Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
1 . FREE MOVEMENT OF GOODS - CUSTOMS DUTIES - CHARGES HAVING EQUIVALENT EFFECT - CONCEPT - CHARGES HAVING EQUIVALENT EFFECT AND INTERNAL TAXATION - DISTINCTION
( EEC TREATY , ARTS 9 , 12 , 13 AND 95 )
2 . TAX PROVISIONS - INTERNAL TAXATION - CHARGE BORNE BY IMPORTED PRODUCTS IN THE ABSENCE OF IDENTICAL OR SIMILAR DOMESTIC PRODUCTS - CLASSIFICATION
( EEC TREATY , ART . 95 )
Summary
1 . THE PROHIBITION OF CHARGES HAVING AN EFFECT EQUIVALENT TO CUSTOMS DUTIES COVERS ANY CHARGE EXACTED AT THE TIME OF OR ON ACCOUNT OF IMPORTATION WHICH , BEING BORNE SPECIFICALLY BY AN IMPORTED PRODUCT TO THE EXCLUSION OF THE SIMILAR DOMESTIC PRODUCT , HAS THE RESULT OF ALTERING THE COST PRICE OF THE IMPORTED PRODUCT THEREBY PRODUCING THE SAME RESTRICTIVE EFFECT ON THE FREE MOVEMENT OF GOODS AS A CUSTOMS DUTY . THE ESSENTIAL FEATURE OF A CHARGE HAVING AN EFFECT EQUIVALENT TO A CUSTOMS DUTY WHICH DISTINGUISHES IT FROM AN INTERNAL TAX THEREFORE RESIDES IN THE FACT THAT THE FORMER IS BORNE SOLELY BY AN IMPORTED PRODUCT AS SUCH WHILST THE LATTER IS BORNE BOTH BY IMPORTED AND DOMESTIC PRODUCTS .
2 . A CHARGE WHICH IS BORNE BY A PRODUCT IMPORTED FROM ANOTHER MEMBER STATE , WHEN THERE IS NO IDENTICAL OR SIMILAR DOMESTIC PRODUCT , DOES NOT CONSTITUTE A CHARGE HAVING EQUIVALENT EFFECT BUT INTERNAL TAXATION WITHIN THE MEAING OF ARTICLE 95 OF THE TREATY IF IT RELATES TO A GENERAL SYSTEM OF INTERNAL DUES APPLIED SYSTEMATICALLY TO CATEGORIES OF PRODUCTS IN ACCORDANCE WITH OBJECTIVE CRITERIA IRRESPECTIVE OF THE ORIGIN OF THE PRODUCTS .
Parties
IN CASE 90/79
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY MANFRED BESCHEL , A MEMBER OF THE LEGAL DEPARTMENT OF THE COMMISSION , ACTING AS AGENT , ASSISTED BY ROBERT COLLIN , ADVOCATE AT THE COUR DE PARIS , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF MARIO CERVINO , JEAN MONNET BUILDING , KIRCHBERG ,
APPLICANT ,
V
FRENCH REPUBLIC , IN THE PERSON OF THE MINISTER FOR FOREIGN AFFAIRS , REPRESENTED BY NOEL MUSEUX , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE FRENCH EMBASSY , 2 RUE BERTHOLET ,
DEFENDANT ,
Subject of the case
APPLICATION FOR A DECLARATION THAT THE FRENCH REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLES 12 UND 113 OF THE EEC TREATY AND UNDER THE COMMON CUSTOMS TARIFF AS LAID DOWN BY REGULATION NO 950/68 OF THE COUNCIL OF 28 JUNE 1968 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 275 ) AND BY THE REGULATIONS MAKING SUBSEQUENT AMENDMENTS THERETO ,
Grounds
1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 5 JUNE 1979 THE COMMISSION OF THE EUROPEAN COMMUNITIES BROUGHT AN ACTION BEFORE THE COURT UNDER ARTICLE 169 OF THE EEC TREATY FOR A DECLARATION THAT BY CHARGING LEVIES ON THE IMPORTATION OF REPROGRAPHIC EQUIPMENT , THE FRENCH REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLES 12 AND 113 OF THE TREATY AND UNDER THE PROVISIONS OF REGULATION NO 950/68 OF THE COUNCIL OF 28 JUNE 1968 ON THE COMMON CUSTOMS TARIFF ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 275 ) AS SUBSEQUENTLY AMENDED AND IN FORCE ON THE DATE OF THE REASONED OPINION SENT TO THE FRENCH REPUBLIC .
2 ARTICLE 22 OF THE FRENCH FINANCE LAW FOR 1976 , NO 75-1278 OF 30 DECEMBER 1975 ( JOURNAL OFFICIEL DE LA REPUBLIQUE FRANCAISE OF 31 DECEMBER 1975 , P . 13564 ), INTRODUCED A TAX CALLED A LEVY ON THE USE OF REPROGRAPHY WHICH IS CHARGED AT THE RATE OF 3% ON SALES AND APPROPRIATIONS FOR THEIR OWN USE , OTHERWISE THAN FOR EXPORT , OF REPROGRAPHIC MACHINES BY UNDERTAKINGS WHICH HAVE MANUFACTURED THEM OR HAVE HAD THEM MANUFACTURED IN FRANCE AND ON IMPORTS OF SUCH MACHINES . A DECREE OF 12 JULY 1976 ( JOURNAL OFFICIEL DE LA REPUBLIQUE FRANCAISE OF 17 JULY 1976 , P . 4279 ) LISTED THE TYPES OF MACHINES SUBJECT TO THE LEVY . THE LIST INCLUDES CERTAIN OFFSET PRINTING MACHINES , HECTOGRAPHS AND STENCIL DUPLICATING MACHINES , SPECIAL PHOTOGRAPHIC EQUIPMENT FOR THE COPYING OF DOCUMENTS , MICROFICHE SCANNERS LINKED TO COPYING EQUIPMENT , OPTICAL PHOTOCOPYING EQUIPMENT , THERMO-COPYING EQUIPMENT AND CERTAIN CONTACT-PHOTOCOPYING EQUIPMENT .
3 ARTICLE 22 OF LAW NO 75-1278 FURTHER PROVIDES FOR THE INTRODUCTION OF A LEVY ON THE PUBLICATION OF BOOKS WHICH IS CHARGED AT THE RATE OF 0.20% AND IS PAYABLE BY PUBLISHERS ON THEIR SALES , OTHER THAN EXPORT SALES , OF ANY KIND OF WORKS PUBLISHED BY THEM .
4 UNDER THE SAME PROVISION THE SUMS RAISED BY BOTH THOSE LEVIES ARE ALLOCATED ENTIRELY TO THE CENTRE NATIONAL DES LETTRES AND REMITTED TO A SPECIAL ACCOUNT CALLED THE ' ' FONDS NATIONAL DU LIVRE ' ' ( NATIONAL BOOK FUND ). THOSE LEVIES ARE ADDED TO THE OTHER RESOURCES OF THE FUND - PARTICULARLY SUBSIDIES - WHICH ARE AVAILABLE TO THE CENTRE NATIONAL DES LETTRES WHICH USES THEM AMONGST OTHER THINGS TO SUBSIDIZE THE PUBLICATION OF QUALITY WORKS AND THE PURCHASE OF BOTH FRENCH AND FOREIGN BOOKS BY LIBRARIES AND THE TRANSLATION OF FOREIGN WORKS INTO FRENCH . FINALLY , IT IS APPARENT FROM PARAGRAPH II OF ARTICLE 22 OF THE SAID LAW THAT THOSE LEVIES ARE ASSESSED , PAID AND COLLECTED IN THE SAME MANNER AS VALUE-ADDED TAX .
5 IT IS NOT DISPUTED THAT THE WIDESPREAD USE OF REPROGRAPHY FOR THE REPRODUCTION OF PRINTED WORKS RESULTS IN THE LOSS NOT ONLY BY AUTHORS BUT ALSO BY PUBLISHERS OF THE MONETARY GAIN WHICH NATIONAL COPYRIGHT LAWS GUARANTEE THEM . AS IT STATED IN ITS COMMUNICATION TO THE COUNCIL OF 22 NOVEMBER 1977 CONCERNING COMMUNITY ACTION IN THE CULTURAL SECTOR ( BULLETIN OF THE EUROPEAN COMMUNITIES , SUPPLEMENT 6/77 , P . 13 ), THE COMMISSION BELIEVES THAT ' ' A SUM OUGHT TO BE INCLUDED IN THE SELLING PRICE OF EQUIPMENT ( PHOTOCOPIERS , TAPE-RECORDERS , VIDEO-RECORDERS ) AND THE MATERIAL THEY USE . . . TO GUARANTEE THE REMUNERATION WHICH AUTHORS , PUBLISHERS AND PERFORMERS ARE ENTITLED TO EXPECT . . . ' ' .
6 IT IS ALSO NOT DISPUTED THAT THE LEVIES IN ISSUE DO NOT CONFER ANY DIRECT AND INDIVIDUAL BENEFIT ON THE AUTHORS AND PUBLISHERS WHOSE WORKS ARE REPRODUCED IN THIS WAY . THE FRENCH GOVERNMENT MAINTAINS HOWEVER THAT THE ALLOCATION OF THE SUMS RAISED BY THOSE LEVIES TO PURPOSES SUCH AS THE DISSEMINATION OF BOOKS , WHICH IS PROMOTED BY THE CENTRE NATIONAL DES LETTRES , AMOUNTS TO A KIND OF COLLECTIVE COMPENSATION WHICH HELPS TO MAKE GOOD , IF ONLY TO A PARTIAL EXTENT , THE LOSS OF EARNINGS SUFFERED BY AUTHORS AND PUBLISHERS OWING TO THE INCREASINGLY FREQUENT USE OF REPROGRAPHY .
7 THE COMMISSION CAME TO THE CONCLUSION THAT FRENCH PRODUCTION OF REPROGRAPHIC EQUIPMENT , TAKEN AS A WHOLE , WAS EXTREMELY SMALL COMPARED TO ALL IMPORTS OF SUCH EQUIPMENT AND IT CONCLUDED FROM THAT FACT THAT THE LEVY IN ISSUE WAS BORNE IN PRACTICE BY IMPORTED PRODUCTS ALONE AND THAT IT ACCORDINGLY CONTRAVENED ARTICLE 12 OF THE TREATY , SO FAR AS IT APPLIES TO EQUIPMENT FROM OTHER MEMBER STATES , AND ARTICLE 113 OF THE TREATY AND THE PROVISIONS OF THE COMMON CUSTOMS TARIFF SO FAR AS IT APPLIES TO EQUIPMENT ORIGINATING IN NON-MEMBER COUNTRIES .
8 THE GOVERNMENT OF THE FRENCH REPUBLIC SUBMITS ON THE CONTRARY THAT THE LEVY IN ISSUE DOES NOT CONSTITUTE A CHARGE HAVING AN EFFECT EQUIVALENT TO A CUSTOMS DUTY REFERRED TO IN ARTICLES 9 , 12 AND 13 BUT IS AN INTERNAL TAX AS REFERRED TO IN ARTICLE 95 OF THE TREATY AND THAT IT SATISFIES THE REQUIREMENTS OF THE LAST-MENTIONED PROVISION REGARDING THE PROHIBITION OF DISCRIMINATION AGAINST PRODUCTS IMPORTED FROM OTHER MEMBER STATES .
9 INVESTIGATIONS UNDERTAKEN JOINTLY BY THE PARTIES AT THE REQUEST OF THE COURT AND ON THE RESULTS OF WHICH BOTH PARTIES ARE AGREED SHOW THAT DOMESTIC PRODUCTION OF ALL THE DIFFERENT KINDS OF REPROGRAPHIC MACHINE IS ONLY A SMALL PERCENTAGE , AMOUNTING IN VALUE TO ABOUT 1% IN 1977 , 1978 AND 1979 , OF THE VALUE OF THE TOTAL NUMBER OF PRODUCTS , BOTH DOMESTIC AND IMPORTED , PUT ON TO THE FRENCH MARKET .
10 AS REGARDS THE FACTS WHICH FORM THE BASIS FOR THE COMMISSION ' S CASE , IT SHOULD BE OBSERVED THAT THE PERCENTAGE MENTIONED ABOVE RELATES TO THE ENTIRE FRENCH PRODUCTION OF REPROGRAPHIC MACHINES . THE DECREE OF 12 JULY 1976 HOWEVER LISTS EIGHT DIFFERENT KINDS OF MACHINES SO THAT , THE PARTIES NOT HAVING BEEN ABLE TO PROVIDE ACCURATE DETAILS ON THIS POINT , IT IS NOT INCONCEIVABLE THAT THE PERCENTAGE IN QUESTION MIGHT BE HIGHER IN THE CASE OF CERTAIN CATEGORIES OF MACHINES .
11 THE FACT THAT FRENCH PRODUCTION IS EXTREMELY LIMITED COMPARED TO IMPORTS , WHICH ACTUALLY APPEARS TO BE THE CASE EVEN IF THE RESERVATION EXPRESSED ABOVE IS TAKEN INTO ACCOUNT , DOES NOT BY ITSELF JUSTIFY THE CONCLUSIONS WHICH THE COMMISSION DRAWS FROM IT REGARDING A FAILURE BY THE FRENCH REPUBLIC TO FULFIL ITS OBLIGATIONS .
12 WELL-ESTABLISHED CASE-LAW OF THE COURT IS TO THE EFFECT THAT THE PROHIBITION LAID DOWN BY ARTICLES 9 , 12 AND 13 OF THE TREATY IN REGARD TO CHARGES HAVING EQUIVALENT EFFECT COVERS ANY CHARGE EXACTED AT THE TIME OF OR ON ACCOUNT OF IMPORTATION WHICH , BEING BORNE SPECIFICALLY BY AN IMPORTED PRODUCT TO THE EXCLUSION OF THE SIMILAR DOMESTIC PRODUCT , HAS THE RESULT OF ALTERING THE COST PRICE OF THE IMPORTED PRODUCT THEREBY PRODUCING THE SAME RESTRICTIVE EFFECT ON THE FREE MOVEMENT OF GOODS AS A CUSTOMS DUTY .
13 THE ESSENTIAL FEATURE OF A CHARGE HAVING AN EFFECT EQUIVALENT TO A CUSTOMS DUTY WHICH DISTINGUISHES IT FROM AN INTERNAL TAX THEREFORE RESIDES IN THE FACT THAT THE FORMER IS BORNE SOLELY BY AN IMPORTED PRODUCT AS SUCH WHILST THE LATTER IS BORNE BOTH BY IMPORTED AND DOMESTIC PRODUCTS .
14 THE COURT HAS HOWEVER RECOGNIZED THAT EVEN A CHARGE WHICH IS BORNE BY A PRODUCT IMPORTED FROM ANOTHER MEMBER STATE , WHEN THERE IS NO IDENTICAL OR SIMILAR DOMESTIC PRODUCT , DOES NOT CONSTITUTE A CHARGE HAVING EQUIVALENT EFFECT BUT INTERNAL TAXATION WITHIN THE MEANING OF ARTICLE 95 OF THE TREATY IF IT RELATES TO A GENERAL SYSTEM OF INTERNAL DUES APPLIED SYSTEMATICALLY TO CATEGORIES OF PRODUCTS IN ACCORDANCE WITH OBJECTIVE CRITERIA IRRESPECTIVE OF THE ORIGIN OF THE PRODUCTS .
15 THOSE CONSIDERATIONS DEMONSTRATE THAT EVEN IF IT WERE NECESSARY IN SOME CASES , FOR THE PURPOSE OF CLASSIFYING A CHARGE BORNE BY IMPORTED PRODUCTS , TO EQUATE EXTREMELY LOW DOMESTIC PRODUCTION WITH ITS NON-EXISTENCE , THAT WOULD NOT MEAN THAT THE LEVY IN QUESTION WOULD NECESSARILY HAVE TO BE REGARDED AS A CHARGE HAVING AN EFFECT EQUIVALENT TO A CUSTOMS DUTY . IN PARTICULAR , THAT WILL NOT BE SO IF THE LEVY IS PART OF A GENERAL SYSTEM ON INTERNAL DUES APPLYING SYSTEMATICALLY TO CATEGORIES OF PRODUCTS ACCORDING TO THE CRITERIA INDICATED ABOVE .
16 THE COURT IS OF THE OPINION THAT THE PARTICULAR FEATURES OF THE LEVY IN ISSUE LEAD TO ITS BEING ACCEPTED AS FORMING PART OF SUCH A GENERAL SYSTEM OF INTERNAL DUES . THAT FOLLOWS FIRST FROM ITS INCLUSION IN TAXATION ARRANGEMENTS WHICH HAVE THEIR ORIGIN IN THE BREACH MADE IN LEGAL SYSTEMS FOR THE PROTECTION OF COPYRIGHT BY THE INCREASE IN THE USE OF REPROGRAPHY AND WHICH ARE DESIGNED TO SUBJECT , IF ONLY INDIRECTLY , THE USERS OF THOSE PROCESSES TO A CHARGE WHICH COMPENSATES FOR THAT WHICH THEY WOULD NORMALLY HAVE TO BEAR .
17 THAT CONCLUSION FOLLOWS IN THE SECOND PLACE FROM THE FACT THAT THE LEVY IN ISSUE FORMS A SINGLE ENTITY WITH THE LEVY IMPOSED ON BOOK PUBLISHERS BY THE SAME INTERNAL LEGISLATION AND FROM THE FACT , TOO , THAT IT IS BORNE BY A RANGE OF VERY DIFFERENT MACHINES WHICH ARE MOREOVER CLASSIFIED UNDER VARIOUS CUSTOMS HEADINGS BUT WHICH HAVE IN COMMON THE FACT THAT THEY ARE ALL INTENDED TO BE USED FOR REPROGRAPHIC PURPOSES IN ADDITION TO MORE SPECIFIC USES .
18 IT FOLLOWS FROM THOSE CONSIDERATIONS THAT THE ALLEGED FAILURE TO FULFIL OBLIGATIONS HAS NOT BEEN PROVED AND THAT THE ACTION SHOULD BE DISMISSED .
Decision on costs
19 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY MUST BE ORDERED TO PAY THE COSTS IF THE OTHER PARTY HAS ASKED FOR THEM . SINCE THE APPLICANT HAS FAILED IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS ,
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATION AS UNFOUNDED ;
2.ORDERS THE APPLICANT TO PAY THE COSTS .
Full & Egal Universal Law Academy