61961J0010

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1 . CUSTOMS DUTIES - ABOLITION - DUTIES APPLIED WITHIN THE MEANING OF ARTICLES 12 AND 14 OF THE EEC TREATY - CONCEPT

( EEC TREATY, ARTICLES 12, 14 AND 19 )

2 . EXTERNAL RELATIONS OF MEMBER STATES OF THE EEC - AGREEMENTS MADE PRIOR TO THE EEC TREATY - RIGHTS AND OBLIGATIONS OF MEMBER STATES

( EEC TREATY, ARTICLE 234 )

1 . IT FOLLOWS FROM A LITERAL INTERPRETATION OF ARTICLES 12 AND 14 OF THE EEC TREATY THAT THE TERM 'DUTIES APPLIED', AS USED IN THESE TWO ARTICLES, MEANS THE DUTIES ACTUALLY APPLIED RATHER THAN THOSE LEGALLY APPLICABLE . THIS INTERPRETATION IS CONFIRMED BY THE THIRD SUBPARAGRAPH OF ARTICLE 19 ( 2 ) OF THE EEC TREATY WHICH, WHILE IT REFERS ONLY TO THE COMMON CUSTOMS TARIFF, IS NOT LIMITED IN SCOPE TO THIS AREA BUT ALLOWS THE CONCLUSION TO BE DRAWN THAT THE AUTHORS OF THE TREATY WERE AWARE OF THE DIFFERENCE BETWEEN THOSE DUTIES LEGALLY APPLICABLE AND THOSE ACTUALLY APPLIED AND THAT BY USING THE WORDS 'DUTIES APPLIED' THEY INTENDED TO REFER TO THOSE DUTIES WHICH WERE ACTUALLY APPLIED .

2 . ACCORDING TO THE PRINCIPLES OF INTERNATIONAL LAW, A MEMBER STATE WHICH BY VIRTUE OF THE ENTRY INTO FORCE OF THE EEC TREATY, ASSUMES NEW OBLIGATIONS WHICH CONFLICT WITH RIGHTS HELD UNDER AN EARLIER AGREEMENT, REFRAINS FROM EXERCISING SUCH RIGHTS TO THE EXTENT NECESSARY FOR THE PERFORMANCE OF ITS NEW OBLIGATIONS; ARTICLE 234 OF THE EEC TREATY ONLY GUARANTEES THE RIGHTS HELD BY THIRD COUNTRIES UNDER EARLIER AGREEMENTS .

IN CASE 10/61

COMMISSION OF THE EUROPEAN ECONOMIC COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, HUBERT EHRING, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF HENRI MANZANARES, SECRETARY OF THE LEGAL DEPARTMENT OF THE EUROPEAN EXECUTIVES, 2 PLACE DE METZ, APPLICANT,

V

GOVERNMENT OF THE ITALIAN REPUBLIC, REPRESENTED BY PROFESSOR RICCARDO MONACO, HEAD OF THE DIPLOMATIC LEGAL DEPARTMENT OF THE FOREIGN MINISTRY ( REPLACED AT THE ORAL PROCEDURE BY DR PAOLO MASSIMO ANTICI, COUNSELLOR AT THE ITALIAN EMBASSY IN LUXEMBOURG ), ACTING AS AGENT, ASSISTED BY PIETRO PERONACI, DEPUTY STATE ADVOCATE-GENERAL, ACTING AS ADVISER, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE ITALIAN EMBASSY, 5 RUE MARIE-ADELAIDE, DEFENDANT,

APPLICATION FOR A RULING THAT BY APPLYING A FIXED MINIMUM DUTY OF 150 LIRE, AFTER THE ENTRY INTO FORCE OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY, AND BY TAKING THAT DUTY AS THE BASIS FOR THE CALCULATION OF THE SUCCESSIVE REDUCTIONS IN CUSTOMS DUTIES IN RELATION TO OTHER MEMBER STATES ON TUBES, VALVES AND LAMPS FOR IMPORTED RADIO RECEIVERS FROM OTHER MEMBER STATES, WITH A DUTIABLE VALUE NOT EXCEEDING 428 LIRE PER ARTICLE, THE ITALIAN REPUBLIC HAS FAILED IN ITS OBLIGATIONS UNDER THE TREATY ESTABLISHING THE EEC;

I - AS TO ADMISSIBILITY

THERE IS NO DISPUTE AS TO THE ADMISSIBILITY OF THE ACTION AND THERE IS NO REASON FOR THE COURT TO RAISE THE MATTER OF ITS OWN MOTION . THE ACTION IS THEREFORE ADMISSIBLE .

II - ON THE SUBSTANCE OF THE CASE

A . ONE MUST FIRST EXAMINE THE MEANING GIVEN BY ARTICLES 12 AND 14 RESPECTIVELY TO THE WORDS 'CUSTOMS DUTIES...OR ANY CHARGES HAVING EQUIVALENT EFFECT...WHICH ( MEMBER STATES )... ALREADY APPLY IN THEIR TRADE WITH EACH OTHER' ( ARTICLE 12 ) AND 'THE DUTY APPLIED ON 1 JANUARY 1957' ( ARTICLE 14 ).

THE APPLICANT ALLEGES THAT THESE PROVISIONS RELATE TO THE DUTIES ACTUALLY APPLIED ON 1 JANUARY 1958 ( ARTICLE 12 ) AND ON 1 JANUARY 1957 ( ARTICLE 14 ) RESPECTIVELY AND THEREFORE CONCLUDES THAT, IN THIS CASE, ONLY THE DUTY ARISING FROM THE APPLICATION OF THE TARIFF WHICH IS THE MORE FAVOURABLE TO IMPORTERS, AS PROVIDED IN THE MINISTERIAL CIRCULAR OF 13 JULY 1956, SHOULD BE RETAINED .

ON THE OTHER HAND, THE DEFENDANT MAINTAINS THAT THE WORDS 'DUTIES APPLIED' WITHIN THE MEANING OF ARTICLES 12 AND 14 MUST REFER TO THOSE DUTIES APPLICABLE BY LAW, AND THAT THE ABOVE-MENTIONED CIRCULAR CANNOT BE INVOKED AS AGAINST THE LEGALLY IMPOSED TARIFF, NAMELY THE DUTY OF 30% WITH FIXED MINIMUM OF 150 LIRE IN ACCORDANCE WITH THE DECREE OF THE PRESIDENT OF THE ITALIAN REPUBLIC DATED 12 JULY 1956 .

THE ARGUMENT PUT FORWARD BY THE APPLICANT ACCORDS WITH A LITERAL INTERPRETATION OF THE TREATY : IN FACT, THE PROVISIONS IN QUESTION REFER TO DUTIES WHICH THE MEMBER STATES 'APPLY' ( ARTICLE 12 ) OR TO THE DUTY 'APPLIED' ( ARTICLE 14 ).

SUPPORT FOR THIS ARGUMENT IS FOUND IN THE FACT THAT THE VIEW HELD BY THE DEFENDANT WOULD LEAD TO UNACCEPTABLE RESULTS .

IN FACT, AS IS SHOWN BY THE DISCUSSION BETWEEN THE PARTIES CONCERNING THE CIRCUMSTANCES SURROUNDING THE ISSUE OF THE CIRCULAR OF 13 JULY 1956, THE ARGUMENT OF THE DEFENDANT WOULD OBLIGE THE COMMISSION AND POSSIBLY THE COURT ITSELF TO CONSIDER IN EACH SPECIFIC CASE THE VALIDITY OF NATIONAL ADMINISTRATIVE MEASURES IN RELATION TO THE LAW OF THE MEMBER STATE CONCERNED; SUCH CONSIDERATION WOULD FALL OUTSIDE THE ROLE OF ENSURING THE PROPER APPLICATION OF THE TREATY GIVEN TO THOSE INSTITUTIONS BY THE TREATY ITSELF .

MOREOVER, IT SHOULD BE REMEMBERED THAT BY MEANS OF THE CIRCULAR TO WHICH REFERENCE HAS BEEN MADE THE MINISTRY OF FINANCE, WHICH WAS RESPONSIBLE FOR THE APPLICATION OF THE DECREE OF 12 JULY 1956, PROVIDED AN OFFICIAL INTERPRETATION OF THE PROVISIONS CONTAINED IN THAT DECREE AND THAT THOSE PROVISIONS WERE UNIFORMLY APPLIED ACCORDING TO THE REQUIREMENTS OF THE CIRCULAR .

IN SUPPORT OF ITS ARGUMENT, THE APPLICANT AGAIN REFERS TO ARTICLE 19 OF THE TREATY AND IN PARTICULAR TO THE THIRD SUBPARAGRAPH OF ARTICLE 19 ( 2 ) WHICH PROVIDES THAT, WITH REGARD TO THE TARIFF HEADINGS SPECIFIED IN LIST A, THE DUTIES APPEARING IN THAT LIST SHALL BE SUBSTITUTED FOR THE DUTIES APPLIED .

THIS CONCERNED THE DUTIES IN THE FRENCH CUSTOMS TARIFF, WHICH HAD BEEN TEMPORARILY SUSPENDED ON 1 JANUARY 1957 AND FOR THE REINTRODUCTION OF WHICH PROVISION HAD BEEN MADE . AN EXCEPTION WAS MADE TO THE RULE AND THESE DUTIES WERE RETAINED AS A BASIS FOR CALCULATING THE DUTIES IN THE COMMON EXTERNAL TARIFF WITHOUT TAKING INTO ACCOUNT THE FACT THAT THEY WERE NOT APPLIED ON 1 JANUARY 1957 .

IT IS TRUE THAT THIS PROVISION DOES NOT REFER TO THE ABOLITION OF CUSTOMS TARIFFS BETWEEN MEMBER STATES BUT ONLY TO THE COMMON EXTERNAL TARIFF .

HOWEVER, IT HAS A WIDER APPLICATION IN THE SENSE THAT IT CAN BE INFERRED THAT THE AUTHORS OF THE TREATY REALIZED THE DIFFERENCE BETWEEN DUTIES WHICH MAY LEGALLY BE APPLIED AND THOSE WHICH ARE ACTUALLY APPLIED AND THAT BY USING THE WORDS 'DUTIES APPLIED' THEY INTENDED TO REFER TO THOSE ACTUALLY APPLIED .

THE DEFENDANT ALSO REFERS TO THE SECOND SUBPARAGRAPH OF ARTICLE 19 ( 2 ), WHICH PROVIDES THAT, IN THE CASE OF THE ITALIAN CUSTOMS TARIFF, WITH RESPECT TO ITEMS ON WHICH THIS TARIFF CONTAINS A CONVENTIONAL DUTY, THIS DUTY SHALL BE SUBSTITUTED FOR THE DUTY APPLIED .

THIS PROVISION IS AN EXCEPTION TO THE RULE THAT THE DUTIES TAKEN AS THE BASIS FOR CALCULATING THE COMMON CUSTOMS TARIFF SHALL BE THOSE APPLIED ON 1 JANUARY 1957 . ITS SOLE PURPOSE IS TO DETERMINE THE DUTIES WHICH ARE TO BE TAKEN AS THE BASIS FOR CALCULATING THE COMMON CUSTOMS TARIFF .

WITHOUT THE NEED TO CONSIDER THE OTHER SUBMISSIONS OF THE PARTIES, IT MUST BE INFERRED FROM THE FOREGOING THAT ARTICLES 12 AND 14 OF THE TREATY REFER TO THE DUTIES ACTUALLY APPLIED ON 1 JANUARY 1958 AND 1 JANUARY 1957 RESPECTIVELY AND THAT IN THIS CASE THEREFORE THE PRACTICE OF THE ITALIAN CUSTOMS ADMINISTRATION CONFORMS WITH THE OFFICIAL INSTRUCTIONS FROM THE COMPETENT AUTHORITIES CONTAINED IN THE CIRCULAR OF 13 JULY 1956 .

B . THE DEFENDANT RAISES AN OBJECTION BASED UPON THE FIRST PARAGRAPH OF ARTICLE 234, RELATING TO THE MAINTENANCE OF RIGHTS AND OBLIGATIONS ARISING FROM PRIOR AGREEMENTS CONCLUDED WITH THIRD COUNTRIES . THE DEFENDANT MAINTAINS THAT THIS TEXT PERMITS AND EVEN OBLIGES IT TO IMPOSE IN EVERY CASE THE DUTY OF 30% SUBJECT TO THE FIXED MINIMUM ESTABLISHED UNDER THE GENEVA AGREEMENTS OF 1956 .

INDEED, THE DEFENDANT MAINTAINS THAT, ALTHOUGH THE ITALIAN REPUBLIC CONSENTED TO THE ABOLITION OF THE DUTY OF 35% IN FORCE AT THAT DATE, AND TO ITS REPLACEMENT BY THE DUTY OF 30%, THIS WAS BECAUSE IN RETURN IT HAD SECURED THE RIGHT TO INTRODUCE A MINIMUM LEVY OF 150 LIRE PER ARTICLE .

THE APPLICANT REPLIES THAT THE TERMS 'RIGHTS AND OBLIGATIONS' IN ARTICLE 234 REFER, AS REGARDS THE 'RIGHTS', TO THE RIGHTS OF THIRD COUNTRIES AND, AS REGARDS THE 'OBLIGATIONS', TO THE OBLIGATIONS OF MEMBER STATES AND THAT, BY VIRTUE OF THE PRINCIPLES OF INTERNATIONAL LAW, BY ASSUMING A NEW OBLIGATION WHICH IS INCOMPATIBLE WITH RIGHTS HELD UNDER A PRIOR TREATY A STATE IPSO FACTO GIVES UP THE EXERCISE OF THESE RIGHTS TO THE EXTENT NECESSARY FOR THE PERFORMANCE OF ITS NEW OBLIGATIONS .

THE APPLICANT'S INTERPRETATION IS WELL FOUNDED AND THE OBJECTION RAISED BY THE DEFENCE MUST BE DISMISSED .

IN FACT, IN MATTERS GOVERNED BY THE EEC TREATY, THAT TREATY TAKES PRECEDENCE OVER AGREEMENTS CONCLUDED BETWEEN MEMBER STATES BEFORE ITS ENTRY INTO FORCE, INCLUDING AGREEMENTS MADE WITHIN THE FRAMEWORK OF GATT .

BY VIRTUE OF ARTICLE 14 OF THE TREATY, THE SYSTEM LAID DOWN IN THE CIRCULAR OF THE MINISTRY OF FINANCE OF 13 JULY 1956 MUST BE REFERRED TO IN ORDER TO DETERMINE THE BASIC DUTY FOR THE REDUCTIONS MADE AFTER 1 JANUARY 1957 .

THE DEFENDANT IS THEREFORE UNJUSTIFIED IN CLAIMING THAT, BY VIRTUE OF THE GENEVA AGREEMENTS OF 1956, IT HAD THE RIGHT TO APPLY, IN RELATION TO OTHER MEMBER STATES, THE SINGLE AD VALOREM DUTY OF 30% SUBJECT TO THE FIXED MINIMUM OF 150 LIRE .

MOREOVER, THE CORRECT APPLICATION OF ARTICLE 14 DOES NOT ADVERSELY AFFECT THE RIGHTS AND OBLIGATIONS OF MEMBER STATES IN RELATION TO THIRD COUNTRIES WHICH ARISE FROM AGREEMENTS CONCLUDED BEFORE THE ENTRY INTO FORCE OF THE EEC TREATY .

AS A RESULT OF ARTICLE 234 DIFFERENT TARIFFS ARE APPLIED TO MEMBER STATES AND THIRD COUNTRIES, EVEN THOUGH THEY ARE PARTIES TO THE SAME GENEVA AGREEMENT OF 1956 . THIS IS THE NORMAL EFFECT OF THE TREATY ESTABLISHING THE EEC . THE MANNER IN WHICH MEMBER STATES PROCEED TO REDUCE CUSTOMS DUTIES AMONGST THEMSELVES CANNOT BE CRITICIZED BY THIRD COUNTRIES SINCE THIS ABOLITION OF CUSTOMS DUTIES IS ACCOMPLISHED ACCORDING TO THE PROVISIONS OF THE TREATY AND DOES NOT INTERFERE WITH THE RIGHTS HELD BY THIRD COUNTRIES UNDER AGREEMENTS STILL IN FORCE .

THE APPLICATION IS THEREFORE WELL-FOUNDED .

BY ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

THE DEFENDANT HAS FAILED IN ALL ITS SUBMISSIONS AND MUST THEREFORE BEAR THE COSTS .

THE COURT

HEREBY :

1 . RULES THAT, BY APPLYING THE FIXED CUSTOMS DUTY OF 150 LIRE ON THE GOODS IN QUESTION FROM OTHER MEMBER STATES WITH A DUTIABLE VALUE NOT EXCEEDING 428 LIRE PER ARTICLE, AFTER THE ENTRY INTO FORCE OF THE TREATY, AND BY TAKING THAT DUTY AS THE BASIS FOR THE CALCULATION OF THE SUCCESSIVE REDUCTIONS IN CUSTOMS DUTIES, THE ITALIAN GOVERNMENT HAS FAILED IN ITS OBLIGATIONS UNDER ARTICLES 12 AND 14 ( 1 ) OF THE TREATY;

2 . ORDERS THE DEFENDANT TO PAY THE COSTS .