Opinion of Mr Advocate General Tesauro delivered on 18 February 1993. - Eurim-Pharm GmbH v Bundesgesundheitsamt. - Reference for a preliminary ruling: Verwaltungsgericht Berlin - Germany. - Free-trade agreement - Parallel imports of pharmaceutical products - Quantitative restriction on imports - Measure having equivalent effect. - Case C-207/91.



European Court reports 1993 Page I-03723



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1. In this case the Court is asked to interpret Articles 13 and 20 of the free- trade Agreement between the Community and the Republic of Austria, (1) which substantially follow the wording of Articles 30 and 36 of the EEC Treaty.

2. The facts which gave rise to these proceedings are relatively straightforward and may be summarized as follows.

Eurim-Pharm, a company whose registered office is in Germany, wished to offer for sale on the German market a drug called "Adalat", manufactured in France by Bayer and distributed by the latter under the same name in Austria and Germany. For that purpose, Eurim-Pharm bought Adalat on the Austrian market intending to resell it in Germany, in parallel with Bayer' s distribution network, after attaching a label with its own company name.

However, the German health authorities rejected the application for marketing authorization because it lacked the information which national rules required to be communicated to the supervisory authority.

3. After making an unsuccessful administrative objection, Eurim-Pharm brought an action before the Verwaltungsgericht (Administrative Court) Berlin, arguing that the national rules in question infringed the prohibition on measures having equivalent effect to quantitative restrictions laid down by Articles 13 and 20 of the Agreement between the Community and Austria. In particular, the requirement that an importer of a medicine from Austria produce documentation for that medicine, when the authority of the importing Member State had already authorized the marketing thereof by the manufacturer' s designated distributor and already had all the necessary documents, constituted a measure having equivalent effect prohibited by those articles. That was especially so where, as in the present case, the documentation in question was unobtainable in practice without the consent of the manufacturer or its authorized distributors.

4. Eurim-Pharm maintains that its arguments are confirmed by the judgment in the De Peijper case, (2) concerning the parallel importation of medicines between Member States. In the applicant' s view, the ruling in that judgment, even though it relates to intra-Community trade, applies equally to a product imported from Austria, since Articles 13 and 20 of the above Agreement and Articles 30 and 36 of the EEC Treaty are similar in content and pursue the same objective, namely the elimination of obstacles to trade.

5. The national court, having ascertained for a fact that the product intended to be imported in parallel from Austria is identical with the product already marketed in Germany, is inclined to hold that, if it were to apply De Peijper to the case before it, the refusal by the German health authorities would be found incompatible with Community law. Since, however, the court is unsure whether that judgment is applicable in its entirety and in any event in the context of a free-trade agreement, it asks the Court to clarify whether, as regards the parallel importation of medicines, Articles 13 and 20 of the Agreement between the Community and Austria are to be interpreted in the light of the same principles as Articles 30 and 36 of the EEC Treaty. If that were so, it would follow that authorization to market a medicine imported into Germany from Austria, which was absolutely identical to a non-parallel product already authorized in Germany, could not be made subject to the condition that the importer provide the competent health authority with documents or information already in its possession.

6. Before considering the merits of that question, it will be useful to consider a number of preliminary issues.

The United Kingdom and the Italian Government maintain that importation of the medicine in question does not come within the scope of the Agreement.

In their opinion, the purpose of the Agreement, which is to foster the development of the economic activities of the Contracting Parties through a liberalization of trade, implies that, in order to benefit from the free-trade regime provided for, the product must necessarily have undergone some processing in the exporting country. In other words, the Agreement applies to products originating in Austria which are imported into the Community, and vice versa, but not to products originating in a Community country which, after merely passing through Austria, are reimported into the Community.

7. Let me say straight away that I find such a restrictive reading of the Agreement devoid of substance and, in the final analysis, unconvincing.

First, as regards the wording, although Article 2, which defines the scope of the Agreement, stipulates that it is to apply to products originating in the Community or in Austria, it makes no reference to any requirement that the Community products should be exported to Austria or vice versa.

8. Secondly, it seems to me that to read an agreement such as this one in a manner calculated significantly to limit its scope is incompatible with its aims and its context.

Under Article 1, the aim of the Agreement is to promote through the expansion of reciprocal trade the harmonious development of economic relations between the Contracting Parties, and thus to foster the advance of economic activity, the improvement of living and employment conditions, and increased productivity and financial stability, while at the same time providing fair conditions of competition for trade between the Contracting Parties.

The Agreement therefore provides for the abolition of customs duties and charges having equivalent effect in trade between the Community and Austria (Articles 3 to 7). The same principle is applied to quantitative restrictions and measures having equivalent effect (Article 13). Those provisions are complemented by the prohibition of discriminatory fiscal measures and practices (Article 18) and by the abolition of all restrictions on payments relating to trade in goods (Article 19). The Agreement also contains a number of provisions concerning competition, public aid and dumping practices (Articles 23 and 25).

9. Moreover, as stated in the preamble to the Agreement, the Contracting Parties' decision progressively to eliminate the obstacles to substantially all their trade should be seen in the general context of the provisions of the General Agreement on Tariffs and Trade ("GATT") concerning the establishment of free-trade areas. Under Article XXIV (8), a free-trade area is to be understood to mean "a group of two or more customs territories in which the duties and other restrictive regulations of commerce ... are eliminated on substantially all the trade between the constituent territories in products originating in such territories".

10. If, therefore, the Agreement was intended primarily to promote the export of products originating in one Contracting State to the other, it follows that there is nothing in it which calls for a restrictive interpretation. On the contrary, the absence of any precise wording along those lines and the general context referred to above suggest that it would be arbitrary to adopt an interpretation which, by completely excluding the possibility of the reimportation of products from the scope of the Agreement, may considerably impede the flow of trade and thereby reduce the benefits that an agreement of this kind is intended to achieve.

11. The Italian Government argues that the national court was wrong to refer to Articles 13 and 20 of the Agreement, and that the relevant provision in this case is Article 15(2), which is narrower in scope and provides that "the Contracting Parties shall apply their agricultural rules in veterinary, health and plant health matters in a non-discriminatory fashion and shall not introduce any new measures that have the effect of unduly obstructing trade."

In my view, however, such a reading of Article 15(2), as a general provision concerning all health-related questions that might arise in relation to trade in goods, does not stand up to closer examination. As is clear from reading the provision as a whole, Article 15 is a special provision which exclusively concerns agricultural products, whilst the protection of health is ensured in more general terms by Article 20 of the Agreement, which, following the example of Article 36 of the EEC Treaty, permits restrictions and prohibitions which are justified on grounds of human health provided they do not constitute a means of arbitrary discrimination or a disguised restriction on trade between the Contracting Parties.

12. Before turning to the merits of the question referred, the further issue arises as to whether the relevant provisions of the Agreement may be pleaded before the national court.

The Court' s case-law on that point seems to me to be sufficiently abundant and clear as to enable an appropriate solution to be found in a case such as this without too much difficulty.

It is settled case-law that "a provision of an agreement concluded by the Community with non-member countries must be regarded as being directly applicable when, regard being had to its wording and to the purpose and nature of the agreement itself, the provision contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure". (3)

13. Moreover, in Case 104/81 Kupferberg I, (4) when faced with the question of the direct applicability of Article 21 of the free-trade agreement between the Community and Portugal, the Court stated, having dismissed a number of objections based in particular on potential lack of reciprocity and on the existence of a special institutional framework for consultations and negotiations in relation to the implementation of the agreement, that its purpose was "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". The Court therefore concluded that the first paragraph of Article 21 of that agreement, drafted in similar terms to the first paragraph of Article 95 of the EEC Treaty, "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."

14. Since the structure of the agreement examined by the Court in the Kupferberg I judgment was similar to that of the agreement in this case, and since Articles 13 and 20 of the Agreement with Austria substantially restate the prohibition on measures having equivalent effect contained in Articles 30 and 36 of the Treaty, it seems to me that the Court' s reasoning in Kupferberg I can easily be applied to this case. Furthermore, although it did not deal with the question expressly, the Court seems to have impliedly recognized the direct applicability of a provision contained in the free-trade agreement between the Community and Switzerland, and drafted in the same terms as Article 13 of the Agreement in this case. (5)

15. Turning now to the interpretation of the provisions which form the subject-matter of the reference, the first point to be made is that, according to a settled line of authority, the interpretation of provisions in the EEC Treaty cannot be applied by way of simple analogy to the corresponding provisions of a free-trade agreement. (6)

However, whilst that statement of principle is perfectly acceptable in itself, it must be seen in its proper perspective and is certainly not intended to encourage or justify in general terms divergent interpretations of the EEC Treaty and the corresponding rules in free-trade agreements to which the Community is a party.

That ruling, which can also be found in case-law prior (7) to the better-known judgment in Polydor, really constitutes no more than the application of a general principle of legal interpretation, which is also taken up by the Vienna Convention on the Law of Treaties, (8) whereby a rule is to be interpreted having regard to the most general context in which it appears. (9)

16. Whilst, therefore, it is true in principle that an interpretation given by the Court in the context of the EEC Treaty is not automatically applicable in the context of an agreement with a non-member country, it is equally true that, when faced with provisions drafted in substantially identical terms and laying down rules of fundamental importance in the context either of the EEC Treaty or of a free-trade agreement, it is still necessary to determine the specific reasons which may lead to a divergent interpretation.

17. That, in my view, is the more correct reading of the Polydor judgment which also appears to be confirmed by the most recent case-law. (10)

In any event, I believe that the De Peijper judgment cited above, (11) in which the Court answered two questions raised in criminal proceedings brought by the Rotterdam district prosecutor against a trader accused of supplying medicines imported from the United Kingdom to Netherlands pharmacies without the authorization of the competent authorities, has to be seen in that perspective.

18. In that case, the Court first pointed out that national rules or practices which result in imports being channelled in such a way that only certain traders can effect them, whilst others are prevented from doing so, constitute measures having an effect equivalent to quantitative restrictions prohibited by Article 30 of the Treaty.

After holding that national rules or practices which restrict imports of pharmaceutical products or are capable of doing so are compatible with the Treaty for the purposes of Article 36 only to the extent to which they are necessary for the effective protection of health and life of humans, the Court went on to examine the various hypotheses submitted by the national court.

19. The Court made a distinction between, on the one hand, the documents relating to a medicinal preparation in general, in that case the "file" prescribed by the Netherlands legislation, and, on the other, those relating to a specific batch of that preparation imported by a particular trader, in that case the "records" prescribed by the same legislation.

As regards the documents concerning a given pharmaceutical product, the Court pointed out that "if the public health authorities of the importing Member State already have in their possession, as a result of importation on a previous occasion, all the pharmaceutical particulars relating to the medicinal preparation in question and considered to be absolutely necessary for the purpose of checking that the medicinal preparation is effective and not harmful, it is clearly unnecessary, in order to protect the health and life of humans, for the said authorities to require a second trader who has imported a medicinal preparation which is in every respect the same, to produce the abovementioned particulars to them again. Therefore national rules or practices which lay down such a requirement are not justified on grounds of the protection of health and life of humans within the meaning of Article 36 of the Treaty" (paragraphs 21 and 22 of the judgment).

20. The Court came to essentially the same conclusion with regard to the documents relating to specific batches of the imported medicinal preparation, since, whilst recognizing that the supervisory authorities must be able to check with absolute certainty and at any time whether a particular batch of the product complies with the particulars on the file, the Court found, first, that national authorities do not lack legislative and administrative methods capable of compelling the manufacturer or its sole importer to supply particulars making it possible to ascertain that the medicinal preparation imported in parallel in the particular case is identical with the medicinal preparation in respect of which the "file" has already been lodged, and, secondly, that simple cooperation between such authorities would enable them to obtain on a reciprocal basis the documents necessary for checking certain largely standardized and widely distributed products.

21. Finally, basing its reasoning once again on the ability of the competent authority of the importing Member State to obtain data and information from the manufacturer or its sole importer, the Court emphasized that the same answer applies to the case where the imported medicinal preparation constitutes a variant of the product already authorized, provided the differences are insignificant and do not have therapeutic effects.

22. The Commission and the two governments which have intervened in this case argue that the Court' s approach in the De Peijper judgment was made possible by the progress which had already been made at that time in harmonizing legislation on medicines (12) and by the cooperation existing between the administrations of the Member States in that sector. (13)

In that context, reference has also been made to the Commission' s Communication on parallel imports of proprietary medicinal products, (14) published following the De Peijper judgment, in which particular emphasis is laid on the importance of cooperation between the administrative authorities of the Member States with a view to effective supervision over parallel imports of medicinal products.

It is on the basis of considerations such as these that the Commission and the intervening governments argue that it is not possible to apply that case-law in the context of a free-trade agreement which does not provide for any harmonization of legislation or even any specific obligation on the part of the administrations of the Contracting Parties to cooperate in that sector.

23. Although I might be able to subscribe to those arguments in general terms, they do not seem to me to be relevant to the specific case referred by the national court.

As emerges clearly from the order for reference, the Verwaltungsgericht Berlin has ascertained that the medicine for which import authorization is sought is absolutely identical with a product already marketed in Germany.

In other words, the case referred to the Court corresponds to the first of the hypothetical cases considered in the De Peijper judgment, namely the case of products established as being identical and in respect of which no particular investigation or cooperation is required on the part of the administration concerned, which already has all the necessary documents at its disposal.

The obstacle to parallel importation is thus purely formal and can have no plausible justification on the grounds of protecting human health, even in the context of a free-trade agreement such as the one in this case.

24. Nor am I swayed by the objections made in the course of the proceedings concerning the risk that the provisions of the Agreement might be read differently by the other party and that the Agreement itself might thus be applied differently, in a manner capable of affecting conditions of competition in commercial relations between the Community and Austria.

Given that such a possibility always exists when a court or tribunal of one of the Contracting Parties is called upon to apply the rules of an international treaty, I do not consider that anything has emerged in the course of the present proceedings to suggest that the other contracting party might be entitled to regard as compatible with the Agreement measures which encourage the channelling of imports and which do not have any justification in terms of protecting human health. Moreover, any potential divergence in the application of the Agreement could be adequately resolved using the procedure for the settlement of disputes laid down by the Agreement itself.

25. Before concluding, however, I would like to allay the fear raised by the United Kingdom concerning the possibility that, if the Agreement were to be interpreted in such a way as to encourage parallel imports of medicinal products, European undertakings would be encouraged to increase the prices of medicinal products marketed in those developing countries towards which the Community has undertaken unilaterally to abolish obstacles to imports.

Apart from anything else, the aforesaid criteria laid down by the Court for interpreting provisions in international agreements, which are based in particular on the nature and purpose of the agreement, do not in any event allow an interpretation given in the context of a free-trade agreement to be automatically applied in the context of an agreement with developing countries.

26. In the light of the above considerations, I therefore propose that the Court give the following answer to the question submitted by the Verwaltungsgericht Berlin:

Articles 13 and 20 of the Agreement between the Republic of Austria and the European Economic Community are to be interpreted as meaning that authorization to market a medicinal product which has been imported into Germany from Austria, and which is in all respects identical to a medicinal product already authorized in Germany, may not be made subject to the condition that the importer submit to the competent health authority documents or information which are already in that authority' s possession.

(*) Original language: Italian.

(1) ° OJ, English Special Edition 1972 (31 December), p. 4.

(2) ° Case 104/75 [1976] ECR 613.

(3) ° Case C-18/90 Kziber [1991] ECR I-199, paragraph 15; Case 12/86 Demirel [1987] ECR 3719, paragraph 14.

(4) ° [1982] ECR 3641.

(5) ° Case 65/79 Chatain [1980] ECR 1345.

(6) ° Kupferberg I, cited above, paragraph 30; Case 270/80 Polydor [1982] ECR 329, paragraphs 15 and 16.

(7) ° Case 225/78 Bouhelier [1979] ECR 3151, paragraph 6.

(8) ° See Article 31(1), whereby a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose .

(9) ° I recall here the ancient rule of interpretation, attributed to Celsus, whereby: Incivile est, nisi tota lege perspecta, una aliqua particula eius proposita, iudicare vel respondere .

(10) ° In the recent judgment in Case C-163/90 Legros [1992] ECR I-4625, paragraph 26, the Court, referring to the free-trade agreement with Sweden, considered that the agreement would be deprived of much of its effectiveness if the term charge having equivalent effect contained in Article 6 of the agreement were to be interpreted as having a more limited scope than the same term appearing in the EEC Treaty .

(11) ° Paragraph 4.

(12) ° See Council Directive 65/65/EEC of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products (OJ, English Special Edition 1965-1966, p. 20); Council Directive 75/318/EEC of 20 May 1975 on the approximation of the laws of Member States relating to analytical, pharmaco-toxicological and clinical standards and protocols in respect of the testing of proprietary medicinal products (OJ 1975 L 147, p. 1); Second Council Directive 75/319/EEC of 20 May 1975 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products (OJ 1975 L 147, p. 13).

(13) ° See, in particular, Articles 8 to 15 of Directive 75/319/EEC and Council Decision 75/320/EEC of 20 May 1975 setting up a pharmaceutical committee (OJ 1975 L 147, p. 23).

(14) ° OJ 1982 C 115, p. 5.