OPINION OF MR ADVOCATE GENERAL WARNER

DELIVERED ON 11 JULY 1979

My Lords,

Introductory

In this action, which is brought by the Commission under Article 169 of the EEC Treaty against the Italian Republic, the Commission contends that the Italian legislation in force since 1971 about the representation of importers and exporters for customs purposes infringes the Treaty in two respects.

Firstly, the Commission says, that legislation infringes the Treaty in that it does not allow an owner of goods who is unable to deal personally with the Customs to choose freely someone to act in his name and on his behalf, but requires him to appoint for that purpose a licensed customs agent (‘spedizioniere doganale’). That, says the Commission, adds to the cost of importations and exportations, so that, in that respect, the legislation is a measure having an effect equivalent to a quantitative restriction, contrary, so far as regards trade between Member States, to Articles 30 and 34 of the Treaty.

As, seemingly, a subsidiary point, the Commission contends that, in requiring a licensed customs agent to reside in the district in which he is licensed to practise, the Italian legislation infringes Article 2 (3) (g) of Commission Directive No 70/50 EEC of 22 December 1969. That Directive, Your Lordships remember, was adopted by the Commission under Article 33 (7) of the Treaty for the purpose of abolishing measures having an effect equivalent to quantitative restrictions on imports from one Member State to another. Article 2 (3) (g) forbids measures that ‘make access of imported products to the domestic market conditional upon having an agent or representative in the territory of the importing Member State’. The Commission does not, however, attack the residence requirement under Article 59 of the Treaty.

The second respect in which the Commission contends that the Italian legislation infringes the Treaty lies in the conditions that it prescribes for the grant of a customs agent's licence. Those conditions include one as to the nationality of the applicant, which the Commission contends, infringes Article 52 of the Treaty.

I have found this a difficult case.

The difficulty of it has, I think, been due, in part, to the obscurity of some of the relevant provisions of the Italian customs legislation and to the fact that different interpretations of those provisions were put forward by the Commission and by the Italian Government.

The Italian legislation

A Statute of 23 January 1968, No 29, laid down general principles for the reform of Italian customs legislation and conferred on the Government power to enact for that purpose measures having statutory force. The power was exercised by Presidential Decrees of 2 February 1970, No 62, and of 18 February 1971, No 18. The latter Decree concerned, among other things, the representation (‘rappresentanza’) of the owner of goods in customs transactions and, in particular, the rights and duties of customs agents, who had been organized as a profession by a Statute of 22 December 1960, No 1612.

The Statute of 23 January 1968 also granted to the Government power, after the completion of the process of reform, to adopt consolidating measures. This power was exercised by a Presidential Decree of 23 January 1973, No 43, approving a consolidated text of the legislation in question (‘Testo Unico delle disposizioni legislative in materia doganale’). I shall refer to this for short as ‘the Code’.

Article 38 of the Code provides that liability for the payment of customs duties falls jointly and severally upon the owner of the goods, as defined by Article 56 (to which I shall advert presently), and anyone on whose behalf the goods have been imported or exported.

Chapter II of the Code is headed ‘Representation of the owners of goods’. It comprises Articles 40 to 54.

Article 40 provides that, where customs provisions require the owner of goods to make any declaration, to perform any act or to comply with any rules or obligations, or where they confer on him any rights, he may act through an agent (‘rappresentante’). The Article goes on:

‘Without prejudice to the provisions of Article 43, authority to represent a person in customs transactions may be granted only to a customs agent whose name appears on the professional register established under the Statute of 22 December 1960, No 1612.

…’

I shall refer to such a customs agent as a ‘professional agent’. By the first paragraph of Article 41 a professional agent is required, in respect of each customs transaction effected by him, to furnish, at the request of the customs authorities, all information necessary for the identification of his principal. By the second paragraph a ‘secondary’ liability is imposed upon a professional agent for any additional duty owing as a result of any correction of the customs assessment or of any review of the amount of duty paid, where it has proved impossible to recover that additional duty from the owner of the goods.

The first paragraph of Article 43 provides that the owner of goods may empower a customs agent not on the professional register to represent him in customs operations, if that agent is one of his employees. By virtue of the third paragraph, the owner of the goods is responsible for the acts of such an agent.

Article 44 requires the names of such employee agents to be entered on a special list compiled and kept up to date by the competent local committee of the professional agents. An employee agent included on the list may conduct customs operations only on the basis and within the limits of the authority granted to him by the owner of the goods.

Article 47, which applies to both professional agents and employee agents, requires them to be licensed by the Minister of Finance. The licence granted to a customs agent must specify a particular customs district (of his choice) within which he is authorized to act. He may effect only ancillary transactions with customs offices outside that district. Moreover, the fourth paragraph of Article 47 requires that:

‘Save for exceptions which may be recognized for sufficient reasons by the heads of customs districts, a customs agent must have his own residence in a commune included in the district for which he has been appointed.’

However, by virtue of the final paragraph of Article 47, an employee agent may be authorized by the Minister to work with the customs offices of more than one district.

Article 48 prescribes the conditions that a person must satisfy in order to be granted a licence. According to that Article he must:

(a) be an Italian citizen or a citizen of a foreign country that grants equal treatment in the matter to Italian citizens:

(b) be of full age;

(c) be demonstrably of good conduct;

(d) be worthy of the trust of the authorities having regard to his conduct in relation to financial legislation and legislation regulating economic and monetary matters;

(e) have passed the examination provided for by Article 50 of the Code.

Article 50 provides for an examination to be held at least every three years. We were told, however, on behalf of the Italian Government that in future there were to be annual examinations.

We were also told on its behalf that in practice the condition as to nationality was not enforced in the case of nationals of other Member States of the Community.

Indeed the Italian Government put in evidence a copy of a circular issued by the Minister of Finance on 28 June 1978, which lists the documents that applicants for licences must furnish. The list includes ‘a certificate of Italian citizenship or of citizenship of one of the countries of the EEC or of a foreign country that grants equal treatment in the matter to Italian citizens’.

Article 56 of the Code, Your Lordships remember, defines the owner of goods. I must quote it in full because it played a central role in the argument. It is headed ‘Customs Declaration’ (‘Dichiarazione doganale’) and provides:

‘Every customs transaction must be preceded by a declaration to be made by the owner of the goods in the form set out in Article 57.

Anyone is deemed to be the owner of the goods who presents them for customs clearance or has possession of them at the moment of entry onto the customs territory or of exit from that territory. This is without prejudice, in every case, to the right of the Customs to ascertain, for all the purposes of the present Code, the identity of the owner of the goods which are the subject of the customs transaction in question.’

It became common ground at the hearing that an effect of that provision, in many cases, was to deem a lorry driver, even one employed by a mere transport undertaking, to be the owner of the goods carried in his lorry.

On the other hand, among the information that, by virtue of Article 57 of the Code, a declaration must contain are:

‘The first name, surname and address of the declarant, as well as of the owner of the goods who may be represented by him.’

The alleged infringement of Articles 30 and 34 of the EEC Treaty

The Italian Government contended that, despite the wording of Article 40 of the Code, the effect of Article 56 was to enable the owner of goods to authorize any person of his choice, whether or not a licensed customs agent, to effect customs transactions on his behalf. This was because Article 56 enabled a customs declaration to be made by anyone ‘who presents the goods for customs clearance or has possession of them at the moment of entry onto the customs territory or exit from that territory’. However, the Italian Government said, a person other than a licensed customs agent making such a declaration, as ‘deemed’ owner of the goods, thereby rendered himself and the true owner jointly and severally liable to the Customs by virtue of Article 38. The identity of the true owner must of course be disclosed in every case.

So, according to the Italian Government, the only difference between representation by a licensed agent and representation by an unlicensed agent lies in the degree of personal liability that the agent assumes. Article 41 makes it clear that a professional agent is not jointly and severally liable with the owner of the goods for the whole amount of the duty that may be payable. His liability is secondary, in that it arises only when the customs authorities have failed to obtain satisfaction from the owner, who is the person primarily liable, and even then it is limited to additional duty arising from a review of the assessment or payment. As for an employee agent, Article 43 provides that he incurs no personal liability at all so long as he acts only within the scope of his authority.

The Commission disputed that interpretation of the Code. Article 56, it said, in assimilating anyone presenting goods for clearance, or in possession of them, to the owner, meant that he must declare them, if at all, in his own name and on his own behalf. Article 57, however, required him to disclose the identity of the true owner. From that inconsistency it must be deduced that Article 56, which is not in Chapter II of the Code, was concerned only with imposing liability and not with authorizing agency.

That dispute led to controversy between the parties as to the significance of certain concepts of the Italian law of agency, such as ‘rappresentanza diretta’, ‘rappresentanza indiretta’ and ‘mandato’. Happily, however, it became common ground at the hearing that that controversy was irrelevant.

In a direct action, unlike on a reference for a preliminary ruling, this Court clearly has jurisdiction to decide a question of interpretation of national law, where that is necessary. But the Court should obviously approach such a question with caution. Here, for two reasons, I do not think it necessary for the Court to adjudicate upon the dispute between the parties as to the interpretation of the Code.

The first reason is that I would accept the Commission's alternative submission that, even according to the Italian Government's interpretation of it, the Code does not leave an importer or exporter entirely free to choose his own customs agent. That freedom is manifestly restricted if the agent so chosen can act only on the footing that he will be jointly and severally liable for the whole duty.

But the second and more important reason is that, in my opinion, it is not enough for the Commission to show that an importer or exporter's freedom to choose a customs agent is restricted. In order to bring the case within Articles 30 and 34 of the Treaty, the Commission must show also that restriction is, actually or potentially, a hindrance to trade between Member States. The Commission, it seems to me, did not in this case even attempt to discharge that onus. Leaving aside vague and unsubstantiated allusions by Counsel for the Commission at the hearing to cases of goods being held up at the frontier because no licensed customs agent was available, the Commission confined itself to stating in general terms that the need to employ a licensed agent increased the cost of importations and exportations. But it preferred no evidence in support of that statement. It treated the statement as a self-evident proposition, which in my opinion it is not. We know that Italian professional customs agents charge in accordance with statutory scales. So much is apparent from Article 11 of the Statute of 22 December 1960, No 1612. But we do not know what those scales are; much less do we know how the fees they prescribe compare with, for instance, the fees charged by customs agents in other Member States where they do not have to be licensed. It may even be that, as the Italian Government suggested, the employment of licensed customs agents facilitates trade, because customs officers can work more speedily when dealing with people who are experts in customs procedures and whom they feel they can trust.

That being so, I can, I think, spare Your Lordships an examination of the laws of the other Member States, to which the Commission referred to show that the Italian system of licensing customs agents was unique in the Community, or at all events had become so since the abolition earlier this year of a similar system existing in France. Unique it may be, but that does not mean that it is a measure having an effect equivalent to a quantitative restriction. It means at most that, according to the experience of other Member States, such a system is unnecessary. But as to that too the Italian Government had a point. It said that conditions in Italy were different, particularly in that customs officers are thinner on the ground there than in other Member States.

The alleged infringement of Article 2 (3) (g) of Directive No 70/50/EEC

I turn to the Commission's subsidiary point based on Article 2 (3) (g) of Directive No 70/50/EEC. This, Your Lordships remember, relates to the requirement that a licensed customs agent should reside in the district for which he is licensed.

The Italian Government's answer to that point was that Article 2 (3) (g) did not apply to legislation about the representation of an importer or exporter in the territory of the Member State where he was established. That is, in itself, clearly right, but it does not, in my opinion, afford a complete answer to the Commission's point, because it does not deal with the case of an exporter in another Member State who remains the owner of the goods at the time when they are presented for customs clearance in Italy. On a literal reading of Article 2 (3) (g), it is a breach of that provision to require him to have an agent resident in Italy.

The real answer, in my opinion, is to be found in the preamble to the Directive. This includes a recital that:

‘… the formalities to which imports are subject do not as a general rule have an effect equivalent to that of quantitative restrictions and, consequently, are not covered by this Directive.’

That is followed by a recital describing in general terms the ‘measures’ that are covered by the Directive, and next by a recital that:

‘… such measures must be considered to include those which make access of imported products to the domestic market, at any marketing stage, subject to a condition which is not laid down for domestic products or to a condition differing from that laid down for domestic products, and more difficult to satisfy, so that a burden is thus placed on imported products only.’

One thus finds that the preamble excludes from the scope of the Directive ‘formalities to which imports are subject’, which obviously comprises customs clearance, but includes within that scope, in language that is echoed by Article 2 (3) (g), ‘measures … which make access of imported products to the domestic market … subject to a condition … more difficult to satisfy’ than it is for domestic products.

One must therefore, in my opinion, in applying Article 2 (3) (g), have regard to the purpose for which the exporter concerned is required to have ‘an agent or representative in the territory of the importing Member State’. If that requirement is imposed only for the purposes of customs clearance it is outside the scope of the Directive.

I would therefore reject the Commission's subsidiary point also.

The alleged infringement of Article 52 of the Treaty

So I come to the Commission's second major contention, with which, like Counsel, I can deal very briefly.

Undoubtedly the requirement in Article 48 of the Code that an applicant for a licence should be an Italian citizen or a citizen of a country that grants equal treatment in the matter to Italian citizens is, on the face of it, incompatible with Article 52 of the Treaty. I do not think it enough to absolve the Italian Republic of the charge of having in that respect failed to fulfil an obligation under the Treaty that it has taken steps by administrative circular to assimilate citizens of other Member States to Italian citizens for the purposes of that requirement. So long as the requirement remains on the statute book a citizen of another Member State, who is ignorant of the circular, may be thereby deterred from seeking a licence — consider Case 167/73 Commission v French Republic [1974] 1 ECR 359. I should however record that the Italian Government has given an undertaking that the Code will in that respect soon be amended.

Conclusion

In the result I am of the opinion that Your Lordships should:

(1) Dismiss the Commission's claim in so far as it relates to Articles 30 and 34 of the Treaty and