JUDGMENT OF 27.3.1984 — CASE 50/83 COMMISSION / ITALY

In Case 50/83

THE COURT composed of: T. Koopmans, President of the First Chamber, acting as President, K. Bahlmann (President of Chamber), P. Pescatore, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and O. Due, Judges, Advocate General : Sir Gordon Slynn Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the conclusions, submissions and arguments of the parties may be summarized as follows:

I — Facts and procedure

Article 1 of the Italian Ministerial Decree of 10 July 1980 (Gazzetta Ufficiale della Repubblica Italiana No 191 of 14. 7. 1980) provides that “used buses which come from outside Italy may not be tested with a view to registration, if their proven date of construction is more than seven years prior to the application for a roadworthiness test.” This prohibition applies to vehicles which are cleared through customs after 31 July 1980.

The Commission considers that this provision, which affects only imported buses, constitutes in effect a prohibition on their importation, since it is not conceivable that importation will take place when they cannot be admitted to the tests or, consequently, be registered. In so far as it applies to used buses imported from other Member States, it constitutes a measure having an equivalent effect to a quantitative restriction on imports within the meaning of Article 30 of the Treaty.

In a letter dated 27 Februaiy 1981, the Commission drew the attention of the Italian authorities to this point and requested clarification concerning the procedure for the registration of buses already within the country which were more than seven years old.

The Italian authorities replied in a letter dated 22 May 1981 that, having regard in particular to a circular of 20 July 1979 issued by the Transport Ministry, no vehicle, if it had been constructed or reconstructed using parts essential for road safety (e.g. the chassis, brakes, or steering) which were more than seven years old, could be registered for the first time in Italy, even if it had been tested under Article 54 of the Italian Highway Code, because the safety of such buses on the roads could no longer be assured. This policy was confined to vehicles which carried a high element of risk, measured in terms of their weight, their size and the number of passengers travelling in them. The purpose of the Ministerial Decree of 10 July 1980 was to extend the same policy to include used buses from outside Italy which were more than seven years old.

According to the Commission, this statement of the facts confirms that discrimination is being practiced between imported buses exceeding seven years of age, which are not even admitted to the tests for registration, and similar buses of domestic construction, the prohibition of which is dependent on the result of tests carried out under Article 54 of the Italian Highway Code.

Taking the view that the ministerial decree in dispute constituted a breach of Article 30 of the Treaty, it gave formal notice to the Italian Republic on 14 December 1981, as provided in Article 169 of the Treaty, inviting the Italian Government to submit its comments within a period of one month.

In a letter dated 25 February 1982, the Italian Government replied that, in order to eliminate any provision which might have the effect of discriminating against vehicles from outside Italy, it was considering the modification of the disputed ministerial decree by a measure which would provide as follows: “The application of the provisions contained in the Ministerial Decree of 10 July 1980 relating to the registration in Italy of used buses which come from abroad shall be extended to include all buses which require registration in Italy the first time.”

The Commission considered that such an amendment would not have the effect of putting an end to the infringement of Article 30 of the Treaty and, in a latter dated 13 October 1982, delivered a reasoned opinion to the Italian Republic, as provided by the first paragraph of Article 169 of the Treaty, inviting it to comply with the opinion within a period of two months.

The Commission, when it did not receive any response other than an acknowledgment of receipt from the Italian Government, brought an action before the Court, pursuant to the second paragraph of Article 169 of the Treaty, claiming that the Italian Republic had failed to fulfil its Community obligations.

The application of the Commission was lodged at the Court Registry on 29 March 1983.

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. It did, however, put certain questions to the parties, to which they replied within the periods prescribed.

II — Conclusions of the parties

The Commission of the European Communities claims that the Court should :

Declare that, by prohibiting the importation of used buses from another Member State which were constructed more than seven years prior to the date of the application for a roadworthiness test, the Italian Republic has failed to fulfil its obligations under Article 30 of the EEC Treaty.

The Italian Republic contends that the Court should:

Dismiss the application.

III — Submissions and arguments of the parties

The applicant) the Commission of the European Communities, reiterates certain arguments already put forward ín the course of the pre-litigation procedure.

In connection with the term “measures having equivalent effect”, it refers to Article 2 (2) of Commission Directive 70/50/EEC of 22 December 1969 (Official Journal, English Special Edition, 1970 (I), p. 17), which states that this term covers inter alia measures which “make imports ... subject tö a condition — other than a formality — which is required in respect of imported products only, or a condition differing from that required for domestic products and more difficult to satisfy”.

More specifically, the decree in dispute may be classified in the category of measures which hinder the purchase by private individuals of imported products (Article 2 (3) (k) of the directive).

Furthermore, Council Directive 77/143/EEC of 29 December 1976, on the approximation of the laws of the Member States relating to roadworthiness tests for motor vehicles and their trailers (Official Journal 1977, L 47, p. 47) provides for a duty to make such vehicles undergo periodic roadworthiness tests, with a clear definition of the compulsory items to be tested and the frequency of the tests. A total ban on the registration of any bus which was constructed more than seven years prior to the application for testing is therefore not justified by the requirements of roadworthiness.

In the view of the Commission, the discrimination alleged by it is in no way removed by the extension of the measure in dispute to include used buses of Italian origin as suggested by the Italian Government. After all, the possibility of a used bus of Italian origin being registered in Italy for the first time, when it is more than seven years old, is purely hypothetical. What is more, any Italian buses which have long been registered in Italy and are more than seven years old will escape the prohibition. Hence the rules as thus amended would retain their discriminatory nature: only in a purely formal sense would they be applicable without distinction to domestic as well as imported products.

The defendant, the Italian Government, begins by declaring that the measure which is disputed by the Commission has been replaced by a Ministerial Decree dated 14 December 1982 (Gazzetta Ufficiale della Repubblica Italiana No 6 of 7 January 1983), which provides in general terms that buses which were constructed more than seven years previously will not be admitted to the tests with a view to first registration in Italy. This decree draws no distinction between vehicles of domestic construction and those of foreign origin. Thus there is no longer any infringement of either Article 30 of the Treaty or Commission Directive 70/50/EEC.

In any event, there is no total ban on the registration of vehicles which were manufactured more than seven years previously, nor therefore on such vehicles being driven if they have Italian registration. Buses of foreign origin as well as those of domestic construction are admitted to the tests for the purpose of registration provided that, subject to any modifications which may be required, they are intended and actually used for purposes other than those which are specific to buses under the existing provisions, namely the carriage of more than nine persons.

The Italian Government considers that the situation which is brought about by the Decree of 14 December 1982 does not constitute discrimination against foreign products. It concedes that the event of a bus being manufactured in Italy and registered more than seven years later will seldom occur. However, from the viewpoint of equal conditions of admission to the registration procedure, it is inappropriate to treat buses which have yet to be registered on the same footing as buses which have already been registered. Furthermore, the fact that a bus which has been registered for more than seven years may, subject to inspections for road safety, remain in service without having its papers cancelled is of equal benefit to buses which have been imported into Italy and registered there before seven years have elapsed since they were built. Accordingly, the circumstances which amount to a measure having equivalent effect contrary to Article 30 of the Treaty are not made out.

The Italian Government argues further that the rules at issue were adopted for reasons connected with the need to ensure the safety of individuals. The preamble to the Decree of 14 December 1982 is addressed exclusively to this problem. It is this requirement that entails the need for a careful examination of the mechanical safety of vehicles, particularly those with which the decree is concerned. There was an urgent need for the introduction of the disputed measure in view of the use of buses in public transport; moreover, the same considerations of safety apply in the case of private use, owing to the large numbers of people who are carried by them. Accordingly, the disputed measure is justified under Article 36 of the Treaty.

In its reply, the Commission reaffirms its opinion that the difference in the treatment of buses imported from other countries and buses registered in Italy persists even after the entry into force of the new Decree of 14 December 1982. In practice, the Italian Government's assertion that buses which come from outside Italy and are more than seven years old may be freely bought and sold in Italy can only be true of buses which are to be scrapped.

Secondly, it contests the view that the measure in question is justified by virtue of Article 36 for reasons relating to the safety of individuals. A mechanical inspection would be an adequate method of ensuring such safety in the case of both foreign buses and buses of Italian origin. In order to secure equality of treatment, the Italian Government should either admit both categories to the procedure for registration or exclude all buses which have been in service for more than seven years.

In its rejoinder, the Italian Government observes that the first indent of Article 3 of Directive 77/143/EEC allows the Member States to submit the vehicle for testing prior to registration. It considers that such an inspection may be of a different character from the roadworthiness testing of vehicles which are already registered as required by the. directive. Under the powers conferred on it by Article 36 of the Treaty, a Member State may therefore legitimately make registration subject to conditions which differ from those applied to vehicles which are already registered and may even prohibit the registration of vehicles which were manufactured more than seven years previously.

In order to explain the reasoning behind the difference in the treatment of buses more than seven years old which have already been registered and those which have not yet been registered, the Italian Government emphasizes that the certificates of mechanical inspection which are issued in Italy allow the mechanical history of the vehicle in question to be traced and thus provide a reliable guarantee of its roadworthiness year by year. A specimen of the certificate used to provide proof of regular inspection has been submitted to the other Member States and the Commission in accordance with Article 5 (2) of Directive 77/143/EEC. These inspection certificates are, moreover, compulsory for buses which have been registered in Italy for some years.

By way of contrast, it is impossible to be sure of the mechanical soundness of an imported bus older than seven years, in the way in which this assurance is available for buses which have already been registered. Directive 77/143/EEC, Article 5 (3) of which requires recognition of the proof that a vehicle registered in another Member State has passed the roadworthiness tests required by the directive, does not yet cover a period of seven years.

IV — Oral procedure

Oral argument was presented by the parties at the hearing on 24 January 1984.

In the course of the hearing, the Commission confirmed that, pursuant to Article 7 of Directive 77/143/EEC, the tests provided for in the directive had been carried out by all the Member States from 1 January 1983. At the request of the Court, it agreed to submit additional information on the frequency of roadworthiness tests carried out on the buses concerned in the present case in the period prior to 1 January 1983.

The Italian Government, for its part, pointed out that it would no longer be necessary to enforce stringent controls such as those in dispute, as soon as it was possible to be sure that buses imported into Italy satisfied appropriate criteria of safety, in particular those listed in Directive 77/143/EEC. As a result, the disputed measures would no longer be applied once there was proof available, issued by the competent authorities, to the effect that roadworthiness tests had been carried out in the other Member States in compliance with the directive.

The Advocate General delivered his opinion at the hearing on 21 February 1984.

Decision

1. By application lodged at the Court Registry on 29 March 1983, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by prohibiting the importation of used buses from another Member State which were constructed more than seven years prior to the date of the application for a roadworthiness test, the Italian Republic had failed to fulfil its obligations under Article 30 of the EEC Treaty.

2. It is necessary first of all to determine the scope of the application, in view of the fact that the reasoned opinion delivered pursuant to the first paragraph of Article 169 of the Treaty did not charge the Italian Republic with prohibiting the importation of old buses, but with prohibiting “the registration of used buses of foreign origin which were more than seven years old”.

3. In its application, the Commission bases its action solely upon Article 1 of the Italian Ministerial Decree of 10 July 1980 (Gazzetta Ufficiale della Repubblica Italiana No 191 of 14 July 1980), which provides that “buses from outside Italy may not be tested with a view to registration, if their proven date of construction is more than seven years prior to the application, for a roadworthiness test”. Indeed, the Commission has itself admitted that its application does not concern the importation of used buses which are not intended for registration but to be used for other purposes, for example as scrap metal.

4. It follows that the application may only be considered in so far as it seeks a declaration that the Italian Republic has failed to fulfil its obligations by not permitting the testing, for the purposes of registration, of buses which are more than seven years old and come from other Member States.

5. With regard to the substance of the application, the Commission's case is that Article 1 of the abovementioned ministerial decree of 1980 constitutes, to the extent to which it is applicable to buses imported from other Member States, a measure having an effect equivalent to a quantitative restriction on imports within the meaning of Article 30 of the Treaty.

6. According to the Commission, the refusal to permit the testing of such buses for the purposes of registration has the result that it is impossible to import them into Italy for use as buses in road transport, whereas buses already registered in Italy are able to continue in service even after seven years from their date of construction.

7. In its defence, the Italian Government points out that, in the course of the procedure prior to the application to the Court, it had already declared its intention to amend the Provision at issue in such a way as to put an end to the difference in the treatment of domestic and imported buses. Accordingly the Ministerial Decree of 10 July 1980 has in the meantime been replaced by the Ministerial Decree of 14 December 1982 (Gazzetta Ufficiale della Repubblica Italiana No 6 of 7. 1. 1983), Article 1 of which provides in general terms that buses which are more than seven years old may not be admitted to tests with a view to obtaining their first registration in Italy.

8. The Commission contests the view that the Ministerial Decree of 1982 introduced equal treatment for domestic and imported products. It maintains that only in the strictly formal sense is their treatment identical, since of buses which are more than seven years old only imported buses normally need to undergo the registration procedure. If the Italian Government really thinks that old buses are a danger to road safety, it should prohibit their use irrespective of their origin.

9. This argument of the Commission must be accepted. Rules under which imported buses manufactured more than seven years ago are subject to prohibitions or restrictions which are not applicable to buses which have already been used within the national territory constitute an obstacle to intra-Community trade prohibited by Article 30 of the Treaty.

10. The Italian Government maintains, however, that in any event the rules in question are justified under Article 36 of the Treaty. The Ministerial Decrees ol 1980 and 1982 were prompted by considerations which related solely to road safety. In view of the use of buses for the transport of passengers, the roadworthiness of these vehicles is an essential prerequisite for the prevention or accidents and for safeguarding human lives.

11. The same considerations explain, according to the Italian Government, why less strict rules are applied to buses over seven years old which have already been used on Italian territory. The technical departments responsible for the inspection and testing of motor vehicles are in a position to trace the mechanical history of any such vehicle if it has an Italian registration, primarily because of the inspection certificates which are regularly issued for vehicles which have already been registered. Similar mechanical details are not available in the case of imported vehicles.

12. In that context it should be noted in the first place that, at the present stage of the development of Community law, it is the responsibility of Member States to ensure road safety within their territories and to arrange for such roadworthiness tests as they consider necessary for that purpose. However, if such requirements are to justify restrictions on imports, they must be necessary in order to attain the objective in view.

13. The Commission has pointed out that Council Directive 77/143/EEC of 29 December 1976, on the approximation of the laws of the Member States relating to roadworthiness tests for motor vehicles and their trailers (Official Journal L 47, p. 47), now governs the matter. By laying down an obligation to submit motor vehicles to periodic roadworthiness tests, the directive precludes any refusal to register a vehicle on grounds connected with road, worthiness.

14. This view cannot be accepted. The purpose of the directive, according to its fourth recital, is to harmonize as far as practicable the frequency of tests and the compulsory items to be tested. As is stated in Article 3, the directive does not prevent Member States from submitting any vehicle to a test prior to registration.

15. The directive does, however, regulate the periodic tests which follow or, in cases where a used vehicle is imported, precede the test for registration. Under Article 5, Member States are to take the necessary measures to make it possible to prove that a vehicle has passed a periodic test in compliance with the directive; these measures are to be notified to the other Member States and the Commission.

16. The Italian Government has stated that it has complied with this provision by submitting a specimen of the certificate which is periodically issued for vehicles registered in Italy. It has expressed its willingness to recognize, for the purpose of registering buses imported from other Member States, proof to the effect that such vehicles have passed the periodic roadworthiness tests prescribed in the previous country of registration in compliance with the directive. When the directive has been in force for a period of seven years it will no longer be necessaiy to retain the special rules applicable to old buses imported from other Member States.

17. The Court considers, however, that even before the expiry of the period of seven years from the date on which the directive came into force, a total refusal to allow old buses to undergo the roadworthiness tests with a view to registration exceeds what is necessary to ensure road safety within the Italian territory.

18. If the Italian authorities take the view that, in order to register a bus which was manufactured more than seven years previously, they must not only subject the vehicle to tests but also know its mechanical history for the period in which it was driven in another Member State, they may require production of such roadworthiness certificates as they consider necessary In such a case it is a matter for the discretion of the Italian authorities to appraise these certificates when they are not covered by the directive. It is not open to them, however, to refuse outright to allow buses older than seven years and imported from another Member State to undergo the test for registration.

19. It follows that the Italian Republic, by not permitting the testing, for the purposes of registration, of buses from other Member States which were constructed more than seven years previously, has failed to fulfil its obligations under Article 30 of the Treaty, and that the remainder of the application is inadmissible.

Costs

20. Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party's pleading. Since neither party has asked for costs, each party should bear its own costs.

On those grounds, THE COURT hereby:

1 Declares that the Italian Republic, by not permitting the testing, for the purposes of registration, of buses from other Member States which were constructed more than seven years previously, has failed to fulfil its obligations under Article 30 of the Treaty;

2 Declares that the remainder of the application is inadmissible;

3 Orders the parties to bear their own costs.