Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords

1 . STATE MONOPOLIES OF A COMMERCIAL CHARACTER - PROVISIONS OF THE TREATY - TEMPORAL APPLICATION

( EEC TREATY , ART . 37 )

2 . STATE MONOPOLIES OF A COMMERCIAL CHARACTER - EXERCISE OF EXCLUSIVE RIGHTS - MEASURES LINKED TO THE GRANT OF AN AID - ASSESSMENT IN THE LIGHT OF ARTICLE 37

( EEC TREATY , ART . 37 , 92 AND 93 )

3 . STATE MONOPOLIES OF A COMMERCIAL CHARACTER - MARKETING OF A PRODUCT AT AN ABNORMALLY LOW RESALE PRICE - INCOMPATIBLE WITH ARTICLE 37

( EEC TREATY , ART . 37 )

4 . STATE MONOPOLIES OF A COMMERCIAL CHARACTER - DISCRIMINATION - PROHIBITION - DIRECT EFFECT

( EEC TREATY , ART . 37 )

5 . STATE MONOPOLIES OF A COMMERCIAL CHARACTER - PROVISIONS OF THE TREATY - PRODUCTS IMPORTED FROM THIRD COUNTRIES - NOT APPLICABLE

( EEC TREATY , ART . 37 )

6 . ASSOCIATION OF THE OVERSEAS COUNTRIES AND TERRITORIES - COUNCIL DECISION NO 70/549/EEC - EFFECTS - GOODS COMING FROM THE COUNTRIES AND TERRITORIES CONCERNED - COMMUNITY PRODUCTS SUBJECT TO A MONOPOLY OF A COMMERCIAL CHARACTER - EQUALITY OF TREATMENT

( EEC TREATY , ART . 37 ; COUNCIL DECISION NO 70/549 , ART . 2 ( 1 ) AND ART . 5 ( 1 ))

Summary

1 . ARTICLE 37 OF THE EEC TREATY REMAINS APPLICABLE , FOLLOWING THE EXPIRY OF THE TRANSITIONAL PERIOD , WHEREVER , EVEN AFTER THE ADJUSTMENT PRESCRIBED IN THE TREATY , THE EXERCISE BY A STATE MONOPOLY OF ITS EXCLUSIVE RIGHTS ENTAILS AN INSTANCE OF DISCRIMINATION OR RESTRICTION PROHIBITED BY THAT ARTICLE . IN PARTICULAR , IN THE CASE OF AN ACTIVITY SPECIFICALLY CONNECTED WITH THE EXERCISE BY A STATE MONOPOLY OF ITS EXCLUSIVE RIGHT TO PURCHASE , PROCESS AND SELL , THE APPLICATION OF ARTICLE 37 CANNOT BE EXCLUDED .

2 . ARTICLE 37 OF THE EEC TREATY CONSTITUTES IN RELATION TO ARTICLES 92 AND 93 OF THAT TREATY A LEX SPECIALIS IN THE SENSE THAT STATE MEASURES , INHERENT IN THE EXERCISE BY A STATE MONOPOLY OF A COMMERCIAL CHARACTER OF ITS EXCLUSIVE RIGHT MUST , EVEN WHERE THEY ARE LINKED TO THE GRANT OF AN AID TO PRODUCERS SUBJECT TO THE MONOPOLY , BE CONSIDERED IN THE LIGHT OF THE REQUIREMENTS OF ARTICLE 37 .

3 . ANY PRACTICE BY A STATE MONOPOLY WHICH CONSISTS IN MARKETING A PRODUCT WITH THE AID OF PUBLIC FUNDS AT AN ABNORMALLY LOW RESALE PRICE COMPARED TO THE PRICE , BEFORE TAX , OF A PRODUCT OF COMPARABLE QUANTITY IMPORTED FROM ANOTHER MEMBER STATE IS INCOMPATIBLE WITH ARTICLE 37 ( 1 ) OF THE TREATY .

4 . ARTICLE 37 OF THE TREATY CONFERS RIGHTS , WHICH THE NATIONAL COURTS MUST PROTECT , ON TRADERS WHO SUFFER THE FINANCIAL CONSEQUENCES OF DISCRIMINATION RESULTING FROM AN ABNORMAL REDUCTION OF THE RESALE PRICE CHARGED BY A PUBLIC MONOPOLY THROUGH THE USE OF STATE FUNDS .

5 . THE SPHERE OF APPLICATION OF ARTICLE 37 OF THE TREATY DOES NOT EXTEND TO STATE MEASURES WHICH AFFECT THE IMPORTATION OF GOODS FROM THIRD COUNTRIES , SINCE THE ARRANGEMENTS FOR THE IMPORTATION OF SUCH PRODUCTS ARE SUBJECT NOT TO THE PROVISIONS GOVERNING THE INTERNAL MARKET BUT TO THOSE RELATING TO COMMERCIAL POLICY .

6 . COUNCIL DECISION NO 70/549 OF 29 SEPTEMBER 1970 ON THE ASSOCIATION OF THE OVERSEAS COUNTRIES AND TERRITORIES WITH THE EUROPEAN ECONOMIC COMMUNITY IS INTENDED TO PLACE GOODS ORIGINATING IN THE COUNTRIES AND TERRITORIES CONCERNED ON AN EQUAL FOOTING WITH COMMUNITY PRODUCTS SO FAR AS CONCERNS ANY DISCRIMINATORY PRACTICES ON THE PART OF A STATE MONOPOLY OF A COMMERCIAL CHARACTER .

Parties

IN CASE 91/78

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT ( FINANCE COURT ) HAMBURG FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

HANSEN GMBH & CO ., HAVING ITS REGISTERED OFFICE IN FLENSBURG ,

AND

HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) FLENSBURG ,

Subject of the case

ON THE INTERPRETATION OF ARTICLES 37 , 92 AND 93 OF THE EEC TREATY AND OF ARTICLE 2 ( 1 ) OF COUNCIL DECISION NO 70/549/EEC OF 29 SEPTEMBER 1970 ON THE ASSOCIATION OF THE OVERSEAS COUNTRIES AND TERRITORIES WITH THE EUROPEAN ECONOMIC COMMUNITY IN RELATION TO THE APPLICATION OF THE GERMAN GESETZ UBER DAS BRANNTWEINMONOPOL ( LAW ON THE MONOPOLY IN SPIRITS ) OF 8 APRIL 1922 AS AMENDED BY THE LAWS OF 2 MAY AND OF 5 JULY 1976 .

Grounds

1BY AN ORDER OF 22 MARCH 1978 WHICH WAS RECEIVED AT THE COURT ON 12 APRIL 1978 THE FINANZGERICHT HAMBURG REFERRED , PURSUANT TO ARTICLE 177 OF THE EEC TREATY , A NUMBER OF QUESTIONS ON THE INTERPRETATION OF ARTICLE 37 OF THE TREATY CONCERNING STATE MONOPOLIES OF A COMMERCIAL CHARACTER IN RELATION TO ARTICLES 92 AND 93 CONCERNING THE SYSTEM OF AIDS AND OF ARTICLE 2 ( 1 ) OF COUNCIL DECISION NO 70/549/EEC OF 29 SEPTEMBER 1970 ON THE ASSOCIATION OF THE OVERSEAS COUNTRIES AND TERRITORIES WITH THE EUROPEAN ECONOMIC COMMUNITY ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION , SECOND SERIES I , EXTERNAL RELATIONS ( 2 ), P . 164 ) IN ORDER TO ESTABLISH WHETHER THE TREATMENT IN MATTERS OF TAXATION ACCORDED BY THE FEDERAL REPUBLIC OF GERMANY TO IMPORTED SPIRITS FOLLOWING THE ENTRY INTO FORCE OF THE GESETZ ZUR ANDERUNG DES GESETZES UBER DAS BRANNTWEINMONOPOL ( LAW FOR THE AMENDMENT OF THE LAW ON THE MONOPOLY IN SPIRITS ) OF 2 MAY 1976 ( BUNDESGESETZBLATT I NO 50 OF 7 MAY 1976 , P . 1145 ) IS COMPATIBLE WITH COMMUNITY LAW .

2THE PLAINTIFF IN THE MAIN ACTION IS AN UNDERTAKING WHICH MANUFACTURES AND DISTRIBUTES SPIRITS AND WHICH MARKETED IN THE FEDERAL REPUBLIC OF GERMANY AT THE TIME IN QUESTION IMPORTED SPIRITS COMING FROM VARIOUS SOURCES , OF BOTH COMMUNITY AND NON-COMMUNITY ORIGIN , EITHER UNPROCESSED OR IN THE FORM OF COUPAGES .

AFTER THE ENTRY INTO FORCE OF THE LAW OF 2 MAY 1976 SUCH SPIRITS BECAME LIABLE TO THE TAX ON SPIRITS OF DM 1 650 PER HECTOLITRE OF WINE-SPIRIT WHICH IS APPLICABLE UNIFORMLY , ALBEIT UNDER VARIOUS DESIGNATIONS , BOTH TO DOMESTIC SPIRITS AND TO IMPORTED SPIRITS .

3THE PLAINTIFF , HOWEVER , MAINTAINS THAT THAT EQUALITY OF TREATMENT IS MERELY APPARENT , SINCE IT IS CLEAR FROM THE PREPARATORY STAGES OF THE LAW OF 2 MAY 1976 THAT THE INCREASE IN THE RATE OF TAXATION FROM DM 1 500 TO DM 1 650 PER HECTOLITRE HAD THE SOLE OBJECTIVE OF ENABLING THE MONOPOLY ADMINISTRATION TO MAKE GOOD ITS LOSSES STEMMING FROM THE MARKED DIFFERENCE WHICH HAD ARISEN BETWEEN , ON THE ONE HAND , THE PURCHASE PRICE WHICH IT IS BOUND BY LAW TO PAY TO PRODUCERS OF SPIRITS TO WHICH THE MONOPOLY APPLIES AND , ON THE OTHER , THE SELLING PRICE OF SUCH SPIRITS TO CONSUMERS , AS DETERMINED BY MARKET FORCES FOLLOWING THE JUDGMENTS OF THE COURT OF 17 FEBRUARY 1976 IN CASES 45/75 REWE (( 1976 ) 1 ECR 181 ) AND 91/75 MIRITZ (( 1976 ) 1 ECR 217 ).

DESPITE THE UNIFORM INCREASE IN THE RATE OF TAXATION BROUGHT ABOUT BY THE LAW OF 2 MAY 1976 THE PRACTICAL RESULT OF THE SYSTEM IS THEREFORE SAID TO BE THAT THE BURDEN OF MASSIVE SUBSIDIES GRANTED IN FAVOUR OF DOMESTICALLY-PRODUCED SPIRITS IS BORNE BY IMPORTED SPIRITS AND THAT THERE EXIST THE CONDITIONS UNDER WHICH THE COURT HAS HELD THAT AN INTERNAL TAX , EVEN IF IN APPEARANCE IT IS NOT DISCRIMINATORY , MAY BE CLASSIFIED AS A CHARGE HAVING AN EFFECT EQUIVALENT TO A CUSTOMS DUTY PROHIBITED BY THE TREATY , AS IS MADE CLEAR BY THE JUDGMENTS OF THE COURT OF 25 MAY 1977 IN CASES 77/76 CUCCHI (( 1977 ) 1 ECR 987 ) AND 105/76 INTERZUCCHERI (( 1977 ) 1 ECR 1029 .

ACCORDING TO THE PLAINTIFF THAT PRACTICE IS SIMPLY THE CONTINUATION OF THE MONOPOLY IN SPIRITS BY OTHER MEANS AND ACCORDINGLY IT IS APPROPRIATE TO APPLY ARTICLE 37 OF THE TREATY , IN PARTICULAR PARAGRAPH ( 2 ), WHEREBY THE MEMBER STATES ARE REQUIRED TO REFRAIN FROM INTRODUCING ANY NEW MEASURE WHICH IS CONTRARY TO THE PRINCIPLES LAID DOWN IN PARAGRAPH ( 1 ) OR WHICH RESTRICTS THE SCOPE OF THE ARTICLES DEALING WITH THE ABOLITION OF CUSTOMS DUTIES AND QUANTITATIVE RESTRICTIONS BETWEEN MEMBER STATES .

4THE GERMAN TAX ADMINISTRATION , THE DEFENDANT IN THE MAIN ACTION , CLAIMS FOR ITS PART THAT THE MONOPOLY IN SPIRITS WAS ADJUSTED IN SUCH A WAY THAT ITS ONLY FUNCTION AT PRESENT IS THAT OF A NATIONAL ORGANIZATION OF THE MARKET AND THAT IT NO LONGER SUPERVISES OR DIRECTS THE IMPORTATION OF SPIRITS .

IT CONTENDS THAT THE INDIRECT CONNEXION EXISTING BETWEEN THE LEVYING OF THE CHARGE ON IMPORTATION AND THE FINANCING OF A NATIONAL ECONOMIC ACTIVITY DOES NOT SUFFICE TO GIVE THAT CHARGE THE CHARACTER OF AN UNLAWFUL TAX OR AID .

5IN ORDER TO SETTLE THE POINTS AT ISSUE THE FINANZGERICHT SUBMITTED THE FOLLOWING QUESTIONS :

' ' 1 . IS ARTICLE 37 OF THE EEC TREATY A LEX SPECIALIS IN RELATION TO ARTICLES 92 AND 93 OF THE EEC TREATY IN THE SENSE THAT STATE MEASURES WHICH AFFECT THE MOVEMENT OF GOODS BETWEEN MEMBER STATES AND , WHERE APPLICABLE , BETWEEN MEMBER STATES AND THIRD COUNTRIES MUST BE JUDGED IN THE LIGHT OF ARTICLE 37 OF THE EEC TREATY EVEN IF THE STATE MEASURES CONTAIN INTER ALIA AN AID?

2.IF QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE :

( A ) IS ARTICLE 37 ( 2 ) IN CONJUNCTION WITH THE FIRST SUBPARAGRAPH OF ARTICLE 37 ( 1 ) OF THE EEC TREATY ON THE PROHIBITION OF DISCRIMINATION BETWEEN NATIONALS OF MEMBER STATES REGARDING THE CONDITIONS UNDER WHICH GOODS ARE PROCURED AND MARKETED TO BE INTERPRETED AS ALSO COVERING STATE MEASURES WHICH ENTAIL AN IDENTICAL INCREASE IN THE TAX ON CONSUMPTION ON IMPORTED AND DOMESTIC GOODS , THE INCOME FROM WHICH IS CREDITED TO THE GENERAL BUDGET AND IS INDIRECTLY INTENDED TO COMPENSATE FOR THE LOSSES OF A STATE MONOPOLY OF A COMMERCIAL CHARACTER WHICH ARE INCURRED BECAUSE CERTAIN PRODUCERS ARE PAID AN EXCESSIVE PRICE WHICH DOES NOT ACCORD WITH MARKET CONDITIONS WITHIN THE COMMUNITY AND BECAUSE AT THE SAME TIME THE SELLING PRICES FOR THE PRODUCTS PURCHASED AT THE EXCESSIVE PRICES HAVE BEEN REDUCED?

( B)IS ARTICLE 37 ( 2 ) OF THE EEC TREATY PROHIBITING THE INTRODUCTION OF MEASURES WHICH RESTRICT THE SCOPE OF THE ARTICLES DEALING WITH THE ABOLITION OF CUSTOMS DUTIES TO BE INTERPRETED AS ALSO INCLUDING MEASURES OF THE KIND REFERRED TO IN QUESTION 2 ( A)?

( C)DOES ARTICLE 37 OF THE EEC TREATY ALSO CONFER DIRECT RIGHTS WHICH MUST BE PROTECTED BY THE NATIONAL COURTS UPON THOSE WHO ARE SUBJECT TO AN INCREASE IN THE TAX ON CONSUMPTION WHICH AFFECTS IMPORTED AND DOMESTIC GOODS EQUALLY IF , ALTHOUGH VIEWED IN ISOLATION THE INCREASE IN THE TAX IS COMPATIBLE WITH THE EEC TREATY , IN CONJUNCTION WITH OTHER MEASURES IT IS INCOMPATIBLE WITH THE TREATY?

( D)DOES THE SPHERE OF APPLICATION OF ARTICLE 37 OF THE EEC TREATY EXTEND TO MEASURES WHICH AFFECT THE IMPORTATION OF GOODS FROM THIRD COUNTRIES , AND IF SO , SUBJECT TO WHAT CONDITIONS?

3.IF