61990C0239

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Mr President,

Members of the Court,

The French Cour de Cassation (Commercial, Financial and Economic Chamber) has referred to the Court of Justice for a preliminary ruling a question on the interpretation of Articles 30, 36 and 59 of the EEC Treaty, in relation to a Law of 1841, as amended in 1943, of which Article 1 lays down the conditions for the retail sale of used goods by public auction. In particular, that national law prohibits sales of that type for goods "belonging to or held by a trader who has not been registered for at least two years in the Registre de Commerce (Trade Register) and the Rôle des Patentes (Business Tax Roll) within the jurisdiction of the Tribunal de Grande Instance (Regional Court) in which the sale is to take place".

I shall keep to a minimum my account of the dispute, which has gone as far as the Cour de Cassation, referring to the Report for the Hearing as far as matters of detail are concerned. Nado, a company governed by German law whose registered office is in Hamburg, instructed SCP Boscher, Studer et Fromentin, a firm of official auctioneers established in Paris, to sell certain luxury, low-mileage or prestige second-hand vehicles by public auction in various French cities on different occasions.

Several traders operating in that sector, the Monegasque company British Motors Wright and other French companies, took the view that, under the 1841 Law, such sales were unlawful and applied for and obtained from the Tribunal de Grande Instance, Paris, an order prohibiting them. The contention that that prohibition was incompatible with Community law was not accepted either at first instance or on appeal; however, at last instance the Cour de Cassation entertained some doubts and it is those doubts, set out in four questions, that the Court of Justice is called upon to resolve.

I do not, I think, need to dwell on the first two questions, which concern whether Article 59 of the Treaty, properly construed, is applicable to occasional sales in one Member State at which a trader established in another Member State sells by public auction second-hand goods belonging to him, and, if so, whether the requirements laid down by the 1841 Law constitute unlawful restrictions. The answer can, without any reasonable doubt, only be negative.

Since what is at issue here is a condition imposed on the seller for the sale of his products, the legislative framework for the "service" comprises the provisions on the free movement of goods, so that those relating to the freedom to provide services are excluded by virtue of the wholly unambiguous terms of Article 60 of the Treaty. And although it may be possible to identify, as a result of the restriction on sales, a barrier to the provision of services by auctioneers, that would in any event be absorbed by the restriction on sales and therefore on the import of goods (judgments in Case 18/84 Commission v France [1985] ECR 1339, paragraph 12, and in Joined Cases 60 and 61/84 Cinéthèque [1985] ECR 2605, paragraphs 10 and 11).

In its third question, the Cour de Cassation asks whether Article 30 of the Treaty is to be interpreted as preventing the application of the 1841 Law in so far as it imposes on the seller of second-hand goods from another Member State the obligation to have been entered in the Trade Register in the district where the sale is to be carried out for at least two years. If the answer is yes, the national court asks (in its fourth question) whether the restriction may be justified on grounds of public policy under Article 36 of the Treaty.

The answer to those questions seems to me to be straightforward, having regard to the consistent and unequivocal line taken by the Court.

Essentially, to require a seller from another Member State to have been entered for a period of at least two years prior to the sale in the local Trade Register is tantamount to requiring him to use the services of a local trader; or else not to use auctions as a means of selling. However, the Court has made it clear that to withhold an effective means of selling from a trader from another Member State (most recently in its judgment in Case 382/87 Buet [1989] ECR 1235, paragraphs 7 to 9) or to require him to have his own representative established in the country where the sale is to take place (judgment in Case 247/81 Commission v Germany [1984] ECR 1111, paragraph 4) is to place obstacles in the way of imports. And if it is true that the larger takes in the smaller, it must a fortiori be concluded that requiring a seller from another Member State to "go through" a local seller is to be regarded as a barrier to imports - whether the local trader is an associate of his or a perfect stranger is of scant importance. In any event, compliance with that requirement would involve additional costs.

Since the legislation at issue applies without distinction, the question must be asked whether the barrier to imports apparent in the French Law is necessary to satisfy mandatory requirements, in particular consumer protection and the fairness of commercial transactions. Needless to say, British Motors Wright and the other traders who brought the proceedings, who are the respondents before the Cour de Cassation, advocate an answer in the affirmative, relying in particular on authoritative opinions to the effect that sales by auction favour speculation, mislead buyers who have no time to reflect, enable a trader on the verge of bankruptcy to undermine his creditors' security and even facilitate the disposal of stolen goods.

In general, I do not go along with those who believe that consumers have no discernment. Moreover, common experience shows that sales by auction are normally surrounded by adequate safeguards: for example, appropriate advance notice is given of the items offered for sale, of the preview days when the goods can be seen and examined, of the identity of the seller and of the auctioneers, and of the terms of payment. In short, an aficionado who wishes to attend an auction sale of prestige cars - so long as he is not someone whose agreement to buy has been obtained by the seller by surprise and deception - has an opportunity in all cases to reflect and to verify the quality of the product and the "propriety" of its origins, as well as the reliability and commercial standing of the seller; furthermore, the Commission states that a buyer in France, as in other countries, has the guarantee that the auctioneer is entered on a professional register, which is subject to control by the competent administrative authority.

In that connection, I would point out that a Law which imposed on a seller a series of safeguards of the kind just described would certainly be capable of satisfying the requirements of consumer protection and fairness of commercial transactions, with less restrictive effects on the movement of goods than the Law with which we are concerned here.

In short, I take the view that the condition imposed by the 1841 Law on the sale by auction of second-hand goods constitutes a barrier to imports which is prohibited by Article 30 of the Treaty.

Similar conclusions apply to the question concerning Article 36 of the Treaty, in relation to the issue of public policy. Bearing in mind that it is a provision which must be interpreted strictly, the documents in this case do not appear to me to disclose any serious reason to conclude that the condition laid down by the French Law of 1841 is necessary to prevent trafficking in stolen goods or that there are no more suitable measures that are less restrictive of trade. It will be remembered in that regard that a similar argument was rejected by the Court in Case 154/85 Commission v Italy [1987] ECR 2735 (paragraphs 13 and 14). On that occasion the Italian Government attempted - albeit timorously - to present the administrative obstacles placed in the way of the registration of vehicles from another Member State as a means, justified under Article 36, of preventing trafficking in stolen cars. The Court upheld the Commission' s view that "less restrictive measures, such as, for example, a check of the chassis number, would be sufficient to achieve the desired objective".

In short, I consider that the restrictive condition imposed by the French Law of 1841 cannot reasonably be justified by grounds of public policy within the meaning and for the purposes of Article 36 of the Treaty.

For the foregoing reasons, I therefore suggest that the court reply as follows to the Cour de Cassation:

"(1) Article 59 of the EEC Treaty must be interpreted as not applying to national rules concerning the conditions for auction sales of goods belonging to a trader established in a different Member State.

(2) Article 30 of the EEC Treaty must be interpreted as precluding the application of a national law which makes auction sales of second-hand goods from another Member State conditional upon entry of the undertaking owning the goods to be sold in the Trade Register at the locality where the sale is to take place.

(3) The national measure in question is not justified on grounds of public policy under Article 36 of the Treaty."

(*) Original language: Italian.

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