Judgment of the Court of 10 January 1980. - Commission of the European Communities v Italian Republic. - Failure of a Member State to fulfil its obligations - Communities' own resources - Additional inspection measures - Privilege of non-disclosure in relation to judicial inquiry. - Case 267/78.



European Court reports 1980 Page 00031

Greek special edition Page 00021

Spanish special edition Page 00021



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . EUROPEAN COMMUNITIES - OWN RESOURCES - ESTABLISHMENT AND MAKING AVAILABLE - VERIFICATIONS AND INQUIRIES - POWERS OF THE COMMISSION - ARRANGEMENTS FOR EXERCISE

( COUNCIL REGULATIONS NO 2/71 , ARTS . 6 AND 14 , AND NO 2891/77 , ART . 18 )

2 . EUROPEAN COMMUNITIES - OWN RESOURCES - ESTABLISHMENT AND MAKING AVAILABLE - VERIFICATIONS AND INQUIRIES - POWERS OF THE COMMISSION - ARRANGEMENTS FOR EXERCISE - POSSIBILITY OF RELYING ON PRIVILEGE IN RESPECT OF CRIMINAL INVESTIGATIONS - CONDITIONS

( COUNCIL REGULATIONS NO 2/71 , ART . 14 , AND NO 2891/77 , ART . 18 )

Summary

1 . A MEMBER STATE MAY NOT CONTEST THE COMMISSION ' S POWER TO EXERCISE ITS SUPERVISION AS SOON AS THE COMMUNITIES ' OWN RESOURCES HAVE BEEN ESTABLISHED BY THE COMPETENT NATIONAL AUTHORITIES . INDEED THE FACT THAT , IN ACCORDANCE WITH ARTICLE 6 OF REGULATION NO 2/71 OF THE COUNCIL , THE ESTABLISHED ENTITLEMENTS ARE TO BE ENTERED IN THE ACCOUNTS OF THE COMMUNITIES AS REVENUE TO BE COLLECTED REQUIRES THAT THE COMMISSION SHALL HAVE A RIGHT TO ASK FOR ADDITIONAL MEASURES OF CONTROL AND TO BE ASSOCIATED WITH THE MEASURES APPLIED BY THE MEMBER STATES THEMSELVES AS FROM THE TIME WHEN THE RESOURCES OUGHT TO HAVE BEEN ESTABLISHED .

2 . ALTHOUGH THE INSPECTION MEASURES WHICH THE COMMISSION MAY REQUEST ON THE OCCASION OF THE ESTABLISHMENT AND MAKING AVAILABLE OF OWN RESOURCES BY THE COMPETENT NATIONAL AUTHORITIES AND WITH WHICH IT MUST BE ASSOCIATED COVER ALL THOSE WHICH THE NATIONAL AUTHORITIES MAY CARRY OUT , NEVERTHELESS IT IS NOT POSSIBLE IN THE PRESENT STATE OF COMMUNITY LAW TO INFER FROM ARTICLE 14 OF REGULATION NO 2/71 OF THE COUNCIL , WHICH HAS BEEN RE-ENACTED BY ARTICLE 18 OF REGULATION NO 2891/77 AN INTENTION TO ALTER THE RELATIONS BETWEEN THE ADMINISTRATION AND THE JUDICIAL AUTHORITIES . RULES WHICH IN THE NATIONAL SYSTEMS OF CRIMINAL LAW PREVENT THE COMMUNICATION TO CERTAIN PERSONS OF DOCUMENTS IN THE CRIMINAL PROCEEDINGS MAY THEREFORE BE RELIED UPON AGAINST THE COMMISSION IN SO FAR AS THE SAME RESTRICTIONS MAY BE RELIED UPON AGAINST THE NATIONAL AUTHORITIES .

Parties

IN CASE 267/78

COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY GIANCARLO OLMI , DEPUTY DIRECTOR-GENERAL OF THE LEGAL DEPARTMENT , AND GIANLUIGI CAMPOGRANDE , A MEMBER OF THE LEGAL DEPARTMENT , ACTING AS AGENTS , ASSISTED BY GIORGIO GREGORI , OF THE TRENTO BAR , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF MARIO CERVINO , LEGAL ADVISER TO THE COMMISSION , JEAN MONNET BUILDING , KIRCHBERG ,

APPLICANT ,

V

ITALIAN REPUBLIC , REPRESENTED BY ITS AMBASSADOR , ADOLFO MARESCA , ACTING AS AGENT , ASSISTED BY OSCAR FIUMARA , AVVOCATO DELLO STATO , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE ITALIAN EMBASSY ,

DEFENDANT ,

Subject of the case

APPLICATION FOR A RULING THAT THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 5 OF THE EEC TREATY AND ARTICLE 14 OF REGULATION NO 2/71 OF THE COUNCIL OF 2 JANUARY 1971 ( NOW REPLACED BY ARTICLE 18 OF COUNCIL REGULATION NO 2891/77 OF 19 DECEMBER 1977 ),

Grounds

1 BY APPLICATION DATED 21 DECEMBER 1978 AND REGISTERED AT THE COURT ON 22 DECEMBER 1978 THE COMMISSION SOUGHT A DECLARATION PURSUANT TO THE SECOND PARAGRAPH OF ARTICLE 169 OF THE EEC TREATY THAT THE ITALIAN REPUBLIC , BY REFUSING TO ASSOCIATE THE COMMISSION WITH CERTAIN MEASURES OF CONTROL ON THE ESTABLISHMENT AND MAKING AVAILABLE OF THE COMMUNITIES ' OWN RESOURCES AND TO NOTIFY IT OF THE RESULTS OBTAINED , HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 5 OF THE TREATY AND UNDER ARTICLE 14 OF REGULATION NO 2/71 OF THE COUNCIL OF 2 JANUARY 1971 IMPLEMENTING THE DECISION OF 21 APRIL 1970 ON THE REPLACEMENT OF FINANCIAL CONTRIBUTIONS FROM MEMBER STATES BY THE COMMUNITIES ' OWN RESOURCES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 3 ) NOW REPLACED BY COUNCIL REGULATION NO 2891/77 OF 19 DECEMBER 1977 ( OFFICIAL JOURNAL L 336 , P . 1 ).

2 IN APRIL 1976 THE COMMISSION WAS INFORMED THAT FRAUDULENT TRANSACTIONS RELATING TO 6 000 TONNES OF BUTTER FROM NON-MEMBER COUNTRIES HAD TAKEN PLACE ON THE BASIS OF INTRA-COMMUNITY TRADE . THE GOODS HAD BEEN TAKEN BY LORRY TO ITALY FROM A WAREHOUSE IN ROTTERDAM . ON LEAVING THE PORT THE CONSIGNMENTS WERE DEALT WITH REGULARLY UNDER THE EXTERNAL COMMUNITY TRANSIT SYSTEM . HOWEVER , THE ( SO-CALLED ' ' T 1 ' ' ) DOCUMENTS RELATING TO THAT SYSTEM HAD BEEN IMPROPERLY CLEARED BOTH DURING THE JOURNEY AND IN ITALY BY MEANS OF FALSE OR FORGED DOCUMENTS RELATING TO INTERNAL COMMUNITY TRANSIT SO AS TO ALLOW CONSIDERABLE AMOUNTS OF AGRICULTURAL LEVIES TO BE AVOIDED .

3 BY LETTER DATED 26 JULY 1976 THE COMMISSION INFORMED THE ITALIAN PERMANENT REPRESENTATIVE THAT ' ' INFORMATION ' ' AT ITS DISPOSAL JUSTIFIED ' ' A REQUEST FOR AN ADDITIONAL MEASURE OF CONTROL WITHIN THE MEANING OF ARTICLE 14 OF REGULATION NO 2/71 ' ' . A REQUEST WAS MADE NOT ONLY THAT ITALY SHOULD CARRY OUT AN ADDITIONAL MEASURE OF CONTROL BUT ALSO THAT THE COMMISSION SHOULD BE ASSOCIATED THEREWITH .

4 THE CENTRAL CUSTOMS AUTHORITIES IN ITALY AGREED TO THE REQUEST AND MEETINGS WERE ARRANGED IN MILAN AND COMO BETWEEN OFFICIALS OF THE ITALIAN CUSTOMS AND THOSE OF THE COMMISSION . FOLLOWING THOSE MEETINGS IT WAS DECIDED THAT THERE WAS PROBABLY A LINK BETWEEN THE FRAUDULENT TRANSACTIONS IN QUESTION AND CERTAIN TRANSACTIONS WHICH HAD BEEN THE SUBJECT OF INQUIRIES SINCE 1975 BY THE GUARDIA DI FINANZA . ACCORDING TO THE ITALIAN AUTHORITIES ASPECTS OF THE INQUIRY ASSOCIATED WITH FACTS LIKELY TO GIVE RISE TO CRIMINAL PROCEEDINGS CAME IN THE LAST RESORT WITHIN THE JURISDICTION OF THE JUDICIAL AUTHORITIES .

5 SINCE THE ITALIAN CUSTOMS AUTHORITIES TOOK THE VIEW THAT THERE WAS A CONNEXION BETWEEN THE INQUIRY CONDUCTED BY THE TURIN UFFICIO ISTRUZIONE PENALE ( CRIMINAL INVESTIGATION OFFICE ) AND THE IMPORTS IN QUESTION , THEY ASKED THE TURIN EXAMINING MAGISTRATE FOR A COPY OF THE REPORT FROM THE GUARDIA DI FINANZA , BUT THE EXAMINING MAGISTRATE ON 2 FEBRUARY 1977 DISMISSED THE APPLICATION ON THE GROUND THAT THE MATTERS WITH WHICH THE REPORT WAS CONCERNED WERE THE SUBJECT OF CRIMINAL INVESTIGATIONS SO THAT THE REPORT ALONG WITH ALL THE OTHER DOCUMENTS RELATING TO THE INVESTIGATIONS WERE PRIVILEGED .

6 A FURTHER APPLICATION MADE ON 24 JANUARY 1978 BY THE MINISTER FOR FINANCE WAS DISMISSED BY THE TURIN EXAMINING MAGISTRATE FOR THE SAME REASONS .

7 IN VIEW OF THE DISMISSAL OF THOSE APPLICATIONS IT APPEARS THAT THE ITALIAN CUSTOMS AUTHORITIES COULD NOT OBTAIN THE INFORMATION IN THE FILE OF THE CRIMINAL PROCEEDINGS OR , THEREFORE , PASS IT ON TO THE COMMISSION .

8 ON 20 APRIL 1978 THE COMMISSION SENT TO THE ITALIAN REPUBLIC A REASONED OPINION AS REFERRED TO IN ARTICLE 169 OF THE TREATY . THAT OPINION STRESSES IN PARTICULAR THE COMMISSION ' S POWER , BECAUSE COMMUNITY LAW HAS PRECEDENCE OVER MUNICIPAL LAW , TO CARRY OUT A THOROUGH INVESTIGATION OF THE ' ' FACTS GIVING RISE ' ' TO THE FISCAL CLAIM WHICH HAD BEEN EVADED ; IT ALSO STRESSES THE DUTY OF THE MEMBER STATES TO CO-OPERATE WITH ALL MEANS AVAILABLE TO THEM IN THE EXERCISE OF THE RIGHT OF SUPERVISION . IN THE COMMISSION ' S VIEW THE DIRECT APPLICABILITY OF REGULATION NO 2/71 MUST BE UNDERSTOOD AS MEANING THAT THE RULES OF COMMUNITY LAW MUST HAVE FULL EFFECT AS AN IMMEDIATE SOURCE OF RIGHTS AND DUTIES FOR ALL THOSE WHOM THEY CONCERN WHETHER THEY BE INDIVIDUALS OR MEMBER STATES . THAT EFFECT ALSO APPLIES TO ALL COURTS WHICH , AS PART OF THEIR JURISDICTION , MUST , AS ORGANS OF A MEMBER STATE , HAVE REGARD TO POWERS GIVEN BY COMMUNITY LAW TO THE INSTITUTIONS . FURTHER , BY THE VERY FACT OF THEIR ENTRY INTO FORCE THE PROVISIONS OF COMMUNITY LAW IPSO JURE RENDER INAPPLICABLE ANY PREVIOUS PROVISION OF NATIONAL LAW TO A CONTRARY EFFECT , INCLUDING THE PROVISIONS OF THE CODE OF CRIMINAL PROCEDURE WHICH CANNOT THEREFORE BE INVOKED AGAINST THE EXERCISE BY THE COMMISSION OF ITS POWER OF SUPERVISION GIVEN IT BY REGULATION NO 2/71 .

9 IN ANSWER TO THAT OPINION THE ITALIAN GOVERNMENT MAINTAINED THAT THE COMMISSION COULD NOT CLAIM TO BE ASSOCIATED WITH JUDICIAL ACTS ( OVER WHICH THE ADMINISTRATIVE DEPARTMENTS OF THE MEMBER STATES CONCERNED WITH MEASURES OF CONTROL HAVE THEMSELVES NO AUTHORITY AND THEY CANNOT THEREFORE ASSOCIATE THE COMMUNITY IN ACTIVITIES FROM WHICH THEY ARE THEMSELVES EXCLUDED .) THE ITALIAN GOVERNMENT STATES THAT THE COMMISSION CANNOT THEREFORE RELY ON THE ALLEGED INFRINGEMENT IN THE PRESENT CASE OF ARTICLE 14 OF REGULATION NO 2/71 IN RESPECT OF DELAY RESULTING FROM THE VERIFICATIONS ' BEING TRANSFERRED FROM THE ADMINISTRATIVE LEVEL TO THE JUDICIAL LEVEL .

10 ON LEARNING ON 6 NOVEMBER 1978 THAT THE PREPARATORY INQUIRY HAD BEEN TERMINATED THE ITALIAN CUSTOMS AUTHORITIES MADE ON 16 DECEMBER 1978 A FRESH APPLICATION TO THE EXAMINING MAGISTRATE .

11 BY ORDER DATED 20 DECEMBER 1978 THE EXAMINING MAGISTRATE AUTHORIZED ONLY A COPY OF THE HEADS OF CHARGES AS DRAFTED BY THE PROCURATORE DELLA REPUBBLICA ( PUBLIC PROSECUTOR ). THAT DOCUMENT WAS FORWARDED TO THE COMMISSION AND IS ANNEXED TO THE DEFENCE .

12 ON 19 JANUARY 1979 THE COMMISSION RECEIVED A COPY OF THE FINAL CHARGES AGAINST ALL THE ACCUSED .

THE COMMISSION ' S POWER OF SUPERVISION

13 THE ITALIAN GOVERNMENT CONTENDS THAT THE POWER OF SUPERVISON GIVEN TO THE COMMISSION BY REGULATION NO 2/71 CAN BE EXERCISED ONLY AFTER THE NATIONAL ADMINISTRATIVE BODY HAS FINISHED ITS TASK OF ESTABLISHING THE COMMUNITIES ' OWN RESOURCES , THAT IS TO SAY HAS DETERMINED THE CLAIM AND MADE IT AVAILABLE TO THE COMMUNITIES . THE PROCEDURE LAID DOWN BY THE COMMUNITY RULES IN FACT COMPRISES THREE STAGES : ' ' ESTABLISHING ' ' THE COMMUNITIES ' OWN RESOURCES , ' ' MAKING AVAILABLE ' ' THE RESOURCES WHICH HAVE BEEN ESTABLISHED AND CARRYING OUT ' ' MEASURES OF CONTROL ' ' . BEFORE THE STAGE OF MEASURES OF CONTROL , IN WHICH THE COMMISSION HAS POWER TO INTERVENE , CAN BEGIN , THE NATIONAL ADMINISTRATIVE DEPARTMENTS MUST HAVE COMPLETED THE PREVIOUS STAGES . ONLY THEN CAN THE COMMISSION CO-OPERATE WITH THOSE DEPARTMENTS TO CHECK WHETHER THE COMMUNITIES ' OWN RESOURCES HAVE BEEN PROPERLY ESTABLISHED AND PAID OVER .

14 AGAINST THIS ARGUMENT THE COMMISSION MAINTAINS THAT TO BE EFFECTIVE IT MUST BE ABLE TO EFFECT ITS SUPERVISION AS SOON AS A FACT GIVING RISE TO THE COMMUNITIES ' OWN RESOURCES HAS BEEN ESTABLISHED . THIS IS APPARENT FROM THE PROVISIONS GOVERNING MEASURES OF CONTROL AND IN PARTICULAR ARTICLES 6 AND 14 OF REGULATION NO 2/71 .

15 THE COURT CANNOT ACCEPT THE ARGUMENTS OF THE ITALIAN GOVERNMENT WHICH WOULD MEAN ROBBING THE APPLICABLE PROVISIONS OF THEIR SUBSTANCE . ON THAT BASIS THE COMMISSION ' S POWERS WOULD BE CONFINED TO A SIMPLE SUBSEQUENT VERIFICATION OF THE ACCOUNTS OF THE COMMUNITIES ' OWN RESOURCES WHICH THE MEMBER STATES ARE REQUIRED TO KEEP . ARTICLE 6 OF REGULATION NO 2/71 PROVIDES FOR A MONTHLY STATEMENT OF ACCOUNTS AND ARTICLE 9 ( 2 ) PROVIDES THAT ANY DELAY IN MAKING AN ENTRY SHALL GIVE RISE TO THE PAYMENT OF INTEREST BY THE MEMBER STATE CONCERNED . THE FACT THAT IN ACCORDANCE WITH THE SAID ARTICLE 6 THE ESTABLISHED ENTITLEMENTS ARE TO BE ENTERED IN THE ACCOUNTS OF THE COMMUNITIES AS REVENUE TO BE COLLECTED REQUIRES THAT FROM THEN ONWARDS THE COMMISSION SHALL HAVE A RIGHT TO ASK FOR ADDITIONAL MEASURES OF CONTROL AND TO BE ASSOCIATED WITH THE MEASURES APPLIED BY THE MEMBER STATES THEMSELVES AS FROM THE TIME WHEN THE RESOURCES OUGHT TO HAVE BEEN ESTABLISHED .

16 THE ITALIAN GOVERNMENT IS THUS NOT JUSTIFIED IN CONTESTING THE COMMISSION ' S POWER TO EXERCISE ITS SUPERVISION AS SOON AS THE COMMUNITIES ' OWN RESOURCES HAVE BEEN ' ' ESTABLISHED ' ' BY THE COMPETENT AUTHORITY IN THE MEMBER STATE IN QUESTION .

THE QUESTION OF PRIVILEGE AS REGARDS CRIMINAL INVESTIGATIONS

17 FROM A CONSIDERATION OF THE ARGUMENTS PUT FORWARD IN SUPPORT OF THE APPLICATION IT IS APPARENT THAT THE COMMISSION ' S MAIN COMPLAINT IS THE REFUSAL BY THE ITALIAN ADMINISTRATION TO PASS ON INFORMATION RELATING TO THE CRIMINAL PROCEEDINGS AND AS SUCH PRIVILEGED . THE QUESTION ACCORDINGLY ARISES WHETHER COMMUNITY RULES IN THE MATTER MAY BE INTERPRETED AS REQUIRING MEMBER STATES TO TRANSMIT SUCH INFORMATION IN DEROGATION , IF NECESSARY , FROM THE RULES OF NATIONAL JUDICIAL PROCEDURE .

18 ARTICLE 14 OF REGULATION NO 2/71 AS RE-ENACTED BY ARTICLE 18 OF REGULATION NO 2891/77 PROVIDES AS FOLLOWS :

' ' ( 1 ) MEMBER STATES SHALL CARRY OUT THE VERIFICATIONS AND INQUIRIES CONCERNING THE ESTABLISHMENT AND THE MAKING AVAILABLE OF OWN RESOURCES . THE COMMISSION SHALL MAKE USE OF ITS POWERS AS SPECIFIED IN THIS ARTICLE .

( 2 ) ACCORDINGLY , MEMBER STATES SHALL :

- CARRY OUT ANY ADDITIONAL INSPECTION MEASURES THE COMMISSION MAY ASK FOR IN A REASONED REQUEST ,

- ASSOCIATE THE COMMISSION , AT ITS REQUEST , WITH THE INSPECTION MEASURES WHICH THEY CARRY OUT .

MEMBER STATES SHALL TAKE ALL STEPS REQUIRED TO FACILITATE THESE INSPECTION MEASURES . . . ' '

19 IT IS NECESSARY TO OBSERVE FIRST OF ALL THAT THE APPLICABLE COMMUNITY REGULATIONS DO NOT EMPOWER THE COMMISSION ITSELF TO CARRY OUT INSPECTIONS BUT PROVIDE THAT THE COMMISSION SHALL BE ' ' ASSOCIATED ' ' WITH THE INSPECTION MEASURES CARRIED OUT BY THE MEMBER STATES . IT FOLLOWS THAT THE REGULATIONS DO NOT MODIFY THE ACTUAL PROCEDURES FOR INSPECTION APPLICABLE IN THE VARIOUS MEMBER STATES .

20 IT IS PROPER FURTHER TO RECALL THAT THE COMMUNITY REGULATIONS DO NOT MENTION THE RELATIONSHIP BETWEEN THE POWERS OF INSPECTION IN RELATION TO ESTABLISHING THE COMMUNITY ' S OWN RESOURCES ON THE ONE HAND AND THE GUARANTEES PROVIDED BY MUNICIPAL LAW FOR THE PROPER CONDUCT OF CRIMINAL PROCEEDINGS ON THE OTHER .

21 IT FOLLOWS FROM THESE CONSIDERATIONS THAT IN THE PRESENT STATE OF COMMUNITY LAW THE INSPECTION MEASURES WHICH THE COMMISSION MAY REQUEST AND WITH WHICH IT MUST BE ASSOCIATED COVER ALL THOSE WHICH THE NATIONAL AUTHORITIES 1 - TRANSLATOR ' S NOTE : IN THE 1977 VERSION THE EXPRESSION ' ' MEASURES OF CONTROL ' ' IS REPLACED BY THE EXPRESSION ' ' INSPECTION MEASURES ' ' .

MAY CARRY OUT BUT IT IS NOT POSSIBLE TO INFER FROM THE REGULATIONS IN QUESTION AN INTENTION TO ALTER THE RELATIONS BETWEEN THE ADMINISTRATION AND THE JUDICIAL AUTHORITIES .

22 RULES WHICH IN THE NATIONAL SYSTEMS OF CRIMINAL LAW PREVENT THE COMMUNICATION TO CERTAIN PERSONS OF DOCUMENTS IN THE CRIMINAL PROCEEDINGS MAY THEREFORE BE RELIED UPON AGAINST THE COMMISSION IN SO FAR AS THE SAME RESTRICTIONS MAY BE RELIED UPON AGAINST THE NATIONAL AUTHORITIES .

23 IT APPEARS FROM CONSIDERATION OF THE FILE THAT THE ITALIAN GOVERNMENT CO-OPERATED WITH THE COMMISSION AS FAR AS WAS LEGALLY POSSIBLE DURING THE PROCEEDINGS AND TRANSMITTED TO THE COMMISSION THE INFORMATION WHICH WAS PRIVILEGED AS RELATING TO CRIMINAL INVESTIGATION AS SOON AS THE PRIVILEGE WAS LIFTED BY THE EXAMINING MAGISTRATE .

24 IT IS THEREFORE NECESSARY TO FIND THAT ITALY DID NOT FAIL TO FULFIL ITS OBLIGATIONS UNDER THE TREATY .

25 THE APPLICATION MUST THEREFORE BE DISMISSED .

COSTS

26 ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

Decision on costs

27 SINCE THE APPLICANT HAS BEEN UNSUCCESSFUL , IT MUST BE ORDERED TO PAY THE COSTS .

Operative part

ON THOSE GROUNDS ,

THE COURT

HEREBY

1 . DISMISSES THE APPLICATION ;

2 . ORDERS THE APPLICANT TO PAY THE COSTS .