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Document 61978CC0007
Opinion of Mr Advocate General Mayras delivered on 4 July 1978. # Regina v Ernest George Thompson, Brian Albert Johnson and Colin Alex Norman Woodiwiss. # Reference for a preliminary ruling: Court of Appeal (England) - United Kingdom. # Means of payment and movements of capital. # Case 7/78.
Ģenerāladvokāta Mayras secinājumi, sniegti 1978. gada 4.jūlijā.
Regina pret Ernest George Thompson, Brian Albert Johnson un Colin Alex Norman Woodiwiss.
Lūgums sniegt prejudiciālu nolēmumu: Court of Appeal (England) - Apvienotā Karaliste.
Lieta 7/78.
Ģenerāladvokāta Mayras secinājumi, sniegti 1978. gada 4.jūlijā.
Regina pret Ernest George Thompson, Brian Albert Johnson un Colin Alex Norman Woodiwiss.
Lūgums sniegt prejudiciālu nolēmumu: Court of Appeal (England) - Apvienotā Karaliste.
Lieta 7/78.
ECLI identifier: ECLI:EU:C:1978:148
OPINION OF MR ADVOCATE GENERAL MAYRAS
DELIVERED ON 4 JULY 1978 ( 1 )
Mr President,
Members of the Court,
I — |
Thanks to the very comprehensive report for the hearing presented by the Judge-Rapporteur Your Lordships undoubtedly have in mind the facts giving rise to this reference for a preliminary ruling by the Court of Appeal (Criminal Division) and also the wording of the questions referred to Your Lordships by that court. The three appellants in the main action were charged before the Crown Court at Canterbury with having been concerned with the illegal importation of 3400 Krugerrands into the United Kingdom. Two of them, who had between 7 August 1974 and 26 May 1975 exported 40.39 tonnes of coins of silver alloy minted in the United Kingdom, are charged with conspiracy to evade the prohibition, in force at that time, on the exportation of such coins. One of the appellants pleaded guilty before the court of first instance, but, subsequently, all three pleaded that there was no case for them to answer owing to the fact that the prohibitions relating to the importation and exportation of the said coins were in conflict with the provisions of the Treaty of Rome: That court rejected this submission without having recourse to the procedure under Article 177. Subsequently the appellants, while pleading guilty, appealed and the court of second instance decided to ask Your Lordships for a preliminary ruling. The subject-matter of the offences is gold and silver coins.
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II — |
The answer to the first question determines the outcome of the dispute. By this question the Court of Appeal requests you to classify the coins in question, Krugerrands and English silver coins, under Community law: in short it would like to know whether they are goods or capital. If under Community law they are goods they fall within the provisions of Chapter 2 of Title I of Part two relating to the elimination of quantitative restrictions between Member States and measures having equivalent effect, which hinder the free movement of goods, both on imports (Article 30) and also on exports (Article 34), unless the provisions of Article 36 of the Treaty are applicable to them. If on the other hand they are capital within the meaning of Community law then the transfers of which the coins are the subject-matter fall within Chapter 4 of Title III (that is to say within Articles 67 to 73 of the Treaty) and the English Court of Appeal would like to know what was the effective scope of these provisions when the events which gave rise to the prosecution occurred. I do not think that it is possible for the Court to answer this question in the direct form in which it has been referred. Nevertheless I will approach the problem squarely for reasons of clarity. The following considerations may be put forward in support of the designation ‘goods’. In the first place, from the point of view of the domestic law of the United Kingdom, one argument can be based on the actual wording of the provisions relating both to importation and exportation which the appellants are charged with having infringed. The aim of the Import, Export and Customs Powers (Defence) Act 1939, passed in the political situation prevailing at that time, was ‘to control the importation, exportation and carriage coastwise of goods and the shipment of goods as ship's stores, to facilitate the enforcement of the law relating to the matters aforesaid and the law relating to trading with the enemy …’. This Act is still in force vis-à-vis non-Member States but it must be regarded as having been repealed or at least amended by the European Communities Act 1972 on the accession of the United Kingdom in so far as it contravenes the provisions of the Treaty of Rome. Statutory Instrument No 23 of 1954 entitled ‘The Import of Goods (Control) Order 1954’ which provides ‘Subject to the provisions of this order, all goods are prohibited to be imported into the United Kingdom’ was made on the basis of the 1939 Act. Naturally the legislature did not stop there, because such a general provision would have meant the strangulation of a country such as the United Kingdom. That is why Article 2 immediately goes on to say: ‘Nothing in Article 1 hereof shall be taken to prohibit the importation of any goods under the authority of any licence granted by the Board of Trade under this article and in accordance with any condition thereto’. Thus the Minister was empowered to authorize some importations specifically and others generally. After the entry into force on 1 January 1973 of the Act of Accession and pursuant to the general principle of the free movement of goods laid down by the Treaty of Rome, the Secretary of State for Trade and Industry granted a general licence for imports (an Open General Import Licence) on 5 July 1973 to take effect on 16 July following. Pursuant to this licence the importation of all ‘gold articles’, or what I will call ‘gold goods’, was authorized. But on 15 April 1975 the same Department adopted a measure (Amendment No 10) prohibiting as from 16 April following, except with a specific licence, the importation of gold medals, gold medallions, gold tablets and other gold pieces in pictorial relief or bearing inscriptions as well as gold coins. It has therefore been established, as moreover the judge of the court of first instance points out, that under the system introduced on 5 July 1973 the importation into the United Kingdom of Krugerrands, which are goods within the meaning of the 1939 Act, was not subject to any restriction and that, since 16 April 1975, importation of these coins has been subject to a system of specific licences as importation of goods, any importation of these coins in contravention of the said provisions falling within section 304 (b) of the Customs and Excise Act, 1969. As far as exportation is concerned a similar trend may be noted. Pursuant to the Export of Goods (Control) Order 1970 the exportation of certain goods is prohibited except under the authority of a general or specific licence. On 20 December 1972 on the eve of accession the Secretary of State granted a general authorization for the export of many categories of goods (Open General Licence of 20 December 1972) including coins, apparently in order to bring the laws of the United Kingdom into line with the provisions of Article 34 of the Treaty. This licence was confirmed on 25 June 1973. However pursuant to two measures adopted on 5 July 1975 and 20 December 1975 the export of more than ten silver coins of the kind at issue (United Kingdom coins in circulation before 1947) was prohibited except with a specific authorization. It has therefore also been established that after the accession of the United Kingdom the exportation of the silver coins at issue in this case had for some time been licensed under the 1939 Act relating to goods; it was perhaps by taking advantage of these rules that the appellants were able to export between 7 August 1974 and 26 May 1975 more than 40 tonnes of silver coins without attracting the attention of the customs. Consequently, if the designation goods, used at the time in the laws of the United Kingdom, is taken, any quantitative restriction on imports and exports of the coins in question between the Community as originally constituted and the United Kingdom, and similarly between the new Member States, was abolished on accession. Measures having an effect equivalent to such restrictions had to be abolished by 1 January 1975 at the latest pursuant to Article 42 of the Act of Accession. From the point of view of Community law the Common Customs Tariff drawn up in accordance with the nomenclature for the classification of goods (Brussels Convention of 15 December 1950) provides that coins which are not of the nature of collector's pieces (heading number 72.01), like moreover the latter pieces (heading number 99.05) and signed and numbered bank notes (heading number 49.07), are free of import duty. This exemption from duty enjoyed by coins may be explained by the wish of each State not to be deprived of receipts from gold and silver. |
III — |
If the coins in question are in fact goods the second question referred by the national court is whether certain of the provisions of Article 36 afford justification for the restrictions in this case. Although for reasons which I will give later the answer to this question does not appear to be necessary for the determination of the appeal, I submit the following observations on this aspect of the matter: A distinction must be drawn between the import of Krugerrands and the export of silver coins.
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IV — |
Nevertheless these considerations do not dispose of the problem. Although some gold and silver coins are in certain respects goods which can in some, if not all of the Member States, perfectly legally be the subject-matter of banking transactions, subject to payment of any VAT which may be chargeable, they are goods of a very special kind which, as I am going to explain, could and can be assimilated ‘to capital’ by reason of the circumstances and conditions of and methods used in the transactions of which they are the subject-matter. I would now like to dispose straightaway of an objection which is bound to be raised against me. The point has often been made that, although all money is perforce goods, at least to begin with, all goods have in certain respects from an economic standpoint the characteristics of capital. This is so, for example, in the case of diamonds, paintings by great masters, stamps, silver tableware or even sugar.
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V — |
It is advisable now to return to the implications of Articles 67 and 71. The latter provides that: ‘Member States shall endeavour to avoid introducing within the Community any new exchange restrictions on the movement of capital and current payments connected with such movements, and shall endeavour not to make existing rules more restrictive’ than they were when the Treaty entered into force, that is to say in the case of the United Kingdom, before 1 January 1973. According to the second paragraph of the said article the Member States ‘declare their readiness to go beyond the degree of liberalization of capital movements provided for in the preceding articles in so far as their economic situation, in particular the situation of the balance of payments, so permits’. It is clear that neither of these two provisions creates rights for the benefit of individuals. Article 67 makes the progressive abolition of restrictions on the movement of capital subject to one condition limited in time and one permanent condition. By admitting that the transitional period, applicable for the elimination of measures having an effect equivalent to quantitative restrictions on the importation and exportation of goods, also applies to the abolition of restrictions in connexion with the free movement of capital, that is to say that it be completed by 1 January 1975, the stipulation ‘to the extent necessary to ensure the proper functioning of the Common Market’ continues to apply even after the expiry of this period. The same criterion of ensuring ‘the proper functioning of the Common Market’ must also influence the Community's activities for example in the field of the approximation of the laws of Member States (Article 3 (h)). Consequently, according to Article 67, if after the entry into force of the Act of Accession and after the expiry of the transitional period, for which it provides, any restrictions on the movement of capital remain in being, their retention only contravenes the Treaty if this abolition is necessary to ensure the proper functioning of the Common Market. I will refrain from defining my position on the question whether the proper functioning of the Common Market requires that ‘assets put away’ and ‘investment’, which were and are still effected and necessarily permitted by the law in force within the frontiers of each Member State, may be made possible at Community level and without any discrimination through the free movement of monetary gold in the remainder of the Community put into circulation in one Member State; I prefer to leave this point to be determined by Your Lordships. The fact that, within some Member States, the coins in question may be freely dealt in and that all the Member States support hoarding and speculation by ‘reminting’ gold coins amounts clearly to discrimination a little like the discrimination in the jugdment of 4 December 1974 in Case 41/74, Yvonne van Duyn v Home Office [1974] 2 ECR 1337, but, Article 67 specifically refrains from excluding the retention even after the expiry of the transitional period, of discriminatory treatment based on the nationality or residence of the parties, or on the place where the assets are put away, if the removal of such discrimination is not necessary to ensure the proper functioning of the Common Market. Therefore there is no doubt that, although the krugerrands and silver coins in question are only the physical ‘substratum’ of capital movements, the appellants can gain no advantage by invoking Article 67 and the expiry of the transitional period does not affect the continuing validity of the restriction flowing from the stipulation that the proper functioning of the Common Market must be ensured. Finally it is for the national court to determine whether the financial movements which accompanied the circulation of the coins in question fall within the class of those which relate to actual trade in and movement of goods in the ordinary meaning of this expression, but it seems to me that, even if the United Kingdom Government has used an unorthodox but very effective instrument (the orders in implementation of the 1939 Act which govern the movement of goods) to regulate these monetary transactions, it is no less true that this objective could be lawfully attained in the context of Articles 67 and 104 of the Treaty. |
In these circumstances it does not seem to me to be necessary to answer the last question referred to the Court and I submit that Your Lordships should declare that:
(1) |
Capital within the meaning of Community law must also be taken to mean gold and silver coins which are legal tender or ‘means of payment of all kinds’; |
(2) |
Even after the expiry of the transitional period referred to in Article 42 of the Act of Accession and notwithstanding Articles 73 and 106 of the Treaty the new Member States only have to abolish between themselves and in their relations with the Community as originally constituted restrictions on trade in capital as thus defined belonging to persons resident in the Member States, as well as discriminatory treatment based on the nationality or the residence of the parties or the place where such capital is situate to the extent necessary to ensure the proper functioning of the Common Market. |
( 1 ) Translated from the French.