CELEX: 61993CC0387
Language: en
Date: 1995-06-20 00:00:00
Title: Opinion of Mr Advocate General Elmer delivered on 20 June 1995. # Criminal proceedings against Giorgio Domingo Banchero. # Reference for a preliminary ruling: Pretura circondariale di Genova - Italy. # Articles 5, 30, 37, 85, 86, 90, 92 and 95 of the EEC Treaty. # Case C-387/93.

OPINION OF ADVOCATE GENERAL
      ELMER
      delivered on 20 June 1995 (
            *1
         )
      
               1. 
            
            
               The Pretura Circondariale di Genova (District Magistrate's Court, Genoa) has in the present case requested the Court of Justice to interpret a number of Treaty provisions in relation to the Italian legislation on, inter alia, trade in manufactured tobacco products.
            
         The relevant national legislation
      
               2.
            
            
               Under Article 1 of Law No 907 of 17 July 1942, as amended by Law No 1293 of 22 December 1957, (
                     1
                  ) the Italian State has a monopoly over the production, importation of and trade in manufactured tobacco. The monopoly is operated by the Amministrazione Autonoma dei Monopoli di Stato (Autonomous Administration of State Monopolies, hereinafter ‘the AAMS’). The manufacture of tobacco products is carried out in part by the AAMS itself and in part by licensed undertakings operated by foreign manufacturers under the control of the AAMS. In addition to VAT, tobacco products are subject to excise duty. AAMS warehouses play a central role in the administration of the monopoly, and they are in particular responsible for levying and paying to the national treasury the abovementioned duties and AAMS revenue.
            
         
               3.
            
            
               Article 1 of Law No 724 of 10 December 1975 (
                     2
                  ) provides that manufactured tobacco products from other Member States of the Community may be imported into Italy for the purpose of retail trade on condition that the goods are stored in warehouses belonging to the AAMS or in private warehouses that have been specially authorized. (
                     3
                  ) Article 1(2) of the Law, however, provides that only those tobacco products can be imported that have previously been included on price lists and that tobacco products cannot be imported in packages other than those which the Minister for Finance has prescribed by ministerial order. Under Article 3, imported tobacco products are subject to a special import duty of the same amount as the consumption tax, and this must be paid by the importer in return for the provision of special State markings to be attached to each packet. According to the information before the Court, imports of tobacco products to date have been effected solely via the AAMS's warehouses.
            
         
               4.
            
            
               Traders specially licensed by the AAMS are the only persons allowed to engage in retail sale of manufactured tobacco products. There are two types of sales outlets. (
                     4
                  ) Ordinary sales outlets, of which there are approximately 60000, are operated by private individuals in locations and at hours determined by the AAMS. In this regard, account is taken inter alia of the distance between existing retail shops, the relation between the number of retail shops and consumer requirements, including local population levels and the existence of special needs. Special sales outlets, of which there are approximately 16000, are operated primarily from hotels, restaurants, hospitals and prisons. The opening hours of these outlets are fixed by regional AAMS inspectors after consultation with local authorities, and outlets must remain open on a rota basis on public holidays.
            
         
               5.
            
            
               Price lists for manufactured tobacco products are drawn up periodically by the Minister for Finance (see Law No 76 of 7 March 1985, (
                     5
                  ) which amended Law No 825 of 13 July 1965 (
                     6
                  )).
            
         
               6.
            
            
               Unlawful possession of domestic tobacco is punishable as smuggling under Article 66 of Law No 907 of 17 July 1942. (
                     7
                  ) Law No 27 of 3 January 1951 (
                     8
                  ) provides that this offence is punishable by a fine of between LIT 150000 and LIT 400000 (corresponding at present to between approximately ECU 70 and ECU 185) per kg of manufactured tobacco or part thereof. This Law also contains provisions for the confiscation of goods and for prison sentences of up to two years in cases where the smuggling involves 15 kg or more of tobacco.
            
         
               7.
            
            
               Under Article 341 of the Testo Unico delle Disposizione Legislative in Materia Doganale (
                     9
                  ) (Single Text on Customs Legislation) (hereinafter ‘the TULD’), smuggling involving foreign tobacco products comes exclusively under the criminal-law provisions contained in Italian customs legislation set out in that decree. Article 292 of the TULD provides that smuggling consists in the failure to pay the duty owing on goods. Under Article 282(f), the penalty is a fine of at least twice and at most ten times the duty avoided, while the goods in question are subject to confiscation under Article 301. Articles 295 and 296 provide that the punishment may be increased to a custodial sentence in the event of repetition (up to one year) or if there are exacerbating circumstances (three to five years).
               Article 25(2) of the TULD requires a person in possession of foreign goods subject to customs duty to demonstrate that they have been lawfully acquired. If he is unable to do so, the person concerned will be deemed guilty of smuggling.
            
         Facts of the case
      
               8.
            
            
               In the course of an audit carried out on 25 October 1990 at the premises of the sole trading firm Sebastiano Banchero, a consignment of 2.320 kg of foreign manufactured tobacco was found, consisting of 116 packets of various brands of cigarettes, none of which bore the State marking evidencing payment of customs and other duties.
            
         
               9.
            
            
               Criminal proceedings were subsequently brought before the Pretura Circondariale di Genova against the owner of the firm, Giorgio Domingo Banchero, for breach of Articles 282(f) and 341 of the TULD by reason of his possession of foreign goods, namely the above manufactured tobacco products, which did not bear the monopoly marking and which he was unable to demonstrate had been lawfully acquired.
               The accused explained during the proceedings that he had bought the tobacco products in question from an unknown man in the street near the Ponte Monumentale in Genoa.
            
         The order for reference
      
               10.
            
            
               The Pretura di Genova concluded that an interpretation of Community law was necessary in order to conclude the criminal proceedings and accordingly issued an order on 14 March 1992 submitting a number of questions to the Court of Justice for a preliminary ruling. By an order of 19 March 1993 in Case C-157/92 Banchero, (
                     10
                  ) however, the Court declined to answer the questions on the ground that the national court had not set out the facts of the main proceedings and the relevant Italian legislation in sufficient detail to enable the Court to give a useful reply to the questions submitted.
            
         
               11.
            
            
               The Pretura di Genova, by order of 30 July 1993, subsequently referred to the Court for a preliminary ruling the following questions on the relation between Community law and the Italian rules on the sale of tobacco products:
               
                        ‘1.
                     
                     
                        Is there any conflict between Articles 5, 30, 37, 85, 86, 90, 92 and 95 of the EEC Treaty, taken together, and the legislative nature and characteristics of a national monopoly such as that which, in itself and in its implementation, derives from the legislation in force in the Italian State governing the tobacco sector, with particular reference to the exclusive rights of production, marketing, sale and distribution in general, such exclusive rights being granted to the national monopoly by a set of rules which is inherently liable to lead to discrimination within the meaning of Article 37 of the Treaty, to allow preferential choices to be made which may be regarded as constituting “measures having equivalent effect” within the meaning of Article 30 of the Treaty, and to allow abuse of a dominant position in breach of Articles 86 and 90 of the Treaty?
                        More specifically:
                        Is there any conflict between Article 30 of the Treaty and national legislation which restricts the retail distribution of foreign manufactured products to an undertaking which has a monopoly over the sale of such products, with the result that the only channel for the marketing of foreign manufactured tobacco products is made up solely of retailers authorized by that monopoly, and, in the case of such a conflict being found, does the national legislation constitute ab initio a measure having an effect equivalent to a quantitative restriction on imports, contrary to Article 30 of the EEC Treaty?
                     
                  
                        2.
                     
                     
                        Is there any conflict between Article 30 of the EEC Treaty, in the light of the interpretation given by the Court of Justice, and national legislation which penalizes the evasion of a tax on consumption levied on manufactured tobacco products coming from other Member States, in whatever quantity, by a penalty which is excessive in relation to the gravity of the offence, in that it provides that in every case, even where the quantity of tobacco is extremely small, there is to be both a criminal penalty and confiscation of the goods? If such a conflict exists, does such national legislation constitute a measure having an effect equivalent to a quantitative restriction on imports contrary to Article 30 of the Treaty?
                     
                  
                        3.
                     
                     
                        Is there any conflict between Article 90(1), in conjunction with heading (b) of the second paragraph of Article 86 of the EEC Treaty, and national legislation which restricts the retail distribution of manufactured tobacco products, including tobacco products from other Member States, to an undertaking which has a monopoly over the sale of such products, even where that undertaking is not in a position to satisfy the demand existing in the market for that product, and therefore the restriction gives rise to a limitation on the free movement of Community goods and an abuse of a dominant position by the monopoly undertaking’
                     
                  
         
               12.
            
            
               The national court points out in its order for reference that the foreign tobacco products to which this case relates originate in the Community.
            
         Admissibility
      
               13.
            
            
               According to the order for reference, the consideration underlying the first question is that a decision holding that the Treaty rules on free movement of goods between Member States are incompatible with national legislation on a tobacco monopoly may affect a State's right to impose domestic criminal penalties. The national court submits in this regard that criminal liability cannot be imposed for failure to comply with unreasonably stringent provisions protecting a monopoly that is unlawful under Community law. Likewise, it submits with regard to the third question that if the Italian tobacco monopoly is being exercised in breach of Article 90 of the Treaty, in conjunction with Article 86, this would necessarily have a bearing on the charge laid. The charge would in that case relate to a failure to comply with rules ‘laid down to uphold a monopoly incompatible with Community law’.
            
         
               14.
            
            
               Counsel for the accused has argued that a reply to the questions is necessary in order to determine whether the accused is guilty according to the charge of ‘possession of foreign goods ... without being in a position to demonstrate that those goods had been lawfully acquired’. Defence counsel has also referred to the rule in Article 25(2) of the TULD.
            
         
               15.
            
            
               The Italian Government takes the view that the first and third questions should be declared inadmissible. The expression ‘lawfully acquired’ in Article 25(2) of the TULD refers solely to the question whether duty has been paid on the goods in question, not to the question whether the goods were or were not purchased from the monopoly. This follows from the fact that the provision also applies to the possession of certain other foreign goods, such as alcohol and petroleum products, in respect of which there is no commercial monopoly.
            
         
               16.
            
            
               The Commission argues that the provisions which MrBanchero is charged with having breached are indeed framed as fiscal provisions. The serious nature of the penalties which breach of those rules attracts must, however, in the Commission's view, raise doubts as to whether those rules are compatible with Community law if one considers that the intended purpose of the rules may also be to protect the monopoly. Thus, even though the Commission takes the view that the questions ought not as a whole to be declared inadmissible, it also finds — along with the French and Spanish Governments — that the national court has failed to explain why it considers Articles 5, 85, 92 and 95 to be relevant in deciding the case, and that the first question ought to be declared inadmissible in so far as those provisions are concerned.
            
         
               17.
            
            
               In view of the fact that Mr Banchero has been charged with an offence under fiscal legislation — the possession of tobacco on which duty had not been paid — it seems to me at first sight surprising that he may in this case be acquitted on the ground that the Treaty is to be interpreted in such a way as to be incompatible with the Italian rules on trade in tobacco products. It is, after all, common ground in this case that duty had not been paid on the goods and that the imposition of excise duty on tobacco goods is in accordance with Community law. (
                     11
                  )
            
         
               18.
            
            
               The question whether such an interpretation of Community law in respect of the Italian rules on trade in tobacco products must have this effect in the present case will depend on an interpretation of national law — here specifically the term ‘lawfully acquired’ in Article 25(2) of the TULD. The national court has, in its order for reference, stated its view that the Court's reply to the questions submitted will necessarily have a bearing on the determination of the issue of guilt, particularly given that, in its opinion, the rules were introduced with a view to protecting the monopoly. The Court of Justice cannot address the Italian Government's submission that the term ‘lawfully acquired’ in Article 25(2) of the TULD must be interpreted in a manner different from that of the national court in its order for reference. National courts and tribunals alone are in a position to address such a question on the interpretation of national law. The cooperation procedure set out in Article 177 of the Treaty implies, according to the Court's settled case-law, that the Court does not have jurisdiction to rule on such matters. (
                     12
                  )
            
         
               19.
            
            
               Likewise, the cooperation procedure implies that it is the national court that determines whether the reply given by the Court of Justice to questions concerning the interpretation of Community law is relevant for the decision which the national court is required to take in the main proceedings.
               The Court of Justice can refuse to answer questions submitted to it only if the procedure of referring questions for a preliminary ruling has been misused in order to elicit a ruling from the Court by means of a spurious dispute or if it is obvious that the provisions of Community law submitted for the interpretation of the Court cannot apply. The cooperation procedure under Article 177 does not require the Court to exercise a jurisdiction of replying to general and hypothetical questions, but rather to address specific problems of Community law which reflect an objective requirement in connection with the resolution of a legal dispute. (
                     13
                  )
            
         
               20.
            
            
               In so far as the national court has set out its reasons for submitting the questions, there is in my view no sufficient basis on which to declare the first and third questions inadmissible in their entirety.
            
         
               21.
            
            
               I am, however, in agreement with the Commission that the national court has failed to explain adequately how Articles 5, 85, 92 and 95 of the Treaty, which are mentioned in the first question, can be relevant for the purposes of deciding the case. (
                     14
                  ) In the light of this I take the view that the Court ought not to address the question whether those provisions constitute a barrier to national legislation such as that here under discussion.
            
         The first question
      
               22.
            
            
               In its first question the national court is in essence requesting the Court to assess the Italian legislation governing trade in manufactured tobacco products in the light of the rules in Articles 30 to 36 of the Treaty on the free movement of goods and Article 37 on State monopolies of a commercial nature.
            
         
               23.
            
            
               The information in this case does not, in my view, provide a basis for considering in greater detail the relationship between the national legislation and Article 37. The Court has consistently held that import monopolies alone are unconditionally contrary to Article 37 of the Treaty. Article 37 does not, however, in itself preclude a national system with exclusive selling rights (see, with specific regard to the Italian tobacco monopoly, Case 78/82 Commission v Italy [1983] ECR 1955, paragraph 11). The provision requires an adjustment of national rules granting exclusive rights so as to ensure that there is no discrimination regarding the conditions under which goods are procured and marketed (see Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraphs 32 and 42, and Case C-361/90 Commission v Portugal [1993] ECR I-95, paragraph 13).
            
         
               24.
            
            
               Following the introduction of Law No 724 of 10 December 1975, however, the AAMS lost its monopoly on importing tobacco, and the possibility of establishing State outlets, including retail shops owned by the AAMS, was abolished by Law No 198 of 13 May 1983. According to the documents in the case, retail traders may themselves also decide which tobacco products they wish to sell. Along with the Commission and the French Government, I take the view that there is no information before the Court to suggest that the commercial State monopoly does not satisfy the requirements of Article 37 in such a way as to ensure that there is no discrimination regarding the conditions under which goods are procured and marketed.
            
         
               25.
            
            
               With regard to Article 30 of the Treaty, the Court has held in its previous case-law that national legislation restricting the right to sell certain goods to specific categories of traders, with the result that trade is channelled, is capable of affecting the possibilities of marketing imported products and may accordingly constitute a measure having an effect equivalent to a quantitative restriction on imports. (
                     15
                  )
            
         
               26.
            
            
               In its judgment in Joined Cases C-267/91 and C-268/91 Keck and Mithouard, (
                     16
                  ) however, the Court reviewed its case-law in this area and set out its views in more detail. The Court first of all noted that ‘it is established by the case-law beginning with “Cassis de Dijon” (Case 120/78 Rewe-Zentral v Bundesmonopolverwaltung für Branntwein [1979] ECR649) that, in the absence of harmonization of legislation, obstacles to free movement of goods which are the consequence of applying, to goods coming from other Member States where they are lawfully manufactured and marketed, rules that lay down requirements to be met by such goods (such as those relating to designation, form, size, weight, composition, presentation, labelling, packaging) constitute measures of equivalent effect prohibited by Article 30. This is so even if those rules apply without distinction to all products unless their application can be justified by a public-interest objective taking precedence over the free movement of goods.’ (
                     17
                  )
               The Court then went on to state that, in contrast to what had previously been decided, ‘... the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment (Case 8/74 [1974] ECR 837), so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States. Provided that those conditions are fulfilled, the application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article 30 of the Treaty.’ (
                     18
                  )
               With reference to this, the Court, in its reply to the question submitted, ruled that Article 30 of the EEC Treaty was to be interpreted as not applying to legislation of a Member State imposing a general prohibition on resale at a loss.
            
         
               27.
            
            
               This judgment should be understood as meaning that, when Article 30 is being applied, it is necessary to draw a distinction between two groups of national provisions. The first group consists of national provisions which restrict or prohibit certain types of sale. (
                     19
                  ) The fact that such provisions are applied to goods from other Member States cannot be assumed directly or indirecdy, actually or potentially to hinder trade between Member States, provided, in the first place, that the provisions apply to all affected traders operating within the national territory and, second, that they have the same effect, in law and in fact, on the marketing of domestic products and products from other Member States.
            
         
               28.
            
            
               If, however, those conditions are not satisfied, provisions which restrict or prohibit certain types of sale will also amount to measures having equivalent effect within the meaning of Article 30 of the Treaty. In its judgment in Case C-320/93 Ortscheit, (
                     20
                  ) thus, the Court held that since a prohibition on advertising for medicinal products which affected only foreign medicinal products did not have the same effect on the marketing of medicinal products from other Member States as on the marketing of domesticallyproduced medicinal products, it could not by itself fall outside the scope of Article 30 of the Treaty. It had for that reason to be understood as being potentially capable of restricting the volume of imports of medicinal products into the Member State in question and was for that reason a measure having equivalent effect within the meaning of Article 30 of the Treaty.
               In the area of services, the Court, in Case C-384/93 Alpine Investments, (
                     21
                  ) treated a prohibition on contacting individuals, without prior authorization, for the purpose of offering them certain financial services as constituting a restriction on freedom to provide services within the meaning of Article 59 of the Treaty. The Court stressed that the prohibition was imposed by the Member State in which the provider of the services was established and affected not only offers made by him to addressees who were established in that State or moved there in order to receive services but also offers made to recipients in another Member State. The prohibition thus directly affected access to the market in services in the other Member States.
            
         
               29.
            
            
               In its judgment in Keck and Mithouard, the Court assigned a national rule prohibiting resale at a loss to that group of ‘provisions restricting or prohibiting certain selling arrangements’ and which in general are not measures having equivalent effect within the meaning of Article 30 of the Treaty. (
                     22
                  ) In its judgment in Hiinermund, the Court also assigned to that group a professional rule prohibiting pharmacists from advertising pharmaceutical products outside pharmacies. (
                     23
                  ) Following the judgment in Tankstation 't Heukske and Boermans, the group also includes rules on the opening hours of petrol stations in so far as such provisions relate to ‘the times and places at which ... goods ... may be sold’. (
                     24
                  ) In its judgment in Punto Casa and PPV, the Court also included in that group national provisions prohibiting retail outlets from staying open on Sundays, on the ground that the provisions in question were concerned with ‘the arrangements whereby goods may be sold to consumers’. (
                     25
                  ) In its judgment in Leclerc-Siplec, the Court has most recently added to this group a rule prohibiting television advertising for a distribution company, finding as it did that this amounted to a prohibition of ‘a particular form of promotion (televised advertising) of a particular method of marketing products (distribution)’. (
                     26
                  )
            
         
               30.
            
            
               
                  The second group covers all other cases and is described in the Keck and Mithouard judgment as comprising obstacles to free movement of goods which are the consequence of applying, to goods coming from other Member States where they are lawfully manufactured and marketed, rules laying down requirements to be met by such goods (such as those relating to designation, form, size, weight, composition, presentation, labelling and packaging). It is immaterial that the rules in this group apply without distinction to both foreign and domestic goods if such application cannot be justified by a public-interest objective taking precedence over the free movement of goods.
               According to the Court's case-law following the judgment in Keck and Mithouard, this group now includes national provisions prohibiting the importation and sale of a product bearing a particular name (
                     27
                  ) or restricting the possibilities for indicating on the packaging of a product the latest date on which it can be used. (
                     28
                  )
               This group, however, is not confined to covering national rules setting out conditions that goods must satisfy. Thus, the Court, in its judgment in Ligur Carni and Others, (
                     29
                  ) treated national provisions that require importers of fresh meat either to use a particular company for the transport and delivery of the goods or to pay a given amount to the company in question as amounting to a measure having equivalent effect within the meaning of Article 30. Likewise, in its judgment in Centre d'Insémination de la Crespelle, (
                     30
                  ) the Court held that national provisions requiring traders who import animal semen from other Member States to deliver it to an approved centre constitute a measure having equivalent effect.
            
         
               31.
            
            
               Counsel for the accused claims that the Italian rules on trade in tobacco products must as a whole be treated as constituting a measure having equivalent effect within the meaning of Article 30 of the Treaty. Defence counsel has also pointed out, inter alia, that the fact that tobacco products must be stored either in an AAMS warehouse or in a warehouse which has previously obtained special authorization amounts to a restriction on the importation of tobacco products into Italy. A restriction, it is claimed, also lies in the fact that tobacco products may not be imported or marketed in packaging other than that specified in the Italian rules, as well as in the fact that the goods must be included on a price list drawn up by the Minister for Finance, which is tantamount to a requirement of public authorization to sell the goods. The practical effect of those rules is that foreign tobacco manufacturers wishing to sell their products on the Italian market must conclude an agreement with the monopoly in respect of the storage and distribution of their products.
            
         
               32.
            
            
               The Italian Government, on the other hand, refers to the Court's recent case-law on national provisions that restrict or prohibit certain selling arrangements. In the Italian Government's view, the Italian rules do not restrict importation of tobacco products from other Member States. The rules also take account of health considerations and protect public revenue in an area with very high levels of duty.
            
         
               33.
            
            
               The French and Spanish Governments submit that the Court's judgment in Keck and Mithouard means that national provisions on retail trade monopolies do not constitute restrictions for the purposes of Article 30 provided that they have the same effect on the marketing of foreign and domestic goods. Retail trade monopolies in tobacco products also exist in France and Spain, one of the reasons given for this being the need to counteract evasion of duty. The French Government further points out that tobacco outlets in provincial towns often also function as newspaper stands and cafes and thus fulfil an important social function.
            
         
               34.
            
            
               The Commission submits that the Italian rules on trade in tobacco products do constitute a measure having equivalent effect within the meaning of Article 30 of the Treaty. The prohibition of persons other than a specified group of traders selling tobacco products channels trade in such a way that it is liable to restrict imports of such products. It cannot be presumed that such a prohibition is covered by the new line of case-law initiated by the Court's judgment in Keck and Mithouard, and, even if it could be, this would constitute a measure having equivalent effect given that the Italian Government has failed to demonstrate that the rules affect in the same manner, in law and in fact, the marketing of domestic products and products from other Member States. This is particularly evident in the present case, where one authority controls all stages in the tobacco trade, and where there is a de facto monopoly in the wholesale trade. The restriction which these rules represent cannot be justified under Article 36, in particular because they are disproportionate.
            
         
               35.
            
            
               In my opinion, there is a fundamental distinction between the rules on the sale of manufactured tobacco products at issue in the present case and those which the Court, in its judgment in Keck and Mithouard and subsequent judgments, assigned to the group of ‘provisions restricting or prohibiting certain selling arrangements’. All of those judgments concerned provisions limiting the possibilities for all or certain groups of traders to engage in specified forms of marketing in such a general and nonrestrictive way that it could not be presumed that they had a serious effect on the marketing of imported goods.
            
         
               36.
            
            
               It seems in my view logical to assume that national rules under which certain goods may be sold only by a particular group of traders must be included in the group of rules ‘restricting or prohibiting certain selling arrangements’. In the present case, however, the position is that a complete set of rules has been introduced in respect of a specific product, namely manufactured tobacco, and that those rules channel production, importation, storage and marketing, all administered by an authority which at the same time levies State duties and other revenue. Further requirements are imposed with regard to the packaging of the goods, while a condition for importing tobacco products from other Member States is that they feature on the price lists drawn up by the Minister for Finance. The system is also combined with a de facto wholesale monopoly and imported goods must be delivered to an authorized warehouse if they are not stored in a warehouse belonging to the State authority itself (on this point, see the above judgments in Ligur Carni and Others and Centre d'Insémination de la Crespelle). There can, in my view, be scarcely any doubt that the Italian rules governing the sale of manufactured tobacco products are, as a whole, liable to affect marketing opportunities for imported goods and must therefore be regarded as constituting a measure having equivalent effect within the meaning of Article 30 of the Treaty.
            
         
               37.
            
            
               Article 36 of the Treaty provides that restrictions on the free movement of goods may be justified on grounds of the protection of health and life of humans.
            
         
               38.
            
            
               It is now generally recognized that both active and passive smoking pose an acute danger to the health and life of humans. The various initiatives which Member States may take with a view to limiting this danger to health ought, in my opinion, to have the ful] support of the Court, even though such initiatives may entail restrictions within crucial areas, such as the free movement of goods.
               Several Member States have thus implemented a variety of rules designed to restrict the danger to health resulting from active and passive smoking, for instance rules banning smoking in public areas, restaurants and other public places, limiting the nicotine and tar content of tobacco products, or banning certain tobacco products and tobacco advertising.
            
         
               39.
            
            
               There are in my opinion no grounds for assuming that the Italian rules on the marketing of tobacco products are designed or are of such a kind as to protect the health and life of humans by restricting active or passive smoking. There are in Italy 76000 sales outlets for manufactured tobacco products, located on the basis of, inter alia, consumer factors, including both local population levels and special requirements. Sales outlets must even remain open on a rota basis on public holidays. Nor is there anything to suggest that those rules were intended to bring the level of tobacco consumption in Italy to below that of the other Member States. These measures cannot therefore be justified on the ground that they protect the health and life of humans.
            
         
               40.
            
            
               Regard for the effective levying and control of taxes and duties may justify some barriers to intra-Community trade (see in particular point 8 of the judgment in Case 120/78 Rewe-Zentral, cited above). There can scarcely be any doubt that the Italian system is an effective means of ensuring the levying and control of the excise duty on manufactured tobacco. However, such a system is in my view not necessary in order to ensure effective levying and control of a duty on goods subject to a high rate of duty. That objective can be achieved through less intrusive measures that do not involve the channelling of production, importation, storage and sale. Other Member States also are able effectively to levy and control duties on tobacco without such a system. It may further be pointed out that duty is also charged in Italy on goods such as alcohol without it ever having proved necessary to introduce similar monopoly rules. The system cannot therefore be justified on the ground of effective levying and control of excise duty on manufactured tobacco products.
            
         
               41.
            
            
               Member States should of course be able to adopt reasonable measures with a view to ensuring that people in provincial towns and villages have opportunities to purchase goods as necessary. That said, however, it is difficult to see how this need can be satisfied solely by a far-reaching system such as the Italian. It cannot in any event justify the maintenance of a system of exclusive rights elsewhere, including the larger towns. It must also, if necessary, be established that the sale of tobacco products is of real economic significance for the prospects of keeping facilities such as newspaper stands, cafes and post offices open in provincial towns and villages. The system cannot therefore be justified on this ground either.
            
         
               42.
            
            
               To sum up, the answer to the first question ought in my opinion to be that Articles 30 and 36 of the Treaty should be interpreted as precluding a general national system for trade in manufactured tobacco products such as that described in the order for reference.
            
         The second question
      
               43.
            
            
               My understanding of this question is that the national court is seeking an assessment of the relationship between Article 30 of the Treaty and legislation, such as the Italian legislation, dealing with penalties and other legal consequences flowing from the possession of manufactured tobacco products on which duty has not been paid. Can such legislation amount to a measure having an effect equivalent to that of a quantitative restriction on imports?
            
         
               44.
            
            
               According to the Court's case-law, mandatory or prohibitive rules to which penalties are attached and which are directed at importers of a product may, in certain circumstances, amount to measures having equivalent effect within the meaning of Article 30 of the Treaty. Thus, in its judgment in Donckerwolcke, (
                     31
                  ) the Court held that a national rule that the country of origin of an imported product must be specified on an accompanying document was covered by Article 30 of the Treaty if the rule required the importer to provide information which he did not have or which he could not reasonably have, or if the omission or inaccuracy of such information on the document in question attracted penalties that were disproportionate in the light of the purely administrative character of the breach in question. The Court also held, in its judgment in Wurmser, (
                     32
                  ) that a provision of national law requiring, on pain of criminal liability, the person responsible for placing a product on the market of a Member State for the first time to verify its conformity with the rules in force on that market will be compatible with Articles 30 and 36 of the Treaty only in so far as the importer has the opportunity to avoid liability by submitting declarations which prove that he has complied with his obligation to check the conformity of the goods.
            
         
               45.
            
            
               The situation in the present case is entirely different. Mr Banchero has been charged with being in possession of tobacco products on which duty had not been paid. He has not been charged with having imported the goods without paying duty since, according to the documents in the case, he bought the goods from an unidentified man in the street near the Ponte Monumentale in Genoa.
            
         
               46.
            
            
               The provisions under which Mr Banchero has been charged are designed to ensure effective implementation of rules on excise duty on tobacco products pursuant to Council Directive 72/464/EEC of 19 December 1972 on taxes other than turnover taxes which affect the consumption of manufactured tobacco. (
                     33
                  ) It is natural that the Member States should prescribe penal sanctions in order to give effect to such rules, and that they should make provision for punishment and confiscation in respect of those in possession of goods on which duty has not been paid. Such rules on penalties do not prevent the importation of goods complying with provisions on duty otherwise in accordance with Community law.
            
         
               47.
            
            
               The answer to the second question ought in my view to be that national rules on the penalties for and other legal consequences of possession of tobacco products on which excise duty has not been paid are not covered by Article 30 of the Treaty.
            
         The third question
      
               48.
            
            
               In its third question, the national court requests the Court of Justice to consider whether national rules such as the Italian rules on retail distribution of tobacco products are compatible with Articles 86 and 90 of the Treaty. It would appear that this question is prompted by doubts on the part of the national court as to whether retail traders can satisfy consumer demand in view of, inter alia, the rules on opening hours and in consequence of strikes.
            
         
               49.
            
            
               Counsel for the accused argues that the retail activities of the AAMS fall within the scope of Article 90 in so far as tobacco outlets must be regarded either as being part of the AAMS or collectively as occupying a dominant position. The granting of exclusive rights is therefore contrary to Article 86, since smokers ought to be able to buy tobacco products round the clock and in all shops wishing to sell them, and since the limitation of the number of traders constitutes a restriction on the sale of tobacco products to the detriment of consumers.
            
         
               50.
            
            
               The Commission submits — with support from the Italian Government — that, under Italian law, the AAMS may not itself operate on the market for the retail sale of tobacco products and that on this market the AAMS merely exercises public authority by licensing individual tobacco traders. The AAMS cannot, in the opinion of the Commission, be deemed to have such an economic and managerial control over retail traders that the latter function in fact as nothing more than organs of the AAMS. Article 90 of the Treaty is for that reason not applicable.
            
         
               51.
            
            
               Under Italian law, the AAMS cannot itself sell tobacco products at retail level. The fact that a particular activity is subject to authorization does not by itself mean that the issuer and recipient of the authorization are to be regarded as constituting a single undertaking for the purpose of Article 86 of the Treaty. The AAMS and individual retailers of tobacco products can be regarded, for the purposes of the Treaty rules on competition, as constituting one and the same undertaking only if there is an economic unity, within which individual retailers have no real freedom to determine their course of action on the market, and if the agreements between the bodies involved are concerned with the internal allocation of tasks as between the undertakings. (
                     34
                  )
            
         
               52.
            
            
               Obviously, it is the Italian State (in the person of the Minister for Finance) which determines the selling price for tobacco products and sets the profit margins of the retailers, just as it is also the State (in the person of the AAMS's regional inspectors) which sets the opening hours of retailers after consulting with local authorities. These facts cannot, however, in my view, be regarded as sufficient for the AAMS and the76000 retailers to be considered as constituting one and the same undertaking for the purpose of applying the Treaty rules on competition. There is, for instance, no proprietorial relationship between the AAMS and the individual tobacco outlets, which are separate legal entities. Furthermore, according to the documents in the case, the retailers themselves bear the risk of losses on tobacco products which they are unable to sell. Finally, significance should be attached to the fact that, according to the available information, the retailers are in a position independently to determine the range of tobacco products which they wish to stock from among the brands distributed by the AAMS. It is for those reasons that I take the view that the preconditions for the national court's third question, namely that the AAMS operates as an undertaking on the market for the retail sale of tobacco products, have not been met.
            
         
               53.
            
            
               I would for the above reasons propose that the Court's answer to the third question should be that a public authority, which may not itself engage in the retail sale of manufactured tobacco products and which has the power to authorize others to sell such products on a retail basis, is not an undertaking operating on that market for the purposes of Articles 86 and 90 of the Treaty.
            
         Conclusion
      
               54.
            
            
               I accordingly propose that the Court reply as follows to the questions submitted by the Pretura di Genova by order of 30 July 1993:
               
                        (1)
                     
                     
                        Articles 30 and 36 of the Treaty should be interpreted as precluding a general national system for trade in manufactured tobacco products such as that described in the order for reference.
                     
                  
                        (2)
                     
                     
                        National rules on the penalties for and other legal consequences of possession of tobacco products on which excise duty has not been paid are not covered by Article 30 of the Treaty.
                     
                  
                        (3)
                     
                     
                        A public authority, which may not itself engage in the retail sale of manufactured tobacco products and which has the power to authorize others to sell such products on a retail basis, is not an undertaking operating on that market for the purposes of Articles 86 and 90 of the Treaty.
                     
                  
         (
            *1
         )	Original language: Danish.
      (
            1
         )	GURI No 9 of 13 January 1958.
      (
            2
         )	GURI No 4 of 7 January 1976.
      (
            3
         )	See the Court's judgment in Case 59/75 Pubblico Ministero v Manghera and Others [1976] ECR 91 on the compatibility with Article 37 of the Treaty of the import monopoly which existed prior to the implementation or this Law.
      (
            4
         )	The possibility of establishing State sales outlets, including retail shops owned by the AAJMS, was abolished by Law No 198 of 13 May 1983 (GURI No 138 of 21 May 1983).
      (
            5
         )	GURI No 65 of 16 March 1985.
      (
            6
         )	In this connection, see the judgment of the Court in Case C-306/91 Commission v Italy [1993] ECR I-2133.
      (
            7
         )	GURI No 199 of 26 July 1942.
      (
            8
         )	GURI No 27 of 2 February 1951.
      (
            9
         )	Presidential Decree No 43 of 23 January 1973, as subsequently amended.
      (
            10
         )	[1993] ECR I-1085.
      (
            11
         )	See Articles 2 and 4 of Council Directive 72/464/EEC of 19 December 1972 on taxes other than turnover taxes which affect the consumption of manufactured tobacco, as amended by Council Directive 77/805/EEC of 19 December 1977 (OJ 1977 L 338, p. 22).
      (
            12
         )	See, for example, Case C-347/89 Eurim-Pharm [1991] ECRI-1747.
      (
            13
         )	Case 244/80 Foglia v Novello [1981] ECR 3045, Case C-231/89 Gmurzynska-Bscher [1990] ECR I-4003, paragraph 23, and Case C-412/93 Leclerc-Siplec [1995] ECR I-179.
      (
            14
         )	See, for example, Case 222/78 I. C. A. P. v Beneventi [1979] ECR 1163.
      (
            15
         )	See, most recently, Case C-271/92 LPO [1993] ECR I-2899, paragraph 7.
      (
            16
         )	[1993] ECR I-6097.
      (
            17
         )	Paragraph 15.
      (
            18
         )	Paragraphs 16 and 17.
      (
            19
         )	The second group is discussed in point 30 below.
      (
            20
         )	[1994] ECR I-5243.
      (
            21
         )	[1995] ECR I-1141.
      (
            22
         )	See footnote 16.
      (
            23
         )	Case C-292/92 Hünermund [1993] ECR I-6787.
      (
            24
         )	Joined Cases C-401/92 and C-402/92 Tankstation 't Heukske vol'and Boermans [1994] ECR I-2199.
      (
            25
         )	Joined Cases C-69/93 and C-258/93 Punto Casa and PPV [1994] ECR I-2355, paragraph 13.
      (
            26
         )	Case C-412/93 Leclerc-Siplec [1995] ECR I-179.
      (
            27
         )	Case C-315/92 Verband Sozialer Wettbewerb [1994] ECR I-317.
      (
            28
         )	Case C-317/92 Commission v Germany [1994] ECR I-2039.
      (
            29
         )	Joined Cases C-277/91, C-318/91 and C-319/91 Ligur Carni and Others [1993] ECR I-6621.
      (
            30
         )	Case C-323/93 Centre d'Insémination de la Crespelle [1994] ECR I-5077.
      (
            31
         )	Case 41/76 Donckerwolcke [1976] ECR 1921.
      (
            32
         )	Case 25/88 Wurmser [1989] ECR 1105.
      (
            33
         )	OJ, English Special Edition 1972, 31 December 1972.
      (
            34
         )	See Case 15/74 Centrafarm [1974] ECR 1147, paragraph 41, Case 170/83 Hydrotherm [1984] ECR 2999, paragraph 11, and Case 30/87 Bodson [1988] ECR 2479, paragraphs 19 and 20.