CELEX: C1996/233/04
Language: en
Date: 1996-08-10 00:00:00
Title: Action brought on 10 May 1996 by the Portuguese Republic against the European Commission (Case C-159/96)

10 . 8 . 96              EN                    Official Journal of the European Communities                                  No C 233 / 3
     — the principle that there must be a balance between                 argument put forward by the Luxembourg authorities, the
         the rights and obligations of the parties : in addition          sending of commercial samples free of charge does in fact
         to the concessions embodied in the ATC conditions,               constitute an operation covered by the Sixth Directive , in
         the Community has made a significant number of                   respect of which Article 5 ( 6 ) of that Directive lays down
         additional concessions in exchange for the measures              special arrangements consisting in an exemption
         for opening up the Indian and Pakistani markets                  accompanied by a refund of the input tax paid by the trader
         incorporated in the Memoranda of Understanding.                  concerned . Moreover, the position adopted by Luxembourg
         Furthermore , the measures for opening up those                  is inconsistent, inasmuch as it subjects to VAT imports of
         markets are extremely uncertain and liable to be                 commercial samples provided free of charge whilst enabling
         reversed .                                                       the tax thus paid to be deducted by taxable persons in
                                                                          Luxembourg .
(')  Not yet published in the Official Journal .
(2)  OJ No L 336 , 1994 , p . 50 .
(■') OJ No L 275 , 1993 , p . 1 .                                         (') OJ No L 145 , 13 . 6 . 1977, p . 1 .
(4)  OJ No L 86 , 1995 , p . 10 .
Action brought on 6 May 1996 by the Commission of the
European Communities against the Grand Duchy of                           Action brought on 10 May 1996 by the Portuguese Republic
                             Luxembourg                                                 against the European Commission
                          ( Case C-152/96 )
                                                                                                  ( Case C-159/96 )
                            ( 96/C 233 /03 )
                                                                                                    ( 96/C 233/04 )
An action against the Grand Duchy of Luxembourg was
brought before the Court of Justice of the European                       An action against the European Commission was brought
Communities on 6 May 1996 by the Commission of the                        before the Court of Justice on 10 May 1996 by the
European Communities, represented by Hélène Michard                       Portuguese Republic, represented by Dr Luis Fernandes and
and Enrico Traversa , acting as Agents , with an address for              Maria Lui'sa Duarte , acting as Agents, with an address for
service in Luxembourg at the office of Carlos Gômez de la                 service in Luxembourg at the Portuguese Embassy, 33 Allée
Cruz , of the Legal Service, Wagner Centre , Kirchberg .                  Scheffer .
The applicant claims that the Court should :
                                                                          The applicant claims that the Court should :
( a ) declare that, by introducing and applying national rules
      operating in such a way that supplies of samples such as            — declare void the Commission's practice of applying
      specimen discs or books, which are exempt for                           ' exceptional flexibility' measures in connection with the
      domestic       transactions    and     in  the    context   of
                                                                              administration of quantitative limits on the import by
      intra-Community supplies under Articles 5 ( 6 ) and                     the European Community of textile products and
      28c ( B ) ( a ) respectively of the Sixth Council VAT                   clothing from non-member countries and, specifically,
      Directive ( 77/388/EEC ) of 17 May 1977 on the                          the decision adopted by the Commission following the
      harmonization of the laws of the Member States
                                                                              meeting of the Textile Committee of 6 March 1996 on
      relating to turnover taxes — common system of value                     textile products from the People's Republic of China ,
      added tax : uniform basis of assessment ( 1 ), as amended ,
      cannot qualify for deduction of input value added tax,
      and by making imports of those goods subject to VAT,                — order the Commission to pay the costs .
      contrary to the provisions of Article 14 ( 1 ) ( a ) of the
      Sixth VAT Directive , the Grand Duchy of Luxembourg
      has failed to fulfil its obligations under the said                 Pleas in law and main arguments adduced in support:
      provisions of the Sixth VAT Directive;
( b ) order the Grand Duchy of Luxembourg to pay the                      — Manifest abuse by the Commission of its powers for the
      costs .                                                                 implementation of international agreements on trade in
                                                                              textile products and clothing : the ' exceptional flexiblity'
                                                                              measures, applied after full use has been made of all the
Pleas in law and main arguments adduced in support:                           mechanisms provided for in the Community legislation
                                                                              and the bilateral agreements between the European
Infringement of the provisions of the Sixth VAT Directive                     Community and supplier countries for flexible
( 77/388/EEC ) referred to in the claims : contrary to the                    observance of quantitative limits, cannot be regarded as
 ---pagebreak---  No C 233/4           EN                  Official Journal of the European Communities                                     10 . 8 . 96
     falling within the Commission's management powers,              Reference for a preliminary ruling from the Rechtbank van
     defined by Council Regulation ( EEC ) No 3030/93 on             Eerste Aanleg, Antwerp, by judgment of that court of
     common rules for imports of certain textile products             13 May 1996 in the case of ( a ) Belgian State v. 1 . Banque
     from third countries ('). Several provisions of that            Indosuez, 2 . Stahlhandel Schmitz GmbH and 3 . NV Rijn­
     Regulation preclude such exercise of discretion by the          and Kanaalvaart Expeditie and ( b ) Belgian State v.
     Commission which , moreover, is contrary to the specific                              European Commumty
     scope and nature of management powers .                                                  ( Case C-177/96 )
                                                                                                 ( 96/C 233/05 )
     The allowing of 'exceptional flexibility' measures is also
     contrary to the objective of rigorous and transparent           Reference has been made to the Court of Justice of the
     management of the quantitative limits underlying the            European Communities by a judgment of the Rechtbank
     system introduced by Regulation ( EEC ) No 3030/93 .            van Eerste Aanleg ( Court of First Instance ), Antwerp, of
    The 'exceptional flexibility' measures made available for        13 May 1996 , which was received at the Court Registry on
    textile products from China on 6 March 1996 by far               22 May 1996 , for a preliminary ruling in the cases of ( a )
    exceeded the limits laid down for normal flexibility             Belgian State v . 1 . Banque Indosuez, 2 . Stahlhandel Schmitz
    measures and undeniably ran counter to the Council's             GmbH and 3 . Rijn- and Kanaalvaart Expeditie NV and ( b )
    decision to reduce the rate of annual growth of the              Belgian State v. European Community, on the following
    quantitative limits applicable to China, as is apparent          questions :
    from the Agreement renegotiated in 1 995 ; consequently,
    those measures have no basis in the bilateral agreement
    and even depart from the spirit and letter of the                1 . Does the name 'Yugoslavia ' in Commission Decision
    provisions thereof. Recourse to 'exceptional flexibility'            No 2131 /88/ECSC (') also refer to the State of
    measures also involves a clear breach of the general and             Macedonia-Scopje after it had broken away from ( what
    fundamental principles of the Community legal order,                 remained of) Yugoslavia ?
    which have been recognized as such by the Community
    case law .                                                       2 . Are the import duties which are to be levied in
                                                                         accordance      with      Decision  No  2131 /88/ECSC      on
                                                                         imports into the Belgian-Luxembourg Economic Union
— Manifest breach of the general Community legal                         of steel products originating in Yugoslavia also
    principles concerning competence, institutional                      applicable to such imports originating in the State of
    equilibrium and protection of the legitimate                         Macedonia-Scopje between 1 May 1992 and 31 July
    expectations of economic agents in the Community : as                1992 inclusive ?
    an authority giving effect to the commercial agreements
    entered into by the Council , the Commission must limit          (') OJ No L 188 , 1988 , p . 14 .
    its action to applying agreed provisions . Any decision
    which goes beyond such limits, such as that represented
    by the 'exceptional flexibility' measures, breaches the
    principle of legally defined competence — and is
    consequently illegal through lack of powers . The
    Commission is also acting in breach of the principle of
    institutional equilibrium in adopting decisions which, as
    regards their legal effects, constitute a derogation from
    the provisions whose approval, at Community level , or          Reference for a preliminary ruling from the Nederlandse
    conclusion, at international level, is a matter for the         Raad van State, by order of that court of 31 May 1996 in the
    Council alone .                                                 case of 1 . Beside B V and 2 . 1 . M. Besselsen v. Minister for
                                                                     Housing, Town and Country Planning and Conservation
                                                                                             ( Case C-192/96 )
    The practice of taking 'exceptional flexibility' measures                                   ( 96/C 233/06 )
    represents a factor of unpredictability as regards the
    reasonable expectations of economic agents, in
    particular those in the textile industry; since such            Reference has been made to the Court of Justice of the
    measures cannot be foreseen by economic agents and do           European Communities by an order of the Nederlandse
    not pursue an overriding public interest, they contravene       Raad van State ( Council of State of the Netherlands ) of
    the principle of legitimate expectations and are, for that      31 May 1996 , which was received at the Court Registry on
    reason among others, illegal .                                  4 June 1996 , for a preliminary ruling in the case of 1 . Beside
                                                                    BV and 2 . I. M. Besselsen v . Minister for Housing, Town
                                                                    and Country Planning and Conservation on the following
(') OJ No L 2 75 , 1993 , p . 1 .                                   questions :
                                                                     1 . Should the expression 'municipal/household waste '
                                                                         referred to under AD 160 in Annex III to Council
                                                                         Regulation ( EEC ) No 259/93 of 1 February 1993 on the
                                                                         supervision 'and control of shipments of waste within,