JUDGMENT OF 28. 6. 1984 — CASE 36/83 MABANAFT / HAUPTZOLLAMT EMMERICH

In Case 36/83 REFERENCE to the Court under Article 41 of the ECSC Treaty by the Fihanzgericht [Finance Court] Düsseldorf, for a preliminary ruling in the proceedings pending before that court between

THE COURT composed of: Lord Mackenzie Stuart, President, T. Koopmans, K. Bahlmann and Y. Galmot (Presidents of Chambers), P. Pescatore, A. O'Keeffe, G. Bosco, O. Due and U. Everling, Judges, Advocate General : Sir Gordon S lyn η Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the observations submitted under Article 103 (3) of the Rules of Procedure of the Court may be summarized as follows:

I — Facts and procedure

1. Legislative background: The evolution of external controls in the coal sector

In 1958 the common market in coal encountered serious upheavals, attributable on the one hand to a considerable decline in demand due to a period of economic depression and, on the other, to the inroads made by fuel oil. The crisis induced a number of producer countries, including Belgium and the Federal Republic of Germany, to introduce restrictions on the importation of coal from non-member countries.

The High Authority adopted a series of recommendations whereby the protective measures sought by certain Member States were authorized on condition that they did not exceed certain limits.

As regards the Federal Republic of Germany, the High Authority after consulting the German Government, adopted a recommendation on 28 January 1959 pursuant to subparagraph (3) of the first paragraph of Article 74 of the ECSC Treaty. The recommendation, published in the Amtsblatt of 11 February 1959 at p. 197, makes the following proposals:

i) The Government of the Federal Republic of Germany should impose customs duties, on a temporary basis, on coal originating in non-member countries and intended for the Federal Republic, to be levied on imports in excess of a duty-free quota, at a rate which should not exceed DM 20 per tonne; for 1959 it should allow a duty-free quota of not less than 5 million tonnes;

ii) The Governments of other Member States should provide the Federal Republic with the cooperation essential for the purpose of levying the customs duties.

The recommendation of 3 November 1959 (Amtsblatt of 14. 11. 1959, p. 1150) once again fixed the duty-free quota to be made available for 1960 at a minimum of 5 million tonnes.

The German Law of 3 December 1959 on the tariff quotas on solid fuels for 1959 and 1960 laid down a quota of slightly more than 5 million tonnes.

By recommendations of 3 November 1960 (Amtsblatt of 19. 11. 1960, p. 1425), 13 December 1961 (Amtsblatt of 19. 12. 1961, p. 1600) and 30 October 1962 (Amtsblatt of 12. 11. 1962, p. 2683), the High Authority on each occasion fixed the quotas to be made available by the Federal Republic for the years 1961, 1962 and 1963 at a minimum of 6 million tonnes. The German Law of 23 December 1960 on the tariff quotas on solid fuels for 1961 and 1962, and that of 27 December 1962 on the quotas for 1963 and 1964, fixed the quotas in accordance with those recommendations. When a review was carried out in late 1963, the High Authority took the view, according to the explanations supplied by the Commission, that it was unnecessary to adopt a recommendation in respect of 1964 since the above-mentioned German Law of 27 December 1962 afforded an adequate legal basis for the duty-free importation in 1964 of at least 6.2 million tonnes.

Over the following years the High Authority addressed no further recommendations to the Government of the Federal Republic, which, for its part, adhered to the minimum fixed by the High Authority's previous recommendations, until the Law of 14 December 1970 raised the quota to 7 million tonnes.

By an amending Law which was passed in order to cater for the consequences of the accession of the United Kingdom, whose coal exports to the other Member States ceased thereafter to be subject to any restrictions, the quota for 1976 was fixed at 5 million tonnes and the validity of the Law was extended until 1981.

The rules at present in force in the Federal Republic of Germany in the matter of coal imports from non-member countries consist of Article 3 of the Second Law for the amendment of the provisions on energy. That Law, of 25 August 1980, introduced inter alia:

i) an extension until i 995 of the validity of the present rules;

ii) a considerable increase in the quotas (7 million tonnes per annum);

iii) the setting up of a new system of import licences.

The collection of customs duties on imports exceeding the duty-free quota was also maintained in the most recent rules.

Mention should also be made of Commission Recommendation (77/328/ECSC) of 15 April 1977 (Official Journal, L 114, 5. 5. 1977, p. 4). The recommendation, which makes the whole range of ECSC products from non-member countries subject to a procedure for reciprocal notification an consultation, recommends that Member States should not resort to national measures until after the above-mentioned procedure has been employed.

2. Facts of the case

In 1977 and 1978 the limited partnership Fisser & van Doornum Köln GmbH (hereinafter referred to as “Fisser”), of which Mabanaft GmbH is the successor in title, bought from LVOB, a Netherlands undertaking, coal described as “EEC products of Netherlands origin, dump stocks and storage stocks”. The supplier produced certificates of mine origin issued by the Netherlands State mines, and consequently the coal was imported duty-free into the Federal Republic of Germany.

Investigations by German customs enforcement officers subsequently revealed that, contrary to Fisser's statements, the coal in fact derived from various non-member countries and that the certificates of origin produced in 1977 and 1978 had been forged. The Hauptzollamt Emmerich thereupon approached Mabanaft, as successor in title to Fisser, which was dissolved on 1 January 1979, with a demand for payment of differential customs duties totalling DM 1382829.77.

Mabanaft brought proceedings before the Finanzgericht Düsseldorf for annulment of the notices of alteration of customs duties addressed to it, arguing that the levying of customs duties on coal released into free circulation within the Community was contrary to Article 4 (a) of the ECSC Treaty. The Hauptzollamt Emmerich contended that the differential customs duty was legitimate as a measure of commercial policy falling within the powers of the Member States, in accordance with the first paragraph of Article 71 of the ECSC Treaty.

The Finanzgericht Düsseldorf doubted whether the recommendations issued by the High Authority between 1959 and 1962, which in any case it regards as incompatible with the principle of the free movement of goods between Member States, were still in force and might thus afford a legal basis for the German rules in force at the time of the disputed import operations. By an order of 7 February 1983 it therefore stayed the proceedings and requested the Court, pursuant to Article 41 of the ECSC Treaty, to give a ruling on the following question:

“Are the Recommendations of the High Authority of 28 January 1959 (Amtsblatt der Europäischen Gemeinschaften of 11. 2. 1959, p. 197) and of 30. 10. 1962 (Amtsblatt of 12. 11. 1962, p. 2683) compatible with Article 4 (a) of the Treaty establishing the European Coal and Steel Community; are they capable of justifying national measures introducing a differential duty on coal imported from the open market in a Member State but which originated in a non-member country; and if so for how long are such measures justified?”

3. Written procedure

The order making the reference was received at the Court on 8 March 1983.

In accordance with Article 103 (3) of the Rules of Procedure of the Court, written observations were submitted by Mabanaft, represented by Dr Krause-Ablass, of the firm of Bruckhaus, Kreifels, Winkhaus & Lieberknecht of Düsseldorf, by the Government of the Federal Republic of Germany, represented by Martin Seidel and Albert Bleckmann, acting as Agents, and by the Commission of the European Communities, represented by its legal Advisers Peter Gilsdorf and Peter Karpenstein, acting as Agents.

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 inquiry.

II — Submissions and arguments of the parties

Admissibility of the preliminary question

The Commission, the only party to deal with the point, observes that the preliminary question is undeniably a question relating to the “validity” of an act of the High Authority, in the words of Article 41 of the ECSC Treaty, inasmuch as it inquires whether the High Authority's recommendations of 28 January 1959 and 30 October 1962 are compatible with Article 4 (a) of the ECSC Treaty, and whether they are capable of affording a legal basis for national measures under which a differential duty is levied on the importation of coal in free circulation in a Member State but which originated in a non-member country — which is tantamount to calling in question generally the content of the enabling clauses incorporated in those recommendations.

On the other hand, the preliminary question is one of interpretation inasmuch as it inquires for how long the above-mentioned recommendations are capable of affording a legal basis for the national measures. According to the Commission it is in fact a matter of interpreting the word “vorübergehend” [temporarily], appearing in the recommendation of 28 January 1959.

The Commission none the less takes the view that that part of the question too may be understood as meaning that the Finanzgericht is asking whether the recommendations in question were still compatible with Article 4 (a) of the ECSC Treaty once the disputed import operations had been carried out (that is to say, in 1977 and 1978). The question may consequently be regarded as relating to the validity of a provision under Community law.

In view of those considerations the Commission therefore raises no formal objection to the admissibility of the preliminary reference.

Substance

Mabanaft argues that the Law of the Federal Republic of Germany on tariff quotas for coal contravenes Article 4 (a) of the ECSC Treaty, under which import and export duties, or charges having equivalent effect, and quantitative restrictions on the movement of products, are incompatible with the common market in coal and steel and accordingly are to be abolished and prohibited within the Community, as provided in the Treaty. That principle, which was confirmed by the Court in its judgment of 14 July 1961, in Joined Cases 9 and 12/60 (Vloeberghs ν High Authority, [1961] ECR 197), applies to all products in free circulation in a Member State, irrespective of their origin.

Turning to the argument put forward by the Hauptzollamt, namely that the levying of a differential customs duty is none the less justified by the provisions of Chapter X of the ECSC Treaty on commercial policy, Mabanft denies that Member States have an independent right to levy such duties.

In that connexion, Mabanaft notes a conflict between Article 72 of the ECSC Treaty, whereby the Council may, at the request of a Member State, fix minimum and maximum rates of customs duties, on the one hand, and the first paragraph of Article 71, whereby the Treaty is not to affect the powers of the governments of Member States in matters of commercial policy, on the other; that conflict cannot be avoided unless the latter provision in interpreted to mean that the basic freedom granted to Member States in the field of commercial policy in fact excludes the collection of customs duties.

In support of that interpretation, Mabanaft argues as follows:

i) The serious interference which customs duties represent in trade with non-member countries is a justification for reserving to the Council permission to charge them.

ii) That conclusion also results from a consistent interpretation of the Community Treaties and from an application in the alternative of the EEC Treaty provisions on the customs union and on the common commcercial policy — at least, whenever there are no contrary provisions in the ECSC Treaty.

iii) Community practice is consistent with that viewpoint, as is proved not only by the reference to a “standard ECSC tariff” within the General Agreement on Tariffs and Trade, (hereinafter referred to as “GATT”), but also by the High Authority's participation in the customs negotiations in the context of the Dillon Round (1960-61) and the Kennedy Round (1964-67), and by Opinion No 1/75 of the Court of Justice of 11 November 1975, which recognized the exclusive powers of the Community to conclude agreements in matters of commercial policy in the ECSC sector.

However, even if Article 71 were to be interpreted as conferring on Member States an independent right to collect customs duties, it cannot, in Mabanaft's view, be allowed to override Article 4 of the Treaty, if it is borne in mind that the latter (a) is one of the provisions defining the Community's tasks and determining its foundations, (b) is not subject to the effects of any amendments of the Treaty rules adopted under Article 95, and (c) is devoid of any reservation admitting of contrary provisions such as is contained in Article 71.

Mabanaft also disputes the applicability to the present circumstances or the first paragraph of Article 73, under which “The administration of import and export licences for trade with third countries shall be a matter for the government in whose territory the place of destination for imports ... is situated”. The article refers only to imports which come direct from non-member countries, and seeks to prevent any State whose territory is traversed by a thoroughfare from obstructing transit by demanding a licence. It is therefore not permissible to infer from that article an entitlement on the part of Member States to authorize or prohibit the importation of products already in free circulation in the Community.

According to Mabanaft the right which the Hauptzollamt claims on behalf of the Federal Republic of Germany, namely of protecting itself from deflected imports by means of national measures, without the prior assent of the Commission, simply does not exist. If Member States were entitled to protect themselves unilaterally against indirect imports, the scheme set up under the third paragraph of Article 71, whereby: “The governments of Member States shall afford each other such mutual assistance as is necessary to implement measures recognized by the High Authority as being in accordance with this Treaty and with existing international agreements”, would become quite meaningless, at least as far as quantitative restrictions on imports were concerned. The absence of any such right was, furthermore, presupposed by Article 15 of the Convention on the Transitional Provisions, which provided that, on expiry of the transitional period, Member States which had been permitted to enforce higher customs duties against non-member countries would have to request the High Authority for authorization to take appropriate steps of their own to afford their indirect imports through Member States with lower tariffs the same degree of protection as that afforded by their own tariffs to their direct imports.

Thus it only remains to be asked whether the right to collect customs duties on coal originating in non-member countries which was already in free circulation in another Member State arose from the Recommendation of the High Authority of 28 January 1959.

On that point Mabanaft takes the view that the above-mentioned recommendation runs counter to Article 72 of the Treaty, which vests in the Council alone the power of fixing, on the proposal of the High Authority, minimum and maximum rates within which Member States may charge customs duties.

Mabanaft adds that, even if the foregoing argument is rejected, the recommendation of 28 January 1959 does not in any event serve as a proper legal basis for the collection of customs duties from 1977 to 1979.

The recommendations made to the Federal Republic of Germany are based on Article 74 of the ECSC Treaty and cannot, according to Mabanaft, be regarded as lawful unless the coal originating in non-member countries is imported “in relatively increased quantities and under such conditions that these imports cause or threaten to cause serious injury to production within the common market of like or directly competing products” (subparagraph (3) of the first paragraph of Article 74). Such a situation was found by the High Authority to exist in the case of 1959. In its last recommendation, of 30 October 1962, it expressed the view that the situation was probably not going to improve to any appreciable extent in 1963. For the following years, however, it should be emphasized, first, that the High Authority made no further findings of that nature and, secondly, that the circumstances changed substantially.

In that regard Mabanaft observes that following the dramatic development of the coal crisis in the Federal Republic of Germany towards the end of the 1950s, there was an economic recovery which became quite apparent in the late 1960s and led to an increase in the consumption of coal and to shortages there on the German market, owing to its closure to imports from non-member countries.

Those developments show, according to Mabanft, the extent to which the circumstances in which the High Authority is able to make recommendations under Article 74 of the ECSC Treaty may change; they point to the inescapable conclusion that the High Authority is not empowered to make such recommendations except for a limited period, as was the case in this instance.

According to Mabanaft the expression “temporarily” used in the recommendation of 28 January 1959 to limit the period during which the Federal Republic was authorized to collect customs duty on imports of coal originating in non-member countries, can therefore, on account of the close economic relationship between quotas and the collection of customs duties, have referred to no more than the year during which the High Authority had imposed a minimum duty-free import quota. A quota was last fixed for 1963. The close of that year therefore marked the end of the “temporary” period in question.

Quite apart from the foregoing, the longest period which might be regarded as “temporary” was the one during which no change occurred in the circumstances which, in the High Authority's view, had justified the recommendation of 28 January 1959; yet those circumstances changed fundamentally by the end of the 1960s, at the latest.

It is unimportant that first the High Authority and then the Commission should, as the Hauptzollamt claims, have tacitly consented to the charging of a customs duty by the Federal Republic of Germany. Mabanaft remarks in that connection that, according to the case-law of the Court (judgment of 16 December 1981, Case 269/80, Regina ν Tymen, [1981] ECR 3079), a Member State is no longer entitled, in an area falling within the competence of the Community, to adopt national measures unilaterally whenever Community institutions abstain from acting.

On the strength of the foregoing considerations, Mabanaft proposes that the following reply be given to the question submitted:

1) The levying of a differential customs duty on coal already in free circulation in a Member State infringes Article 4 (a) of the ECSC Treaty;

2) The recommendations of the High Authority dated 28 January 1959 and 30 October 1962 are not compatible with Article 4 (a) of the ECSC Treaty and did not empower the Federal Republic of Germany to charge, in respect of the years 1977 to 1979, a differential customs duty on coal originating in a non-member country and imported from the open market of a Member State.

The Government of the Federal Republic of Germany is of the opinion that the Federal Republic's powers over customs duties derive, in cases of differential customs duties, from the fact that the ECSC reflects on that point, not the principle of a customs union but only that of a free-trade area. If the viev were none the less taken that Article 4 (a) of the ECSC Treaty excludes the levying, in the course of trade within the Community, of customs duties on goods originating in non-member countries, the Federal Government is of the opinion that the Federal Republic of Germany is entitled to charge customs duties, by virtue either of an application by analogy of Article 73 of the ECSC treaty or else of the recommendation of the High Authority dated 28 January 1959.

The Federal Government observes that whilst, in its judgment of 14 July 1961 (Joined Cases 9 and 12/60, Vloeberghs), the Court concurred with the Advocate General's Opinion in holding that the principle of the free movement of goods laid down by Article 4 (a) extends also to products from non-member countries, it did not endorse that part of the Opinion in which the Advocate General extended to scope of the above-mentioned provision to customs barriers as well.

That being so, there are therefore grounds for inquiring whether, when the Court develops a general rule to afford a solution to certain specific cases, that rule is really of general application or whether it is valid only for the particular case on which a decision has been made.

It is nevertheless out of the question that the Court can be bound by a general rule such as that, even when new categories of case are under consideration. That is so both because the Court has at its disposal neither the time nor the means of inquiry needed in order to ascertain whether a general rule is adapted to all categories of individual cases, and because any other solution would lead to a risk that the supreme courts or tribunals of the Member States would be induced merely to apply the general rule to new circumstances, without allowing the Court the opportunity of passing judgment, as is clearly necessary, at least in cases in which there are substantial doubts as to such an application.

Moreover, in the above-mentioned judgment, the Court itself indicated that the principle which it had laid down might have to be interpreted differently when the goods in question originated in a non-member country, as distinct from the Community. Indeed, by basing the principle primarily on the assent of the parties and by founding it's decision on a provision such as Article 73 of the ECSC Treaty, thereby depriving a specific decision on the principle itself of any practical value, the Court demonstrated that it viewed those pronouncements as no more than an obiter dictum.

The Federal Government admits that the fact that the Court finally settled on Article 73 of the ECSC Treaty as a basis for the powers of a Member State to impose an import ban or quantitative restrictions seems at first sight to bear out the view that the general rule, applicable to customs duties as well, is that of the free movement of goods within the Community even if they originate in non-member countries, Article 73 standing merely as an exception to that rule.

However, the Federal Government notes that, unlike the Advocate General in his Opinion, the Court placed a very broad interpretation on Article 73, construing the expression “place of destination”, which occurs therein, as meaning the final place of destination envisaged by the importer, which rules out the application of Article 4 (a) in respect of any goods routed into one Member State via another Member State.

In the Federal Government's opinion, therefore, the Court must have had crucial objections to overrule the Opinion of its Advocate General and give a liberal interpretation to Article 73. The true, deep-seated reason for that attitude lies in the fact that the interests protected by the ECSC Treaty are not sufficient to warrant a demand for a limitation of the powers of Member States.

It follows that in the context of Article 4 (a), in respect of customs duties as well, the interests protected by the Treaty, especially those of the Community's own undertakings, must be weighed up against the national interests safeguarded by Chapter X in obtaining protection against competition from goods originating in non-member countries. Here, too, it is thus no more than an obiter dictum which is involved.

It is of course possible to interpret the Court's judgment as meaning that it perceives the movement of goods within the Community from a purely material point of view, as a movement between Member States, and hence as opening up such movement, in principle, to goods originating in non-member countries in general. Even broadly interpreted, Article 73 is merely an exception to that rule.

In that regard the Federal Government observes in the first place that, even if an interpretation of that nature were adopted, it would still be necessary to investigate whether Chapter X does not contain derogations in respect of customs duties such as Article 73 contains in respect of quantitative restrictions.

It then notes that a thorough study of the judgment in question reveals that the Court perceives the concept of movement within the Community not in purely material terms but in legal terms. The consideration which is given to the place of destination of the goods points to a departure from the purely material construction placed on the concept of movement within the Community. That consideration is especially relevant whenever, as for instance under the rules of the EEC Treaty, goods originating in a non-member country are not available for movement within the Community until after proper clearance through customs in the State initially importing them.

Especially in the broad interpretation which the Court gave it, Article 73 assumes that, when the place of destination for the goods lies in the territory of a State other than the State of first importation, the matter is one of trade with non-member countries within the meaning of Chapter X of the Treaty, to which Article 73 logically belongs, and not merely trade within the Community as referred to in Article 4 (a). The interpretation of Article 4 (a) thus determines that of Article 73, and conversely the interpretation of Chapter X, especially Article 73 thereof, in turn affects that of Article 4. Indeed, it should be observed that only a narrow interpretation of Article 4 (a) by means of a study of the interests protected by that provision, admits of a broad interpretation of Article 73, in just the same way as State interests in the allocation of powers, protected by Article 73, ultimately called for a narrow interpretation of Article 4 (a).

If Article 4 (a) were interpreted in isolation, so broadly that it covered any material trade movement within the Community, Article 73 would be seen as a derogation from the general scheme of the ECSC Treaty which would no longer be explicable by reference to the objectives of the EEC Treaty.

The Federal Government thus concludes in that connection that, whilst Article 4 (a) does in principle preclude the application of Chapter X to goods originating in a non-member country which are in free circulation within the Community, the actual question whether such goods are in free circulation is governed by Chapter X, and hence by the allocation of powers in customs matters under the ECSC Treaty and by the measures adopted on the basis of those powers.

The very broad interpretation of Article 73 upheld by the Court gives occasion, in the necessaiy analysis of the content of Chapter X of the ECSC Treaty, for a consideration, first, of the possibility of applying that article by analogy to customs duties. If the article can justify quantitative restrictions which seriously affect trade between States, there is cause, in the case of lesser interference in the interests protected under Article 4 (a), to apply it by analogy to customs duties in accordance with the rule a tnaiore ad minus since, in general, not only the European Treaties but also international economic law proceed on the assumption that quantitative restrictions constitute a greater impediment than customs duties to inter-State trade.

In order to study the relationship between Article 4 (a) and Chapter X of the ECSC Treaty, it is appropriate to start once again with the interpretation of Article 4 (a) seen in isolation. It should be observed at the outset that the Court, in the above-mentioned judgment, held in principle that both the wording of Article 4 (a) and its interpretation in the light of the EEC Treaty depart from the teleological and, still more, the systematic interpretation of the ECSC Treaty itself. That is, incidentally, in keeping with the interpretative methods prevailing in European law, according to which the wording of the Treaty is subordinated to the teleological and systematic interpretation.

The Federal Government goes on to note that, in the light of a thorough study of treaties in the economic sphere, practice and academic writings have established a distinction between customs unions and free-trade areas. According to that distinction, a customs union implies the total freedom of intra-community trade and the imposition of a compulsory common customs tariff in trade with non-member countries, whereas in a free-trade area it is only the movement of goods within that area which is liberated. That distinction typically affects the movement within the community of goods originating in non-member countries; whilst in a customs union such goods may be totally exempted from customs duties, in free-trade areas they are totally excluded from free circulation within the community.

Since the Member States of a free trade area retain the power to determine at national level their customs duties and other restrictive trading rules as against non-member countries, they are obliged to restrict the benefit of free circulation within the community to products which were bought or manufactured in a member country, in order to prevent national safeguards from being circumvented by the initial importation of products originating in non-member countries into whichever member State has the lowest customs duties, in order subsequently to bring them into the true country of destination within the free-trade area.

In a customs union, by contrast, the importation conditions for products originating in non-member countries are identical in all Member States, with the result that indirect imports are generally not a matter for concern.

The context described above also reveals why it is that there cannot be genuinely free movement of goods except where it is possible to discard inspections and protective measures by reason of standard provisions on external trade.

The Federal Government then turns to the three basic Treaties (the ECSC, EEC and EAEC Treaties) to ascertain whether, and if so to what extent, the Communities which they establish exhibit the characteristics of a customs union or of a free-trade area, as outlined above.

As far as the EEC and EAEC Treaties are concerned, it takes the view, on the basis of a detailed study of their provisions, that they are treaties establishing a customs union.

As to the ECSC Treaty, the Federal Government notes that it makes no provision for a common customs territory, but does on the other hand liberalize trade within the Community, with the result that the concept embodied therein is not that of a customs union but that of a free trade area.

None the less, there is a contradiction between the wording of Article 4 (a), which does not confine the abolition of customs duties and other trade restrictions to products originating in the Member States, and Article 71, which in principle reserves power to the Member States in matters of commercial policy as regards non-member countries. That contradiction cannot, it believes, be resolved otherwise than by a restrictive interpretation of Article 4 (a). It is only by accepting such an interpretation that it is possible to justify the existence of Article 71, which would be meaningless if national customs protection could be circumvented by reason of the fact that goods originating in non-member countries enjoyed free movement within the Community by passing through Member States which applied lower external customs tariffs..

To the extent to which external customs duties have been harmonized — which has occurred in the ECSC, in the field of iron and steel products — it is no longer necessary for the purposes of the customs tariff to call for special evidence regarding the origin of goods, or possibly to take protective measures against indirect imports. On the other hand, in cases such as coal, where Member States' provisions on external trade differ inter se, Member States are authorized, on account of the threat of seeing their external trade provisions rendered nugatory, to limit the benefits of free movement within the Community to products originating in a Member State of the ECSC, in order to avoid indirect imports.

The distinction between a free trade area and a customs union has its deeper raison d'être in Member States' differing spheres of interest. Thus, a State having a considerable domestic output of coal, such as the Federal Republic of Germany, is vitally concerned to protect it, by means of customs duties for example, whereas that concern is not to be found in some other countries such as the Netherlands for example. It would not be possible to take account of the interests of countries applying higher customs duties if the movement of goods within the Community were completely free irrespective of their origin and if they could enter that country via another Member State which applied lower customs duties. If, on the other hand, the ECSC itself established a common customs tariff, the Member States would have the opportunity of having their interests taken into consideration at the time when that tariff was being prepared.

The Federal Government believes that, irrespective of the question of the basis on which the general principles derived from a comparison of economic treaties may be applied to the ECSC Treaty, it should be noted that the application to free trade areas of the rules evolved for a customs union leads to absurdities; consequently, the interests of Member States in a free trade area are totally opposed to such a transposition. It is even more decisive that Articles 2 and 3 of the ECSC Treaty, and especially Article 74 thereof, manifestly protect the interests of the Member States and of the Community undertakings which are opposed to a boundless extension of indirect imports. Thus the distinction between free trade areas and a customs union should also be taken into consideration when the ECSC Treaty is to be interpreted in isolation.

According to the Federal Government the decisive question is therefore whether the ECSC itself constitutes a customs union or a free trade area. It should be recalled in that connection that Article 72 allows the Community to fix only maximum and minimum customs duties, not to fix a common customs tariff, which is a determining feature of a customs union.

The ECSC Treaty is, as the second paragraphs of Articles 71 and 71 and subparagraph (1) of the first paragraph of Article 74 thereof demonstrate, designed to ensure compliance with GATT on the part of both the Community itself and the Member States. It should therefore be interpreted in such a way as not to infringe GATT.

GATT, however, proceeds on the assumption that, when goods are imported into one State and then forwarded to another, not only the first but also the second State are empowered to collect customs duties, except in cases where the accompanying document shows that the goods are intended for the second State and are therefore merely in transit through the territory of the first. Article XXIV of GATT provides a broad exception to the rules of that Agreement, but only, in principle, in the case of a customs union, not of a free trade area. It may therefore be argued that the Member States of the ECSC Treaty may not, on the strength of that Treaty, waive the customs powers conferred on them by GATT, even in connection with the movement within the Community of products, originating in non-member countries; the ECSC Treaty should be interpreted accordingly.

In the present instance, however, the question may be left in abeyance since the ECSC Treaty cannot depart from GATT, at least from Article V, because the latter protects the immediate interests, not of the Member States, but of non-member countries. It follows that, if Article 4 (a) were to be interpreted as being applicable to imports from non-member countries as well, the collection of a customs duty by the Member State through which the goods pass would be prohibited by Article V of GATT, whilst collection by the Member State for which they were destined would equally be forbidden by Article 4 (a) of the Treaty. The absurd consequence of such rules would therefore be that all the customs provisions laid down by the ECSC Treaty would be circumvented and the interests of Member States and joint undertakings, despite their being protected by Articles 2, 3 and 74, would be left quite defenceless.

Even if that consequence could be avoided, for example by the application of Article 73 by analogy to customs duties, the fact would remain that, unless it could levy customs duties, the Member State concerned would no longer be in a position to demand from non-member countries the. reciprocity which is required by GATT., and it would even be compelled by Article I thereof to waive its customs duties when importing direct from non-member countries as well.

The Federal Government then turns to consider the interpretation in isolation of Chapter X of the ECSC Treaty on commercial policy.

Since Chapter X relates only to trade with non-member countries, it might be inferred that Article 4 (a) is to be distinguished from that chapter by the fact that it covers actual trade within the Community, whilst Chapter X covers only direct, actual trade with non-member countries. Yet the very fact that the EEC Treaty, and still more the ECSC Treaty itself, require goods from non-member countries to be properly cleared through customs in the first State of importation into the Community, is at odds with a purely factual approach such as that. If clearance through customs did not occur there would be no movement of goods within the Community for the purposes of the Treaty even though there would be an actual movement within the Community. Furthermore, under Article V of GATT there can be no movement of goods within the Community, at least in terms of the ECSC Treaty, when the final destination of the goods is to be found in another Member State. That shows that even the EEC Treaty, and a fortiori the ECSC Treaty, do not adopt a factual approach to the movement of goods within the Community.

For the purpose of interpreting Article 4 (a) and Chapter X of the ECSC Treaty, the allocation under GATT of powers in matters of customs duties is the only decisive factor. For even if Member States could, in connexion with the movement of goods within the Community, waive the subjective rights based on GATT, or establish divergent rules by virtue of Article XXIV thereof, a virtually irrebuttable presumption would none the less preclude any effective waiver of those rights derived from GATT on the part of the Member States of the ECSC Treaty.

The Federal Government further observes that, as is clearly shown by the EEC Treaty with its detailed provisions on customs powers, Member States wished in principle to insert into the ECSC Treaty as well explicit and definitive provisions to cover those problems. However, as Article 4 (a) does not totally liberate the movement within the Community of goods originating in non-member countries, the ECSC Treaty would display a considerable lacuna if Chapter X were not equally applicable to that aspect of trade in goods with non-member countries, because otherwise there would be no limitation on Member States' powers in that field since an application by analogy of the restrictions under Article 71 alone is inconceivable.

In the light of the foregoing arguments, the interests of Member States in the protection of their industries and in the revenue yielded by customs duties could not be guaranteed unless a common customs tariff Avere set up. No obligation on the part of the Member State through which goods are transported, to give consideration to the interests of another Member State when determining and implementing its economic policy, can be inferred from the principle of loyalty to the Community laid down by Article 5 of the EEC Treaty, even on the supposition that that principle may be directly transposed into the context of the ECSC Treaty. A broad interpretation of Article 4 (a) would therefore tend to deprive Member States of the power ultimately to deal with their own interests, whereas the whole system of international law is so conceived that such powers always belong to the States concerned or, at the very least, to a supranational organization, in the determination of whose policies each State participates on an equal footing. Moreover, such an interpretation would culminate in a distortion of competition in favour of persons importing goods from non-member countries through a Member State, and would therefore also harm private interests protected by Articles 2 and 3 of the ECSC Treaty, especially those of Community industries and direct importers.

The Federal Government concedes that the above interpretation of the relationship between Article 4 (a) and Chapter X of the ECSC Treaty may be called in question by Articles 73 and 74 thereof. In that regard, however, it may be pointed out that it is precisely subparagraph (2) of the first paragraph of Article 74 which militates in favour of an application of Chapter X as a whole also to the movement within the Community of goods originating in non-member countries. On the other hand, the wording of Article 73 bears out the opinion that as far as the concept of external trade in Chapter X is concerned importance attaches, not to the actual movement of goods within the Community or to direct trade with non-member countries, but to a legal concept of the movement of goods which is derived from GATT. No different solution could be adopted unless Article 73 could be regarded as a genuine exception departing completely from the rules of the ECSC Treaty, whereas the content of that article affords no evidence in support of such an interpretation. It must moreover be borne in mind that, unlike Article 115 of the EEC Treaty, Article 74 of the ECSC Treaty lays down a derogation from Article 4 (a), not for the sake of every deflection of trade but only in very serious and compelling circumstances. In those circumstances, a broad interpretation of Article 4 (a) would run completely counter to the fundamental principle of the Treaties, which requires the EEC Treaty, for the sake of the harmonization of commercial policy, to limit the rights of Member States in the field of commercial policy more stringently than does the ECSC Treaty.

Lastly, it should be taken into account that, by its very wording, subparagraph (3) of the first paragraph of Article 74 empowers the Community, even in respect of goods moving within the Community, to adopt measures such as the collection of customs duties at internal frontiers, even in derogation from the general rules of the ECSC Treaty. That literal interpretation is confirmed by the objectives of the ECSC Treaty, which is designed to protect Community industry.

Article 74 cannot be interpreted as excluding from the customs powers held by Member States under Article 71 the matters of commercial policy defined in the various subparagraphs of its first paragraph. Such an interpretation of the provision would conflict with the fact that Article 71 is based on the idea that the powers of Member States are basically unlimited but are, under the second paragraph, curtailed in individual points, though not eliminated, by the subsequent provisions. In that regard Article 74, whose allusion to “any measures” principally envisages recommendations, itself implicitly assumes the formal powers of the Member States in the field which it covers, since those recommendations must be implemented by the enactments of the Member States. It is, furthermore, necessary to bear in mind that the partial inability of the ECSC to function means that the protection of Member States' interests and those of undertakings, which are rooted in Article 74, cannot be fully guaranteed except by Member States; that, however, reveals the audacity of the proposition that the powers of the ECSC preclude any parallel powers.

In order to collect their own customs duites Member States therefore need specific authorization, at most, only if, contrary to the foregoing arguments, Article 4 (a) must in principle be understood to mean that it totally exempts from customs duties even goods from non-member countries circulating within the Community.

The Federal Government takes the view that, even if the Court were not to concur with the foregoing arguments, the charging of differential customs duties by the Federal Republic of Germany is covered by the Commission's recommendations under article 74 of the ECSC Treaty.

In order to refute the objection that the commercial policy referred to in Chapter X does not extend to the movement within the Community of goods originating in non-member countries, the Federal Government, in addition to the arguments set forth above, observes that, despite such an interpretation of Chapter X, commercial policy may introduce customs duties even on goods from non-member countries moving within the Community. Evidence to show that the High Authority, in making its recommendations, wished to include precisely that type of traffic within the Community emerges from the fact that the recitals in the preamble to the recommendations also relate to that sector, and that Point A of the recommendation of 28 January 1959 refers in very general terms to coal originating in non-member countries.

Turning to the opinion expressed by the court making the reference, namely that no adequate powers were conferred on the Federal Republic principally on the ground that the recommendations are limited in time, the Federal Government maintains that the argument does not distinguish properly between the time-limit on the validity of the recommendation itself and the fact that the customs quotas were fixed only in respect of certains years. Despite the use of the expression “temporarily”, it is clear from the wording of the recommendation of 28 January 1959 that the recommendation itself is not limited to 1959. In the following years the recommendation itself was not extended as regards the collection of customs duties; indeed, only, the tariff quota was fixed for each year. In such a legal situation it cannot be supposed that the recommendation ceases to be valid if the customs quota is not fixed for a given year. The economic difficulties of the coal sector in the Federal Republic of Germany have actually grown in the meantime. In view of the reference to that situation in the preamble to the decision it cannot be imagined that the High Authority wished the collection of customs duties to be discontinued in the other years. It is even possible that, by virtue of Article 74, the High Authority was required to maintain that emergency requirement, because its discretionary power had disappeared. Such a situation necessarily suggests that the customs quota fixed in the recommendation automatically continues to apply until it is fixed afresh.

Lastly, even if it is possible that subparagraph (3) of the first paragraph of Article 74 of the Treaty does basically vest in the High Authority the exclusive power to authorize Member States to depart from Article 4 (a), there is in this particular case a state of emergency due to the High Authority's failure to act, which allows the view, as the Court admitted in the fishing sector, that there is a subsidiary power on the part of the Member States to adopt provisional rules in their capacity as agents of the Community. The Federal Republic cannot be accused of failing to put sufficient pressure on the Commission to adopt the necessary decisions, since it was entitled to assume either that it needed no authorization from the High Authority or that such authorization had already been granted to it by the earlier recommendations.

The Federal Government thereby arrives at the conclusion that, although Article 4 (a) is equally applicable to goods originating in non-member countries, it does not impinge on Chapter X of the ECSC Treaty, which deals with the customs powers of Member States as regards goods from non-member countries in circulation within the Community.

The Commission of the European Communities takes the view that, before the question raised by the Finanzgericht is examined, it is appropriate to set forth a number of general points concerning powers in matters of commercial policy in the field of ECSC products.

It starts by observing that the ECSC Treaty, unlike the EEC Treaty, left Member States' powers in matters of commercial policy largely intact, as may be seen chiefly from the first paragraph of Article 71, and transferred only limited powers to the Community. Nevertheless, the Community's powers in the field of external trade are not negligible. They entail not only unilateral measures under Articles 72, 73 and 74 of the ECSC Treaty but also contractual measures such as the negotiation and conclusion of trade agreements, which are not expressly envisaged by the Treaty but over which a power, on the part of the Community, may be inferred from a whole series of Treaty provisions.

Thus, in its very conception, the ECSC is, the Commission argues, more than a free-trade area within the meaning of Article XXIV, paragraph 5 (b) of GATT. Even though it is not a full customs union, it none the less constitutes a hybrid form between a customs union and a free-trade area by virtue of its real powers of co-ordination and intervention; the characteristics of a customs union are further emphasized by the aspect of the free movement of goods. Despite all that, it is undeniable that, by comparision with the EEC, the ECSC shows a considerable deficiency in the field of commercial policy, including matters of customs duties.

The Commission believes that it is necessary to inquire, first in the light of actual developments and then in the context of legal considerations, whether the position of the ECSC as outlined above has undergone a change, in particular after the entry into force of the EEC Treaty.

As regards actual developments, the Commission notes that after the EEC Treaty entered into force there was a growing trend towards incorporating ECSC products also in the single commercial policy which was in the making. Thus, in the steel sector, rapid progress was made towards a broad de facto harmonization of customs duties and the development of a Community policy characterized by the conclusion of agreements by the Commission, acting on the basis of a mandate conferred by the Member States' representatives meeting within the Council. No standardization of that nature has occurred with regard to coal. Here, too, however, first the High Authority and then the Commission were vested by Member States with a mandate to negotiate in the context of the GATT negotiations which led to a consolidation of national customs duties.

As far as the conclusion of commercial agreements relating to ECSC products is concerned, practice varies. There have been agreements signed by the Member States, acting either alone or in conjunction with the Community, agreements concluded by the Commission in the context óf the EEC Treaty which have covered ECSC products without encountering opposition from Member States, and agreements concluded by the Community in pursuance of Article 95 of the ECSC Treaty.

In spite of the developments described above, however, it cannot be generally concluded that, within the ECSC Treaty, there has been a complete shift of powers in matters of external policy, to the benefit of the Community. The abovementioned considerations at all events support the conclusion that the allocation of powers has not been fundamentally changed by the progress of events and that the basic powers of Member States to levy autonomous duties on coal cannot be called in question.

From a legal viewpoint, the Commission points out that, according to an argument which has become increasingly widespread in academic legal writings, the common commercial policy of the EEC Treaty should, at least in a supplementary capacity, extend to ECSC products. It notes that if that argument were to apply equally to the charging of customs duties on coal from non-member countries, the legal appraisal of the present case would in turn be different.

In that regard the Commission observes that the above-mentioned argument is based on the principle that the provisions of the EEC Treaty on commercial policy are general in character and contain no restrictions on any specific products. That contention is based principally on the fact that the reasons which originally militated in favour of excluding commercial policy from the ECSC Treaty became irrelevant after the development of a common commercial policy which was valid for the whole economy. The upshot would be the replacement of the essentially intergovernmental administration of commercial policy in the ECSC by the common commercial policy evolved, or to be evolved, under the EEC Treaty, regard of course being had to the limited and specific powers already held by the ECSC in that field.

In Opinion No 1/75 the Court left the door open to that interpretation. The Community institutions responsible for the common commercial policy have not so far subscribed to that thesis, yet neither have they expressly rejected it.

If that contention (the “extension thesis”) were accepted, the consequences would be the following:

1) The Council of the EEC would be empowered to fix the customs duties on ECSC products, on the strength either of Article 113 or of Article 28 of the EEC Treaty, which also belongs to the armoury serving the commercial policy of that Treaty.

2) The fact of basing such powers on the EEC Treaty would not, on the other hand, automatically mean that national customs duties previously governing ECSC products would become invalid. That being so, it would be absolutely imperative, in the interests of a harmonious transition from a national to a Community system, and thus in the interests of legal certainty, to allow customs duties previously in force to continue under a provisional arrangement until such time as Community powers were actually exercised.

The Commission then turns to consider the preliminary question as formulated by the court making the reference. It observes that the question which arises in the context of this case concerns the basis and scope of the free movement of goods from non-member countries under the ECSC Treaty. In that regard the Commission takes the view that, whilst the existence, under Article 71 of the ECSC Treaty, of measures of commercial policy which differ between Member States makes it necessary to guarantee that such measures shall not be rendered ineffective by deflection of trade, their presence in no way requires the curtailment, a priori, of the principle of the free movement of goods but only the insertion of specific derogations.

The Commission nevertheless considers that the Court's judgment of 14 July 1961, whilst acknowledging the principle of free movement, limited its scope to a significant degree, mainly in the finding that: “Although the principle of free movement ... prohibits the Member States from refusing entry into their territory of products originating in third countries and lawfully imported into another Member State, Article 73 of the Treaty on the other hand assigns the administration of import licences for trade with third countries to the government in whose territory the place of destination for imports is situated.” The Commission notes, however, that the restriction subjects free movement to a subjective criterion (namely the appointment of a destination on the occasion of the first importation into the Community) which is not, for practical purposes, capable of proof; the result is that the principle of the free movement of goods from non-member countries is, in practice, deprived of an absolutely essential part of its practical content. The experience gained in the meantime by the Commission in the application of Article 115 of the EEC Treaty confirms that the subjective criterion of destination is unusable and that the free movement of goods from non-member countries may be consistent with legitimate economic needs on precisely those occasions when, from the outset, some other Member State is envisaged as the place of destination. The same considerations are valid in the context of the ECSC Treaty, and therefore the Commission can now no longer agree with the restriction mentioned above.

The “mutual assistance” procedure under the third paragraph of Article 71 of the ECSC Treaty corresponds to the arrangements under Article 115 of the EEC Treaty; it is thus an instrument serving primarily to ensure that measures adopted by Member States in pursuance of the Treaty shall not be rendered ineffective by deflection of trade. Unlike the first paragraph of Article 115 of the EEC Treaty, the third paragraph of Article 71 of the ECSC Treaty confers no powers on the High Authority as regards the adoption of national measures; on the other hand, the High Authority does have to consider such measures and to determine whether they comply with the Treaty and the international agreements which are in force. Moreover, it is important that such measures should not be adopted unilaterally but by mutual agreement with the Member State or States concerned, in order to avoid administrative hindrances.

The legal entitlement to adopt protective measures is based here, therefore, in contrast to Article 115 of the EEC Treaty, directly on the Treaty, but is of no avail without the agreement of the other Member State concerned. Owing to the fact that the risk of deflection of trade often necessitates immediate action whereas it takes some time to set in motion the procedure of mutual assistance, the High Authority evolved, in practice, an emergency procedure enabling Member States to adopt provisional measures pending the actual implementation of the mutual assistance arrangements.

Interpreted and described in that light, the machinery under the third paragraph of Article 71 is quite adequate for obviating the problem of harmful deflection of trade, and there is no need to vest in Member States, in addition, any autonomous powers whatever for the adoption of precautionary measures in trade in goods between Member States. In particular, such a right may not be inferred from the power granted to Member States by the first paragraph of Article 73 to administer import and export licences in trade with non-member countries; indeed, if it were otherwise, the mutual assistance scheme would be rendered quite ineffective.

However, the Commission believes that the High Authority should, in addition, when adopting under subparagraph (3) of the first paragraph of Article 74 a Community measure on the importation of goods from non-member countries, be empowered to introduce an ancillary provision in association with that measure, in order to curtail the free movement of goods if that appears necessary in view of its nature; it would indeed be a pointless duplication in the present instance to allow the essential “flank protection” to be achieved only by the devious expedient of utilizing the mutual assistance scheme.

According to the Commission, consideration should lastly be given to the legal situation which is arrived at if the “extension thesis” which it set forth earlier is adopted.

It would be consistent with the logic of that thesis to resort to the machinery of Article 115 of the EEC Treaty for the purposes of derogation as well. None the less, the transitional situation should once again be taken into account; mesures validly adopted as part of the mutual assistance scheme under the third paragraph of Article 71, or measures introduced by the High Authority under subparagraph (3) of the first paragraph of Article 74 of the ECSC Treaty, which limit the free movement of products from non-member countries, should be regarded as valid for as long as the powers granted to the Commission by Article 115 of the EEC Treaty are not actually exercised.

In drawing its conclusions from the foregoing observations, the Commission claims, first and foremost, that no ground may be seen to point to the invalidity of either the High Authority's recommendation of 28 January 1959 or its other recommendations concerning the continuation until 1962 of the dutyfree quota scheme.

Article 4 (a) of the ECSC Treaty in no way means that the Community may not order the introduction of customs duties on goods crossing the internal frontiers of the Community as well, with a view to affording measures of economic policy protection against the indirect deflection of trade.

Nor are there any objections to be raised by the Court of its own motion against the validity of the High Authority's recommendations. For various reasons, Germany encountered a serious slump on the coal market during 1958. The slump was aggravated by the constant pressure of coal imports from non-member countries. The material conditions for intervention under subparagraph (3) of the first paragraph of Article 74 of the ECSC Treaty were thereby satisfied.

In the light of the serious threats affecting the German coal market on account of the unlimited import opportunities available until September 1958, the measures adopted by the High Authority were not disproportionate, either. Furthermore, the introduction of a duty-free quota also took account, as far as possible, of the reuqirements under Article 3 (f) of the ECSC Treaty.

The annual revision of the duty-free quota clearly demonstrates that, at least until the end of 1963, the High Authority still regarded the basic recommendation of 28 January 1959 as valid.

As regards 1964, in view of the fact that the German Law of 27 December 1962 on tariff quotas for solid fuels for 1963 and 1964 had created a firm legal basis for the duty-free importation of at least 6.2 million tonnes of coal from non-member countries, the High Authority considered it unnecessary to revise that quota by way of a special recommendation. Since the continuous revision of the tariff quotas in German legislation afforded adequate guarantees for subsequent years as well, the High Authority, after 1964, again considered that there were no grounds for adopting special Community measures.

Following the adoption of the German Law of 14 December 1970 on tariff quotas for solid fuels for 1971 to 1976 inclusive, it became apparent during consultations within the Council, held in November 1971 in pursuance of the Protocol on Energy Problems of 21 April 1964, that there was no significant opposition or objection to the German import system. Thus, even if the recommendation of 28 January 1959 were to be regarded as being no longer authoritative in all its aspects, the system must be regarded as endorsed by the Community.

In view of those considerations, the Commission submits that the following conclusions must be drawn:

1) The recommendation of 28 January 1959 and the recommendations adopted until 1962 for the revision of the duty-free quota do not contravene either Article 4 (a) or any other provision of the ECSC Treaty.

2) The recommendation of 28 January 1959 was never formally repealed. Even if the view be taken that the obligation which it contains to fix a duty-free quota every year has been replaced since 1964 be independent German measures, nevertheless the other provisions made by the recommendation hold good. In any case, the Federal Republic's right to levy, on coal imported from non-member countries in excess of the fixed quota, a differential customs duty in conformity with the prevailing GATT requirements cannot be challenged, owing to Community endorsement of the relevant German legislation in 1971, even if the recommendation of 28 January 1959 were to be regarded as no longer mandatory in all its parts.

The Commission therefore suggests that the following answer be given to the question raised by the court making the reference:

“Consideration of the recommendations adopted by the High Authority between 1959 and 1962 on the arrangements for the importation by the Federal Republic of Germany of coal from non-member countries has disclosed no factor of such a kind as to affect the validity of those recommendations.”

III — Oral procedure

At the sitting on 7 February 1984 Mabanaft, represented by Dr Wolf-Dietrich Krause-Ablass, Rechtsanwalt, Düsseldorf, the Government of the Federal Republic of Germany, represented by Professor Dr Albert Bleckmann, acting as Agent, and the Commission of the European Communities, represented by its Legal Adviser, Peter Gilsdorf, acting as Agent, presented oral argument.

The Advocate General delivered his opinion at the sitting on 27 March 1984.

Decision

1. By order of 7 February 1983, received at the Court of Justice on 8 March 1983, the Finanzgericht [Finance Court] Düsseldorf submitted under Article 41 of the ECSC Treaty a preliminary question concerning the validity of the recommendations of the High Authority of 28 January 1959 Amtsblatt of 11. 2. 1959, p. 197) and of 30 October 1962 (Amtsblatt of 12. 11. 1962, p. 2683).

2. The question arose in litigation between Mabanaft GmbH, having its registered office in Hamburg, and the Hauptzollamt [Principal Customs Office] Emmerich, which had demanded from the plaintiff payment of differential customs duties totalling DM 1382829.77 in respect of coal imported during 1977 and 1978 by the limited partnership Fisser & van Doornum Köln GmbH & Co., of which Mabanaft is the successor in title.

3. The coal in question had initially been imported into the Federal Republic of Germany free of customs duties, as being “EEC products of Netherlands origin, dump stocks and storage stocks”. Subsequent inquiries by the German customs enforcement officers revealed, however, that although the goods were in free circulation in the Netherlands, they derived in fact from various non-member countries.

4. The corrective notices dealing with the charging of a differential customs duty which were served on Mabanaft by the Hauptzollamt Emmerich are based on the German Law of 14 December 1970 on tariff quotas for solid fuels for 1971 to 1976 inclusive (Bundesgesetzblatt I 1970, p. 1713) as amended by the Law of 28 June 1976. The latter, whilst amending the quota previously in force, extended until 1981 the validity of the 1970 Law.

5. The Hauptzollamt Emmerich argued before the Finanzgericht that the levying of a differential customs duty on imported coal originating in non-member countries and released into free circulation in another Member State was not contrary to Community law. In its opinion, the issue concerned a measure of commercial policy, which remains within the powers of Member States pursuant to the first paragraph of Article 71 of the ECSC Treaty.

6. In reply, Mabanaft claimed that the disputed measure was incompatible with Article 4 (a) of the ECSC Treaty, which prohibits within the Community “import and export duties, or charges having equivalent effect, and quantitative restrictions on the movement of products”.

7. The Finanzgericht considered that the charging of a differential customs duty in the above-mentioned case did not fall within the powers of Member States in matters of commercial policy, but that it might none the less be compatible with the ECSC Treaty as a measure adopted on the basis of recommendations which were made to the Federal Republic of Germany by the High Authority under Article 74 of the ECSC Treaty, on condition that those recommendations were validly adopted and were still valid at the material time. The Finanzgericht accordingly referred the following question to the Court:

“Are the Recommendations of the High Authority of 28 January 1959 (Amtsblatt der Europäischen Gemeinschaften of 11. 2. 1959, p. 197) and of 30 October 1962 (Amtsblatt of 12. 11. 1962, p. 2683) compatible with Article 4 (a) of the Treaty establishing the European Coal and Steel Community; are they capable of justifying national measures introducing a differential duty on coal imported from the open market in a Member State but which originated in a non-member country, and if so for how long are such measures justified?”

8. The Recommendation of 28 January 1959 recommends the Government of the Federal Republic of Germany to introduce, on a temporary basis, customs duties on imports of coal originating in non-member countries and destined for the Federal Republic, in excess of a duty-free quota, at a rate which is not to exceed DM 20 per tonne, and to establish, for 1959, a dutyfree quota of not less than 5 million tonnes; the recommendation calls upon the governments of the other Member States to lend the Federal Republic the assistance essential for the purpose of collecting such duties.

9. The Recommendation of 30 October 1962 is the last of a series (comprising the recommendations of 3 November 1959, 3 November 1960, 13 December 1961 and 30 October 1962) whereby the High Authority fixed the minimum level for the duty-free quota for the years 1960, 1961, 1962 and 1963 respectively.

10. The question submitted by the Finanzgericht must therefore be understood as inquiring, in respect of eveiy year from 1959 to 1963, whether the recommendation of 28 January 1959 and the recommendation fixing the minimum annual quota were valid; on the other hand, as regards the period from 1964 to 1977/78, the question relates solely to the validity of the recommendation of 28 January 1959, since no further minimum level was fixed by the High Authority for the years subsequent to 1963.

11. The first part of the question simply amounts to asking whether the disputed recommendations are compatible with the principle of the free movement of products, as laid down by Article 4 (a) of the ECSC Treaty, in respect of goods which have been released into free circulation in a Member State. In fact, as regards the conditions to which subparagraph (3) of the first paragraph of Article 74 of the ECSC Treaty subjects the adoption of a recommendation, it is not denied that they were fulfilled during the period from 1959 to 1963.

12. An interpretation of the aforesaid Article 4 may thus be seen to be essential for an appraisal of the validity of the disputed recommendations.

13. In that connection it is appropriate to begin by considering the interpretation suggested in its observations by the Government of the Federal Republic of Germany, which takes the view that the article cannot be correctly understood unless account is taken of the first paragraph of Article 71 of the ECSC Treaty, according to which: “The powers of the Governments of Member States in matters of commercial policy shall not be affected by this Treaty, save as otherwise provided therein.”

14. According to the German Government, the scope of Article 4 (a) and of the first paragraph of Article 71 must be determined by reference to the fact that the ECSC is not a true customs union but, although displaying the characteristics of a common market, is without a common customs tariff, with the result that products falling within the ECSC — in this instance, coal — may be imported into the various Member States sometimes subject to payment of a more or less high rate of customs duty, and sometimes duty-free. In those circumstances the first paragraph of Article 71 enables Member States not only to pursue an independent commercial policy but also to ensure compliance with that policy by avoiding deflections of trade by means of customs duties levied on imports from another Member State which have originated in non-member countries.

15. In the light of those considerations, the German Government believes that there are grounds for interpreting Article 4 (a) in a restrictive manner, namely as affecting those products originating in Member States the free movement of which does not threaten to obstruct any Member State's commercial policy towards non-member countries.

16. In that regard it is appropriate to not that the interpretation advocated by the German Government exceeds the bounds of the question raised, inasmuch as it not only leads to claiming that Article 4 (a) is no obstacle to the adoption of a recommendation calling upon a Member State to levy a customs duty on coal originating in non-member countries and imported from another Member State, but also leads to acknowledging that.such a duty may be imposed by a Member State independently of any recommendation.

17. That interpretation cannot be upheld.

18. It should be pointed out that under the provisions of the ECSC Treaty the principle of free movement necessarily extends to products originating in non-member countries and released into free circulation in a Member State.

19. It is apparent from the provisions of the Treaty that the institutions of the Community have certain duties as regards external trade. Thus, Article 3 of the Treaty, which lays down the tasks of the Community institutions, provides in subparagraph (a) that they must “ensure an orderly supply to the common market, taking into account the needs of third countries” and in subparagraph (f) must “promote the growth of international trade”.

20. Article 15 of the Convention on the Transitional Provisions, annexed to the ECSC Treaty, presupposes the existence of the principle of the free movement of goods, inasmuch as it requires inter alia, with reference to steel, authorization from the High Authority to enable States to take appropriate steps of their own to afford their indirect imports through Member States with lower tariffs the same degree of protection as that afforded by their own tariffs to their direct imports. In fact, there would have been no need for such authorization if Member States had been free to adopt unilaterally, within the framework of their own commercial policy, whichever measures were considered most expedient in dealing with indirect imports.

21. In its judgment of 14 July 1961 (Vloebergbs, Joined Cases 9 and 12/60, [1961] ECR 197), the Court expressly endorsed the principle (which was not disputed by the parties) of the free movement of products originating in non-member countries and released into free circulation in a Member State.

22. All the foregoing considerations show that the ECSC does not constitute a free-trade area in which the origin of a product is a determining factor, but is more akin in its structure to the principle of a customs union.

23. Whilst it should therefore be concluded that Article 4 (a) of the ECSC Treaty lays down a principle of free movement which embraces also products originating in non-member countries and released into free circulation within the Member States, it should none the less be pointed out that, unlike Article 9 of the EEC Treaty which does not refer to any limitation, Article 4 of the ECSC Treaty specifies that import duties and other restrictions are recognized as incompatible with the common market for coal and steel and are accordingly to be abolished and prohibited within the Community, “as provided in this Treaty”.

24. It is apparent from the foregoing reservation that the principle of free movement may, under the ECSC Treaty, be subject to limitations in the circumstances envisaged therein. It is therefore necessary to consider whether, in respect of recommendations, the ECSC Treaty contains provisions which empower the High Authority to depart from that principle.

25. In Article 74, the ECSC Treaty provides that the High Authority is empowered to take any measure which is in accordance with the Treaty, and in particular with the objectives set out in Article 3, and to make to governments, in three cases enumerated in subparagraphs (1), (2) and (3) of the first paragraph of Article 74, any recommendation which is in accordance with the second paragraph of Article 71. The third such case concerns “one of the products referred to in Article 81 of this Treaty... imported into the territory of one or more Member States in relatively increased quantities and under such conditions that these imports cause or threaten to cause serious injury to production within the common market of like or directly competing products”.

26. Regard being had to the aforesaid provision, and to the fact that it is not disputed that the conditions subject to which measures may be taken by the Commission are satisfied, the conclusion to be drawn is that the High Authority was empowered to authorize a Member State, by way of a recommendation under subparagraph (3) of the first paragraph of Article 74, to depart from the principle laid down by Article 4 (a) of the ECSC Treaty with regard to coal imported from non-member countries and released into free circulation in another Member State.

27. In the light of the foregoing considerations, the disputed recommendations must therefore be recognized as being compatible with Article 4 (a) of the ECSC Treaty.

28. The second part of the question raised by the court making the reference inquires in substance how long the recommendations in question have remained valid.

29. Since the circumstances envisaged by subparagraph (3) of the first paragraph of Article 74 are acknowledged to have been present during the years 1959 to 1963, only the period from 1964 to 1978 inclusive remains to be considered.

30. In that regard it should first be made clear that, in relation to the above-mentioned period, the question is in fact concerned only with the recommendation of 28 January 1959.

31. As may be seen from Section A, the recommendation authorizes the Government of the Federal Republic of Germany to introduce temporary customs duties on coal originating in non-member countries and destined for the Federal Republic, to be levied on imports in excess of a duty-free quota. Paragraph 2 of Section A stipulates that the duty-free quota for 1959 may not be less than 5 million tonnes.

32. The recommendation thereby lays down the principle of opening a duty-free quota in order to safeguard, as the fifth recital in the preamble explains, the traditional patterns of importation into the Community, so as to achieve an orderly supply to the market. However, the recommendation confines itself to fixing a minimum quota for 1959 alone, on the understanding that the level may be amended thereafter in the light of developments on the coal market.

33. In those circumstances it is unnecessary that the quota level should be fixed by the Member State concerned by reference to a minimum indicated in a recommendation from the High Authority, as was the case up to and including 1963. The only matter of importance is that the High Authority should be in a position to ascertain, in good time, that the quota has been fixed at a suitable level to ensure the preservation of traditional patterns of importation. That facility has always been guaranteed as far as German legislation on quotas is concerned, and consequently the absence of any recommendation from the High Authority, fixing the minimum quota, in no way affects the validity of the recommendation of 28 January 1959.

34. Although the ECSC Treaty does not expressly limit the duration of the validity of the exceptional provisions derogating from its rules, it is obvious that such provisions cannot be regarded as being still valid once the circumstances justifying them have ceased to obtain.

35. In that regard it should be observed that, even after the period from 1959 to 1963 the demand for coal within the Community, to which Community output had to adapt itself, was in constant decline. There is therefore no doubt that the liberalization of imports of products originating in non-member countries during the majority of the years to be taken into consideration would still further have depressed the market and would very seriously have harmed German output by increasing to an intolerable extent stocks which were already very high.

36. Further, certain increases in demand such as those of 1968 to 1970 and of 1974, which were subsequently shown to be short-lived phenomena, cannot, contrary to the opinion of the plaintiff in the main proceedings, be regarded as having put an end to the circumstances which justified the existence of the disputed recommendation.

37. The view may indeed be taken that there was no reason to believe that the crisis in the coal sector had come to an end merely on the strength of a few slight improvements in demand which, as experience later showed, were simply due to short-term economic factors.

38. The threat of serious damage to Community output moreover never ceased to exist, even in the most favourable years, as is apparent from the statistics included in the documents before the Court which deal with output, consumption and stocks during the above-mentioned years.

39. A study of the position on the coal market during the period from 1964 to 1978 therefore points to the conclusion that, over that period, there was no reversal of trends such as to put an end to the circumstances which had justified the adoption of the disputed recommendation.

40. In the light of those considerations the Court must therefore rule that consideration of the question raised has disclosed no factor of such a kind as to call in question the compatibility of the Recommendations of the High Authority of 28 January 1959 and 30 October 1962 with Article 4 (a) of the ECSC Treaty, the validity of the Recommendation of 30 October 1962 as regards the year 1963 or that of the Recommendation of 28 January 1959 from the date of its adoption until the end of 1978. Those recommendations may, therefore, for the period in question, serve as a legal basis for national rules providing for the charging of a differential customs duty on coal originating in a non-member country and imported after its release into free circulation in another Member State.

Costs

41. The costs incurred by the Federal Republic of Germany and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT in answer to the question referred to it by the Finanzgericht Düsseldorf, by order of 7 February 1983, hereby rules: