C-32/82

JUDGMENT OF 30. 11. 1982 — CASE 32/82 SUYS

CELEX: 61982CJ0032
Datum: 1982-11-30
Källa: eur-lex.europa.eu

In Case 32/82 REFERENCE to the Court under Article 177 of the EEC Treaty by the Rechtbank van Eerste Aanleg [Court of First Instance], Ghent, for a preliminary ruling in the criminal proceedings pending before that court against

THE COURT composed of: J. Mertens de Wilmars, President, P. Pescatore, A. O'Keeffe and U. Everling (Presidents of Chambers), Lord Mackenzie Stuart, G. Bosco and O. Due, Judges, Advocate General: S. Rozes Registrar: J. A. Pompe, Deputy Registrar

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I — Facts and written procedure

Regulation No 1174/68 of the Council of 30 July 1968 on the introduction of a system of bracket tariffs for the carriage of goods by road between Member States (Official Journal, English Special Edition 1968 (II) p. 411), as amended by Regulation No 293/70 of the Council of 16 February 1970 (Official Journal 1970 (I), p. 90), introduced a system of compulsory bracket tariffs, for the carriage of goods by road between Member States of the Community, in the form of uriffs prescribed and published by the competent authorities and governing, subject to ceruin exceptions and derogations, the fixing of transport rates and conditions (Article 1 (1), (2) and (3)).

Bracket uriffs are uriffs laying down maximum and minimum rates. The difference between the two rates constitutes the bracket spread (Article 2 (1)).

The bracket spread was fixed by the regulation at 23% of the maximum rate (Article 2 (2)).

Rates for any given transpon operation may be freely determined within the upper and lower limits of the relevant bracket uriff (first subparagraph of Article 2 (3)).

The conclusion of contracts at transport rates falling outside the upper or lower limits of the brackets is, as a rule, prohibited (second subparagraph of Article 2 (3)). However, special contracts may be concluded in writing between a carrier and another party at transport rates outside the upper or lower limits of the brackets in the circumsunces and subject to the special conditions set forth in the second subparagraph (as amended) of Article 5 (1) of the regulation.

According to the fifth recital in the preamble to Regulation No 1174/68, the tariffs must be drawn up in such a way as to avoid both abuse of dominant positions and damaging competition.

In fact, each tariff is to be drawn up by reference to a base-rate which is the middle point of the bracket (first subparagraph of Article 3 (1)). The base-rate itself is to be fixed having regard to the average cost of the transport operation, including the general expenses of the business, for a properly managed undertaking enjoying normal conditions of use of its carrying capacity, and to market conditions and is to be such as to provide a fair return for carriers (second subparagraph of Article 3 (1)).

Tariffs may vary according to the circumstances of the service provided, in particular according to the technical and economic characteristics of the operation in question, the route concerned, the length of the transit period, the tonnage conditions and the type of goods carried (Article 3 (2)).

The tariffs are to be fixed or amended by agreement between the Member States directly concerned, that is the States on whose territory the goods are to be loaded or unloaded (first subparagraph of Article 4 (1)). The Commission may participate in an advisory capacity in the negotiations; it may submit to the Member States directly concerned proposals designed to produce agreement (first subparagraph of Article 4 (2)).

If an agreement is reached between the Member States directly concerned, it is to be notified forthwith to the Commission and to the other Member States (indent (a) of the third subparagraph of Article 4 (2)).

If no agreement is reached, the dispute may be referred to the Commission at the request of any of the Member States concerned. After consulting a Committee of Experts, composed of government experts and having a represenutive of the Commission as Chairman (Article 11), the Commission, acting as soon as possible is to adopt a decision which is to be notified to the Member States concerned and at the same time communicated to the other Member States. That decision is to uke effect after a period of twenty days, unless before the expiry of that period the matter is referred to the Council by a Member State. In such cases, the Council is to give its decision by a qualified majority within twenty days. The decisions so adopted by the Council or Commission are to remain in force until such time as an agreement is concluded between the Member States concerned or until any further decision by the Council or the Commission in accordance with the same procedure (indent (b) of the third subparagraph of Article 4 (2)).

Each Member State is to bring the uriffs into force within two months following conclusion of negotiations for the fixing or amendment of uriffs or, as the case may be, following completion of the procedure leading to a decision by the Commission or Council (second subparagraph of Article 4(1)). The tariffs are to be communicated by Member States to the Commission (Article 4 (3)).

Bracket tariffs are to be officially published in the Member States concerned. The particulars published are to include the dates of their entry into force; only the maximum rate for each bracket need be published (Article 6).

It is incumbent upon Member States, after consulting the Commission, to adopt such laws, regulations or administrative provisions as may be necessary for the implementation of the regulation. Those measures are to cover inter alia the organization of, procedure for and means of carrying out checks on compliance and the penalties applicable in case of breach (Article 12 (1)).

Regulation No 1174/68 entered into force on 1 September 1968 and remained valid until 31 December 1971. It provided however that it would remain in force for a period of one year in the event of the Council's not having decided before that date on the system to be applied subsequently (Articles 17 and 18). In fact, the period of validity of the regulation was extended several times, on the last occasion to 31 December 1977 by Council Regulation No 3181/76 of 21 December 1976 (Official Journal 1976, L 359, p. 13).

Pursuant to Regulation No 1174/68, the Kingdom of Belgium negotiated and concluded several tariff agreements with the Member States concerned. Thus, the Royal Decree of 17 November 1971 (Moniteur Belge [Belgian Official Gazette] of 9 December 1971), adopted in accordance with the Law of 1 August 1960 on the Carriage of Goods by Road for Remuneration (Moniteur Belge of 12 August 1960) and the Law of 18 February 1969 on Measures for the Implementation of International Treaties and Instruments relating to Transport by Road, Rail or Waterway (Moniteur Belge of 4 April 1969), brought into force with effect from 19 December 1971 the tariff for the carriage of goods by road for remuneration between the Kingdom of Belgium and the French Republic, even if such carriage involved transit through a third country.

The Royal Decree of 17 November 1971 fixes the tariff for the carriage of goods by road between Belgium and France. That tariff enables the prices applicable to the various carriage operations to be determined and thus contributes to the preparation of contracts of carriage.

The transport rate is to constitute the full remuneration for the actual transport operations and for the periods when the vehicle is immobilized for loading or unloading (Article 6 (1)). It is to be determined separately for each operation on the basis of the tariff distance, the nature of the goods and the chargeable weight thereof (Article 6(2)). The transport rate may be freely fixed by agreement between the parties within a spread of 23% of the maximum rate (Article 6 (3)). It is to be expressed in Belgian francs or French francs and centimes (Article 6 (4)). The general scales, which set the maximum tariff rate, were laid down by the decree on the basis of a fixed conversion rate of FF 1 : BFR 9 and no provision was made for any adjustment in the event of changes in exchange rates.

Regulation No 1174/68 was superseded by Council Regulation No 2831/77 of 12 December 1977 on the fixing of rates for the carriage of goods by road between Member States (Official Journal 1977, L 334, p. 22).

Since it is considered that a single system for the fixing of rates and conditions for the carriage of goods by road between Member States can be achieved only progressively and in parallel with the development of the markets concerned, the regulation offers Member States, as an experiment, the choice, on the basis of a common principle, between a non-binding reference tariff and compulsory bracket tariffs (second and third recitals in the preamble).

It is for the Member States concerned to decide by mutual agreement on the application of one or other of the tariff systems, taking particular account of the economic and technical conditions of the transport market concerned (first subparagraph of Article 2 (3)). Subject to compliance with that principle, the Member States may maintain compulsory tariffs where such tariffs have been applied in pursuance of a Community regulation and may introduce reference tariffs where no Community tariff rules have been applied (second subparagraph of Article 2(3)).

The reference tariffs are merely recommendations. They provide guidelines for the determination of transport rates and each transport undertaking has the responsibility of agreeing the rate with its customer according to the market situation and the interests of both parties.

As regards the compulsory bracket tariffs, Regulation No 2831/77 repeats the essential provisions of Regulation No 1174/68.

Moreover, the compulsory tariffs applied at the time of the entry into force of Regulation No 2831/77 are to remain in force until they are replaced by other tariffs (Article 20 (2)) and the laws, regulations and administrative provisions introduced by the Member States pursuant to Regulation No 1174/68 are to remain in force for the compulsory tariffs established pursuant to the new regulation until they are replaced by provisions adopted on the basis of the latter (Article 20 (3)).

Regulation No 2831/77 contains a significant innovation as compared with Regulation No 1174/68 — it provides that a Member State may, in order to offset the effects of monetary fluctuations, unilaterally carry out an upward revision of price schedules expressed in its currency: the Member State concerned is then to inform the other Member States concerned and the Commission at least one month before that measure is brought into effect (Article 11 (3)).

When an inspector from the Ministry of Transport carried out checks in Belgium, he ascertained that during January 1979 a number of Belgian undertakings had transported goods between France and Belgium at rates lower than those determined in accordance with the minimum compulsory uriff fixed by the Royal Decree of 17 November 1971, as amended by the Royal Decree of 11 October 1978 (Moniteur Belge of 8 November 1978), which raised all the uriffs by 15 %.

A report was made and five natural persons and five transport undertakings were summoned to appear before the Politierechtbank [local court with jurisdiction in respect of minor offences], Ghent, charged with the offence as principals, accomplices or parties having incurred civil liability. The court imposed fines on the accused by judgment of 15 April 1980.

An appeal from that judgment was lodged on 17 April 1980 with the Rechtbank van Eerste Aanleg [Court of First Instance], Ghent.

In the appeal proceedings, the appellants whilst not denying that they took the action of which they were accused, claimed that the parity between the French franc and the Belgian franc no longer corresponded, at the material time, to the fixed parity adopted in the Royal Decree of 17 November 1971 and that, in order to avoid having to operate at a loss, they had been obliged to apply the real exchange rate of 1 :6.85 to the transport rates. The rates actually applied were lower than the minimum fixed by the Royal Decree in Belgian francs but higher than the minimum expressed in French francs and converted into Belgian francs at the rate ruling on the day of conversion.

By interlocutory judgment on appeal of 8 May 1981 the Sixth Chamber of the Rechtbank van Eerste Aanleg, Ghent, held that the proceedings were to be stayed until, pursuant to Article 177 of the EEC Treaty, the Court of Justice had given a preliminary ruling on the following questions:

1) Is Regulation No 1174/68 of the Council of 30 July 1968 compatible with Article 75 of the EEC Treaty if no provision is made to eliminate the disparity in currencies between the Member States?

2) Is the regulation compatible with its aim that tariffs must be drawn up in such a way as to avoid both abuse of dominant positions and damaging competition?

3) As a measure adopted by the Council, must the regulation still be regarded as valid if instead of producing harmonization it leads to excessive discrimination between the inhabitants of the various Member States?

The judgment of the Rechtbank van Eerste Aanleg, Ghent, was received at the Court Registry on 18 January 1982.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were lodged on 10 March 1982 by the appellants in the main proceedings, Jozef Guldentops and PVBA Corditrans, both represented by Marc Decramer, of the Wervik Bar; on 23 March by the Kingdom of Belgium, represented by the Minister of Transport, assisted by Robert Wijffels, of the Antwerp Bar; on 26 March by the Council of the European Communities, represented by Jill Aussant, Principal Administrator in the Legal Department; on 29 March by the Commission of the European Communities, represented by Auke Haagsma, a member of its Legal Department, and on 6 April 1982 by the appellants in the main proceedings, Jan Flour and NV Translev, both represented by Professor Michel Waelbroeck, of the Brussels Bar.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory enquiry. However, it issued the following requests:

The representatives of the appellants in the main proceedings were called upon to provide at the hearing all factual information which they might have at their disposal regarding the transport tariffs which constituted the subject-matter of the proceedings before the national court and, in particular, a copy of the contracts at issue;

The Government of the Kingdom of Belgium was called upon to define its position at the hearing on the observations contained in the written observations of the appellants in the main proceedings, Jan Flour and NV Translev, and more particularly on the courses of action proposed in those observations;

The Government of the Kingdom of Belgium was called upon to have its agent assisted by an expert able to explain to the Court the practical operation of the bracket-tariff system at the material time;

The Government of the French Republic was called to have itself represented at the hearing, if possible by an expert able to explain to the Court the conditions which at the material time had developed between French and Belgian carriers following the devaluation of the French franc.

II — Written observations submitted to the Court

The appellants in the main proceedings, Jozef Guldentops and PVBA Corditrans, claim that the parity fixed by law at 1 :9, whilst the actual parity was 1 :6.85, entailed unacceptable discrimination against Belgian carriers and a distortion of the conditions of competition. That discriminatory situation is in direct breach of the EEC Treaty, in particular Article 75 thereof. It is incompatible with Regulation No 1174/68, the object of which is to avoid abuse of dominant positions and damaging competition. Maintenance of the parity provided for in the Royal Decree of 17 November 1978 has precisely the opposite effect, namely the collapse of the Belgian transport market.

Since it contains no provisions to counter the effects of the disparity between the currencies of the Member States, Regulation No 1174/68 is incompatible with Article 75 of the EEC Treaty. It disregards one of its own essential aims. Instead of achieving harmonization it creates discrimination between citizens of the various Member States. It breaches the principles of proportionality and equality and does not conform to Article 2 of the EEC Treaty.

The appellants in the main proceedings, Jan Flour and NV Translev, observe that Regulation No 1174/68 was no longer applicable when the events giving rise to the main proceedings occurred. It is appropriate however to examine its validity on the twofold ground that Regulation No 2831/77 repeated the provisions of Regulation No 1174/68 and that it provides for the laws, regulations and administrative provisions adopted by the Member States in order to implement it to be maintained in force.

a) Regulation No 1174/68 is contrary to the objectives of the Treaty, as set forth in Articles 74 and 75, in so far as, whilst imposing upon Member States the obligation to fix common transport tariffs, it conuins no provision enabling the problem of fluctuations in currency exchange rates to be dealt with. Since 1971, and more particularly since 1974, developments in the monetary system have led to very considerable and noticeable discrepancies when the fixed exchange rates based on the 1968 rates are applied. The lack of any provision in Regulation No 1174/68 to neutralize the affects of fluctuations between currencies is an intolerable deficiency and a breach of the principle of equality between the nationals of Member States in so far as it enables some of them to apply transport tariffs lower than the minimum tariffs which must be complied with by nationals of other Member States. When the Community institutions adopted Regulation No 2831/71, they were informed that the fluctuations in monetary parities between the various Member States had brought about, to a considerable extent, a distortion of the bracket-tariff system, they are guilty of neglecting to impose upon Member States the obligation to adapt their tariffs to take account of developments in the international monetary system.

b) The case-law of the Court, in particular the judgments of 3 June 1980 in Case 135/79 Gedelfi [1980] ECR 1713 and of 3 February 1982 in Case 248/80 Glunz [1982] ECR 197, confirms the obligation of the Community legislature to be mindful of developments in the international monetary system and the finding that a regulation which gives rise to the application of different tariffs for the carriage of the same goods by the same means, depending upon which currency is used, does not conform to the Community aim of ensuring equality. Regulation No 1174/68 is therefore void, by reason of default on the part of the legislature, if it appears that it cannot be interpreted in such a way as not to infringe Community law.

c) In any event the question arises whether or not the Belgian legislature was under an obligation to provide for a system to adapt transpon tariffs to monetary fluctuations and whether, in such circumstances, the Royal Decree of 17 November 1971 is incompatible with the principle of equality between nationals of the Member States. The Royal Decree is open to three different interpretations. According to the judgment of the Politierechtbank, Ghent, of 15 April 1980, the Royal Decree of 17 November 1971 fixes the tariff solely in Belgian currency, without any reservation or basis for amendment or adjustment. For the transpon of identical goods by the same means, French carriers therefore fix their prices in French francs and Belgian carriers fix theirs in Belgian francs. The schedules for the fixed tariffs, in Belgian francs and French francs, date from 1971 and incorporate a fixed parity of FF 1 : BFR 9. They have not been amended, even though at the date of the events at issue the parity used in the schedules was rendered completely irrelevant by the fall in value of the French franc and despite the fact that the exchange rate was in the region of FF 1 : BFR 6.85, that is to say a difference of almost 25%. The fact that Belgian carriers are obliged, bv the Royal Decree, to express their tariffs in Belgian francs involves considerable discrimination, of such a nature as to entail a wholesale distortion of competition: Belgian carriers, obliged to fix their transpon rates in Belgian francs, are unable to compete with their French colleagues. The fact that the Royal Decree of 17 November 1971 contains no provision to deal with the consequences of the monetary disparities is contrary to Community law and, more specifically, to the principle of equality between nationals of the various Member States. At the very least, the Royal Decree should have provided for the possibility of limiting monetary disparities between the French and the Belgian franc. If it had to be interpreted in such a manner that it was impossible to make allowance for fluctuations in the exchange rates, the Royal Decree of 17 November 1971 would be incompatible with the principle of treatment and of fair competition in the Community. The decree may be interpreted as allowing carriers the choice of fixing their tariffs in Belgian francs or in French francs, with die obligation, once the choice is made, to abide by the tariff expressed in the currency adopted. In such a case, the minimum tariff, expressed in the weaker currency, would always be lower than the minimum tariff expressed in the stronger currency and the maximum tariff expressed in the stronger currency would always be higher than the maximum tariff expressed in the weaker currency. The upper and lower limits would therefore differ depending on whether the rates were expressed in Belgian francs or in French francs. Moreover, depending on whether the minimum or maximum rate is fixed, on the basis of the present exchange rates, in Belgian francs or in French francs, and vice versa, sanctions may or may not be applicable. Such a consequence is totally irrelevant, devoid of any economic reality and contrary to the principle of equality. Moreover, there is not one transport tariff expressed in two currencies but rather two tariffs. Such an interpretation of the Royal Decree of 17 November 1971 is also therefore contrary to Community law. The only interpretation of the Royal Decree which conforms to Community law is to the effect that carriers have the option of expressing the transport rate in Belgian francs or in French francs, provided that they comply with the maximum and minimum tariffs fixed by the decree, having regard to the exchange rate ruling on the date in question; the carrier applies the prescribed tariff, but has the choice of charging a rate expressed in the other currency, taking into account the real monetary situation. This interpretation is the only one compatible with the aims of the regulation and with the common transport policy. By applying the same bracket tariffs to all carriers, regardless of nationality or the currency habitually used by them, it ensures equality as between carriers and the existence of fair conditions of competition between them.

d) It is appropriate to answer the questions submitted by the Rechtbank van Eerste Aanleg, Ghent, as follows:

1) Regulation No 1174/68 of the Council of 30 July 1968 is not compatible with Community law in so far as it contains no provision to eliminate the effects of the disparity in currencies between the Member States, an omission which results in considerable discrimination between the inhabitants of the various Member States when fixed transport rates are applied to the carriage of goods by road.

2) If a national law, regulation or administrative provision adopted in implementation of Regulation No 1174/68 must be interpreted as meaning that Belgian carriers (or carriers who express their rates in Belgian francs) are obliged to comply with maximum and minimum rates different from those which must be observed by carriers in other Member States (or carriers who express their rates in the currency of other Member States), such law, regulation or provision is contrary to Community law.

The Government of the Kingdom of Belgium considers the reference for a preliminary ruling to be inadmissible or devoid of purpose. It contends that the questions submitted concern events which all occurred on a date when Regulation No 1174/68 was no longer in force. That regulation, with which the judgment making the reference was exclusively concerned, was replaced by Regulation No 2831/77 which entered into force on 1 January 1978, whilst the events which gave rise to the main proceedings occurred in January 1979.

In any event, it should be held, in the alternative, that Regulation No 2831/77, as applied in Belgium, prevents, on the one hand, any abuse of a dominant position and damaging competition and, on the other, any discrimination between Member States.

During the period in question, Belgian carriers and customers were permitted and had the opportunity to agree rates as low as those of their French colleagues, by fixing those rates in French francs. The Royal Decree of 17 November 1971 does not impose the obligation to stipulate rates in a specified currency. It is clear m particular from Article 6 (3) and (4) and from the penultimate subparagraph of Article 4 (2) that it allows the stipulation of rates in French francs and that the possibility of doing so is not reserved to French carriers and customers.

The general schedules appearing in Pan IV of the Royal Decree indicate the upper limit of the transport rates both in Belgian francs and in French francs. Accordingly, if Belgian carriers or customers wish to extend the bracket downwards, they may do so in a totally legal manner by stipulating the price in French francs.

The Council also points out that Regulation No 1174/68 was no longer in force when the offences in respect of which proceedings were brought before the national court were committed.

The validity of the regulation depends, in the first place, on whether it embodies a provision which takes into account the fluctuations of exchange rates between the currencies of the Member States.

In that regard, it should be noted that neither Regulation No 1174/68 nor Regulation No 2831/77, which replaced it, fixes the tariffs which must be applied to carriage between two Member States or prescribes the currency in which they must be expressed. It is clear, in particular, from Article 11 (1) and Article 10(1) of Regulation No 2831/77 (Article 4 (1) and Article 3 (1) of Regulation No 1174/68) that the Member States were in a position to react to currency movements affecting the carriage operations with which they were concerned. That possibility is specifically provided for in Article 11 (3) of Regulation No 2831/77. Since the regulation entered into force on 1 January 1978, that possibility was clearly open to every Member State as from that date.

Regulation No 1174/68 incorporated (in Article 4) a procedure for settling differences regarding the fixing of transport tariffs, failing agreement between the Member States concerned. Pursuant to that provision, an application was referred to the Commission by a Member State concerning the raising of its bilateral tariff with another Member State, on the basis, in particular, of the movements of the two currencies involved (Commission Decision of 12 June 1978, Official Journal, L 188, p. 24).

Regulations Nos 1174/68 and 2831/77 therefore included provisions intended to take account of currency movements.

In such circumstances it is no longer necessary to consider whether, in the absence of such provisions, Regulation No 1174/68 is to be regarded as valid in the light of its legal basis and purpose.

The questions submitted by the national court should be answered as follows:

1) In so far as Regulation No 1174/68 contains provisions on the basis of which disparities between the currencies of Member States can be eliminated, the question whether it is compatible with Article 75 of the EEC Treaty in the absence of such provisions requires no answer.

2) The compatibility of the regulation with its purpose, namely that the tariffs must be drawn up so as to avoid both abuse of a dominant position and damaging competition, is not to be considered in the light of the entirety of the system which it adopts for the fixing of tariffs but rather in the light of the possibility of preventing such effects in so far as they may result from currency fluctuations. Since the regulation contains provisions intended to take account of such fluctuations it is compatible with its purpose.

3) The fact that the regulation provides for currency fluctuations to be taken into account does not involve discrimination between the inhabitants of the various Member States and that question need not therefore be answered.

The Commission too points out that whilst the measures implementing Regulation No 1174/68 were in fact still in force in Belgium when the infringements giving rise to the main proceedings were esublished, that regulation had in the meantime been replaced by Regulation No 2831/77. Moreover, the questions referred to the Court relate to the validity of Community law whilst the criminal proceedings concern an infringement not of Community law but of the national measures by which the transpon tariff had been fixed. It is for the Court of Justice to provide the national court with such information falling within the scope of Community law as will enable the national court to adjudicate upon the national implementing measures.

a) As regards the validity of Regulation No 1174/68 (and of Regulation No 2831/71) in the light of Article 75 of the EEC Treaty, it is appropriate to emphasize that the mere fact that measures are adopted under that article does not mean that they must necessarily contain a provision relating to the risks connected with fluctuations in exchange rates. Nevertheless, a measure which did not contain a provision of that kind might produce results incompatible with Article 75 or with certain general provisions of the Treaty. Fluctuations in the exchange rate between two or more currencies result from inadequacies in the harmonization of the economic and monetary policies of the Member States. Until satisfactory harmonization is achieved, no provisions of Community law will be capable of eliminating fluctuations in exchange rates. It is nevertheless possible to prevent or palliate any effects of such fluctuations which are harmful or are indeed contrary to Community law. However, the regulations in question not only offer every possibility in that regard but even require the Member States to keep a close watch on changes in exchange rates and, if such changes so require, to adjust the tariffs. Thus, Article 3 of Regulation No 1174/68 (Article 10 of Regulation No 2831/77) provides that each tariff is to be drawn up by reference to a base-rate, which is the middle point of the bracket and is itself fixed “having regard ... to the average costs of the transpon operation concerned”. A change in that average cost gives rise to an adjustment of the tariff. This occurs particularly where there is a change in the exchange rates. In strict terms, there is then no longer just one tariff expressed in two currencies but two different tariffs, in the same way as there is no longer one base-rate but two different base-rates. Article 2(2) of Regulation No 1174/68 (Article 9 (2) of Regulation No 2831/71) fixes the bracket spread at 23% of the maximum rate of the tariff. In fact, currency fluctuations give rise to wider brackets if the tariffs are expressed in two currencies. Thus, a fall in value of the French franc in relation to the Belgian franc gave rise to a difference between the conversion rate applied for the fixing of the tariff and the rate quoted from day to day, so that the minimum and maximum rates expressed in French francs and converted into Belgian francs at the rate ruling on the day in question were lower than the minimum and maximum rates of the official tariff in Belgian francs. In this case, the question is whether a rate invoiced in Belgian francs must exceed the minimum rate expressed in Belgian francs taken direct from the tariff or whether it is sufficient if it exceeds the exchange value in Belgian francs, at the rate ruling on the day in question, of the minimum expressed in French francs. Conversely must a rate invoiced in French francs be lower than the maximum expressed in French francs according to the tariff or may it go as high as the exchange value in French francs, at the rate ruling on the day in question, of the maximum rate expressed in Belgian francs? One approach is strict adherence to the tariff so that if an invoice expressed in Belgian francs is used, the rate must then fall within the bracket expressed in that currency according to the tariff. Likewise, if the rate is invoiced in French francs, it must fall within the bracket expressed in that currency. This approach involves the fewest difficulties of verification. It also appears to be the most acceptable according to the letter of the regulation. It is not discriminatory since it allows undertakings to choose freely in which currency they wish to invoice the rate, having regard to the consequences of that choice as far as the tariff is concerned. However, it displays the clear disadvantage of being extremely formalistic. According to another view, it is possible freely to convert the rates at the parity ruling on the day in question so that, regardless of the currency in which the invoiced rate is expressed, it must fall between the maximum in the strong currency and the minimum in the weak currency. Owing to the possibility of choosing whether to invoice in Belgian francs or in French francs, it is in fact possible to agree upon any rate falling between the lowest minimum and the highest maximum. This is moreover the main argument in favour of the second point of view. The court making the reference did not deal with that problem and since the two approaches lead ultimately to a practically identical result it is not necessary to choose one or the other. In any event, both give rise to a real bracket wider than the spread of 23 % laid down in the regulations. In such cases, it is incumbent upon the Member States, by virtue of the regulations, to review and adjust the tariff in accordance with the variations in the exchange rates so as to re-establish a real spread of 23%. That obligation is not affected by the right, provided for in Article 11 (3) of Regulation No 2831/77, of a Member State in such a situation unilaterally to “carry out an upward revision of price schedules expressed in its currency”. Moreover, equilibrium could also be restored by a reduction of the rates expressed in the strong currency or by such a reduction together with an increase in the rates expressed in the weak currency. The obligation to review the tariffs in the event both of changes in average costs and of currency fluctuations involving a change in bracket spread must not, however, give rise to a review on the occasion of the slightest variations.

b) As regards the compatibility of Regulation No 1174/68 with its aims, it should be noted that the preamble contains a clear statement of the reasons for which, pursuant to Article 3 thereof (Article 10 of Regulation No 2831/77), the tariffs must be drawn up by reference to a base-rate, having regard to the average cost of transport operations. It is also made clear that the upper limit of the bracket is intended to prevent abuse of a dominant position and the minimum to prevent damaging competition. The requirement contained in Article 190 of the Treaty that the reasons upon which a measure is based must be stated is thereby satisfied. If it were established practice that the Franco-Belgian tariff nevertheless gives rise to abuse of a dominant position or to damaging competition either because the base-rate no longer reflects the costs or because by reason of currency fluctuations the spread extends beyond 23 %, such a situation would entail the obligation to adjust the tariff.

c) As regards the problem of discrimination, it should be recalled that Regulation No 1174/68 introduced a bracket-tariff system which was in principle compulsory for all carriage of goods by road between Member States and that that system, and also the exceptions to it, apply to those concerned with such carriage without distinction as to nationality or residence.

d) Consideration of the questions raised by the Rechtbank van Eerste Aanleg, Ghent, has disclosed no factor of such a kind as to effect the validity of Regulation No 1174/68 or of Regulation No 2831/77.

III — Oral procedure

At the sitting on 29 September 1982 oral argument was presented and answers to questions put by the Court were given by the appellants in the main proceedings, Jan Flour and the company NV Translev, represented by Mr Waelbroek, the Government of the Kingdom of Belgium, represented by Mr Wijffels, the Government of the French Republic, represented by Alexandre Carnelutti, Secretary for Foreign Affairs in the Ministry of External Relations, the Council, represented by Hessel Daalder, a member of its Legal Department, and the Commission, represented by Mr Haagsma.

The appellants in the main proceedings, Flour and Translev, conceded that their interpretation of the Royal Decree of 17 November 1971 conflicted with the provision in the Community Regulations to the effect that the bracket spread may not exceed 23 %. In those circumstances none of the three possible interpretations of the Royal Decree led to a result compatible with the wording and objective of Regulations Nos 1174/68 and 2831/77. Article 11(3) of Regulation No 2831/77 did not impose any obligation on the Member States but simply gave them the power, in the event of currency fluctuations, to adapt the price schedules expressed in their currency. Because they make no provision for automatic and mandatory adaptation of transport tariffs to variations in exchange rates Regulations Nos 1174/68 and 2831/77 must be regarded as invalid.

The Government of the French Republic observed that the two Community regulations in question enable, by means of bilateral negotiation between the Member States concerned or of Community arbitration in the event of dispute, tariffs to be revised where this is rendered necessary by currency fluctuations. Moreover, since there were provisions that the tariffs must be drawn up in such a way as to avoid abuse of dominant positions or damaging competition and be fixed by reference to a base-rate which allowed account to be taken of the market situation and to give carriers a fair return, the adjustments required by monetary fluctuations were possible. Such adjustments need not necessarily take the form of an upwards revision of the price schedules expressed in the “weak” currency; they may also take the form of a reduction in the prices expressed in the “strong” currency or in an approximation between the two. In practice the transport market was somewhat insensitive to currency fluctuations which did not reach a certain level. The 23 % bracket applied to the tariff expressed in a particular currency and not to the conversion into another currency.

The Commission maintained that the Member States were required to revise the tariffs when the variation in the rates of exchange of their currency was sufficiently large. Nevertheless, because the States had a discretion in the matter parties could not challenge the relevant national provisions before the national courts.

The Advocate General delivered her opinion at the sitting on 26 October 1982.

Decision

1. By judgment of 8 May 1981, received at the Court on 18 January 1982, the Rechtbank van Eerste Aanleg [Court of First Instance], Ghent, sitting as a court of appeal, referred to the Court pursuant to Article 177 of the EEC Treaty three questions for a preliminary ruling on the validity and interpretation of Regulation No 1174/68 of the Council of 30 July 1968 on the introduction of the system of bracket tariffs for the carriage of goods by road between Member States (Official Journal, English Special Edition 1968 (II), p. 411), as amended by Regulation No 293/70 of the Council of 16 February 1970 (Official Journal, English Special Edition 1970 (I), p. 90).

2. It appears from the file on the case that those questions were raised in criminal proceedings brought against several Belgian transport operators charged with failure to comply, when fixing their rates for the carriage of goods between France and Belgium in January 1979, with the provisions of the Royal Decree of 17 November 1971 laying down the tariff for the carriage of goods by road for remuneration between the Kingdom of Belgium and the Republic of France (Moniteur Belge [Belgian Official Gazette], 14413) adopted in application of Regulation No 1174/68 on the basis of the Law of 1 August 1960 on the Carriage of Goods by Road for Remuneration (Moniteur Belge, p. 6101) and the Law of 18 February 1969 on measures for the implementation of international treaties and instruments relating to transpon (Moniteur Belge, p. 2988), hereinafter referred to as “the Belgian legislation”.

The state of the applicable legislation

3. Article 1 of Regulation No 1174/68 which was adopted pursuant to Article 75 of the EEC Treaty subjects the carriage of goods by road between Member States to a “system of compulsory bracket tariffs”. Articles 2 and 3 provide that the brackets are to be calculated by reference to a base-rate which is fixed having regard both to the average cost of the transpon operation concerned, including the general expenses of the business, for a properly managed undertaking enjoying normal conditions of use of its carrying capacity, and to market conditions, and is to be such as to provide a fair return for carriers. Brackets calculated on the base-rate have an upper and lower limit and the difference between them is 23 °/o. The rates for any given transpon operation may be freely determined within the upper and lower limits of the relevant bracket tariff.

4. According to the fifth recital in the preamble to the regulation the aim of the upper limit of the brackets is to avoid abuse of dominant positions and damaging competition.

5. Article 4 provides that the tariffs are to be fixed or amended by agreement between the Member States directly concerned by way of negotiation and with the assistance of the Commission. If the negotiations do not result in an agreement the dispute may be referred to the Commission; in such a case it is to take a decision which is to take effect in the Member States subject to appeal to the Council pursuant to the procedures laid down in Article 4 (2).

6. Article 6 provides that the bracket tariffs are to be official y published in the Member States concerned and Article 12 provides that the Member States are to adopt such laws, regulations or administrative provisions as may be necessary for the implementation of the regulation, including measures tor checks on compliance, and are to prescribe the penalties applicable in case of breach.

7. The transport tariffs applicable between Belgium and France were fixed, m conformity with the provisions of Regulation No 1174/68, by agreement between the two Member States concerned and brought into force in Belgium by the Royal Decree of 17 November 1971 Article 6 (3) of that decree provides that the transport rate may be freely determined by he parties within the bracket, in conformity with the schedules laid down by the decree Article 4 provides that the transport rate is to be expressed in Belgian or French francs. The exchange rate applicable in determining the amounts which appear in the schedules is FF 1 : BFR 9 and no provision is made tor any adjustment in the event of changes in the exchange rate.

8. The tariffs fixed by the aforesaid decree were increased by 15 % by the Royal Decree of 11 October 1978 (Moniteur Belge, p. 13536). It is to be observed that the exchange rate of FF 1 : BFR 9 was amended subsequently to the facts of the case by the Royal Decree of 3 October 1979 (Moniteur Belge, p. 12126).

9. Following the enlargement of the Community, Regulation No 1174/68 was replaced by Council Regulation No 2831/77 of 12 December 1977 on the fixing of rates for the carriage of goods by road between Member States (Official Journal 1977, L 334, p. 22) That regulation gave the Member States an option between a system of “reference tariffs” and the fomer system of “compulsory tariffs”. The latter system, which has remained applicable as beween Belgium and France, is essentially identical to he system under the previous regulation, as is emphasized in the seventh recital in the preamble, save that by virtue of Article 11 (3) a Member State may, in order to offset the effects of monetary fluctuations, unilaterally carry out an upward revision of price schedules expressed in its currency. By its nature that power of unilateral revision is open to a Member State which has devalued its currency.

10. According to Article 20 (3) of the new regulation measures adopted by Member States in implementation of Regulation No 1174/68 are to remain in force until they are replaced by subsequent provisions. Since no new provision was introduced in Belgium before the occurrence of the matters which gave rise to the main proceedings the position must be considered on the basis of Regulation No 1174/68 and the measures adopted by the Belgian State to implement that regulation.

The background to the proceedings

11. It appears from the file on the case that the appellants in the main proceedings carried out transport operations in January 1979 between France and Belgium at invoiced rates which were lower than those of the minimum tariff, expressed in Belgian francs, under the Belgian legislation. They were charged with contravening the Royal Decree of 17 November 1971, as subsequently amended, and fined by the Politierechtbank [local court with jurisdiction in respect of minor offences], Ghent.

12. They appealed against that judgement to the Rechtbank van Eerste Aanleg before which they contended that the minimum tariffs had not been applied because, by reason of the disparity in currencies between Belgium and France, the legal tariffs would entail serious discrimination to the detriment of the Belgian transport operators and lead to a collapse of the Belgian transport market. The former monetary parity of 1 : 9 had been overtaken by the devaluation of the French franc. The real rate of exchange was 1 :6.85 and they had to apply it if they did not wish to operate at a loss.

13. After referring to the fifth recital in the preamble to Regulation No 1174/68 according to which “tariffs must be drawn up in such a way as to avoid both the abuse of dominant positions and damaging competition; ... such tariffs must be fixed by reference to a base-rate, set with due regard to the cost of the relevant transport operations and to the state of the market and in such a way as to provide a fair return for carriers”, the national court observes that according to the regulation fluctuations in the exchange rates of the currencies of the Member States are not a determinant factor in fixing transport tariffs. It wonders whether in those circumstances the regulation is compatible with Article 75 of the Treaty and whether the provisions of the regulation are consistent with its objectives, as set out in its preamble.

14. In order to obtain clarification in regard to these matters the Rechtbank referred the following questions to the Court:

“1) Is Regulation No 1174/68 of the Council of 30 July 1968 compatible with Article 75 of the EEC Treaty if no provision is made to eliminate the disparity in currencies between the Member States?

2) Is the regulation compatible with its aim that tariffs must be drawn up in such a way as to avoid both abuse of dominant positions and damaging competition?

The validity of Regulation No 1174/68

15. The questions submitted by the Rechtbank essentially seek to ascertain whether in the absence of provisions to eliminate the effects of currency disparities in the event of an alteration in the exchange rate Regulation No 1174/68 has the effect of creating, in the matter of determination of transport rates, a distortion of competition which is contrary to the very objective of the regulation and to the requirements of a common transport policy, so that the validity of the regulation is affected.

16. The answer to the question thus framed must be derived from the system and purpose of Regulation No 1174/68 and in particular from the distribution of powers between the Community and the Member States to which that regulation gave rise.

17. As has been pointed out above, Regulation No 1174/68 is centred on the establishment of “bracket tariffs”, to ensure normal conditions of competition in the market in road transport within the Community. That objective can be achieved only on condition that the limits set by the bracket spread, as defined by the regulation, are respected.

18. The determination of the tariffs and, more precisely, everything relating to the fixing of them and their subsequent amendment, is effected, according to Article 4 of the regulation, by way of agreement between the States directly concerned in the matter. Should the States concerned have difficulty in reaching an agreement the regulation provides for arbitration by the Commission with ultimate appeal to the Council which in such a case gives its decision by a qualified majority. The arbitration takes place within a very short period of time and the decisions taken thereunder take effect in the Member States. Thus the regulation has all the provisions to ensure that the agreements or decisions are made at the right time both as regards the original fixing of the tariffs and their subsequent amendment should the need arise.

19. When transport tariffs are fixed simultaneously in the currencies of the two Member States concerned, as the case of Belgium and France, and there is an alteration in the exchange rates between their currencies such as to affect the conditions of competition between carriers in a manner which is contrary to the aim of the regulation, those States are under an obligation to seek a revision of the tariffs in accordance with the procedure which has been described. That obligation is inherent in the very concept of bracket tariffs which under the system of Regulation No 1174/68 are conceived as single tariffs, even if expressed in two currencies, and as being required to have essentially the same spread.

20. The scope of that obligation must nevertheless be understood in the sense that there cannot be automatic adaptation of the brackets to the variations in exchange rates in a system of floating rates of exchange. To take account of the frequent and generally small variations which characterize such a system would make any stability in transport rates impossible. The Member States must therefore be recognized as having an appropriate discretion in fulfilling their obligation under Regulation No 1174/68 to undertake revisions inasmuch as revision is not required except where the conditions of competition are appreciably affected.

21. It therefore appears that Regulation No 1174/68 contains the necessary provisions to eliminate the effects of disparities between currencies. For that reason, if it is correctly applied by the Member States concerned, it is not apt to create distortions of competition or to cause discrimination against carriers in the event of a parity change in the currencies of the States concerned with a given transport relationship. Under the distribution of powers effected by the regulation it is for the Member States concerned to take, in pursuance of Article 4 thereof, the necessary steps to bring about an amendment of the tariffs when a change in the conversion rate between their currencies causes distortions of competition incompatible with the objective of the regulation.

22. The validity of the regulation cannot therefore be doubted on the ground that it does not make it possible for the effects of disparities in currencies between the Member States to be eliminated.

23. In view of that conclusion it is for the national court to ascertain whether, subject to the discretion mentioned above, the Member State concerned has satisfied the obligation to adapt transport tariffs to the variations in exchange rates and to draw the necessary consequences as regards the prosecutions pending before it.

Costs

24. The costs incurred by the Government of the Kingdom of Belgium, the Government of the French Republic, the Council of the European Communities and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since the proceedings are in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT in answer to the questions referred to it by the Rechtbank van Eerste Aanleg by judgment of that court of 8 May 1981, hereby rules: