1 BY ORDER DATED 11 JANUARY 1973, RECEIVED AT THE REGISTRY OF THE COURT ON 16 JANUARY 1973, THE PRAETOR OF MILAN REFERRED, UNDER ARTICLE 177 OF THE EEC TREATY, SEVERAL QUESTIONS ON THE INTERPRETATION OF ARTICLE 5, PARAGRAPHS 2 AND 3 OF ARTICLE 40 ( 3 ) AND ARTICLE 86 OF THE TREATY TOGETHER WITH CERTAIN PROVISIONS OF REGULATION NO 359/67/EEC OF THE COUNCIL OF 25 JULY, ON THE COMMON ORGANIZATION OF THE MARKET IN RICE ( OJ 31 JULY 1967, NO 174 ). THESE QUESTIONS WERE PUT CONCERNING A PECUNIARY CHARGE, CALLED A CONTRACT DUTY, LEVIED ON THE PURCHASER OF PADDY RICE OF DOMESTIC ORIGIN IN ORDER TO FINANCE THE ACTIVITIES OF A NATIONAL RICE AUTHORITY . ON THE FIRST SIX QUESTIONS
2 THE FIRST QUESTION ASKS WHETHER THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY, TAKEN IN CONJUNCTION WITH ARTICLE 5, PROHIBITS A MEMBER STATE FROM AUTHORIZING THE IMPOSITION OF A DUTY ON THE PURCHASE OF PADDY RICE PRODUCED IN THAT STATE FOR THE BENEFIT OF AN ORGANIZATION OTHER THAN THE STATE . THE SECOND QUESTION ASKS WHETHER THE FACT THAT A LEVY OF THIS KIND IS NOT REPAID AT THE TIME OF EXPORT TO A MEMBER COUNTRY OR A THIRD COUNTRY CONSTITUTES DISCRIMINATION WITHIN THE MEANING OF THE SAME RULE IN ARTICLE 40, TAKEN TOGETHER WITH THE PROVISIONS OF REGULATION NO 359/67 AND OF ARTICLE 5 OF THE TREATY . THE THIRD QUESTION ASKS WHETHER, IN AUTHORIZING SUCH A LEVY, WITHOUT AT THE SAME TIME PROVIDING FOR THE OBLIGATION TO REPAY IT ON EXPORT, THE COMMUNITY ITSELF HAS FAILED TO COMPLY WITH THE OBLIGATIONS PLACED ON IT BY THE THIRD SUBPARAGRAPH OF ARTICLE 40 ( 3 ), TAKEN TOGETHER WITH THE PROVISIONS OF REGULATION NO 359/67/EEC . THE FOURTH QUESTION ASKS WHETHER THE PROVISIONS OF THE SECOND AND THIRD SUBPARAGRAPHS OF ARTICLE 40 ( 3 ) ARE DIRECTLY APPLICABLE WITHIN THE LEGAL SYSTEMS OF MEMBER STATES AND WHETHER THEY HAVE CREATED SUBJECTIVE RIGHTS FOR INDIVIDUALS WHICH NATIONAL COURTS MUST PROTECT, AND, IF THE ANSWER IS IN THE AFFIRMATIVE, WHETHER THESE RIGHTS AROSE FROM THE DATE OF ENTRY INTO FORCE OF REGULATION NO 16/64 OR OF REGULATION NO 359/67 . THE FIRST PART OF THE FIFTH QUESTION, ASKS WHETHER THE LEVYING OF SUCH A DUTY INFRINGES THE PRINCIPLE OF THE PREFERENCE TO BE GRANTED TO COMMUNITY PRODUCTS, AS LAID DOWN IN THE TWELFTH RECITAL IN THE PREAMBLE TO REGULATION NO 359/67; THE SECOND PART OF THE FIFTH QUESTION AND ALSO THE SIXTH QUESTION ASKS WHETHER A LEVY OF THIS KIND CAN CONSTITUTE A CHARGE HAVING EQUIVALENT EFFECT TO A CUSTOMS DUTY OR A MEASURE HAVING EQUIVALENT EFFECT TO A QUANTITATIVE RESTRICTION AS PROHIBITED BY REGULATION NO 359/67 .
3 BEFORE REPLYING TO THESE QUESTIONS, IT IS NECESSARY TO CONSIDER THE PROVISIONS CITED IN THEIR CONTEXT WITHIN THE TREATY . ARTICLE 40 OF THE TREATY FORMS PART OF THE SPECIAL PROVISIONS FOR THE FUNCTIONING AND DEVELOPMENT OF THE COMMON MARKET FOR AGRICULTURAL PRODUCTS CONTAINED IN ARTICLE 38 . TO ATTAIN THE OBJECTIVES DEFINED IN ARTICLE 39, ARTICLE 40 ( 2 ) PROVIDES FOR THE ESTABLISHMENT OF A COMMON ORGANIZATION OF AGRICULTURAL MARKETS WHICH TAKES ONE OF THE FOLLOWING THREE FORMS : COMMON RULES ON COMPETITION, COMPULSORY COORDINATION OF THE VARIOUS NATIONAL MARKET ORGANIZATIONS, OR A EUROPEAN MARKET ORGANIZATION . ARTICLE 40 ( 3 ) PROVIDES THAT THE COMMON ORGANIZATION ESTABLISHED IN ACCORDANCE WITH ARTICLE 40 ( 2 ) MAY INCLUDE ALL MEASURES REQUIRED TO ATTAIN THE OBJECTIVES SET OUT IN ARTICLE 39, INCLUDING REGULATION OF PRICES, BUT SPECIFIES THAT THE COMMON ORGANIZATION MUST EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY, AND THAT ANY COMMON PRICE POLICY SHALL BE BASED ON COMMON CRITERIA AND UNIFORM METHODS OF CALCULATION . UNDER THE TERMS OF ARTICLE 43, THE COMMISSION IS REQUIRED TO SUBMIT PROPOSALS FOR IMPLEMENTING THE COMMON AGRICULTURAL POLICY, INCLUDING THE REPLACEMENT OF THE NATIONAL ORGANIZATIONS, AND THE COUNCIL IS EMPOWERED TO CARRY OUT THESE PROPOSALS BY MAKING REGULATIONS, ISSUING DIRECTIVES, OR TAKING DECISIONS . BY REGULATION NO 16/64/EEC OF 5 FEBRUARY 1964 ( OJ 34 OF 27 FEBRUARY 1964, P . 574/64 ) THE COUNCIL ENSURED THE GRADUAL ESTABLISHMENT OF AN ORGANIZATION OF THE MARKET IN RICE . FOR PRODUCER MEMBER STATES THE MAIN FEATURES OF THIS ORGANIZATION OF THE MARKET WERE THE ANNUAL FIXING OF TARGET PRICES AND THE FIXING, ON THE BASIS OF THE TARGET PRICE, OF AN INTERVENTION PRICE AT WHICH THE COMPETENT AGENCIES ARE OBLIGED TO BUY IN THE PADDY RICE OFFERED TO THEM; IT ALSO MEANS THE ANNUAL FIXING OF A COMMON THRESHOLD PRICE TO BE DETERMINED FOR THE FIRST YEAR ON THE BASIS OF THE PRICE RECORDED ON THE WORLD MARKET AND TO WHICH THE PRICE OF IMPORTED PRODUCTS MUST BE EQUATED BY MEANS OF A VARIABLE LEVY . REGULATION NO 359/67 OF 25 JULY 1967, WHICH REPLACED THIS LEGISLATION, PROVIDES FOR A SINGLE TARGET PRICE FOR HUSKED RICE ON WHICH TWO INTERVENTION PRICES, ONE FOR ARLES, THE OTHER FOR VERCELLI, ARE FIXED FOR RICE IN THE HUSK . APART FROM THIS SINGLE PRICE SYSTEM, THE REGULATION PROVIDES FOR THE CHARGING OF A STANDARD LEVY ON IMPORTS FROM THIRD COUNTRIES AND FOR PAYMENT OF A STANDARD REFUND ON EXPORTS TO THOSE COUNTRIES . ARTICLES 20 ( 2 ) AND 23 OF THE SAID REGULATION PROHIBIT THE LEVYING OF ANY CUSTOMS DUTY OR CHARGE HAVING EQUIVALENT EFFECT AND THE APPLICATION OF ANY QUANTITATIVE RESTRICTION OR MEASURE HAVING EQUIVALENT EFFECT ON EXPORTS TO A THIRD COUNTRY OR ON TRADE WITHIN THE COMMUNITY .
4 IN THE CONTEXT OF THE RICE MARKET, THEREFORE, ARTICLE 40 WAS IMPLEMENTED BY REGULATION NO 359/67 WHICH, IN ACCORDANCE WITH ARTICLE 189 OF THE TREATY, WAS DIRECTLY ENFORCEABLE BY THE NATIONAL COURTS . IN PROVIDING THAT MEMBER STATES SHALL TAKE ALL APPROPRIATE MEASURES TO ENSURE THAT THEIR OBLIGATIONS ARE CARRIED OUT AND SHALL ABSTAIN FROM ANY MEASURE LIABLE TO JEOPARDIZE THE ATTAINMENT OF THE OBJECTIVES OF THE TREATY, ARTICLE 5 IMPOSES A GENERAL OBLIGATION ON MEMBER STATES, THE ACTUAL SIGNIFICANCE OF WHICH DEPENDS, IN EACH PARTICULAR CASE, ON THE PROVISIONS OF THE TREATY OR ON THE RULES LAID DOWN WITHIN ITS GENERAL FRAMEWORK . IN THE RICE SECTOR, THE ONLY PROVISIONS OF THE REGULATION WHICH PROHIBIT NATIONAL MEASURES ARE THOSE CONTAINED IN ARTICLES 20 ( 2 ) AND 23 .
5 THE PROHIBITION ON THE LEVYING OF ANY CUSTOMS DUTY OR CHARGE HAVING EQUIVALENT EFFECT, CONTAINED IN ARTICLE 20 ( 2 ) OF THE SAID REGULATION, COVERS ANY CHARGE LEVIED AT THE TIME OF OR BY REASON OF IMPORT OR EXPORT TO A THIRD COUNTRY . THE PROHIBITION ON THE LEVYING OF A CUSTOMS DUTY OR CHARGE HAVING EQUIVALENT EFFECT IN TRADE WITHIN THE COMMUNITY, CONTAINED IN ARTICLE 23 OF THE SAID REGULATION, COVERS ANY CHARGE LEVIED AT THE TIME OF OR BY REASON OF IMPORT OR EXPORT OF THE PRODUCT IN QUESTION WHICH, BY CHANGING ITS COST PRICE, PRODUCES THE SAME RESTRICTIVE EFFECT AS A CUSTOMS DUTY ON THE FREE MOVEMENT OF GOODS . THIS PROHIBITION COVERS ANY PECUNIARY CHARGE AFFECTING GOODS BY REASON OF THEIR CROSSING THE FRONTIER .
6 SUCH DOES NOT APPEAR TO APPLY IN THE CASE OF AN INTERNAL TAX AFFECTING DOMESTIC PRODUCTS ALONE ON COMPLETION OF A CONTRACT COVERING THEM AND DESIGNED TO BUILD UP A FUND TO PROMOTE NATIONAL PRODUCTION . NOR, ON THE OTHER HAND, COULD SUCH A TAX BE CONTRARY TO THE PROVISIONS OF THE REGULATION PROVIDING FOR EXPORT REFUNDS UNLESS IT APPEARED TO BE A METHOD OF REDUCING THE AMOUNT OF SUCH REFUNDS . FINALLY, IF SUCH A TAX CAN COME SIMULTANEOUSLY WITHIN THE AMBIT OF THE PROVISIONS CONCERNING AIDS, INTERNAL TAXES AND ARTICLES 5, 40 ( 3 ) AND 98 OF THE TREATY, IT IS FOR THE COMMISSION TO ENSURE, WITH A DILIGENCE WHICH REFLECTS THE FACT THAT INDIVIDUALS HAVE NO IMMEDIATE REDRESS, THAT THOSE PROVISIONS ARE OBSERVED .
7 THE BAN ON ANY QUANTITATIVE RESTRICTION OR MEASURE HAVING EQUIVALENT EFFECT IN ARTICLE 20 ( 2 ) OF THE SAID REGULATION HAS AMONG ITS OBJECTS TO PREVENT MEMBER STATES FROM TAKING UNILATERAL MEASURES TO LIMIT EXPORTS TO THIRD COUNTRIES UNLESS OTHERWISE PERMITTED BY THE REGULATIONS . THE PROHIBITION OF SUCH A MEASURE AS BETWEEN MEMBERS OF THE COMMUNITY IN ARTICLE 23 IS INTENDED TO ENSURE THE FREE MOVEMENT OF GOODS WITHIN THE COMMUNITY . THE PROHIBITION ON QUANTITATIVE RESTRICTIONS COVERS MEASURES WHICH AMOUNT TO A TOTAL OR PARTIAL RESTRAINT OF, ACCORDING TO THE CIRCUMSTANCES, IMPORTS, EXPORTS OR GOODS IN TRANSIT . MEASURES HAVING EQUIVALENT EFFECT NOT ONLY TAKE THE FORM OF RESTRAINT DESCRIBED; WHATEVER THE DESCRIPTION OR TECHNIQUE EMPLOYED, THEY CAN ALSO CONSIST OF ENCUMBRANCES HAVING THE SAME EFFECT . THIS DOES NOT APPEAR TO APPLY IN THE CASE OF A PECUNIARY CHARGE SUCH AS THAT REFERRED TO BY THE NATIONAL COURT . ON THE LAST QUESTION
8 THIS QUESTION ASKS WHETHER THE IMPOSITION OF SUCH A LEVY COULD CONSTITUTE AN ABUSE OF A DOMINANT POSITION WITHIN THE MEANING OF ARTICLE 86 OF THE TREATY .
9 ARTICLE 86 OF THE TREATY DOES NOT APPLY TO A CHARGE FOR THE PURPOSE OF FINANCING NATIONAL AIDS .