CELEX: 61980CC0203
Language: en
Date: 1981-07-07 00:00:00
Title: Opinion of Mr Advocate General Capotorti delivered on 7 July 1981. # Criminal proceedings against Guerrino Casati. # Reference for a preliminary ruling: Tribunale di Bolzano - Italy. # Free movement of capital - National control requirements. # Case 203/80.

OPINION OF MR ADVOCATE GENERAL CAPOTORTI
      DELIVERED ON 7 JULY 1981 (
            1
         )
      
         Mr President,
      
         Members of the Court,
      
               1. 
            
            
               This reference for a preliminary ruling has arisen in connection with a case concerning the re-exportation of foreign currency previously imported into a Member State by one of its citizens residing in another Member State without such importation having been linked to the provision of specific services. Essentially, the Court has to establish whether and, if the answer is in the affirmative, in what manner an operation of this kind is regulated by Community law and whether not only the restrictions laid down in the matter by the law of a Member State but also the penalties provided for against those who infringe such restrictions are compatible with Community law. As a result, it is necessary to interpret a number of provisions of the EEC Treaty and of secondary legislation relating to movements of capital, a body of rules which raises problems which are very important also in view of their novelty. I would observe that this Court has not so far had an opportunity to express itself on the subject of the movement of capital, apart from some general and incidental dicta contained in the judgment of 23 November 1978Regina ν Thompson [1978] ECR 2247.
               I shall give a brief summary of the facts.
               Mr Guerrino Casati, an Italian citizen residing in the Federal Republic of Germany appeared before the Tribunale di Bolzano [District Court, Bolzano] charged with the criminal offence of attempting to export, without the authorization prescribed by the Italian currency rules, the sums of LIT 650 000 and DM 24 000 which had been found in his possession as he was about to leave the Italian State at the frontier with Austria. He sought to justify himself by stating that he had previously imported the sums in question into Italy in order to purchase certain equipment (machinery for the manufacture of pasta and icecream) which he needed for his restaurant in Cologne and that he had been compelled to re-export the currency because the factory where he intended to purchase those goods was closed for the holidays. In the course of the proceedings, the Tribunale di Bolzano decided, by order of 6 October 1980, to refer to this Court, pursuant to Article 177 of the EEC Treaty, eight questions, the text of which I shall give as I examine them in turn.
            
         
               2. 
            
            
               To enable the problems raised by the court of trial to be properly understood, I believe a preliminary explanation is called for concerning the Italian rules governing the import and export of foreign currencies on the part of persons who do not reside in Italy. Those rules are based on the criterion that the importation of foreign currencies should be freely permitted whereas their exportation should be subject to strict administrative control. Article 14 of the Decreto Ministeriale [Ministerial Decree] of 7 August 1978 provides that “credit notes issued or payable abroad and foreign treasury notes or bank notes which are legal tender may be freely imported, irrespective of the means employed” whilst under Article 13 (b) of the same decree, “the exportation by non-residents of credit notes issued or payable abroad ..., foreign treasury notes or bank notes ... is permitted up to the amount previously imported ... or the amount lawfully acquired in Italy, in accordance with the formalities laid down by the Ministry for Foreign Trade”. Those formalities had already been specified by Circular No A/300 of 3 May 1974 of the Ufficio Italiano dei Cambi [Italian Foreign Exchange Department] Article 11 of which provides, with regard to currencies, that non-residents may reexport foreign treasury notes and bank notes previously imported provided that at the time of importation they completed a declaration concerning the possession of valuables and currencies (on the so-called V2 form). The declaration must be received and endorsed with a visa by the customs authorities and then returned to the traveller upon his entering Italian territory. This means that if a nonresident fails to produce Form V 2 duly endorsed with a visa, he is prohibited from re-exporting the imported foreign currencies unless he obtains an ad hoc authorization from the Ufficio Italiano dei Cambi. Any unauthorized exportation of an amount exceeding LIT 500 000 in value constitutes an offence within the meaning of Article 1 of Decreto Legge [Decree-Law] No 31 of 4 March 1976 (converted into Law No 159 of 30 Aprii 1976 and subsequently amended by Law No 863 of 23 December 1976). The offence is punishable by a term of imprisonment of one to six years and a fine of between two and four times the value of the currencies exported. An attempt to commit the offence is treated as if the offence had actually been committed. In their decisions, the Italian courts have, in applying that provision, treated the reexportation of imported currencies as a criminal offence when the traveller was not in possession of Form V 2, establishing the lawful origin of the currencies, on leaving the territory of the State. In that connection, I would recall the judgments of the Corte di Cassazione (First Criminal Division) No 1879 of 17 December 1979 and No 4779 of 12 April 1980. That approach has recently been confirmed by the Decreto Ministeriale of 12 March 1981 on currency rules and financial relations with foreign countries (published in the Gazzetta Ufficiale Italiana No 82 of 24 March 1981, Supplemento Ordinario) which lays down, in Article 49 (1), that for foreign treasury notes and bank notes to be lawfully re-exported “non-residents must, on importing such notes into the territory of the Republic, obtain as proof thereof an appropriate customs certificate which may be used for that purpose within six months of the date of issue”.
            
         
               3. 
            
            
               In the course of the oral procedure, the representative of the French Government observed that the present case concerns an attempt to export currency which occurred at the frontier between the Italian Republic and the Austrian Republic. Accordingly, there were grounds for calling in question the applicability of the rules of Community law on the free movement of capital and it might be argued that the answers to the questions formulated by the Tribunale di Bolzano could not have any influence on the decision in the case pending before that court. Consequently, the Court should decline to answer those questions. In support of that argument, the representative of the French Government relied on the judgment of this Court of 11 March 1980 in Case 104/79 Foglio ν Novello [1980] ECR 745, inferring from it that the Court has no jurisdiction to give preliminary rulings when the questions submitted to it by the national court pursuant to Article 177 of the EEC Treaty have no connection with a genuine controversy.
               I do not intend to adopt a position here and now on the scope and the possible implications of that precedent. I would merely observe, for what it is worth, that that judgment can provide no effective support of the contention that the Court has no jurisdiction in the present case. I believe that it is beyond all doubt, in the light of the facts which have emerged during the proceedings, that the dispute pending before the Tribunale di Bolzano has not been artificially contrived. Furthermore, I consider it arbitrary to extend the ratio of the Foglio ν Novello judgment to a quite different situation in which there is a danger that the national court may come to the conclusion, after referring the matter to the Court, that it is possible to decide the case on its merits, disregarding the rules of Community law which it has sought to have interpreted. In reality, to question whether a specific case comes within the scope of the rules of Community law to which the questions submitted to the Court for a preliminary ruling refer, is tantamount to wondering whether such questions are relevant for the purposes of the decision in the main action. However, this Court has no jurisdiction, under Article 177, to resolve that issue. Such an assessment is exclusively a matter for the national court. In that connection, the case-law contains an abundance of precedents. Amongst the most recent judgments, I would recall those of 5 October 1977 in Case 5/77 Tedeschi [1977] ECR 1555, 16 November 1977 in Case 13/77 GB-Inno [1977] ECR 2115, 29 November 1978 in Case 83/78 Pigs Marketing Board [1978] ECR 2347, and 14 February 1980 in Case 53/79 ONPTS ν Damiani [1980] ECR 273.
            
         
               4. 
            
            
               In its first question, the Italian court asks: “After the end of the transitional period must the restrictions on the movement of capital referred to in Article 67 of the EEC Treaty be deemed to have been abolished regardless of the provisions of Article 69 thereof?”
               It is well-known that the free movement of capital is governed by Chapter 4 of Title III of the Treaty, comprising Articles 67 to 73. Article 67 (1) provides: “During the transitional period and to the extent necessary to ensure the proper functioning of the common market, Member States shall progressively abolish between themselves all restrictions on the movement of capital belonging to persons resident in Member States and any discrimination based on the nationality or on the place of residence of the parties or on the place where such capital is invested”. Article 69 states: “The Council shall, on a proposal from the Commission, which for this purpose shall consult the Monetary Committee provided for in Article 105, issue the necessary directives for the progressive implementation of the provisions of Article 67, acting unanimously during the first two stages and by a qualified majority thereafter”.
               The question cited above clearly takes into account the case-law of this Court on the direct effect of certain provisions of the Treaty. Those are, to be precise, provisions on the progressive abolition during the transitional period of certain limitations or restrictions, such as Articles 13 and 16 (abolition of customs duties and charges having equivalent effect), Articles 52 and 59 (abolition of restrictions on the freedom of establishment and on the freedom to provide services). It is well-known that, in the light of the approach adopted by the Court, the limitations or restrictions in question must be regarded as having been entirely abolished upon the expiry of the transitional period even where the Treaty provided for the adoption of directives for that purpose in the course of that period. It is sufficient to refer to the judgments of 19 June 1973 in Case 77/72, Capolongo [1973] ECR 611 relating to Article 13, 16 December 1976 in Case 45/76 Comet [1976] ECR 2043 relating to Article 16, and in particular, 21 June 1974 in Case 2/74 Reyners [1974] ECR 631, 3 December 1974 in Case 33/74 Van Binsbergen [1974] ECR 1299, 12 December 1974 in Case 36/74 Walrave [1974] ECR 1405, 8 April 1976 in Case 48/75 Royer [1976] ECR 497, 15 July 1976 in Case 13/76 Donà [1976] ECR 1333, 28 June 1977 in Case 11/77 Patrick [1977] ECR 1199 and 28 April 1977 in Case 71/76 Thieffry [1977] ECR 765, all of which relate to Articles 52 and 59. It is therefore necessary to ascertain whether Article 67 (1) also displays features which are of such a nature as to justify the argument that it has direct effect.
               What Article 67 has in common with the provisions referred to above is that it also provides for the progressive abolition of restrictions during the transitional period. There is however an important difference. Article 67 also contains a qualifying phrase which does not appear in the other provisions, namely “to the extent necessary to ensure the proper functioning of the common market”. The effect of those words is to make the obligation on the part of the Member States to abolish restrictions on movements of capital subject to a limitation. The obligation exists where abolition constitutes or comes to constitute a necessity for the proper functioning of the Common Market. If the assessment of that necessity were left to the individual Member States, the uniform effect of Article 67 (1) and its binding force would be placed in jeopardy. It is therefore reasonable to assume that the appraisal in question is a matter for the Council, the institution competent to adopt directives for the progressive implementation of Articles 67 (Article 69 cited above). In carrying out its policy assessments, the Council is required to establish the times and procedures for and the substantive aspects of the abolition of the restrictions concerned, not only during the transitional period but also subsequently, in view of the fact that the proper functioning of the Common Market has not rendered a complete liberalization of the capital market necessary before the end of that period.
               It is interesting to note that an expression similar to the one contained in Article 67 (1) (namely, “to the extent necessary to ensure the proper functioning of the common market”) is used in Article 3 (h) of the Treaty in relation to the objective of the approximation of national laws. That, to my mind, is significant because in that sector, too, the action taken by the Member States is made to depend on the adoption of Council directives (Article 100) which presuppose a discretionary assessment of the interests of the Community and a comparison between those interests and the interest of the individual Member States in retaining their own freedom of action.
               My interpretation of Article 67 (1) coincides with that suggested by Mr Advocate General Mayras in his opinion in Case 7/78 Regina ν Thompson [1978] ECR 2247. In that case, the Court had to establish whether and within what limits trade in gold and silver coins came within the scope of application of Articles 30 to 37 of the EEC Treaty. In its judgment of 23 November 1978, the Court did not rule on the problem of the direct effect of Article 67 (1) but the Advocate General stated that “according to Article 67, if after the entry into force of the Act of Accession and after the expiry of the transitional period, for which it provides, any restrictions on the movement of capital remain in being, their retention only contravenes the Treaty if this abolition is necessary to ensure the proper functioning of the Common Market”. In justification of that point of view he observed that the provision in question “makes the progressive abolition of restrictions ... subject to one condition limited in time” (the expiry of the transitional period) “and one permanent condition”, namely that abolition should be necessary for the proper functioning of the Common Market. That condition “continues to apply even after the expiry of the transitional period”.
               The importance of the condition of which I have been speaking may be more easily understood if it is borne in mind that according to the case-law of this Court the possibility of endowing a provision of the Treaty with direct effect, failing the adoption within the prescribed period of implementing measures by the Member States or the Community institutions, depends in each case on the content of the provision itself which must be complete and unconditional. There are a number of decisions on this point, including those, already referred to, given in Case 2/74 Reyners and in Case 33/74 Van Binsbergen. I would add to the list the judgments of 14 July 1971 in Case 10/71 Muller [1971] ECR 723 and 22 March 1977 in Case 78/76 Steinike und Weinlig [1977] ECR 595. From the approach adopted by the Court in those cases it may easily be inferred that Article 67 (1) does not display features such as to enable it to be numbered among the provisions which became directly applicable after the end of the transitional period.
            
         
               5. 
            
            
               If the rule contained in Article 67 (1) is examined in connection with other related provisions of the Treaty on the movement of capital and on economic policy, the argument which I have propounded becomes even more convincing.
               I refer in the first place to the first paragraph of Article 71 according to which “Member States shall endeavour to avoid introducing within the Community any new exchange restrictions on the movement of capital and current payments connected with such movements, and shall endeavour not to make existing rules more restrictive”. Ostensibly, that provision would appear to come within the category of stand-still clauses. It certainly has an affinity in a number of respects with clauses of that kind contained in Articles 12, 31, 32, 53 and 62. However, there is one peculiarity which gives it its specific character, namely the use of the term “shall endeavour to avoid introducing” instead of “shall refrain from introducing” or, more briefly, “shall not introduce” used in the other articles which I have mentioned. Recourse to a different wording, more flexible and less exacting, by the authors of the Treaty, shows that they wished merely to lay down a policy guideline in order to give direction to the choices made by the Member States in the matter of rules governing the movement of capital and that the Member States simply promised to do their best not to worsen the existing situation in that field.
               What is known about the preparatory work reinforces the argument that there is no real stand-still clause in the strict sense of the term. One delegation had initially proposed a draft article providing for an obligation on the part of the Member States to consolidate the level of liberalization attained in the sector concerned at the time of the entry into force of the Treaty. Certain experts, however, who were members of the so-called Working Party on the Common Market, pointed out that to impose a stand-still obligation in that sector would be unfair to those countries which had already attained a very advanced level of progress in the field of the free movement of capital, as it was impossible to foresee whether they would be in a position to maintain that level after the entry into force of the Treaty. Furthermore, the currency measures which had enabled a degree of liberalization to be achieved might have proved undesirable under the Common Market system. The Committee of Heads of Delegation decided to accept those observations and therefore to adopt a draft in line with the present text of Article 71 based on the criterion that the Member States are not under an obligation in the true sense of the word. It is hardly necessary to add that the provisions of Article 71, which are not binding, are consistent with the argument that Article 67 (1) is incapable of having direct effect.
               Account should also be taken of Article 104, which is included in Chapter 2 (“balance of payments”) of Title II (“Economic policy”). That article provides: “Each Member State shall pursue the economic policy needed to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency, while taking care to ensure a high level of employment and a stable level of prices”. In the course of these proceedings, the representative of the Italian Government pointed out that it would be inconsistent to entrust the individual Member States with responsibility for their respective monetary policies and to impose on them “an unconditional and unlimited obligation to liberalize transfers of currency not made for a consideration of equal value”. I believe that point of view is correct. The need to align the liberalization of movements of capital with the effectiveness of national measures intended to ensure the stability of exchange rates and domestic prices, by conferring on the Member States sufficient room for manoeuvre, is in conformity with the system of the Treaty, under which the provisions on the movement of capital may not be interpreted independently of those on economic policy (as the Court has recognized by affirming in its decision inRegina ν Thompson that movements of capital come within the wider category of monetary transfers). In my opinion, even after the creation of the European Monetary System, the Member States must retain the right to take action in relation to movements of capital other than for consideration of equal value in order to ensure the stability of exchange rates which is essential for the proper functioning of the system.
            
         
               6. 
            
            
               Therefore I do not share the attitude taken by the Government of the Federal Republic of Germany and by Mr Casati according to which Article 67 (1), where it provides that restrictions on movements of capital are to be abolished only “to the extent necessary to ensure the proper functioning of the common market”, does not make the time-table for abolition depend on discretionary assessments by the Council but merely restricts the scope of the obligation imposed on Member States from the quantitative point of view. It follows from that argument that private persons might, after the end of the transitional period, assert a personal right to carry out transfers of currency (the Federal Government has explained that its statements refer specifically to the currency aspect of movements of capital) and that the national court would have jurisdiction to determinate, case by case, by reference to the criterion of the necessity of liberalization for the proper functioning of the Common Market, whether a given movement of capital should be regarded as liberalized.
               The first argument adduced in support of these ideas is of a general nature. It is asserted that the free movement of capital under the system of the EEC Treaty is as important as the other freedoms of movement (for goods, persons and services) and should therefore also be regarded as having been achieved, by means of the direct application of the relevant provisions, upon the expiry of the transitional period. The unifying reference in Article 3 (c) of the Treaty to the objective of the “abolition as between Member States of obstacles to freedom of movement for persons, services and capital” is said to demonstrate that the Contracting Parties intended to create a fundamentally uniform body of rules for the freedoms in question. In my opinion, however, an interpreter may not confine himself to the general context of the principles on which integration is based, set out in the early articles of the Treaty, but must above all take account of the specific rules on each matter. In addition, the provisions on the movement of capital are formulated in a manner which clearly distinguishes them from the provisions on the movement of workers, the right of establishment and the free movement of services. I do not believe there is any justification for neglecting or minimizing that difference in the name of the unicity of inspiration underlying the principles common to all the Community “freedoms of movement”.
               Furthermore, the position of the German Government is far from clear when it admits that some restrictions are still lawful after the expiry of the transitional period, namely restrictions on “short-term” movements of capital, and identifies them by reference to one of the lists annexed to the Directive of 11 May 1960 (List D) (First Directive for the Implementation of Article 67 of the Treaty, Official Journal, English Special Edition, 1959-1962, p. 42). If, in order to identify permissible restrictions, it is necessary to resort to the directives adopted, that means that the application of the criterion of whether or not it is necessary to abolish restrictions in the interests of the proper functioning of the Common Market may not be entrusted to the interpreter and that this criterion is given concrete form only through the discretionary assessments of the Council. But in that case the directives also have to be issued in order to identify prohibited restrictions. On the other hand that is in conformity with the function of those measures which, according to Article 69, are intended to bring about the abolition of restrictions and not to indicate restrictions permitted. Thus, in the final analysis, it makes no sense to assert that after the expiry of the transitional period currency restrictions on movements of capital are abolished, regardless of what is laid down by Article 69.
               
               Nor would there be any point in objecting, in that connection, that the German Government does not dispute the efficacy of the directives which have already been adopted but merely considers that no purpose is served by making progress in achieving liberalization depend on fresh directives once the transitional period is over and the prohibition contained in Article 67 is operative in its own right. In reality, when it comes to distinguishing between currency and non-currency restrictions, the Federal Government again refers to the directives, adding that the Council “has reserved the right to carry out further liberalization”. For the time being, therefore, that Government refrains from attributing direct effect to Article 67 as regards non-currency rstrictions although that provision concerns restrictions on all movements of capital.
               The Federal Government observes, again in support of its contention that Article 67 is directly applicable, that in any event the Member States may always adopt appropriate safeguard measures if movements of capital were to lead to “disturbances in the functioning of the capital market” (Article 73 (1)) or to difficulties as regards the balance of payments (Article 108). However, the easy answer to that is that it is one thing to regard the Member States as still being free to maintain in force any restrictive measures which are compatible with the directives adopted or to be adopted by the Council pursuant to Article 69, and another to recall that in certain circumstances and subject to the Commission's authorization those Member States have the option of adopting safeguard measures. In other words, it is not a question of ascertaining whether an individual Member State is in a position to avoid the potentially intolerable consequences for its economy of a liberalized capital market but, rather, of defining the scope of the restrictions so far imposed on all the Member States as a result of the effect of Article 67 et seq. and the secondary legislation. Assuming that to be the case, I consider that the argument to which I subscribe, namely that Article 67 does not have direct effect, is in no way affected by the fact that Articles 73 (1) and 108 of the Treaty contain safeguard clauses. It will of course be possible to use them, in the circumstances specified by the two articles, as temporary derogations from the liberalized system of capital movements, irrespective of the level of liberalization attained.
            
         
               7. 
            
            
               It is now time to consider the third question referred to the Court of Justice by the national court. That question is worded as follows: “Does any principle or provision of the Treaty guarantee non-residents the right to re-export currency previously imported and not used, even if it has been converted into Italian lire?”. To begin with, I would observe in that regard that once the possibility that Article 67 (1) may have direct effect is ruled out, the alleged right of non-residents to re-export currency may certainly not be derived from that provision but could stem from one of the directives on liberalization adopted by the Council. Consequently, our researches must be extended to the provisions of those directives.
               In the part of the Treaty which concerns the balance of payments, the provision on which the right to re-export currencies is alleged to be founded is contained in the first subparagraph of Article 106 (1) which provides: “Each Member State undertakes to authorize, in the currency of the Member State in which the creditor or the beneficiary resides, any payments connected with the movement of goods, services of capital, and any transfers of capital and earnings, to the extent that the movement of goods, services, capital and persons between Member States has been liberalized pursuant to this Treaty.” The Court has already had occasion to state that “the aim of this provision is to ensure that the necessary monetary transfers may be made both for the liberalization of movements of capital and for the free movement of goods, services and persons” (judgment of 23 November 1978 in Regina ν Thompson, paragraph 24 of the decision) and that the entire complex of Articles 104 to 109 “which are concerned with the overall balance of payments and which for this reason relate to all monetary movements” must be considered as “essential for the purpose of attaining the free movement of goods, services or capital which is of fundamental importance for the attainment of the Common Market”(ibidem, paragraph 22 of the decision).
               In my opinion, what emerges clearly from these statements is a recognition of the instrumental function of the first subparagraph of Article 106 (1) in relation to the rules on the movement of goods, persons, services and capital. Those rules determine the level of and the methods to be used for achieving liberalization. Article 106 merely provides a guarantee that, to a degree corresponding to the existing level of liberalization, each Member State is to authorize transfers of its own currency into that of the country in which the creditor or beneficiary resides. In view of the fact that the obligation to grant such authorization is imposed “to the extent that the movement of goods, services, capital and persons ... has been liberalized ...”, there can be no doubt that the provision is applicable on condition that the process of liberalization takes place. That process is neither accelerated nor expanded by Article 106 but is merely supplemented by it in such a way as to make available the currency required for payments connected with commercial transactions as well as for transfers of capital and earnings.
               Returning to the problem raised by the Tribunale di Bolzano, I would observe that if attention is focused on the obligation to authorize the monetary transfers which are inherent in transfers of capital, it will be seen that the restrictive clause at the end of Article 106 (1) embodies a reference to Article 67 et seq. The argument to which I subscribe concerning Article 67 precludes the possibility of inferring from that provision an automatic liberalization of capital movements. I will consider the secondary legislation shortly. If we then look at payments connected with trade in goods or services or with transfers of earnings, it must be said that the premise adopted by the Tribunale di Bolzano concerns the re-exportation of currency and certainly not a payment under a contract for the sale of goods or the provision of services, or a transfer of earnings. It is true that Counsel for Mr Casati has insisted that the defendant imported the currency with the intention of using it to purchase certain products but our inquiries may not be extended in that direction in view of the fact that neither the questions submitted by the national court nor the grounds of the order referring the matter to the Court mention that particular factor which is therefore no more than a feature of the case in point which has to be verified in the main proceedings. I would add that, in any event, a payment by way of consideration for a purchase, which would be a significant factor for the purposes of Article 106 (1) is one thing, whereas the straightforward importation of currency with a view to a purchase is quite another.
               Finally, it has been said that the alleged right to re-export currencies is linked to the provisions of the Treaty relating to the free movement of goods, persons and services in the sense that it constitutes an essential complement to those freedoms.
               In that connection I would observe that, whilst payments relating to trade in goods, services and capital are governed by Article 106, complementary transfers of capital connected with those freedoms are governed by the directives adopted by the Council pursuant to Article 69. Mere transfers of currencies or the reexportation of imported and unused foreign currencies do not come within those movements which have been liberalized. That stands to reason since movements of currencies are in no way complementary to the exercise of freedom of movement in respect of goods, persons and services.
            
         
               8. 
            
            
               Before examining in greater detail the directives on this subject, I should mention the problem of the conditions under which they may have direct effect and the limits of that effect. The third question put by the Tribunale di Bolzano in fact concerns an alleged right in favour of individuals. I would merely recall that the case-law of this Court has on numerous occasions recognized the direct effect of directives where a Member State has failed to adopt implementing measures within the prescribed period, provided that the unfulfilled obligation is unconditional and sufficiently precise (see the judgments of 17 December 1970 in Case 33/70 SACE [1970] ECR 1213, 4 December 1974 in Case 41/74 Van Duyn [1974] ECR 1337, 26 February 1976 in Case 52/75, Commission ν Italian Republic [1976] ECR 277, 5 April 1979 in Case 148/78 Ratti [1979] ECR 1629, 6 May 1980 in Case 102/79, Commission ν Belgium [1980] ECR 1473, and 12 June 1980 in Case 88/79 Grunert [1980] ECR 1827). That approach undoubtedly applies also in the case of the directives on the movement of capital.
               Let us now turn to the issue which is central to this inquiry, namely whether or not the directives for the implementation of Article 67, issued by the Council pursuant to Article 69, confer a right on non-residents to reexport foreign currencies previously imported. The answer in my opinion is that they do not. The Council Directive of 11 May 1960 and that of 18 December 1962 (Official Journal, English Special Edition, 1963-1964, p. 5) which adds to and amends it, require the Member States to grant foreign exchange authorizations for the capital movements set out in Lists Α, Β and C (with the option of maintaining or reintroducing restrictions on the movements specified in List C if liberalization forms an obstacle to the achievement of the economic policy objectives of a Member State) but the movements listed do not include the importation and exportation of currency as such. The currency transfers envisaged by those three lists have as their object investments, the granting of credits or guarantees, or the repayment of credits connected with commercial transactions and with the provision of services, operations in securities, the performance of certain contracts etc. In brief, there is a precise cause for each transfer. The “physical import and export of financial assets” constitutes on the other hand one of the movements mentioned in List D, which covers capital movements which have not been liberalized. Furthermore, Item XIII of the Nomenclature annexed to the directive makes it clear that the movement in question includes the import or export of “means of payment of all kinds”. Such movements of capital therefore continue to be subject to the restrictions imposed by the Member States, which are not as yet under any obligation to abolish them. The directive merely provides that they must notify the Commission of “any amendment of the provisions governing the capital movements set out in List D” (second paragraph of Article 7) and also that the Monetary Committee is to examine existing restrictions at least once a year (Article 4). Those two provisions are clearly aimed at creating favourable conditions for the possible future abolition of restrictions in the sectors covered by List D.
               The result of this brief examination of the Directives of 11 May 1960 and 18 December 1962 may therefore be summed up by stating that those directives not only lack a provision giving rise to the alleged right of nonresidents to re-export currency imported into a Member State, but to the contrary, there is a provision which is incompatible with the existence of such a right. The importation and re-exportation of currencies constitute a movement which has yet to be liberalized. Nor is that finding gainsaid by Council Directive No 63/340/EEC of 31 May 1963 (Official Journal, English Special Edition 1963-1964, p. 31) or by Council Directive No 63/474/EEC (Official Journal, English Special Edition 1963-1964, p. 45), both adopted pursuant to Article 106. The first directive concerns payments for services whereas the second is concerned with transfers in respect of invisible transactions not connected with the movement of goods, services, capital or persons.
            
         
               9. 
            
            
               What the fourth to eighth questions have in common is that they refer, in different respects, to the problem of the penal sanctions imposed by the legislation of a Member State for the breach of currency rules. I think it is advisable to begin by examining the sixth question which is related to a matter on which I have already expressed my views in the first part of this opinion. The Tribunale di Bolzano asks: “After the end of the transitional period is it possible to consider as being compatible with the stand-still requirements set out in Articles 71 and 106 (3) domestic legislation which increases penalties prescribed by other, previous legislation, as, for example, when infringements which were previously punishable by administrative penalties are made punishable by imprisonment and fines, thereby rendering them criminal offences?”
               As regards the scope of Article 71,1 will confine myself to repeating that that provision does not constitute a genuine stand-still clause. The intention expressed by the Member States, to the effect that they will endeavour to avoid introducing new exchange restrictions, is clearly not of a binding nature, Consequently, the question whether an increase in the penalties prescribed for certain infringements of currency regulations is compatible with Article 71 ceases to be of any significance. Any incompatibility would not constitute a failure on the part of a Member State to fulfil its obligations, contrary to what the Tribunale di Bolzano appears to believe.
               As regards Article 106 (3), it is worth recalling that it provides (first subparagraph) that “Member States undertake not to introduce between themselves any new restrictions on transfers connected with the invisible transactions listed in Annex III to this Treaty”. Those are, to be precise, transactions connected with freights, transport, customs charges, banking charges, business travel, emigrants' remittances, interest on securities etc. These are matters which are clearly quite different from the importation and re-exportation of means of payment, It is true that the list includes the item “refunds in the case of cancellation of contracts and refunds of uncalled-for payments” which may be regarded as bearing a certain resemblance to the case of the re-exportation of currency which has not been used for the purpose of concluding a contract of purchase. However, the crucial difference lies in the fact that the item in question presupposes the existence of a contract or a debt which was subsequently cancelled.
               Therefore I consider that the stand-still clause contained in Article 106 (3) has nothing whatever to do with the introduction of heavier penalties for persons who re-export without authorization imported foreign currency which has not been used. Thus no purpose is served by discussing whether the amendment of the penalties prescribed for failure to comply with previous currency restrictions may be treated on the same footing as the introduction of new restrictions on transfers of currency. I would however point out that the question should in my opinion be answered in the negative.
            
         
               10. 
            
            
               The fourth question is put on the basis of an affirmative answer to the third, that is to say, on the assumption that the legal order of the Community recognizes the right of a non-resident tö re-export previously imported currency which was never used. On that basis, the Tribunale di Bolzano asks: “If so, may any failure to comply with the formalities prescribed by the currency legislation of the State from which the sums are subsequently re-exported in the above-mentioned circumstances be punished by penalties including confiscation of the currency, a fine of up to five times the amount of that currency and deprivation of personal liberty for a period of up to five years (subject to heavier penalties where a number of persons are involved)?”
               I could, of course, merely state that having answered the third question in the negative, I no longer need concern myself with the forth question. However, I believe some observations are called for concerning the general problem of the significance in relation to Community law of the penalties prescribed by national legislation on currency matters. In my opinion, the principal issues which stand in need of clarification are as follows: in the case of movements of capital which have not been liberalized, the Member States remain fully empowered to adopt rules thereon, even as far as criminal and administrative penalties are concerned, and their right to exercise that power is not restricted by any provisions of Community law. By contrast, in the case of liberalized movements of capital, inasmuch as it is possible to speak of a personal right, conferred by Community law on individuals, to carry out the transactions concerned, the criminal penalties provided for by national law for failure to comply with certain formalities or procedures for the exercise of that right may be assessed by reference to principles forming part of the legal system of the Community.
               In connection with the first point, it is sufficient to recall that movements of capital which have not been liberalized may be affected by provisions of Community law only in the sense of being expressly excluded, either permanently or provisionally, from the scope of the liberalization provided for by Article 67. That applies to the import and export of means of payment which are included, as we have seen, in List D of the Council Directive of 11 May 1960. There can be no doubt, however, that in such cases there is no personal right under Community law in favour of individuals. In its case-law, this Court has assessed the appropriateness of the criminal penalties laid down for certian infringements by provisions of national law (applying, in particular, the principle of proportionality) only when such provisions were capable of creating an obstacle to compliance with the principles of the Treaty which give rise to personal rights in favour of individuals. I would recall, amongst others, the judgments of the Court of 7 July 1976 in Case 118/75 Watson [1976] ECR 1185, 15 December 1976 in Case 41/76 Donckerwolcke [1976] ECR 1921, 14 July 1977 in Case 8/77 Sagulo [1977] ECR 1495, and 30 November 1977 in Case 52/77 Cayrol [1977] ECR 2261. In cases, however, where the precondition just mentioned does not exist, the problem of the appropriateness of the penalties in the light of Community law does not arise at all.
               In connection with the second point, I would point out that national criminal penalties for non-compliance with currency rules are unquestionably lawful even as regards liberalized movements of capital. That is confirmed by Article 5 of the above-mentioned Directive of 11 May 1960 which leaves intact “the right of Member States to verify the nature and genuineness of transactions or transfers” and “to take all requisite measures to prevent infringement of their laws and regulations”. It is of course for each Member State to determine which infringements should attract criminal penalties. However, I believe that to impose such penalties on persons who transfer currency without authorization does certainly not run counter to the logic of the Treaty or of the secondary legislation implementing it, in view of the fact that both permit a system of (general and particular) authorizations to exist for the performance of liberalized transactions, thereby recognizing the need for a control mechanism which is moreover in keeping with the aims of Article 104 of the Treaty.
            
         
               11. 
            
            
               The considerations discussed above concerning the fourth question are also relevant for the purpose of answering the fifth and seventh questions both of which presuppose the existence (which I deny) of a personal right under Community law in favour of non-residents to reexport previously imported currency. It is precisely in its fifth question that the Tribunale di Bolzano asks: “If the preceding question is answered in the affirmative, may any failure to comply with the above-mentioned formalities carry penalties on the same scale as those imposed for the unlawful exportation of currency?” The seventh question seeks to establish whether “the principle in accordance with which dissimilar situations may not be treated in the same way (which is encompassed by the prohibition of discrimination referred to inter alia in Article 7 of the Treaty) permit[s] the same penalties as those imposed by a Member State in respect of the unlawful exportation of currency or of failure to comply with the formalities in relation to currency to be applied without distinction both to residents of that State and to non-residents.”
               The comparison, from the point of view of criminal law, between failure to comply with the formalities prescribed for the re-exportation of currency and the unlawful exportation of currency cannot have any meaning, in so far as Community law is concerned, unless it is assumed that re-exportation of currency is envisaged by Community law, in other words, that it is numbered among the “liberalized” movements of currency. We have seen that this is not the case and I do not believe that any purpose would be served by returning to the point.
            
         
               12. 
            
            
               The problem raised in the eighth question is: “After the end of the transitional period is it possible to consider as compatible with Articles 67, 71 and 106 (3) of the Treaty provisions of national law which prescribe specified formalities in connexion with the exercise of the right, which is however recognized, to re-export previously imported capital, requiring the fulfilment of such formalities as sole proof of prior importation, thereby creating in substance a penalty under criminal law for failing to fulfil them?”
               We have seen that the “right to reexport previously imported capital” to which the court of trial refers in the text of this question, is recognized in national legal systems (in the case in point, by the Italian legal system) but is not one which stems from any provisions of Community law. Thus the Member States have unlimited discretion in regulating all aspects of the re-exportation of foreign currencies and these include the formalities chosen and their probative value. The provisions of the Treaty, by reference to which the Tribunale di Bolzano measures the lawfulness of national provisions on the matter, in no way restrict the above-mentioned freedom of the Member States. In that connection, I would refer to the interpretation of Articles 67, 71 and 106 (3) which I have given in the course of this opinion.
               Counsel for the Commission has sought to argue, by reference to the directives for the implementation of Article 67, that national rules of evidence in regard to movements of currency, including those which have not been liberalized, are significant in relation to the Community. The premise on which that reasoning is founded is that persons, including nonresidents, who effect liberalized transfers of capital on the basis of the 1960 and 1962 directives should be accorded the right to prove that the transactions performed do in fact fall within the category of liberalized movements; otherwise the personal right arising under Community law to carry out liberalized transactions would be impaired. Since the transfer of the physical means of payment, may, if accompanied by other circumstances (for example by a contract for a loan in connection with a commercial transaction or by a contract for the sale of property), come within the category of liberalized transfers, national legislation which created excessive difficulties for those concerned to provide the administrative and judicial authorities with proof that a given transaction came within that category would not be in conformity with Community law. Therefore, even the rules prescribing the evidence to be required of the importation of foreign currencies for the purpose of determining whether their reexportation is permissible indirectly concern the legal order of the Community and consequently their legality may be assessed in the light of the principles of proportionality and of non-discrimination, which form part of Community law.
               That is an attractive argument but it does not stand up to criticism. It must be borne in mind that the two sectors, liberalized transfers and non-liberalized transfers, cover different types of transactions. The extent of the difference is particularly marked if liberalized transactions are compared with straightforward transfers of means of payment. I mean that all the liberalized movements of capital set out in Lists A and Β (as well as those subject to certain restrictions included in List C) relate to transactions performed within a precise framework and involving the intervention of the public authorities which authorize them, in accordance with Articles 1 and 2 of the Directive of 11 May 1960. Therefore I fail to see how a person who has performed a “liberalized” transaction can find himself, as regards the furnishing of proof, in the same position as someone who merely re-exports recently imported currency. Any comparison between those two situations is to my mind quite arbitrary.
               However, even if that consideration is disregarded, the Commission's argument does not apply in the present case. It assumes that the person concerned claims to have performed a liberalized transaction and seeks to be allowed to furnish proof of its nature, whereas the questions asked by the national court involve the quite different idea that the re-exportation of currency comes within the category of liberalized capital movements.
            
         
               13. 
            
            
               I shall deal with the second question last inasmuch as it strikes me as being in substance unrelated to the others. The national court asks the Court of Justice: “Does the fact that the Italian Government omitted the consultative procedure laid down in Article 73 of the Treaty in relation to Decreto Legge [Decree-Law] No 31 of 4 March 1976, which was converted into Law No 159 of 30 April 1976, constitute an infringement of that Treaty?” As it stands, the question falls outside the scope of the Court's jurisdiction to give preliminary rulings since it requests the Court to rule on the legality of a provision of national law. However, I believe it is possible to discern behind the terms used by the court of trial, a request for the interpretation of Article 73 which seeks to ascertain whether or not that article of the Treaty imposes on the Member States an obligation to consult the Commission when one of them adopts in the field of currency transfers national measures of the same type as Decreto Legge No 31 of 1976.
               Article 73, to which I have already referred, contains a safeguard clause for cases in which “movements of capital lead to disturbances in the functioning of the capital market in any Member State”. According to the first paragraph of that article, the Commission is empowered, after consulting the Monetary Committee, to authorize the State in question to take “protective measures in the field of capital movements, the conditions and details of which the Commission shall determine”. Under the second paragraph, a Member State which is in difficulties may take the measures mentioned above on its own initiative “on grounds of secrecy or urgency ... where this proves necessary”, provided that the Commission and the other Member States are promptly informed of this.
               In all probability, when the court of trial referred to the obligation on the part of the Member States to consult the Commission, it had in mind the case provided for in Article 73 (2). In reality, that paragraph imposes an obligation to provide information whereas the first paragraph implies the making of a request for authorization. In any event, measures which fall into the same category as Decreto Legge No 31 of 4 March 1976 bear no relation whatever to the protective measures provided for by Article 73. That Decree-Law is a standard measure adopted by a Member State for the suppression of infringements of currency rules and is certainly not a measure intended to remedy disturbances occasioned on the capital market by the Community's liberalization policy. It is hardly necessary to add that the prevention and punishment of currency offences come within the scope of the Member States' powers, regardless of whether the offences are committed in connexion with transfers which have been liberalized (and without prejudice to the application of any limits set by Community law to penalties for infringements connected with liberalized movements of capital).
            
         
               14. 
            
            
               In the light of all the considerations set out above, I propose that the questions formulated by the Tribunale di Bolzano in its order of 6 October 1980 in criminal proceedings against Mr Guerrino Casati should be answered by the Court as follows :
               
                         
                     
                     
                        Question No 1
                        Restrictions on the movement of capital, within the meaning of Article 67 (1) of the EEC Treaty, belonging to persons residing in the Member States had to be abolished before the end of the transitional period only to the extent necessary for the proper functioning of the Common Market. Since that condition involves a discretionary appraisal on the part of the Community institutions, the above-mentioned provision may not be construed as being capable of having direct effect. It is for the Council, exercising, on a proposal from the Commission, its powers under Article 69 of the Treaty, to issue the directives for the implementation of Article 67 even after the end of the transitional period.
                     
                  
                         
                     
                     
                        Question No 2
                        Article 73 of the EEC Treaty must be interpreted as meaning that it applies not to national measures introducing standard controls and penalties in regard to currency movements but only to safeguard measures adopted after the liberalization of certain movements of capital.
                     
                  
                         
                     
                     
                        Question No 3
                        The legal order of the Community does not confer on non-residents the right to re-export previously imported currency which has not been used.
                     
                  
                         
                     
                     
                        Questions Nos 4, 5 and 7
                        The power of Member States to impose penalties, whether criminal or administrative, for failure to comply with provisions of national law relating to transfers of currency is not subject to any limitation under the legal order of the Community as long as such transfers have not been liberalized in pursuance of Article 67 of the EEC Treaty.
                     
                  
                         
                     
                     
                        Question No 6
                        Article 71 of the EEC Treaty must be interpreted as meaning that it does not impose on the Member States the obligation to consolidate the level of liberalization achieved at the time of the entry into force of the Treaty in respect of the movements of capital referred to in Article 67 (1), but merely recommends that action be taken to that end. The first subparagraph of Article 106 (3) of the EEC Treaty is not applicable to transfers of currency consisting in the physical importation and re-exportation of foreign currencies which the traveller carries with him.
                     
                  
                         
                     
                     
                        Question No 8
                        Articles 67, 71 and 106 of the EEC Treaty do not impose any restrictions on the freedom of the Member States to adopt rules in respect of the administrative formalities to be observed in the case of re-exportation by non-residents of previously imported currencies or, as the case may be, to make the completion of certain formalities the sole means of proof of the prior importation.
                     
                  
         (
            1
         )	Translated from the Italian.