1 BY JUDGMENT OF 8 MAY 1981 , RECEIVED AT THE COURT ON 18 JANUARY 1982 , THE RECHTBANK VAN EERSTE AANLEG ( COURT OF FIRST INSTANCE ), GHENT , SITTING AS A COURT OF APPEAL , REFERRED TO THE COURT PURSUANT TO ARTICLE 177 OF THE EEC TREATY THREE QUESTIONS FOR A PRELIMINARY RULING ON THE VALIDITY AND INTERPRETATION OF REGULATION NO 1174/68 OF THE COUNCIL OF 30 JULY 1968 ON THE INTRODUCTION OF THE SYSTEM OF BRACKET TARIFFS FOR THE CARRIAGE OF GOODS BY ROAD BETWEEN MEMBER STATES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( II ), P . 411 ), AS AMENDED BY REGULATION NO 293/70 OF THE COUNCIL OF 16 FEBRUARY 1970 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( I ), P . 90 ).
2 IT APPEARS FROM THE FILE ON THE CASE THAT THOSE QUESTIONS WERE RAISED IN CRIMINAL PROCEEDINGS BROUGHT AGAINST SEVERAL BELGIAN TRANSPORT OPERATORS CHARGED WITH FAILURE TO COMPLY , WHEN FIXING THEIR RATES FOR THE CARRIAGE OF GOODS BETWEEN FRANCE AND BELGIUM IN JANUARY 1979 , WITH THE PROVISIONS OF THE ROYAL DECREE OF 17 NOVEMBER 1971 LAYING DOWN THE TARIFF FOR THE CARRIAGE OF GOODS BY ROAD FOR REMUNERATION BETWEEN THE KINGDOM OF BELGIUM AND THE REPUBLIC OF FRANCE ( MONITEUR BELGE ( BELGIAN OFFICIAL GAZETTE ), 14413 ) ADOPTED IN APPLICATION OF REGULATION NO 1174/68 ON THE BASIS OF THE LAW OF 1 AUGUST 1960 ON THE CARRIAGE OF GOODS BY ROAD FOR REMUNERATION ( MONITEUR BELGE , P . 6101 ) AND THE LAW OF 18 FEBRUARY 1969 ON MEASURES FOR THE IMPLEMENTATION OF INTERNATIONAL TREATIES AND INSTRUMENTS RELATING TO TRANSPORT ( MONITEUR BELGE , P . 2988 ), HEREINAFTER REFERRED TO AS ' ' THE BELGIAN LEGISLATION ' ' . THE STATE OF THE APPLICABLE LEGISLATION
3 ARTICLE 1 OF REGULATION NO 1174/68 WHICH WAS ADOPTED PURSUANT TO ARTICLE 75 OF THE EEC TREATY SUBJECTS THE CARRIAGE OF GOODS BY ROAD BETWEEN MEMBER STATES TO A ' ' SYSTEM OF COMPULSORY BRACKET TARIFFS ' ' . ARTICLES 2 AND 3 PROVIDE THAT THE BRACKETS ARE TO BE CALCULATED BY REFERENCE TO A BASE-RATE WHICH IS FIXED HAVING REGARD BOTH TO THE AVERAGE COST OF THE TRANSPORT OPERATION CONCERNED , INCLUDING THE GENERAL EXPENSES OF THE BUSINESS , FOR A PROPERLY MANAGED UNDERTAKING ENJOYING NORMAL CONDITIONS OF USE OF ITS CARRYING CAPACITY , AND TO MARKET CONDITIONS , AND IS TO BE SUCH AS TO PROVIDE A FAIR RETURN FOR CARRIERS . BRACKETS CALCULATED ON THE BASE-RATE HAVE AN UPPER AND LOWER LIMIT AND THE DIFFERENCE BETWEEN THEM IS 23 % . THE RATES FOR ANY GIVEN TRANSPORT OPERATION MAY BE FREELY DETERMINED WITHIN THE UPPER AND LOWER LIMITS OF THE RELEVANT BRACKET TARIFF .
4 ACCORDING TO THE FIFTH RECITAL IN THE PREAMBLE TO THE REGULATION THE AIM OF THE UPPER LIMIT OF THE BRACKETS IS TO AVOID ABUSE OF DOMINANT POSITIONS AND DAMAGING COMPETITION .
5 ARTICLE 4 PROVIDES THAT THE TARIFFS ARE TO BE FIXED OR AMENDED BY AGREEMENT BETWEEN THE MEMBER STATES DIRECTLY CONCERNED BY WAY OF NEGOTIATION AND WITH THE ASSISTANCE OF THE COMMISSION . IF THE NEGOTIATIONS DO NOT RESULT IN AN AGREEMENT THE DISPUTE MAY BE REFERRED TO THE COMMISSION ; IN SUCH A CASE IT IS TO TAKE A DECISION WHICH IS TO TAKE EFFECT IN THE MEMBER STATES SUBJECT TO APPEAL TO THE COUNCIL PURSUANT TO THE PROCEDURES LAID DOWN IN ARTICLE 4 ( 2 ).
6 ARTICLE 6 PROVIDES THAT THE BRACKET TARIFFS ARE TO BE OFFICIALLY PUBLISHED IN THE MEMBER STATES CONCERNED AND ARTICLE 12 PROVIDES THAT THE MEMBER STATES ARE TO ADOPT SUCH LAWS , REGULATIONS OR ADMINISTRATIVE PROVISIONS AS MAY BE NECESSARY FOR THE IMPLEMENTATION OF THE REGULATION , INCLUDING MEASURES FOR CHECKS ON COMPLIANCE , AND ARE TO PRESCRIBE THE PENALTIES APPLICABLE IN CASE OF BREACH .
7 THE TRANSPORT TARIFFS APPLICABLE BETWEEN BELGIUM AND FRANCE WERE FIXED , IN CONFORMITY WITH THE PROVISIONS OF REGULATION NO 1174/68 , BY AGREEMENT BETWEEN THE TWO MEMBER STATES CONCERNED AND BROUGHT INTO FORCE IN BELGIUM BY THE ROYAL DECREE OF 17 NOVEMBER 1971 . ARTICLE 6 ( 3 ) OF THAT DECREE PROVIDES THAT THE TRANSPORT RATE MAY BE FREELY DETERMINED BY THE PARTIES WITHIN THE BRACKET , IN CONFORMITY WITH THE SCHEDULES LAID DOWN BY THE DECREE . ARTICLE 4 PROVIDES THAT THE TRANSPORT RATE IS TO BE EXPRESSED IN BELGIAN OR FRENCH FRANCS . THE EXCHANGE RATE APPLICABLE IN DETERMINING THE AMOUNTS WHICH APPEAR IN THE SCHEDULES IS FF 1 : BFR 9 AND NO PROVISION IS MADE FOR ANY ADJUSTMENT IN THE EVENT OF CHANGES IN THE EXCHANGE RATE .
8 THE TARIFFS FIXED BY THE AFORESAID DECREE WERE INCREASED BY 15 % BY THE ROYAL DECREE OF 11 OCTOBER 1978 ( MONITEUR BELGE , P . 13536 ). IT IS TO BE OBSERVED THAT THE EXCHANGE RATE OF FF 1 : BFR 9 WAS AMENDED SUBSEQUENTLY TO THE FACTS OF THE CASE BY THE ROYAL DECREE OF 3 OCTOBER 1979 ( MONITEUR BELGE , P . 12126 ).
9 FOLLOWING THE ENLARGEMENT OF THE COMMUNITY , REGULATION NO 1174/68 WAS REPLACED BY COUNCIL REGULATION NO 2831/77 OF 12 DECEMBER 1977 ON THE FIXING OF RATES FOR THE CARRIAGE OF GOODS BY ROAD BETWEEN MEMBER STATES ( OFFICIAL JOURNAL 1977 , L 334 , P . 22 ). THAT REGULATION GAVE THE MEMBER STATES AN OPTION BETWEEN A SYSTEM OF ' ' REFERENCE TARIFFS ' ' AND THE FORMER SYSTEM OF ' ' COMPULSORY TARIFFS ' ' . THE LATTER SYSTEM , WHICH HAS REMAINED APPLICABLE AS BETWEEN BELGIUM AND FRANCE , IS ESSENTIALLY IDENTICAL TO THE SYSTEM UNDER THE PREVIOUS REGULATION , AS IS EMPHASIZED IN THE SEVENTH RECITAL IN THE PREAMBLE , SAVE THAT BY VIRTUE OF ARTICLE 11 ( 3 ) A MEMBER STATE MAY , IN ORDER TO OFFSET THE EFFECTS OF MONETARY FLUCTUATIONS , UNILATERALLY CARRY OUT AN UPWARD REVISION OF PRICE SCHEDULES EXPRESSED IN ITS CURRENCY . BY ITS NATURE THAT POWER OF UNILATERAL REVISION IS OPEN TO A MEMBER STATE WHICH HAS DEVALUED ITS CURRENCY .
10 ACCORDING TO ARTICLE 20 ( 3 ) OF THE NEW REGULATION MEASURES ADOPTED BY MEMBER STATES IN IMPLEMENTATION OF REGULATION NO 1174/68 ARE TO REMAIN IN FORCE UNTIL THEY ARE REPLACED BY SUBSEQUENT PROVISIONS . SINCE NO NEW PROVISION WAS INTRODUCED IN BELGIUM BEFORE THE OCCURRENCE OF THE MATTERS WHICH GAVE RISE TO THE MAIN PROCEEDINGS THE POSITION MUST BE CONSIDERED ON THE BASIS OF REGULATION NO 1174/68 AND THE MEASURES ADOPTED BY THE BELGIAN STATE TO IMPLEMENT THAT REGULATION . THE BACKGROUND TO THE PROCEEDINGS
11 IT APPEARS FROM THE FILE ON THE CASE THAT THE APPELLANTS IN THE MAIN PROCEEDINGS CARRIED OUT TRANSPORT OPERATIONS IN JANUARY 1979 BETWEEN FRANCE AND BELGIUM AT INVOICED RATES WHICH WERE LOWER THAN THOSE OF THE MINIMUM TARIFF , EXPRESSED IN BELGIAN FRANCS , UNDER THE BELGIAN LEGISLATION . THEY WERE CHARGED WITH CONTRAVENING THE ROYAL DECREE OF 17 NOVEMBER 1971 , AS SUBSEQUENTLY AMENDED , AND FINED BY THE POLITIERECHTBANK ( LOCAL COURT WITH JURISDICTION IN RESPECT OF MINOR OFFENCES ), GHENT .
12 THEY APPEALED AGAINST THAT JUDGEMENT TO THE RECHTBANK VAN EERSTE AANLEG BEFORE WHICH THEY CONTENDED THAT THE MINIMUM TARIFFS HAD NOT BEEN APPLIED BECAUSE , BY REASON OF THE DISPARITY IN CURRENCIES BETWEEN BELGIUM AND FRANCE , THE LEGAL TARIFFS WOULD ENTAIL SERIOUS DISCRIMINATION TO THE DETRIMENT OF THE BELGIAN TRANSPORT OPERATORS AND LEAD TO A COLLAPSE OF THE BELGIAN TRANSPORT MARKET . THE FORMER MONETARY PARITY OF 1 : 9 HAD BEEN OVERTAKEN BY THE DEVALUATION OF THE FRENCH FRANC . THE REAL RATE OF EXCHANGE WAS 1 : 6.85 AND THEY HAD TO APPLY IT IF THEY DID NOT WISH TO OPERATE AT A LOSS .
13 AFTER REFERRING TO THE FIFTH RECITAL IN THE PREAMBLE TO REGULATION NO 1174/68 ACCORDING TO WHICH ' ' TARIFFS MUST BE DRAWN UP IN SUCH A WAY AS TO AVOID BOTH THE ABUSE OF DOMINANT POSITIONS AND DAMAGING COMPETITION ; . . . SUCH TARIFFS MUST BE FIXED BY REFERENCE TO A BASE-RATE , SET WITH DUE REGARD TO THE COST OF THE RELEVANT TRANSPORT OPERATIONS AND TO THE STATE OF THE MARKET AND IN SUCH A WAY AS TO PROVIDE A FAIR RETURN FOR CARRIERS ' ' , THE NATIONAL COURT OBSERVES THAT ACCORDING TO THE REGULATION FLUCTUATIONS IN THE EXCHANGE RATES OF THE CURRENCIES OF THE MEMBER STATES ARE NOT A DETERMINANT FACTOR IN FIXING TRANSPORT TARIFFS . IT WONDERS WHETHER IN THOSE CIRCUMSTANCES THE REGULATION IS COMPATIBLE WITH ARTICLE 75 OF THE TREATY AND WHETHER THE PROVISIONS OF THE REGULATION ARE CONSISTENT WITH ITS OBJECTIVES , AS SET OUT IN ITS PREAMBLE .
14 IN ORDER TO OBTAIN CLARIFICATION IN REGARD TO THESE MATTERS THE RECHTBANK REFERRED THE FOLLOWING QUESTIONS TO THE COURT : ' ' 1 . IS REGULATION NO 1174/68 OF THE COUNCIL OF 30 JULY 1968 COMPATIBLE WITH ARTICLE 75 OF THE EEC TREATY IF NO PROVISION IS MADE TO ELIMINATE THE DISPARITY IN CURRENCIES BETWEEN THE MEMBER STATES? 2.IS THE REGULATION COMPATIBLE WITH ITS AIM THAT TARIFFS MUST BE DRAWN UP IN SUCH A WAY AS TO AVOID BOTH ABUSE OF DOMINANT POSITIONS AND DAMAGING COMPETITION? 3.AS A MEASURE ADOPTED BY THE COUNCIL , MUST THE REGULATION STILL BE REGARDED AS VALID IF INSTEAD OF PRODUCING HARMONIZATION IT LEADS TO EXCESSIVE DISCRIMINATION BETWEEN THE INHABITANTS OF THE VARIOUS MEMBER STATES? ' ' THE VALIDITY OF REGULATION NO 1174/68
15 THE QUESTIONS SUBMITTED BY THE RECHTBANK ESSENTIALLY SEEK TO ASCERTAIN WHETHER IN THE ABSENCE OF PROVISIONS TO ELIMINATE THE EFFECTS OF CURRENCY DISPARITIES IN THE EVENT OF AN ALTERATION IN THE EXCHANGE RATE REGULATION NO 1174/68 HAS THE EFFECT OF CREATING , IN THE MATTER OF DETERMINATION OF TRANSPORT RATES , A DISTORTION OF COMPETITION WHICH IS CONTRARY TO THE VERY OBJECTIVE OF THE REGULATION AND TO THE REQUIREMENTS OF A COMMON TRANSPORT POLICY , SO THAT THE VALIDITY OF THE REGULATION IS AFFECTED .
16 THE ANSWER TO THE QUESTION THUS FRAMED MUST BE DERIVED FROM THE SYSTEM AND PURPOSE OF REGULATION NO 1174/68 AND IN PARTICULAR FROM THE DISTRIBUTION OF POWERS BETWEEN THE COMMUNITY AND THE MEMBER STATES TO WHICH THAT REGULATION GAVE RISE .
17 AS HAS BEEN POINTED OUT ABOVE , REGULATION NO 1174/68 IS CENTRED ON THE ESTABLISHMENT OF ' ' BRACKET TARIFFS ' ' , TO ENSURE NORMAL CONDITIONS OF COMPETITION IN THE MARKET IN ROAD TRANSPORT WITHIN THE COMMUNITY . THAT OBJECTIVE CAN BE ACHIEVED ONLY ON CONDITION THAT THE LIMITS SET BY THE BRACKET SPREAD , AS DEFINED BY THE REGULATION , ARE RESPECTED .
18 THE DETERMINATION OF THE TARIFFS AND , MORE PRECISELY , EVERYTHING RELATING TO THE FIXING OF THEM AND THEIR SUBSEQUENT AMENDMENT , IS EFFECTED , ACCORDING TO ARTICLE 4 OF THE REGULATION , BY WAY OF AGREEMENT BETWEEN THE STATES DIRECTLY CONCERNED IN THE MATTER . SHOULD THE STATES CONCERNED HAVE DIFFICULTY IN REACHING AN AGREEMENT THE REGULATION PROVIDES FOR ARBITRATION BY THE COMMISSION WITH ULTIMATE APPEAL TO THE COUNCIL WHICH IN SUCH A CASE GIVES ITS DECISION BY A QUALIFIED MAJORITY . THE ARBITRATION TAKES PLACE WITHIN A VERY SHORT PERIOD OF TIME AND THE DECISIONS TAKEN THEREUNDER TAKE EFFECT IN THE MEMBER STATES . THUS THE REGULATION HAS ALL THE PROVISIONS TO ENSURE THAT THE AGREEMENTS OR DECISIONS ARE MADE AT THE RIGHT TIME BOTH AS REGARDS THE ORIGINAL FIXING OF THE TARIFFS AND THEIR SUBSEQUENT AMENDMENT SHOULD THE NEED ARISE .
19 WHEN TRANSPORT TARIFFS ARE FIXED SIMULTANEOUSLY IN THE CURRENCIES OF THE TWO MEMBER STATES CONCERNED , AS THE CASE OF BELGIUM AND FRANCE , AND THERE IS AN ALTERATION IN THE EXCHANGE RATES BETWEEN THEIR CURRENCIES SUCH AS TO AFFECT THE CONDITIONS OF COMPETITION BETWEEN CARRIERS IN A MANNER WHICH IS CONTRARY TO THE AIM OF THE REGULATION , THOSE STATES ARE UNDER AN OBLIGATION TO SEEK A REVISION OF THE TARIFFS IN ACCORDANCE WITH THE PROCEDURE WHICH HAS BEEN DESCRIBED . THAT OBLIGATION IS INHERENT IN THE VERY CONCEPT OF BRACKET TARIFFS WHICH UNDER THE SYSTEM OF REGULATION NO 1174/68 ARE CONCEIVED AS SINGLE TARIFFS , EVEN IF EXPRESSED IN TWO CURRENCIES , AND AS BEING REQUIRED TO HAVE ESSENTIALLY THE SAME SPREAD .
20 THE SCOPE OF THAT OBLIGATION MUST NEVERTHELESS BE UNDERSTOOD IN THE SENSE THAT THERE CANNOT BE AUTOMATIC ADAPTATION OF THE BRACKETS TO THE VARIATIONS IN EXCHANGE RATES IN A SYSTEM OF FLOATING RATES OF EXCHANGE . TO TAKE ACCOUNT OF THE FREQUENT AND GENERALLY SMALL VARIATIONS WHICH CHARACTERIZE SUCH A SYSTEM WOULD MAKE ANY STABILITY IN TRANSPORT RATES IMPOSSIBLE . THE MEMBER STATES MUST THEREFORE BE RECOGNIZED AS HAVING AN APPROPRIATE DISCRETION IN FULFILLING THEIR OBLIGATION UNDER REGULATION NO 1174/68 TO UNDERTAKE REVISIONS INASMUCH AS REVISION IS NOT REQUIRED EXCEPT WHERE THE CONDITIONS OF COMPETITION ARE APPRECIABLY AFFECTED .
21 IT THEREFORE APPEARS THAT REGULATION NO 1174/68 CONTAINS THE NECESSARY PROVISIONS TO ELIMINATE THE EFFECTS OF DISPARITIES BETWEEN CURRENCIES . FOR THAT REASON , IF IT IS CORRECTLY APPLIED BY THE MEMBER STATES CONCERNED , IT IS NOT APT TO CREATE DISTORTIONS OF COMPETITION OR TO CAUSE DISCRIMINATION AGAINST CARRIERS IN THE EVENT OF A PARITY CHANGE IN THE CURRENCIES OF THE STATES CONCERNED WITH A GIVEN TRANSPORT RELATIONSHIP . UNDER THE DISTRIBUTION OF POWERS EFFECTED BY THE REGULATION IT IS FOR THE MEMBER STATES CONCERNED TO TAKE , IN PURSUANCE OF ARTICLE 4 THEREOF , THE NECESSARY STEPS TO BRING ABOUT AN AMENDMENT OF THE TARIFFS WHEN A CHANGE IN THE CONVERSION RATE BETWEEN THEIR CURRENCIES CAUSES DISTORTIONS OF COMPETITION INCOMPATIBLE WITH THE OBJECTIVE OF THE REGULATION .
22 THE VALIDITY OF THE REGULATION CANNOT THEREFORE BE DOUBTED ON THE GROUND THAT IT DOES NOT MAKE IT POSSIBLE FOR THE EFFECTS OF DISPARITIES IN CURRENCIES BETWEEN THE MEMBER STATES TO BE ELIMINATED .
23 IN VIEW OF THAT CONCLUSION IT IS FOR THE NATIONAL COURT TO ASCERTAIN WHETHER , SUBJECT TO THE DISCRETION MENTIONED ABOVE , THE MEMBER STATE CONCERNED HAS SATISFIED THE OBLIGATION TO ADAPT TRANSPORT TARIFFS TO THE VARIATIONS IN EXCHANGE RATES AND TO DRAW THE NECESSARY CONSEQUENCES AS REGARDS THE PROSECUTIONS PENDING BEFORE IT .