JUDGMENT OF 18. 11. 1970 — CASE 8/70 COMMISSION v ITALY
In Case 8/70
THE COURT composed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, Presidents of Chambers, R. Monaco, J. Mertens de Wilmars (Rapporteur), Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts and procedure
1. The Italian Law No 330 of 15 June 1950 Official Journal of the Italian Republic No 137 of 17 June 1950) introduced a duty for administrative services which is imposed on goods imported from abroad at the rate of 0.50 % of their value. For the purposes of applying this duty, the taxable value of the goods is determined according to the rules in force for the application of ad valorem customs duties.
2. The Commission, which considered that this duty was a charge having an effect equivalent to a customs duty on imports, initiated two distinct procedures against the Italian Republic on the basis of Article 169 of the Treaty. The first concerned the charge in question in so far as it was imposed on agricultural products which came within a common organization of markets and the second concerned the same charge in so far as it involved other goods or products imported into Italy from other Member States.
3. As regards products which come within a common organization of agricultural markets and certain goods resulting from the processing of agricultural products, the Commission considers that, in accordance with a provision which is found expressed in similar terms in all the agricultural regulations which it quotes in its conclusions, as soon as a market organization has been set up and without waiting for the transitional period to come to an end, it is absolutely and immediately prohibited, for Member States to impose customs duties or charges having equivalent effect on imports of the products involved because these duties and charges have been replaced by a system of levies. In these circumstances it initiated the procedure laid down in Article 169 against the Italian Republic in a letter of 28 December 1967. After correspondence had been exchanged, during which the Italian Government announced its intention of laying a motion before Parliament as soon as possible for the repeal of the duty in question and after the Commission had urged to no avail that the duty be abolished by 1 July 1968 at the latest, that is, by the end of the transitional period, it delivered a reasoned opinion on 20 January 1969 in which it stated that by imposing the charge in question as regards goods which come within common organizations of markets, the Italian Republic was failing to fulfil its obligations under the Treaty and requested it to comply with that opinion within one month.
4. As regarded products which did not come within a common organization of agricultural markets, the Commission based its action on Article 13 (2) of the Treaty which provides for the abolition during the transitional period of charges having equivalent effect, according to a timetable determined by means of directives. On 28 December 1967 it communicated Directive No 68/31 of 22 December 1968 to the Italian Government which fixed the timetable for the abolition of the duty in question (OJ 1968 L 12, p. 8). According to this directive, the duty was to be abolished by means of successive reductions of the rate applied on 31 December 1957 so that it would be completely abolished by 1 July 1968. The Italian Government did not challenge this directive but took no action to comply with it so that the charge in question continued to be levied. In these circumstances, the Commission initiated the procedure under Article 169 in a letter of 22 January 1969. The Italian Republic informed it once more that a bill to abolish the duty in question had been drafted. As no indication had been given as to the date on which the infringement would be brought to an end, the Commission delivered a second reasoned opinion on 12 June 1969 finding that the Italian Republic had failed to fulfil an obligation under the Treaty and requesting it to comply with this reasoned opinion within one month.
5. The two procedures which had thus been initiated and followed separately according to whether the products in question came within the regulations relating to common organizations of agricultural markets had reached the same stage in June 1969 as regards the course of proceedings laid down in Article 169. The Permanent Representative of Italy repeated in his letter No 3489 of 25 June 1969 the assurance that a bill to abolish the duties in question had been approved by the Council of Ministers of the Italian Republic and had been laid before Parliament. The Commission waited until 7 March 1970 before lodging a single application at the Court of Justice concerning both aspects of the charge in question. The bill to abolish this tax was approved by the Italian Senate on 29 April 1970 but a vote had not yet been taken on it by the Chamber of Deputies.
6. The oral procedure followed the normal course. The Court, after hearing the report of the Judge-Rapporteur and the views of the Advocate-General, decided to open the oral procedure without a preparatory inquiry. The parties presented oral argument at the hearing on 20 October 1970. The Advocate-General delivered his opinion at the hearing on 28 October 1970.
II — Conclusions of the parties
The applicant claims that the Court should :
a) declare that the Italian Republic, by levying under Law No 330 of 15 June 1950 the duty of 0.50 % for administrative services on goods which come within the regulations of the Council on certain common organizations of agricultural markets and on certain goods resulting from the processing of agricultural products imported from other Member States, has failed to fulfil its obligations under the provisions of Article 189 of the EEC Treaty in conjunction with the following articles of the said regulations :
Article 12 (1) of Regulation No 13/64/EEC, replaced by Article 22(1) of Regulation (EEC) No 804/68;
Article 12 (1) of Regulation No 14/64/EEC, replaced by Article 22(1) of Regulation (EEC) No 805/68;
Article 3 (1) of Regulation No 136/66/EEC;
Article 13 (1) of Regulation No 159/66/EEC;
Article 7 (1) of Regulation No 160/66/EEC, replaced by Article 10 (1) of Regulation No 1059/69;
Article 12 of Regulation No 44/67/EEC, replaced by Article 35 (1) of Regulation No 1009/67/EEC;
Article 21 (1) of Regulation No 120/67/EEC;
Article 19 (1) of Regulation No 121/67/EEC;
Article 13 (1) of Regulation No 122/67/EEC;
Article 13 (1) of Regulation No 123/67/EEC;
Article 8 (1) of Regulation No 170/67/EEC;
Article 23 (1) of Regulation No 359/67/EEC;
b) declare that the Italian Republic, by levying the duty of 0.50 % for administrative services laid down by Law No 330 of 15 June 1950 on goods other than those to which the abovementioned regulations apply which were made under Articles 43 and 235 of the EEC Treaty, has failed to fulfil its obligations under the provisions of Article 189 of the Treaty in conjunction with Directive No 68/31/EEC of 22 December 1967;
c) order the Italian Republic to pay the costs. The Italian Republic contends that the Court should:
dismiss the application of the Commission of the European Communities ;
order the Commission to pay the costs.
III — Submissions and arguments of the parties
The applicant states that it has carried out all the formalities which must precede bringing the matter before the Court and observes that the duty for administrative services is imposed on imported goods but not on domestic goods, and that there is no internal taxation to justify the duty's being imposed under Article 95 of the Treaty.
From this it deduces that the duty is a charge having an effect equivalent to a customs duty on imports.
The defendant alleges in its statement of defence that the application no longer reflects the existing legal situation in Italy because in the meantime a bill to abolish the charge in question has been laid before the Senate on 27 June 1969; therefore the situation upon which the application of the Commission is based has been radically altered.
The applicant replies that the infringement continues as long as draft Bill No 745 has not become a law of the Italian Republic and that the introduction of this bill is not enough to entitle the Italian Government to state that the Italian Republic has fulfilled its obligations under Community law, especially since the charge is still being levied.
Failure to fulfil an obligation can be ascribed to a state as such no matter what state agency caused the failure to fulfil the obligation by its action or inaction, even if it is an institution which is constitutionally independent. (Case 77/69 of 5 May 1970, Commission v Belgium, [1970] ECR).
The applicant adds, moreover, that it only lodged a reply in order to enable the defendant to put the situation in order during the course of the proceedings.
The defendant answers that the Government has done all in its power under the constitution of the State to eliminate the discrimination in question: a bill was laid before the Senate which has passed it in the meantime and the bill has been sent on to the Chamber of Deputies.
The reason why the examination of the bill by the Chamber of Deputies has been delayed is that there has been a ministerial crisis and Parliament's work has been suspended during the summer months.
It is therefore an unavoidable case of force majeure connected with the parliamentary constitutional system of the Member State and this means that it cannot be declared that the Member State has infringed the Treaty.
Grounds of judgment
1. By application lodged at the Court Registry on 7 March 1970 the Commission has brought before the Court under Article 169 of the EEC Treaty an action for a declaration that, by levying on imported goods the duty of 0.50 % laid down by Italian Law No 330 of 15 June 1950, for administrative services, the Italian Republic has failed as regards goods which come within certain common organizations of agricultural markets to fulfil its obligations under Article 189 of the Treaty in conjunction with various regulations relating to the common organization of markets and, as regards other goods, has failed to fulfil its obligations under the provisions of Article 189 of the Treaty in conjunction with Directive No 68/31/EEC of 22 December 1967 (OJ L 12 of 16. 1. 1968, p. 8).
2. The charge in question imposes an ad valorem duty of 0.50 % on imported goods only. The Italian Government claimed during the preliminary proceedings that this duty represented conisderation for services rendered by the customs administration and could not be considered as a charge having effect equivalent to a customs duty but following this it announced in a note dated 23 April 1968 its intention of putting before Parliament the necessary legislation for the purpose of abolishing the charge in question. However the taxation in question has continued to be levied.
3. There is no dispute that the charge in question is imposed on imported goods owing to the fact that they cross the frontier. It is not alleged that it is a charge to compensate for internal taxation, nor is it maintained that it is a consideration for services actually rendered. On the contrary, it must be regarded as a charge having an effect equivalent to a customs duty and it therefore comes within the prohibition in Article 9 of the Treaty.
4. Under Article 13 (2) of the Treaty this charge should have been abolished during the transitional period according to the timetable indicated in Directive No 68/31/EEC of 22 December 1967 in so far as it is imposed on products other than those to which the regulations relating to organizations of the agricultural market apply. According to this directive, the charge in question should have been abolished by means of successive reductions so as to have been entirely eliminated by 1 July 1968.
5. The charge in question therefore infringes Article 13 (2) of the Treaty in conjunction with Directive No 68/31/EEC of 22 December 1967 in so far as it is imposed on products other than agricultural products which come within a market organization.
6. The duty in question, in so far as it is imposed on agricultural products which come within regulations relating to a common organization of the market, infringes the provisions of these regulations which prohibit as from the respective dates on which they enter into force the levying on the products to which they apply of any customs duty or charge having an equivalent effect.
7. Under Article 189 of the Treaty, these regulations are binding in their entirety and directly applicable in all Member States. The retention of the taxation in question is incompatible with these regulations.
8. The defendant does not dispute that the contested charge is contrary to the provisions of Community law but relies on the fact that it is willing to adopt the necessary measures to abolish it. To this end the Italian Government introduced a bill which the Senate approved on 29 April 1970 and which is at present before the Chamber of Deputies. According to the defendant the delay in examining this bill is due to force majeure which prevented Parliament from coming to a decision in good time in spite of the efforts made by the Italian Government.
9. The obligations arising from the Treaty devolve upon States as such and the liability of a Member State under Article 169 arises whatever the agency of the State whose action or inaction is the cause of the failure to fulfil its obligations, even in the case of a constitutionally independent institution.
10. In any case a Member State cannot justify itself by relying upon obstacles which not only did not emerge until long after the coming into existence of the obligations which it is alleged to have failed to fulfil, but only did so after the period laid down in the: reasoned opinion had expired.
11. The failure consists essentially in the actual levying of the charge in question.
12. In these circumstances, the Italian Republic, by continuing to levy an 0.50 % duty for administrative services on imported products to which the regulations on the organization of agricultural markets apply after the dates on which those regulations entered into force and on other goods imported from a Member State after1 July 1968, has failed to fulfil an obligation under the Treaty establishing the European Economic Community.
Costs
13. Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. The defendant has failed in its submissions.
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties ; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 9, 13, 43, 169, 171, 189 and 235; Having regard to Regulations Nos 13/64/EEC, 14/64/EEC, 136/66/EEC, 159/66/EEC, 160/66/EEC, 44/67/EEC, 120/67/EEC, 121/67/EEC, 122/67/EEC, 123/67/EEC, 170/67/EEC, 359/67/EEC, 1009/76/EEC, (EEC) 804/68, (EEC) 805/68 and (EEC) 1059/69; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT hereby:
1 Declares that, by levying an 0.50 % charge for administrative services on imports from other Member States of goods which come within regulations of the Council on certain common organizations of the agricultural market and on certain goods resulting from the processing of agricultural products imported from other Member States, the Italian Republic has failed to fulfil its obligations under the provisions of Article 189 of the EEC Treaty in conjunction with the said regulations;
2 Declares that, by imposing an 0.50 % charge for administrative services on goods, other than those to which the abovementioned regulations apply, imported from other Member States, the Italian Republic has failed to fulfil its obligations under the provisions of Article 13 of the EEC Treaty in conjunction with those of Directive No 68/31 EEC of 22 December 1967;
3 Orders the defendant to pay the costs.