Commission of the European Communities v United Kingdom.
Date: 2003-09-23
47. Under Article 299(4) EC, the Treaty applies to Gibraltar as it is a Crown Colony for whose external relations the United Kingdom is responsible.  However, under the UK Act of Accession, certain Treaty provisions do not apply to Gibraltar.  The territory is  inter alia  excluded from the customs territory of the Community, as defined in Article 1 of Regulation No 1496/68 and Article 29 of that Act and in Annex I, Section I, point 4, thereto.
50. Under Article 23(2) EC, the measures laid down for the liberalisation of intra-Community trade apply in the same way both to products originating in Member States and to products coming from third countries which are in free circulation in the Community (see Case 41/76  Donckerwolcke and Schou  [1976] ECR 1921, paragraph 15).
51. The customs union incorporates a common customs tariff intended to bring about equalisation of the charges borne at the external frontiers of the Community by products imported from non-member countries, in order to ensure that trade with such countries is not diverted and that the free movement of products between Member States and the conditions of competition between economic agents are not distorted (see Case C-125/94  Aprile  [1995] ECR I-2919, paragraph 32).
52. The Treaty sought to give general scope and effect to the rule on the elimination of customs duties and charges having equivalent effect in order to ensure the free movement of goods (Joined Cases 2/69 and 3/69  Brachfeld and Chougol  [1969] ECR 211, paragraph 12).
53. The customs union necessarily implies that the free movement of goods should be ensured between Member States (Case 266/81  SIOT  [1983] ECR 731, paragraph 16) and, in more general terms, within the customs union (see Joined Cases C-363/93 and C-407/93 to C-411/93  Lancry and Others  [1994] ECR I-3957, paragraph 29).
54. It is clear from Article 23 EC that, as regards free circulation of goods within the Community, products entitled to   " free circulation"  are definitively and wholly assimilated to products originating in Member States.  The result of this assimilation is that the provisions of Article 28 EC concerning the elimination of quantitative restrictions and all measures having equivalent effect are applicable without distinction to products originating in the Community and to those which were put into free circulation in any one of the Member States, irrespective of the actual origin of these products (see  Donckerwolcke and Schou , cited above, paragraphs 17 and 18).
60. That interpretation is not called into question by the rules applicable to Ceuta and Melilla, which contain an express provision that goods originating in those territories are exempt from customs duties following their release into free circulation in the customs territory of the Community.  Rather, those rules confirm the soundness of that interpretation, to the effect that exclusion from the customs territory of the Community entails the inapplicability of the Treaty provisions and secondary legislation on trade in goods, unless otherwise expressly provided.
61. Nor can that interpretation be called into question by the Commission ' s submission that it is paradoxical that, while most of the rules of Community law on the environment are applicable to Gibraltar, that is not the case where such provisions are contained in directives based on Articles 94 EC and 95 EC.
62. It is not disputed that the principal objective of the directives at issue is to remove barriers to trade in goods between Member States.  They are therefore inextricably tied to the free movement of goods from which Gibraltar is excluded for the reasons set out in paragraph 58 of this judgment.
63. Of course, failure to apply the directives at issue to Gibraltar may endanger the consistency of other Community policies, such as environmental protection, where the objectives of those policies are pursued as an ancillary aim by those directives.  However, that fact cannot lead to the extension of the territorial scope of those directives beyond the limits imposed by the Treaty and by the UK Act of Accession.