEMBER STATES ARE NOT OBLIGED TO LIBERALIZE UNDER THE RULES OF COMMUNITY LAW , THOSE RULES DO NOT RESTRICT THE MEMBER STATES ' POWER TO ADOPT CONTROL MEASURES AND TO ENFORCE COMPLIANCE THEREWITH BY MEANS OF CRIMINAL PENALTIES .

Parties

IN CASE 203/80

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNALE ( DISTRICT COURT ), BOLZANO , FOR A PRELIMINARY RULING IN THE CRIMINAL PROCEEDINGS PENDING BEFORE THAT COURT AGAINST

GUERRINO CASATI

Subject of the case

ON THE INTERPRETATION , INTER ALIA , OF ARTICLES 67 , 69 , 71 , 73 AND 106 OF THAT TREATY AND OF VARIOUS PRINCIPLES OF COMMUNITY LAW IN ORDER TO ENABLE THE NATIONAL COURT TO ADJUDICATE ON THE COMPATIBILITY OF CERTAIN PROVISIONS OF ITALIAN EXCHANGE CONTROL LEGISLATION WITH THOSE ARTICLES AND PRINCIPLES ,

Grounds

1 BY ORDER OF 6 OCTOBER 1980 , RECEIVED AT THE COURT REGISTRY ON 16 OCTOBER 1980 , THE TRIBUNALE ( DISTRICT COURT ), BOLZANO , REFERRED TO THE COURT FOR A PRELIMINARY RULING , PURSUANT TO ARTICLE 177 OF THE EEC TREATY , SEVERAL QUESTIONS ON THE INTERPRETATION OF ARTICLES 67 , 69 , 71 , 73 AND 106 OF THE EEC TREATY AND ON THE EXISTENCE OF VARIOUS PRINCIPLES OF COMMUNITY LAW , TO ENABLE IT TO ADJUDICATE ON THE COMPATIBILITY OF CERTAIN PROVISIONS OF ITALIAN EXCHANGE CONTROL LEGISLATION WITH THOSE ARTICLES AND PRINCIPLES .

2 THE QUESTIONS HAVE BEEN RAISED IN CONNECTION WITH CRIMINAL PROCEEDINGS BROUGHT AGAINST AN ITALIAN NATIONAL , RESIDING IN THE FEDERAL REPUBLIC OF GERMANY , WHO IS CHARGED WITH ATTEMPTING TO EXPORT FROM ITALY , WITHOUT THE AUTHORIZATION PRESCRIBED BY ITALIAN EXCHANGE CONTROL LEGISLATION , INTER ALIA , THE SUM OF 24 000 DM , WHICH WAS FOUND IN HIS POSSESSION ON 16 JULY 1979 AT THE FRONTIER BETWEEN ITALY AND AUSTRIA . THE ACCUSED IN THE MAIN PROCEEDINGS STATED THAT HE HAD PREVIOUSLY IMPORTED THAT SUM OF MONEY INTO ITALY , WITHOUT DECLARING IT , WITH A VIEW TO PURCHASING EQUIPMENT WHICH HE NEEDED FOR HIS BUSINESS IN GERMANY AND WAS OBLIGED TO RE-EXPORT THE CURRENCY BECAUSE THE FACTORY AT WHICH HE INTENDED TO BUY THE EQUIPMENT WAS CLOSED FOR THE HOLIDAYS .

3 ARTICLE 14 OF THE ITALIAN DECRETO MINISTERIALE ( MINISTERIAL DECREE ) OF 7 AUGUST 1978 ( GAZZETTA UFFICIALE NO 220 OF 8 AUGUST 1978 ) PROVIDES THAT FOREIGN BANK NOTES MAY BE FREELY IMPORTED . ARTICLE 13 OF THE SAME DECRETO MINISTERIALE PROVIDES THAT THE EXPORTATION OF FOREIGN BANKNOTES BY A NON-RESIDENT IS PERMITTED UP TO THE AMOUNT PREVIOUSLY IMPORTED OR THE AMOUNT LAWFULLY ACQUIRED IN ITALY , WHICH MUST BE PROVED IN ACCORDANCE WITH THE PROCEDURES LAID DOWN BY THE MINISTER FOR FOREIGN TRADE . THOSE PROCEDURES WERE LAID DOWN IN PARTICULAR BY CIRCULAR NO A/300 OF 3 MAY 1974 OF THE UFFICIO ITALIANO DEI CAMBI ( ITALIAN FOREIGN EXCHANGE DEPARTMENT ), ARTICLE 11 OF WHICH PROVIDES THAT NON-RESIDENTS MAY EXPORT THE AMOUNT OF MONEY WHICH THEY DECLARED ON FORM V 2 ON ENTRY INTO ITALY .

4 ACCORDING TO ARTICLE 1 OF LAW NO 159 OF 30 APRIL 1976 , THE UNAUTHORIZED EXPORTATION OF CURRENCY OF A VALUE EXCEEDING LIT 500 000 IS PUNISHABLE BY A TERM OF IMPRISONMENT OF ONE TO SIX YEARS AND BY A FINE OF BETWEEN TWO AND FOUR TIMES THE VALUE OF THE CURRENCY EXPORTED . BEFORE 1976 , THOSE INFRINGEMENTS WERE NO MORE THAN ADMINISTRATIVE INFRINGEMENTS , NOT OFFENCES , AND ATTRACTED ONLY ADMINISTRATIVE PENALTIES , CONSISTING OF FINES OF UP TO FIVE TIMES THE VALUE OF THE EFFECTS EXPORTED .

5 IN ITS ORDER MAKING THE REFERENCE TO THE COURT , THE NATIONAL COURT REFERRED TO THE CASE-LAW OF THE CORTE SUPREMA DI CASSAZIONE ( SUPREME COURT OF CASSATION ), ACCORDING TO WHICH A NON-RESIDENT WHO FAILS TO COMPLETE FORM V 2 ON ENTRY INTO ITALIAN TERRITORY AND ATTEMPTS TO RE-EXPORT THE CURRENCY WHICH HE CLAIMS TO HAVE LEGALLY IMPORTED COMMITS THE OFFENCE SPECIFIED IN ARTICLE 1 OF LAW NO 159 OF 1976 .

6 HAVING REGARD TO THOSE CIRCUMSTANCES , THE NATIONAL COURT ASKS THE COURT OF JUSTICE TO GIVE A PRELIMINARY RULING ON THE FOLLOWING QUESTIONS :

' ' ( 1 ) AFTER THE END OF THE TRANSITIONAL PERIOD MUST THE RESTRICTIONS ON THE MOVEMENT OF CAPITAL REFERRED TO IN ARTICLE 67 OF THE EEC TREATY BE DEEMED TO BE ABOLISHED REGARDLESS OF THE PROVISIONS OF ARTICLE 68 THEREOF?

( 2)DOES THE FACT THAT THE ITALIAN GOVERNMENT OMITTED THE CONSULTATIVE PROCEDURE LAID DOWN IN ARTICLE 73 OF THE TREATY IN RELATION TO DECRETO LEGGE NO 31 OF 4 MARCH 1976 , WHICH WAS ENACTED AS LAW NO 159 OF 30 APRIL 1976 , CONSTITUTE AN INFRINGEMENT OF THAT TREATY?

( 3)DOES ANY PRINCIPLE OR PROVISION OF THE TREATY GUARANTEE NONRESIDENTS THE RIGHT TO RE-EXPORT CURRENCY PREVIOUSLY IMPORTED AND NOT USED , EVEN IF IT HAS BEEN CONVERTED INTO ITALIAN LIRE?

( 4)IF SO , MAY ANY FAILURE TO COMPLY WITH THE FORMALITIES PRESCRIBED BY THE CURRENCY LEGISLATION OF THE STATE FROM WHICH THE SUMS ARE SUBSEQUENTLY RE-EXPORTED IN THE ABOVE-MENTIONED CIRCUMSTANCES BE PUNISHED BY PENALTIES INCLUDING CONFISCATION OF THE CURRENCY , A FINE OF UP TO FIVE TIMES THE AMOUNT OF THAT CURRENCY AND DEPRIVATION OF PERSONAL LIBERTY FOR A PERIOD OF UP TO FIVE YEARS ( SUBJECT TO HEAVIER PENALTIES WHERE A NUMBER OF PERSONS ARE INVOLVED)?

( 5)IF THE PRECEDING QUESTION IS ANSWERED IN THE AFFIRMATIVE , MAY ANY FAILURE TO COMPLY WITH THE ABOVE-MENTIONED FORMALITIES CARRY PENALTIES ON THE SAME SCALE AS THOSE IMPOSED FOR THE UNLAWFUL EXPORTATION OF CURRENCY?

( 6)AFTER THE END OF THE TRANSITIONAL PERIOD IS IT POSSIBLE TO CONSIDER AS BEING COMPATIBLE WITH THE ' ' STANDSTILL ' ' REQUIREMENTS SET OUT IN ARTICLES 71 AND 106 ( 3 ) DOMESTIC LEGISLATION WHICH INCREASES PENALTIES PRESCRIBED BY OTHER , PREVIOUS LEGISLATION , AS , FOR EXAMPLE , WHEN INFRINGEMENTS WHICH WERE PREVIOUSLY PUNISHABLE BY ADMINISTRATIVE PENALTIES ARE MADE PUNISHABLE BY IMPRISONMENT AND FINES , THEREBY RENDERING THEM CRIMINAL OFFENCES?

( 7)DOES THE PRINCIPLE IN ACCORDANCE WITH WHICH DISSIMILAR SITUATIONS MAY NOT BE TREATED IN THE SAME WAY ( WHICH IS ENCOMPASSED BY THE PROHIBITION OF DISCRIMINATION REFERRED TO INTER ALIA IN ARTICLE 7 OF THE TREATY ) PERMIT THE SAME PENALTIES IMPOSED BY A MEMBER STATE IN RESPECT OF THE UNLAWFUL EXPORTATION OF CURRENCY OR OF FAILURE TO COMPLY WITH THE FORMALITIES IN RELATION TO CURRENCY TO BE APPLIED WITHOUT DISTINCTION BOTH TO RESIDENTS OF THAT STATE AND TO NON-RESIDENTS?

( 8)AFTER THE END OF THE TRANSITIONAL PERIOD IS IT POSSIBLE TO CONSIDER COMPATIBLE WITH ARTICLES 67 , 71 AND 106 ( 3 ) OF THE TREATY DOMESTIC PROVISIONS WHICH PRESCRIBE SPECIFIED FORMALITIES IN CONNECTION WITH THE EXERCISE OF THE RIGHT , WHICH IS HOWEVER RECOGNIZED , TO RE-EXPORT PREVIOUSLY IMPORTED CAPITAL , REQUIRING THE FULFILMENT OF SUCH FORMALITIES AS SOLE PROOF OF PRIOR IMPORTATION , THEREBY CREATING IN SUBSTANCE A PENALTY UNDER CRIMINAL LAW IN RESPECT OF NON-FULFILMENT THEROF?

7 THOSE QUESTIONS MAY BE DIVIDED INTO TWO GROUPS . THE FIRST THREE QUESTIONS AND THE SIXTH QUESTION CONCERN IN PARTICULAR THE INTERPRETATION OF THE PROVISIONS OF THE EEC TREATY ON MOVEMENTS OF CAPITAL AND TRANSFERS OF CURRENCY . THE OTHERS CONCERN THE LIMITS , IF ANY , SET BY COMMUNITY LAW TO THE PROVISIONS OF CRIMINAL LAW AND PROCEDURE ADOPTED BY THE MEMBER STATES IN MATTERS CONNECTED WITH COMMUNITY LAW .

INTERPRETATION OF THE PROVISIONS RELATING TO MOVEMENTS OF CAPITAL AND TRANSFERS OF CURRENCY

8 THE FIRST QUESTION CONCERNS THE EFFECTS OF ARTICLE 67 AND , MORE PARTICULARLY , ARTICLE 67 ( 1 ), AFTER THE EXPIRY OF THE TRANSITIONAL PERIOD . THAT ARTICLE HEADS THE CHAPTER ON CAPITAL WHICH BELONGS TO TITLE II , ' ' FREE MOVEMENT OF PERSONS , SERVICES AND CAPITAL ' ' , INCORPORATED IN PART TWO OF THE EEC TREATY , ENTITLED ' ' FOUNDATIONS OF THE COMMUNITY ' ' . THE GENERAL SCHEME OF THOSE PROVISIONS IS IN KEEPING WITH THE LIST , SET OUT IN ARTICLE 3 OF THE EEC TREATY , OF THE METHODS PROVIDED FOR THE ATTAINMENT OF THE COMMUNITY ' S OBJECTIVES . THOSE METHODS INCLUDE , ACCORDING TO ARTICLE 3 ( C ) ' ' THE ABOLITION , AS BETWEEN MEMBER STATES , OF OBSTACLES TO FREEDOM OF MOVEMENT FOR PERSONS , SERVICES AND CAPITAL ' ' . THUS THE FREE MOVEMENT OF CAPITAL CONSTITUTES , ALONGSIDE THAT OF PERSONS AND SERVICES , ONE OF THE FUNDAMENTAL FREEDOMS OF THE COMMUNITY . FURTHERMORE , FREEDOM TO MOVE CERTAIN TYPES OF CAPITAL IS , IN PRACTICE , A PRE-CONDITION FOR THE EFFECTIVE EXERCISE OF OTHER FREEDOMS GUARANTEED BY THE TREATY , IN PARTICULAR THE RIGHT OF ESTABLISHMENT .

9 HOWEVER , CAPITAL MOVEMENTS ARE ALSO CLOSELY CONNECTED WITH THE ECONOMIC AND MONETARY POLICY OF THE MEMBER STATES . AT PRESENT , IT CANNOT BE DENIED THAT COMPLETE FREEDOM OF MOVEMENT OF CAPITAL MAY UNDERMINE THE ECONOMIC POLICY OF ONE OF THE MEMBER STATES OR CREATE AN IMBALANCE IN ITS BALANCE OF PAYMENTS , THEREBY IMPAIRING THE PROPER FUNCTIONIMG OF THE COMMON MARKET .

10 FOR THOSE REASONS , ARTICLE 67 ( 1 ) DIFFERS FROM THE PROVISIONS ON THE FREE MOVEMENT OF GOODS , PERSONS AND SERVICES IN THE SENSE THAT THERE IS AN OBLIGATION TO LIBERALIZE CAPITAL MOVEMENTS ONLY ' ' TO THE EXTENT NECESSARY TO ENSURE THE PROPER FUNCTIONING OF THE COMMON MARKET ' ' . THE SCOPE OF THAT RESTRICTION , WHICH REMAINED IN FORCE AFTER THE EXPIRY OF THE TRANSITIONAL PERIOD , VARIES IN TIME AND DEPENDS ON AN ASSESSMENT OF THE REQUIREMENTS OF THE COMMON MARKET AND ON AN APPRAISAL OF BOTH THE ADVANTAGES AND RISKS WHICH LIBERALIZATION MIGHT ENTAIL FOR THE LATTER , HAVING REGARD TO THE STAGE IT HAS REACHED AND , IN PARTICULAR , TO THE LEVEL OF INTEGRATION ATTAINED IN MATTERS IN RESPECT OF WHICH CAPITAL MOVEMENTS ARE PARTICULARLY SIGNIFICANT .

11 SUCH AN ASSESSMENT IS , FIRST AND FOREMOST , A MATTER FOR THE COUNCIL , IN ACCORDANCE WITH THE PROCEDURE PROVIDED FOR BY ARTICLE 69 . THE COUNCIL HAS ADOPTED TWO DIRECTIVES UNDER THAT ARTICLE , THE FIRST ON 11 MAY 1960 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1959-1962 , P.49 ) AND THE SECOND , WHICH ADDS TO AND AMENDS THE FIRST , ON 18 DECEMBER 1962 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1963-1964 , P.5 ). ALL THE MOVEMENTS OF CAPITAL ARE DIVIDED INTO FOUR LISTS ( A , B , C & D ) ANNEXED TO THE DIRECTIVES . IN THE CASE OF THE MOVEMENTS COVERED BY LISTS A AND B , UNCONDITIONAL LIBERALIZATION IS PRESCRIBED BY THE DIRECTIVES . HOWEVER , IN THE CASE OF THE MOVEMENTS COVERED BY LIST C , THE DIRECTIVES AUTHORIZE THE MEMBER STATES TO MAINTAIN OR TO RE- IMPOSE THE EXCHANGE RESTRICTIONS IN EXISTENCE ON THE DATE OF THE ENTRY INTO FORCE OF THE FIRST DIRECTIVE IF THE FREEDOM OF MOVEMENT OF CAPITAL IS CAPABLE OF FORMING AN OBSTACLE TO THE ACHIEVEMENT OF THE ECONOMIC POLICY OBJECTIVES OF THE STATE CONCERNED . FINALLY , IN THE CASE OF THE MOVEMENTS REFERRED TO IN LIST D , THE DIRECTIVES DO NOT REQUIRE THE MEMBER STATES TO ADOPT ANY LIBERALIZING MEASURES . LIST D COVERS , INTER ALIA , THE PHYSICAL IMPORTATION AND EXPORTATION OF FINANCIAL ASSETS , INCLUDING BANK NOTES .

12 THE CONCLUSION MUST BE DRAWN THAT THE OBLIGATION CONTAINED IN ARTICLE 67 ( 1 ) TO ABOLISH RESTRICTIONS ON MOVEMETS OF CAPITAL CANNOT BE DEFINED , IN RELATION TO A SPECIFIC CATEGORY OF SUCH MOVEMENTS , IN ISOLATION FROM THE COUNCIL ' S ASSESSMENT UNDER ARTICLE 69 OF THE NEED TO LIBERALIZE THAT CATEGORY IN ORDER TO ENSURE THE PROPER FUNCTIONING OF THE COMMON MARKET . THE COUNCIL HAS SO FAR TAKEN THE VIEW THAT IT IS UNNECESSARY TO LIBERALIZE THE EXPORTATION OF BANK NOTES , THE OPERATION WITH WHICH THE ACCUSED IN THE MAIN PROCEEDINGS IS CHARGED , AND THERE IS NO REASON TO SUPPOSE THAT , BY ADOPTING THAT POSITION , IT HAS OVERSTEPPED THE LIMITS OF ITS DISCRETIONARY POWER .

13 THE ANSWER TO THE FIRST QUESTION SHOULD THEREFORE BE THAT ARTICLE 67 ( 1 ) MUST BE INTERPRETED AS MEANING THAT RESTRICTIONS ON THE EXPORTATION OF BANK NOTES MAY NOT BE REGARDED AS ABOLISHED AS FROM THE EXPIRY OF THE TRANSITIONAL PERIOD , IRRESPECTIVE OF THE PROVISIONS OF ARTICLE 69 .

14 THE SECOND QUESTION PUT BY THE NATIONAL COURT CONCERNS THE SAFEGUARD CLAUSE CONTAINED IN ARTICLE 73 . THE PURPOSE OF THAT ARTICLE IS TO ENABLE A MEMBER STATE TO INTRODUCE , SUBJECT TO CERTAIN CONDITIONS AND IN ACCORDANCE WITH CERTAIN PROCEDURES , RESTRICTIONS WHICH THAT STATE WOULD OTHERWISE BE OBLIGED TO REFRAIN FROM IMPOSING UNDER THE GENERAL RULES GOVERNING MOVEMENTS OF CAPITAL . IT IS INAPPLICABLE IN THE CASE OF RESTRICTIONS THE INTRODUCTION OF WHICH IS ALREADY PERMITTED UNDER THOSE RULES .

15 IN VIEW OF THE ANSWER TO THE FIRST QUESTION , IT IS SUFFICIENT TO STATE IN REPLY TO THE SECOND QUESTION THAT FAILURE TO HAVE RECOURSE TO THE PROCEDURES PROVIDED FOR BY ARTICLE 73 IN REGARD TO RESTRICTIONS IMPOSED ON CAPITAL MOVEMENTS WHICH THE MEMBER STATE CONCERNED IS NOT OBLIGED TO LIBERALIZE UNDER THE RULES OF COMMUNITY LAW DOES NOT CONSTITUTE AN INFRINGEMENT OF THE EEC TREATY .

16 IN ITS THIRD QUESTION , THE NATIONAL COURT ASKS ESSENTIALLY WHETHER A PRINCIPLE OF COMMUNITY LAW OR ANY PROVISION OF THE TREATY GUARANTEES THE RIGHT OF NON-RESIDENTS TO RE-EXPORT CURRENCY PREVIOUSLY IMPORTED AND NOT USED .

17 TO BEGIN WITH IT IS NECESSARY TO OBSERVE THAT , AS THE REPLIES GIVEN TO THE FIRST TWO QUESTIONS SHOW , THE EXTENT TO WHICH CAPITAL MOVEMENTS ARE LIBERALIZED AND EXCHANGE RESTRICTIONS GRADUALLY ABOLISHED DOES NOT DEPEND ON A GENERAL PRINCIPLE BUT IS GOVERNED BY THE PROVISIONS OF ARTICLES 67 AND 69 OF THE EEC TREATY AND BY THOSE OF THE AFORESAID DIRECTIVES OF 11 MAY 1960 AND 18 DECEMBER 1962 ADOPTED TO GIVE EFFECT TO THOSE ARTICLES . HOWEVER , IT IS NECESSARY TO CONSIDER WHETHER , IN MATTERS WHERE , ACCORDING TO THOSE PROVISIONS , THERE IS SO FAR NO OBLIGATION TO LIBERALIZE MOVEMENTS OF CAPITAL - FOR EXAMPLE , TRANSFERS OF CURRENCY - INDIVIDUALS MAY DERIVE RIGHTS , WHICH THE MEMBER STATES ARE BOUND TO RESPECT , EITHER FROM THE STANDSTILL PROVISIONS CONTAINED IN ARTICLE 71 OF THE EEC TREATY OR FROM ARTICLE 106 OF THE EEC TREATY , BOTH OF WHICH ARE REFERRED TO BY THE NATIONAL COURT , THOUGH IN ANOTHER CONTEXT , IN ITS SIXTH AND EIGHTH QUESTIONS .

18 ACCORDING TO THE FIRST PARAGRAPH OF ARTICLE 71 , THE MEMBER STATES MUST ENDEAVOUR TO AVOID INTRODUCING WITHIN THE COMMUNITY ANY NEW EXCHANGE RESTRICTIONS ON THE MOVEMENT OF CAPITAL AND MUST ENDEAVOUR NOT TO MAKE EXISTING RULES MORE RESTRICTIVE .

19 BY USING THE TERM ' ' SHALL ENDEAVOUR ' ' , THE WORDING OF THAT PROVISION DEPARTS NOTICABLY FROM THE MORE IMPERATIVE FORMS OF WORDING EMPLOYED IN OTHER SIMILAR PROVISIONS CONCERNING RESTRICTIONS ON THE FREE MOVEMENT OF GOODS , PERSONS AND SERVICES . IT IS APPARENT FROM THAT WORDING THAT , IN ANY EVENT , THE FIRST PARAGRAPH OF ARTICLE 71 DOES NOT IMPOSE ON THE MEMBER STATES AN UNCONDITIONAL OBLIGATION CAPABLE OF BEING RELIED UPON BY INDIVIDUALS .

20 CAPITAL MOVEMENTS ACCOUNT FOR ONLY A PART OF THE TRANSACTIONS INVOLVING TRANSFERS OF CURRENCY . WITH GOOD REASON , THEREFORE , THE NATIONAL COURT DRAWS ATTENTION TO ARTICLE 106 WHICH IS DESIGNED TO ENSURE THAT THE NECESSARY TRANSFERS OF CURRENCY MAY BE MADE BOTH FOR THE LIBERALIZATION OF CAPITAL MOVEMENTS AND FOR THE FREE MOVEMENT OF GOODS , SERVICES AND PERSONS AND WHICH , MOREOVER , DOES NOT CONTAIN THE SAME RESTRICTIONS AS THOSE EXPRESSLY PROVIDED FOR BY THE PROVISIONS ALREADY CONSIDERED .

21 MORE SPECIFICALLY , IN ITS SIXTH QUESTION , THE NATIONAL COURT REFERS TO THE STANDSTILL OBLIGATION CONTAINED IN THE FIRST SUB-PARAGRAPH OF ARTICLE 106 ( 3 ). ACCORDING TO THAT PROVISION , THE MEMBER STATES UNDERTAKE NOT TO INTRODUCE BETWEEN THEMSELVES ANY NEW RESTRICTIONS ON TRANSFERS CONNECTED WITH THE SO-CALLED ' ' INVISIBLE ' ' TRANSACTIONS LISTED IN ANNEX III TO THE TREATY .

22 IN THAT REGARD , IT IS NECESSARY TO RECALL THAT THE DEFENDANT IN THE MAIN PROCEEDINGS HAS STATED THAT HE INTENDED TO RE-EXPORT A SUM OF MONEY PREVIOUSLY IMPORTED WITH A VIEW TO MAKING PURCHASES OF A COMMERCIAL NATURE , NOT AN AMOUNT CORRESPONDING TO A TRANSACTION ACTUALLY LISTED IN ANNEX III .

23 THE ANSWER TO THE QUESTIONS RELATING TO ARTICLE 106 ( 3 ) SHOULD THEREFORE BE THAT THE LATTER PROVISION IS INAPPLICABLE TO THE RE-EXPORTATION OF A SUM OF MONEY PREVIOUSLY IMPORTED WITH A VIEW TO MAKING PURCHASES OF A COMMERCIAL NATURE IF SUCH PURCHASES HAVE NOT IN FACT BEEN EFFECTED .

24 THE ORDER REFERRING THE MATTER TO THE COURT CONTAINS NO EXPRESS REFERENCE TO THE FIRST TWO PARAGRAPHS OF ARTICLE 106 . IN VIEW OF THE ALLEGED PURPOSE OF THE IMPORTATION OF THE SUM OF MONEY IN QUESTION , THOSE TWO PARAGRAPHS ARE SIGNIFICANT IN RELATION TO THE THIRD QUESTION . ACCORDING TO THOSE PROVISIONS , THE MEMBER STATES UNDERTAKE TO AUTHORIZE ON THE EXPIRY OF THE TRANSITIONAL PERIOD , ANY PAYMENTS CONNECTED WITH , INTER ALIA , THE MOVEMENT OF GOODS . THE FIRST TWO PARAGRAPHS OF ARTICLE 106 ARE THUS DESIGNED TO ENSURE THE FREE MOVEMENT OF GOODS IN PRACTICE BY AUTHORIZING ALL THE TRANSFERS OF CURRENCY NECESSARY TO ACHIEVE THAT AIM . HOWEVER , THOSE PROVISIONS DO NOT REQUIRE THE MEMBER STATES TO AUTHORIZE THE IMPORTATION AND EXPORTATION OF BANK NOTES FOR THE PERFORMANCE OF COMMERCIAL TRANSACTIONS , IF SUCH TRANSFERS ARE NOT NECESSARY FOR THE FREE MOVEMENT OF GOODS . IN CONNECTION WITH COMMERCIAL TRANSACTIONS , THAT METHOD OF TRANSFER WHICH , MOREOVER , IS NOT IN CONFORMITY WITH STANDARD PRACTICE , CANNOT BE REGARDED AS NECESSARY TO ENSURE SUCH FREE MOVEMENT .

25 IN THE LIGHT OF THE FOREGOING CONSIDERATIONS , THE ANSWER TO THE THIRD QUESTION SHOULD BE THAT THE RIGHT OF NON-RESIDENTS TO RE-EXPORT BANK NOTES WHICH WERE PREVIOUSLY IMPORTED WITH A VIEW TO PERFORMING COMMERCIAL TRANSACTIONS BUT HAVE NOT BEEN USED IS NOT GUARANTEED BY ANY PRINCIPLE OF COMMUNITY LAW OR BY ANY PROVISIONS OF COMMUNITY LAW RELATING TO CAPITAL MOVEMENTS OR BY THE RULES OF ARTICLE 106 CONCERNING PAYMENTS CONNECTED WITH THE MOVEMENT OF GOODS .

POSSIBLE LIMITS SET BY COMMUNITY LAW TO NATIONAL RULES OF CRIMINAL LAW AND PROCEDURE

26 IN ITS FOURTH , FIFTH AND SIXTH QUESTIONS , THE NATIONAL COURT ASKS IN SUBSTANCE WHETHER PENALTIES OF THE KIND PROVIDED FOR BY ITALIAN EXCHANGE CONTROL LEGISLATION ARE INCOMPATIBLE WITH THE PRINCIPLES OF PROPORTIONALITY AND NON-DISCRIMINATION WHICH FORM PART OF COMMUNITY LAW . THE EIGHTH QUESTION RAISES THE PROBLEM OF THE FREEDOM TO PROVIDE EVIDENCE IN CRIMINAL PROCEEDINGS .

27 IN PRINCIPLE , CRIMINAL LEGISLATION AND THE RULES OF CRIMINAL PROCEDURE ARE MATTERS FOR WHICH THE MEMBER STATES ARE STILL RESPONSIBLE . HOWEVER , IT IS CLEAR FROM A CONSISTENT LINE OF CASES DECIDED BY THE COURT , THAT COMMUNITY LAW ALSO SETS CERTAIN LIMITS IN THAT AREA AS REGARDS THE CONTROL MEASURES WHICH IT PERMITS THE MEMBER STATES TO MAINTAIN IN CONNECTION WITH THE FREE MOVEMENT OF GOODS AND PERSONS . THE ADMINISTRATIVE MEASURES OR PENALTIES MUST NOT GO BEYOND WHAT IS STRICTLY NECESSARY , THE CONTROL PROCEDURES MUST NOT BE CONCEIVED IN SUCH A WAY AS TO RESTRICT THE FREEDOM REQUIRED BY THE TREATY AND THEY MUST NOT BE ACCOMPANIED BY A PENALTY WHICH IS SO DISPROPORTIONATE TO THE GRAVITY OF THE INFRINGEMENT THAT IT BECOMES AN OBSTACLE TO THE EXERCISE OF THAT FREEDOM .

28 CERTAIN SITUATIONS WHICH ARE COMPARABLE TO THOSE CONSIDERED IN THAT CASE-LAW MAY ARISE , IN CONNECTION WITH CAPITAL MOVEMENTS AND TRANSFERS OF CURRENCY , IN RELATION TO CONTROL MEASURES MAINTAINED BY THE MEMBER STATES FOR EXAMPLE UNDER ARTICLE 5 OF THE FIRST DIRECTIVE FOR THE IMPLEMENTATION OF ARTICLE 67 OF THE TREATY , BUT ONLY IN CONNECTION WITH TRANSACTIONS LIBERALIZED UNDER COMMUNITY LAW . THE LIMITS SET BY THAT CASE-LAW ARE DESIGNED TO PREVENT THE FREEDOMS GUARANTEED BY COMMUNITY LAW FROM BEING ERODED BY THE CONTROL MEASURES WHICH COMMUNITY LAW PERMITS THE MEMBER STATES TO MAINTAIN . THAT IS NOT THE CASE IN THESE PROCEEDINGS . IT IS APPARENT FROM THE REPLIES TO THE OTHER QUESTIONS REFERRED TO THE COURT FOR A PRELIMINARY RULING THAT THE TRANSACTION IN QUESTION HAS NOT BEEN LIBERALIZED EITHER BY THE PROVISIONS OF THE TREATY OR BY THE DIRECTIVES ADOPTED FOR THEIR IMPLEMENTATION . IN SUCH CIRCUMSTANCES , THE AFORESAID CASE-LAW IS INAPPLICABLE .

29 THE REPLY TO THOSE QUESTIONS SHOULD THEREFORE BE THAT WITH REGARD TO CAPITAL MOVEMENTS AND TRANSFERS OF CURRENCY WHICH THE MEMBER STATES ARE NOT OBLIGED TO LIBERALIZE UNDER THE RULES OF COMMUNITY LAW , THOSE RULES DO NOT RESTRICT THE MEMBER STATES ' POWER TO ADOPT CONTROL MEASURES AND TO ENFORCE COMPLIANCE THEREWITH BY MEANS OF CRIMINAL PENALTIES .

Decision on costs

30 THE COSTS INCURRED BY THE FRENCH GOVERNMENT , THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY , THE ITALIAN GOVERNMENT , THE UNITED KINGDOM GOVERNMENT , THE DANISH GOVERNMENT , THE IRISH GOVERNMENT AND THE COMMISSION OF THE EUROPEAN COMMUNITIES ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN PROCEEDINGS ARE CONCERNED , IN THE NATURE OF A STEP IN THE PROCEEDINGS PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE TRIBUNALE , BOLZANO , BY ORDER OF 6 OCTOBER 1980 , HEREBY RULES :

1 . ARTICLE 67 ( 1 ) MUST BE INTERPRETED AS MEANING THAT RESTRICTIONS ON THE EXPORTATION OF BANK NOTES MAY NOT BE REGARDED AS ABOLISHED AS FROM THE EXPIRY OF THE TRANSITIONAL PERIOD , IRRESPECTIVE OF THE PROVISIONS OF ARTICLE 69 .

2 . FAILURE TO HAVE RECOURSE TO THE PROCEDURES PROVIDED FOR BY ARTICLE 73 IN REGARD TO RESTRICTIONS IMPOSED ON CAPITAL MOVEMENTS WHICH THE MEMBER STATE CONCERNED IS NOT OBLIGED TO LIBERALIZE UNDER THE RULES OF COMMUNITY LAW DOES NOT CONSTITUTE AN INFRINGEMENT OF THE EEC TREATY .

3 . THE FIRST PARAGRAPH OF ARTICLE 71 DOES NOT IMPOSE ON THE MEMBER STATES AN UNCONDITIONAL OBLIGATION CAPABLE OF BEING RELIED UPON BY INDIVIDUALS .

4 . ARTICLE 106 ( 3 ) IS INAPPLICABLE TO THE RE-EXPORTATION OF A SUM OF MONEY PREVIOUSLY IMPORTED WITH A VIEW TO MAKING PURCHASES OF A COMMERCIAL NATURE IF SUCH PURCHASES HAVE NOT IN FACT BEEN EFFECTED .

5 . THE RIGHT OF NON-RESIDENTS TO RE-EXPORT BANK NOTES WHICH WERE PREVIOUSLY IMPORTED WITH A VIEW TO PERFORMING COMMERCIAL TRANSACTIONS BUT HAVE NOT BEEN USED IS NOT GUARANTEED BY ANY PRINCIPLE OF COMMUNITY LAW OR BY PROVISIONS OF COMMUNITY LAW RELATING TO CAPITAL MOVEMENTS OR BY THE RULES OF ARTICLE 106 CONCERNING PAYMENTS CONNECTED WITH THE MOVEMENT OF GOODS .

6 . WITH REGARD TO CAPITAL MOVEMENTS AND TRANSFERS OF CURRENCY WHICH THE MEMBER STATES ARE NOT OBLIGED TO LIBERALIZE UNDER THE RULES OF COMMUNITY LAW , THOSE RULES DO NOT RESTRICT THE MEMBER STATES ' POWER TO ADOPT CONTROL MEASURES AND TO ENFORCE COMPLIANCE THEREWITH BY MEANS OF CRIMINAL PENALTIES .