1 By order of 16 December 1993 received at the Court on 4 February 1994, the Tribunal Superior de Justicia, Andalusia, referred for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Article 25 of the Act concerning the conditions of accession of the Kingdom of Spain and the Republic of Portugal and the adjustments to the Treaties of 12 June 1985 (OJ 1985 L 302, p. 23, hereinafter "the Act of Accession"), and of Protocol No 2 thereto, in conjunction with the provisions of the EEC, now the EC, and ECSC Treaties concerning the free movement of goods.
2 That question was raised in the context of a dispute between the Cámara de Comercio, Industria y Navegación, Ceuta, and the Municipality of Ceuta concerning an action for the annulment of a Municipal Order adopted on 24 September 1991 by the Municipality of Ceuta definitively adopting the charge (arbitrio) on production in and imports into the city of Ceuta (Boletín Oficial de Ceuta of 25 September 1991, p. 143).
3 Ceuta and Melilla are Spanish territories on the coast of North Africa. They enjoy a special status.
4 Article 25 of the Act of Accession provides: "1. The Treaties and the acts of the institutions of the European Communities shall apply to the Canary Islands and to Ceuta and Melilla, subject to the derogations referred to in paragraphs 2 and 3 and to the other provisions of this Act. 2 The conditions under which the provisions of the EEC and ECSC Treaties concerning the free movement of goods and the acts of the institutions of the Community concerning customs legislation and commercial policy shall apply to the Canary Islands and to Ceuta and Melilla are set out in Protocol No 2. ..."
5 According to Article 1(2) of Protocol No 2, the customs territory of the Community is not to include the Canary Islands and Ceuta and Melilla.
6 Article 6 of Protocol No 2 provides: "1. On import into the Canary Islands or into Ceuta and Melilla, products originating in the customs territory of the Community shall qualify for exemption from the customs duties and charges having equivalent effect under the conditions defined in paragraphs 2 and 3. 2. The customs duties existing in the Canary Islands and in Ceuta and Melilla and the charge known as the 'arbitrio insular ° tarifa general' existing in the Canary Islands shall be abolished progressively, with regard to products originating in the customs territory of the Community, according to the same timetable and under the same conditions as those provided for in Articles 30, 31 and 32 of the Act of Accession. 3. ..."
7 Article 31 of the Act of Accession provides for the abolition, by 1 January 1993 at the latest, of customs duties on imports.
8 It appears from the order for reference that, until 1991, a municipal charge was levied in Ceuta on the import of goods.
9 In order to maintain that charge after the accession of the Kingdom of Spain to the European Communities, the Spanish legislature decided to extend its scope to goods produced in Ceuta. To that end, it adopted Law 8/1991 of 25 March 1991 adopting the municipal charge (arbitrio) on production and importation applicable to Ceuta and Melilla (Boletín Oficial del Estado of 26 March 1991, p. 9418).
10 In order to apply that Law, the Municipality of Ceuta adopted the Municipal Order of 24 September 1991, mentioned above.
11 The Cámara de Comercio, Industria y Navegación, Ceuta, considering that order to be unlawful, brought an action for annulment before the Tribunal Superior de Justicia, Andalusia.
12 The national court considered that an interpretation of Community law was necessary for the purposes of the decision in the case. It therefore stayed proceedings and referred the following question to the Court for a preliminary ruling: "Do Article 25(2) of the Act concerning the conditions of accession of the Kingdom of Spain to the European Communities and Protocol No 2 thereto, in conjunction with the provisions of the EEC and ECSC Treaties concerning the free movement of goods, allow the existence after 1991 of a charge such as the one governed by Spanish Law 8/1991 of 25 March 1991 approving the Arbitrio sobre la Producción e Importación en las Ciudades de Ceuta y Melilla (charge on production in and import into the cities of Ceuta and Melilla) which is structured in such a way as to result in the 'almost total absence of any additional tax burden on internal operations' while at the same time maintaining an actual charge on imports from the customs territory of the Community?"
13 It is appropriate to consider, first, the relevant articles of the Act of Accession and then those articles of the EC and ECSC Treaties which relate to the free movement of goods. The Act of Accession
14 So far as concerns the provisions of the EC and ECSC Treaties on the free movement of goods, the defendant in the main proceedings claims that the Act of Accession does not preclude retention, in the territory of Ceuta, of a charge having an effect equivalent to a customs duty. According to the defendant, although charges having equivalent effect are expressly mentioned in Article 6(1) of Protocol No 2, only customs duties and a charge specific to the Canary Islands are referred to in Article 6(2), to which Article 6(1) refers for the conditions governing exemption from the duties and charges for which it provides.
15 That argument cannot be accepted.
16 It is settled case-law that a measure dealing with customs duties but not expressly mentioning charges having equivalent effect may be understood as being intended also to refer to such charges (see, in particular, Case C-260/90 Leplat v Territory of French Polynesia [1992] ECR I-643, paragraph 15).
17 The purpose of Article 6(2) of Protocol No 2 is to specify the conditions under which the result prescribed by paragraph 1 of that article, that is to say, the abolition of customs duties and charges having equivalent effect, is to be attained.
18 Article 6(2) must therefore be interpreted as applying both to charges having equivalent effect and to customs duties stricto sensu.
19 It follows that Article 6 of Protocol No 2 required the customs duties and charges having equivalent effect existing in Ceuta to be abolished progressively according to the same timetable and under the same conditions as those provided for in Articles 30, 31 and 32 of the Act of Accession, that is to say, by 1 January 1993 at the latest.
20 That conclusion applies both to products imported into Ceuta from Spain and to those coming from the rest of the Community customs territory (see Joined Cases C-363/93 and C-407/93 to C-411/93 Lancry v Direction Générale des Douanes [1994] ECR I-3957).
21 As regards Article 95 of the EC Treaty, that provision applies to the territory of Ceuta by virtue of Article 25 of the Act of Accession. The provisions on the free movement of goods
22 The defendant and the Spanish Government maintain that the arbitrio does not constitute a charge having an effect equivalent to a customs duty but non-discriminatory internal taxation, since it affects both imported and local products.
23 It should be noted, as a preliminary point, that in its order for reference the national court made the following finding: "...the introduction of the charge on the local 'production' of goods in Ceuta is no more than a cover for maintaining the existence of the Arbitrio sobre la Importación after 1991, when it was required to be abolished. This charge on local production is structured in such a way as to deprive it of practical relevance for the continued existence of the Arbitrio sobre la Importación (...) which the Spanish legislature seeks to maintain..."
24 That finding is based in particular on a statement contained in one of the reports drawn up by the Directorate General of Taxes prior to the approval of the municipal order at issue. According to that statement: "The legislature has so structured the charge that it should in practice result in the almost total absence of any additional tax burden on internal operations if account is taken of the fact that industrial production and manufacture in the cities of Ceuta and Melilla is very small, so that the main burden of the municipal charge would fall on the importation of goods into Ceuta and Melilla, and that in turn would result in better protection of local production, which is largely exempt, and would make it possible to increase the revenue of local funds since trade in imported goods is one of the most characteristic activities of the aforementioned cities."
25 However, the order for reference does not specify the reasons which enabled the national administrative authority to arrive at that conclusion. Nor does it spell out the significance of the words "almost total" which appear both in the reports of the administrative authority concerned and in the question referred to the Court.
26 In that connection, it must be stressed that it is for the national court to resolve any question of fact relevant to the disposal of the case before it, to assess the scope of the national provisions and the manner in which they must be applied. The Court of Justice may, however, infer from the questions referred the various possible hypotheses and indicate, for each of them, the criteria of Community law which it will be for the national court to apply.
27 In this case, it has to be determined, in particular, whether the disputed charge falls under Articles 9 and 12 of the EC Treaty, to which Article 4(a) of the ECSC Treaty corresponds, or under Article 95 of the EC Treaty.
28 The Court has consistently held that any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9, 12, 13 and 16 of the Treaty. However, such a charge may not be so characterized if it forms part of a general system of internal dues applying systematically to categories of products according to objective criteria applied without regard to the origin of the products (see, to that effect, Case 15/81 Schul v Inspecteur der Invoerrechten en Accijnzen [1982] ECR 1409, paragraph 20).
29 Since the aim of Article 95 is to ensure free movement of goods between the Member States in normal conditions of competition by the elimination of all forms of protection which may result from the application of internal taxation that discriminates against products from other Member States, that article must guarantee complete neutrality of internal taxation as regards competition between domestic products and imported products. The prohibition which it lays down applies whenever a fiscal levy is likely to discourage imports of goods originating in other Member States to the benefit of national production (see Case 252/86 Bergandi v Directeur-Général des Impôts [1988] ECR 1343, paragraphs 24 and 25).
30 It follows that, in circumstances such as those in point in the present case, the national court must first ascertain whether the statutory and regulatory provisions imposing the disputed charge are such as to establish, in a transparent manner, a general system applying, on the basis of objective criteria, without distinction to local products and to imports. It must then consider whether application of those provisions satisfies those same requirements.
31 In that respect, it should be noted that, in its order for reference, the national court states: "nor can it be maintained that the present case concerns a charge which is part of a national system of internal taxation which places equal burdens on imported goods and goods produced (within the territory of the city)".
32 On that point, it is clear from the documents before the Court that the national legislation at issue lays down, separately, the system applying to imported products and that applying to local products.
33 Although that separation could be indicative of two distinct systems of taxation, it does not, in itself, support the conclusion that Article 95 is inapplicable in the present case.
34 None the less, it is capable of rendering the system so opaque that it would not be possible for the national court to satisfy itself that imported products and local products are subjected, on the basis of objective criteria unrelated to their origin, to one and the same charge.
35 It is also possible that application of the legislation at issue by the competent national authorities does not meet those requirements. That could be the case in particular if the administrative authorities were to make systematic use, for the benefit of local production, of a power to grant exemptions.
36 It is therefore for the national court to consider whether the charge, although having the appearance of internal taxation, in fact constitutes a charge equivalent to a customs duty so far as imported products are concerned.
37 Finally, it is to be noted that the words "almost total", used in the question referred, could signify that, although the greater part of local production is exempt from the charge, a small part is not. In those circumstances, three possible situations may be envisaged, each entailing different legal consequences.
38 A first possibility is that, even though the greater part of local production is exempt, the charge is levied according to objective criteria which apply in the same manner to local and imported products. It would then fall under Article 95 of the Treaty.
39 A second possibility is that non-exempt local products belong to a defined category of products, so that the legislation must be regarded as establishing two distinct systems of taxation, one applying to that category of local and imported products, the other to all other categories of imported products. While the first system would fall under Article 95, the second would introduce a charge having an effect equivalent to a customs duty.
40 A third possibility is that non-exemption of a small proportion of local production is designed solely to conceal what is in reality a charge having an effect equivalent to a customs duty.
41 It is for the national court to determine the significance of the words "almost total" used by it in its question and to draw the appropriate conclusions in the light of the foregoing considerations.
42 As regards the argument put forward by the Spanish Government and the Municipality of Ceuta to the effect that the Court, when interpreting the EC and ECSC Treaties, must take account of the isolated situation of Ceuta and the undertaking given by the Community to encourage the economic development of the less advantaged regions, it must be stated that, in the absence of specific derogating measures enacted by the Community, the provisions of the EC and ECSC Treaties concerning the free movement of goods must apply in all their force to Ceuta.
43 The reply to the question put by the national court must therefore be that the provisions of the Act of Accession and of Protocol No 2 thereto, in conjunction with Articles 9 and 12 of the EC Treaty or Article 4(a) of the ECSC Treaty, or with Article 95 of the EC Treaty, preclude the levying by a Member State of a charge which, although having the appearance of internal taxation, is, either by reason of the wording of the provisions imposing it or by reason of the manner in which the administrative authority applies it, such as to be levied upon imported products or certain categories of those products, to the exclusion of local products in the same category.