Judgment of the Court of 21 June 1988. - Commission of the European Communities v Hellenic Republic. - Failure of a Member State to fulfil its obligations - Maximum import prices for sheepmeat and goatmeat. - Case 127/87.



European Court reports 1988 Page 03333



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1 . Free movement of goods - Quantitative restrictions - Measures having equivalent effect - Pricing systems - National authorities fixing maximum prices applicable only to imported products - Prohibition - Pursuit of monetary objectives - Unacceptable justification

( EEC Treaty, Art . 30 )

2 . Agriculture - Common organization of the markets - Price formation - National measures - Incompatibility with Community legislation - Criteria

Summary

1 . The imposition by a Member State of maximum prices on imports of a given product from other Member States and the systematic checking on compliance with those prices when comparable maximum prices are not applied to domestic production constitutes a measure having an effect equivalent to quantitative restrictions, prohibited by Article 30 of the Treaty . Since the fact that Member States retain certain monetary powers does not entitle them to take unilateral measures prohibited by the Treaty, the monetary objective of such a measure is not such as to justify it .

2 . In sectors covered by a common organization of the market, and a fortiori when that organization is based on a common price system, Member States can no longer take action, through national provisions adopted unilaterally, affecting the machinery of price formation at the same production or marketing stage established under the common organization .

Parties

In Case 127/87

Commission of the European Communities, represented by X . Yataganas, a member of its Legal Department, acting as Agent, with an address for service in Luxembourg at the office of G . Kremlis, a member of its Legal Department, Jean Monnet Building,

applicant,

Hellenic Republic, represented by N . Fragakis, Legal Adviser in the office of the Greek Permanent Representative to the European Communities in Brussels, acting as Agent, assisted by A . Pliakos, Adviser at the Greek Ministry of Trade, with an address for service in Luxembourg at the Greek Embassy, 117 Val-Sainte-Croix,

defendant,

APPLICATION for a declaration that, by virtue of its domestic provisions and its practice with regard to imports of sheepmeat and goatmeat and of live sheep and goats, in particular by imposing on such imports maximum prices and systematically checking that those prices are complied with, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 113 of the EEC Treaty, Council Regulation ( EEC ) No 1837/80 of 27 June 1980 on the common organization of the market in sheepmeat and goatmeat ( Official Journal 1980, L 183, p . 1 ), Commission Regulation ( EEC ) No 19/82 of 6 January 1982 laying down detailed rules for applying Regulation ( EEC ) No 2641/80 with regard to imports of sheepmeat and goatmeat products originating in certain non-member countries ( Official Journal 1982, L 3, p . 18 ), and Commission Regulation No 20/82 of 6 January 1982 on special detailed rules for applying the system of import and export licences for sheepmeat and goatmeat ( Official Journal 1982, L 3, p . 26 ) and agreements in the form of exchanges of letters between the European Economic Community and certain non-member countries on trade in the sheepmeat and goatmeat sector,

THE COURT

composed of : Lord Mackenzie Stuart, President, O . Due, J . C . Moitinho de Almeida and G . C . Rodríguez Iglesias, Presidents of Chambers, T . Koopmans, U . Everling, Y . Galmot, C . Kakouris and T . F . O' Higgins, Judges,

Advocate General : C . O . Lenz

Registrar : H . A . Ruehl, Principal Administrator

having regard to the Report for the Hearing, as supplemented following the hearing on 2 March 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 24 March 1988,

gives the following

Judgment

Grounds

1 By an application lodged with the Court Registry on 15 April 1987, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that by virtue of its domestic provisions and its practice with regard to imports of sheepmeat and goatmeat and of live sheep and goats, in particular by imposing on such imports maximum prices and systematically checking that those prices are complied with, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 113 of the EEC Treaty, Council Regulation ( EEC ) No 1837/80 of 27 June 1980 on the common organization of the market in sheepmeat and goatmeat ( Official Journal 1980, L 183, p . 1 ), Commission Regulation ( EEC ) No 19/82 of 6 January 1982 laying down detailed rules for applying Regulation ( EEC ) No 2641/80 with regard to imports of sheepmeat and goatmeat products originating in certain non-member countries, and Commission Regulation No 20/82 of 6 January 1982 on special detailed rules for applying the system of import and export licences for sheepmeat and goatmeat ( Official Journal 1982, L 3, pp . 18 and 26 ) and agreements in the form of exchanges of letters between the European Economic Community and certain non-member countries on trade in the sheepmeat and goatmeat sector .

2 It appears from the documents before the Court that, by Decision No E6/1484/3/84 of 19 March 1984, the Greek Minister of Trade gave notice of maximum prices for imports of sheepmeat and goatmeat and live sheep and goats into the Hellenic Republic . Under that decision invoices for such imports were to be submitted to an exchange-control committee for the purpose of preventive control of prices, and import licences already issued for imports invoiced at a higher price were to be cancelled unless the price of the goods had already been paid .

3 Reference is made to the Report for the Hearing for details of the prelitigation proceedings and the submissions and arguments of the parties, which are mentioned hereinafter only in so far as is necessary for the reasoning of the Court .

4 The Greek Government asserts that the prices fixed by the contested decision are merely target prices . Their aim is to facilitate the work of the exchange-control authorities by enabling them to prevent the illegal outflow of foreign exchange and they have the incidental effect of protecting healthy competition and preventing unrealistic and artificial price increases . In the Greek Government' s view, the notification of such prices cannot be regarded as a measure having an effect equivalent to a quantitative restriction on imports within the meaning of Article 30 of the Treaty or as affecting the common commercial policy as provided for in Article 113 of the Treaty .

5 With regard to the nature of the prices in question, it should be noted that the very title of the contested decision appears to give them mandatory force . At the hearing, the representative of the Greek Government explained that in fact traders are aware of the risk of penalties and accept the prices fixed and that in practice there are no imports at higher prices . In those circumstances, it must be accepted that they are maximum prices observance of which is a prerequisite for any importation . It is, moreover, undisputed that those maximum prices and preliminary price control measures apply not to domestic production but only to imports either from other Member States of the Community or from non-member countries .

6 Such a system is obviously capable, at least potentially, of forming a barrier to trade . When applied to imports from other Member States it therefore constitutes, according to the consistent case-law of the Court ( see primarily the judgment of 11 JUly 1974 in Case 8/74 Procureur du Roi v Dassonville (( 1974 )) ECR 837 ), a measure having an effect equivalent to a quantitative restriction, prohibited by Article 30 of the Treaty, as, indeed, is indicated in Article 2 ( 3 ) ( a ) of Commission Directive 70/50 of 22 December 1969, based on Article 33 ( 7 ) of the Treaty, on the abolition of measures which have an effect equivalent to quantitative restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty ( Official Journal, English Special Edition 1970 ( I ), p . 17 ).

7 The monetary objective of the contested measure is not such as to justify it . As the Court has consistently held ( see, most recently, the judgment of 7 June 1988 in Case 57/86 Hellenic Republic v Commission (( 1988 )) ECR 0000 ), the fact that Member States retain certain monetary powers does not entitle them to take unilateral measures prohibited by the Treaty .

8 The prohibition on taking unilateral national measures having an effect equivalent to quantitative restrictions was extended to trade with non-member countries by Article 20 ( 2 ) of Regulation No 1837/80, cited above, which forms the basic regulation on the common organization of the market in sheepmeat and goatmeat . That regulation also set up a price system providing, inter alia, for a basic price and an intervention price and the Court consistently held ( see primarily the judgment of 6 November 1979 in Case 10/79 Toffoli v Regione Veneto (( 1979 )) ECR 3301 ) that in sectors covered by a common organization of the market, and a fortiori when that organization is based on a common price system, Member States can no longer take action, through national provisions adopted unilaterally, affecting the machinery of price formation at the same production or marketing stage established under the common organization . It must therefore be held that the contested Greek measure is also contrary to Regulation No 1837/80 .

9 In relation to imports from non-member countries, the contested measure falls within the scope of the common commercial policy which, under Article 113 of the Treaty, is within the exclusive competence of the Community . That fact is highlighted by the conclusion of voluntary-restraint agreements between the Community and certain non-member countries, particularly State-trading countries, precisely in the sheepmeat and goatmeat sector . Those agreements prohibit any measures having an effect equivalent to a quantitative restriction on imports in so far as trade does not exceed certain quantities, and provides for the automatic issue of import licences by Member States on presentation of export licences . The two Commission Regulations, Nos 19/82 and 20/82, cited above, cover the implementation of those obligations in the Member States . It must therefore be held that the contested Greek measure is also contrary to the abovementioned provisions .

10 It follows from the foregoing that, by imposing maximum prices on imports of sheepmeat and goatmeat and of live sheep and goats and systematically checking that those prices are complied with, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 113 of the EEC Treaty, Council Regulation No 1837/80, Commission Regulations Nos 19/82 and 20/82 and the agreements in the form of exchanges of letters between the European Economic Community and certain non-member countries in the sheepmeat and goatmeat sector .

Decision on costs

Costs

11 Under Article 69 ( 2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs . Since the defendant has failed in its submissions, it must be ordered to pay the costs .

Operative part

On those grounds,

THE COURT

hereby :

( 1 ) Declares that, by imposing maximum prices on imports of sheepmeat and goatmeat and of live sheep and goats and systematically checking that those prices are complied with, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 113 of the EEC Treaty and under Council Regulation ( EEC ) No 1837/80 of 27 June 1980 on the common organization of the market in sheepmeat and goatmeat, Commission Regulation ( EEC ) No 19/82 of 6 January 1982 laying down detailed rules for applying Regulation ( EEC ) No 2641/80 with regard to imports of sheepmeat and goatmeat products originating in certain non-member countries, and Commission Regulation No 20/82 of 6 January 1982 on special detailed rules for applying the system of import and export licences for sheepmeat and goatmeat, and the agreements in the form of exchanges of letters between the European Economic Community and certain non-member countries in the sheepmeat and goatmeat sector;

( 2 ) Orders the Hellenic Republic to pay the costs .