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					                        Table of Contents
No.   Page   Date
         2   1950   Schuman Declaration
 1       3   1963   Van Gend & Loos
 2       7   1964   Flaminio Costa
 3       9   1970   Franz Grad v Finanzamt Traunstein
 4      12   1970   Internationale Handelsgesellschaft
 5      16   1971   Politi
 6      19   1974   Van Duyn
 7      23   1978   Simmenthal
 8      26   1979   Ratti
 9      31   1979   Hauer
10      37   1982   Becker
11      41   1984   Harz v Deutsche Tradax
12      45   1986   Marshall
13      50   1987   Kolpinghuis Nijmegen
14      53   1989   Fratelli Constanzo
15      56   1989   Wachauf
16      60   1990   Marleasing
17      61   1991   Commission v Italian Republic
18      64   1991   ERT
19      66   1991   Protection of Unborn Children
20      68   1992   Hansa Fleisch
21      71   1994   Faccini Dori
22      74   1995   Großkrotzenburg
23      78   1997   Rheinland-Pfalz v Alcan
24      83   1997   Germany v EU Parliament and Council
25      90   1998   Ministero delle Finanze v IN.CO.GE and others
26      91   2000   Unilever Italia v Central Food
27      96   2000   Tobacco Advertisement Directive
28      99   2000   Masterfoods v HB Ice Cream
29     102   2004   Pfeiffer
30     104   2004   Omega Laserdrome
31     106   2004   Zhu & Chen
32     108   2005   Pupino
33     114   2005   Austria University Admission
34     116   2005   Yusuf (first instance to Kadi)
35     130   2005   Mangold
36     134   2007   European Arrest Warrant
37     139   2007   Laval
38     148   2008   Small Arms
39     155   2008   Kadi and others



                                                                    1
                                                      Introduction


     The Schuman Declaration, 9 May 1950

     This is the full text of the proposal, which was presented by the French foreign minister
     Robert Schuman and which led to the creation of what is now the European Union:
1    World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which
     threaten it.
2    The contribution which an organised and living Europe can bring to civilization is indispensable to the
     maintenance of peaceful relations. In taking upon herself for more than 20 years the role of champion of a united
     Europe, France has always had as her essential aim the service of peace. A united Europe was not achieved and
     we had war.
3    Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements
     which first create a de facto solidarity. The coming together of the nations of Europe requires the elimination of
     the age-old opposition of France and Germany. Any action taken must in the first place concern these two
     countries.
4    With this aim in view, the French Government proposes that action be taken immediately on one limited but
     decisive point:
5    It proposes that Franco-German production of coal and steel as a whole be placed under a common High
     Authority, within the framework of an organization open to the participation of the other countries of Europe.
6    The pooling of coal and steel production should immediately provide for the setting up of common foundations
     for economic development as a first step in the federation of Europe, and will change the destinies of those
     regions which have long been devoted to the manufacture of munitions of war, of which they have been the most
     constant victims.
7    The solidarity in production thus established will make it plain that any war between France and Germany
     becomes not merely unthinkable, but materially impossible. The setting up of this powerful productive unit, open
     to all countries willing to take part and bound ultimately to provide all the member countries with the basic
     elements of industrial production on the same terms, will lay a true foundation for their economic unification.
8    This production will be offered to the world as a whole without distinction or exception, with the aim of
     contributing to raising living standards and to promoting peaceful achievements.
9    In this way, there will be realized simply and speedily that fusion of interest which is indispensable to the
     establishment of a common economic system; it may be the leaven from which may grow a wider and deeper
     community between countries long opposed to one another by sanguinary divisions.
10   By pooling basic production and by instituting a new High Authority, whose decisions will bind France,
     Germany and other member countries, this proposal will lead to the realization of the first concrete foundation of
     a European federation indispensable to the preservation of peace.
11   To promote the realization of the objectives defined, the French Government is ready to open negotiations on the
     following bases :
12   The task with which this common High Authority will be charged will be that of securing in the shortest possible
     time the modernization of production and the improvement of its quality; the supply of coal and steel on
     identical terms to the French and German markets, as well as to the markets of other member countries; the
     development in common of exports to other countries; the equalization and improvement of the living conditions
     of workers in these industries.
13   To achieve these objectives, starting from the very different conditions in which the production of member
     countries is at present situated, it is proposed that certain transitional measures should be instituted, such as the
     application of a production and investment plan, the establishment of compensating machinery for equating
     prices, and the creation of a restructuring fund to facilitate the rationalization of production. The movement of
     coal and steel between member countries will immediately be freed from all customs duty, and will not be
     affected by differential transport rates. Conditions will gradually be created which will spontaneously provide for
     the more national distribution of production at the highest level of productivity.
14   In contrast to international cartels, which tend to impose restrictive practices on distribution and the exploitation
     of national markets, and to maintain high profits, the organization will ensure the fusion of markets and the
                                                                                                                             2
     expansion of production.
15   The essential principles and undertakings defined above will be the subject of a treaty signed between the States
     and submitted for the ratification of their parliaments. The negotiations required to settle details of applications
     will be undertaken with the help of an arbitrator appointed by common agreement. He will be entrusted with the
     task of seeing that the agreements reached conform with the principles laid down, and, in the event of a
     deadlock, he will decide what solution is to be adopted. The common High Authority entrusted with the
     management of the scheme will be composed of independent persons appointed by the governments, giving
     equal representation. A chairman will be chosen by common agreement between the governments. The
     Authority's decisions will be enforceable in France, Germany and other member countries. Appropriate measures
     will be provided for means of appeal against the decisions of the Authority.
16   A representative of the United Nations will be accredited to the Authority, and will be instructed to make a
     public report to the United Nations twice yearly, giving an account of the working of the new organization,
     particularly as concerns the safeguarding of its objectives.
17   The institution of the High Authority will in no way prejudge the methods of ownership of enterprises. In the
     exercise of its functions, the common High Authority will take into account the powers conferred upon the
     International Ruhr Authority and the obligations of all kinds imposed upon Germany, so long as these remain in
     force."



     Case 01
     ECJ, Judgment of the Court of 5 February 1963 – van Gend & Loos v Netherlands
     Inland Revenue Administration. – Case 26-62 – 1963 ECR 1
     [marginal numbers added]

     …
     IN CASE 26/62
1    REFERENCE TO THE COURT UNDER SUBPARAGRAPH (A) OF THE FIRST PARAGRAPH AND
     UNDER THE THIRD PARAGRAPH OF ARTICLE 177 OF THE TREATY ESTABLISHING THE
     EUROPEAN ECONOMIC COMMUNITY BY THE TARIEFCOMMISSIE, A NETHERLANDS
     ADMINISTRATIVE TRIBUNAL HAVING FINAL JURISDICTION IN REVENUE CASES, FOR A
     PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN N.V.
     ALGEMENE TRANSPORT - EN EXPEDITIE ONDERNEMING VAN GEND & LOOS, HAVING ITS
     REGISTERED OFFICE AT UTRECHT, REPRESENTED BY H.G. STIBBE AND L.F.D. TER
     KUILE, BOTH ADVOCATES OF AMSTERDAM, WITH AN ADDRESS FOR SERVICE IN
     LUXEMBOURG AT THE CONSULATE-GENERAL OF THE KINGDOM OF THE NETHERLANDS AND
     NEDERLANDSE ADMINISTRATIE DER BELASTINGEN (NETHERLANDS INLAND REVENUE
     ADMINISTRATION), REPRESENTED BY THE INSPECTOR OF CUSTOMS AND EXCISE AT
     ZAANDAM, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE NETHERLANDS
     EMBASSY,
     ON THE FOLLOWING QUESTIONS :
2    1. WHETHER ARTICLE 12 OF THE EEC TREATY HAS DIRECT APPLICATION WITHIN THE
     TERRITORY OF A MEMBER STATE, IN OTHER WORDS, WHETHER NATIONALS OF SUCH A
     STATE CAN, ON THE BASIS OF THE ARTICLE IN QUESTION, LAY CLAIM TO INDIVIDUAL
     RIGHTS WHICH THE COURTS MUST PROTECT;
3    2. IN THE EVENT OF AN AFFIRMATIVE REPLY, WHETHER THE APPLICATION OF AN
     IMPORT DUTY OF 8% TO THE IMPORT INTO THE NETHERLANDS BY THE APPLICANT IN
     THE MAIN ACTION OF UREAFORMALDEHYDE ORIGINATING IN THE FEDERAL REPUBLIC OF
     GERMANY REPRESENTED AN UNLAWFUL INCREASE WITHIN THE MEANING OF ARTICLE 12
     OF THE EEC TREATY OR WHETHER IT WAS IN THIS CASE A REASONABLE ALTERATION OF
     THE DUTY APPLICABLE BEFORE 1 MARCH 1960, AN ALTERATION WHICH, ALTHOUGH
     AMOUNTING TO AN INCREASE FROM THE ARITHMETICAL POINT OF VIEW, IS
     NEVERTHELESS NOT TO BE REGARDED AS PROHIBITED UNDER THE TERMS OF ARTICLE
     12;
     I - PROCEDURE

                                                                                                                            3
4   NO OBJECTION HAS BEEN RAISED CONCERNING THE PROCEDURAL VALIDITY OF THE
    REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE
    TARIEFCOMMISSIE, A COURT OR TRIBUNAL WITHIN THE MEANING OF THAT ARTICLE.
    FURTHER, NO GROUNDS EXIST FOR THE COURT TO RAISE THE MATTER OF ITS OWN
    MOTION.
5   II - THE FIRST QUESTION
    A - JURISDICTION OF THE COURT
THE GOVERNMENT OF THE NETHERLANDS AND THE BELGIAN GOVERNMENT CHALLENGE THE
     JURISDICTION OF THE COURT ON THE GROUND THAT THE REFERENCE RELATES NOT TO
     THE INTERPRETATION BUT TO THE APPLICATION OF THE TREATY IN THE CONTEXT OF
     THE CONSTITUTIONAL LAW OF THE NETHERLANDS, AND THAT IN PARTICULAR THE COURT
     HAS NO JURISDICTION TO DECIDE, SHOULD THE OCCASION ARIISE, WHETHER THE
     PROVISIONS OF THE EEC TREATY PREVAIL OVER NETHERLANDS LEGISLATION OR OVER
     OTHER AGREEMENTS ENTERED INTO BY THE NETHERLANDS AND INCORPORATED INTO
     DUTCH NATIONAL LAW. THE SOLUTION OF SUCH A PROBLEM, IT IS CLAIMED, FALLS
     WITHIN THE EXCLUSIVE JURISDICTION OF THE NATIONAL COURTS, SUBJECT TO AN
     APPLICATION IN ACCORDANCE WITH THE PROVISIONS LAID DOWN BY ARTICLES 169 AND
     170 OF THE TREATY. HOWEVER IN THIS CASE THE COURT IS NOT ASKED TO
     ADJUDICATE UPON THE APPLICATION OF THE TREATY ACCORDING TO THE PRINCIPLES
     OF THE NATIONAL LAW OF THE NETHERLANDS, WHICH REMAINS THE CONCERN OF THE
     NATIONAL COURTS, BUT IS ASKED, IN CONFORMITY WITH SUBPARAGRAPH (A) OF THE
     FIRST PARAGRAPH OF ARTICLE 177 OF THE TREATY, ONLY TO INTERPRET THE SCOPE
     OF ARTICLE 12 OF THE SAID TREATY WITHIN THE CONTEXT OF COMMUNITY LAW AND
     WITH REFERENCE TO ITS EFFECT ON INDIVIDUALS. THIS ARGUMENT HAS THEREFORE NO
     LEGAL FOUNDATION. THE BELGIAN GOVERNMENT FURTHER ARGUES THAT THE COURT HAS
     NO JURISDICTION ON THE GROUND THAT NO ANSWER WHICH THE COURT COULD GIVE TO
     THE FIRST QUESTION OF THE TARIEFCOMMISSIE WOULD HAVE ANY BEARING ON THE
     RESULT OF THE PROCEEDINGS BROUGHT IN THAT COURT. HOWEVER, IN ORDER TO
     CONFER JURISDICTION ON THE COURT IN THE PRESENT CASE IT IS NECESSARY ONLY
     THAT THE QUESTION RAISED SHOULD CLEARLY BE CONCERNED WITH THE
     INTERPRETATION OF THE TREATY. THE CONSIDERATIONS WHICH MAY HAVE LED A
     NATIONAL COURT OR TRIBUNAL TO ITS CHOICE OF QUESTIONS AS WELL AS THE
     RELEVANCE WHICH IT ATTRIBUTES TO SUCH QUESTIONS IN THE CONTEXT OF A CASE
     BEFORE IT ARE EXCLUDED FROM REVIEW BY THE COURT OF JUSTICE. IT APPEARS FROM
     THE WORDING OF THE QUESTIONS REFERRED THAT THEY RELATE TO THE
     INTERPRETATION OF THE TREATY. THE COURT THEREFORE HAS THE JURISDICTION TO
     ANSWER THEM. THIS ARGUMENT, TOO, IS THEREFORE UNFOUNDED.


    B - ON THE SUBSTANCE OF THE CASE
6   THE FIRST QUESTION OF THE TARIEFCOMMISSIE IS WHETHER ARTICLE 12 OF THE
    TREATY HAS DIRECT APPLICATION IN NATIONAL LAW IN THE SENSE THAT NATIONALS
    OF MEMBER STATES MAY ON THE BASIS OF THIS ARTICLE LAY CLAIM TO RIGHTS WHICH
    THE NATIONAL COURT MUST PROTECT. TO ASCERTAIN WHETHER THE PROVISIONS OF AN
    INTERNATIONAL TREATY EXTEND SO FAR IN THEIR EFFECTS IT IS NECESSARY TO
    CONSIDER THE SPIRIT, THE GENERAL SCHEME AND THE WORDING OF THOSE
    PROVISIONS. THE OBJECTIVE OF THE EEC TREATY, WHICH IS TO ESTABLISH A COMMON
    MARKET, THE FUNCTIONING OF WHICH IS OF DIRECT CONCERN TO INTERESTED PARTIES
    IN THE COMMUNITY, IMPLIES THAT THIS TREATY IS MORE THAN AN AGREEMENT WHICH
    MERELY CREATES MUTUAL OBLIGATIONS BETWEEN THE CONTRACTING STATES. THIS VIEW
    IS CONFIRMED BY THE PREAMBLE TO THE TREATY WHICH REFERS NOT ONLY TO
    GOVERNMENTS BUT TO PEOPLES. IT IS ALSO CONFIRMED MORE SPECIFICALLY BY THE
    ESTABLISHMENT OF INSTITUTIONS ENDOWED WITH SOVEREIGN RIGHTS, THE EXERCISE
    OF WHICH AFFECTS MEMBER STATES AND ALSO THEIR CITIZENS. FURTHERMORE, IT
    MUST BE NOTED THAT THE NATIONALS OF THE STATES BROUGHT TOGETHER IN THE
    COMMUNITY ARE CALLED UPON TO COOPERATE IN THE FUNCTIONING OF THIS COMMUNITY
    THROUGH THE INTERMEDIARY OF THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND
    SOCIAL COMMITTEE. IN ADDITION THE TASK ASSIGNED TO THE COURT OF JUSTICE
    UNDER ARTICLE 177, THE OBJECT OF WHICH IS TO SECURE UNIFORM INTERPRETATION
    OF THE TREATY BY NATIONAL COURTS AND TRIBUNALS, CONFIRMS THAT THE STATES

                                                                                   4
     HAVE ACKNOWLEDGED THAT COMMUNITY LAW HAS AN AUTHORITY WHICH CAN BE INVOKED
     BY THEIR NATIONALS BEFORE THOSE COURTS AND TRIBUNALS. THE CONCLUSION TO BE
     DRAWN FROM THIS IS THAT THE COMMUNITY CONSTITUTES A NEW LEGAL ORDER OF
     INTERNATIONAL LAW FOR THE BENEFIT OF WHICH THE STATES HAVE LIMITED THEIR
     SOVEREIGN RIGHTS, ALBEIT WITHIN LIMITED FIELDS, AND THE SUBJECTS OF WHICH
     COMPRISE NOT ONLY MEMBER STATES BUT ALSO THEIR NATIONALS. INDEPENDENTLY OF
     THE LEGISLATION OF MEMBER STATES, COMMUNITY LAW THEREFORE NOT ONLY IMPOSES
     OBLIGATIONS ON INDIVIDUALS BUT IS ALSO INTENDED TO CONFER UPON THEM RIGHTS
     WHICH BECOME PART OF THEIR LEGAL HERITAGE. THESE RIGHTS ARISE NOT ONLY
     WHERE THEY ARE EXPRESSLY GRANTED BY THE TREATY, BUT ALSO BY REASON OF
     OBLIGATIONS WHICH THE TREATY IMPOSES IN A CLEARLY DEFINED WAY UPON
     INDIVIDUALS AS WELL AS UPON THE MEMBER STATES AND UPON THE INSTITUTIONS OF
     THE COMMUNITY.
7    WITH REGARD TO THE GENERAL SCHEME OF THE TREATY AS IT RELATES TO CUSTOMS
     DUTIES AND CHARGES HAVING EQUIVALENT EFFECT IT MUST BE EMPHASIZED THAT
     ARTICLE 9, WHICH BASES THE COMMUNITY UPON A CUSTOMS UNION, INCLUDES AS AN
     ESSENTIAL PROVISION THE PROHIBITION OF THESE CUSTOMS DUTIES AND CHARGESS.
     THIS PROVISION IS FOUND A THE BEGINNING OF THE PART OF THE TREATY WHICH
     DEFINES THE “FOUNDATIONS OF THE COMMUNITY”. IT IS APPLIED AND EXPLAINED BY
     ARTICLE 12.
8    THE WORDING OF ARTICLE 12 CONTAINS A CLEAR AND UNCONDITIONAL PROHIBITION
     WHICH IS NOT A POSITIVE BUT A NEGATIVE OBLIGATION. THIS OBLIGATION,
     MOREOVER, IS NOT QUALIFIED BY ANY RESERVATION ON THE PART OF STATES WHICH
     WOULD MAKE ITS IMPLEMENTATION CONDITIONAL UPON A POSITIVE LEGISLATIVE
     MEASURE ENACTED UNDER NATIONAL LAW. THE VERY NATURE OF THIS PROHIBITION
     MAKES IT IDEALLY ADAPTED TO PRODUCE DIRECT EFFECTS IN THE LEGAL
     RELATIONSHIP BETWEEN MEMBER STATES AND THEIR SUBJECTS.
9    THE IMPLEMENTATION OF ARTICLE 12 DOES NOT REQUIRE ANY LEGISLATIVE
     INTERVENTION ON THE PART OF THE STATES. THE FACT THAT UNDER THIS ARTICLE IT
     IS THE MEMBER STATES WHO ARE MADE THE SUBJECT OF THE NEGATIVE OBLIGATION
     DOES NOT IMPLY THAT THEIR NATIONALS CANNOT BENEFIT FROM THIS OBLIGATION.
10   IN ADDITION THE ARGUMENT BASED ON ARTICLES 169 AND 170 OF THE TREATY PUT
     FORWARD BY THE THREE GOVERNMENTS WHICH HAVE SUBMITTED OBSERVATIONS TO THE
     COURT IN THEIR STATEMENTS OF CASE IS MISCONCEIVED. THE FACT THAT THESE
     ARTICLES OF THE TREATY ENABLE THE COMMISSION AND THE MEMBER STATES TO BRING
     BEFORE THE COURT A STATE WHICH HAS NOT FULFILLED ITS OBLIGATIONS DOES NOT
     MEAN THAT INDIVIDUALS CANNOT PLEAD THESE OBLIGATIONS, SHOULD THE OCCASION
     ARISE, BEFORE A NATIONAL COURT, ANY MORE THAN THE FACT THAT THE TREATY
     PLACES AT THE DISPOSAL OF THE COMMISSION WAYS OF ENSURING THAT OBLIGATIONS
     IMPOSED UPON THOSE SUBJECT TO THE TREATY ARE OBSERVED, PRECLUDES THE
     POSSIBILITY, IN ACTIONS BETWEEN INDIVIDUALS BEFORE A NATIONAL COURT, OF
     PLEADING INFRINGEMENTS OF THESE OBLIGATIONS.
11   A RESTRICTION OF THE GUARANTEES AGAINST AN INFRINGEMENT OF ARTICLE 12 BY
     MEMBER STATES TO THE PROCEDURES UNDER ARTICLE 169 AND 170 WOULD REMOVE ALL
     DIRECT LEGAL PROTECTION OF THE INDIVIDUAL RIGHTS OF THEIR NATIONALS. THERE
     IS THE RISK THAT RECOURSE TO THE PROCEDURE UNDER THESE ARTICLES WOULD BE
     INNEFFECTIVE IF IT WERE TO OCCUR AFTER THE IMPLEMENTATION OF A NATIONAL
     DECISION TAKEN CONTRARY TO THE PROVISIONS OF THE TREATY.
12   THE VIGILANCE OF INDIVIDUALS CONCERNED TO PROTECT THEIR RIGHTS AMOUNTS TO
     AN EFFECTIVE SUPERVISION IN ADDITION TO THE SUPERVISION ENTRUSTED BY
     ARTICLES 169 AND 170 TO THE DILIGENCE OF THE COMMISSION AND OF THE MEMBER
     STATES.
13   IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT, ACCORDING TO THE SPIRIT,
     THE GENERAL SCHEME AND THE WORDING OF THE TREATY, ARTICLE 12 MUST BE
     INTERPRETED AS PRODUCING DIRECT EFFECTS AND CREATING INDIVIDUAL RIGHTS
     WHICH NATIONAL COURTS MUST PROTECT.
     III - THE SECOND QUESTION
     A - THE JURISDICTION OF THE COURT
                                                                                   5
14   ACCORDING TO THE OBSERVATIONS OF THE BELGIAN AND NETHERLANDS GOVERNMENTS,
     THE WORDING OF THIS QUESTION APPEARS TO REQUIRE, BEFORE IT CAN BE ANSWERED,
     AN EXAMINATION BY THE COURT OF THE TARIFF CLASSIFICATION OF
     UREAFORMALDEHYDE IMPORTED INTO THE NETHERLANDS, A CLASSIFICATION ON WHICH
     VAN GEND & LOOS AND THE INSPECTOR OF CUSTOMS AND EXCISE AT ZAANDAM HOLD
     DIFFERENT OPINIONS WITH REGARD TO THE “TARIEFBESLUIT” OF 1947. THE QUESTION
     CLEARLY DOES NOT CALL FOR AN INTERPRETATION OF THE TREATY BUT CONCERNS THE
     APPLICATION OF NETHERLANDS CUSTOMS LEGISLATION TO THE CLASSIFICATION OF
     AMINOPLASTS, WHICH IS OUTSIDE THE JURISDICTION CONFERRED UPON THE COURT OF
     JUSTICE OF THE EUROPEAN COMMUNITIES BY SUBPARAGRAPH (A) OF THE FIRST
     PARAGRAPH OF ARTICLE 177.
15   THE COURT HAS THEREFORE NO JURISDICTION TO CONSIDER THE REFERENCE MADE BY
     THE TARIEFCOMMISSIE.
16   HOWEVER, THE REAL MEANING OF THE QUESTION PUT BY THE TARIEFCOMMISSIE IS
     WHETHER, IN LAW, AN EFFECTIVE INCREASE IN CUSTOMS DUTIES CHARGED ON A GIVEN
     PRODUCT AS A RESULT NOT OF AN INCREASE IN THE RATE BUT OF A NEW
     CLASSIFICATION OF THE PRODUCT ARISING FROM A CHANGE OF ITS TARIFF
     DESCRIPTION CONTRAVENES THE PROHIBITION IN ARTICLE 12 OF THE TREATY.
17   VIEWED IN THIS WAY THE QUESTION PUT IS CONCERNED WITH AN INTERPRETATION OF
     THIS PROVISION OF THE TREATY AND MORE PARTICULARLY OF THE MEANING WHICH
     SHOULD BE GIVEN TO THE CONCEPT OF DUTIES APPLIED BEFORE THE TREATY ENTERED
     INTO FORCE. THEREFORE THE COURT HAS JURISDICTION TO GIVE A RULING ON THIS
     QUESTION.
     B - ON THE SUBSTANCE
18   IT FOLLOWS FROM THE WORDING AND THE GENERAL SCHEME OF ARTICLE 12 OF THE
     TREATY THAT, IN ORDER TO ASCERTAIN WHETHER CUSTOMS DUTIES OR CHARGES HAVING
     EQUIVALENT EFFECT HAVE BEEN INCREASED CONTRARY TO THE PROHIBITION CONTAINED
     IN THE SAID ARTICLE, REGARD MUST BE HAD TO THE CUSTOMS DUTIES AND CHARGES
     ACTUALLY APPLIED AT THE DATE OF THE ENTRY INTO FORCE OF THE TREATY.
19   FURTHER, WITH REGARD TO THE PROHIBITION IN ARTICLE 12 OF THE TREATY, SUCH
     AN ILLEGAL INCREASE MAY ARISE FROM A RE-ARRANGEMENT OF THE TARIFF RESULTING
     IN THE CLASSIFICATION OF THE PRODUCT UNDER A MORE HIGHLY TAXED HEADING AND
     FROM AN ACTUAL INCREASE IN THE RATE OF CUSTOMS DUTY.
20   IT IS OF LITTLE IMPORTANCE HOW THE INCREASE IN CUSTOMS DUTIES OCCURRED
     WHEN, AFTER THE TREATY ENTERED INTO FORCE, THE SAME PRODUCT IN THE SAME
     MEMBER STATE WAS SUBJECTED TO A HIGHER RATE OF DUTY.
21   THE APPLICATION OF ARTICLE 12, IN ACCORDANCE WITH THE INTERPRETATION GIVEN
     ABOVE, COMES WITHIN THE JURISDICTION OF THE NATIONAL COURT WHICH MUST
     ENQUIRE WHETHER THE DUTIABLE PRODUCT, IN THIS CASE UREAFORMALDEHYDE
     ORIGINATING IN THE FEDERAL REPUBLIC OF GERMANY, IS CHARGED UNDER THE
     CUSTOMS MEASURES BROUGHT INTO FORCE IN THE NETHERLANDS WITH AN IMPORT DUTY
     HIGHER THAN THAT WITH WHICH IT WAS CHARGED ON 1 JANUARY 1958.
22   THE COURT HAS NO JURISDICTION TO CHECK THE VALIDITY OF THE CONFLICTING
     VIEWS ON THIS SUBJECT WHICH HAVE BEEN SUBMITTED TO IT DURING THE
     PROCEEDINGS BUT MUST LEAVE THEM TO BE DETERMINED BY THE NATIONAL COURTS.


     COSTS
     …
     THE COURT
     IN ANSWER TO THE QUESTIONS REFERRED TO IT FOR A PRELIMINARY RULING BY THE
     TARIEFCOMMISSIE BY DECISION OF 16 AUGUST 1962, HEREBY RULES:
     1. ARTICLE 12 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY
     PRODUCES DIRECT EFFECTS AND CREATES INDIVIDUAL RIGHTS WHICH NATIONAL COURTS
     MUST PROTECT.

                                                                                   6
    2. IN ORDER TO ASCERTAIN WHETHER CUSTOMS DUTIES OR CHARGES HAVING
    EQUIVALENT EFFECT HAVE BEEN INCREASED CONTRARY TO THE PROHIBITION CONTAINED
    IN ARTICLE 12 OF THE TREATY, REGARD MUST BE HAD TO THE DUTIES AND CHARGES
    ACTUALLY APPLIED BY THE MEMBER STATE IN QUESTION AT THE DATE OF THE ENTRY
    INTO FORCE OF THE TREATY. SUCH AN INCREASE CAN ARISE BOTH FROM A RE-
    ARRANGEMENT OF THE TARIFF RESULTING IN THE CLASSIFICATION OF THE PRODUCT
    UNDER A MORE HIGHLY TAXED HEADING AND FROM AN INCREASE IN THE RATE OF
    CUSTOMS DUTY APPLIED.
    3. THE DECISION AS TO COSTS IN THESE PROCEEDINGS IS A MATTER FOR THE
    TARIEFCOMMISSIE.


    Case 02
    Judgment of the Court of 15 July 1964. Flaminio Costa v E.N.E.L.. Reference for a
    preliminary ruling: Giudice conciliatore di Milano - Italy. Case 6/64. European Court
    reports (German edition 1964 Page 01253) English special edition 1964 Page 00585
    …
    [Background: In 1962 the Republic of Italy nationalized the production and distribution of electricity, founding
    the “Ente nazionale Energia elettrica impresa già della Edisonvolta” (E.N.E.L.) to whom the property rights to
    the facilities of the nationalized electricity companies were transferred. The Milano attorney Flaminio Costa,
    shareholder of the stock corporation Edisonvolta, refused to pay an electricity bill over 1.925 Lira. In the law-
    suit before the Court of the Peace, Milan, Mr. Costa claimed the nationalization statute to violate the EEC Treaty
    and requested the Court to refer to the ECJ for a preliminary ruling according to Art. 177 EEC Treaty(now
    Art. 239 EC]).
    IN CASE 6/64
    REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE GIUDICE
    CONCILIATORE, MILAN, FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE
    THAT COURT BETWEEN FLAMINIO COSTA
    AND
    ENEL ( ENTE NAZIONALE ENERGIA ELETTRICA ( NATIONAL ELECTRICITY BOARD ),
    FORMERLY THE EDISON VOLTA UNDERTAKING )
    ON THE INTERPRETATION OF ARTICLES 102, 93, 53 AND 37 OF THE SAID TREATY
    …
    ON THE APPLICATION OF ARTICLE 177
    ON THE SUBMISSION REGARDING THE WORKING OF THE QUESTION THE COMPLAINT IS
    MADE THAT THE INTENTION BEHIND THE QUESTION POSED WAS TO OBTAIN, BY MEANS
    OF ARTICLE 177, A RULING ON THE COMPATIBILITY OF A NATIONAL LAW WITH THE
    TREATY.
    …
6   … SINCE, HOWEVER, ARTICLE 177 IS BASED UPON A CLEAR SEPARATION OF FUNCTIONS
    BETWEEN NATIONAL COURTS AND THE COURT OF JUSTICE, IT CANNOT EMPOWER THE
    LATTER EITHER TO INVESTIGATE THE FACTS OF THE CASE OR TO CRITICIZE THE
    GROUNDS AND PURPOSE OF THE REQUEST FOR INTERPRETATION .
    ON THE SUBMISSION THAT THE COURT WAS OBLIGED TO APPLY THE NATIONAL LAW
7   THE ITALIAN GOVERNMENT SUBMITS THAT THE REQUEST OF THE GIUDICE CONCILIATORE
    IS ' ABSOLUTELY INADMISSIBLE ', INASMUCH AS A NATIONAL COURT WHICH IS
    OBLIGED TO APPLY A NATIONAL LAW CANNOT AVAIL ITSELF OF ARTICLE 177.
8   BY CONTRAST WITH ORDINARY INTERNATIONAL TREATIES, THE EEC TREATY HAS
    CREATED ITS OWN LEGAL SYSTEM WHICH, ON THE ENTRY INTO FORCE OF THE TREATY,
    BECAME AN INTEGRAL PART OF THE LEGAL SYSTEMS OF THE MEMBER STATES AND WHICH
    THEIR COURTS ARE BOUND TO APPLY. BY CREATING A COMMUNITY OF UNLIMITED
    DURATION, HAVING ITS OWN INSTITUTIONS, ITS OWN PERSONALITY, ITS OWN LEGAL
                                                                                                                         7
     CAPACITY AND CAPACITY OF REPRESENTATION ON THE INTERNATIONAL PLANE AND,
     MORE PARTICULARLY, REAL POWERS STEMMING FROM A LIMITATION OF SOVEREIGNTY OR
     A TRANSFER OF POWERS FROM THE STATES TO THE COMMUNITY, THE MEMBER STATES
     HAVE LIMITED THEIR SOVEREIGN RIGHTS, ALBEIT WITHIN LIMITED FIELDS, AND HAVE
     THUS CREATED A BODY OF LAW WHICH BINDS BOTH THEIR NATIONALS AND THEMSELVES.
9    THE INTEGRATION INTO THE LAWS OF EACH MEMBER STATE OF PROVISIONS WHICH
     DERIVE FROM THE COMMUNITY, AND MORE GENERALLY THE TERMS AND THE SPIRIT OF
     THE TREATY, MAKE IT IMPOSSIBLE FOR THE STATES, AS A COROLLARY, TO ACCORD
     PRECEDENCE TO A UNILATERAL AND SUBSEQUENT MEASURE OVER A LEGAL SYSTEM
     ACCEPTED BY THEM ON A BASIS OF RECIPROCITY. SUCH A MEASURE CANNOT THEREFORE
     BE INCONSISTENT WITH THAT LEGAL SYSTEM. THE EXECUTIVE FORCE OF COMMUNITY
     LAW CANNOT VARY FROM ONE STATE TO ANOTHER IN DEFERENCE TO SUBSEQUENT
     DOMESTIC LAWS, WITHOUT JEOPARDIZING THE ATTAINMENT OF THE OBJECTIVES OF THE
     TREATY SET OUT IN ARTICLE 5 ( 2 ) AND GIVING RISE TO THE DISCRIMINATION
     PROHIBITED BY ARTICLE 7.
10   THE OBLIGATIONS UNDERTAKEN UNDER THE TREATY ESTABLISHING THE COMMUNITY
     WOULD NOT BE UNCONDITIONAL, BUT MERELY CONTINGENT, IF THEY COULD BE CALLED
     IN QUESTION BY SUBSEQUENT LEGISLATIVE ACTS OF THE SIGNATORIES. WHEREVER THE
     TREATY GRANTS THE STATES THE RIGHT TO ACT UNILATERALLY, IT DOES THIS BY
     CLEAR AND PRECISE PROVISIONS ( FOR EXAMPLE ARTICLES 15, 93 ( 3 ), 223, 224
     AND 225 ). APPLICATIONS, BY MEMBER STATES FOR AUTHORITY TO DEROGATE FROM
     THE TREATY ARE SUBJECT TO A SPECIAL AUTHORIZATION PROCEDURE ( FOR EXAMPLE
     ARTICLES 8 ( 4 ), 17 ( 4 ), 25, 26, 73, THE THIRD SUBPARAGRAPH OF ARTICLE
     93 ( 2 ), AND 226 ) WHICH WOULD LOSE THEIR PURPOSE IF THE MEMBER STATES
     COULD RENOUNCE THEIR OBLIGATIONS BY MEANS OF AN ORDINARY LAW.
11   THE PRECEDENCE OF COMMUNITY LAW IS CONFIRMED BY ARTICLE 189, WHEREBY A
     REGULATION ' SHALL BE BINDING ' AND ' DIRECTLY APPLICABLE IN ALL MEMBER
     STATES '. THIS PROVISION, WHICH IS SUBJECT TO NO RESERVATION, WOULD BE
     QUITE MEANINGLESS IF A STATE COULD UNILATERALLY NULLIFY ITS EFFECTS BY
     MEANS OF A LEGISLATIVE MEASURE WHICH COULD PREVAIL OVER COMMUNITY LAW. IT
     FOLLOWS FROM ALL THESE OBSERVATIONS THAT THE LAW STEMMING FROM THE TREATY,
     AN INDEPENDENT SOURCE OF LAW, COULD NOT, BECAUSE OF ITS SPECIAL AND
     ORIGINAL NATURE, BE OVERRIDDEN BY DOMESTIC LEGAL PROVISIONS, HOWEVER
     FRAMED, WITHOUT BEING DEPRIVED OF ITS CHARACTER AS COMMUNITY LAW AND
     WITHOUT THE LEGAL BASIS OF THE COMMUNITY ITSELF BEING CALLED INTO QUESTION.
12   THE TRANSFER BY THE STATES FROM THEIR DOMESTIC LEGAL SYSTEM TO THE
     COMMUNITY LEGAL SYSTEM OF THE RIGHTS AND OBLIGATIONS ARISING UNDER THE
     TREATY CARRIES WITH IT A PERMANENT LIMITATION OF THEIR SOVEREIGN RIGHTS,
     AGAINST WHICH A SUBSEQUENT UNILATERAL ACT INCOMPATIBLE WITH THE CONCEPT OF
     THE COMMUNITY CANNOT PREVAIL. CONSEQUENTLY ARTICLE 177 IS TO BE APPLIED
     REGARDLESS OF ANY DOMESTIC LAW, WHENEVER QUESTIONS RELATING TO THE
     INTERPRETATION OF THE TREATY ARISE .
     …
29   ARTICLE 37 ( 2 ) CONTAINS AN ABSOLUTE PROHIBITION: NOT AN OBLIGATION TO DO
     SOMETHING BUT AN OBLIGATION TO REFRAIN FROM DOING SOMETHING. THIS
     OBLIGATION IS NOT ACCOMPANIED BY ANY RESERVATION WHICH MIGHT MAKE ITS
     IMPLEMENTATION SUBJECT TO ANY POSITIVE ACT OF NATIONAL LAW. THIS
     PROHIBITION IS ESSENTIALLY ONE WHICH IS CAPABLE OF PRODUCING DIRECT EFFECTS
     ON THE LEGAL RELATIONS BETWEEN MEMBER STATES AND THEIR NATIONALS.
30   SUCH A CLEARLY EXPRESSED PROHIBITION WHICH CAME INTO FORCE WITH THE TREATY
     THROUGHOUT THE COMMUNITY, AND SO BECAME AN INTEGRAL PART OF THE LEGAL
     SYSTEM OF THE MEMBER STATES, FORMS PART OF THE LAW OF THOSE STATES AND
     DIRECTLY CONCERNS THEIR NATIONALS, IN WHOSE FAVOUR IT CREATES INDIVIDUAL
     RIGHTS WHICH NATIONAL COURTS MUST PROTECT. …




                                                                                   8
    Case 03
    ECJ, Judgment of 6 October 1970. Franz Grad v Finanzamt Traunstein. Reference for a
    preliminary ruling: Finanzgericht München - Germany. Case 9-70. European Court
    reports 1970 Page 00825
    …
    IN CASE 9/70
    …
1   BY AN ORDER DATED 23 FEBRUARY 1970, RECEIVED AT THE COURT ON 16 MARCH 1970,
    THE FINANZGERICHT MUENCHEN HAS REFERRED TO THE COURT, PURSUANT TO ARTICLE
    177 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY, SEVERAL
    QUESTIONS ON THE INTERPRETATION OF ARTICLE 4 OF THE COUNCIL DECISION OF 13
    MAY 1965 ON THE HARMONIZATION OF CERTAIN PROVISIONS AFFECTING COMPETITION
    IN TRANSPORT BY RAIL, ROAD AND INLAND WATERWAY (OJ SPECIAL EDITION 1965, P.
    67) AND OF ARTICLE 1 OF THE FIRST COUNCIL DIRECTIVE OF 11 APRIL 1967 ON THE
    HARMONIZATION OF LEGISLATION OF MEMBER STATES CONCERNING TURNOVER TAXES (OJ
    SPECIAL EDITION 1967, P. 14). ALTERNATIVELY, IN CASE THE COURT SHOULD GIVE
    A NEGATIVE ANSWER TO THESE QUESTIONS, THE FINANZGERICHT HAS SUBMITTED
    FURTHER QUESTIONS ON THE INTERPRETATION IN PARTICULAR OF ARTICLES 90 AND 92
    OF THE EEC TREATY.
    THE FIRST QUESTION
2   IN ITS FIRST QUESTION THE FINANZGERICHT ASKS THE COURT FOR A RULING ON
    WHETHER THE SECOND PARAGRAPH OF ARTICLE 4 OF THE DECISION IN CONJUNCTION
    WITH ARTICLE 1 OF THE DIRECTIVE PRODUCES DIRECT EFFECTS IN THE LEGAL
    RELATIONSHIPS BETWEEN THE MEMBER STATES AND THOSE SUBJECT TO THEIR
    JURISDICTION IN SUCH A WAY THAT THESE PROVISIONS CREATE RIGHTS FOR
    INDIVIDUALS WHICH THE NATIONAL COURTS MUST PROTECT.
3   THE QUESTION CONCERNS THE COMBINED EFFECT OF PROVISIONS CONTAINED IN A
    DECISION AND A DIRECTIVE. ACCORDING TO ARTICLE 189 OF THE EEC TREATY A
    DECISION IS BINDING IN ITS ENTIRETY UPON THOSE TO WHOM IT IS ADDRESSED.
    FURTHERMORE, ACCORDING TO THIS ARTICLE A DIRECTIVE IS BINDING, AS TO THE
    RESULT TO BE ACHIEVED, UPON EACH MEMBER STATE TO WHICH IT IS ADDRESSED, BUT
    LEAVES TO THE NATIONAL AUTHORITIES THE CHOICE OF FORM AND METHODS.
4   THE GERMAN GOVERNMENT IN ITS OBSERVATIONS DEFENDS THE VIEW THAT BY
    DISTINGUISHING BETWEEN THE EFFECTS OF REGULATIONS ON THE ONE HAND AND OF
    DECISIONS AND DIRECTIVES ON THE OTHER, ARTICLE 189 PRECLUDES THE
    POSSIBILITY OF DECISIONS AND DIRECTIVES PRODUCING THE EFFECTS MENTIONED IN
    THE QUESTION, WHICH ARE RESERVED TO REGULATIONS.
5   HOWEVER, ALTHOUGH IT IS TRUE THAT BY VIRTUE OF ARTICLE 189, REGULATIONS ARE
    DIRECTLY APPLICABLE AND THEREFORE BY VIRTUE OF THEIR NATURE CAPABLE OF
    PRODUCING DIRECT EFFECTS, IT DOES NOT FOLLOW FROM THIS THAT OTHER
    CATEGORIES OF LEGAL MEASURES MENTIONED IN THAT ARTICLE CAN NEVER PRODUCE
    SIMILAR EFFECTS. IN PARTICULAR, THE PROVISION ACCORDING TO WHICH DECISIONS
    ARE BINDING IN THEIR ENTIRETY ON THOSE TO WHOM THEY ARE ADDRESSED ENABLES
    THE QUESTION TO BE PUT WHETHER THE OBLIGATION CREATED BY THE DECISION CAN
    ONLY BE INVOKED BY THE COMMUNITY INSTITUTIONS AGAINST THE ADDRESSEE OR
    WHETHER SUCH A RIGHT MAY POSSIBLY BE EXERCISED BY ALL THOSE WHO HAVE AN
    INTEREST IN THE FULFILMENT OF THIS OBLIGATION. IT WOULD BE INCOMPATIBLE
    WITH THE BINDING EFFECT ATTRIBUTED TO DECISIONS BY ARTICLE 189 TO EXCLUDE
    IN PRINCIPLE THE POSSIBILITY THAT PERSONS AFFECTED MAY INVOKE THE
    OBLIGATION IMPOSED BY A DECISION. PARTICULARLY IN CASES WHERE, FOR EXAMPLE,
    THE COMMUNITY AUTHORITIES BY MEANS OF A DECISION HAVE IMPOSED AN OBLIGATION
    ON A MEMBER STATE OR ALL THE MEMBER STATES TO ACT IN A CERTAIN WAY, THE
    EFFECTIVENES (" L’EFFET UTILE ") OF SUCH A MEASURE WOULD BE WEAKENED IF THE
    NATIONALS OF THAT STATE COULD NOT INVOKE IT IN THE COURTS AND THE NATIONAL
    COURTS COULD NOT TAKE IT INTO CONSIDERATION AS PART OF COMMUNITY LAW.

                                                                                          9
     ALTHOUGH THE EFFECTS OF A DECISION MAY NOT BE IDENTICAL WITH THOSE OF A
     PROVISION CONTAINED IN A REGULATION, THIS DIFFERENCE DOES NOT EXCLUDE THE
     POSSIBILITY THAT THE END RESULT, NAMELY THE RIGHT OF THE INDIVIDUAL TO
     INVOKE THE MEASURE BEFORE THE COURTS, MAY BE THE SAME AS THAT OF A DIRECTLY
     APPLICABLE PROVISION OF A REGULATION.
6    ARTICLE 177, WHEREBY THE NATIONAL COURTS ARE EMPOWERED TO REFER TO THE
     COURT ALL QUESTIONS REGARDING THE VALIDITY AND INTERPRETATION OF ALL ACTS
     OF THE INSTITUTIONS WITHOUT DISTINCTION, ALSO IMPLIES THAT INDIVIDUALS MAY
     INVOKE SUCH ACTS BEFORE THE NATIONAL COURTS. THEREFORE, IN EACH PARTICULAR
     CASE, IT MUST BE ASCERTAINED WHETHER THE NATURE, BACKGROUND AND WORDING OF
     THE PROVISION IN QUESTION ARE CAPABLE OF PRODUCING DIRECT EFFECTS IN THE
     LEGAL RELATIONSHIPS BETWEEN THE ADDRESSEE OF THE ACT AND THIRD PARTIES.
7    THE COUNCIL DECISION OF 13 MAY 1965 ADDRESSED TO ALL THE MEMBER STATES IS
     BASED IN PARTICULAR ON ARTICLE 75 OF THE TREATY WHICH EMPOWERS THE COUNCIL
     TO LAY DOWN " COMMON RULES ", " THE CONDITIONS UNDER WHICH NON-RESIDENT
     CARRIERS MAY OPERATE " AND " ANY OTHER APPROPRIATE PROVISION " TO IMPLEMENT
     A COMMON TRANSPORT POLICY. THE COUNCIL THEREFORE HAS EXTENSIVE FREEDOM IN
     THE CHOICE OF THE MEASURES TO ADOPT. THE DECISION IN QUESTION, TAKEN AS A
     WHOLE, LAYS DOWN THE OBJECTIVES TO BE ACHIEVED WITHIN THE CONTEXT OF A
     POLICY OF HARMONIZING NATIONAL PROVISIONS AND THE TIMETABLE FOR THEIR
     REALIZATION. IN VIEW OF THESE OBJECTIVES THE FIRST PARAGRAPH OF ARTICLE 4
     OF THE DECISION PROVIDES THAT ONCE A COMMON SYSTEM OF TURNOVER TAX HAS BEEN
     ADOPTED BY THE COUNCIL AND BROUGHT INTO FORCE IN THE MEMBER STATES, THE
     LATTER SHALL APPLY THAT SYSTEM, IN A MANNER TO BE DETERMINED, TO THE
     CARRIAGE OF GOODS BY RAIL, ROAD AND INLAND WATERWAY. THE SECOND PARAGRAPH
     OF THAT ARTICLE PROVIDES THAT THIS COMMON SYSTEM OF TURNOVER TAX SHALL, IN
     SO FAR AS THE CARRIAGE OF GOODS BY ROAD, BY RAIL AND BY INLAND WATERWAY IS
     SUBJECT TO SPECIFIC TAXES INSTEAD OF TO THE TURNOVER TAX, REPLACE SUCH
     SPECIFIC TAXES.
8    THUS THIS PROVISION IMPOSES TWO OBLIGATIONS ON THE MEMBER STATES: FIRST, TO
     APPLY THE COMMON SYSTEM OF TURNOVER TAX TO THE CARRIAGE OF GOODS BY RAIL,
     ROAD AND INLAND WATERWAY BY A GIVEN DATE, AND SECONDLY TO REPLACE THE
     SPECIFIC TAXES REFERRED TO BY THE SECOND PARAGRAPH BY THIS SYSTEM NO LATER
     THAN THE DATE WHEN IT HAS BEEN BROUGHT INTO FORCE. THIS SECOND OBLIGATION
     OBVIOUSLY IMPLIES A PROHIBITION ON INTRODUCING OR REINTRODUCING SUCH TAXES
     SO AS TO PREVENT THE COMMON SYSTEM OF TURNOVER TAX FROM APPLYING
     CONCURRENTLY IN THE FIELD OF TRANSPORT WITH ADDITIONAL TAX SYSTEMS OF THE
     LIKE NATURE.
9    IT IS APPARENT FROM THE FILE SUBMITTED BY THE FINANZGERICHT THAT THE
     QUESTION RELATES IN PARTICULAR TO THE SECOND OBLIGATION. THE SECOND
     OBLIGATION IS BY ITS NATURE MANDATORY AND GENERAL, ALTHOUGH THE PROVISION
     LEAVES OPEN THE DETERMINATION OF THE DATE ON WHICH IT BECOMES EFFECTIVE. IT
     THUS EXPRESSLY PROHIBITS THE MEMBER STATES FROM APPLYING THE COMMON SYSTEM
     OF TURNOVER TAX CONCURRENTLY WITH SPECIFIC TAXES LEVIED INSTEAD OF TURNOVER
     TAXES. THIS OBLIGATION IS UNCONDITIONAL AND SUFFICIENTLY CLEAR AND PRECISE
     TO BE CAPABLE OF PRODUCING DIRECT EFFECTS IN THE LEGAL RELATIONSHIPS
     BETWEEN THE MEMBER STATES AND THOSE SUBJECT TO THEIR JURISDICTION.
10   THE DATE ON WHICH THIS OBLIGATION BECOMES EFFECTIVE WAS LAID DOWN BY THE
     COUNCIL DIRECTIVES ON THE HARMONIZATION OF THE LEGISLATION CONCERNING
     TURNOVER TAXES WHICH FIXED THE LATEST DATE BY WHICH THE MEMBER STATES MUST
     INTRODUCE INTO THEIR LEGISLATION THE COMMON SYSTEM OF VALUE-ADDED TAX. THE
     FACT THAT THIS DATE WAS FIXED BY A DIRECTIVE DOES NOT DEPRIVE THIS
     PROVISION OF ANY OF ITS BINDING FORCE. THUS THE OBLIGATION CREATED BY THE
     SECOND PARAGRAPH OF ARTICLE 4 OF THE DECISION OF 13 MAY 1965 WAS PERFECTED
     BY THE FIRST DIRECTIVE. THEREFORE THIS PROVISION IMPOSES ON THE MEMBER
     STATES OBLIGATIONS - IN PARTICULAR THE OBLIGATION NOT TO APPLY AS FROM A
     CERTAIN DATE THE COMMON SYSTEM OF VALUE-ADDED TAX CONCURRENTLY WITH THE
     SPECIFIC TAXES MENTIONED - WHICH ARE CAPABLE OF PRODUCING DIRECT EFFECTS IN
     THE LEGAL RELATIONSHIPS BETWEEN THE MEMBER STATES AND THOSE SUBJECT TO

                                                                                   10
     THEIR JURISDICTION AND OF CREATING THE RIGHT FOR THE LATTER TO INVOKE THESE
     OBLIGATIONS BEFORE THE COURTS.
     THE SECOND QUESTION
11   THE SECOND QUESTION OF THE FINANZGERICHT ASKS THE COURT TO RULE WHETHER
     ARTICLE 4 OF THE DECISION IN CONJUNCTION WITH ARTICLE 1 OF THE DIRECTIVE
     PROHIBITS A MEMBER STATE, WHICH HAS ALREADY BROUGHT THE COMMON SYSTEM OF
     VALUE-ADDED TAX INTO FORCE AND ABOLISHED SPECIFIC TAXES ON THE CARRIAGE OF
     GOODS, BEFORE 1 JANUARY 1970 FROM REINTRODUCING SPECIFIC TAXES WHICH ARE
     LEVIED ON THE CARRIAGE OF GOODS INSTEAD OF TURNOVER TAX. THIS QUESTION IS
     OBVIOUSLY AIMED AT ARTICLE 1 OF THE FIRST DIRECTIVE AS AMENDED BY THE THIRD
     COUNCIL DIRECTIVE OF 9 DECEMBER 1969 ON THE SAME SUBJECT (OJ SPECIAL
     EDITION 1969, P. 551) WHICH SUBSTITUTED THE DATE OF 1 JANUARY 1972 FOR THAT
     OF 1 JANUARY 1970.
12   IT IS TRUE THAT A LITERAL INTERPRETATION OF THE SECOND PARAGRAPH OF ARTICLE
     4 OF THE DECISION MIGHT LEAD TO THE VIEW THAT THIS PROVISION REFERS TO THE
     DATE ON WHICH THE MEMBER STATE CONCERNED HAS BROUGHT THE COMMON SYSTEM INTO
     FORCE IN ITS OWN TERRITORY.
13   HOWEVER, SUCH AN INTERPRETATION WOULD NOT CORRESPOND TO THE AIM OF THE
     DIRECTIVES IN QUESTION. THE AIM OF THE DIRECTIVES IS TO ENSURE THAT THE
     SYSTEM OF VALUE-ADDED TAX IS APPLIED THROUGHOUT THE COMMON MARKET FROM A
     CERTAIN DATE ONWARDS. AS LONG AS THIS DATE HAS NOT YET BEEN REACHED THE
     MEMBER STATES RETAIN THEIR FREEDOM OF ACTION IN THIS RESPECT.
14   MOREOVER, THE OBJECTIVE OF THE DECISION OF 13 MAY 1965 CAN ONLY BE ACHIEVED
     AT THE COMMUNITY LEVEL AND THEREFORE CANNOT BE BROUGHT ABOUT SOLELY BY THE
     INTRODUCTION OF HARMONIZATION MEASURES ON THE PART OF MEMBER STATES
     INDIVIDUALLY AT DIFFERENT DATES AND ACCORDING TO DIFFERENT TIMETABLES.
15   THE ANSWER TO THE QUESTION PUT MUST THEREFORE BE THAT THE PROHIBITION
     CONTAINED IN THE SECOND PARAGRAPH OF ARTICLE 4 OF THE DECISION CAN ONLY
     COME INTO EFFECT AS FROM 1 JANUARY 1972.
     THE THIRD QUESTION
16   IN ITS THIRD QUESTION THE FINANZGERICHT ASKS THE COURT TO RULE WHETHER THE
     FEDERAL TAX ON THE CARRIAGE OF GOODS BY ROAD (STRASSENGUETER VERKEHRSTEUER)
     MUST BE CONSIDERED AS A SPECIFIC TAX LEVIED ON THE CARRIAGE OF GOODS
     INSTEAD OF TURNOVER TAX AND WHETHER IT THEREFORE COMES UNDER THE
     PROHIBITION IN THE SECOND PARAGRAPH OF ARTICLE 4 OF THE DECISION OF 13 MAY
     1965.
17   IT IS NOT FOR THE COURT IN THESE PROCEEDINGS TO ASSESS FROM THE POINT OF
     VIEW OF COMMUNITY LAW THE FEATURES OF A TAX INTRODUCED BY ONE OF THE MEMBER
     STATES. ON THE OTHER HAND, IT IS WITHIN ITS JURISDICTION TO INTERPRET THE
     RELEVANT PROVISION OF COMMUNITY LAW IN ORDER TO ENABLE THE NATIONAL COURT
     TO APPLY IT CORRECTLY TO THE TAX AT ISSUE.
18   ARTICLE 4 PROVIDES FOR THE ABOLITION OF " SPECIFIC TAXES " IN ORDER TO
     ENSURE A COMMON AND CONSISTENT SYSTEM OF TAXATION OF TURNOVER. BY FAVOURING
     IN THIS WAY THE TRANSPARENCY OF THE MARKET IN THE FIELD OF TRANSPORT THIS
     PROVISION CONTRIBUTES TO THE APPROXIMATION OF THE CONDITIONS OF COMPETITION
     AND MUST BE REGARDED AS AN ESSENTIAL MEASURE FOR THE HARMONIZATION OF THE
     TAX OF THE MEMBER STATES IN THE FIELD OF TRANSPORT. THIS OBJECTIVE DOES NOT
     PROHIBIT THE IMPOSITION ON TRANSPORT SERVICES OF OTHER TAXES WHICH ARE OF A
     DIFFERENT NATURE AND HAVE AIMS DIFFERENT FROM THOSE PURSUED BY THE COMMON
     SYSTEM OF TURNOVER TAX.
19   A TAX WITH THE FEATURES DESCRIBED BY THE FINANZGERICHT WHICH IS NOT IMPOSED
     ON COMMERCIAL TRANSACTIONS BUT ON A SPECIFIC ACTIVITY, WITHOUT
     DISTINGUISHING, MOREOVER, BETWEEN ACTIVITIES ON ONE’S OWN ACCOUNT AND THOSE
     ON THE ACCOUNT OF OTHERS, AND THE BASIS OF ASSESSMENT OF WHICH IS NOT THE
     CONSIDERATION FOR A SERVICE BUT THE PHYSICAL LOAD EXPRESSED IN METRIC
     TONNES/KILOMETRES TO WHICH THE ROADS ARE SUBJECTED THROUGH THE ACTIVITY
                                                                                   11
    TAXED DOES NOT CORRESPOND TO THE USUAL FORM OF TURNOVER TAX. FURTHERMORE
    THE FACT THAT IT IS INTENDED TO EFFECT A REDISTRIBUTION OF TRAFFIC IS
    CAPABLE OF DISTINGUISHING IT FROM THE " SPECIFIC TAXES " REFERRED TO IN THE
    SECOND PARAGRAPH OF ARTICLE 4. THE QUESTION PUT MUST THEREFORE BE ANSWERED
    TO THIS EFFECT.
    …
    THE COURT
    IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE FINANZGERICHT MUENCHEN, BY
    ORDER OF 23 FEBRUARY 1970, HEREBY RULES :
    1. THE SECOND PARAGRAPH OF ARTICLE 4 OF THE COUNCIL DECISION OF 13 MAY
    1965, WHICH PROHIBITS THE MEMBER STATES FROM APPLYING THE COMMON SYSTEM OF
    TURNOVER TAX CONCURRENTLY WITH SPECIFIC TAXES LEVIED INSTEAD OF TURNOVER
    TAX, IS CAPABLE, IN CONJUNCTION WITH THE PROVISIONS OF THE COUNCIL
    DIRECTIVES OF 11 APRIL 1967 AND 9 DECEMBER 1969, OF PRODUCING DIRECT
    EFFECTS IN THE LEGAL RELATIONSHIPS BETWEEN THE MEMBER STATES TO WHICH THE
    DECISION IS ADDRESSED AND THOSE SUBJECT TO THEIR JURISDICTION AND OF
    CREATING FOR THE LATTER THE RIGHT TO INVOKE THESE PROVISIONS BEFORE THE
    COURTS;
    2. THE PROHIBITION ON APPLYING THE COMMON SYSTEM OF TURNOVER TAX
    CONCURRENTLY WITH SPECIFIC TAXES BECOMES EFFECTIVE ON THE DATE LAID DOWN IN
    THE THIRD COUNCIL DIRECTIVE OF 9 DECEMBER 1969, NAMELY ON 1 JANUARY 1972;
    3. A TAX WITH THE FEATURES DESCRIBED BY THE FINANZGERICHT WHICH IS NOT
    IMPOSED UPON COMMERCIAL TRANSACTIONS BUT MERELY BECAUSE GOODS ARE CARRIED
    BY ROAD AND THE BASIS OF ASSESSMENT OF WHICH IS NOT CONSIDERATION FOR A
    SERVICE BUT THE PHYSICAL LOAD EXPRESSED IN METRIC TONNES/KILOMETRES TO
    WHICH THE ROADS ARE SUBJECTED THROUGH THE ACTIVITY TAXED, DOES NOT
    CORRESPOND TO THE USUAL FORM OF TURNOVER TAX WITHIN THE MEANING OF THE
    SECOND PARAGRAPH OF ARTICLE 4 OF THE DECISION OF 13 MAY 1965.



    Case 04
    Judgment of the Court of 17 December 1970. Internationale Handelsgesellschaft mbH v
    Einfuhr- und Vorratsstelle für Getreide und Futtermittel. Reference for a preliminary
    ruling: Verwaltungsgericht Frankfurt am Main - Germany.
    In Case 11-70,

    REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE
    VERWALTUNGSGERICHT ( ADMINISTRATIVE COURT ) FRANKFURT-AM-MAIN, FOR A
    PRELIMINARY RULING IN THE CASE PENDING BEFORE THAT COURT BETWEEN
    INTERNATIONALE HANDELSGESELLSCHAFT MBH, THE REGISTERED OFFICE OF WHICH IS AT
    FRANKFURT-AM-MAIN, AND EINFUHR - UND VORRATSSTELLE FUER GETREIDE UND
    FUTTERMITTEL, FRANKFURT-AM-MAIN,
    ON THE VALIDITY OF THE THIRD SUBPARAGRAPH OF ARTICLE 12 ( 1 ) OF REGULATION NO
    120/67/EEC OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE
    MARKET IN CEREALS AND ARTICLE 9 OF REGULATION NO 473/67/EEC OF THE COMMISSION OF
    21 AUGUST 1967 ON IMPORT AND EXPORT LICENCES FOR CEREALS AND PROCESSED CEREAL
    PRODUCTS, RICE, BROKEN RICE AND PROCESSED RICE PRODUCTS,
1   BY ORDER OF 18 MARCH 1970 RECEIVED AT THE COURT ON 26 MARCH 1970, THE
    VERWALTUNGSGERICHT FRANKFURT-AM-MAIN, PURSUANT TO ARTICLE 177 OF THE EEC
    TREATY, HAS REFERRED TO THE COURT OF JUSTICE TWO QUESTIONS ON THE VALIDITY OF
    THE SYSTEM OF EXPORT LICENCES AND OF THE DEPOSIT ATTACHING TO THEM -
    HEREINAFTER REFERRED TO AS " THE SYSTEM OF DEPOSITS " - PROVIDED FOR BY
    REGULATION NO 120/67/EEC OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON
    ORGANIZATION OF THE MARKET IN CEREALS ( OJ SPECIAL EDITION 1967, P . 33 ) AND

                                                                                            12
    REGULATION NO 473/67/EEC OF THE COMMISSION OF 21 AUGUST 1967 ON IMPORT AND EXPORT
    LICENCES ( OJ 1967, NO 204, P . 16 ).
2   IT APPEARS FROM THE GROUNDS OF THE ORDER REFERRING THE MATTER THAT THE
    VERWALTUNGSGERICHT HAS UNTIL NOW REFUSED TO ACCEPT THE VALIDITY OF THE
    PROVISIONS IN QUESTION AND THAT FOR THIS REASON IT CONSIDERS IT TO BE ESSENTIAL TO
    PUT AN END TO THE EXISTING LEGAL UNCERTAINTY . ACCORDING TO THE EVALUATION OF
    THE VERWALTUNGSGERICHT, THE SYSTEM OF DEPOSITS IS CONTRARY TO CERTAIN
    STRUCTURAL PRINCIPLES OF NATIONAL CONSTITUTIONAL LAW WHICH MUST BE PROTECTED
    WITHIN THE FRAMEWORK OF COMMUNITY LAW, WITH THE RESULT THAT THE PRIMACY OF
    SUPRANATIONAL LAW MUST YIELD BEFORE THE PRINCIPLES OF THE GERMAN BASIC LAW .
    MORE PARTICULARLY, THE SYSTEM OF DEPOSITS RUNS COUNTER TO THE PRINCIPLES OF
    FREEDOM OF ACTION AND OF DISPOSITION, OF ECONOMIC LIBERTY AND OF
    PROPORTIONALITY ARISING IN PARTICULAR FROM ARTICLES 2 ( 1 ) AND 14 OF THE BASIC LAW
    . THE OBLIGATION TO IMPORT OR EXPORT RESULTING FROM THE ISSUE OF THE LICENCES,
    TOGETHER WITH THE DEPOSIT ATTACHING THERETO, CONSTITUTES AN EXCESSIVE
    INTERVENTION IN THE FREEDOM OF DISPOSITION IN TRADE, AS THE OBJECTIVE OF THE
    REGULATIONS COULD HAVE BEEN ATTAINED BY METHODS OF INTERVENTION HAVING LESS
    SERIOUS CONSEQUENCES .
    THE PROTECTION OF FUNDAMENTAL RIGHTS IN THE COMMUNITY LEGAL SYSTEM
3   RECOURSE TO THE LEGAL RULES OR CONCEPTS OF NATIONAL LAW IN ORDER TO JUDGE THE
    VALIDITY OF MEASURES ADOPTED BY THE INSTITUTIONS OF THE COMMUNITY WOULD HAVE
    AN ADVERSE EFFECT ON THE UNIFORMITY AND EFFICACY OF COMMUNITY LAW . THE
    VALIDITY OF SUCH MEASURES CAN ONLY BE JUDGED IN THE LIGHT OF COMMUNITY LAW . IN
    FACT, THE LAW STEMMING FROM THE TREATY, AN INDEPENDENT SOURCE OF LAW, CANNOT
    BECAUSE OF ITS VERY NATURE BE OVERRIDDEN BY RULES OF NATIONAL LAW, HOWEVER
    FRAMED, WITHOUT BEING DEPRIVED OF ITS CHARACTER AS COMMUNITY LAW AND WITHOUT
    THE LEGAL BASIS OF THE COMMUNITY ITSELF BEING CALLED IN QUESTION . THEREFORE THE
    VALIDITY OF A COMMUNITY MEASURE OR ITS EFFECT WITHIN A MEMBER STATE CANNOT BE
    AFFECTED BY ALLEGATIONS THAT IT RUNS COUNTER TO EITHER FUNDAMENTAL RIGHTS AS
    FORMULATED BY THE CONSTITUTION OF THAT STATE OR THE PRINCIPLES OF A NATIONAL
    CONSTITUTIONAL STRUCTURE .
6   ACCORDING TO THE TERMS OF THE THIRTEENTH RECITAL OF THE PREAMBLE TO
    REGULATION NO 120/67, " THE COMPETENT AUTHORITIES MUST BE IN A POSITION
    CONSTANTLY TO FOLLOW TRADE MOVEMENTS IN ORDER TO ASSESS MARKET TRENDS AND
    TO APPLY THE MEASURES ... AS NECESSARY " AND " TO THAT END, PROVISION SHOULD BE
    MADE FOR THE ISSUE OF IMPORT AND EXPORT LICENCES ACCOMPANIED BY THE LODGING OF
    A DEPOSIT GUARANTEEING THAT THE TRANSACTIONS FOR WHICH SUCH LICENCES ARE
    REQUESTED ARE EFFECTED ". IT FOLLOWS FROM THESE CONSIDERATIONS AND FROM THE
    GENERAL SCHEME OF THE REGULATION THAT THE SYSTEM OF DEPOSITS IS INTENDED TO
    GUARANTEE THAT THE IMPORTS AND EXPORTS FOR WHICH THE LICENCES ARE REQUESTED
    ARE ACTUALLY EFFECTED IN ORDER TO ENSURE BOTH FOR THE COMMUNITY AND FOR THE
    MEMBER STATES PRECISE KNOWLEDGE OF THE INTENDED TRANSACTIONS .
7   THIS KNOWLEDGE, TOGETHER WITH OTHER AVAILABLE INFORMATION ON THE STATE OF THE
    MARKET, IS ESSENTIAL TO ENABLE THE COMPETENT AUTHORITIES TO MAKE JUDICIOUS USE
    OF THE INSTRUMENTS OF INTERVENTION, BOTH ORDINARY AND EXCEPTIONAL, WHICH ARE
    AT THEIR DISPOSAL FOR GUARANTEEING THE FUNCTIONING OF THE SYSTEM OF PRICES
    INSTITUTED BY THE REGULATION, SUCH AS PURCHASING, STORING AND DISTRIBUTING,
    FIXING DENATURING PREMIUMS AND EXPORT REFUNDS, APPLYING PROTECTIVE MEASURES
    AND CHOOSING MEASURES INTENDED TO AVOID DEFLECTIONS OF TRADE . THIS IS ALL THE
    MORE IMPERATIVE IN THAT THE IMPLEMENTATION OF THE COMMON AGRICULTURAL POLICY
    INVOLVES HEAVY FINANCIAL RESPONSIBILITIES FOR THE COMMUNITY AND THE MEMBER
    STATES .
8   IT IS NECESSARY, THEREFORE, FOR THE COMPETENT AUTHORITIES TO HAVE AVAILABLE NOT
    ONLY STATISTICAL INFORMATION ON THE STATE OF THE MARKET BUT ALSO PRECISE
    FORECASTS ON FUTURE IMPORTS AND EXPORTS . SINCE THE MEMBER STATES ARE OBLIGED
    BY ARTICLE 12 OF REGULATION NO 120/67 TO ISSUE IMPORT AND EXPORT LICENCES TO ANY
    APPLICANT, A FORECASE WOULD LOSE ALL SIGNIFICANCE IF THE LICENCES DID NOT
    INVOLVE THE RECIPIENTS IN AN UNDERTAKING TO ACT ON THEM . AND THE UNDERTAKING

                                                                                          13
     WOULD BE INEFFECTUAL IF OBSERVANCE OF IT WERE NOT ENSURED BY APPROPRIATE
     MEANS .
9    THE CHOICE FOR THAT PURPOSE BY THE COMMUNITY LEGISLATURE OF THE DEPOSIT
     CANNOT BE CRITICIZED IN VIEW OF THE FACT THAT THAT MACHINERY IS ADAPTED TO THE
     VOLUNTARY NATURE OF REQUESTS FOR LICENCES AND THAT IT HAS THE DUAL ADVANTAGE
     OVER OTHER POSSIBLE SYSTEMS OF SIMPLICITY AND EFFICACY .
10   A SYSTEM OF MERE DECLARATION OF EXPORTS EFFECTED AND OF UNUSED LICENCES, AS
     PROPOSED BY THE PLAINTIFF IN THE MAIN ACTION, WOULD, BY REASON OF ITS
     RETROSPECTIVE NATURE AND LACK OF ANY GUARANTEE OF APPLICATION, BE INCAPABLE
     OF PROVIDING THE COMPETENT AUTHORITIES WITH SURE DATA ON TRENDS IN THE
     MOVEMENT OF GOODS .
11   LIKEWISE, A SYSTEM OF FINES IMPOSED A POSTERIORI WOULD INVOLVE CONSIDERABLE
     ADMINISTRATIVE AND LEGAL COMPLICATIONS AT THE STAGE OF DECISION AND OF
     EXECUTION, AGGRAVATED BY THE FACT THAT THE TRADERS CONCERNED MAY BE BEYOND
     THE REACH OF THE INTERVENTION AGENCIES BY REASON OF THEIR RESIDENCE IN ANOTHER
     MEMBER STATE, SINCE ARTICLE 12 OF THE REGULATION IMPOSES ON MEMBER STATES THE
     OBLIGATION TO ISSUE THE LICENCES TO ANY APPLICANT " IRRESPECTIVE OF THE PLACE OF
     HIS ESTABLISHMENT IN THE COMMUNITY . "
12   IT THEREFORE APPEARS THAT THE REQUIREMENT OF IMPORT AND EXPORT LICENCES
     INVOLVING FOR THE LICENSEES AN UNDERTAKING TO EFFECT THE PROPOSED
     TRANSACTIONS UNDER THE GUARANTEE OF A DEPOSIT CONSTITUTES A METHOD WHICH IS
     BOTH NECESSARY AND APPROPRIATE TO ENABLE THE COMPETENT AUTHORITIES TO
     DETERMINE IN THE MOST EFFECTIVE MANNER THEIR INTERVENTIONS ON THE MARKET IN
     CEREALS .
13   THE PRINCIPLE OF THE SYSTEM OF DEPOSITS CANNOT THEREFORE BE DISPUTED .
14   HOWEVER, EXAMINATION SHOULD BE MADE AS TO WHETHER OR NOT CERTAIN DETAILED
     RULES OF THE SYSTEM OF DEPOSITS MIGHT BE CONTESTED IN THE LIGHT OF THE PRINCIPLES
     ENOUNCED BY THE VERWALTUNGSGERICHT, ESPECIALLY IN VIEW OF THE ALLEGATION OF
     THE PLAINTIFF IN THE MAIN ACTION THAT THE BURDEN OF THE DEPOSIT IS EXCESSIVE FOR
     TRADE, TO THE EXTENT OF VIOLATING FUNDAMENTAL RIGHTS .
15   IN ORDER TO ASSESS THE REAL BURDEN OF THE DEPOSIT ON TRADE, ACCOUNT SHOULD BE
     TAKEN NOT SO MUCH OF THE AMOUNT OF THE DEPOSIT WHICH IS REPAYABLE - NAMELY 0.5
     UNIT OF ACCOUNT PER 1 000 KG - AS OF THE COSTS AND CHARGES INVOLVED IN LODGING IT .
     IN ASSESSING THIS BURDEN, ACCOUNT CANNOT BE TAKEN OF FORFEITURE OF THE DEPOSIT
     ITSELF, SINCE TRADERS ARE ADEQUATELY PROTECTED BY THE PROVISIONS OF THE
     REGULATION RELATING TO CIRCUMSTANCES RECOGNIZED AS CONSTITUTING FORCE
     MAJEURE .
16   THE COSTS INVOLVED IN THE DEPOSIT DO NOT CONSTITUTE AN AMOUNT
     DISPROPORTIONATE TO THE TOTAL VALUE OF THE GOODS IN QUESTION AND OF THE OTHER
     TRADING COSTS . IT APPEARS THEREFORE THAT THE BURDENS RESULTING FROM THE
     SYSTEM OF DEPOSITS ARE NOT EXCESSIVE AND ARE THE NORMAL CONSEQUENCE OF A
     SYSTEM OF ORGANIZATION OF THE MARKETS CONCEIVED TO MEET THE REQUIREMENTS OF
     THE GENERAL INTEREST, DEFINED IN ARTICLE 39 OF THE TREATY, WHICH AIMS AT ENSURING
     A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY WHILE ENSURING THAT
     SUPPLIES REACH CONSUMERS AT REASONABLE PRICES .
17   THE PLAINTIFF IN THE MAIN ACTION ALSO POINTS OUT THAT FORFEITURE OF THE DEPOSIT IN
     THE EVENT OF THE UNDERTAKING TO IMPORT OR EXPORT NOT BEING FULFILLED REALLY
     CONSTITUTES A FINE OR A PENALTY WHICH THE TREATY HAS NOT AUTHORIZED THE
     COUNCIL AND THE COMMISSION TO INSTITUTE .
18   THIS ARGUMENT IS BASED ON A FALSE ANALYSIS OF THE SYSTEM OF DEPOSITS WHICH
     CANNOT BE EQUATED WITH A PENAL SANCTION, SINCE IT IS MERELY THE GUARANTEE THAT
     AN UNDERTAKING VOLUNTARILY ASSUMED WILL BE CARRIED OUT .
19    FINALLY, THE ARGUMENTS RELIED UPON BY THE PLAINTIFF IN THE MAIN ACTION BASED
     FIRST ON THE FACT THAT THE DEPARTMENTS OF THE COMMISSION ARE NOT TECHNICALLY
     IN A POSITION TO EXPLOIT THE INFORMATION SUPPLIED BY THE SYSTEM CRITICIZED, SO
     THAT IT IS DEVOID OF ALL PRACTICAL USEFULNESS, AND SECONDLY ON THE FACT THAT THE
                                                                                           14
     GOODS WITH WHICH THE DISPUTE IS CONCERNED ARE SUBJECT TO THE SYSTEM OF INWARD
     PROCESSING ARE IRRELEVANT . THESE ARGUMENTS CANNOT PUT IN ISSUE THE ACTUAL
     PRINCIPLE OF THE SYSTEM OF DEPOSITS .
20   IT FOLLOWS FROM ALL THESE CONSIDERATIONS THAT THE FACT THAT THE SYSTEM OF
     LICENCES INVOLVING AN UNDERTAKING, BY THOSE WHO APPLY FOR THEM, TO IMPORT OR
     EXPORT, GUARANTEED BY A DEPOSIT, DOES NOT VIOLATE ANY RIGHT OF A FUNDAMENTAL
     NATURE . THE MACHINERY OF DEPOSITS CONSTITUTES AN APPROPRIATE METHOD, FOR THE
     PURPOSES OF ARTICLE 40 ( 3 ) OF THE TREATY, FOR CARRYING OUT THE COMMON
     ORGANIZATION OF THE AGRICULTURAL MARKETS AND ALSO CONFORMS TO THE
     REQUIREMENTS OF ARTICLE 43 .
     THE SECOND QUESTION ( CONCEPT OF " FORCE MAJEURE " )
21   BY THE SECOND QUESTION THE VERWALTUNGSGERICHT ASKS WHETHER, IN THE EVENT OF
     THE COURT' S CONFIRMING THE VALIDITY OF THE DISPUTED PROVISION OF REGULATION NO
     120/67, ARTICLE 9 OF REGULATION NO 473/67 OF THE COMMISSION, ADOPTED IN
     IMPLEMENTATION OF THE FIRST REGULATION, IS IN CONFORMITY WITH THE LAW, IN THAT IT
     ONLY EXCLUDES FORFEITURE OF THE DEPOSIT IN CASES OF FORCE MAJEURE .
22   IT APPEARS FROM THE GROUNDS OF THE ORDER REFERRING THE MATTER THAT THE COURT
     CONSIDERS EXCESSIVE AND CONTRARY TO THE ABOVEMENTIONED PRINCIPLES THE
     PROVISION IN ARTICLE 1 ( SIC ) OF REGULATION NO 473/67, THE EFFECT OF WHICH IS TO LIMIT
     THE CANCELLATION OF THE OBLIGATION TO IMPORT OR EXPORT AND RELEASE OF THE
     DEPOSIT ONLY TO " CIRCUMSTANCES WHICH MAY BE CONSIDERED TO BE A CASE OF FORCE
     MAJEURE " . IN THE LIGHT OF ITS EXPERIENCE, THE VERWALTUNGSGERICHT CONSIDERS
     THAT PROVISION TO BE TOO NARROW, LEAVING EXPORTERS OPEN TO FORFEITURE OF THE
     DEPOSIT IN CIRCUMSTANCES IN WHICH EXPORTATION WOULD NOT HAVE TAKEN PLACE FOR
     REASONS WHICH WERE JUSTIFIABLE BUT NOT ASSIMILABLE TO A CASE OF FORCE MAJEURE
     IN THE STRICT MEANING OF THE TERM . FOR ITS PART, THE PLAINTIFF IN THE MAIN ACTION
     CONSIDERS THIS PROVISION TO BE TOO SEVERE BECAUSE IT LIMITS THE RELEASE OF THE
     DEPOSIT TO CASES OF FORCE MAJEURE WITHOUT TAKING INTO ACCOUNT THE
     ARRANGEMENTS OF IMPORTERS OR EXPORTERS WHICH ARE JUSTIFIED BY CONSIDERATIONS
     OF A COMMERCIAL NATURE .
23   THE CONCEPT OF FORCE MAJEURE ADOPTED BY THE AGRICULTURAL REGULATIONS TAKES
     INTO ACCOUNT THE PARTICULAR NATURE OF THE RELATIONSHIPS IN PUBLIC LAW BETWEEN
     TRADERS AND THE NATIONAL ADMINISTRATION, AS WELL AS THE OBJECTIVES OF THOSE
     REGULATIONS . IT FOLLOWS FROM THOSE OBJECTIVES AS WELL AS FROM THE POSITIVE
     PROVISIONS OF THE REGULATIONS IN QUESTION THAT THE CONCEPT OF FORCE MAJEURE IS
     NOT LIMITED TO ABSOLUTE IMPOSSIBILITY BUT MUST BE UNDERSTOOD IN THE SENSE OF
     UNUSUAL CIRCUMSTANCES, OUTSIDE THE CONTROL OF THE IMPORTER OR EXPORTER, THE
     CONSEQUENCES OF WHICH, IN SPITE OF THE EXERCISE OF ALL DUE CARE, COULD NOT HAVE
     BEEN AVOIDED EXCEPT AT THE COST OF EXCESSIVE SACRIFICE . THIS CONCEPT IMPLIES A
     SUFFICIENT FLEXIBILITY REGARDING NOT ONLY THE NATURE OF THE OCCURRENCE RELIED
     UPON BUT ALSO THE CARE WHICH THE EXPORTER SHOULD HAVE EXERCISED IN ORDER TO
     MEET IT AND THE EXTENT OF THE SACRIFICES WHICH HE SHOULD HAVE ACCEPTED TO THAT
     END .
24   THE CASES OF FORFEITURE CITED BY THE COURT AS IMPOSING AN UNJUSTIFIED AND
     EXCESSIVE BURDEN ON THE EXPORTER APPEAR TO CONCERN SITUATIONS IN WHICH
     EXPORTATION HAS NOT TAKEN PLACE EITHER THROUGH THE FAULT OF THE EXPORTER
     HIMSELF OR AS A RESULT OF AN ERROR ON HIS PART OR FOR PURELY COMMERCIAL
     CONSIDERATIONS . THE CRITICISMS MADE AGAINST ARTICLE 9 OF REGULATION NO 473/67
     LEAD THEREFORE IN REALITY TO THE SUBSTITUTION OF CONSIDERATIONS BASED SOLELY
     ON THE INTEREST AND BEHAVIOUR OF CERTAIN TRADERS FOR A SYSTEM LAID DOWN IN THE
     PUBLIC INTEREST OF THE COMMUNITY . THE SYSTEM ESTABLISHED, UNDER THE PRINCIPLES
     OF REGULATION NO 120/67, BY IMPLEMENTING REGULATION NO 473/67 IS INTENDED TO
     RELEASE TRADERS FROM THEIR UNDERTAKING ONLY IN CASES IN WHICH THE IMPORT OR
     EXPORT TRANSACTION WAS NOT ABLE TO BE CARRIED OUT DURING THE PERIOD OF
     VALIDITY OF THE LICENCE AS A RESULT OF THE OCCURRENCES REFERRED TO BY THE SAID
     PROVISIONS . BEYOND SUCH OCCURRENCES, FOR WHICH THEY CANNOT BE HELD
     RESPONSIBLE, IMPORTERS AND EXPORTERS ARE OBLIGED TO COMPLY WITH THE PROVISIONS
     OF THE AGRICULTURAL REGULATIONS AND MAY NOT SUBSTITUTE FOR THEM

                                                                                               15
     CONSIDERATIONS BASED UPON THEIR OWN INTERESTS .
25    IT THEREFORE APPEARS THAT BY LIMITING THE CANCELLATION OF THE UNDERTAKING TO
     EXPORT AND THE RELEASE OF THE DEPOSIT TO CASES OF FORCE MAJEURE THE COMMUNITY
     LEGISLATURE ADOPTED A PROVISION WHICH, WITHOUT IMPOSING AN UNDUE BURDEN ON
     IMPORTERS OR EXPORTERS, IS APPROPRIATE FOR ENSURING THE NORMAL FUNCTIONING OF
     THE ORGANIZATION OF THE MARKET IN CEREALS, IN THE GENERAL INTEREST AS DEFINED IN
     ARTICLE 39 OF THE TREATY . IT FOLLOWS THAT NO ARGUMENT AGAINST THE VALIDITY OF
     THE SYSTEM OF DEPOSITS CAN BE BASED ON THE PROVISIONS LIMITING RELEASE OF THE
     DEPOSIT TO CASES OF FORCE MAJEURE .
     THE COURT IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE VERWALTUNGSGERICHT
     FRANKFURT-AM-MAIN, BY ORDER OF THAT COURT OF 18 MARCH 1970, HEREBY RULES :
     EXAMINATION OF THE QUESTIONS PUT REVEALS NO FACTOR CAPABLE OF AFFECTING THE
     VALIDITY OF :
     ( 1 ) THE THIRD SUBPARAGRAPH OF ARTICLE 12 ( 1 ) OF REGULATION NO 120/67/EEC OF THE
     COUNCIL OF 13 JUNE 1967 MAKING THE ISSUE OF IMPORT AND EXPORT LICENCES
     CONDITIONAL ON THE LODGING OF A DEPOSIT GUARANTEEING PERFORMANCE OF THE
     UNDERTAKING TO IMPORT OR EXPORT DURING THE PERIOD OF VALIDITY OF THE LICENCE;
     ( 2 ) ARTICLE 9 OF REGULATION NO 473/67/EEC OF THE COMMISSION OF 21 AUGUST 1967, THE
     EFFECT OF WHICH IS TO LIMIT THE CANCELLATION OF THE UNDERTAKING TO IMPORT OR
     EXPORT AND THE RELEASE OF THE DEPOSIT ONLY TO CIRCUMSTANCES WHICH MAY BE
     CONSIDERED TO BE A CASE OF " FORCE MAJEURE " .


     Case 05
     ECJ, Judgment of 14 December 1971. Politi s.a.s. v Ministry for Finance of the Italian
     Republic. Case 43-71. European Court reports 1971, 1039
     …
     IN CASE 43/71
     …


1    BY ORDER OF 17 JULY 1971, RECEIVED AT THE COURT REGISTRY ON 23 JULY 1971,
     THE PRESIDENT OF THE TRIBUNALE DI TORINO SUBMITTED SEVERAL QUESTIONS TO THE
     COURT OF JUSTICE CONCERNING, IN PARTICULAR, THE INTERPRETATION OF
     REGULATIONS NOS 20 OF 4 APRIL 1962 AND 121/67/EEC OF 13 JUNE 1967 OF THE
     COUNCIL ON THE COMMON ORGANIZATION OF THE MARKET IN PIGMEAT. THESE
     QUESTIONS HAVE BEEN REFERRED IN CONNEXION WITH THE IMPOSITION BY THE
     ITALIAN AUTHORITIES, PURSUANT TO ITALIAN LAW NO 330 OF 15 JUNE 1950 AND THE
     DECREES OF THE PRESIDENT OF THE ITALIAN REPUBLIC NOS 723 OF 26 JUNE 1965
     AND 1339 OF 21 DECEMBER 1961, OF A DUTY FOR ADMINISTRATIVE SERVICES AND A
     STATISTICAL LEVY ON IMPORTS FROM OTHER MEMBER STATES AND FROM THIRD
     COUNTRIES.
     I - THE JURISDICTION OF THE COURT
2     (1) THE ITALIAN GOVERNMENT CONSIDERS THAT, SINCE ITALIAN LAW NO 447, WHICH
     WAS PUBLISHED ON THE SAME DATE AS THE ORDER MAKING THE REFERENCE, HAS
     ABOLISHED THE CHARGES IN DISPUTE, THE FILE SHOULD BE RETURNED TO THE
     NATIONAL COURT WITHOUT ANY REPLY BEING GIVEN TO THE QUESTIONS REFERRED, SO
     THAT IT MAY HAVE THE OPPORTUNITY TO CONSIDER WHETHER IT IS STILL NECESSARY
     TO MAINTAIN THE REFERENCE TO THE COURT.
3    HOWEVER, ARTICLE 177 OF THE TREATY DOES NOT ENTITLE THE COURT TO ASSESS THE
     IMMEDIACY OF THE RELEVANCE OF QUESTIONS REFERRED WITH REGARD TO THE
     PROCEEDINGS PENDING BEFORE THE NATIONAL COURT, EVEN WHERE THE DOMESTIC LAW
     WITH WHICH THE CASE IS CONCERNED HAS BEEN MODIFIED. IN ANY EVENT, THE
     REPEAL OF NATIONAL PROVISIONS WHICH ARE ACKNOWLEDGED TO HAVE BEEN
     INCOMPATIBLE WITH COMMUNITY LAW LEAVES OPEN THE QUESTION OF THE LEGAL

                                                                                              16
     CONSEQUENCES OF SUCH INCOMPATIBILITY DURING THE PERIOD PRECEDING THE
     REPEAL.
4    (2) THE ITALIAN GOVERNMENT FURTHER MAINTAINS THAT THE CONDITIONS REQUIRED
     FOR THE APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 177 ARE NOT
     FULFILLED, AS THE DECISION (DECRETO) WHICH THE PRESIDENT OF THE TRIBUNALE
     DI TORINO IS CALLED UPON TO GIVE IS TO BE MADE AT THE CONCLUSION OF A
     SPECIAL PROCEDURE ON THE BASIS OF THE PLAINTIFF’S ALLEGATIONS ALONE,
     WITHOUT ANY PRIOR DISCUSSION BETWEEN THE PARTIES.
5    IT IS SUFFICIENT TO NOTE THAT THE PRESIDENT OF THE TRIBUNALE DI TORINO IS
     PERFORMING A JUDICIAL FUNCTION WITHIN THE MEANING OF ARTICLE 177 AND THAT
     HE CONSIDERED AN INTERPRETATION OF COMMUNITY LAW TO BE NECESSARY TO ENABLE
     HIM TO REACH A DECISION, THERE BEING THEREFORE NO NEED FOR THE COURT TO
     CONSIDER THE STAGE OF THE PROCEEDINGS AT WHICH THE QUESTIONS WERE REFERRED.
     II - THE SUBSTANCE
     THE FIRST QUESTION
6    THE FIRST QUESTION REQUESTS THE COURT TO RULE WHETHER THE DUTY FOR
     ADMINISTRATIVE SERVICES AND THE STATISTICAL LEVY INTRODUCED BY ITALIAN
     LEGISLATION CONSTITUTE CHARGES HAVING AN EFFECT EQUIVALENT TO CUSTOMS
     DUTIES WITHIN THE MEANING OF REGULATION NO 20.
7    IT IS CLEAR FROM THE JUDGMENTS OF THE COURT OF 1 JULY 1969 IN CASE 24/68
     (1969) ECR 193) AND 18 NOVEMBER 1970 IN CASE 8/70 (REC. 1970, P. 961) THAT
     SUCH DUTIES AND LEVIES CONSTITUTE CHARGES HAVING AN EFFECT EQUIVALENT TO
     CUSTOMS DUTIES WITHIN THE MEANING OF ARTICLES 9, 12 AND 13 OF THE EEC
     TREATY AND CERTAIN REGULATIONS CONCERNING THE COMMON ORGANIZATION OF THE
     AGRICULTURAL MARKET, IN PARTICULAR ARTICLE 19 (1) OF REGULATION NO
     121/67/EEC OF THE COUNCIL.
     THE CONCEPT OF A " CHARGE HAVING EQUIVALENT EFFECT " AS EMPLOYED IN
     ARTICLES 14 (1) AND 18 (1) OF REGULATION NO 20 WHICH PROHIBIT THE LEVYING
     OF SUCH CHARGES ON IMPORTS OF PIGMEAT FROM MEMBER STATES AND THIRD
     COUNTRIES IS EQUIVALENT TO THE SAME EXPRESSION EMPLOYED IN ARTICLE 9 ET
     SEQ. OF THE TREATY AND IN OTHER REGULATIONS ON THE ORGANIZATION OF
     AGRICULTURAL MARKETS.
     QUESTIONS 2 (A) AND (B), 3 (A) AND (B), 4 (A) AND (B), 5 (A) AND (B)
8    THE COURT IS NEXT ASKED WHETHER THE PROVISIONS OF ARTICLES 14 (1) AND 18
     (1) OF REGULATION NO 20, AS WELL AS THE FIRST INDENT OF ARTICLE 17 (2) AND
     THE FIRST INDENT OF ARTICLE 19 (1) OF REGULATION NO 121/67 ARE IMMEDIATELY
     APPLICABLE WITHIN THE NATIONAL LEGAL SYSTEM AND, AS SUCH, CREATE INDIVIDUAL
     RIGHTS WHICH NATIONAL COURTS MUST PROTECT.
9    UNDER THE TERMS OF THE SECOND PARAGRAPH OF ARTICLE 189 REGULATIONS " SHALL
     HAVE GENERAL APPLICATION“ AND " SHALL BE... DIRECTLY APPLICABLE IN ALL
     MEMBER STATES“. THEREFORE, BY REASON OF THEIR NATURE AND THEIR FUNCTION IN
     THE SYSTEM OF THE SOURCES OF COMMUNITY LAW, REGULATIONS HAVE DIRECT EFFECT
     AND ARE AS SUCH, CAPABLE OF CREATING INDIVIDUAL RIGHTS WHICH NATIONAL
     COURTS MUST PROTECT. THE EFFECT OF A REGULATION, AS PROVIDED FOR IN ARTICLE
     189, IS THEREFORE TO PREVENT THE IMPLEMENTATION OF ANY LEGISLATIVE MEASURE,
     EVEN IF IT IS ENACTED SUBSEQUENTLY, WHICH IS INCOMPATIBLE WITH ITS
     PROVISIONS. THIS APPLIES TO THE PROVISIONS IN QUESTION. QUESTIONS 2 (C), 3
     (C), 4 (C), 5 (C) AND 6
10   FINALLY, THE COURT IS ASKED TO GIVE THE DATES ON WHICH THESE INDIVIDUAL
     RIGHTS CAME INTO EXISTENCE, PURSUANT TO ARTICLES 14 (1) AND 18 (1) OF
     REGULATION NO 20, AND ARTICLES 17 (1) AND 19 (1) OF REGULATION NO 121/67.
     THE COURT IS ALSO REQUESTED TO STATE WHETHER THESE RIGHTS HAVE REMAINED IN
     EXISTENCE SINCE THEIR CREATION UNDER REGULATION NO 20. IT IS, THEREFORE,
     NECESSARY TO ASCERTAIN THE DATES ON WHICH THOSE PROVISIONS CAME INTO EFFECT
     AND WHETHER THEY HAVE REMAINED EFFECTIVE SINCE THAT TIME.
11   (1) UNDER THE TERMS OF ARTICLE 14 OF THE BASIC REGULATION NO 20: " IN TRADE

                                                                                   17
     BETWEEN MEMBER STATES, BOTH IMPORT AND EXPORT“, THE CHARGES IN DISPUTE "
     SHALL BE INCOMPATIBLE WITH THE INTRA-COMMUNITY LEVY SYSTEM“ AND UNDER THE
     TERMS OF ARTICLE 18 OF THE SAME REGULATION, " THE APPLICATION OF THE LEVY
     SYSTEM TO IMPORTS FROM THIRD COUNTRIES SHALL ENTAIL THE ABOLITION " OF THE
     SAID CHARGES ON IMPORTS FROM THOSE COUNTRIES. THIS IMPLIES THAT THE
     PROHIBITION ON THE IMPOSITION OF THOSE CHARGES BY THE MEMBER STATES AND,
     THEREFORE, THE RIGHT OF INDIVIDUALS TO REQUIRE ITS OBSERVANCE, ONLY CAME
     INTO EXISTENCE ON THE DATE ON WHICH THE ABOVEMENTIONED LEVY SYSTEMS TOOK
     EFFECT.
12   THAT DATE, WHICH WAS ORIGINALLY FIXED AT 1 JULY 1962 BY ARTICLE 23 OF
     REGULATION NO 20, WAS POSTPONED UNTIL 30 JULY 1962 BY ARTICLE 1 (1) (B) OF
     REGULATION NO 49. AS REGARDS PIG CARCASSES, THE AMOUNT OF THE INTRA-
     COMMUNITY LEVIES WAS FIXED FOR THE FIRST TIME BY REGULATION NO 50, ARTICLE
     2 OF WHICH STATES THAT THAT REGULATION CAME INTO FORCE ON 30 JULY 1962.
     ARTICLE 2 OF REGULATION NO 51 AND ARTICLE 3 OF REGULATIONS NOS 52 AND 53
     PROVIDE THAT THOSE PROVISIONS - WHICH FIXED FOR THE FIRST TIME THE AMOUNT
     OF THE LEVIES APPLYING TO PIG CARCASSES IMPORTED FROM THIRD COUNTRIES
     (REGULATION NO 51) AND TO LIVE SWINE IMPORTED FROM OTHER MEMBER STATES
     (REGULATION NO 52) AND FROM THIRD COUNTRIES (REGULATION NO 53) - WERE TO
     COME INTO FORCE " ON THE DATE OF INTRODUCTION OF THE SYSTEM OF LEVIES
     INSTITUTED IN RESPECT OF PIG CARCASSES BY REGULATION NO 20 OF THE COUNCIL
     ".
     [discussion of dates in question]
17   (3) IT FOLLOWS FROM THE ABOVE CONSIDERATIONS THAT, UNDER THE SYSTEM
     ESTABLISHED IN REGULATION NO 20, THE PROHIBITION ON THE IMPOSITION BY THE
     MEMBER STATE OF THE CHARGES IN QUESTION WAS CONCOMITANT WITH THE OBLIGATION
     TO IMPOSE THE LEVIES PROVIDED FOR IN THAT REGULATION. IT FOLLOWS ALSO THAT
     THIS OBLIGATION CAME INTO EFFECT ON 30 JULY 1962 OR 2 SEPTEMBER 1963,
     ACCORDING TO THE PRODUCTS INVOLVED. MOREOVER, AS FROM THOSE DATES THE
     LEVIES IN QUESTION WERE APPLIED WITHOUT INTERRUPTION UNTIL 1 JULY 1967, THE
     DATE ON WHICH REGULATION NO 121/67 CAME INTO FORCE. THAT REGULATION IS
     STILL IN FORCE.
18   THE REPLY TO THE QUESTION REFERRED BY THE NATIONAL COURT MUST THEREFORE BE
     THAT THE EFFECTS IN QUESTION CAME INTO EXISTENCE ON 30 JULY 1962 OR 2
     SEPTEMBER 1963, ACCORDING TO THE PRODUCTS INVOLVED.
19   THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND THE
     COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS
     TO THE COURT, ARE NOT RECOVERABLE, AND AS THESE PROCEEDINGS ARE, IN SO FAR
     AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED, IN THE NATURE OF A STEP IN
     THE ACTION PENDING BEFORE THE NATIONAL COURT, THE DECISION AS TO COSTS IS A
     MATTER FOR THAT COURT,
     THE COURT
     IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRESIDENT OF THE TRIBUNALE
     DI TORINO BY ORDER OF THAT COURT DATED 17 JULY 1971, HEREBY RULES :
     ON THE FIRST QUESTION :
     1. THE CONCEPT OF A " CHARGE HAVING EQUIVALENT EFFECT " AS EMPLOYED IN
     ARTICLES 14 (1) AND 18 (1) OF REGULATION NO 20 IS EQUIVALENT TO THE SAME
     EXPRESSION EMPLOYED IN ARTICLE 9 ET SEQ. OF THE TREATY AND IN OTHER
     REGULATIONS ON THE ORGANIZATION OF AGRICULTURAL MARKETS. ON QUESTIONS 2 (A)
     AND (B), 3 (A) AND (B), 4 (A) AND (B), 5 (A) AND (B):
     2. REGULATIONS HAVE DIRECT EFFECT AND ARE, AS SUCH, CAPABLE OF CREATING
     INDIVIDUAL RIGHTS WHICH NATIONAL COURTS MUST PROTECT. THIS APPLIS TO
     ARTICLES 14 (1) AND 18 (1) OF REGULATION NO 20, AND TO THE FIRST INDENT OF
     ARTICLE 17 (2) AND THE FIRST INDENT OF ARTICLE 19 (1) OF REGULATION NO
     121/67.
     ON QUESTIONS 2 (C), 3 (C), 4 (C), 5 (C) AND 6 :

                                                                                   18
    3. THE PROVISIONS OF ARTICLES 14 (1) AND 18 (1) OF REGULATION NO 20 CAME
    INTO EFFECT ON 30 JULY 1962 AS REGARDS LIVE SWINE AND PIG CARCASSES AND ON
    2 SEPTEMBER 1963 AS REGARDS THE OTHER PRODUCTS REFERRED TO IN THAT
    REGULATION.
    4. THE PROVISIONS OF ARTICLES 17 (1) AND 19 (1) OF REGULATION NO 121/67/EEC
    CAME INTO EFFECT ON 1 JULY 1967.
    5. THE EFFECTS IN QUESTION CAME INTO EXISTENCE ON 30 JULY 1962 OR 2
    SEPTEMBER 1963, ACCORDING TO THE PRODUCTS INVOLVED.




    Case 06
    ECJ, Judgment of 4 December 1974. Yvonne van Duyn v Home Office. Reference for a
    preliminary ruling: High Court of Justice, Chancery Division - United Kingdom. Public
    policy. Case 41-74. European Court reports 1974 Page 01337
    …
    AND
    HOME OFFICE
    …
1   BY ORDER OF THE VICE-CHANCELLOR OF 1 MARCH 1974, LODGED AT THE COURT ON 13
    JUNE, THE CHANCERY DIVISION OF THE HIGH COURT OF JUSTICE OF ENGLAND,
    REFERRED TO THE COURT, UNDER ARTICLE 177 OF THE EEC TREATY, THREE QUESTIONS
    RELATING TO THE INTERPRETATION OF CERTAIN PROVISIONS OF COMMUNITY LAW
    CONCERNING FREEDOM OF MOVEMENT FOR WORKERS.
2   THESE QUESTIONS ARISE OUT OF AN ACTION BROUGHT AGAINST THE HOME OFFICE BY A
    WOMAN OF DUTCH NATIONALITY WHO WAS REFUSED LEAVE TO ENTER THE UNITED
    KINGDOM TO TAKE UP EMPLOYMENT AS A SECRETARY WITH THE " CHURCH OF
    SCIENTOLOGY ".
3   LEAVE TO ENTER WAS REFUSED IN ACCORDANCE WITH THE POLICY OF THE GOVERNMENT
    OF THE UNITED KINGDOM IN RELATION TO THE SAID ORGANIZATION, THE ACTIVITIES
    OF WHICH IT CONSIDERS TO BE SOCIALLY HARMFUL.
    FIRST QUESTION
4   BY THE FIRST QUESTION, THE COURT IS ASKED TO SAY WHETHER ARTICLE 48 OF THE
    EEC TREATY IS DIRECTLY APPLICABLE SO AS TO CONFER ON INDIVIDUALS RIGHTS
    ENFORCEABLE BY THEM IN THE COURTS OF A MEMBER STATE.
5   IT IS PROVIDED, IN ARTICLE 48 (1) AND (2), THAT FREEDOM OF MOVEMENT FOR
    WORKERS SHALL BE SECURED BY THE END OF THE TRANSITIONAL PERIOD AND THAT
    SUCH FREEDOM SHALL ENTAIL " THE ABOLITION OF ANY DISCRIMINATION BASED ON
    NATIONALITY BETWEEN WORKERS OF MEMBER STATES AS REGARDS EMPLOYMENT,
    REMUNERATION AND OTHER CONDITIONS OF WORK AND EMPLOYMENT ".
6   THESE PROVISIONS IMPOSE ON MEMBER STATES A PRECISE OBLIGATION WHICH DOES
    NOT REQUIRE THE ADOPTION OF ANY FURTHER MEASURE ON THE PART EITHER OF THE
    COMMUNITY INSTITUTIONS OR OF THE MEMBER STATES AND WHICH LEAVES THEM, IN
    RELATION TO ITS IMPLEMENTATION, NO DISCRETIONARY POWER.
7   PARAGRAPH 3, WHICH DEFINES THE RIGHTS IMPLIED BY THE PRINCIPLE OF FREEDOM
    OF MOVEMENT FOR WORKERS, SUBJECTS THEM TO LIMITATIONS JUSTIFIED ON GROUNDS
    OF PUBLIC POLICY, PUBLIC SECURITY OR PUBLIC HEALTH. THE APPLICATION OF
    THESE LIMITATIONS IS, HOWEVER, SUBJECT TO JUDICIAL CONTROL, SO THAT A
    MEMBER STATE’S RIGHT TO INVOKE THE LIMITATIONS DOES NOT PREVENT THE
    PROVISIONS OF ARTICLE 48, WHICH ENSHRINE THE PRINCIPLE OF FREEDOM OF
    MOVEMENT FOR WORKERS, FROM CONFERRING ON INDIVIDUALS RIGHTS WHICH ARE
    ENFORCEABLE BY THEM AND WHICH THE NATIONAL COURTS MUST PROTECT.

                                                                                            19
8    THE REPLY TO THE FIRST QUESTION MUST THEREFORE BE IN THE AFFIRMATIVE.
     SECOND QUESTION
9    THE SECOND QUESTION ASKS THE COURT TO SAY WHETHER COUNCIL DIRECTIVE NO
     64/221 OF 25 FEBRUARY 1964 ON THE CO-ORDINATION OF SPECIAL MEASURES
     CONCERNING THE MOVEMENT AND RESIDENCE OF FOREIGN NATIONALS WHICH ARE
     JUSTIFIED ON GROUNDS OF PUBLIC POLICY, PUBLIC SECURITY OR PUBLIC HEALTH IS
     DIRECTLY APPLICABLE SO AS TO CONFER ON INDIVIDUALS RIGHTS ENFORCEABLE BY
     THEM IN THE COURTS OF A MEMBER STATE.
10   IT EMERGES FROM THE ORDER MAKING THE REFERENCE THAT THE ONLY PROVISION OF
     THE DIRECTIVE WHICH IS RELEVANT IS THAT CONTAINED IN ARTICLE 3 (1) WHICH
     PROVIDES THAT " MEASURES TAKEN ON GROUNDS OF PUBLIC POLICY OR PUBLIC
     SECURITY SHALL BE BASED EXCLUSIVELY ON THE PERSONAL CONDUCT OF THE
     INDIVIDUAL CONCERNED ".
11   THE UNITED KINGDOM OBSERVES THAT, SINCE ARTICLE 189 OF THE TREATY
     DISTINGUISHES BETWEEN THE EFFECTS ASCRIBED TO REGULATIONS, DIRECTIVES AND
     DECISIONS, IT MUST THEREFORE BE PRESUMED THAT THE COUNCIL, IN ISSUING A
     DIRECTIVE RATHER THAN MAKING A REGULATION, MUST HAVE INTENDED THAT THE
     DIRECTIVE SHOULD HAVE AN EFFECT OTHER THAN THAT OF A REGULATION AND
     ACCORDINGLY THAT THE FORMER SHOULD NOT BE DIRECTLY APPLICABLE.
12   IF, HOWEVER, BY VIRTUE OF THE PROVISIONS OF ARTICLE 189 REGULATIONS ARE
     DIRECTLY APPLICABLE AND, CONSEQUENTLY, MAY BY THEIR VERY NATURE HAVE DIRECT
     EFFECTS, IT DOES NOT FOLLOW FROM THIS THAT OTHER CATEGORIES OF ACTS
     MENTIONED IN THAT ARTICLE CAN NEVER HAVE SIMILAR EFFECTS. IT WOULD BE
     INCOMPATIBLE WITH THE BINDING EFFECT ATTRIBUTED TO A DIRECTIVE BY ARTICLE
     189 TO EXCLUDE, IN PRINCIPLE, THE POSSIBILITY THAT THE OBLIGATION WHICH IT
     IMPOSES MAY BE INVOKED BY THOSE CONCERNED. IN PARTICULAR, WHERE THE
     COMMUNITY AUTHORITIES HAVE, BY DIRECTIVE, IMPOSED ON MEMBER STATES THE
     OBLIGATION TO PURSUE A PARTICULAR COURSE OF CONDUCT, THE USEFUL EFFECT OF
     SUCH AN ACT WOULD BE WEAKENED IF INDIVIDUALS WERE PREVENTED FROM RELYING ON
     IT BEFORE THEIR NATIONAL COURTS AND IF THE LATTER WERE PREVENTED FROM
     TAKING IT INTO CONSIDERATION AS AN ELEMENT OF COMMUNITY LAW. ARTICLE 177,
     WHICH EMPOWERS NATIONAL COURTS TO REFER TO THE COURT QUESTIONS CONCERNING
     THE VALIDITY AND INTERPRETATION OF ALL ACTS OF THE COMMUNITY INSTITUTIONS,
     WITHOUT DISTINCTION, IMPLIES FURTHERMORE THAT THESE ACTS MAY BE INVOKED BY
     INDIVIDUALS IN THE NATIONAL COURTS. IT IS NECESSARY TO EXAMINE, IN EVERY
     CASE, WHETHER THE NATURE, GENERAL SCHEME AND WORDING OF THE PROVISION IN
     QUESTION ARE CAPABLE OF HAVING DIRECT EFFECTS ON THE RELATIONS BETWEEN
     MEMBER STATES AND INDIVIDUALS.
13   BY PROVIDING THAT MEASURES TAKEN ON GROUNDS OF PUBLIC POLICY SHALL BE BASED
     EXCLUSIVELY ON THE PERSONAL CONDUCT OF THE INDIVIDUAL CONCERNED, ARTICLE 3
     (1) OF DIRECTIVE NO 64/221 IS INTENDED TO LIMIT THE DISCRETIONARY POWER
     WHICH NATIONAL LAWS GENERALLY CONFER ON THE AUTHORITIES RESPONSIBLE FOR THE
     ENTRY AND EXPULSION OF FOREIGN NATIONALS. FIRST, THE PROVISION LAYS DOWN AN
     OBLIGATION WHICH IS NOT SUBJECT TO ANY EXCEPTION OR CONDITION AND WHICH, BY
     ITS VERY NATURE, DOES NOT REQUIRE THE INTERVENTION OF ANY ACT ON THE PART
     EITHER OF THE INSTITUTIONS OF THE COMMUNITY OR OF MEMBER STATES. SECONDLY,
     BECAUSE MEMBER STATES ARE THEREBY OBLIGED, IN IMPLEMENTING A CLAUSE WHICH
     DEROGATES FROM ONE OF THE FUNDAMENTAL PRINCIPLES OF THE TREATY IN FAVOUR OF
     INDIVIDUALS, NOT TO TAKE ACCOUNT OF FACTORS EXTRANEOUS TO PERSONAL CONDUCT,
     LEGAL CERTAINTY FOR THE PERSONS CONCERNED REQUIRES THAT THEY SHOULD BE ABLE
     TO RELY ON THIS OBLIGATION EVEN THOUGH IT HAS BEEN LAID DOWN IN A
     LEGISLATIVE ACT WHICH HAS NO AUTOMATIC DIRECT EFFECT IN ITS ENTIRETY.
14   IF THE MEANING AND EXACT SCOPE OF THE PROVISION RAISE QUESTIONS OF
     INTERPRETATION, THESE QUESTIONS CAN BE RESOLVED BY THE COURTS, TAKING INTO
     ACCOUNT ALSO THE PROCEDURE UNDER ARTICLE 177 OF THE TREATY.
15   ACCORDINGLY, IN REPLY TO THE SECOND QUESTION, ARTICLE 3 (1) OF COUNCIL
     DIRECTIVE NO 64/221 OF 25 FEBRUARY 1964 CONFERS ON INDIVIDUALS RIGHTS WHICH
     ARE ENFORCEABLE BY THEM IN THE COURTS OF A MEMBER STATE AND WHICH THE

                                                                                   20
     NATIONAL COURTS MUST PROTECT.
     THIRD QUESTION
16   BY THE THIRD QUESTION THE COURT IS ASKED TO RULE WHETHER ARTICLE 48 OF THE
     TREATY AND ARTICLE 3 OF DIRECTIVE NO 64/221 MUST BE INTERPRETED AS MEANING
     THAT " A MEMBER STATE, IN THE PERFORMANCE OF ITS DUTY TO BASE A MEASURE
     TAKEN ON GROUNDS OF PUBLIC POLICY EXCLUSIVELY ON THE PERSONAL CONDUCT OF
     THE INDIVIDUAL CONCERNED IS ENTITLED TO TAKE INTO ACCOUNT AS MATTERS OF
     PERSONAL CONDUCT:
     (A) THE FACT THAT THE INDIVIDUAL IS OR HAS BEEN ASSOCIATED WITH SOME BODY
     OR ORGANIZATION THE ACTIVITIES OF WHICH THE MEMBER STATE CONSIDERS CONTRARY
     TO THE PUBLIC GOOD BUT WHICH ARE NOT UNLAWFUL IN THAT STATE;
     (B) THE FACT THAT THE INDIVIDUAL INTENDS TO TAKE EMPLOYMENT IN THE MEMBER
     STATE WITH SUCH A BODY OR ORGANIZATION IT BEING THE CASE THAT NO
     RESTRICTIONS ARE PLACED UPON NATIONALS OF THE MEMBER STATE WHO WISH TO TAKE
     SIMILAR EMPLOYMENT WITH SUCH A BODY OR ORGANIZATION. "
17   IT IS NECESSARY, FIRST, TO CONSIDER WHETHER ASSOCIATION WITH A BODY OR AN
     ORGANIZATION CAN IN ITSELF CONSTITUTE PERSONAL CONDUCT WITHIN THE MEANING
     OF ARTICLE 3 OF DIRECTIVE NO 64/221. ALTHOUGH A PERSON’S PAST ASSOCIATION
     CANNOT IN GENERAL, JUSTIFY A DECISION REFUSING HIM THE RIGHT TO MOVE FREELY
     WITHIN THE COMMUNITY, IT IS NEVERTHELESS THE CASE THAT PRESENT ASSOCIATION,
     WHICH REFLECTS PARTICIPATION IN THE ACTIVITIES OF THE BODY OR OF THE
     ORGANIZATION AS WELL AS IDENTIFICATION WITH ITS AIMS AND ITS DESIGNS, MAY
     BE CONSIDERED A VOLUNTARY ACT OF THE PERSON CONCERNED AND, CONSEQUENTLY, AS
     PART OF HIS PERSONAL CONDUCT WITHIN THE MEANING OF THE PROVISION CITED.
18   THIS THIRD QUESTION FURTHER RAISES THE PROBLEM OF WHAT IMPORTANCE MUST BE
     ATTRIBUTED TO THE FACT THAT THE ACTIVITIES OF THE ORGANIZATION IN QUESTION,
     WHICH ARE CONSIDERED BY THE MEMBER STATE AS CONTRARY TO THE PUBLIC GOOD ARE
     NOT HOWEVER PROHIBITED BY NATIONAL LAW. IT SHOULD BE EMPHASIZED THAT THE
     CONCEPT OF PUBLIC POLICY IN THE CONTEXT OF THE COMMUNITY AND WHERE, IN
     PARTICULAR, IT IS USED AS A JUSTIFICATION FOR DEROGATING FROM THE
     FUNDAMENTAL PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS, MUST BE
     INTERPRETED STRICTLY, SO THAT ITS SCOPE CANNOT BE DETERMINED UNILATERALLY
     BY EACH MEMBER STATE WITHOUT BEING SUBJECT TO CONTROL BY THE INSTITUTIONS
     OF THE COMMUNITY. NEVERTHELESS, THE PARTICULAR CIRCUMSTANCES JUSTIFYING
     RECOURSE TO THE CONCEPT OF PUBLIC POLICY MAY VARY FROM ONE COUNTRY TO
     ANOTHER AND FROM ONE PERIOD TO ANOTHER, AND IT IS THEREFORE NECESSARY IN
     THIS MATTER TO ALLOW THE COMPETENT NATIONAL AUTHORITIES AN AREA OF
     DISCRETION WITHIN THE LIMITS IMPOSED BY THE TREATY.
19   IT FOLLOWS FROM THE ABOVE THAT WHERE THE COMPETENT AUTHORITIES OF A MEMBER
     STATE HAVE CLEARLY DEFINED THEIR STANDPOINT AS REGARDS THE ACTIVITIES OF A
     PARTICULAR ORGANIZATION AND WHERE, CONSIDERING IT TO BE SOCIALLY HARMFUL,
     THEY HAVE TAKEN ADMINISTRATIVE MEASURES TO COUNTERACT THESE ACTIVITIES, THE
     MEMBER STATE CANNOT BE REQUIRED, BEFORE IT CAN RELY ON THE CONCEPT OF
     PUBLIC POLICY, TO MAKE SUCH ACTIVITIES UNLAWFUL, IF RECOURSE TO SUCH A
     MEASURE IS NOT THOUGHT APPROPRIATE IN THE CIRCUMSTANCES.
20   THE QUESTION RAISES FINALLY THE PROBLEM OF WHETHER A MEMBER STATE IS
     ENTITLED, ON GROUNDS OF PUBLIC POLICY, TO PREVENT A NATIONAL OF ANOTHER
     MEMBER STATE FROM TAKING GAINFUL EMPLOYMENT WITHIN ITS TERRITORY WITH A
     BODY OR ORGANIZATION, IT BEING THE CASE THAT NO SIMILAR RESTRICTION IS
     PLACED UPON ITS OWN NATIONALS.
21   IN THIS CONNEXION, THE TREATY, WHILE ENSHRINING THE PRINCIPLE OF FREEDOM OF
     MOVEMENT FOR WORKERS WITHOUT ANY DISCRIMINATION ON GROUNDS OF NATIONALITY,
     ADMITS, IN ARTICLE 48 (3), LIMITATIONS JUSTIFIED ON GROUNDS OF PUBLIC
     POLICY, PUBLIC SECURITY OR PUBLIC HEALTH TO THE RIGHTS DERIVING FROM THIS
     PRINCIPLE. UNDER THE TERMS OF THE PROVISION CITED ABOVE, THE RIGHT TO
     ACCEPT OFFERS OF EMPLOYMENT ACTUALLY MADE, THE RIGHT TO MOVE FREELY WITHIN
     THE TERRITORY OF MEMBER STATES FOR THIS PURPOSE, AND THE RIGHT TO STAY IN A
     MEMBER STATE FOR THE PURPOSE OF EMPLOYMENT ARE, AMONG OTHERS ALL SUBJECT TO
                                                                                   21
     SUCH LIMITATIONS. CONSEQUENTLY, THE EFFECT OF SUCH LIMITATIONS, WHEN THEY
     APPLY, IS THAT LEAVE TO ENTER THE TERRITORY OF A MEMBER STATE AND THE RIGHT
     TO RESIDE THERE MAY BE REFUSED TO A NATIONAL OF ANOTHER MEMBER STATE.
22   FURTHERMORE, IT IS A PRINCIPLE OF INTERNATIONAL LAW, WHICH THE EEC TREATY
     CANNOT BE ASSUMED TO DISREGARD IN THE RELATIONS BETWEEN MEMBER STATES, THAT
     A STATE IS PRECLUDED FROM REFUSING ITS OWN NATIONALS THE RIGHT OF ENTRY OR
     RESIDENCE.
23   IT FOLLOWS THAT A MEMBER STATE, FOR REASONS OF PUBLIC POLICY, CAN, WHERE IT
     DEEMS, NECESSARY, REFUSE A NATIONAL OF ANOTHER MEMBER STATE THE BENEFIT OF
     THE PRINCIPLE OF FREEDOM OF MOVEMENT FOR WORKERS IN A CASE WHERE SUCH A
     NATIONAL PROPOSES TO TAKE UP A PARTICULAR OFFER OF EMPLOYMENT EVEN THOUGH
     THE MEMBER STATE DOES NOT PLACE A SIMILAR RESTRICTION UPON ITS OWN
     NATIONALS.
24   ACCORDINGLY, THE REPLY TO THE THIRD QUESTION MUST BE THAT ARTICLE 48 OF THE
     EEC TREATY AND ARTICLE 3 (1) OF DIRECTIVE NO 64/221 ARE TO BE INTERPRETED
     AS MEANING THAT A MEMBER STATE, IN IMPOSING RESTRICTIONS JUSTIFIED ON
     GROUNDS OF PUBLIC POLICY, IS ENTITLED TO TAKE INTO ACCOUNT, AS A MATTER OF
     PERSONAL CONDUCT OF THE INDIVIDUAL CONCERNED, THE FACT THAT THE INDIVIDUAL
     IS ASSOCIATED WITH SOME BODY OR ORGANIZATION THE ACTIVITIES OF WHICH THE
     MEMBER STATE CONSIDERS SOCIALLY HARMFUL BUT WHICH ARE NOT UNLAWFUL IN THAT
     STATE, DESPITE THE FACT THAT NO RESTRICTION IS PLACED UPON NATIONALS OF THE
     SAID MEMBER STATE WHO WISH TO TAKE SIMILAR EMPLOYMENT WITH THESE SAME
     BODIES OR ORGANIZATIONS.
25   THE COSTS INCURRED BY THE UNITED KINGDOM AND BY THE COMMISSION OF THE
     EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE
     NOT RECOVERABLE, AND AS THESE PROCEEDINGS ARE, INSOFAR AS THE PARTIES TO
     THE MAIN ACTION ARE CONCERNED, A STEP IN THE ACTION PENDING BEFORE THE
     NATIONAL COURT, COSTS ARE A MATTER FOR THAT COURT.
     ON THOSE GROUNDS,
     THE COURT
     IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE HIGH COURT OF JUSTICE, BY
     ORDER OF THAT COURT, DATED 1 MARCH 1974, HEREBY RULES:
     1. ARTICLE 48 OF THE EEC TREATY HAS A DIRECT EFFECT IN THE LEGAL ORDERS OF
     THE MEMBER STATES AND CONFERS ON INDIVIDUALS RIGHTS WHICH THE NATIONAL
     COURTS MUST PROTECT.
     2. ARTICLE 3 (1) OF COUNCIL DIRECTIVE NO 64/221 OF 25 FEBRUARY 1964 ON THE
     COORDINATION OF SPECIAL MEASURES CONCERNING THE MOVEMENT AND RESIDENCE OF
     FOREIGN NATIONALS WHICH ARE JUSTIFIED ON GROUNDS OF PUBLIC POLICY, PUBLIC
     SECURITY OR PUBLIC HEALTH CONFERS ON INDIVIDUALS RIGHTS WHICH ARE
     ENFORCEABLE BY THEM IN THE NATIONAL COURTS OF A MEMBER STATE AND WHICH THE
     NATIONAL COURTS MUST PROTECT.
     3. ARTICLE 48 OF THE EEC TREATY AND ARTICLE 3 (1) OF DIRECTIVE NO 64/221
     MUST BE INTERPRETED AS MEANING THAT A MEMBER STATE, IN IMPOSING
     RESTRICTIONS JUSTIFIED ON GROUNDS OF PUBLIC POLICY, IS ENTITLED TO TAKE
     INTO ACCOUNT AS A MATTER OF PERSONAL CONDUCT OF THE INDIVIDUAL CONCERNED,
     THE FACT THAT THE INDIVIDUAL IS ASSOCIATED WITH SOME BODY OR ORGANIZATION
     THE ACTIVITIES OF WHICH THE MEMBER STATE CONSIDERS SOCIALLY HARMFUL BUT
     WHICH ARE NOT UNLAWFUL IN THAT STATE, DESPITE THE FACT THAT NO RESTRICTION
     IS PLACED UPON NATIONALS OF THE SAID MEMBER STATE WHO WISH TO TAKE SIMILAR
     EMPLOYMENT WITH THE SAME BODY OR ORGANIZATION.




                                                                                   22
     Case 07
     ECJ, Judgment of 9 March 1978. Amministrazione delle Finanze dello Stato v
     Simmenthal SpA. Reference for a preliminary ruling: Pretura di Susa - Italy. Discarding
     by the national court of a law contrary to Community law. Case 106/77. European Court
     reports 1978 Page 00629
     …
     IN CASE 106/77
     …
20   BY AN ORDER OF 28 JULY 1977, RECEIVED AT THE COURT ON 29 AUGUST 1977, THE
     PRETORE DI SUSA REFERRED TO THE COURT FOR A RULING PURSUANT TO ARTICLE 177
     OF THE EEC TREATY, TWO QUESTIONS RELATING TO THE PRINCIPLE OF THE DIRECT
     APPLICABILITY OF COMMUNITY LAW AS SET OUT IN ARTICLE 189 OF THE TREATY FOR
     THE PURPOSE OF DETERMINING THE EFFECTS OF THAT PRINCIPLE WHEN A RULE OF
     COMMUNITY LAW CONFLICTS WITH A SUBSEQUENT PROVISION OF NATIONAL LAW.
21   IT IS APPROPRIATE TO DRAW ATTENTION TO THE FACT THAT AT A PREVIOUS STAGE OF
     THE PROCEEDINGS THE PRETORE REFERRED TO THE COURT FOR A PRELIMINARY RULING
     QUESTIONS DESIGNED TO ENABLE HIM TO DETERMINE WHETHER VETERINARY AND PUBLIC
     HEALTH FEES LEVIED ON IMPORTS OF BEEF AND VEAL UNDER THE CONSOLIDATED TEXT
     OF THE ITALIEN VETERINARY AND PUBLIC HEALTH LAWS, THE RATE OF WHICH WAS
     LAST FIXED BY THE SCALE ANNEXED TO LAW NO 1239 OF 30 DECEMBER 1970 (GAZZETA
     UFFICIALE NO 26 OF 1 FEBRUARY 1971), WERE COMPATIBLE WITH THE TREATY AND
     WITH CERTAIN REGULATIONS - IN PARTICULAR REGULATION (EEC) NO 805/68 OF THE
     COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN BEEF
     AND VEAL (OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1968 (I), P. 187).
22   HAVING REGARD TO THE ANSWERS GIVEN BY THE COURT IN ITS JUDGMENT OF 15
     DECEMBER 1976 IN CASE 35/76 (SIMMENTHAL S.P.A. V ITALIAN MINISTER FOR
     FINANCE (1976) ECR 1871) THE PRETORE HELD THAT THE LEVYING OF THE FEES IN
     QUESTION WAS INCOMPATIBLE WITH THE PROVISIONS OF COMMUNITY LAW AND ORDERED
     THE AMMINISTRAZIONE DELLE FINANZE DELLO STATO (ITALIAN FINANCE
     ADMINISTRATION) TO REPAY THE FEES UNLAWFULLY CHARGED, TOGETHER WITH
     INTEREST.
23   THE AMMINISTRAZIONE APPEALED AGAINST THAT ORDER.
24   THE PRETORE, TAKING INTO ACCOUNT THE ARGUMENTS PUT FORWARD BY THE PARTIES
     DURING THE PROCEEDINGS ARISING OUT OF THIS APPEAL, HELD THAT THE ISSUE
     BEFORE HIM INVOLVED A CONFLICT BETWEEN CERTAIN RULES OF COMMUNITY LAW AND A
     SUBSEQUENT NATIONAL LAW, NAMELY THE SAID LAW NO 1239/70.
25   HE POINTED OUT THAT TO RESOLVE AN ISSUE OF THIS KIND, ACCORDING TO RECENTLY
     DECIDED CASES OF THE ITALIAN CONSTITUTIONAL COURT (JUDGMENTS NO 232/75 AND
     NO 205/76 AND ORDER NO 206/76), THE QUESTION WHETHER THE LAW IN QUESTION
     WAS UNCONSTITUTIONAL UNDER ARTICLE 11 OF THE CONSTITUTION MUST BE REFERRED
     TO THE CONSTITUTIONAL COURT ITSELF.
26   THE PRETORE, HAVING REGARD, ON THE ONE HAND, TO THE WELL-ESTABLISHED CASE-
     LAW OF THE COURT OF JUSTICE RELATING TO THE APPLICABILITY OF COMMUNITY LAW
     IN THE LEGAL SYSTEMS OF THE MEMBER STATES AND, ON THE OTHER HAND, TO THE
     DISADVANTAGES WHICH MIGHT ARISE IF THE NATIONAL COURT, INSTEAD OF DECLARING
     OF ITS OWN MOTION THAT A LAW IMPEDING THE FULL FORCE AND EFFECT OF
     COMMUNITY LAW WAS INAPPLICABLE, WERE REQUIRED TO RAISE THE ISSUE OF
     CONSTITUTIONALITY, REFERRED TO THE COURT TWO QUESTIONS FRAMED AS FOLLOWS :
      (A) SINCE, IN ACCORDANCE WITH ARTICLE 189 OF THE EEC TREATY AND THE
     ESTABLISHED CASE-LAW OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES,

                                                                                               23
     DIRECTLY APPLICABLE COMMUNITY PROVISIONS MUST, NOTWITHSTANDING ANY INTERNAL
     RULE OR PRACTICE WHATSOEVER OF THE MEMBER STATES, HAVE FULL, COMPLETE AND
     UNIFORM EFFECT IN THEIR LEGAL SYSTEMS IN ORDER TO PROTECT SUBJECTIVE LEGAL
     RIGHTS CREATED IN FAVOUR OF INDIVIDUALS, IS THE SCOPE OF THE SAID
     PROVISIONS TO BE INTERPRETED TO THE EFFECT THAT ANY SUBSEQUENT NATIONAL
     MEASURES WHICH CONFLICT WITH THOSE PROVISIONS MUST BE FORTHWITH DISREGARDED
     WITHOUT WAITING UNTIL THOSE MEASURES HAVE BEEN ELIMINATED BY ACTION ON THE
     PART OF THE NATIONAL LEGISLATURE CONCERNED (REPEAL) OR OF OTHER
     CONSTITUTIONAL AUTHORITIES (DECLARATION THAT THEY ARE UNCONSTITUTIONAL)
     ESPECIALLY, IN THE CASE OF THE LATTER ALTERNATIVE, WHERE, SINCE THE
     NATIONAL LAW CONTINUES TO BE FULLY EFFECTIVE PENDING SUCH DECLARATION, IT
     IS IMPOSSIBLE TO APPLY THE COMMUNITY PROVISIONS AND, IN CONSEQUENCE, TO
     ENSURE THAT THEY ARE FULLY, COMPLETELY AND UNIFORMLY APPLIED AND TO PROTECT
     THE LEGAL RIGHTS CREATED IN FAVOUR OF INDIVIDUALS?
     (B) ARISING OUT OF THE PREVIOUS QUESTION, IN CIRCUMSTANCES WHERE COMMUNITY
     LAW RECOGNIZES THAT THE PROTECTION OF SUBJECTIVE LEGAL RIGHTS CREATED AS A
     RESULT OF „DIRECTLY APPLICABLE” COMMUNITY PROVISIONS MAY BE SUSPENDED UNTIL
     ANY CONFLICTING NATIONAL MEASURES ARE ACTUALLY REPEALED BY THE COMPETENT
     NATIONAL AUTHORITIES, IS SUCH REPEAL IN ALL CASES TO HAVE A WHOLLY
     RETROACTIVE EFFECT SO AS TO AVOID ANY ADVERSE EFFECTS ON THOSE SUBJECTIVE
     LEGAL RIGHTS?
     THE REFERENCE TO THE COURT
27   THE AGENT OF THE ITALIAN GOVERNMENT IN HIS ORAL OBSERVATIONS DREW THE
     ATTENTION OF THE COURT TO A JUDGMENT OF THE ITALIAN CONSTITUTIONAL COURT NO
     163/77 OF 22 DECEMBER 1977 DELIVERED IN ANSWER TO QUESTIONS OF
     CONSTITUTIONALITY RAISED BY THE COURTS OF MILAN UND ROME, WHICH DECLARED
     THAT CERTAIN OF THE PROVISIONS OF LAW NO 1239 OF 30 DECEMBER 1970 INCLUDING
     THOSE AT ISSUE IN THE ACTION PENDING BEFORE THE PRETORE DI SUSA, WERE
     UNCONSTITUTIONAL.
28   IT WAS SUGGESTED THAT SINCE THE DISPUTED PROVISIONS HAVE BEEN SET ASIDE BY
     THE DECLARATION THAT THEY ARE UNCONSTITUTIONAL, THE QUESTIONS RAISED BY THE
     PRETORE NO LONGER HAVE RELEVANCE SO THAT IT IS NO LONGER NECESSARY TO
     ANSWER THEM.
29   ON THIS ISSUE IT SHOULD BE BORNE IN MIND THAT IN ACCORDANCE WITH ITS
     UNVARYING PRACTICE THE COURT OF JUSTICE CONSIDERS A REFERENCE FOR A
     PRELIMINARY RULING, PURSUANT TO ARTICLE 177 OF THE TREATY, AS HAVING BEEN
     VALIDLY BROUGHT BEFORE IT SO LONG AS THE REFERENCE HAS NOT BEEN WITHDRAWN
     BY THE COURT FROM WHICH IT EMANATES OR HAS NOT BEEN QUASHED ON APPEAL BY A
     SUPERIOR COURT.
30   THE JUDGMENT REFERRED TO, WHICH WAS DELIVERED IN PROCEEDINGS IN NO WAY
     CONNECTED WITH THE ACTION GIVING RISE TO THE REFERENCE TO THIS COURT,
     CANNOT HAVE SUCH A RESULT AND THE COURT CANNOT DETERMINE ITS EFFECT ON
     THIRD PARTIES.
31   THE PRELIMINARY OBJECTION RAISED BY THE ITALIAN GOVERNMENT MUST THEREFORE
     BE OVERRULED.
     THE SUBSTANCE OF THE CASE
32   THE MAIN PURPOSE OF THE FIRST QUESTION IS TO ASCERTAIN WHAT CONSEQUENCES
     FLOW FROM THE DIRECT APPLICABILITY OF A PROVISION OF COMMUNITY LAW IN THE
     EVENT OF INCOMPATIBILITY WITH A SUBSEQUENT LEGISLATIVE PROVISION OF A
     MEMBER STATE.
33   DIRECT APPLICABILITY IN SUCH CIRCUMSTANCES MEANS THAT RULES OF COMMUNITY
     LAW MUST BE FULLY AND UNIFORMLY APPLIED IN ALL THE MEMBER STATES FROM THE
     DATE OF THEIR ENTRY INTO FORCE AND FOR SO LONG AS THEY CONTINUE IN FORCE.
34   THESE PROVISIONS ARE THEREFORE A DIRECT SOURCE OF RIGHTS AND DUTIES FOR ALL
     THOSE AFFECTED THEREBY, WHETHER MEMBER STATES OR INDIVIDUALS, WHO ARE
     PARTIES TO LEGAL RELATIONSHIPS UNDER COMMUNITY LAW.

                                                                                   24
35   THIS CONSEQUENCE ALSO CONCERNS ANY NATIONAL COURT WHOSE TASK IT IS AS AN
     ORGAN OF A MEMBER STATE TO PROTECT, IN A CASE WITHIN ITS JURISDICTION, THE
     RIGHTS CONFERRED UPON INDIVIDUALS BY COMMUNITY LAW.
36   FURTHERMORE, IN ACCORDANCE WITH THE PRINCIPLE OF THE PRECEDENCE OF
     COMMUNITY LAW, THE RELATIONSHIP BETWEEN PROVISIONS OF THE TREATY AND
     DIRECTLY APPLICABLE MEASURES OF THE INSTITUTIONS ON THE ONE HAND AND THE
     NATIONAL LAW OF THE MEMBER STATES ON THE OTHER IS SUCH THAT THOSE
     PROVISIONS AND MEASURES NOT ONLY BY THEIR ENTRY INTO FORCE RENDER
     AUTOMATICALLY INAPPLICABLE ANY CONFLICTING PROVISION OF CURRENT NATIONAL
     LAW BUT - IN SO FAR AS THEY ARE AN INTEGRAL PART OF, AND TAKE PRECEDENCE
     IN, THE LEGAL ORDER APPLICABLE IN THE TERRITORY OF EACH OF THE MEMBER
     STATES - ALSO PRECLUDE THE VALID ADOPTION OF NEW NATIONAL LEGISLATIVE
     MEASURES TO THE EXTENT TO WHICH THEY WOULD BE INCOMPATIBLE WITH COMMUNITY
     PROVISIONS.
37   INDEED ANY RECOGNITION THAT NATIONAL LEGISLATIVE MEASURES WHICH ENCROACH
     UPON THE FIELD WITHIN WHICH THE COMMUNITY EXERCISES ITS LEGISLATIVE POWER
     OR WHICH ARE OTHERWISE INCOMPATIBLE WITH THE PROVISIONS OF COMMUNITY LAW
     HAD ANY LEGAL EFFECT WOULD AMOUNT TO A CORRESPONDING DENIAL OF THE
     EFFECTIVENESS OF OBLIGATIONS UNDERTAKEN UNCONDITIONALLY AND IRREVOCABLY BY
     MEMBER STATES PURSUANT TO THE TREATY AND WOULD THUS IMPERIL THE VERY
     FOUNDATIONS OF THE COMMUNITY.
38   THE SAME CONCLUSION EMERGES FROM THE STRUCTURE OF ARTICLE 177 OF THE TREATY
     WHICH PROVIDES THAT ANY COURT OR TRIBUNAL OF A MEMBER STATE IS ENTITLED TO
     MAKE A REFERENCE TO THE COURT WHENEVER IT CONSIDERS THAT A PRELIMINARY
     RULING ON A QUESTION OF INTERPRETATION OR VALIDITY RELATING TO COMMUNITY
     LAW IS NECESSARY TO ENABLE IT TO GIVE JUDGMENT.
39   THE EFFECTIVENESS OF THAT PROVISION WOULD BE IMPAIRED IF THE NATIONAL COURT
     WERE PREVENTED FROM FORTHWITH APPLYING COMMUNITY LAW IN ACCORDANCE WITH THE
     DECISION OR THE CASE-LAW OF THE COURT.
40   IT FOLLOWS FROM THE FOREGOING THAT EVERY NATIONAL COURT MUST, IN A CASE
     WITHIN ITS JURISDICTION, APPLY COMMUNITY LAW IN ITS ENTIRETY AND PROTECT
     RIGHTS WHICH THE LATTER CONFERS ON INDIVIDUALS AND MUST ACCORDINGLY SET
     ASIDE ANY PROVISION OF NATIONAL LAW WHICH MAY CONFLICT WITH IT, WHETHER
     PRIOR OR SUBSEQUENT TO THE COMMUNITY RULE.
41   ACCORDINGLY ANY PROVISION OF A NATIONAL LEGAL SYSTEM AND ANY LEGISLATIVE,
     ADMINISTRATIVE OR JUDICIAL PRACTICE WHICH MIGHT IMPAIR THE EFFECTIVENESS OF
     COMMUNITY LAW BY WITHHOLDING FROM THE NATIONAL COURT HAVING JURISDICTION TO
     APPLY SUCH LAW THE POWER TO DO EVERYTHING NECESSARY AT THE MOMENT OF ITS
     APPLICATION TO SET ASIDE NATIONAL LEGISLATIVE PROVISIONS WHICH MIGHT
     PREVENT COMMUNITY RULES FROM HAVING FULL FORCE AND EFFECT ARE INCOMPATIBLE
     WITH THOSE REQUIREMENTS WHICH ARE THE VERY ESSENCE OF COMMUNITY LAW.
42   THIS WOULD BE THE CASE IN THE EVENT OF A CONFLICT BETWEEN A PROVISION OF
     COMMUNITY LAW AND A SUBSEQUENT NATIONAL LAW IF THE SOLUTION OF THE CONFLICT
     WERE TO BE RESERVED FOR AN AUTHORITY WITH A DISCRETION OF ITS OWN, OTHER
     THAN THE COURT CALLED UPON TO APPLY COMMUNITY LAW, EVEN IF SUCH AN
     IMPEDIMENT TO THE FULL EFFECTIVENESS OF COMMUNITY LAW WERE ONLY TEMPORARY.
43   THE FIRST QUESTION SHOULD THEREFORE BE ANSWERED TO THE EFFECT THAT A
     NATIONAL COURT WHICH IS CALLED UPON, WITHIN THE LIMITS OF ITS JURISDICTION,
     TO APPLY PROVISIONS OF COMMUNITY LAW IS UNDER A DUTY TO GIVE FULL EFFECT TO
     THOSE PROVISIONS, IF NECESSARY REFUSING OF ITS OWN MOTION TO APPLY ANY
     CONFLICTING PROVISION OF NATIONAL LEGISLATION, EVEN IF ADOPTED
     SUBSEQUENTLY, AND IT IS NOT NECESSARY FOR THE COURT TO REQUEST OR AWAIT THE
     PRIOR SETTING ASIDE OF SUCH PROVISION BY LEGISLATIVE OR OTHER
     CONSTITUTIONAL MEANS.
44   THE ESSENTIAL POINT OF THE SECOND QUESTION IS WHETHER - ASSUMING IT TO BE
     ACCEPTED THAT THE PROTECTION OF RIGHTS CONFERRED BY PROVISIONS OF COMMUNITY
     LAW CAN BE SUSPENDED UNTIL ANY NATIONAL PROVISIONS WHICH MIGHT CONFLICT
                                                                                   25
     WITH THEM HAVE BEEN IN FACT SET ASIDE BY THE COMPETENT NATIONAL AUTHORITIES
     - SUCH SETTING ASIDE MUST IN EVERY CASE HAVE UNRESTRICTED RETROACTIVE
     EFFECT SO AS TO PREVENT THE RIGHTS IN QUESTION FROM BEING IN ANY WAY
     ADVERSELY AFFECTED.
45   IT FOLLOWS FROM THE ANSWER TO THE FIRST QUESTION THAT NATIONAL COURTS MUST
     PROTECT RIGHTS CONFERRED BY PROVISIONS OF THE COMMUNITY LEGAL ORDER AND
     THAT IT IS NOT NECESSARY FOR SUCH COURTS TO REQUEST OR AWAIT THE ACTUAL
     SETTING ASIDE BY THE NATIONAL AUTHORITIES EMPOWERED SO TO ACT OF ANY
     NATIONAL MEASURES WHICH MIGHT IMPEDE THE DIRECT AND IMMEDIATE APPLICATION
     OF COMMUNITY RULES.
46   THE SECOND QUESTION THEREFORE APPEARS TO HAVE NO PURPOSE.
47   COSTS
     …
48   AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE
     CONCERNED, IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE PRETORE
     DI SUSA, THE DECISION ON COSTS IS A MATTER FOR THAT COURT.
     ON THOSE GROUNDS
     THE COURT,IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRETORE DI SUSA
     BY ORDER OF 28 JULY 1977, HEREBY RULES:
     NATIONAL COURT WHICH IS CALLED UPON, WITHIN THE LIMITS OF ITS JURISDICTION,
     TO APPLY PROVISIONS OF COMMUNITY LAW IS UNDER A DUTY TO GIVE FULL EFFECT TO
     THOSE PROVISIONS, IF NECESSARY REFUSING OF ITS OWN MOTION TO APPLY ANY
     CONFLICTING PROVISION OF NATIONAL LEGISLATION, EVEN IF ADOPTED
     SUBSEQUENTLY, AND IT IS NOT NECESSARY FOR THE COURT TO REQUEST OR AWAIT THE
     PRIOR SETTING ASIDE OF SUCH PROVISIONS BY LEGISLATIVE OR OTHER
     CONSTITUTIONAL MEANS.




     Case 08
     ECJ, Judgment of 5 April 1979. Criminal proceedings against Tullio Ratti. Case 148/78.
     European Court reports 1979 Page 01629
     …
     IN CASE 148/78
     …
1    BY AN ORDER OF 8 MAY 1978, RECEIVED AT THE COURT ON 21 JUNE 1978, THE
     PRETURA PENALE, MILAN, REFERRED SEVERAL QUESTIONS TO THE COURT FOR A
     PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY ON THE
     INTERPRETATION OF TWO COUNCIL DIRECTIVES ON THE APPROXIMATION OF THE LAWS,
     REGULATIONS AND ADMINISTRATIVE PROVISIONS OF THE MEMBER STATES, THE FIRST,
     NO 73/173/EEC OF 4 JUNE 1973 ON THE CLASSIFICATION, PACKAGING AND LABELLING
     OF DANGEROUS PREPARATIONS (SOLVENTS) (OFFICIAL JOURNAL NO L 189, P. 7) AND
     THE SECOND, NO 77/728/EEC OF 7 NOVEMBER 1977 ON THE CLASSIFICATION,
     PACKAGING AND LABELLING OF PAINTS, VARNISHES, PRINTING INKS, ADHESIVES AND
     SIMILAR PRODUCTS (OFFICIAL JOURNAL NO L 303, P. 23).
2    THOSE QUESTIONS ARE RAISED IN THE CONTEXT OF CRIMINAL PROCEEDINGS AGAINST
     THE HEAD OF AN UNDERTAKING WHICH PRODUCES SOLVENTS AND VARNISHES, ON A
     CHARGE OF HAVING INFRINGED CERTAIN PROVISIONS OF THE ITALIAN LAW NO 245 OF
     5 MARCH 1963 (GAZZETTA UFFICIALE OF 21 MARCH 1963, P. 1451) WHICH REQUIRE
     MANUFACTURERS OF PRODUCTS CONTAINING BENZENE, TOLUENE AND XYLENE TO AFFIX
     TO THE CONTAINERS OF THOSE PRODUCTS LABELS INDICATING, NOT ONLY THE FACT
     THAT THOSE SUBSTANCES ARE PRESENT, BUT ALSO THEIR TOTAL PERCENTAGE AND,
     SEPARATELY, THE PERCENTAGE OF BENZENE.
                                                                                              26
3    AS FAR AS SOLVENTS ARE CONCERNED, THAT LEGISLATION OUGHT, AT THE MATERIAL
     TIME, TO HAVE BEEN AMENDED IN ORDER TO COMPLY WITH DIRECTIVE NO 73/173 OF 4
     JUNE 1973, THE PROVISIONS OF WHICH MEMBER STATES WERE SUPPOSED TO
     INCORPORATE INTO THEIR INTERNAL LEGAL ORDERS BY 8 DECEMBER 1974 AT THE
     LATEST, AN OBLIGATION WHICH THE ITALIAN GOVERNMENT HAS NOT FULFILLED.
4    THAT AMENDMENT WOULD HAVE RESULTED IN THE REPEAL OF THE PROVISION OF THE
     ITALIAN LAW WHICH THE ACCUSED IS CHARGED WITH CONTRAVENING AND WOULD
     CONSEQUENTLY HAVE ALTERED THE CONDITIONS FOR APPLYING THE CRIMINAL
     SANCTIONS CONTAINED IN THE LAW IN QUESTION.
5    AS REGARDS THE PACKAGING AND LABELLING OF VARNISHES, DIRECTIVE NO 77/728 OF
     7 NOVEMBER 1977 HAD, AT THE MATERIAL TIME, BEEN ADOPTED BY THE COUNCIL, BUT
     BY VIRTUE OF ARTICLE 12 THEREOF MEMBER STATES HAVE UNTIL 9 NOVEMBER 1979 TO
     BRING INTO FORCE THE LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS
     NECESSARY TO COMPLY THEREWITH.
6    THE INCORPORATION OF THE PROVISIONS OF THAT DIRECTIVE INTO THE INTERNAL
     ITALIAN LEGAL ORDER MUST LIKEWISE RESULT IN THE REPEAL OF THE PROVISIONS OF
     THE ITALIAN LAW WHICH THE ACCUSED IS CHARGED WITH CONTRAVENING.
7    AS REGARDS THE PACKAGING AND LABELLING OF BOTH THE SOLVENTS AND THE
     VARNISHES PRODUCED BY HIS UNDERTAKING, THE ACCUSED COMPLIED, IN THE ONE
     CASE, WITH THE PROVISIONS OF DIRECTIVE NO 73/173 (SOLVENTS), WHICH THE
     ITALIAN GOVERNMENT HAD FAILED TO INCORPORATE INTO ITS INTERNAL LEGAL ORDER,
     AND, IN THE OTHER CASE, WITH THE PROVISIONS OF DIRECTIVE NO 77/728
     (VARNISHES), WHICH MEMBER STATES MUST IMPLEMENT BY 9 NOVEMBER 1979.
8    THE REPLIES TO THE QUESTIONS SUBMITTED, THE FIRST FOUR OF WHICH CONCERN
     DIRECTIVE NO 73/173, WHILE THE FIFTH CONCERNS DIRECTIVE NO 77/728, MUST
     ENABLE THE NATIONAL COURT TO DECIDE WHETHER THE PENALTIES PRESCRIBED BY
     ITALIAN LAW NO 245 FOR AN INFRINGEMENT OF ITS PROVISIONS MAY BE APPLIED IN
     THE CASE IN QUESTION.
     A - THE INTERPRETATION OF DIRECTIVE NO 73/173
9    THIS DIRECTIVE WAS ADOPTED PURSUANT TO ARTICLE 100 OF THE TREATY AND
     COUNCIL DIRECTIVE NO 67/548/EEC OF 27 JUNE 1967 (OFFICIAL JOURNAL, ENGLISH
     SPECIAL EDITION 1967, P. 234), AMENDED ON 21 MAY 1973 (OFFICIAL JOURNAL OF
     25 JUNE 1973 NO L 167, P. 1), ON DANGEROUS SUBSTANCES, IN ORDER TO ENSURE
     THE APPROXIMATION OF THE LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS OF
     THE MEMBER STATES ON THE CLASSIFICATION, PACKAGING AND LABELLING OF
     DANGEROUS PREPARATIONS (SOLVENTS).
10   THAT DIRECTIVE PROVED NECESSARY BECAUSE DANGEROUS SUBSTANCES AND
     PREPARATIONS WERE SUBJECT TO RULES IN THE MEMBER STATES WHICH DISPLAYED
     CONSIDERABLE DIFFERENCES, PARTICULARLY AS REGARDS LABELLING, PACKAGING AND
     CLASSIFICATION ACCORDING TO THE DEGREE OF RISK PRESENTED BY THE SAID
     PRODUCTS.
11   THOSE DIFFERENCES CONSTITUTED A BARRIER TO TRADE AND TO THE FREE MOVEMENT
     OF GOODS AND DIRECTLY AFFECTED THE ESTABLISHMENT AND FUNCTIONING OF THE
     MARKET IN DANGEROUS PREPARATIONS SUCH AS SOLVENTS USED REGULARLY IN
     INDUSTRIAL, FARMING AND CRAFT ACTIVITIES, AS WELL AS FOR DOMESTIC PURPOSES.
12   IN ORDER TO ELIMINATE THOSE DIFFERENCES THE DIRECTIVE MADE A NUMBER OF
     EXPRESS PROVISIONS CONCERNING THE CLASSIFICATION, PACKAGING AND LABELLING
     OF THE PRODUCTS IN QUESTION (ARTICLE 2 (1), (2) AND (3) AND ARTICLES 4, 5
     AND 6).
13   AS REGARDS ARTICLE 8, TO WHICH THE NATIONAL COURT REFERRED IN PARTICULAR,
     AND WHICH PROVIDES THAT MEMBER STATES MAY NOT PROHIBIT, RESTRICT OR IMPEDE
     ON THE GROUNDS OF CLASSIFICATION, PACKAGING OR LABELLING THE PLACING ON THE
     MARKET OF DANGEROUS PREPARATIONS WHICH SATISFY THE REQUIREMENTS OF THE
     DIRECTIVE, ALTHOUGH IT LAYS DOWN A GENERAL DUTY, IT HAS NO INDEPENDENT
     VALUE, BEING NO MORE THAN THE NECESSARY COMPLEMENT OF THE SUBSTANTIVE
     PROVISIONS CONTAINED IN THE AFORESAID ARTICLES AND DESIGNED TO ENSURE THE
     FREE MOVEMENT OF THE PRODUCTS IN QUESTION.
                                                                                   27
14   THE MEMBER STATES WERE UNDER A DUTY TO IMPLEMENT DIRECTIVE NO 73/173, IN
     ACCORDANCE WITH ARTICLE 11 THEREOF, WITHIN 18 MONTHS OF ITS NOTIFICATION.
15   ALL THE MEMBER STATES WERE SO NOTIFIED ON 8 JUNE 1973.
16   THE PERIOD OF 18 MONTHS EXPIRED ON 8 DECEMBER 1974 AND UP TO THE TIME WHEN
     THE EVENTS MATERIAL IN THE CASE OCCURRED THE PROVISIONS OF THE DIRECTIVE
     HAD NOT BEEN IMPLEMENTED WITHIN THE ITALIAN INTERNAL LEGAL ORDER.
17   IN THOSE CIRCUMSTANCES THE NATIONAL COURT, FINDING THAT „THERE WAS A
     MANIFEST CONTRADICTION BETWEEN THE COMMUNITY RULES AND INTERNAL ITALIAN
     LAW”, WONDERED „WHICH OF THE TWO SETS OF RULES SHOULD TAKE PRECEDENCE IN
     THE CASE BEFORE THE COURT „AND REFERRED TO THE COURT THE FIRST QUESTION,
     ASKING AS FOLLOWS :
     „DOES COUNCIL DIRECTIVE 73/173/EEC OF 4 JUNE 1973, IN PARTICULAR ARTICLE 8
     THEREOF, CONSTITUTE DIRECTLY APPLICABLE LEGISLATION CONFERRING UPON
     INDIVIDUALS PERSONAL RIGHTS WHICH THE NATIONAL COURTS MUST PROTECT?”
18   THIS QUESTION RAISES THE GENERAL PROBLEM OF THE LEGAL NATURE OF THE
     PROVISIONS OF A DIRECTIVE ADOPTED UNDER ARTICLE 189 OF THE TREATY.
19   IN THIS REGARD THE SETTLED CASE-LAW OF THE COURT, LAST REAFFIRMED BY THE
     JUDGMENT OF 1 FEBRUARY 1977 IN CASE 51/76 NEDERLANDSE ONDERNEMINGEN (1977)
     1 ECR 126, LAYS DOWN THAT, WHILST UNDER ARTICLE 189 REGULATIONS ARE
     DIRECTLY APPLICABLE AND, CONSEQUENTLY, BY THEIR NATURE CAPABLE OF PRODUCING
     DIRECT EFFECTS, THAT DOES NOT MEAN THAT OTHER CATEGORIES OF ACTS COVERED BY
     THAT ARTICLE CAN NEVER PRODUCE SIMILAR EFFECTS.
20   IT WOULD BE INCOMPATIBLE WITH THE BINDING EFFECT WHICH ARTICLE 189 ASCRIBES
     TO DIRECTIVES TO EXCLUDE ON PRINCIPLE THE POSSIBILITY OF THE OBLIGATIONS
     IMPOSED BY THEM BEING RELIED ON BY PERSONS CONCERNED.
21   PARTICULARLY IN CASES IN WHICH THE COMMUNITY AUTHORITIES HAVE, BY MEANS OF
     DIRECTIVE, PLACED MEMBER STATES UNDER A DUTY TO ADOPT A CERTAIN COURSE OF
     ACTION, THE EFFECTIVENESS OF SUCH AN ACT WOULD BE WEAKENED IF PERSONS WERE
     PREVENTED FROM RELYING ON IT IN LEGAL PROCEEDINGS AND NATIONAL COURTS
     PREVENTED FROM TAKING IT INTO CONSIDERATION AS AN ELEMENT OF COMMUNITY LAW.
22   CONSEQUENTLY A MEMBER STATE WHICH HAS NOT ADOPTED THE IMPLEMENTING MEASURES
     REQUIRED BY THE DIRECTIVE IN THE PRESCRIBED PERIODS MAY NOT RELY, AS
     AGAINST INDIVIDUALS, ON ITS OWN FAILURE TO PERFORM THE OBLIGATIONS WHICH
     THE DIRECTIVE ENTAILS.
23   IT FOLLOWS THAT A NATIONAL COURT REQUESTED BY A PERSON WHO HAS COMPLIED
     WITH THE PROVISIONS OF A DIRECTIVE NOT TO APPLY A NATIONAL PROVISION
     INCOMPATIBLE WITH THE DIRECTIVE NOT INCORPORATED INTO THE INTERNAL LEGAL
     ORDER OF A DEFAULTING MEMBER STATE, MUST UPHOLD THAT REQUEST IF THE
     OBLIGATION IN QUESTION IS UNCONDITIONAL AND SUFFICIENTLY PRECISE.
24   THEREFORE THE ANSWER TO THE FIRST QUESTION MUST BE THAT AFTER THE
     EXPIRATION OF THE PERIOD FIXED FOR THE IMPLEMENTATION OF A DIRECTIVE A
     MEMBER STATE MAY NOT APPLY ITS INTERNAL LAW - EVEN IF IT IS PROVIDED WITH
     PENAL SANCTIONS - WHICH HAS NOT YET BEEN ADAPTED IN COMPLIANCE WITH THE
     DIRECTIVE, TO A PERSON WHO HAS COMPLIED WITH THE REQUIREMENTS OF THE
     DIRECTIVE.
25   IN THE SECOND QUESTION THE NATIONAL COURT ASKS, ESSENTIALLY, WHETHER, IN
     INCORPORATING THE PROVISIONS OF THE DIRECTIVE ON SOLVENTS INTO ITS INTERNAL
     LEGAL ORDER, THE STATE TO WHICH IT IS ADDRESSED MAY PRESCRIBE „OBLIGATIONS
     AND LIMITATIONS WHICH ARE MORE PRECISE AND DETAILED THAN, OR AT ALL EVENTS
     DIFFERENT FROM, THOSE SET OUT IN THE DIRECTIVE „, REQUIRING IN PARTICULAR
     INFORMATION NOT REQUIRED BY THE DIRECTIVE TO BE AFFIXED TO THE CONTAINERS.
26   THE COMBINED EFFECT OF ARTICLES 3 TO 8 OF DIRECTIVE NO 73/173 IS THAT ONLY
     SOLVENTS WHICH „COMPLY WITH THE PROVISIONS OF THIS DIRECTIVE AND THE ANNEX
     THERETO „MAY BE PLACED ON THE MARKET AND THAT MEMBER STATES ARE NOT
     ENTITLED TO MAINTAIN, PARALLEL WITH THE RULES LAID DOWN BY THE SAID
     DIRECTIVE FOR IMPORTS, DIFFERENT RULES FOR THE DOMESTIC MARKET.
                                                                                   28
27   THUS IT IS A CONSEQUENCE OF THE SYSTEM INTRODUCED BY DIRECTIVE NO 73/173
     THAT A MEMBER STATE MAY NOT INTRODUCE INTO ITS NATIONAL LEGISLATION
     CONDITIONS WHICH ARE MORE RESTRICTIVE THAN THOSE LAID DOWN IN THE DIRECTIVE
     IN QUESTION, OR WHICH ARE EVEN MORE DETAILED OR IN ANY EVENT DIFFERENT, AS
     REGARDS THE CLASSIFICATION, PACKAGING AND LABELLING OF SOLVENTS AND THAT
     THIS PROHIBITION ON THE IMPOSITION OF RESTRICTIONS NOT PROVIDED FOR APPLIES
     BOTH TO THE DIRECT MARKETING OF THE PRODUCTS ON THE HOME MARKET AND TO
     IMPORTED PRODUCTS.
28   THE SECOND QUESTION SUBMITTED BY THE NATIONAL COURT MUST BE ANSWERED IN
     THAT WAY.
29   IN THE THIRD QUESTION THE NATIONAL COURT ASKS WHETHER THE DUTY TO INDICATE
     ON THE CONTAINER OF THE SOLVENT OFFERED FOR SALE THAT IT CONTAINS BENZENE,
     TOLUENE AND XYLENE, SPECIFYING THE TOTAL PERCENTAGE OF THOSE SUBSTANCES
     AND, SEPARATELY THAT OF BENZENE, PURSUANT TO ARTICLE 8 OF LAW NO 245 OF 5
     MARCH 1963, MAY BE CONSIDERED INCOMPATIBLE WITH THE SAID DIRECTIVE.
30   ARTICLE 8 OF ITALIAN LAW NO 245 OF 5 MARCH 1963 LAYS DOWN A DUTY, „WHERE
     SOLVENTS CONTAIN BENZENE, TOLUENE OR XYLENE, TO AFFIX TO THE CONTAINERS
     OFFERED FOR SALE A LABEL MENTIONING THE PRESENCE OF THOSE SUBSTANCES IN THE
     SOLVENTS, THE TOTAL PERCENTAGE OF THOSE SUBSTANCES AND, SEPARATELY, THE
     PERCENTAGE OF BENZENE …”.
31   HOWEVER, ARTICLE 5 OF DIRECTIVE NO 73/173 REQUIRES IN ALL CASES THAT
     PACKAGES INDICATE CLEARLY AND INDELIBLY THE PRESENCE OF SUBSTANCES
     CLASSIFIED AS TOXIC UNDER ARTICLE 2, SUCH AS BENZENE, AND ALSO THAT THEY
     SHOW, BUT ONLY IN CERTAIN CASES, THE PRESENCE OF SUBSTANCES CLASSIFIED AS
     HARMFUL, SUCH AS TOLUENE AND XYLENE IN A CONCENTRATION HIGHER THAN 5%.
32   ON THE OTHER HAND NO INDICATION OF THE PERCENTAGE, SEPARATE OR IN THE
     AGGREGATE, OF THOSE SUBSTANCES IS REQUIRED.
33   THUS THE ANSWER TO THE NATIONAL COURT MUST BE THAT DIRECTIVE NO 73/173 MUST
     BE INTERPRETED AS MEANING THAT IT IS NOT PERMISSIBLE FOR NATIONAL
     PROVISIONS TO PRESCRIBE THAT CONTAINERS SHALL BEAR A STATEMENT OF THE
     PRESENCE OF INGREDIENTS OF THE PRODUCTS IN QUESTION IN TERMS GOING BEYOND
     THOSE LAID DOWN BY THE SAID DIRECTIVE.
34   THE FOURTH QUESTION IS DRAFTED AS FOLLOWS: „DO THE SAID NATIONAL
     PROVISIONS, WHICH ARE APPLICABLE WITHOUT DISTINCTION TO ALL GOODS PLACED ON
     THE DOMESTIC MARKET, NEVERTHELESS CONSTITUTE AN OBSTACLE, A PROHIBITION OR
     A RESTRICTION ON TRADE IN AND THE FREE MOVEMENT OF SUCH GOODS, EVEN IF SUCH
     PROVISIONS WERE ENACTED FOR THE PURPOSE OF ENSURING GREATER PROTECTION FOR
     THE PHYSICAL SAFETY OF USERS OF THE PRODUCTS IN QUESTION?”
35   THIS QUESTION IS AN ALLUSION TO ARTICLE 36 OF THE TREATY WHICH PERMITS
     EXCEPTIONS TO THE FREE MOVEMENTS OF GOODS TO THE EXTENT TO WHICH THEY ARE
     JUSTIFIED ON GROUNDS OF PUBLIC SECURITY OR THE PROTECTION OF HEALTH AND
     LIFE OF HUMANS AND ANIMALS.
36   WHEN, PURSUANT TO ARTICLE 100 OF THE TREATY, COMMUNITY DIRECTIVES PROVIDE
     FOR THE HARMONIZATION OF MEASURES NECESSARY TO ENSURE THE PROTECTION OF THE
     HEALTH OF HUMANS AND ANIMALS AND ESTABLISH COMMUNITY PROCEDURES TO
     SUPERVISE COMPLIANCE THEREWITH, RECOURSE TO ARTICLE 36 CEASES TO BE
     JUSTIFIED AND THE APPROPRIATE CONTROLS MUST HENCEFORTH BE CARRIED OUT AND
     THE PROTECTIVE MEASURES TAKEN IN ACCORDANCE WITH THE SCHEME LAID DOWN BY
     THE HARMONIZING DIRECTIVE.
37   DIRECTIVE NO 73/173 PROVIDES THAT WHERE A MEMBER STATE ESTABLISHED THAT A
     DANGEROUS PREPARATION, ALTHOUGH SATISFYING THE REQUIREMENTS OF THAT
     DIRECTIVE, PRESENTS A HEALTH OR SAFETY RISK, IT MAY HAVE RECOURSE,
     TEMPORARILY AND SUBJECT TO THE SUPERVISION OF THE COMMISSION, TO A
     PROTECTIVE MEASURE PROVIDED FOR IN ARTICLE 9 OF THE DIRECTIVE IN ACCORDANCE
     WITH THE PROCEDURE LAID DOWN IN THAT ARTICLE.
38   IT FOLLOWS THAT NATIONAL PROVISIONS GOING BEYOND THOSE LAID DOWN IN
     DIRECTIVE NO 73/173 ARE COMPATIBLE WITH COMMUNITY LAW ONLY IF THEY HAVE
                                                                                   29
     BEEN ADOPTED IN ACCORDANCE WITH THE PROCEDURES AND FORMALITIES PRESCRIBED
     IN ARTICLE 9 OF THE SAID DIRECTIVE.
     B - THE INTERPRETATION OF COUNCIL DIRECTIVE NO 77/728/EEC OF 7 NOVEMBER
     1977
39   IN A FIFTH QUESTION THE NATIONAL COURT ASKS WHETHER COUNCIL DIRECTIVE NO
     77/728 OF 7 NOVEMBER 1977, IN PARTICULAR ARTICLE 9 THEREOF, IS IMMEDIATELY
     AND DIRECTLY APPLICABLE WITH REGARD TO THE OBLIGATIONS IMPOSED ON MEMBER
     STATES TO REFRAIN FROM ACTION AS FROM THE DATE OF NOTIFICATION OF THAT
     DIRECTIVE IN A CASE WHERE A PERSON, ACTING UPON A LEGITIMATE EXPECTATION,
     HAS COMPLIED WITH THE PROVISIONS OF THAT DIRECTIVE BEFORE THE EXPIRY OF THE
     PERIOD WITHIN WHICH THE MEMBER STATE MUST COMPLY WITH THE SAID DIRECTIVE.
40   THE OBJECTIVE OF THAT DIRECTIVE IS ANALOGOUS TO THAT OF DIRECTIVE NO 73/173
     IN THAT IT LAYS DOWN SIMILAR RULES FOR PREPARATIONS INTENDED TO BE USED AS
     PAINTS, VARNISHES, PRINTING INKS, ADHESIVES AND SIMILAR PRODUCTS, AND
     CONTAINING DANGEROUS SUBSTANCES.
41   ARTICLE 12 OF THAT DIRECTIVE PROVIDES THAT MEMBER STATES MUST IMPLEMENT IT
     WITHIN 24 MONTHS OF ITS NOTIFICATION, WHICH TOOK PLACE ON 9 NOVEMBER 1977.
42   THAT PERIOD HAS NOT YET EXPIRED AND THE STATES TO WHICH THE DIRECTIVE WAS
     ADDRESSED HAVE UNTIL 9 NOVEMBER 1979 TO INCORPORATE THE PROVISIONS OF
     DIRECTIVE NO 77/728 INTO THEIR INTERNAL LEGAL ORDERS.
43   IT FOLLOWS THAT, FOR THE REASONS EXPOUNDED IN THE GROUNDS OF THE ANSWER TO
     THE NATIONAL COURT’S FIRST QUESTION, IT IS ONLY AT THE END OF THE
     PRESCRIBED PERIOD AND IN THE EVENT OF THE MEMBER STATE’S DEFAULT THAT THE
     DIRECTIVE - AND IN PARTICULAR ARTICLE 9 THEREOF - WILL BE ABLE TO HAVE THE
     EFFECTS DESCRIBED IN THE ANSWER TO THE FIRST QUESTION.
44   UNTIL THAT DATE IS REACHED THE MEMBER STATES REMAIN FREE IN THAT FIELD.
45   IF ONE MEMBER STATE HAS INCORPORATED THE PROVISIONS OF A DIRECTIVE INTO ITS
     INTERNAL LEGAL ORDER BEFORE THE END OF THE PERIOD PRESCRIBED THEREIN, THAT
     FACT CANNOT PRODUCE ANY EFFECT WITH REGARD TO OTHER MEMBER STATES.
46   IN CONCLUSION, SINCE A DIRECTIVE BY ITS NATURE IMPOSES OBLIGATIONS ONLY ON
     MEMBER STATES, IT IS NOT POSSIBLE FOR AN INDIVIDUAL TO PLEAD THE PRINCIPLE
     OF „LEGITIMATE EXPECTATION „BEFORE THE EXPIRY OF THE PERIOD PRESCRIBED FOR
     ITS IMPLEMENTATION.
47   THEREFORE THE ANSWER TO THE FIFTH QUESTION MUST BE THAT DIRECTIVE NO 77/728
     OF THE COUNCIL OF THE EUROPEAN COMMUNITIES OF 7 NOVEMBER 1977, IN
     PARTICULAR ARTICLE 9 THEREOF, CANNOT BRING ABOUT WITH RESPECT TO ANY
     INDIVIDUAL WHO HAS COMPLIED WITH THE PROVISIONS OF THE SAID DIRECTIVE
     BEFORE THE EXPIRATION OF THE ADAPTATION PERIOD PRESCRIBED FOR THE MEMBER
     STATE ANY EFFECT CAPABLE OF BEING TAKEN INTO CONSIDERATION BY NATIONAL
     COURTS.
     …
     ON THOSE GROUNDS,
     THE COURT
     IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRETURA PENALE, MILAN, BY
     AN ORDER OF 8 MAY 1978 HEREBY RULES :
     1. AFTER THE EXPIRATION OF THE PERIOD FIXED FOR THE IMPLEMENTATION OF A
     DIRECTIVE A MEMBER STATE MAY NOT APPLY ITS INTERNAL LAW - EVEN IF IT IS
     PROVIDED WITH PENAL SANCTIONS - WHICH HAS NOT YET BEEN ADAPTED IN
     COMPLIANCE WITH THE DIRECTIVE, TO A PERSON WHO HAS COMPLIED WITH THE
     REQUIREMENTS OF THE DIRECTIVE.
     2. IT IS A CONSEQUENCE OF THE SYSTEM INTRODUCED BY DIRECTIVE NO 73/173 THAT
     A MEMBER STATE MAY NOT INTRODUCE INTO ITS NATIONAL LEGISLATION CONDITIONS
     WHICH ARE MORE RESTRICTIVE THAN THOSE LAID DOWN IN THE DIRECTIVE IN
     QUESTION, OR WHICH ARE EVEN MORE DETAILED OR IN ANY EVENT DIFFERENT, AS

                                                                                   30
    REGARDS THE CLASSIFICATION, PACKAGING AND LABELLING OF SOLVENTS AND THAT
    THIS PROHIBITION ON THE IMPOSITION OF RESTRICTIONS NOT PROVIDED FOR APPLIES
    BOTH TO THE DIRECT MARKETING OF THE PRODUCTS ON THE HOME MARKET AND TO
    IMPORTED PRODUCTS.
    3. DIRECTIVE NO 73/173 MUST BE INTERPRETED AS MEANING THAT IT IS NOT
    PERMISSIBLE FOR NATIONAL PROVISIONS TO PRESCRIBE THAT CONTAINERS SHALL BEAR
    A STATEMENT OF THE PRESENCE OF INGREDIENTS OF THE PRODUCTS IN QUESTION IN
    TERMS GOING BEYOND THOSE LAID DOWN BY THE SAID DIRECTIVE.
    4. NATIONAL PROVISIONS GOING BEYOND THOSE LAID DOWN IN DIRECTIVE NO 73/173
    ARE COMPATIBLE WITH COMMUNITY LAW ONLY IF THEY HAVE BEEN ADOPTED IN
    ACCORDANCE WITH THE PROCEDURES AND FORMALITIES PRESCRIBED IN ARTICLE 9 OF
    THE SAID DIRECTIVE.
    5. DIRECTIVE NO 77/728 OF THE COUNCIL OF THE EUROPEAN COMMUNITIES OF 7
    NOVEMBER 1977, IN PARTICULAR ARTICLE 9 THEREOF, CANNOT BRING ABOUT WITH
    RESPECT TO ANY INDIVIDUAL WHO HAS COMPLIED WITH THE PROVISIONS OF THE SAID
    DIRECTIVE BEFORE THE EXPIRATION OF THE ADAPTATION PERIOD PRESCRIBED FOR THE
    MEMBER STATE ANY EFFECT CAPABLE OF BEING TAKEN INTO CONSIDERATION BY
    NATIONAL COURTS.



    Case 09
    Judgment of the Court of 13 December 1979. - Liselotte Hauer v Land Rheinland-Pfalz.
    - Reference for a preliminary ruling: Verwaltungsgericht Neustadt an der Weinstraße -
    Germany. - Prohibition on new planting of vines. - Case 44/79.
    REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE
    VERWALTUNGSGERICHT ( ADMINISTRATIVE COURT ) NEUSTADT AN DER WEINSTRASSE FOR A
    PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
    LISELOTTE HAUER, RESIDING AT BAD DURKHEIM AND LAND RHEINLAND-PFALZ


    ON THE INTERPRETATION OF ARTICLE 2 OF COUNCIL REGULATION ( EEC ) NO 1162/76 OF 17
    MAY 1976 ON MEASURES DESIGNED TO ADJUST WINE-GROWING POTENTIAL TO MARKET
    REQUIREMENTS, AS AMENDED BY COUNCIL REGULATION ( EEC ) NO 2776/78 OF 23 NOVEMBER
    1978, WITH REGARD TO ARTICLE 1 OF THE GESETZ UBER MASSNAHMEN AUF DEM GEBIETE
    DER WEINWIRTSCHAFT ( WEINWIRTSCHAFTSGESETZ ),


1   BY AN ORDER OF 14 DECEMBER 1978, RECEIVED AT THE COURT ON 20 MARCH 1979, THE
    VERWALTUNGSGERICHT NEUSTADT AN DER WEINSTRASSE SUBMITTED TWO QUESTIONS TO
    THE COURT FOR A PRELIMINARY RULING, PURSUANT TO ARTICLE 177 OF THE EEC TREATY,
    ON THE INTERPRETATION OF COUNCIL REGULATION ( EEC ) NO 1162/76 OF 17 MAY 1976 ON
    MEASURES DESIGNED TO ADJUST WINE-GROWING POTENTIAL TO MARKET REQUIREMENTS (
    OFFICIAL JOURNAL L 135, P. 32 ), AMENDED BY COUNCIL REGULATION ( EEC ) NO 2776/78 OF 23
    NOVEMBER 1978 ( OFFICIAL JOURNAL L 333, P. 1 ).
2   THE FILE ON THE CASE SHOWS THAT ON 6 JUNE 1975 THE PLAINTIFF IN THE MAIN ACTION
    APPLIED TO THE COMPETENT ADMINISTRATIVE AUTHORITY OF THE LAND RHEINLAND-PFALZ
    FOR AUTHORIZATION TO PLANT VINES ON A PLOT OF LAND WHICH SHE OWNS IN THE REGION
    OF BAD DURKHEIM. THAT AUTHORIZATION WAS REFUSED INITIALLY OWING TO THE FACT
    THAT UNDER THE PROVISIONS OF THE GERMAN LEGISLATION APPLICABLE TO THAT SPHERE,
    NAMELY THE LAW RELATING TO THE WINE INDUSTRY ( WEINWIRTSCHAFTSGESETZ ) OF 10
    MARCH 1977, THE PLOT OF LAND IN QUESTION WAS NOT CONSIDERED SUITABLE FOR WINE-
    GROWING. ON 22 JANUARY 1976 THE PERSON CONCERNED LODGED AN OBJECTION AGAINST
    THAT DECISION. WHILE PROCEEDINGS RELATING TO THAT OBJECTION WERE PENDING
    BEFORE THE COMPETENT ADMINISTRATIVE AUTHORITY, REGULATION NO 1162/76 OF 17 MAY
    1976 WAS ADOPTED, ARTICLE 2 OF WHICH IMPOSES A PROHIBITION FOR A PERIOD OF THREE
    YEARS ON ALL NEW PLANTING OF VINES. ON 21 OCTOBER OF THAT YEAR THE
    ADMINISTRATIVE AUTHORITY OVERRULED THE OBJECTION, STATING TWO GROUNDS: ON
                                                                                              31
     THE ONE HAND, THE UNSUITABILITY OF THE LAND AND, ON THE OTHER HAND, THE
     PROHIBITION ON PLANTING AS A RESULT OF THE COMMUNITY REGULATION REFERRED TO .
3    THE PERSON CONCERNED APPEALED TO THE VERWALTUNGSGERICHT. AS A RESULT OF
     EXPERTS ' REPORTS ON THE GRAPES GROWN IN THE SAME AREA AND TAKING INTO ACCOUNT
     A SETTLEMENT REACHED WITH VARIOUS OTHER OWNERS OF PLOTS OF LAND ADJACENT TO
     THAT OF THE APPLICANT, THE ADMINISTRATIVE AUTHORITY ACCEPTED THAT THE PLAINTIFF
     ' S LAND MAY BE CONSIDERED SUITABLE FOR WINE-GROWING IN ACCORDANCE WITH THE
     MINIMUM REQUIREMENTS LAID DOWN BY NATIONAL LEGISLATION. CONSEQUENTLY, THE
     AUTHORITY STATED ITS WILLINGNESS TO GRANT THE AUTHORIZATION AS FROM THE END OF
     THE PROHIBITION ON NEW PLANTING IMPOSED BY THE COMMUNITY RULES. THUS IT
     APPEARS THAT THE DISPUTE BETWEEN THE PARTIES IS HENCEFORTH SOLELY CONCERNED
     WITH QUESTIONS OF COMMUNITY LAW.
     THE FIRST QUESTION ( APPLICATION OF REGULATION NO 1162/76 IN TIME )
6    IN THIS REGARD, THE PLAINTIFF IN THE MAIN ACTION CLAIMS THAT HER APPLICATION,
     SUBMITTED TO THE COMPETENT ADMINISTRATIVE AUTHORITY ON 6 JUNE 1975, SHOULD IN
     THE NORMAL COURSE OF EVENTS HAVE LED TO A DECISION IN HER FAVOUR BEFORE THE
     ENTRY INTO FORCE OF THE COMMUNITY REGULATION IF THE ADMINISTRATIVE PROCEDURE
     HAD TAKEN ITS USUAL COURSE AND IF THE ADMINISTRATION HAD RECOGNIZED WITHOUT
     DELAY THE FACT THAT HER PLOT OF LAND IS SUITABLE FOR WINE-GROWING IN
     ACCORDANCE WITH THE REQUIREMENTS OF NATIONAL LAW. IT IS, SHE ARGUES, NECESSARY
     TO TAKE ACCOUNT OF THAT SITUATION IN DECIDING THE TIME FROM WHICH THE
     COMMUNITY REGULATION IS APPLICABLE, THE MORE SO AS THE PRODUCTION OF THE
     VINEYARD IN QUESTION WOULD NOT HAVE HAD ANY APPRECIABLE INFLUENCE ON MARKET
     CONDITIONS, IN VIEW OF THE TIME WHICH ELAPSES BETWEEN THE PLANTING OF A
     VINEYARD AND ITS FIRST PRODUCTION .
7    THE ARGUMENTS ADVANCED BY THE PLAINTIFF IN THE MAIN ACTION CANNOT BE UPHELD.
     INDEED THE SECOND SUBPARAGRAPH OF ARTICLE 2 ( 1 ) OF REGULATION NO 1162/76
     EXPRESSLY PROVIDES THAT MEMBER STATES SHALL NO LONGER GRANT AUTHORIZATIONS
     FOR NEW PLANTING ' ' AS FROM THE DATE ON WHICH THIS REGULATION ENTERS INTO FORCE
     ' '. BY REFERRING TO THE ACT OF GRANTING AUTHORIZATION, THAT PROVISION RULES OUT
     THE POSSIBILITY OF TAKING INTO CONSIDERATION THE TIME AT WHICH AN APPLICATION
     WAS SUBMITTED. IT INDICATES THE INTENTION TO GIVE IMMEDIATE EFFECT TO THE
     REGULATION, TO SUCH AN EXTENT THAT EVEN THE EXERCISE OF RIGHTS TO PLANT OR RE-
     PLANT ACQUIRED PRIOR TO THE ENTRY INTO FORCE OF THE REGULATION IS SUSPENDED
     DURING THE PERIOD OF THE PROHIBITION AS A RESULT OF ARTICLE 4 OF THE SAME
     REGULATION .
8    AS IS STATED IN THE SIXTH RECITAL OF THE PREAMBLE, WITH REGARD TO THE LAST-
     MENTIONED PROVISION, THE PROHIBITION ON NEW PLANTINGS IS REQUIRED BY AN ' '
     UNDENIABLE PUBLIC INTEREST ' ', MAKING IT NECESSARY TO PUT A BRAKE ON THE
     OVERPRODUCTION OF WINE IN THE COMMUNITY, TO RE-ESTABLISH THE BALANCE OF THE
     MARKET AND TO PREVENT THE FORMATION OF STRUCTURAL SURPLUSES. THUS IT APPEARS
     THAT THE OBJECT OF REGULATION NO 1162/76 IS THE IMMEDIATE PREVENTION OF ANY
     EXTENSION IN THE AREA COVERED BY VINEYARDS. THEREFORE NO EXCEPTION MAY BE
     MADE IN FAVOUR OF AN APPLICATION SUBMITTED BEFORE ITS ENTRY INTO FORCE .
9    IT IS THEREFORE NECESSARY TO REPLY TO THE FIRST QUESTION THAT COUNCIL
     REGULATION NO 1162/76 OF 17 MAY 1976, AMENDED BY REGULATION NO 2776/78 OF 23
     NOVEMBER 1978, MUST BE INTERPRETED AS MEANING THAT ARTICLE 2 ( 1 ) THEREOF ALSO
     APPLIES TO APPLICATIONS FOR AUTHORIZATION OF NEW PLANTING OF VINES MADE BEFORE
     THE ENTRY INTO FORCE OF THE FIRST REGULATION .
     THE SECOND QUESTION ( THE SUBSTANTIVE SCOPE OF REGULATION NO 1162/76 )
10   IN ITS SECOND QUESTION THE VERWALTUNGSGERICHT ASKS THE COURT TO RULE WHETHER
     THE PROHIBITION ON GRANTING AUTHORIZATIONS FOR NEW PLANTING LAID DOWN BY
     ARTICLE 2 ( 1 ) OF REGULATION NO 1162/76 IS OF INCLUSIVE APPLICATION, THAT IS TO SAY
     WHETHER IT ALSO INCLUDES LAND RECOGNIZED AS SUITABLE FOR WINE-GROWING IN
     ACCORDANCE WITH THE CRITERIA APPLIED BY NATIONAL LEGISLATION .
11   IN THIS REGARD, THE TEXT OF THE REGULATION IS EXPLICIT IN SO FAR AS ARTICLE 2
     PROHIBITS ' ' ALL NEW PLANTING ' ' WITHOUT MAKING ANY DISTINCTION ACCORDING TO THE
                                                                                            32
     QUALITY OF THE LAND CONCERNED. IT IS CLEAR FROM BOTH THE TEXT AND THE STATED
     OBJECTIVES OF REGULATION NO 1162/76 THAT THE PROHIBITION MUST APPLY TO NEW
     PLANTINGS IRRESPECTIVE OF THE NATURE OF THE LAND AND OF THE CLASSIFICATION
     THEREOF UNDER NATIONAL LEGISLATION. IN FACT, THE OBJECT OF THE REGULATION, AS IS
     CLEAR IN PARTICULAR FROM THE SECOND RECITAL OF THE PREAMBLE THERETO, IS TO
     BRING TO AN END THE SURPLUS IN EUROPEAN WINE PRODUCTION AND TO RE-ESTABLISH
     THE BALANCE OF THE MARKET BOTH IN THE SHORT AND IN THE LONG TERM. ONLY ARTICLE
     2 ( 2 ) OF THE REGULATION PROVIDES FOR SOME EXCEPTIONS TO THE GENERAL NATURE OF
     THE PROHIBITION LAID DOWN BY PARAGRAPH ( 1 ) OF THE SAME ARTICLE, BUT IT IS
     COMMON GROUND THAT NONE OF THOSE EXCEPTIONS APPLIES IN THIS CASE .
12   THEREFORE THE REPLY TO THE SECOND QUESTION MUST BE THAT ARTICLE 2 ( 1 ) OF
     REGULATION NO 1162/76 MUST BE INTERPRETED AS MEANING THAT THE PROHIBITION LAID
     DOWN THEREIN ON THE GRANTING OF AUTHORIZATIONS FOR NEW PLANTING -
     DISREGARDING THE EXCEPTIONS SPECIFIED IN ARTICLE 2 ( 2 ) OF THE REGULATION - IS OF
     INCLUSIVE APPLICATION, THAT IS TO SAY, IS IN PARTICULAR UNAFFECTED BY THE QUESTION
     OF THE SUITABILITY OR OTHERWISE OF A PLOT OF LAND FOR WINE-GROWING, AS
     DETERMINED BY THE PROVISIONS OF A NATIONAL LAW .
     THE PROTECTION OF FUNDAMENTAL RIGHTS IN THE COMMUNITY LEGAL ORDER
13   IN ITS ORDER MAKING THE REFERENCE, THE VERWALTUNGSGERICHT STATES THAT IF
     REGULATION NO 1162/76 MUST BE INTERPRETED AS MEANING THAT IT LAYS DOWN A
     PROHIBITION OF GENERAL APPLICATION, SO AS TO INCLUDE EVEN LAND APPROPRIATE FOR
     WINE GROWING, THAT PROVISION MIGHT HAVE TO BE CONSIDERED INAPPLICABLE IN THE
     FEDERAL REPUBLIC OF GERMANY OWING TO DOUBTS EXISTING WITH REGARD TO ITS
     COMPATIBILITY WITH THE FUNDAMENTAL RIGHTS GUARANTEED BY ARTICLES 14 AND 12 OF
     THE GRUNDGESETZ CONCERNING, RESPECTIVELY, THE RIGHT TO PROPERTY AND THE RIGHT
     FREELY TO PURSUE TRADE AND PROFESSIONAL ACTIVITIES .
14   AS THE COURT DECLARED IN ITS JUDGMENT OF 17 DECEMBER 1970, INTERNATIONALE
     HANDELSGESELLSCHAFT ( 1970 ) ECR 1125, THE QUESTION OF A POSSIBLE INFRINGEMENT OF
     FUNDAMENTAL RIGHTS BY A MEASURE OF THE COMMUNITY INSTITUTIONS CAN ONLY BE
     JUDGED IN THE LIGHT OF COMMUNITY LAW ITSELF. THE INTRODUCTION OF SPECIAL
     CRITERIA FOR ASSESSMENT STEMMING FROM THE LEGISLATION OR CONSTITUTIONAL LAW
     OF A PARTICULAR MEMBER STATE WOULD, BY DAMAGING THE SUBSTANTIVE UNITY AND
     EFFICACY OF COMMUNITY LAW, LEAD INEVITABLY TO THE DESTRUCTION OF THE UNITY OF
     THE COMMON MARKET AND THE JEOPARDIZING OF THE COHESION OF THE COMMUNITY .
15   THE COURT ALSO EMPHASIZED IN THE JUDGMENT CITED, AND LATER IN THE JUDGMENT OF
     14 MAY 1974, NOLD ( 1974 ) ECR 491, THAT FUNDAMENTAL RIGHTS FORM AN INTEGRAL PART
     OF THE GENERAL PRINCIPLES OF THE LAW, THE OBSERVANCE OF WHICH IT ENSURES; THAT
     IN SAFEGUARDING THOSE RIGHTS, THE COURT IS BOUND TO DRAW INSPIRATION FROM
     CONSTITUTIONAL TRADITIONS COMMON TO THE MEMBER STATES, SO THAT MEASURES
     WHICH ARE INCOMPATIBLE WITH THE FUNDAMENTAL RIGHTS RECOGNIZED BY THE
     CONSTITUTIONS OF THOSE STATES ARE UNACCEPTABLE IN THE COMMUNITY; AND THAT,
     SIMILARLY, INTERNATIONAL TREATIES FOR THE PROTECTION OF HUMAN RIGHTS ON WHICH
     THE MEMBER STATES HAVE COLLABORATED OR OF WHICH THEY ARE SIGNATORIES, CAN
     SUPPLY GUIDELINES WHICH SHOULD BE FOLLOWED WITHIN THE FRAMEWORK OF
     COMMUNITY LAW. THAT CONCEPTION WAS LATER RECOGNIZED BY THE JOINT
     DECLARATION OF THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE COMMISSION OF 5
     APRIL 1977, WHICH, AFTER RECALLING THE CASE-LAW OF THE COURT, REFERS ON THE ONE
     HAND TO THE RIGHTS GUARANTEED BY THE CONSTITUTIONS OF THE MEMBER STATES AND
     ON THE OTHER HAND TO THE EUROPEAN CONVENTION FOR THE PROTECTION OF HUMAN
     RIGHTS AND FUNDAMENTAL FREEDOMS OF 4 NOVEMBER 1950 ( OFFICIAL JOURNAL C 103,
     1977, P. 1 ).
16   IN THESE CIRCUMSTANCES, THE DOUBTS EVINCED BY THE VERWALTUNGSGERICHT AS TO
     THE COMPATIBILITY OF THE PROVISIONS OF REGULATION NO 1162/76 WITH THE RULES
     CONCERNING THE PROTECTION OF FUNDAMENTAL RIGHTS MUST BE UNDERSTOOD AS
     QUESTIONING THE VALIDITY OF THE REGULATION IN THE LIGHT OF COMMUNITY LAW. IN
     THIS REGARD, IT IS NECESSARY TO DISTINGUISH BETWEEN, ON THE ONE HAND, A POSSIBLE
     INFRINGEMENT OF THE RIGHT TO PROPERTY AND, ON THE OTHER HAND, A POSSIBLE
     LIMITATION UPON THE FREEDOM TO PURSUE A TRADE OR PROFESSION .

                                                                                          33
     THE QUESTION OF THE RIGHT TO PROPERTY
17   THE RIGHT TO PROPERTY IS GUARANTEED IN THE COMMUNITY LEGAL ORDER IN
     ACCORDANCE WITH THE IDEAS COMMON TO THE CONSTITUTIONS OF THE MEMBER STATES,
     WHICH ARE ALSO REFLECTED IN THE FIRST PROTOCOL TO THE EUROPEAN CONVENTION FOR
     THE PROTECTION OF HUMAN RIGHTS .
18   ARTICLE 1 OF THAT PROTOCOL PROVIDES AS FOLLOWS:
     ' ' EVERY NATURAL OR LEGAL PERSON IS ENTITLED TO THE PEACEFUL ENJOYMENT OF HIS
     POSSESSIONS. NO ONE SHALL BE DEPRIVED OF HIS POSSESSIONS EXCEPT IN THE PUBLIC
     INTEREST AND SUBJECT TO THE CONDITIONS PROVIDED FOR BY LAW AND BY THE GENERAL
     PRINCIPLES OF INTERNATIONAL LAW .
     THE PRECEDING PROVISIONS SHALL NOT, HOWEVER, IN ANY WAY IMPAIR THE RIGHT OF A
     STATE TO ENFORCE SUCH LAWS AS IT DEEMS NECESSARY TO CONTROL THE USE OF
     PROPERTY IN ACCORDANCE WITH THE GENERAL INTEREST OR TO SECURE THE PAYMENT OF
     TAXES OR OTHER CONTRIBUTIONS OR PENALTIES. ' '
19    HAVING DECLARED THAT PERSONS ARE ENTITLED TO THE PEACEFUL ENJOYMENT OF THEIR
     PROPERTY, THAT PROVISION ENVISAGES TWO WAYS IN WHICH THE RIGHTS OF A PROPERTY
     OWNER MAY BE IMPAIRED, ACCORDING AS THE IMPAIRMENT IS INTENDED TO DEPRIVE THE
     OWNER OF HIS RIGHT OR TO RESTRICT THE EXERCISE THEREOF. IN THIS CASE IT IS
     INCONTESTABLE THAT THE PROHIBITION ON NEW PLANTING CANNOT BE CONSIDERED TO BE
     AN ACT DEPRIVING THE OWNER OF HIS PROPERTY, SINCE HE REMAINS FREE TO DISPOSE OF IT
     OR TO PUT IT TO OTHER USES WHICH ARE NOT PROHIBITED. ON THE OTHER HAND, THERE IS
     NO DOUBT THAT THAT PROHIBITION RESTRICTS THE USE OF THE PROPERTY. IN THIS REGARD,
     THE SECOND PARAGRAPH OF ARTICLE 1 OF THE PROTOCOL PROVIDES AN IMPORTANT
     INDICATION IN SO FAR AS IT RECOGNIZES THE RIGHT OF A STATE ' ' TO ENFORCE SUCH LAWS
     AS IT DEEMS NECESSARY TO CONTROL THE USE OF PROPERTY IN ACCORDANCE WITH THE
     GENERAL INTEREST ' '. THUS THE PROTOCOL ACCEPTS IN PRINCIPLE THE LEGALITY OF
     RESTRICTIONS UPON THE USE OF PROPERTY, WHILST AT THE SAME TIME LIMITING THOSE
     RESTRICTIONS TO THE EXTENT TO WHICH THEY ARE DEEMED ' ' NECESSARY ' ' BY A STATE
     FOR THE PROTECTION OF THE ' ' GENERAL INTEREST ' '. HOWEVER, THAT PROVISION DOES
     NOT, ENABLE A SUFFICIENTLY PRECISE ANSWER TO BE GIVEN TO THE QUESTION SUBMITTED
     BY THE VERWALTUNGSGERICHT
20   THEREFORE, IN ORDER TO BE ABLE TO ANSWER THAT QUESTION, IT IS NECESSARY TO
     CONSIDER ALSO THE INDICATIONS PROVIDED BY THE CONSTITUTIONAL RULES AND
     PRACTICES OF THE NINE MEMBER STATES. ONE OF THE FIRST POINTS TO EMERGE IN THIS
     REGARD IS THAT THOSE RULES AND PRACTICES PERMIT THE LEGISLATURE TO CONTROL THE
     USE OF PRIVATE PROPERTY IN ACCORDANCE WITH THE GENERAL INTEREST. THUS SOME
     CONSTITUTIONS REFER TO THE OBLIGATIONS ARISING OUT OF THE OWNERSHIP OF PROPERTY
     ( GERMAN GRUNDGESETZ, ARTICLE 14 ( 2 ), FIRST SENTENCE ), TO ITS SOCIAL FUNCTION (
     ITALIAN CONSTITUTION, ARTICLE 42 ( 2 )), TO THE SUBORDINATION OF ITS USE TO THE
     REQUIREMENTS OF THE COMMON GOOD ( GERMAN GRUNDGESETZ, ARTICLE 14 ( 2 ), SECOND
     SENTENCE, AND THE IRISH CONSTITUTION, ARTICLE 43.2.2* ), OR OF SOCIAL JUSTICE ( IRISH
     CONSTITUTION, ARTICLE 43.2.1* ). IN ALL THE MEMBER STATES, NUMEROUS LEGISLATIVE
     MEASURES HAVE GIVEN CONCRETE EXPRESSION TO THAT SOCIAL FUNCTION OF THE RIGHT
     TO PROPERTY. THUS IN ALL THE MEMBER STATES THERE IS LEGISLATION ON AGRICULTURE
     AND FORESTRY, THE WATER SUPPLY, THE PROTECTION OF THE ENVIRONMENT AND TOWN
     AND COUNTRY PLANNING, WHICH IMPOSES RESTRICTIONS, SOMETIMES APPRECIABLE, ON
     THE USE OF REAL PROPERTY .
21   MORE PARTICULARLY, ALL THE WINE-PRODUCING COUNTRIES OF THE COMMUNITY HAVE
     RESTRICTIVE LEGISLATION, ALBEIT OF DIFFERING SEVERITY, CONCERNING THE PLANTING
     OF VINES, THE SELECTION OF VARIETIES AND THE METHODS OF CULTIVATION. IN NONE OF
     THE COUNTRIES CONCERNED ARE THOSE PROVISIONS CONSIDERED TO BE INCOMPATIBLE IN
     PRINCIPLE WITH THE REGARD DUE TO THE RIGHT TO PROPERTY .
22   THUS IT MAY BE STATED, TAKING INTO ACCOUNT THE CONSTITUTIONAL PRECEPTS COMMON
     TO THE MEMBER STATES AND CONSISTENT LEGISLATIVE PRACTICES, IN WIDELY VARYING
     SPHERES, THAT THE FACT THAT REGULATION NO 1162/76 IMPOSED RESTRICTIONS ON THE
     NEW PLANTING OF VINES CANNOT BE CHALLENGED IN PRINCIPLE. IT IS A TYPE OF
     RESTRICTION WHICH IS KNOWN AND ACCEPTED AS LAWFUL, IN IDENTICAL OR SIMILAR

                                                                                             34
     FORMS, IN THE CONSTITUTIONAL STRUCTURE OF ALL THE MEMBER STATES .
23   HOWEVER, THAT FINDING DOES NOT DEAL COMPLETELY WITH THE PROBLEM RAISED BY THE
     VERWALTUNGSGERICHT. EVEN IF IT IS NOT POSSIBLE TO DISPUTE IN PRINCIPLE THE
     COMMUNITY ' S ABILITY TO RESTRICT THE EXERCISE OF THE RIGHT TO PROPERTY IN THE
     CONTEXT OF A COMMON ORGANIZATION OF THE MARKET AND FOR THE PURPOSES OF A
     STRUCTURAL POLICY, IT IS STILL NECESSARY TO EXAMINE WHETHER THE RESTRICTIONS
     INTRODUCED BY THE PROVISIONS IN DISPUTE IN FACT CORRESPOND TO OBJECTIVES OF
     GENERAL INTEREST PURSUED BY THE COMMUNITY OR WHETHER, WITH REGARD TO THE AIM
     PURSUED, THEY CONSTITUTE A DISPROPORTIONATE AND INTOLERABLE INTERFERENCE WITH
     THE RIGHTS OF THE OWNER, IMPINGING UPON THE VERY SUBSTANCE OF THE RIGHT TO
     PROPERTY. SUCH IN FACT IS THE PLEA SUBMITTED BY THE PLAINTIFF IN THE MAIN ACTION,
     WHO CONSIDERS THAT ONLY THE PURSUIT OF A QUALITATIVE POLICY WOULD PERMIT THE
     LEGISLATURE TO RESTRICT THE USE OF WINE-GROWING PROPERTY, WITH THE RESULT THAT
     SHE POSSESSES AN UNASSAILABLE RIGHT FROM THE MOMENT THAT IT IS RECOGNIZED THAT
     HER LAND IS SUITABLE FOR WINE GROWING. IT IS THEREFORE NECESSARY TO IDENTIFY THE
     AIM PURSUED BY THE DISPUTED REGULATION AND TO DETERMINE WHETHER THERE EXISTS
     A REASONABLE RELATIONSHIP BETWEEN THE MEASURES PROVIDED FOR BY THE
     REGULATION AND THE AIM PURSUED BY THE COMMUNITY IN THIS CASE .
24   THE PROVISIONS OF REGULATION NO 1162/76 MUST BE CONSIDERED IN THE CONTEXT OF THE
     COMMON ORGANIZATION OF THE MARKET IN WINE WHICH IS CLOSELY LINKED TO THE
     STRUCTURAL POLICY ENVISAGED BY THE COMMUNITY IN THE AREA IN QUESTION. THE AIMS
     OF THAT POLICY ARE STATED IN REGULATION ( EEC ) NO 816/70 OF 28 APRIL 1970 LAYING
     DOWN ADDITIONAL PROVISIONS FOR THE COMMON ORGANIZATION OF THE MARKET IN WINE
     ( OFFICIAL JOURNAL, ENGLISH SPECIAL EDITION 1970 ( 1 ), P. 234 ), WHICH PROVIDES THE
     BASIS FOR THE DISPUTED REGULATION, AND IN REGULATION NO 337/79 OF 5 FEBRUARY 1979
     ON THE COMMON ORGANIZATION OF THE MARKET IN WINE ( OFFICIAL JOURNAL L 54, P. 1 ),
     WHICH CODIFIES ALL THE PROVISIONS GOVERNING THE COMMON ORGANIZATION OF THE
     MARKET. TITLE III OF THAT REGULATION, LAYING DOWN ' ' RULES CONCERNING
     PRODUCTION AND FOR CONTROLLING PLANTING ' ', NOW FORMS THE LEGAL FRAMEWORK IN
     THAT SPHERE. ANOTHER FACTOR WHICH MAKES IT POSSIBLE TO PERCEIVE THE COMMUNITY
     POLICY PURSUED IN THAT FIELD IS THE COUNCIL RESOLUTION OF 21 APRIL 1975 CONCERNING
     NEW GUIDELINES TO BALANCE THE MARKET IN TABLE WINES ( OFFICIAL JOURNAL C 90, P. 1 ).
25   TAKEN AS A WHOLE, THOSE MEASURES SHOW THAT THE POLICY INITIATED AND PARTIALLY
     IMPLEMENTED BY THE COMMUNITY CONSISTS OF A COMMON ORGANIZATION OF THE
     MARKET IN CONJUNCTION WITH A STRUCTURAL IMPROVEMENT IN THE WINE-PRODUCING
     SECTOR. WITHIN THE FRAMEWORK OF THE GUIDELINES LAID DOWN BY ARTICLE 39 OF THE
     EEC TREATY THAT ACTION SEEKS TO ACHIEVE A DOUBLE OBJECTIVE, NAMELY, ON THE ONE
     HAND, TO ESTABLISH A LASTING BALANCE ON THE WINE MARKET AT A PRICE LEVEL WHICH
     IS PROFITABLE FOR PRODUCERS AND FAIR TO CONSUMERS AND, SECONDLY, TO OBTAIN AN
     IMPROVEMENT IN THE QUALITY OF WINES MARKETED. IN ORDER TO ATTAIN THAT DOUBLE
     OBJECTIVE OF QUANTITATIVE BALANCE AND QUALITATIVE IMPROVEMENT, THE
     COMMUNITY RULES RELATING TO THE MARKET IN WINE PROVIDE FOR AN EXTENSIVE RANGE
     OF MEASURES WHICH APPLY BOTH AT THE PRODUCTION STAGE AND AT THE MARKETING
     STAGE FOR WINE .
26   IN THIS REGARD, IT IS NECESSARY TO REFER IN PARTICULAR TO THE PROVISIONS OF ARTICLE
     17 OF REGULATION NO 816/70, RE-ENACTED IN AN EXTENDED FORM BY ARTICLE 31 OF
     REGULATION NO 337/79, WHICH PROVIDE FOR THE ESTABLISHMENT BY THE MEMBER STATES
     OF FORECASTS OF PLANTING AND PRODUCTION, CO-ORDINATED WITHIN THE FRAMEWORK
     OF A COMPULSORY COMMUNITY PLAN. FOR THE PURPOSE OF IMPLEMENTING THAT PLAN
     MEASURES MAY BE ADOPTED CONCERNING THE PLANTING, RE-PLANTING, GRUBBING-UP OR
     CESSATION OF CULTIVATION OF VINEYARDS .
27   IT IS IN THIS CONTEXT THAT REGULATION NO 1162/76 WAS ADOPTED. IT IS APPARENT FROM
     THE PREAMBLE TO THAT REGULATION AND FROM THE ECONOMIC CIRCUMSTANCES IN
     WHICH IT WAS ADOPTED, A FEATURE OF WHICH WAS THE FORMATION AS FROM THE 1974
     HARVEST OF PERMANENT PRODUCTION SURPLUSES, THAT THAT REGULATION FULFILS A
     DOUBLE FUNCTION: ON THE ONE HAND, IT MUST ENABLE AN IMMEDIATE BRAKE TO BE PUT
     ON THE CONTINUED INCREASE IN THE SURPLUSES; ON THE OTHER HAND, IT MUST WIN FOR
     THE COMMUNITY INSTITUTIONS THE TIME NECESSARY FOR THE IMPLEMENTATION OF A
     STRUCTURAL POLICY DESIGNED TO ENCOURAGE HIGH-QUALITY PRODUCTION, WHILST

                                                                                            35
     RESPECTING THE INDIVIDUAL CHARACTERISTICS AND NEEDS OF THE DIFFERENT WINE-
     PRODUCING REGIONS OF THE COMMUNITY, THROUGH THE SELECTION OF LAND FOR GRAPE
     GROWING AND THE SELECTION OF GRAPE VARIETIES, AND THROUGH THE REGULATION OF
     PRODUCTION METHODS .
28   IT WAS IN ORDER TO FULFIL THAT TWOFOLD PURPOSE THAT THE COUNCIL INTRODUCED BY
     REGULATION NO 1162/76 A GENERAL PROHIBITION ON NEW PLANTINGS, WITHOUT MAKING
     ANY DISTINCTION, APART FROM CERTAIN NARROWLY DEFINED EXCEPTIONS, ACCORDING TO
     THE QUALITY OF THE LAND. IT SHOULD BE NOTED THAT, AS REGARDS ITS SWEEPING SCOPE,
     THE MEASURE INTRODUCED BY THE COUNCIL IS OF A TEMPORARY NATURE. IT IS DESIGNED
     TO DEAL IMMEDIATELY WITH A CONJUNCTURAL SITUATION CHARACTERIZED BY
     SURPLUSES, WHILST AT THE SAME TIME PREPARING PERMANENT STRUCTURAL MEASURES .
29   SEEN IN THIS LIGHT, THE MEASURE CRITICIZED DOES NOT ENTAIL ANY UNDUE LIMITATION
     UPON THE EXERCISE OF THE RIGHT TO PROPERTY. INDEED, THE CULTIVATION OF NEW
     VINEYARDS IN A SITUATION OF CONTINUOUS OVER-PRODUCTION WOULD NOT HAVE ANY
     EFFECT, FROM THE ECONOMIC POINT OF VIEW, APART FROM INCREASING THE VOLUME OF
     THE SURPLUSES; FURTHER, SUCH AN EXTENSION AT THAT STAGE WOULD ENTAIL THE RISK
     OF MAKING MORE DIFFICULT THE IMPLEMENTATION OF A STRUCTURAL POLICY AT THE
     COMMUNITY LEVEL IN THE EVENT OF SUCH A POLICY RESTING ON THE APPLICATION OF
     CRITERIA MORE STRINGENT THAN THE CURRENT PROVISIONS OF NATIONAL LEGISLATION
     CONCERNING THE SELECTION OF LAND ACCEPTED FOR WINE-GROWING .
30   THEREFORE IT IS NECESSARY TO CONCLUDE THAT THE RESTRICTION IMPOSED UPON THE USE
     OF PROPERTY BY THE PROHIBITION ON THE NEW PLANTING OF VINES INTRODUCED FOR A
     LIMITED PERIOD BY REGULATION NO 1162/76 IS JUSTIFIED BY THE OBJECTIVES OF GENERAL
     INTEREST PURSUED BY THE COMMUNITY AND DOES NOT INFRINGE THE SUBSTANCE OF THE
     RIGHT TO PROPERTY IN THE FORM IN WHICH IT IS RECOGNIZED AND PROTECTED IN THE
     COMMUNITY LEGAL ORDER .
     THE QUESTION OF THE FREEDOM TO PURSUE TRADE OR PROFESSIONAL ACTIVITIES
31   THE APPLICANT IN THE MAIN ACTION ALSO SUBMITS THAT THE PROHIBITION ON NEW
     PLANTINGS IMPOSED BY REGULATION NO 1162/76 INFRINGES HER FUNDAMENTAL RIGHTS IN
     SO FAR AS ITS EFFECT IS TO RESTRICT HER FREEDOM TO PURSUE HER OCCUPATION AS A
     WINE-GROWER .
32   AS THE COURT HAS ALREADY STATED IN ITS JUDGMENT OF 14 MAY 1974, NOLD, REFERRED TO
     ABOVE, ALTHOUGH IT IS TRUE THAT GUARANTEES ARE GIVEN BY THE CONSTITUTIONAL
     LAW OF SEVERAL MEMBER STATES IN RESPECT OF THE FREEDOM TO PURSUE TRADE OR
     PROFESSIONAL ACTIVITIES, THE RIGHT THEREBY GUARANTEED, FAR FROM CONSTITUTING
     AN UNFETTERED PREROGATIVE, MUST LIKEWISE BE VIEWED IN THE LIGHT OF THE SOCIAL
     FUNCTION OF THE ACTIVITIES PROTECTED THEREUNDER. IN THIS CASE, IT MUST BE
     OBSERVED THAT THE DISPUTED COMMUNITY MEASURE DOES NOT IN ANY WAY AFFECT
     ACCESS TO THE OCCUPATION OF WINE-GROWING, OR THE FREEDOM TO PURSUE THAT
     OCCUPATION ON LAND AT PRESENT DEVOTED TO WINE-GROWING. TO THE EXTENT TO WHICH
     THE PROHIBITION ON NEW PLANTINGS AFFECTS THE FREE PURSUIT OF THE OCCUPATION OF
     WINE-GROWING, THAT LIMITATION IS NO MORE THAN THE CONSEQUENCE OF THE
     RESTRICTION UPON THE EXERCISE OF THE RIGHT TO PROPERTY, SO THAT THE TWO
     RESTRICTIONS MERGE. THUS THE RESTRICTION UPON THE FREE PURSUIT OF THE
     OCCUPATION OF WINE-GROWING, ASSUMING THAT IT EXISTS, IS JUSTIFIED BY THE SAME
     REASONS WHICH JUSTIFY THE RESTRICTION PLACED UPON THE USE OF PROPERTY .
33   THUS IT IS APPARENT FROM THE FOREGOING THAT CONSIDERATION OF REGULATION NO
     1162/76, IN THE LIGHT OF THE DOUBTS EXPRESSED BY THE VERWALTUNGSGERICHT, HAS
     DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF THAT REGULATION
     ON ACCOUNT OF ITS BEING CONTRARY TO THE REQUIREMENTS FLOWING FROM THE
     PROTECTION OF FUNDAMENTAL RIGHTS IN THE COMMUNITY .
     ON THOSE GROUNDS, THE COURT, IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE
     VERWALTUNGSGERICHT NEUSTADT AN DER WEINSTRASSE BY ORDER OF 14 DECEMBER 1978,
     HEREBY RULES:
     1. COUNCIL REGULATION ( EEC ) NO 1162/76 OF 17 MAY 1976 ON MEASURES DESIGNED TO
     ADJUST WINE-GROWING POTENTIAL TO MARKET REQUIREMENTS, AS AMENDED BY COUNCIL
     REGULATION ( EEC ) NO 2776/78 OF 23 NOVEMBER 1978, AMENDING FOR THE SECOND TIME
                                                                                         36
    REGULATION NO 1162/76, MUST BE INTERPRETED AS MEANING THAT ARTICLE 2 ( 1 ) THEREOF
    ALSO APPLIES TO APPLICATIONS FOR AUTHORIZATION OF NEW PLANTING OF VINES
    SUBMITTED BEFORE THE ENTRY INTO FORCE OF THAT REGULATION .
    2. ARTICLE 2 ( 1 ) OF REGULATION NO 1162/76 MUST BE INTERPRETED AS MEANING THAT THE
    PROHIBITION LAID DOWN THEREIN ON THE GRANTING OF AUTHORIZATIONS FOR NEW
    PLANTING - DISREGARDING THE EXCEPTIONS SPECIFIED IN ARTICLE 2 ( 2 ) OF THE
    REGULATION - IS OF INCLUSIVE APPLICATION, THAT IS TO SAY, IS IN PARTICULAR
    UNAFFECTED BY THE QUESTION OF THE SUITABILITY OR OTHERWISE OF A PLOT OF LAND
    FOR WINE-GROWING, AS DETERMINED BY THE PROVISIONS OF A NATIONAL LAW .




    Case 10
    ECJ, Judgment of 19 January 1982. Ursula Becker v Finanzamt Münster-Innenstadt.
    Reference for a preliminary ruling: Finanzgericht Münster - Germany. Direct effect of
    directives. Case 8/81. European Court reports 1982 Page 00053
    …
    IN CASE 8/81
    REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE
    FINANZGERICHT (FINANCE COURT) MUNSTER FOR A PRELIMINARY RULING IN THE CASE
    PENDING BEFORE THAT COURT BETWEEN
    URSULA BECKER, A SELF-EMPLOYED CREDIT NEGOTIATOR, RESIDING IN MUNSTER,
    AND
    FINANZAMT MUNSTER-INNENSTADT (TAX OFFICE, MUNSTER CENTRAL),
    ON THE INTERPRETATION OF ARTICLE 13 B (D) 1 OF THE SIXTH COUNCIL DIRECTIVE
    77/388/EEC OF 17 MAY 1977 ON THE HARMONIZATION OF THE LAWS OF THE MEMBER
    STATES RELATING TO TURNOVER TAXES - COMMON SYSTEM OF VALUE-ADDED TAX:
    UNIFORM BASIS OF ASSESSMENT (OFFICIAL JOURNAL 1977, L 145, P. 1),
1   BY ORDER OF 27 NOVEMBER 1980, WHICH WAS RECEIVED AT THE COURT ON 14 JANUARY
    1981, THE FINANZGERICHT (FINANCE COURT) MUNSTER REFERRED TO THE COURT FOR A
    PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE
    INTERPRETATION OF ARTICLE 13 B (D) 1 OF THE SIXTH COUNCIL DIRECTIVE
    77/388/EEC OF 17 MAY 1977 ON THE HARMONIZATION OF THE LAWS OF THE MEMBER
    STATES RELATING TO TURNOVER TAXES - COMMON SYSTEM OF VALUE-ADDED TAX:
    UNIFORM BASIS OF ASSESSMENT (OFFICIAL JOURNAL 1977, L 145, P. 1) IN ORDER
    TO DETERMINE WHETHER THAT PROVISION MAY BE REGARDED AS HAVING BEEN DIRECTLY
    APPLICABLE IN THE FEDERAL REPUBLIC OF GERMANY SINCE 1 JANUARY 1979 IN VIEW
    OF THE FAILURE BY THAT MEMBER STATE TO ADOPT WITHIN THE PRESCRIBED PERIOD
    THE MEASURES NECESSARY IN ORDER TO ENSURE ITS IMPLEMENTATION.
    THE BACKGROUND TO THE DISPUTE
2   IT SHOULD BE RECALLED THAT THE SIXTH DIRECTIVE, WHICH WAS ADOPTED ON 17 MAY
    1977, PROVIDED IN ARTICLE 1 THAT THE MEMBER STATES WERE TO ADOPT BY 1
    JANUARY 1978 AT THE LATEST THE NECESSARY LAWS, REGULATIONS AND
    ADMINISTRATIVE PROVISIONS IN ORDER TO MODIFY THEIR VALUE-ADDED TAX SYSTEMS
    IN ACCORDANCE WITH THE REQUIREMENTS OF THE DIRECTIVE. A NUMBER OF MEMBER
    STATES, INCLUDING THE FEDERAL REPUBLIC OF GERMANY, WERE UNABLE TO MAKE THE
    NECESSARY MODIFICATIONS WITHIN THE PRESCRIBED PERIOD AND THEREFORE THE
    COUNCIL, BY THE NINTH DIRECTIVE, 78/583/EEC OF 26 JUNE 1978 ON THE
    HARMONIZATION OF THE LAWS OF THE MEMBER STATES RELATING TO TURNOVER TAXES
    (OFFICIAL JOURNAL 1978, L 194, P. 16), EXTENDED, IN THE CASE OF THOSE
    MEMBER STATES, TO 1 JANUARY 1979 THE PERIOD LAID DOWN IN ARTICLE 1 OF THE
    SIXTH DIRECTIVE.
3   IT WAS NOT UNTIL THE ADOPTION OF THE LAW OF 26 NOVEMBER 1979
    (BUNDESGESETZBLATT I, P. 1953), WHICH TOOK EFFECT ON 1 JANUARY 1980, THAT
                                                                                            37
     THE FEDERAL REPUBLIC OF GERMANY IMPLEMENTED THE SIXTH DIRECTIVE.
4    IT IS APPARENT FROM THE ORDER MAKING THE REFERENCE TO THE COURT THAT IN HER
     MONTHLY RETURNS IN RESPECT OF TURNOVER TAX FOR THE PERIOD FROM MARCH TO
     JUNE 1979 THE PLAINTIFF IN THE MAIN ACTION, WHO CARRIES ON THE BUSINESS OF
     A SELF-EMPLOYED CREDIT NEGOTIATOR, APPLIED FOR EXEMPTION FROM TAX IN
     RESPECT OF HER TRANSACTIONS, CLAIMING THAT ARTICLE 13 B (D) 1 COMPELLED THE
     MEMBER STATES TO EXEMPT FROM VALUE-ADDED TAX INTER ALIA „THE GRANTING AND
     THE NEGOTIATION OF CREDIT „AND THAT THAT DIRECTIVE HAD BEEN PART OF
     NATIONAL LAW SINCE 1 JANUARY 1979.
5    IT APPEARS FROM THE FILE ON THE CASE THAT THE PLAINTIFF IN THE MAIN ACTION
     INFORMED THE FINANZAMT (TAX OFFICE) OF THE AMOUNT OF HER TURNOVER AND OF
     THE INPUT TAX WHICH SHE HAD PAID AND AT THE SAME TIME CLAIMED THAT SHE WAS
     ENTITLED TO THE EXEMPTION PROVIDED FOR BY ARTICLE 13 B (D) 1 OF THE
     DIRECTIVE. CONSEQUENTLY, IN EACH CASE SHE DECLARED THE AMOUNT OF TAX
     PAYABLE AND THE DEDUCTION IN RESPECT OF INPUT TAX TO BE „NIL „.
6    THE FINANZAMT DID NOT ACCEPT THOSE RETURNS AND, IN ITS PROVISIONAL NOTICES
     OF ASSESSMENT FOR THE MONTHS IN QUESTION, CHARGED TURNOVER TAX ON THE
     TRANSACTIONS OF THE PLAINTIFF IN THE MAIN ACTION, IN ACCORDANCE WITH THE
     NATIONAL LEGISLATION WHICH HAD NOT YET BEEN AMENDED, SUBJECT TO A DEDUCTION
     IN RESPECT OF INPUT TAX.
7    FOLLOWING THE DISMISSAL OF HER OBJECTION, THE PLAINTIFF IN THE MAIN ACTION
     APPEALED AGAINST THOSE ASSESSMENTS TO THE FINANZGERICHT, RELYING UPON THE
     ABOVE-MENTIONED PROVISION OF THE DIRECTIVE.
8    IN ITS DEFENCE BEFORE THE FINANZGERICHT, THE FINANZAMT CONTENDED THAT
     DURING THE PERIOD IN QUESTION THE SIXTH DIRECTIVE HAD NOT YET BEEN
     IMPLEMENTED IN THE FEDERAL REPUBLIC OF GERMANY. IT MAINTAINED, MOREOVER,
     THAT THE VIEW SHARED BY ALL THE MEMBER STATES WAS THAT ARTICLE 13 B COULD
     NOT BE CONSIDERED TO BE A PROVISION CREATING DIRECTLY APPLICABLE LAW, IN
     VIEW OF THE FACT THAT THAT PROVISION RESERVED A MARGIN OF DISCRETION TO THE
     MEMBER STATES.
9    IN ORDER TO RESOLVE THAT ISSUE THE FINANZGERICHT REFERRED TO THE COURT THE
     FOLLOWING QUESTION:
     „HAS THE PROVISION CONTAINED IN TITLE X, ARTICLE 13 B (D) 1 OF THE SIXTH
     COUNCIL DIRECTIVE 77/388/EEC OF 17 MAY 1977 ON THE HARMONIZATION OF THE
     LAWS OF THE MEMBER STATES RELATING TO TURNOVER TAXES - COMMON SYSTEM OF
     VALUE-ADDED TAX: UNIFORM BASIS OF ASSESSMENT, CONCERNING THE EXEMPTION FROM
     TURNOVER TAX OF TRANSACTIONS CONSISTING OF THE NEGOTIATION OF CREDIT, BEEN
     DIRECTLY APPLICABLE IN THE FEDERAL REPUBLIC OF GERMANY AS FROM 1 JANUARY
     1979?”
     …
     SUBSTANCE OF THE CASE
     …
17   ACCORDING TO THE THIRD PARAGRAPH OF ARTICLE 189 OF THE TREATY, „A DIRECTIVE
     SHALL BE BINDING, AS TO THE RESULT TO BE ACHIEVED, UPON EACH MEMBER STATE
     TO WHICH IT IS ADDRESSED, BUT SHALL LEAVE TO THE NATIONAL AUTHORITIES THE
     CHOICE OF FORM AND METHODS.”
18   IT IS CLEAR FROM THAT PROVISION THAT STATES TO WHICH A DIRECTIVE IS
     ADDRESSED ARE UNDER AN OBLIGATION TO ACHIEVE A RESULT, WHICH MUST BE
     FULFILLED BEFORE THE EXPIRY OF THE PERIOD LAID DOWN BY THE DIRECTIVE
     ITSELF.
19   IT FOLLOWS THAT WHEREVER A DIRECTIVE IS CORRECTLY IMPLEMENTED, ITS EFFECTS
     EXTEND TO INDIVIDUALS THROUGH THE MEDIUM OF THE IMPLEMENTING MEASURES
     ADOPTED BY THE MEMBER STATE CONCERNED (JUDGMENT OF 6 MAY 1980 IN CASE
     102/79 COMMISSION V BELGIUM (1980) ECR 1473).
20   HOWEVER, SPECIAL PROBLEMS ARISE WHERE A MEMBER STATE HAS FAILED TO

                                                                                   38
     IMPLEMENT A DIRECTIVE CORRECTLY AND, MORE PARTICULARLY, WHERE THE
     PROVISIONS OF THE DIRECTIVE HAVE NOT BEEN IMPLEMENTED BY THE END OF THE
     PERIOD PRESCRIBED FOR THAT PURPOSE.
21   IT FOLLOWS FROM WELL-ESTABLISHED CASE-LAW OF THE COURT AND, MOST RECENTLY,
     FROM THE JUDGMENT OF 5 APRIL 1979 IN CASE 148/78 PUBBLICO MINISTERO V RATTI
     (1979) ECR 1629, THAT WHILST UNDER ARTICLE 189 REGULATIONS ARE DIRECTLY
     APPLICABLE AND, CONSEQUENTLY, BY THEIR NATURE CAPABLE OF PRODUCING DIRECT
     EFFECTS, THAT DOES NOT MEAN THAT OTHER CATEGORIES OF MEASURES COVERED BY
     THAT ARTICLE CAN NEVER PRODUCE SIMILAR EFFECTS.
22   IT WOULD BE INCOMPATIBLE WITH THE BINDING EFFECT WHICH ARTICLE 189 ASCRIBES
     TO DIRECTIVES TO EXCLUDE IN PRINCIPLE THE POSSIBILITY OF THE OBLIGATIONS
     IMPOSED BY THEM BEING RELIED ON BY PERSONS CONCERNED.
23   PARTICULARLY IN CASES IN WHICH THE COMMUNITY AUTHORITIES HAVE, BY MEANS OF
     A DIRECTIVE, PLACED MEMBER STATES UNDER A DUTY TO ADOPT A CERTAIN COURSE OF
     ACTION, THE EFFECTIVENESS OF SUCH A MEASURE WOULD BE DIMINISHED IF PERSONS
     WERE PREVENTED FROM RELYING UPON IT IN PROCEEDINGS BEFORE A COURT AND
     NATIONAL COURTS WERE PREVENTED FROM TAKING IT INTO CONSIDERATION AS AN
     ELEMENT OF COMMUNITY LAW.
24   CONSEQUENTLY, A MEMBER STATE WHICH HAS NOT ADOPTED THE IMPLEMENTING
     MEASURES REQUIRED BY THE DIRECTIVE WITHIN THE PRESCRIBED PERIOD MAY NOT
     PLEAD, AS AGAINST INDIVIDUALS, ITS OWN FAILURE TO PERFORM THE OBLIGATIONS
     WHICH THE DIRECTIVE ENTAILS.
25   THUS, WHEREVER THE PROVISIONS OF A DIRECTIVE APPEAR, AS FAR AS THEIR
     SUBJECT-MATTER IS CONCERNED, TO BE UNCONDITIONAL AND SUFFICIENTLY PRECISE,
     THOSE PROVISIONS MAY, IN THE ABSENCE OF IMPLEMENTING MEASURES ADOPTED
     WITHIN THE PRESCRIBED PERIOD, BE RELIED UPON AS AGAINST ANY NATIONAL
     PROVISION WHICH IS INCOMPATIBLE WITH THE DIRECTIVE OR IN SO FAR AS THE
     PROVISIONS DEFINE RIGHTS WHICH INDIVIDUALS ARE ABLE TO ASSERT AGAINST THE
     STATE.
26   THE QUESTION PUT TO THE COURT BY THE FINANZGERICHT SEEKS TO DETERMINE
     WHETHER ARTICLE 13 B (D) 1 OF THE DIRECTIVE MAY BE CONSIDERED TO BE OF SUCH
     A NATURE. UNDER THE TERMS OF THAT PROVISION „MEMBER STATES SHALL EXEMPT THE
     FOLLOWING UNDER CONDITIONS WHICH THEY SHALL LAY DOWN FOR THE PURPOSE OF
     ENSURING THE CORRECT AND STRAIGHTFORWARD APPLICATION OF THE EXEMPTIONS AND
     OF PREVENTING ANY POSSIBLE EVASION, AVOIDANCE OR ABUSE :... (D) THE
     FOLLOWING TRANSACTIONS: 1. THE GRANTING AND THE NEGOTIATION OF CREDIT …”
     THE SCHEME OF THE DIRECTIVE AND THE CONTEXT OF ARTICLE 13
27   INASMUCH AS IT SPECIFIES THE EXEMPT SERVICE AND THE PERSON ENTITLED TO THE
     EXEMPTION, THE PROVISION, TAKEN BY ITSELF, IS SUFFICIENTLY PRECISE TO BE
     RELIED UPON BY AN INDIVIDUAL AND APPLIED BY A COURT. HOWEVER, IT REMAINS TO
     BE CONSIDERED WHETHER THE RIGHT TO EXEMPTION WHICH IT CONFERS MAY BE
     CONSIDERED TO BE UNCONDITIONAL, HAVING REGARD TO THE GENERAL SCHEME OF THE
     DIRECTIVE, TO THE CONTEXT IN WHICH ARTICLE 13 IS PLACED AND ALSO TO THE
     PARTICULAR CHARACTERISTICS OF THE SYSTEM OF TAXATION WITHIN WHICH THE
     EXEMPTION IS TO APPLY.
28   WITH REGARD TO THE GENERAL SCHEME OF THE DIRECTIVE, THE FIRST ARGUMENT TO
     BE CONSIDERED IS THAT BASED ON THE FACT THAT THE PROVISION REFERRED TO BY
     THE NATIONAL COURT IS AN INTEGRAL PART OF A HARMONIZING DIRECTIVE WHICH IN
     VARIOUS RESPECTS RESERVES TO THE MEMBER STATES A MARGIN OF DISCRETION
     ENTAILING POWERS AND OPTIONS.
29   WHILST THE SIXTH DIRECTIVE UNDOUBTEDLY CONFERS UPON THE MEMBER STATES
     VARYING DEGRESS OF DISCRETION AS REGARDS IMPLEMENTING CERTAIN OF ITS
     PROVISIONS, INDIVIDUALS MAY NOT FOR THAT REASON BE DENIED THE RIGHT TO RELY
     ON ANY PROVISIONS WHICH OWING TO THEIR PARTICULAR SUBJECT-MATTER ARE
     CAPABLE OF BEING SEVERED FROM THE GENERAL BODY OF PROVISIONS AND APPLIED
     SEPARATELY. THIS MINIMUM GUARANTEE FOR PERSONS ADVERSELY AFFECTED BY THE
     FAILURE TO IMPLEMENT THE DIRECTIVE IS A CONSEQUENCE OF THE BINDING NATURE

                                                                                   39
     OF THE OBLIGATION IMPOSED ON THE MEMBER STATES BY THE THIRD PARAGRAPH OF
     ARTICLE 189 OF THE TREATY. THAT OBLIGATION WOULD BE RENDERED TOTALLY
     INEFFECTUAL IF THE MEMBER STATES WERE PERMITTED TO ANNUL, AS THE RESULT OF
     THEIR INACTIVITY, EVEN THOSE EFFECTS WHICH CERTAIN PROVISIONS OF A
     DIRECTIVE ARE CAPABLE OF PRODUCING BY VIRTUE OF THEIR SUBJECT-MATTER.
30   CONSEQUENTLY, THE GENERAL NATURE OF THE DIRECTIVE IN QUESTION OR THE
     DISCRETION WHICH, IN OTHER AREAS, IT LEAVES TO THE MEMBER STATES MAY NOT BE
     RELIED UPON IN ORDER TO DENY ANY EFFECT TO THOSE PROVISIONS WHICH IN VIEW
     OF THEIR SUBJECT-MATTER MAY BE RELIED UPON TO GOOD PURPOSE BEFORE A COURT
     EVEN THOUGH THE DIRECTIVE AS A WHOLE HAS NOT BEEN IMPLEMENTED.
31   WITH REGARD TO THE CONTEXT IN WHICH ARTICLE 13 IS PLACED, THE FINANZAMT,
     SUPPORTED BY THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY AND THE
     FRENCH REPUBLIC, DRAWS PARTICULAR ATTENTION TO THE MARGIN OF DISCRETION
     RESERVED TO THE MEMBER STATES BY THE INTRODUCTORY SENTENCE OF PART B OF
     THAT ARTICLE, WHERE IT IS STATED THAT THE EXEMPTION IS TO BE GRANTED BY THE
     MEMBER STATES „UNDER CONDITIONS WHICH THEY SHALL LAY DOWN FOR THE PURPOSE
     OF ENSURING THE CORRECT AND STRAIGHTFORWARD APPLICATION OF THE EXEMPTIONS
     AND OF PREVENTING ANY POSSIBLE EVASION, AVOIDANCE OR ABUSE „. IT IS
     SUBMITTED THAT IN VIEW OF THAT RIDER THE EXEMPTION PROVISIONS CONTAINED IN
     ARTICLE 13 ARE NOT UNCONDITIONAL; CONSEQUENTLY, THEY MAY NOT BE RELIED UPON
     UNTIL THE CONDITIONS REFERRED TO HAVE BEEN LAID DOWN.
     …[argument expounded]
36   IN SUPPORT OF THE VIEW THAT THE PROVISION IN QUESTION MAY NOT BE RELIED
     UPON, THE FINANZAMT, THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY AND
     THE FRENCH REPUBLIC ALSO REFER TO PART C OF ARTICLE 13, WHICH READS AS
     FOLLOWS: „OPTIONS. MEMBER STATES MAY ALLOW TAXPAYERS A RIGHT OF OPTION FOR
     TAXATION IN CASES OF :... (B) THE TRANSACTIONS COVERED IN B (D)... MEMBER
     STATES MAY RESTRICT THE SCOPE OF THIS RIGHT OF OPTION AND SHALL FIX THE
     DETAILS OF ITS USE”.
37   THE GERMAN GOVERNMENT EMPHASIZES THAT THE OPTION PROVIDED FOR BY THAT
     PROVISION IS „RESERVED TO THE MEMBER STATES „AND THAT THE FEDERAL REPUBLIC
     OF GERMANY EXERCISED THAT POWER ONLY IN ARTICLE 9 OF THE IMPLEMENTING LAW.
     IT IS NOT PERMISSIBLE TO PRE-EMPT THAT LEGAL OPTION. THE GERMAN GOVERNMENT
     CLAIMS THAT IN VIEW OF THAT POWER RESERVED TO THE MEMBER STATES AND OF THE
     POSSIBILITY WHICH IT ENTAILS OF RESTRICTING THE SCOPE OF THE RIGHT OF
     OPTION AND OF FIXING THE DETAILS OF ITS USE, THE PROVISION RELIED UPON BY
     THE PLAINTIFF IN THE MAIN ACTION MAY NOT BE CONSIDERED AS CONSTITUTING AN
     UNCONDITIONAL RULE.
38   THAT LINE OF ARGUMENT IS BASED ON AN INCORRECT UNDERSTANDING OF THE MEANING
     OF ARTICLE 13 C. BY VIRTUE OF THE POWER CONFERRED UPON THEM BY THAT
     PROVISION THE MEMBER STATE MAY ALLOW PERSONS ENTITLED TO EXEMPTIONS
     PROVIDED FOR BY THE DIRECTIVE TO WAIVE THEIR EXEMPTIONS IN ALL CASES OR
     WITHIN CERTAIN LIMITS OR SUBJECT TO CERTAIN DETAILED RULES. HOWEVER, IT
     SHOULD BE EMPHASIZED THAT, UNDER THE ABOVE-MENTIONED PROVISION, WHERE A
     MEMBER STATE MAKES USE OF THAT POWER, THE EXERCISE OF THE OPTION CONFERRED
     SUBJECT TO THOSE CONDITIONS IS A MATTER FOR THE TAXPAYER ALONE AND NOT FOR
     THE STATE.
39   IT FOLLOWS THAT ARTICLE 13 C DOES NOT IN ANY WAY CONFER UPON THE MEMBER
     STATES THE RIGHT TO PLACE CONDITIONS ON OR TO RESTRICT IN ANY MANNER
     WHATSOEVER THE EXEMPTIONS PROVIDED FOR BY PART B. IT MERELY RESERVES THE
     RIGHT TO THE MEMBER STATES TO ALLOW, TO A GREATER OR LESSER DEGREE, PERSONS
     ENTITLED TO THOSE EXEMPTIONS TO OPT FOR TAXATION THEMSELVES, IF THEY
     CONSIDER THAT IT IS IN THEIR INTEREST TO DO SO.
40   CONSEQUENTLY, THE PROVISION RELIED UPON BY THE FINANZAMT AND THE GOVERNMENT
     OF THE FEDERAL REPUBLIC OF GERMANY IN ORDER TO SHOW THAT THE EXEMPTION IS
     CONDITIONAL IS NOT RELEVANT TO THE POSITION OF A TAXPAYER WHO HAS CLEARLY
     DEMONSTRATED HIS INTENTION TO TAKE ADVANTAGE OF THE EXEMPTION CONFERRED BY
     THE DIRECTIVE, SINCE THE EXPRESSION OF THAT INTENTION NECESSARILY EXCLUDES

                                                                                   40
    THE EXERCISE OF THE RIGHT OF OPTION ENVISAGED BY ARTICLE 13 C.
    THE SYSTEM OF VALUE-ADDED TAX
    …
    COSTS
    …
    ON THOSE GROUNDS,
    THE COURT
    IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE FINANZGERICHT MUNSTER BY
    ORDER OF 27 NOVEMBER 1980, HEREBY RULES:
    AS FROM 1 JANUARY 1979 IT WAS POSSIBLE FOR THE PROVISION CONCERNING THE
    EXEMPTION FROM TURNOVER TAX OF TRANSACTIONS CONSISTING OF THE NEGOTIATION
    OF CREDIT CONTAINED IN ARTICLE 13 B (D) 1 OF THE SIXTH COUNCIL DIRECTIVE
    77/388/EEC OF 17 MAY 1977 ON THE HARMONIZATION OF THE LAWS OF THE MEMBER
    STATES RELATING TO TURNOVER TAXES - COMMON SYSTEM OF VALUE-ADDED TAX:
    UNIFORM BASIS OF ASSESSMENT TO BE RELIED UPON, IN THE ABSENCE OF THE
    IMPLEMENTATION OF THAT DIRECTIVE, BY A CREDIT NEGOTIATOR WHERE HE HAD
    REFRAINED FROM PASSING THAT TAX ON TO PERSONS FOLLOWING HIM IN THE CHAIN OF
    SUPPLY, AND THE STATE COULD NOT CLAIM, AS AGAINST HIM, THAT IT HAD FAILED
    TO IMPLEMENT THE DIRECTIVE.


    Case 11
    ECJ, Judgment of 10 April 1984. Dorit Harz v Deutsche Tradax GmbH. Reference for a
    preliminary ruling: Arbeitsgericht Hamburg - Germany. Equal treatment for men and
    women - Access to employment. Case 79/83. European Court reports 1984 Page 01921
    …
    IN CASE 79/83
   BY ORDER OF 5 JULY 1982, WHICH WAS RECEIVED AT THE COURT ON 3 MAY 1983, THE
    ARBEITSGERICHT (LABOUR COURT) HAMBURG REFERRED TO THE COURT FOR A
    PRELIMINARY RULING PURSUANT TO ARTICLE 177 OF THE EEC TREATY SEVERAL
    QUESTIONS ON THE INTERPRETATION OF COUNCIL DIRECTIVE NO 76/207/EEC OF 9
    FEBRUARY 1976 ON THE IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT FOR
    MEN AND WOMEN AS REGARDS ACCESS TO EMPLOYMENT, VOCATIONAL TRAINING AND
    PROMOTION, AND WORKING CONDITIONS (OFFICIAL JOURNAL 1976, L 39, P. 40).
   THOSE QUESTIONS WERE RAISED IN THE COURSE OF PROCEEDINGS BETWEEN DORIT
    HARZ, A GRADUATE IN BUSINESS STUDIES, AND DEUTSCHE TRADAX GMBH. IT APPEARS
    FROM THE GROUNDS OF THE ORDER FOR REFERENCE THAT THE ARBEITSGERICHT
    CONSIDERS THAT THE DEFENDANT UNDERTAKING PRACTISED SEX DISCRIMINATION IN
    THE RECRUITMENT PROCEDURE COMMENCED BY IT IN WHICH MRS HARZ WAS A
    CANDIDATE.
   IN THE ARBEITSGERICHT’S VIEW, UNDER GERMAN LAW, THE ONLY SANCTION FOR
    DISCRIMINATION IN A RECRUITMENT PROCEDURE IS COMPENSATION FOR „ „, NAMELY
    THE LOSS INCURRED BY CANDIDATES WHO ARE VICTIMS OF DISCRIMINATION AS A
    RESULT OF THEIR BELIEF THAT THERE WOULD BE NO DISCRIMINATION IN THE
    ESTABLISHMENT OF THE EMPLOYMENT RELATIONSHIP. SUCH COMPENSATION IS PROVIDED
    FOR IN PARAGRAPH 611A (2) OF THE BURGERLICHES GESETZBUCH.
   UNDER THAT PROVISION, IN THE EVENT OF DISCRIMINATION REGARDING ACCESS TO
    EMPLOYMENT, THE EMPLOYER IS LIABLE FOR „DAMAGES IN RESPECT OF THE LOSS
    INCURRED BY THE WORKER AS A RESULT OF HIS RELIANCE ON THE EXPECTATION THAT
    THE ESTABLISHMENT OF THE EMPLOYMENT RELATIONSHIP WOULD NOT BE PRECLUDED BY
    SUCH A BREACH (OF THE PRINCIPLE OF EQUAL TREATMENT) „. THAT PROVISION
    PURPORTS TO IMPLEMENT COUNCIL DIRECTIVE NO 76/207.
   CONSEQUENTLY THE ARBEITSGERICHT FOUND THAT, UNDER GERMAN LAW, IT COULD
                                                                                         41
     ORDER THE PAYMENT ONLY OF MINIMAL COMPENSATION, OF DM 2.31 IN THE CASE IN
     POINT, IN RESPECT OF EXPENSES INCURRED BY MRS HARZ IN RELATION TO HER
     APPLICATION. IT CONSIDERED THAT SUCH COMPENSATION WAS NOT SUFFICIENT TO
     ENSURE COMPLIANCE WITH THE COMMUNITY DIRECTIVE, SINCE IT WOULD NOT SERVE TO
     ENSURE THAT EMPLOYERS CONDUCT THEMSELVES IN CONFORMITY WITH THE LAW.
    IN ORDER TO DETERMINE THE RULES OF COMMUNITY LAW APPLICABLE IN THE EVENT OF
     DISCRIMINATION REGARDING ACCESS TO EMPLOYMENT, THE ARBEITSGERICHT REFERRED
     THE FOLLOWING QUESTIONS TO THE COURT OF JUSTICE :
     … [questions]
    THOSE QUESTIONS ARE INTENDED PRIMARILY TO ESTABLISH WHETHER DIRECTIVE NO
     76/207 REQUIRES MEMBER STATES TO LAY DOWN LEGAL CONSEQUENCES OR SPECIFIC
     SANCTIONS IN THE EVENT OF DISCRIMINATION REGARDING ACCESS TO EMPLOYMENT
     (QUESTIONS 1 TO 4) AND WHETHER INDIVIDUALS MAY, WHERE APPROPRIATE, RELY ON
     THE PROVISIONS OF THE DIRECTIVE BEFORE THE NATIONAL COURTS WHERE THE
     DIRECTIVE HAS NOT BEEN TRANSPOSED INTO THE NATIONAL LEGAL ORDER WITHIN THE
     PERIODS PRESCRIBED. (QUESTION 5).
     (A) QUESTION 1
    IN ITS FIRST QUESTION THE ARBEITSGERICHT ASKS ESSENTIALLY WHETHER DIRECTIVE
     NO 76/207 REQUIRES DISCRIMINATION ON GROUNDS OF SEX IN THE MATTER OF ACCESS
     TO EMPLOYMENT TO BE PENALIZED BY AN OBLIGATION, IMPOSED ON AN EMPLOYER WHO
     IS GUILTY OF DISCRIMINATION, TO CONCLUDE A CONTRACT OF EMPLOYMENT WITH THE
     CANDIDATE WHO WAS THE VICTIM OF DISCRIMINATION.
    ACCORDING TO THE ARBEITSGERICHT THE SANCTIONS WHICH MAY BE ENVISAGED IN
     ORDER TO ENFORCE THE PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN
     REGARDING ACCESS TO EMPLOYMENT ARE AN AUTOMATIC RIGHT TO BE GIVEN A POST OR
     A RIGHT TO DAMAGES, WHICH IN GERMAN LAW ARE CLASSIFIED AS COMPENSATION FOR
     A „POSITIVE INTEREST” (ERSATZ DES POSITIVEN INTERESSES). THE
     ARBEITSGERICHT CONSIDERS THAT DIRECTIVE NO 76/207 HAS NOT YET BEEN
     TRANSPOSED INTO GERMAN LAW INASMUCH AS THE SANCTION PROVIDED FOR IN
     PARAGRAPH 611A (2) OF THE BURGERLICHES GESETZBUCH IS NOT, IN ITS VIEW,
     SUFFICENT IN THAT RESPECT.
   ACCORDING TO THE PLAINTIFF IN THE MAIN ACTION, BY RESTRICTING THE RIGHT TO
     COMPENSATION SOLELY TO „VERTRAUENSSCHADEN „, PARAGRAPH 611A (2) OF THE
     BURGERLICHES GESETZBUCH EXCLUDED THE POSSIBILITIES OF COMPENSATION AFFORDED
     BY THE GENERAL RULES OF LAW. DIRECTIVE NO 76/207 REQUIRES MEMBER STATES TO
     INTRODUCE APPROPRIATE MEASURES WITH A VIEW TO AVOIDING DISCRIMINATION IN
     THE FUTURE. IT SHOULD, THEREFORE, AT LEAST BE ACCEPTED THAT PARAGRAPH 611A
     (2) MUST BE LEFT OUT OF ACCOUNT. THE RESULT OF THAT WOULD BE THAT THE
     EMPLOYER WOULD BE REQUIRED TO CONCLUDE A CONTRACT OF EMPLOYMENT WITH THE
     CANDIDATE DISCRIMINATED AGAINST OR, IF THAT PROVES IMPOSSIBLE OR OUT OF THE
     QUESTION IN THE PARTICULAR CASE, AT LEAST TO PAY HIM APPRECIABLE DAMAGES.
     …[arguments put forward]
ACCORDING TO THE THIRD PARAGRAPH OF ARTICLE 189: „A DIRECTIVE SHALL BE BINDING,
     AS TO THE RESULT TO BE ACHIEVED, UPON EACH MEMBER STATE TO WHICH IT IS
     ADDRESSED, BUT SHALL LEAVE TO THE NATIONAL AUTHORITIES THE CHOICE OF FORM
     AND METHODS“. ALTHOUGH THAT PROVISION LEAVES MEMBER STATES FREE TO CHOOSE
     THE WAYS AND MEANS OF ENSURING THAT THE DIRECTIVE IS IMPLEMENTED, THAT
     FREEDOM DOES NOT AFFECT THE OBLIGATION, IMPOSED ON ALL THE MEMBER STATES TO
     WHICH THE DIRECTIVE IS ADDRESSED, TO ADOPT, WITHIN THE FRAMEWORK OF THEIR
     NATIONAL LEGAL SYSTEMS, ALL THE MEASURES NECESSARY TO ENSURE THAT THE
     DIRECTIVE IS FULLY EFFECTIVE, IN ACCORDANCE WITH THE OBJECTIVE WHICH IT
     PURSUES.
   IT IS THEREFORE NECESSARY TO EXAMINE DIRECTIVE NO 76/207 IN ORDER TO
     DETERMINE WHETHER IT REQUIRES MEMBER STATES TO PROVIDE FOR SPECIFIC LEGAL
     CONSEQUENCES OR SANCTIONS IN RESPECT OF A BREACH OF THE PRINCIPLE OF EQUAL
     TREATMENT REGARDING ACCESS TO EMPLOYMENT.
   THE OBJECT OF THAT DIRECTIVE IS TO IMPLEMENT IN THE MEMBER STATES THE
                                                                                   42
     PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN, IN PARTICULAR BY GIVING
     MALE AND FEMALE WORKERS REAL EQUALITY OF OPPORTUNITY AS REGARDS ACCESS TO
     EMPLOYMENT. WITH THAT END IN VIEW. ARTICLE 2 DEFINES THE PRINCIPLE OF EQUAL
     TREATMENT AND ITS LIMITS, WHILE ARTICLE 3 (1) SETS OUT THE SCOPE OF THE
     PRINCIPLE SPECIFICALLY AS REGARDS ACCESS TO EMPLOYMENT. ARTICLE 3 (2) (A)
     PROVIDES THAT MEMBER STATES ARE TO TAKE THE MEASURES NECESSARY TO ENSURE
     THAT ANY LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS CONTRARY TO THE
     PRINCIPLE OF EQUAL TREATMENT ARE ABOLISHED.
   ARTICLE 6 REQUIRES MEMBER STATES TO INTRODUCE INTO THEIR NATIONAL LEGAL
     SYSTEMS SUCH MEASURES AS ARE NECESSARY TO ENABLE ALL PERSONS WHO CONSIDER
     THEMSELVES WRONGED BY DISCRIMINATION „TO PURSUE THEIR CLAIMS BY JUDICIAL
     PROCESS“. IT FOLLOWS FROM THAT PROVISION THAT MEMBER STATES ARE REQUIRED TO
     ADOPT MEASURES WHICH ARE SUFFICIENTLY EFFECTIVE TO ACHIEVE THE OBJECTIVE OF
     THE DIRECTIVE AND TO ENSURE THAT THOSE MEASURES MAY IN FACT BE RELIED ON
     BEFORE THE NATIONAL COURTS BY THE PERSONS CONCERNED. SUCH MEASURES MAY
     INCLUDE, FOR EXAMPLE, PROVISIONS REQUIRING THE EMPLOYER TO OFFER A POST TO
     THE CANDIDATE DISCRIMINATED AGAINST OR GIVING THE CANDIDATE ADEQUATE
     FINANCIAL COMPENSATION, REINFORCED WHERE NECESSARY BY A SYSTEM OF FINES.
     HOWEVER THE DIRECTIVE DOES NOT PRESCRIBE A SPECIFIC SANCTION; IT LEAVES
     MEMBER STATES FREE TO CHOOSE BETWEEN THE DIFFERENT SOLUTIONS SUITABLE FOR
     ACHIEVING ITS OBJECTIVE.
   THE REPLY TO THE FIRST QUESTION SHOULD THEREFORE BE THAT DIRECTIVE NO
     76/207 DOES NOT REQUIRE DISCRIMINATION ON GROUNDS OF SEX REGARDING ACCESS
     TO EMPLOYMENT TO BE MADE THE SUBJECT OF A SANCTION BY WAY OF AN OBLIGATION
     IMPOSED UPON THE EMPLOYER WHO IS THE AUTHOR OF THE DISCRIMINATION TO
     CONCLUDE A CONTRACT OF EMPLOYMENT WITH THE CANDIDATE DISCRIMINATED AGAINST.
     …
     (C) QUESTIONS 3, 4 AND 5
IN ITS THIRD AND FOURTH QUESTIONS THE ARBEITSGERICHT ESSENTIALLY ASKS WHETHER IT
     IS POSSIBLE TO INFER FROM THE DIRECTIVE THAT A FINANCIALLY APPRECIABLE
     SANCTION IS NECESSARY. THE FIFTH QUESTION ASKS WHETHER THE DIRECTIVE, AS
     PROPERLY INTERPRETED, MAY BE RELIED ON BEFORE NATIONAL COURTS BY PERSONS
     WHO HAVE SUFFERED INJURY.
   IN THAT RESPECT IT MUST BE REMARKED THAT IT IS IMPOSSIBLE TO ESTABLISH REAL
     EQUALITY OF OPPORTUNITY WITHOUT AN APPROPRIATE SYSTEM OF SANCTIONS. THAT
     FOLLOWS NOT ONLY FROM THE ACTUAL PURPOSE OF THE DIRECTIVE BUT MORE
     SPECIFICALLY FROM ARTICLE 6 THEREOF WHICH, BY GRANTING APPLICANTS FOR A
     POST WHO HAVE BEEN DISCRIMINATED AGAINST RECOURSE TO THE COURTS,
     ACKNOWLEDGES THAT THOSE CANDIDATES HAVE RIGHTS OF WHICH THEY MAY AVAIL
     THEMSELVES BEFORE THE COURTS.
   ALTHOUGH, AS HAS BEEN STATED IN THE REPLY TO THE FIRST QUESTION, FULL
     IMPLEMENTATION OF THE DIRECTIVE DOES NOT REQUIRE A SPECIFIC FORM OF
     SANCTION FOR BREACH OF THE PROHIBITION OF DISCRIMINATION, IT DOES ENTAIL
     THAT THAT SANCTION BE SUCH AS TO GUARANTEE REAL AND EFFECTIVE JUDICIAL
     PROTECTION. MOREOVER IT MUST ALSO HAVE A REAL DETERRENT EFFECT ON THE
     EMPLOYER. IT FOLLOWS THAT WHERE A MEMBER STATE CHOOSES TO PENALIZE THE
     BREACH OF THE PROHIBITION OF DISCRIMINATION BY THE AWARD OF COMPENSATION,
     THAT COMPENSATION MUST IN ANY EVENT BE ADEQUATE IN RELATION TO THE DAMAGE
     SUSTAINED. 24 IN CONSEQUENCE NATIONAL PROVISIONS LIMITING THE RIGHT TO
     COMPENSATION OF PERSONS WHO HAVE BEEN DISCRIMINATED AGAINST AS REGARDS
     ACCESS TO EMPLOYMENT TO A PURELY NOMINAL AMOUNT, SUCH AS FOR EXAMPLE THE
     REMBURSEMENT OF EXPENSES INCURRED IN CONNEXION WITH THEIR APPLICATION,
     WOULD NOT SATISFY THE REQUIREMENTS OF AN EFFECTIVE TRANSPOSITION OF THE
     DIRECTIVE.
   THE NATURE OF THE SANCTIONS PROVIDED FOR IN THE FEDERAL REPUBLIC OF GERMANY
     IN RESPECT OF DISCRIMINATION REGARDING ACCESS TO EMPLOYMENT AND IN
     PARTICULAR THE QUESTION WHETHER THE RULE IN PARAGRAPH 611A (2) OF THE
     BURGERLICHES GESETZBUCH EXCLUDES THE POSSIBILITY OF COMPENSATION ON THE

                                                                                   43
     BASIS OF THE GENERAL RULES OF LAW WERE THE SUBJECT OF LENGTHY DISCUSSION
     BEFORE THE COURT. THE GERMAN GOVERNMENT MAINTAINED IN THE ORAL PROCEDURE
     THAT THAT PROVISION DID NOT NECESSARILY EXCLUDE THE APPLICATION OF GENERAL
     RULES OF LAW REGARDING COMPENSATION. IT IS FOR THE NATIONAL COURT ALONE TO
     RULE ON THAT QUESTION CONCERNING THE INTERPRETATION OF ITS NATIONAL LAW.
   HOWEVER, THE MEMBER STATES’ OBLIGATION ARISING FROM A DIRECTIVE TO ACHIEVE
     THE RESULT ENVISAGED BY THE DIRECTIVE AND THEIR DUTY UNDER ARTICLE 5 OF THE
     TREATY TO TAKE ALL APPROPRIATE MEASURES, WHETHER GENERAL OR PARTICULAR, TO
     ENSURE THE FULFILMENT OF THAT OBLIGATION, IS BINDING ON ALL THE AUTHORITIES
     OF MEMBER STATES INCLUDING, FOR MATTERS WITHIN THEIR JURISDICTION, THE
     COURTS. IT FOLLOWS THAT, IN APPLYING NATIONAL LAW AND IN PARTICULAR THE
     PROVISIONS OF A NATIONAL LAW SPECIFICALLY INTRODUCED IN ORDER TO IMPLEMENT
     DIRECTIVE NO 76/207, THE NATIONAL COURT IS REQUIRED TO INTERPRET ITS
     NATIONAL LAW IN THE LIGHT OF THE WORDING AND THE PURPOSE OF THE DIRECTIVE
     IN ORDER TO ACHIEVE THE RESULT REFERRED TO IN THE THIRD PARAGRAPH OF
     ARTICLE 189.
   ON THE OTHER HAND, AS THE ABOVE CONSIDERATIONS SHOW, THE DIRECTIVE DOES NOT
     INCLUDE ANY UNCONDITIONAL AND SUFFICIENTLY PRECISE OBLIGATION AS REGARDS
     SANCTIONS FOR DISCRIMINATION WHICH, IN THE ABSENCE OF IMPLEMENTING MEASURES
     ADOPTED IN GOOD TIME, MAY BE RELIED ON BY INDIVIDUALS IN ORDER TO OBTAIN
     SPECIFIC COMPENSATION UNDER THE DIRECTIVE, WHERE THAT IS NOT PROVIDED FOR
     OR PERMITTED UNDER NATIONAL LAW.
   IT SHOULD, HOWEVER, BE POINTED OUT TO THE NATIONAL COURT THAT ALTHOUGH
     DIRECTIVE NO 76/207/EEC, FOR THE PURPOSE OF IMPOSING A SANCTION FOR THE
     BREACH OF THE PROHIBITION OF DISCRIMINATION, LEAVES THE MEMBER STATES FREE
     TO CHOOSE BETWEEN THE DIFFERENT SOLUTIONS SUITABLE FOR ACHIEVING ITS
     OBJECTIVE, IT NEVERTHELESS REQUIRES THAT IF A MEMBER STATE CHOOSES TO
     PENALIZE BREACHES OF THAT PROHIBITION BY THE AWARD OF COMPENSATION, THEN IN
     ORDER TO ENSURE THAT IT IS EFFECTIVE AND THAT IT HAS A DETERRENT EFFECT,
     THAT COMPENSATION MUST IN ANY EVENT BE ADEQUATE IN RELATION TO THE DAMAGE
     SUSTAINED AND MUST THEREFORE AMOUNT TO MORE THAN PURELY NOMINAL
     COMPENSATION SUCH AS, FOR EXAMPLE, THE REIMBURSEMENT ONLY OF THE EXPENSES
     INCURRED IN CONNECTION WITH THE APPLICATION. IT IS FOR THE NATIONAL COURT
     TO INTERPRET AND APPLY THE LEGISLATION ADOPTED FOR THE IMPLEMENTATION OF
     THE DIRECTIVE IN CONFORMITY WITH THE REQUIREMENTS OF COMMUNITY LAW, IN SO
     FAR AS IT IS GIVEN DISCRETION TO DO SO UNDER NATIONAL LAW.
     COSTS
     …
     ON THOSE GROUNDS, THE COURT IN ANSWER TO THE QUESTIONS REFERRED TO IT BY
     THE ARBEITSGERICHT HAMBURG BY ORDER OF 5 JULY 1982, HEREBY RULES :
     1. DIRECTIVE NO 76/207/EEC DOES NOT REQUIRE DISCRIMINATION ON GROUNDS OF
     SEX REGARDING ACCESS TO EMPLOYMENT TO BE MADE THE SUBJECT OF A SANCTION BY
     WAY OF AN OBLIGATION IMPOSED ON THE EMPLOYER WHO IS THE AUTHOR OF THE
     DISCRIMINATION TO CONCLUDE A CONTRACT OF EMPLOYMENT WITH THE CANDIDATE
     DISCRIMINATED AGAINST.
     2. AS REGARDS SANCTIONS FOR ANY DISCRIMINATION WHICH MAY OCCUR, THE
     DIRECTIVE DOES NOT INCLUDE ANY UNCONDITIONAL AND SUFFICIENTLY PRECISE
     OBLIGATION WHICH, IN THE ABSENCE OF IMPLEMENTING MEASURES ADOPTED WITHIN
     THE PRESCRIBED TIME-LIMITS, MAY BE RELIED ON BY AN INDIVIDUAL IN ORDER TO
     OBTAIN SPECIFIC COMPENSATION UNDER THE DIRECTIVE, WHERE THAT IS NOT
     PROVIDED FOR OR PERMITTED UNDER NATIONAL LAW.
     3. ALTHOUGH DIRECTIVE NO 76/207/EEC, FOR THE PURPOSE OF IMPOSING A SANCTION
     FOR THE BREACH OF THE PROHIBITION OF DISCRIMINATION, LEAVES THE MEMBER
     STATES FREE TO CHOOSE BETWEEN THE DIFFERENT SOLUTIONS SUITABLE FOR
     ACHIEVING ITS OBJECTIVE, IT NEVERTHELESS REQUIRES THAT IF A MEMBER STATE
     CHOOSES TO PENALIZE BREACHES OF THAT PROHIBITION BY THE AWARD OF
     COMPENSATION, THEN IN ORDER TO ENSURE THAT IT IS EFFECTIVE AND THAT IT HAS
     A DETERRENT EFFECT, THAT COMPENSATION MUST IN ANY EVENT BE ADEQUATE IN
                                                                                   44
    RELATION TO THE DAMAGE SUSTAINED AND MUST THEREFORE AMOUNT TO MORE THAN
    PURELY NOMINAL COMPENSATION SUCH AS, FOR EXAMPLE, THE REIMBURSEMENT ONLY OF
    THE EXPENSES INCURRED IN CONNECTION WITH THE APPLICATION. IT IS FOR THE
    NATIONAL COURT TO INTERPRET AND APPLY THE LEGISLATION ADOPTED FOR THE
    IMPLEMENTATION OF THE DIRECTIVE IN CONFORMITY WITH THE REQUIREMENTS OF
    COMMUNITY LAW, IN SO FAR AS IT IS GIVEN DISCRETION TO DO SO UNDER NATIONAL
    LAW.




    Case 12
    ECJ, Judgment of 26 February 1986. M. H. Marshall v Southampton and South-West
    Hampshire Area Health Authority (Teaching). Reference for a preliminary ruling:
    Court of Appeal (England) - United Kingdom. Equality of treatment for men and
    women - Conditions governing dismissal. Case 152/84. European Court reports 1986
    Page 00723
    …
    IN CASE 152/84
    …
1   BY AN ORDER OF 12 MARCH 1984, WHICH WAS RECEIVED AT THE COURT ON 19 JUNE
    1984, THE COURT OF APPEAL OF ENGLAND AND WALES REFERRED TO THE COURT FOR A
    PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS ON THE
    INTERPRETATION OF COUNCIL DIRECTIVE NO 76/207/EEC OF 9 FEBRUARY 1976 ON THE
    IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN AS
    REGARDS ACCESS TO EMPLOYMENT, VOCATIONAL TRAINING AND PROMOTION, AND
    WORKING CONDITIONS (OFFICIAL JOURNAL 1976, L 39, P. 40).
2   THE QUESTIONS WERE RAISED IN THE COURSE OF PROCEEDINGS BETWEEN MISS M. H.
    MARSHALL (HEREINAFTER REFERRED TO AS “THE APPELLANT”) AND SOUTHAMPTON AND
    SOUTH-WEST HAMPSHIRE AREA HEALTH AUTHORITY (TEACHING) (HEREINAFTER
    REFERRED TO AS “THE RESPONDENT”) CONCERNING THE QUESTION WHETHER THE
    APPELLANT’S DISMISSAL WAS IN ACCORDANCE WITH SECTION 6 (4) OF THE SEX
    DISCRIMINATION ACT 1975 AND WITH COMMUNITY LAW.
3   THE APPELLANT, WHO WAS BORN ON 4 FEBRUARY 1918, WAS EMPLOYED BY THE
    RESPONDENT FROM JUNE 1966 TO 31 MARCH 1980. FROM 23 MAY 1974 SHE WORKED
    UNDER A CONTRACT OF EMPLOYMENT AS SENIOR DIETICIAN.
4   ON 31 MARCH 1980, THAT IS TO SAY APPROXIMATELY FOUR WEEKS AFTER SHE HAD
    ATTAINED THE AGE OF 62, THE APPELLANT WAS DISMISSED, NOTWITHSTANDING THAT
    SHE HAD EXPRESSED HER WILLINGNESS TO CONTINUE IN THE EMPLOYMENT UNTIL SHE
    REACHED THE AGE OF 65, THAT IS TO SAY UNTIL 4 FEBRUARY 1983.
5   ACCORDING TO THE ORDER FOR REFERENCE, THE SOLE REASON FOR THE DISMISSAL WAS
    THE FACT THAT THE APPELLANT WAS A WOMAN WHO HAD PASSED “THE RETIREMENT AGE”
    APPLIED BY THE RESPONDENT TO WOMEN.
6   IN THAT RESPECT IT APPEARS FROM THE DOCUMENTS BEFORE THE COURT THAT THE
    RESPONDENT HAS FOLLOWED A GENERAL POLICY SINCE 1975 THAT “THE NORMAL
    RETIREMENT AGE WILL BE THE AGE AT WHICH SOCIAL SECURITY PENSIONS BECOME
    PAYABLE”. THE COURT OF APPEAL STATES THAT, ALTHOUGH THAT POLICY WAS NOT
    EXPRESSLY MENTIONED IN THE APPELLANT'S CONTRACT OF EMPLOYMENT, IT NONE THE
    LESS CONSTITUTED AN IMPLIED TERM THEREOF.
7   SECTIONS 27 (1) AND 28 (1) OF THE SOCIAL SECURITY ACT 1975, THE UNITED
    KINGDOM LEGISLATION GOVERNING PENSIONS, PROVIDE THAT STATE PENSIONS ARE TO
    BE GRANTED TO MEN FROM THE AGE OF 65 AND TO WOMEN FROM THE AGE OF 60.
    HOWEVER, THE LEGISLATION DOES NOT IMPOSE ANY OBLIGATION TO RETIRE AT THE
    AGE AT WHICH THE STATE PENSION BECOMES PAYABLE. WHERE AN EMPLOYEE CONTINUES
    IN EMPLOYMENT AFTER THAT AGE, PAYMENT OF THE STATE PENSION OR OF THE

                                                                                       45
     PENSION UNDER AN OCCUPATIONAL PENSION SCHEME IS DEFERRED.
8    HOWEVER, THE RESPONDENT WAS PREPARED, IN ITS ABSOLUTE DISCRETION, TO WAIVE
     ITS GENERAL RETIREMENT POLICY IN RESPECT OF A PARTICULAR INDIVIDUAL IN
     PARTICULAR CIRCUMSTANCES AND IT DID IN FACT WAIVE THAT POLICY IN RESPECT OF
     THE APPELLANT BY EMPLOYING HER FOR A FURTHER TWO YEARS AFTER SHE HAD
     ATTAINED THE AGE OF 60.
9    IN VIEW OF THE FACT THAT SHE SUFFERED FINANCIAL LOSS CONSISTING OF THE
     DIFFERENCE BETWEEN HER EARNINGS AS AN EMPLOYEE OF THE RESPONDENT AND HER
     PENSION AND SINCE SHE HAD LOST THE SATISFACTION SHE DERIVED FROM HER WORK,
     THE APPELLANT INSTITUTED PROCEEDINGS AGAINST THE RESPONDENT BEFORE AN
     INDUSTRIAL TRIBUNAL. SHE CONTENDED THAT HER DISMISSAL AT THE DATE AND FOR
     THE REASON INDICATED BY THE RESPONDENT CONSTITUTED DISCRIMINATORY TREATMENT
     BY THE RESPONDENT ON THE GROUND OF SEX AND, ACCORDINGLY, UNLAWFUL
     DISCRIMINATION CONTRARY TO THE SEX DISCRIMINATION ACT AND COMMUNITY LAW.
10   THE INDUSTRIAL TRIBUNAL DISMISSED THE APPELLANT’S CLAIM IN SO FAR AS IT WAS
     BASED ON INFRINGEMENT OF THE SEX DISCRIMINATION ACT, SINCE SECTION 6 (4) OF
     THAT ACT PERMITS DISCRIMINATION ON THE GROUND OF SEX WHERE IT ARISES OUT OF
     “PROVISION IN RELATION TO RETIREMENT”; THE INDUSTRIAL TRIBUNAL TOOK THE
     VIEW THAT THE RESPONDENT’S GENERAL POLICY CONSTITUTED SUCH PROVISION.
     HOWEVER, THE CLAIM THAT THE PRINCIPLE OF EQUALITY OF TREATMENT LAID DOWN BY
     DIRECTIVE NO 76/207 HAD BEEN INFRINGED WAS UPHELD BY THE INDUSTRIAL
     TRIBUNAL.
11   ON APPEAL TO THE EMPLOYMENT APPEAL TRIBUNAL THAT DECISION WAS CONFIRMED AS
     REGARDS THE FIRST POINT BUT WAS SET ASIDE AS REGARDS THE SECOND POINT ON
     THE GROUND THAT, ALTHOUGH THE DISMISSAL VIOLATED THE PRINCIPLE OF EQUALITY
     OF TREATMENT LAID DOWN IN THE AFOREMENTIONED DIRECTIVE, AN INDIVIDUAL COULD
     NOT RELY UPON SUCH VIOLATION IN PROCEEDINGS BEFORE A UNITED KINGDOM COURT
     OR TRIBUNAL.
12   THE APPELLANT APPEALED AGAINST THAT DECISION TO THE COURT OF APPEAL.
     OBSERVING THAT THE RESPONDENT WAS CONSTITUTED UNDER SECTION 8 (1) A (B) OF
     THE NATIONAL HEALTH SERVICE ACT 1977 AND WAS THEREFORE AN “EMANATION OF THE
     STATE”, THE COURT OF APPEAL REFERRED THE FOLLOWING QUESTIONS TO THE COURT
     OF JUSTICE FOR A PRELIMINARY RULING:
     “(1) WHETHER THE RESPONDENT’S DISMISSAL OF THE APPELLANT AFTER SHE HAD
     PASSED HER 60TH BIRTHDAY PURSUANT TO THE POLICY (FOLLOWED BY THE
     RESPONDENT) AND ON THE GROUNDS ONLY THAT SHE WAS A WOMAN WHO HAD PASSED THE
     NORMAL RETIRING AGE APPLICABLE TO WOMEN WAS AN ACT OF DISCRIMINATION
     PROHIBITED BY THE EQUAL TREATMENT DIRECTIVE.
     (2)IF THE ANSWER TO (1) ABOVE IS IN THE AFFIRMATIVE, WHETHER OR NOT THE
     EQUAL TREATMENT DIRECTIVE CAN BE RELIED UPON BY THE APPELLANT IN THE
     CIRCUMSTANCES OF THE PRESENT CASE IN NATIONAL COURTS OR TRIBUNALS
     NOTWITHSTANDING THE INCONSISTENCY (IF ANY) BETWEEN THE DIRECTIVE AND
     SECTION 6 (4) OF THE SEX DISCRIMINATION ACT.”
     RELEVANT LEGAL PROVISIONS
13   ARTICLE 1 (1) OF DIRECTIVE NO 76/207 PROVIDES AS FOLLOWS: “THE PURPOSE OF
     THIS DIRECTIVE IS TO PUT INTO EFFECT IN THE MEMBER STATES THE PRINCIPLE OF
     EQUAL TREATMENT FOR MEN AND WOMEN AS REGARDS ACCESS TO EMPLOYMENT,
     INCLUDING PROMOTION, AND TO VOCATIONAL TRAINING AND AS REGARDS WORKING
     CONDITIONS AND, ON THE CONDITIONS REFERRED TO IN PARAGRAPH (2), SOCIAL
     SECURITY. THIS PRINCIPLE IS HEREINAFTER REFERRED TO AS „THE PRINCIPLE OF
     EQUAL TREATMENT”.
14   ARTICLE 2 (1) OF THE DIRECTIVE PROVIDES THAT: “…THE PRINCIPLE OF EQUAL
     TREATMENT SHALL MEAN THAT THERE SHALL BE NO DISCRIMINATION WHATSOEVER ON
     GROUNDS OF SEX EITHER DIRECTLY OR INDIRECTLY BY REFERENCE IN PARTICULAR TO
     MARITAL OR FAMILY STATUS”.
15   ARTICLE 5 (1) OF THE DIRECTIVE PROVIDES THAT: “APPLICATION OF THE PRINCIPLE
     OF EQUAL TREATMENT WITH REGARD TO WORKING CONDITIONS, INCLUDING THE
                                                                                   46
     CONDITIONS GOVERNING DISMISSAL, MEANS THAT MEN AND WOMEN SHALL BE
     GUARANTEED THE SAME CONDITIONS WITHOUT DISCRIMINATION ON GROUNDS OF SEX.”
     ARTICLE 5 (2) THEREOF PROVIDES THAT :
     “TO THIS END, MEMBER STATES SHALL TAKE THE MEASURES NECESSARY TO ENSURE
     THAT :
      (A) ANY LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS CONTRARY TO THE
     PRINCIPLE OF EQUAL TREATMENT SHALL BE ABOLISHED;
      (B)ANY PROVISIONS CONTRARY TO THE PRINCIPLE OF EQUAL TREATMENT WHICH ARE
     INCLUDED IN COLLECTIVE AGREEMENTS, INDIVIDUAL CONTRACTS OF EMPLOYMENT,
     INTERNAL RULES OF UNDERTAKINGS OR IN RULES GOVERNING THE INDEPENDENT
     OCCUPATIONS AND PROFESSIONS SHALL BE, OR MAY BE DECLARED, NULL AND VOID OR
     MAY BE AMENDED;
     (C) THOSE LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS CONTRARY TO THE
     PRINCIPLE OF EQUAL TREATMENT WHEN THE CONCERN FOR PROTECTION WHICH
     ORIGINALLY INSPIRED THEM IS NO LONGER WELL FOUNDED SHALL BE REVISED; AND
     THAT WHERE SIMILAR PROVISIONS ARE INCLUDED IN COLLECTIVE AGREEMENTS LABOUR
     AND MANAGEMENT SHALL BE REQUESTED TO UNDERTAKE THE DESIRED REVISION.”
16   ARTICLE 1 (2) OF THE DIRECTIVE PROVIDES THAT: “WITH A VIEW TO ENSURING THE
     PROGRESSIVE IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT IN MATTERS
     OF SOCIAL SECURITY, THE COUNCIL, ACTING ON A PROPOSAL FROM THE COMMISSION,
     WILL ADOPT PROVISIONS DEFINING ITS SUBSTANCE, ITS SCOPE AND THE
     ARRANGEMENTS FOR ITS APPLICATION.”
17   PURSUANT TO THE LAST-MENTIONED PROVISION, THE COUNCIL ADOPTED DIRECTIVE NO
     79/7/EEC OF 19 DECEMBER 1978 ON THE PROGRESSIVE IMPLEMENTATION OF THE
     PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN IN MATTERS OF SOCIAL
     SECURITY (OFFICIAL JOURNAL 1979, L 6, P. 24), WHICH THE MEMBER STATES WERE
     TO TRANSPOSE INTO NATIONAL LAW, ACCORDING TO ARTICLE 8 (1) THEREOF, WITHIN
     SIX YEARS OF ITS NOTIFICATION. THE DIRECTIVE APPLIES, ACCORDING TO ARTICLE
     3 (1) THEREOF, TO :
     “(A) STATUTORY SCHEMES WHICH PROVIDE PROTECTION AGAINST THE FOLLOWING RISKS
     :, INVALIDITY, AGE, AT WORK AND OCCUPATIONAL DISEASES,;
     (B)SOCIAL ASSISTANCE, IN SO FAR AS IT IS INTENDED TO SUPPLEMENT OR REPLACE
     THE SCHEMES REFERRED TO IN (A). “
18   ACCORDING TO ARTICLE 7 (1) THEREOF, THE DIRECTIVE IS TO BE: “ WITHOUT
     PREJUDICE TO THE RIGHT OF MEMBER STATES TO EXCLUDE FROM ITS SCOPE :
      (A) THE DETERMINATION OF PENSIONABLE AGE FOR THE PURPOSES OF GRANTING OLD-
     AGE AND RETIREMENT PENSIONS AND THE POSSIBLE CONSEQUENCES THEREOF FOR OTHER
     BENEFITS…”.
19   WITH REGARD TO OCCUPATIONAL SOCIAL SECURITY SCHEMES, ARTICLE 3 (3) OF THE
     DIRECTIVE PROVIDES THAT WITH A VIEW TO ENSURING IMPLEMENTATION OF THE
     PRINCIPLE OF EQUAL TREATMENT IN SUCH SCHEMES “THE COUNCIL, ACTING ON A
     PROPOSAL FROM THE COMMISSION, WILL ADOPT PROVISIONS DEFINING ITS SUBSTANCE,
     ITS SCOPE AND THE ARRANGEMENTS FOR ITS APPLICATION”. ON 5 MAY 1983 THE
     COMMISSION SUBMITTED TO THE COUNCIL A PROPOSAL FOR A DIRECTIVE ON THE
     IMPLEMENTATION OF THE PRINCIPLE OF EQUAL TREATMENT FOR MEN AND WOMEN IN
     OCCUPATIONAL SOCIAL SECURITY SCHEMES (OFFICIAL JOURNAL 1983, C 134, P. 7).
     THE PROPOSED DIRECTIVE WOULD, ACCORDING TO ARTICLE 2 (1) THEREOF, APPLY TO
     “BENEFITS INTENDED TO SUPPLEMENT THE BENEFITS PROVIDED BY STATUTORY SOCIAL
     SECURITY SCHEMES OR TO REPLACE THEM”. THE COUNCIL HAS NOT YET RESPONDED TO
     THAT PROPOSAL.
20   OBSERVATIONS WERE SUBMITTED TO THE COURT BY THE UNITED KINGDOM AND THE
     COMMISSION, IN ADDITION TO THE APPELLANT AND THE RESPONDENT.
     THE FIRST QUESTION
21   BY THE FIRST QUESTION THE COURT OF APPEAL SEEKS TO ASCERTAIN WHETHER OR NOT
     ARTICLE 5 (1) OF DIRECTIVE NO 76/207 MUST BE INTERPRETED AS MEANING THAT A

                                                                                   47
     GENERAL POLICY CONCERNING DISMISSAL, FOLLOWED BY A STATE AUTHORITY,
     INVOLVING THE DISMISSAL OF A WOMAN SOLELY BECAUSE SHE HAS ATTAINED OR
     PASSED THE QUALIFYING AGE FOR A STATE PENSION, WHICH AGE IS DIFFERENT UNDER
     NATIONAL LEGISLATION FOR MEN AND FOR WOMEN, CONSTITUTES DISCRIMINATION ON
     GROUNDS OF SEX, CONTRARY TO THAT DIRECTIVE.
     …
32   THE COURT OBSERVES IN THE FIRST PLACE THAT THE QUESTION OF INTERPRETATION
     WHICH HAS BEEN REFERRED TO IT DOES NOT CONCERN ACCESS TO A STATUTORY OR
     OCCUPATIONAL RETIREMENT SCHEME, THAT IS TO SAY THE CONDITIONS FOR PAYMENT
     OF AN OLD-AGE OR RETIREMENT PENSION, BUT THE FIXING OF AN AGE LIMIT WITH
     REGARD TO THE TERMINATION OF EMPLOYMENT PURSUANT TO A GENERAL POLICY
     CONCERNING DISMISSAL. THE QUESTION THEREFORE RELATES TO THE CONDITIONS
     GOVERNING DISMISSAL AND FALLS TO BE CONSIDERED UNDER DIRECTIVE NO 76/207.
33   ARTICLE 5 (1) OF DIRECTIVE NO 76/207 PROVIDES THAT APPLICATION OF THE
     PRINCIPLE OF EQUAL TREATMENT WITH REGARD TO WORKING CONDITIONS, INCLUDING
     THE CONDITIONS GOVERNING DISMISSAL, MEANS THAT MEN AND WOMEN ARE TO BE
     GUARANTEED THE SAME CONDITIONS WITHOUT DISCRIMINATION ON GROUNDS OF SEX.
34   IN ITS JUDGMENT IN THE BURTON CASE THE COURT HAS ALREADY STATED THAT THE
     TERM “DISMISSAL” CONTAINED IN THAT PROVISION MUST BE GIVEN A WIDE MEANING.
     CONSEQUENTLY, AN AGE LIMIT FOR THE COMPULSORY DISMISSAL OF WORKERS PURSUANT
     TO AN EMPLOYER’S GENERAL POLICY CONCERNING RETIREMENT FALLS WITHIN THE TERM
     “DISMISSAL” CONSTRUED IN THAT MANNER, EVEN IF THE DISMISSAL INVOLVES THE
     GRANT OF A RETIREMENT PENSION.
35   AS THE COURT EMPHASIZED IN ITS JUDGMENT IN THE BURTON CASE, ARTICLE 7 OF
     DIRECTIVE NO 79/7 EXPRESSLY PROVIDES THAT THE DIRECTIVE DOES NOT PREJUDICE
     THE RIGHT OF MEMBER STATES TO EXCLUDE FROM ITS SCOPE THE DETERMINATION OF
     PENSIONABLE AGE FOR THE PURPOSES OF GRANTING OLD-AGE AND RETIREMENT
     PENSIONS AND THE POSSIBLE CONSEQUENCES THEREOF FOR OTHER BENEFITS FALLING
     WITHIN THE STATUTORY SOCIAL SECURITY SCHEMES. THE COURT THUS ACKNOWLEDGED
     THAT BENEFITS TIED TO A NATIONAL SCHEME WHICH LAYS DOWN A DIFFERENT MINIMUM
     PENSIONABLE AGE FOR MEN AND WOMEN MAY LIE OUTSIDE THE AMBIT OF THE
     AFOREMENTIONED OBLIGATION.
36   HOWEVER, IN VIEW OF THE FUNDAMENTAL IMPORTANCE OF THE PRINCIPLE OF EQUALITY
     OF TREATMENT, WHICH THE COURT HAS REAFFIRMED ON NUMEROUS OCCASIONS, ARTICLE
     1 (2) OF DIRECTIVE NO 76/207, WHICH EXCLUDES SOCIAL SECURITY MATTERS FROM
     THE SCOPE OF THAT DIRECTIVE, MUST BE INTERPRETED STRICTLY. CONSEQUENTLY,
     THE EXCEPTION TO THE PROHIBITION OF DISCRIMINATION ON GROUNDS OF SEX
     PROVIDED FOR IN ARTICLE 7 (1) (A) OF DIRECTIVE NO 79/7 APPLIES ONLY TO THE
     DETERMINATION OF PENSIONABLE AGE FOR THE PURPOSES OF GRANTING OLD-AGE AND
     RETIREMENT PENSIONS AND THE POSSIBLE CONSEQUENCES THEREOF FOR OTHER
     BENEFITS.
37   IN THAT RESPECT IT MUST BE EMPHASIZED THAT, WHEREAS THE EXCEPTION CONTAINED
     IN ARTICLE 7 OF DIRECTIVE NO 79/7 CONCERNS THE CONSEQUENCES WHICH
     PENSIONABLE AGE HAS FOR SOCIAL SECURITY BENEFITS, THIS CASE IS CONCERNED
     WITH DISMISSAL WITHIN THE MEANING OF ARTICLE 5 OF DIRECTIVE NO 76/207.
38   CONSEQUENTLY, THE ANSWER TO THE FIRST QUESTION REFERRED TO THE COURT BY THE
     COURT OF APPEAL MUST BE THAT ARTICLE 5 (1) OF DIRCTIVE NO 76/207 MUST BE
     INTERPRETED AS MEANING THAT A GENERAL POLICY CONCERNING DISMISSAL INVOLVING
     THE DISMISSAL OF A WOMAN SOLELY BECAUSE SHE HAS ATTAINED THE QUALIFYING AGE
     FOR A STATE PENSION, WHICH AGE IS DIFFERENT UNDER NATIONAL LEGISLATION FOR
     MEN AND FOR WOMEN, CONSTITUTES DISCRIMINATION ON GROUNDS OF SEX, CONTRARY
     TO THAT DIRECTIVE.
     THE SECOND QUESTION
39   SINCE THE FIRST QUESTION HAS BEEN ANSWERED IN THE AFFIRMATIVE, IT IS
     NECESSARY TO CONSIDER WHETHER ARTICLE 5 (1) OF DIRECTIVE NO 76/207 MAY BE
     RELIED UPON BY AN INDIVIDUAL BEFORE NATIONAL COURTS AND TRIBUNALS.

                                                                                   48
40   THE APPELLANT AND THE COMMISSION CONSIDER THAT THAT QUESTION MUST BE
     ANSWERED IN THE AFFIRMATIVE. THEY CONTEND IN PARTICULAR, WITH REGARD TO
     ARTICLES 2 (1) AND 5 (1) OF DIRECTIVE NO 76/207, THAT THOSE PROVISIONS ARE
     SUFFICIENTLY CLEAR TO ENABLE NATIONAL COURTS TO APPLY THEM WITHOUT
     LEGISLATIVE INTERVENTION BY THE MEMBER STATES, AT LEAST SO FAR AS OVERT
     DISCRIMINATION IS CONCERNED.
     …
46   IT IS NECESSARY TO RECALL THAT, ACCORDING TO A LONG LINE OF DECISIONS OF
     THE COURT (IN PARTICULAR ITS JUDGMENT OF 19 JANUARY 1982 IN CASE 8/81
     BECKER V FINANZAMT MUNSTER-INNENSTADT (1982) ECR 53), WHEREVER THE
     PROVISIONS OF A DIRECTIVE APPEAR, AS FAR AS THEIR SUBJECT-MATTER IS
     CONCERNED, TO BE UNCONDITIONAL AND SUFFICIENTLY PRECISE, THOSE PROVISIONS
     MAY BE RELIED UPON BY AN INDIVIDUAL AGAINST THE STATE WHERE THAT STATE
     FAILS TO IMPLEMENT THE DIRECTIVE IN NATIONAL LAW BY THE END OF THE PERIOD
     PRESCRIBED OR WHERE IT FAILS TO IMPLEMENT THE DIRECTIVE CORRECTLY.
47   THAT VIEW IS BASED ON THE CONSIDERATION THAT IT WOULD BE INCOMPATIBLE WITH
     THE BINDING NATURE WHICH ARTICLE 189 CONFERS ON THE DIRECTIVE TO HOLD AS A
     MATTER OF PRINCIPLE THAT THE OBLIGATION IMPOSED THEREBY CANNOT BE RELIED ON
     BY THOSE CONCERNED. FROM THAT THE COURT DEDUCED THAT A MEMBER STATE WHICH
     HAS NOT ADOPTED THE IMPLEMENTING MEASURES REQUIRED BY THE DIRECTIVE WITHIN
     THE PRESCRIBED PERIOD MAY NOT PLEAD, AS AGAINST INDIVIDUALS, ITS OWN
     FAILURE TO PERFORM THE OBLIGATIONS WHICH THE DIRECTIVE ENTAILS.
48   WITH REGARD TO THE ARGUMENT THAT A DIRECTIVE MAY NOT BE RELIED UPON AGAINST
     AN INDIVIDUAL, IT MUST BE EMPHASIZED THAT ACCORDING TO ARTICLE 189 OF THE
     EEC TREATY THE BINDING NATURE OF A DIRECTIVE, WHICH CONSTITUTES THE BASIS
     FOR THE POSSIBILITY OF RELYING ON THE DIRECTIVE BEFORE A NATIONAL COURT,
     EXISTS ONLY IN RELATION TO “EACH MEMBER STATE TO WHICH IT IS ADDRESSED”. IT
     FOLLOWS THAT A DIRECTIVE MAY NOT OF ITSELF IMPOSE OBLIGATIONS ON AN
     INDIVIDUAL AND THAT A PROVISION OF A DIRECTIVE MAY NOT BE RELIED UPON AS
     SUCH AGAINST SUCH A PERSON. IT MUST THEREFORE BE EXAMINED WHETHER, IN THIS
     CASE, THE RESPONDENT MUST BE REGARDED AS HAVING ACTED AS AN INDIVIDUAL.
49   IN THAT RESPECT IT MUST BE POINTED OUT THAT WHERE A PERSON INVOLVED IN
     LEGAL PROCEEDINGS IS ABLE TO RELY ON A DIRECTIVE AS AGAINST THE STATE HE
     MAY DO SO REGARDLESS OF THE CAPACITY IN WHICH THE LATTER IS ACTING, WHETHER
     EMPLOYER OR PUBLIC AUTHORITY. IN EITHER CASE IT IS NECESSARY TO PREVENT THE
     STATE FROM TAKING ADVANTAGE OF ITS OWN FAILURE TO COMPLY WITH COMMUNITY
     LAW.
50   IT IS FOR THE NATIONAL COURT TO APPLY THOSE CONSIDERATIONS TO THE
     CIRCUMSTANCES OF EACH CASE; THE COURT OF APPEAL HAS, HOWEVER, STATED IN THE
     ORDER FOR REFERENCE THAT THE RESPONDENT, SOUTHAMPTON AND SOUTH WEST
     HAMPSHIRE AREA HEALTH AUTHORITY (TEACHING), IS A PUBLIC AUTHORITY.
51   THE ARGUMENT SUBMITTED BY THE UNITED KINGDOM THAT THE POSSIBILITY OF
     RELYING ON PROVISIONS OF THE DIRECTIVE AGAINST THE RESPONDENT QUA ORGAN OF
     THE STATE WOULD GIVE RISE TO AN ARBITRARY AND UNFAIR DISTINCTION BETWEEN
     THE RIGHTS OF STATE EMPLOYEES AND THOSE OF PRIVATE EMPLOYEES DOES NOT
     JUSTIFY ANY OTHER CONCLUSION. SUCH A DISTINCTION MAY EASILY BE AVOIDED IF
     THE MEMBER STATE CONCERNED HAS CORRECTLY IMPLEMENTED THE DIRECTIVE IN
     NATIONAL LAW.
52   FINALLY, WITH REGARD TO THE QUESTION WHETHER THE PROVISION IN ARTICLE 5 (1)
     OF DIRECTIVE NO 76/207, WHICH IMPLEMENTS THE PRINCIPLE OF EQUALITY OF
     TREATMENT SET OUT IN ARTICLE 2 (1) OF THE DIRECTIVE, MAY BE CONSIDERED, AS
     FAR AS ITS CONTENTS ARE CONCERNED, TO BE UNCONDITIONAL AND SUFFICIENTLY
     PRECISE TO BE RELIED UPON BY AN INDIVIDUAL AS AGAINST THE STATE, IT MUST BE
     STATED THAT THE PROVISION, TAKEN BY ITSELF, PROHIBITS ANY DISCRIMINATION ON
     GROUNDS OF SEX WITH REGARD TO WORKING CONDITIONS, INCLUDING THE CONDITIONS
     GOVERNING DISMISSAL, IN A GENERAL MANNER AND IN UNEQUIVOCAL TERMS. THE
     PROVISION IS THEREFORE SUFFICIENTLY PRECISE TO BE RELIED ON BY AN
     INDIVIDUAL AND TO BE APPLIED BY THE NATIONAL COURTS.

                                                                                   49
53   IT IS NECESSARY TO CONSIDER NEXT WHETHER THE PROHIBITION OF DISCRIMINATION
     LAID DOWN BY THE DIRECTIVE MAY BE REGARDED AS UNCONDITIONAL, IN THE LIGHT
     OF THE EXCEPTIONS CONTAINED THEREIN AND OF THE FACT THAT ACCORDING TO
     ARTICLE 5 (2) THEREOF THE MEMBER STATES ARE TO TAKE THE MEASURES NECESSARY
     TO ENSURE THE APPLICATION OF THE PRINCIPLE OF EQUALITY OF TREATMENT IN THE
     CONTEXT OF NATIONAL LAW.
54   WITH REGARD, IN THE FIRST PLACE, TO THE RESERVATION CONTAINED IN ARTICLE 1
     (2) OF DIRECTIVE NO 76/207 CONCERNING THE APPLICATION OF THE PRINCIPLE OF
     EQUALITY OF TREATMENT IN MATTERS OF SOCIAL SECURITY, IT MUST BE OBSERVED
     THAT, ALTHOUGH THE RESERVATION LIMITS THE SCOPE OF THE DIRECTIVE RATIONE
     MATERIAE, IT DOES NOT LAY DOWN ANY CONDITION ON THE APPLICATION OF THAT
     PRINCIPLE IN ITS FIELD OF OPERATION AND IN PARTICULAR IN RELATION TO
     ARTICLE 5 OF THE DIRECTIVE. SIMILARLY, THE EXCEPTIONS TO DIRECTIVE NO
     76/207 PROVIDED FOR IN ARTICLE 2 THEREOF ARE NOT RELEVANT TO THIS CASE.
55   IT FOLLOWS THAT ARTICLE 5 OF DIRECTIVE NO 76/207 DOES NOT CONFER ON THE
     MEMBER STATES THE RIGHT TO LIMIT THE APPLICATION OF THE PRINCIPLE OF
     EQUALITY OF TREATMENT IN ITS FIELD OF OPERATION OR TO SUBJECT IT TO
     CONDITIONS AND THAT THAT PROVISION IS SUFFICIENTLY PRECISE AND
     UNCONDITIONAL TO BE CAPABLE OF BEING RELIED UPON BY AN INDIVIDUAL BEFORE A
     NATIONAL COURT IN ORDER TO AVOID THE APPLICATION OF ANY NATIONAL PROVISION
     WHICH DOES NOT CONFORM TO ARTICLE 5 (1).
56   CONSEQUENTLY, THE ANSWER TO THE SECOND QUESTION MUST BE THAT ARTICLE 5 (1)
     OF COUNCIL DIRECTIVE NO 76/207 OF 9 FEBRUARY 1976, WHICH PROHIBITS ANY
     DISCRIMINATION ON GROUNDS OF SEX WITH REGARD TO WORKING CONDITIONS,
     INCLUDING THE CONDITIONS GOVERNING DISMISSAL, MAY BE RELIED UPON AS AGAINST
     A STATE AUTHORITY ACTING IN ITS CAPACITY AS EMPLOYER, IN ORDER TO AVOID THE
     APPLICATION OF ANY NATIONAL PROVISION WHICH DOES NOT CONFORM TO ARTICLE 5
     (1).
     COSTS
     …
     ON THOSE GROUNDS,
     THE COURT,IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE COURT OF APPEAL
     BY AN ORDER OF 12 MARCH 1984, HEREBY RULES :
      (1) ARTICLE 5 (1) OF DIRECTIVE NO 76/207 MUST BE INTERPRETED AS MEANING
     THAT A GENERAL POLICY CONCERNING DISMISSAL INVOLVING THE DISMISSAL OF A
     WOMAN SOLELY BECAUSE SHE HAS ATTAINED OR PASSED THE QUALIFYING AGE FOR A
     STATE PENSION, WHICH AGE IS DIFFERENT UNDER NATIONAL LEGISLATION FOR MEN
     AND FOR WOMEN, CONSTITUTES DISCRIMINATION ON GROUNDS OF SEX, CONTRARY TO
     THAT DIRECTIVE.
     (2) ARTICLE 5 (1) OF COUNCIL DIRECTIVE NO 76/207 OF 9 FEBRUARY 1976, WHICH
     PROHIBITS ANY DISCRIMINATION ON GROUNDS OF SEX WITH REGARD TO WORKING
     CONDITIONS, INCLUDING THE CONDITIONS GOVERNING DISMISSAL, MAY BE RELIED
     UPON AS AGAINST A STATE AUTHORITY ACTING IN ITS CAPACITY AS EMPLOYER, IN
     ORDER TO AVOID THE APPLICATION OF ANY NATIONAL PROVISION WHICH DOES NOT
     CONFORM TO ARTICLE 5 (1).


     Case 13
     Judgment of the Court (Sixth Chamber) of 8 October 1987. Criminal proceedings
     against Kolpinghuis Nijmegen BV. Reference for a preliminary ruling:
     Arrondissementsrechtbank Arnhem - Netherlands. The possibility for a directive which
     has not yet been implemented to be relied upon against an individual. Case 80/86.
     European Court reports 1987 Page 03969
     …

                                                                                            50
    IN CASE 80/86
    REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE
    ARRONDISSEMENTSRECHTBANK (DISTRICT COURT), ARNHEM, FOR A PRELIMINARY RULING
    IN THE CRIMINAL PROCEEDINGS PENDING BEFORE THAT COURT AGAINST
    KOLPINGHUIS NIJMEGEN BV, NIJMEGEN,
    …
    THE COURT (SIXTH CHAMBER)
    …
    GIVES THE FOLLOWING
    JUDGMENT
1   BY AN ORDER OF 3 FEBRUARY 1986, WHICH WAS RECEIVED AT THE COURT ON 14 MARCH
    1986, THE ARRONDISSEMENTSRECHTBANK, ARNHEM, SUBMITTED TO THE COURT FOR A
    PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY FOUR QUESTIONS ON
    THE INTERPRETATION OF COMMUNITY LAW WITH REGARD TO THE EFFECT OF A
    DIRECTIVE UNDER THE NATIONAL LAW OF A MEMBER STATE WHICH HAS NOT YET
    ADOPTED THE MEASURES NEEDED TO IMPLEMENT THAT DIRECTIVE.
2   THOSE QUESTIONS AROSE IN CRIMINAL PROCEEDINGS BROUGHT AGAINST AN
    UNDERTAKING RUNNING A CAFE FOR STOCKING FOR SALE AND DELIVERY A BEVERAGE
    WHICH IT CALLED "MINERAL WATER" BUT WHICH CONSISTED OF TAP-WATER AND CARBON
    DIOXIDE. THE UNDERTAKING IS CHARGED WITH INFRINGING ARTICLE 2 OF THE
    KEURINGSVERORDENING (INSPECTION REGULATION) OF THE MUNICIPALITY OF NIJMEGEN
    WHICH PROHIBITS THE STOCKING FOR SALE AND DELIVERY OF GOODS INTENDED FOR
    TRADE AND HUMAN CONSUMPTION WHICH ARE OF UNSOUND COMPOSITION.
3   BEFORE THE POLITIERECHTER (MAGISTRATE DEALING WITH COMMERCIAL OFFENCES),
    THE OFFICIER VAN JUSTITIE (PUBLIC PROSECUTOR) RELIED INTER ALIA UPON
    COUNCIL DIRECTIVE 80/777/EEC OF 15 JULY 1980 ON THE APPROXIMATION OF THE
    LAWS OF THE MEMBER STATES RELATING TO THE EXPLOITATION AND MARKETING OF
    NATURAL MINERAL WATERS (OFFICIAL JOURNAL 1980, L*229, P.*1). THE DIRECTIVE
    PROVIDES IN PARTICULAR THAT THE MEMBER STATES ARE TO TAKE THE MEASURES
    NECESSARY TO ENSURE THAT ONLY WATERS EXTRACTED FROM THE GROUND OF A MEMBER
    STATE AND RECOGNIZED BY THE RESPONSIBLE AUTHORITY OF THAT MEMBER STATE AS
    NATURAL MINERAL WATERS SATISFYING THE PROVISIONS OF ANNEX I, SECTION I, OF
    THE DIRECTIVE MAY BE MARKETED AS NATURAL MINERAL WATERS. THAT PROVISION OF
    THE DIRECTIVE OUGHT TO HAVE BEEN IMPLEMENTED WITHIN FOUR YEARS AFTER THE
    DIRECTIVE WAS NOTIFIED, THAT IS TO SAY BY 17 JULY 1984, BUT THE NETHERLANDS
    LEGISLATION WAS AMENDED ONLY WITH EFFECT FROM 8 AUGUST 1985, WHEREAS THE
    OFFENCES WITH WHICH THE ACCUSED IN THE MAIN PROCEEDINGS IS CHARGED TOOK
    PLACE ON 7 AUGUST 1984.
4   UNDER THOSE CIRCUMSTANCES THE ARRONDISSEMENTSRECHTBANK SUBMITTED TO THE
    COURT THE FOLLOWING QUESTIONS:
    "(1) CAN AN AUTHORITY OF A MEMBER STATE (IN THIS CASE THE PROSECUTING BODY)
    RELY AS AGAINST NATIONALS OF THAT MEMBER STATE ON A PROVISION OF A
    DIRECTIVE IN A CASE WHICH IS NOT COVERED BY THE STATE’S OWN LEGISLATION OR
    IMPLEMENTING PROVISIONS?
    (2) IS A NATIONAL COURT OBLIGED, WHERE A DIRECTIVE HAS NOT BEEN
    IMPLEMENTED, TO GIVE DIRECT EFFECT TO PROVISIONS OF THE DIRECTIVE WHICH
    LEND THEMSELVES TO SUCH TREATMENT EVEN WHERE THE INDIVIDUAL CONCERNED DOES
    NOT SEEK TO DERIVE ANY RIGHT FROM THOSE PROVISIONS?
    (3) WHERE A NATIONAL COURT IS REQUIRED TO INTERPRET A NATIONAL RULE, SHOULD
    OR MAY THAT COURT BE GUIDED IN ITS INTERPRETATION BY THE PROVISIONS OF AN
    APPLICABLE DIRECTIVE?
    (4) DOES IT MAKE A DIFFERENCE TO THE ANSWERS TO QUESTIONS 1, 2 AND 3 IF ON
    THE MATERIAL DATE (IN THIS CASE 7 AUGUST 1984) THE PERIOD WHICH THE MEMBER
    STATE HAD IN WHICH TO ADAPT NATIONAL LAW HAD NOT YET EXPIRED?"

                                                                                  51
5    REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE
     FACTS OF THE MAIN PROCEEDINGS, THE RELEVANT COMMUNITY AND NATIONAL RULES
     AND THE OBSERVATIONS SUBMITTED TO THE COURT, WHICH ARE MENTIONED OR
     DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF
     THE COURT.
     THE FIRST TWO QUESTIONS
6    THE FIRST TWO QUESTIONS CONCERN THE POSSIBILITY WHETHER THE PROVISIONS OF A
     DIRECTIVE WHICH HAS NOT YET BEEN IMPLEMENTED IN NATIONAL LAW IN THE MEMBER
     STATE IN QUESTION MAY BE APPLIED AS SUCH.
7    IN THIS REGARD IT SHOULD BE RECALLED THAT, ACCORDING TO THE ESTABLISHED
     CASE-LAW OF THE COURT (IN PARTICULAR ITS JUDGMENT OF 19 JANUARY 1982 IN
     CASE 8/81 BECKER V FINANZAMT MUENSTER-INNENSTADT ((1982)) ECR 53),
     WHEREVER THE PROVISIONS OF A DIRECTIVE APPEAR, AS FAR AS THEIR SUBJECT-
     MATTER IS CONCERNED, TO BE UNCONDITIONAL AND SUFFICIENTLY PRECISE, THOSE
     PROVISIONS MAY BE RELIED UPON BY AN INDIVIDUAL AGAINST THE STATE WHERE THAT
     STATE FAILS TO IMPLEMENT THE DIRECTIVE IN NATIONAL LAW BY THE END OF THE
     PERIOD PRESCRIBED OR WHERE IT FAILS TO IMPLEMENT THE DIRECTIVE CORRECTLY.
8    THAT VIEW IS BASED ON THE CONSIDERATION THAT IT WOULD BE INCOMPATIBLE WITH
     THE BINDING NATURE WHICH ARTICLE 189 CONFERS ON THE DIRECTIVE TO HOLD AS A
     MATTER OF PRINCIPLE THAT THE OBLIGATION IMPOSED THEREBY CANNOT BE RELIED ON
     BY THOSE CONCERNED. FROM THAT THE COURT DEDUCED THAT A MEMBER STATE WHICH
     HAS NOT ADOPTED THE IMPLEMENTING MEASURES REQUIRED BY THE DIRECTIVE WITHIN
     THE PRESCRIBED PERIOD MAY NOT PLEAD, AS AGAINST INDIVIDUALS, ITS OWN
     FAILURE TO PERFORM THE OBLIGATIONS WHICH THE DIRECTIVE ENTAILS.
9    IN ITS JUDGMENT OF 26 FEBRUARY 1986 IN CASE 152/84 MARSHALL V SOUTH-WEST
     HAMPSHIRE AREA HEALTH AUTHORITY ((1986)) ECR 723, THE COURT EMPHASIZED,
     HOWEVER, THAT ACCORDING TO ARTICLE 189 OF THE EEC TREATY THE BINDING NATURE
     OF A DIRECTIVE, WHICH CONSTITUTES THE BASIS FOR THE POSSIBILITY OF RELYING
     ON THE DIRECTIVE BEFORE A NATIONAL COURT, EXISTS ONLY IN RELATION TO "EACH
     MEMBER STATE TO WHICH IT IS ADDRESSED ". IT FOLLOWS THAT A DIRECTIVE MAY
     NOT OF ITSELF IMPOSE OBLIGATIONS ON AN INDIVIDUAL AND THAT A PROVISION OF A
     DIRECTIVE MAY NOT BE RELIED UPON AS SUCH AGAINST SUCH A PERSON BEFORE A
     NATIONAL COURT.
10   THE ANSWER TO THE FIRST TWO QUESTIONS SHOULD THEREFORE BE THAT A NATIONAL
     AUTHORITY MAY NOT RELY, AS AGAINST AN INDIVIDUAL, UPON A PROVISION OF A
     DIRECTIVE WHOSE NECESSARY IMPLEMENTATION IN NATIONAL LAW HAS NOT YET TAKEN
     PLACE.
     THE THIRD QUESTION
11   THE THIRD QUESTION IS DESIGNED TO ASCERTAIN HOW FAR THE NATIONAL COURT MAY
     OR MUST TAKE ACCOUNT OF A DIRECTIVE AS AN AID TO THE INTERPRETATION OF A
     RULE OF NATIONAL LAW.
12   AS THE COURT STATED IN ITS JUDGMENT OF 10 APRIL 1984 IN CASE 14/83 VON
     COLSON AND KAMANN V LAND NORDRHEIN-WESTFALEN ((1984)) ECR 1891, THE MEMBER
     STATES' OBLIGATION ARISING FROM A DIRECTIVE TO ACHIEVE THE RESULT ENVISAGED
     BY THE DIRECTIVE AND THEIR DUTY UNDER ARTICLE 5 OF THE TREATY TO TAKE ALL
     APPROPRIATE MEASURES, WHETHER GENERAL OR PARTICULAR, TO ENSURE THE
     FULFILMENT OF THAT OBLIGATION, IS BINDING ON ALL THE AUTHORITIES OF MEMBER
     STATES INCLUDING, FOR MATTERS WITHIN THEIR JURISDICTION, THE COURTS. IT
     FOLLOWS THAT, IN APPLYING THE NATIONAL LAW AND IN PARTICULAR THE PROVISIONS
     OF A NATIONAL LAW SPECIFICALLY INTRODUCED IN ORDER TO IMPLEMENT THE
     DIRECTIVE, NATIONAL COURTS ARE REQUIRED TO INTERPRET THEIR NATIONAL LAW IN
     THE LIGHT OF THE WORDING AND THE PURPOSE OF THE DIRECTIVE IN ORDER TO
     ACHIEVE THE RESULT REFERRED TO IN THE THIRD PARAGRAPH OF ARTICLE 189 OF THE
     TREATY.
13   HOWEVER, THAT OBLIGATION ON THE NATIONAL COURT TO REFER TO THE CONTENT OF
     THE DIRECTIVE WHEN INTERPRETING THE RELEVANT RULES OF ITS NATIONAL LAW IS
     LIMITED BY THE GENERAL PRINCIPLES OF LAW WHICH FORM PART OF COMMUNITY LAW

                                                                                   52
     AND IN PARTICULAR THE PRINCIPLES OF LEGAL CERTAINTY AND NON-RETROACTIVITY.
     THUS THE COURT RULED IN ITS JUDGMENT OF 11 JUNE 1987 IN CASE 14/86 PRETORE
     DE SALO V X ((1987)) ECR... THAT A DIRECTIVE CANNOT, OF ITSELF AND
     INDEPENDENTLY OF A NATIONAL LAW ADOPTED BY A MEMBER STATE FOR ITS
     IMPLEMENTATION, HAVE THE EFFECT OF DETERMINING OR AGGRAVATING THE LIABILITY
     IN CRIMINAL LAW OF PERSONS WHO ACT IN CONTRAVENTION OF THE PROVISIONS OF
     THAT DIRECTIVE.
14   THE ANSWER TO THE THIRD QUESTION SHOULD THEREFORE BE THAT IN APPLYING ITS
     NATIONAL LEGISLATION A COURT OF A MEMBER STATE IS REQUIRED TO INTERPRET
     THAT LEGISLATION IN THE LIGHT OF THE WORDING AND THE PURPOSE OF THE
     DIRECTIVE IN ORDER TO ACHIEVE THE RESULT REFERRED TO IN THE THIRD PARAGRAPH
     OF ARTICLE 189 OF THE TREATY, BUT A DIRECTIVE CANNOT, OF ITSELF AND
     INDEPENDENTLY OF A LAW ADOPTED FOR ITS IMPLEMENTATION, HAVE THE EFFECT OF
     DETERMINING OR AGGRAVATING THE LIABILITY IN CRIMINAL LAW OF PERSONS WHO ACT
     IN CONTRAVENTION OF THE PROVISIONS OF THAT DIRECTIVE.
     THE FOURTH QUESTION
15   THE QUESTION WHETHER THE PROVISIONS OF A DIRECTIVE MAY BE RELIED UPON AS
     SUCH BEFORE A NATIONAL COURT ARISES ONLY IF THE MEMBER STATE CONCERNED HAS
     NOT IMPLEMENTED THE DIRECTIVE IN NATIONAL LAW WITHIN THE PRESCRIBED PERIOD
     OR HAS IMPLEMENTED THE DIRECTIVE INCORRECTLY. THE FIRST TWO QUESTIONS WERE
     ANSWERED IN THE NEGATIVE. HOWEVER, IT MAKES NO DIFFERENCE TO THOSE ANSWERS
     IF ON THE MATERIAL DATE THE PERIOD WHICH THE MEMBER STATE HAD IN WHICH TO
     ADAPT NATIONAL LAW HAD NOT YET EXPIRED. AS REGARDS THE THIRD QUESTION
     CONCERNING THE LIMITS WHICH COMMUNITY LAW MIGHT IMPOSE ON THE OBLIGATION OR
     POWER OF THE NATIONAL COURT TO INTERPRET THE RULES OF ITS NATIONAL LAW IN
     THE LIGHT OF THE DIRECTIVE, IT MAKES NO DIFFERENCE WHETHER OR NOT THE
     PERIOD PRESCRIBED FOR IMPLEMENTATION HAS EXPIRED.
16   THE ANSWER TO THE FOURTH QUESTION MUST THEREFORE BE THAT IT MAKES NO
     DIFFERENCE TO THE ANSWERS SET OUT ABOVE IF ON THE MATERIAL DATE THE PERIOD
     WHICH THE MEMBER STATE HAD IN WHICH TO ADAPT NATIONAL LAW HAD NOT YET
     EXPIRED.
     COSTS
     …
     ON THOSE GROUNDS,
     THE COURT (SIXTH CHAMBER)
     HEREBY RULES :
      (1) A NATIONAL AUTHORITY MAY NOT RELY, AS AGAINST AN INDIVIDUAL, UPON A
     PROVISION OF A DIRECTIVE WHOSE NECESSARY IMPLEMENTATION IN NATIONAL LAW HAS
     NOT YET TAKEN PLACE.
      (2) IN APPLYING ITS NATIONAL LEGISLATION, A COURT OF A MEMBER STATE IS
     REQUIRED TO INTERPRET THAT LEGISLATION IN THE LIGHT OF THE WORDING AND THE
     PURPOSE OF THE DIRECTIVE IN ORDER TO ACHIEVE THE RESULT REFERRED TO IN THE
     THIRD PARAGRAPH OF ARTICLE 189 OF THE TREATY, BUT A DIRECTIVE CANNOT, OF
     ITSELF AND INDEPENDENTLY OF A LAW ADOPTED FOR ITS IMPLEMENTATION, HAVE THE
     EFFECT OF DETERMINING OR AGGRAVATING THE LIABILITY IN CRIMINAL LAW OF
     PERSONS WHO ACT IN CONTRAVENTION OF THE PROVISIONS OF THAT DIRECTIVE.
      (3) IT MAKES NO DIFFERENCE TO THE ANSWERS SET OUT ABOVE IF ON THE MATERIAL
     DATE THE PERIOD WHICH THE MEMBER STATE HAD IN WHICH TO ADAPT NATIONAL LAW
     HAD NOT YET EXPIRED.




     Case 14
                                                                                   53
    Judgment of the Court of 22 June 1989. Fratelli Constanzo SpA v Comune di Milano.
    Reference for a preliminary ruling: Tribunale amministrativo regionale della
    Lombardia - Italy. Public works contracts - Abnormally low tenders - Direct effect of
    directives in relation to administrative authorities. Case 103/88. European Court reports
    1989 Page 01839
    …
    In Case 103/88,
    …
    THE COURT
    …
    JUDGEMENT
1   By order of 16 December 1987, which was received at the Court Registry on 30 March 1988, the Tribunale
    amministrativo regionale per la Lombardia referred to the Court for a preliminary ruling under Article 177 of the
    EEC Treaty a number of questions on the interpretation of Article 29(5) of Council Directive 71/305/EEC of 26
    July 1971 concerning the coordination of procedures for the award of public works contracts (Official Journal,
    English Special Edition 1971 (II),p. 682) and the third paragraph of Article 189 of the EEC Treaty.
2   The questions were raised in proceedings brought by Fratelli Costanzo SpA (hereinafter referred to as "Costanzo
    "), the plaintiff in the main proceedings, for the annulment of a decision of the Giunta municipale (Municipal
    Executive Board) of Milan eliminating the tender submitted by Costanzo from a tendering procedure for a public
    works contract and awarding the contract in question to Ing. Lodigiani SpA (hereinafter: "Lodigiani ").
3   Article 29(5) of Council Directive 71/305/EEC provides as follows :
4   "If, for a given contract, tenders are obviously abnormally low in relation to the transaction, the authority
    awarding contracts shall examine the details of the tenders before deciding to whom it will award the contract.
    The result of this examination shall be taken into account. For this purpose it shall request the tenderer to furnish
    the necessary explanations and, where appropriate, it shall indicate which parts it finds unacceptable. If the
    documents relating to the contract provide for its award at the lowest price tendered, the authority awarding
    contracts must justify to the Advisory Committee set up by the Council Decision of 26 July 1971 the rejection of
    tenders which it considers to be too low."
5   Article 29(5) of Directive 71/305 was implemented in Italy by the third paragraph of Article 24 of Law No 584
    of 8 August 1977 amending the procedures for the award of public works contracts in accordance with the
    directives of the European Economic Community (Gazzetta Ufficiale della Repubblica Italiana (Official Journal
    of the Italian Republic) No 232 of 26 August 1977, p. 6272).
    That provision is worded as follows:
6   "If, for a given contract, tenders are abnormally low in relation to the transaction, the authority awarding the
    contract shall, after requesting the tenderer to furnish the necessary explanations and after indicating, where
    appropriate, which parts it considers unacceptable, examine the details of the tenders and may disallow them if it
    takes the view that they are not valid; in that event, if the call for tenders provides that the lowest tender price is
    the criterion for the award of the contract, the awarding authority is obliged to notify the rejection of the tenders,
    together with its reasons for doing so, to the Ministry of Public Works, which is responsible for forwarding the
    information to the Advisory Committee for Public Works Contracts of the European Economic Community
    within the period laid down by the first paragraph of Article 6 of this Law."
7   Subsequently, in 1987, the Italian Government adopted three decree laws in succession which provisionally
    amended the third paragraph of Article 24 of Law No 584 (Decree Law No 206 of 25 May 1987, Gazzetta
    Ufficiale No 120, 26.5.1987, p. 5; Decree Law No 302 of 27 July 1987, Gazzetta Ufficiale No 174, 28.7.1987, p.
    3; and Decree Law No 393 of 25 September 1987, Gazzetta Ufficiale No 225, 26.9.1987, p. 3).
    The three decree laws each contain an Article 4 worded in identical terms, as follows:
8   "In order to speed up the procedures for the award of public works contracts, for a period of two years from the
    date on which this decree enters into force tenders with a percentage discount greater than the average
    percentage divergence of the tenders admitted, increased by a percentage which must be stated in the call for
    tenders, shall be considered abnormal for the purposes of the third paragraph of Article 24 of Law No 584 of 8
    August 1977 and shall be excluded from the tendering procedure."

                                                                                                                              54
9    The decree laws lapsed because they were not converted into laws within the period prescribed by the Italian
     Constitution. However, a subsequent law provided that the effects of legal measures adopted pursuant to them
     were to remain valid (Article 1(2) of Law No 478 of 25 November 1987, Gazzetta Ufficiale No 277, 26.11.1987,
     p. 3).
10   In preparation for the 1990 World Cup for football, to be held in Italy, the Comune di Milano issued a restricted
     call for tenders for alteration work on a football stadium. The criterion chosen for awarding the contract was that
     of the lowest price.
11   The call for tenders stated that in accordance with Article 4 of Decree Law No 206 of 25 May 1987 tenders
     which exceeded the basic amount fixed for the price of the work by a percentage more than 10 points below the
     average percentage by which the tenders admitted exceeded that amount would be considered anomalous and
     consequently eliminated.
12   The tenders admitted to the procedure exceeded the basic amount fixed for the price of the work by an average
     of 19.48 %. In accordance with the call for tenders any tender which did not exceed the basic amount by at least
     9.48% was to be automatically eliminated.
13   The tender submitted by Costanzo was less than the basic amount. Accordingly, on 6 October 1987 the Giunta
     Municipale, on the basis of Article 4 of Decree Law No 393 of 25 September 1987, which in the mean time had
     replaced the decree law cited in the call for tenders, decided to exclude Costanzo‟s bid from the tendering
     procedure and to award the contract to Lodigiani, which had submitted the lowest tender of those which fulfilled
     the condition set out in the call for tenders.
14   Costanzo challenged that decision in proceedings before the Tribunale amministrativo regionale per la
     Lombardia, claiming inter alia that it was illegal on the ground that it was based on a decree law which was itself
     incompatible with Article 29(5) of Council Directive 71/305.
     The national court therefore referred the following questions to the Court of Justice for a preliminary ruling:
     …[questions]
     The second part of the third question and the first question
24   In the second part of the third question the Tribunale amministrativo regionale seeks in essence to establish
     whether Article 29(5) of Council Directive 71/305 prohibits Member States from introducing provisions which
     require the automatic exclusion from procedures for the award of public works contracts of certain tenders
     determined according to a mathematical criterion, instead of obliging the awarding authority to apply the
     examination procedure laid down in the directive, giving the tenderer an opportunity to furnish explanations. In
     its first question it asks whether the Member States may, when implementing Council Directive 71/305, depart to
     any material extent from Article 29(5) thereof.
25   With regard to the second part of the third question it should be noted that Article 29(5) of Directive 71/305
     requires the awarding authority to examine the details of tenders which are obviously abnormally low, and for
     that purpose obliges the authority to request the tenderer to furnish the necessary explanations. Article 29(5)
     further requires the awarding authority, where appropriate, to indicate which parts of those explanations it finds
     unacceptable. Finally, if the criterion adopted for the award of the contract is the lowest price tendered, the
     awarding authority must justify to the Advisory Committee set up by the Council Decision of 26 July 1971
     (Official Journal, English Special Edition 1971 (II), p. 693) the rejection of tenders which it considers to be too
     low.
26   The Comune di Milano and the Italian Government maintain that it is in keeping with the aim of Article 29(5) to
     replace the examination procedure which it envisages, giving the tenderer an opportunity to state its views, with
     a mathematical criterion for exclusion. They point out that the aim of that provision is, as the Court ruled in its
     judgment of 10 February 1982 in Case 76/81 Transporoute v Minister for Public Works ((1982)) ECR 417, at p.
     428), to protect tenderers against arbitrariness on the part of the authority awarding the contract. A mathematical
     criterion for exclusion affords an absolute safeguard. It has the further advantage of being faster in its application
     than the procedure laid down by the Directive.
27   That argument cannot be upheld. A mathematical criterion for exclusion deprives tenderers who have submitted
     exceptionally low tenders of the opportunity of demonstrating that those tenders are genuine ones. The
     application of such a criterion is contrary to the aim of Directive 71/305, namely to promote the development of
     effective competition in the field of public contracts.
28   The answer to the second part of the third question must therefore be that Article 29(5) of Council Directive
     71/305 prohibits Member States from introducing provisions which require the automatic exclusion from
     procedures for the award of public works contracts of certain tenders determined according to a mathematical
     criterion, instead of obliging the awarding authority to apply the examination procedure laid down in the
                                                                                                                              55
     Directive, giving the tenderer an opportunity to furnish explanations.
29   With regard to the first question, it should be observed that it was in order to enable tenderers submitting
     exceptionally low tenders to demonstrate that those tenders are genuine ones that the Council, in Article 29(5) of
     Directive 71/305, laid down a precise, detailed procedure for the examination of tenders which appear to be
     abnormally low. That aim would be jeopardized if Member States were able, when implementing Article 29(5)
     of the directive, to depart from it to any material extent.
30   The answer to the first question must therefore be that when implementing Council Directive 71/305 Member
     States may not depart to any material extent from the provisions of Article 29(5) thereof.
     …
     The fourth question
37   In the fourth question the national court asks whether administrative authorities, including municipal authorities,
     are under the same obligation as a national court to apply the provisions of Article 29(5) of Council Directive
     71/305 and to refrain from applying provisions of national law which conflict with them.
38   In its judgments of 19 January 1982 in Case 8/81 Becker v Finanzamt Muenster-Innenstadt ((1982)) ECR 53, at
     p. 71 and 26 February 1986 in Case 152/84 Marshall v Southampton and South-West Hampshire Area Health
     Authority ((1986) ECR 723, at p. 748) the Court held that wherever the provisions of a directive appear, as far as
     their subject-matter is concerned, to be unconditional and sufficiently precise, those provisions may be relied
     upon by an individual against the State where that State has failed to implement the directive in national law by
     the end of the period prescribed or where it has failed to implement the Directive correctly.
39   It is important to note that the reason for which an individual may, in the circumstances described above, rely on
     the provisions of a directive in proceedings before the national courts is that the obligations arising under those
     provisions are binding upon all the authorities of the Member States.
40   It would, moreover, be contradictory to rule that an individual may rely upon the provisions of a directive which
     fulfil the conditions defined above in proceedings before the national courts seeking an order against the
     administrative authorities, and yet to hold that those authorities are under no obligation to apply the provisions of
     the directive and refrain from applying provisions of national law which conflict with them. It follows that when
     the conditions under which the Court has held that individuals may rely on the provisions of a directive before
     the national courts are met, all organs of the administration, including decentralized authorities such as
     municipalities, are obliged to apply those provisions.
41   With specific regard to Article 29(5) of Directive 71/305, it is apparent from the discussion of the first question
     that it is unconditional and sufficiently precise to be relied upon by an individual against the State. An individual
     may therefore plead that provision before the national courts and, as is clear from the foregoing, all organs of the
     administration, including decentralized authorities such as municipalities, are obliged to apply it.
42   The answer to the fourth question must therefore be that administrative authorities, including municipal
     authorities, are under the same obligation as a national court to apply the provisions of Article 29(5) of Council
     Directive 71/305/EEC and to refrain from applying provisions of national law which conflict with them.


     Costs
     …
     On those grounds,
     THE COURT, in answer to the questions referred to it by the Tribunale amministrativo regionale per la
     Lombardia by order of 16 December 1987, hereby rules :
      (1) Article 29(5) of Council Directive 71/305 prohibits Member States from introducing provisions which
     require the automatic exclusion from procedures for the award of public works contracts of certain tenders
     determined according to a mathematical criterion, instead of obliging the awarding authority to apply the
     examination procedure laid down in the Directive, giving the tenderer an opportunity to furnish explanations.
      (2) When implementing Council Directive 71/305/EEC, Member States may not depart to any material extent
     from the provisions of Article 29(5) thereof.
      (3) Article 29(5) of Council Directive 71/305 allows Member States to require that tenders be examined when
     those tenders appear to be abnormally low, and not only when they are obviously abnormally low.
      (4) Administrative authorities, including municipal authorities, are under the same obligation as a national court
     to apply the provisions of Article 29(5) of Council Directive 71/305/EEC and to refrain from applying provisions
                                                                                                                             56
    of national law which conflict with them.



    Case 15
    Judgment of the Court (Third Chamber) of 13 July 1989. Hubert Wachauf v Bundesamt
    für Ernährung und Forstwirtschaft. Reference for a preliminary ruling:
    Verwaltungsgericht Frankfurt am Main - Germany. Agriculture - Additional levy on
    milk.
    In Case 5/88

    REFERENCE to the Court under Article 177 of the EEC Treaty by the Verwaltungsgericht ( Administrative
    Court ) Frankfurt am Main for a preliminary ruling in the proceedings pending before that court between

    Hubert Wachauf and Federal Republic of Germany,

    on the interpretation of Article 12 ( d ) of Council Regulation No 857/84 of 31 March 1984 adopting general
    rules for the application of the levy referred to in Article 5c of Regulation ( EEC ) No 804/68 in the milk and
    milk products sector ( Official Journal 1984, L 90, p. 13 ), and of Article 5(3 ) of Commission Regulation ( EEC
    ) No 1371/84 of 16 May 1984 laying down detailed rules for the application of the additional levy referred to in
    Article 5c of Regulation ( EEC ) No 804/68 ( Official Journal 1984, L 132, p. 11 ),

    THE COURT ( Third Chamber ) gives the following Judgment

1   By an order of 17 December 1987, which was received at the Court on 8 January 1988, the Verwaltungsgericht
    Frankfurt am Main referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two
    questions on the interpretation of Article 12(d ) of Council Regulation No 857/84 of 31 March 1984 adopting
    general rules for the application of the levy referred to in Article 5c of Regulation ( EEC ) No 804/68 in the milk
    and milk products sector ( Official Journal 1984, L 90, p. 13 ) and Article 5(3 ) of Commission Regulation ( EEC
    ) No 1371/84 of 16 May 1984 laying down detailed rules for the application of the additional levy referred to in
    Article 5c of Regulation ( EEC ) No 804/68 ( Official Journal 1984, L 132, p. 11 ).
2   Those questions were raised in proceedings between Mr Hubert Wachauf, a farmer, and the Bundesamt fuer
    Ernaehrung und Forstwirtschaft ( Federal Office for Food and Forestry, hereinafter referred to as "the Federal
    Office "). Mr Wachauf was a tenant farmer. Upon the expiry of his tenancy, he requested compensation for the
    definitive discontinuance of milk production pursuant to the German Law of 17 July 1984 on compensation for
    the discontinuance of the production of milk for sale and its implementing order of 20 July 1984. That
    legislation, which is based on a power contained in Article 4(1)(a ) of Regulation No 857/84, mentioned above,
    essentially provides that a milk producer within the meaning of Article 12(c ) of Regulation No 857/84 may
    apply for compensation if he undertakes to discontinue milk production definitively within a period of six
    months from the grant of the compensation. If the person making that application is the tenant of a farm within
    the meaning of Article 12(d ) of Regulation No 857/84 his application must also be accompanied by the lessor' s
    written consent.
3   On the basis of the latter provision, the Federal Office refused to grant to Mr Wachauf the compensation
    requested, since the landlord of the farm in question had withdrawn the consent which he had originally given.
4   Mr Wachauf brought an action against the decision of the Federal Office before the Verwaltungsgericht
    Frankfurt am Main. That court has doubts about whether Mr Wachauf was the tenant of a "holding" within the
    meaning of Article 12(b ) of Regulation No 857/84, since the landlord of the farm had never himself carried on
    milk production on the farm leased and, moreover, the essential elements of a farm intended for milk production,
    namely a dairy herd and the technical facilities necessary for milk production, had always been the property of
    the tenant. Should such a farm nevertheless be deemed to be a "holding", the national court asks whether Article
    5(3 ) of Regulation No 1371/84 also applies in the case of the surrender of a tenanted farm.
    The first question
7   Regard being had to the facts of the main proceedings, the first question must be construed as seeking to
    ascertain whether the term "holding" in Article 12(d ) of Council Regulation No 857/84 refers to all the
    agricultural production units which are the subject of a lease, even if those units, as leased, had neither dairy
    cows nor the technical facilities necessary for milk production and the lease provided for no obligation on the
    part of the lessee to engage in milk production.

                                                                                                                          57
8    A "holding" is defined in Article 12(d ) of Regulation No 857/84 as "all the production units operated by the
     producer and located within the geographical territory of the Community ".
9    The very wording of that provision shows that it relates to production units which satisfy two conditions, namely
     that they should be operated by a producer, that is to say a person who sells milk or other milk products directly
     to the consumer or who supplies the purchaser ( Article 12(c ) of Regulation No 857/84 ) and that they should be
     located within the geographical territory of the Community. The concept of a "holding" does not, however,
     presuppose that, in the event of the production units in question being leased, the dairy herd and the technical
     facilities necessary for milk production have been provided by the lessor or that, under the terms of the tenancy
     agreement, those production units are to be utilized specifically for milk production.
10   The correctness of that interpretation, which is based on the wording of Article 12(d ) of Regulation No 857/84,
     is borne out by the purpose of that provision. In fact, as the United Kingdom and the Commission rightly point
     out, Article 12(d ) is intended to define the scope of the rules relating to transfers of reference quantities
     following a change of ownership or occupancy of the holding. Consequently, a restrictive interpretation of the
     provision, to the effect that only agricultural production units specifically adapted to, or intended for, milk
     production are covered, would have the effect of excluding from the scope of those transfer rules a large number
     of farms, and, more particularly, "mixed" farms combining milk production with arable farming or with other
     types of agriculture. Such an exclusion would impair the effectiveness of those rules.
11   The reply to be given to the first question must therefore be that the term "holding" in Article 12(d ) of Council
     Regulation No 857/84 of 31 March 1984 covers all the agricultural production units which are the subject of a
     lease, even if those units, as leased, had neither dairy cows nor the technical facilities necessary for milk
     production and the lease provided for no obligation on the part of the lessee to engage in milk production.
     The second question
12   The second question seeks to ascertain whether Article 5(3 ) of Regulation No 1371/84 must be interpreted as
     applying to the surrender, upon the expiry of the lease, of all the agricultural production units leased, even if
     those units, as leased, had neither dairy cows nor the technical facilities necessary for milk production and the
     lease provided for no obligation on the part of the lessee to engage in milk production.
13   According to Article 7(1 ) of Regulation No 857/74, as amended by Council Regulation No 590/85 of 26
     February 1985 ( Official Journal 1985, L 68, p. 1 ), "where a holding is sold, leased or transferred by inheritance,
     all or part of the corresponding reference quantity ( that is to say the quantity exempt from the additional levy )
     shall be transferred to the purchaser, tenant or heir according to procedures to be determined ". However,
     paragraph ( 4 ) of that article provides that "in the case of rural leases due to expire, where the lessee is not
     entitled to an extension of the lease on similar terms, Member States may provide that all or part of the reference
     quantity corresponding to the holding or the part thereof which forms the subject of the lease shall be put at the
     disposal of the departing lessee if he intends to continue milk production ". It is apparent from the provisions
     quoted, considered as a whole, that the Community legislature intended that at the end of the lease the reference
     quantity should in principle return to the lessor who retakes possession of the holding, subject, however, to the
     Member States' power to allocate all or part of the reference quantity to the departing lessee.
14   Article 5 of Commission Regulation No 1371/84 laid down the detailed rules governing the transfer of reference
     quantities following a change in the ownership or occupancy of a holding. Paragraph ( 1 ) of that article provides
     in this connection that "where an entire holding is sold, leased or transferred by inheritance, the corresponding
     reference quantity shall be transferred in full to the producer who takes over the holding ". Article 5(3 ) provides
     that the provisions of paragraph ( 1 ) "shall also be applicable in other cases of transfer which, under the various
     national rules, have comparable legal effects as far as producers are concerned ".
15   The surrender of a tenanted holding upon the expiry of a lease has comparable legal effects, within the meaning
     of Article 5(3 ) of Regulation No 1371/84, to those brought about by the transfer of the holding upon the grant of
     the lease, for both transactions entail a change in the possession of the production units in question within the
     contractual relations created by the lease. Consequently, the surrender, upon the expiry of the lease, of leased
     agricultural production units is a case covered by Article 5(3 ) of Regulation No 1371/84, provided that upon the
     grant of the lease their transfer falls under Article 5(1 ), which is the case when a "holding" within the meaning
     of Article 12(d ) of Regulation No 857/84, as interpreted above in reply to the first question, is involved.
16   In its order for reference, the Verwaltungsgericht states that, should the rules in question be interpreted as
     meaning that they provide for the reference quantity to be returned to the lessor, those rules could have the effect
     of precluding the lessee from benefiting from the system of compensation for discontinuance of milk production
     if the lessor is opposed to it. However, such a consequence would be unacceptable if, as in the present case, the
     lessor has never engaged in milk production or contributed to the setting up of a dairy farm, since the lessee, who
     would have acquired the reference quantity by his own labour, would then be deprived, without compensation, of
     the fruits of that labour, which would constitute an infringement of constitutional guarantees.
                                                                                                                            58
17   The Court has consistently held, in particular in its judgment of 13 December 1979 in Case 44/79 Hauer v Land
     Rheinland Pfalz (( 1979 )) ECR 3727, that fundamental rights form an integral part of the general principles of
     the law, the observance of which is ensured by the Court. In safeguarding those rights, the Court has to look to
     the constitutional traditions common to the Member States, so that measures which are incompatible with the
     fundamental rights recognized by the constitutions of those States may not find acceptance in the Community.
     International treaties concerning the protection of human rights on which the Member States have collaborated
     or to which they have acceded can also supply guidelines to which regard should be had in the context of
     Community law.
18   The fundamental rights recognized by the Court are not absolute, however, but must be considered in relation to
     their social function. Consequently, restrictions may be imposed on the exercise of those rights, in particular in
     the context of a common organization of a market, provided that those restrictions in fact correspond to
     objectives of general interest pursued by the Community and do not constitute, with regard to the aim pursued, a
     disproportionate and intolerable interference, impairing the very substance of those rights.
19   Having regard to those criteria, it must be observed that Community rules which, upon the expiry of the lease,
     had the effect of depriving the lessee, without compensation, of the fruits of his labour and of his investments in
     the tenanted holding would be incompatible with the requirements of the protection of fundamental rights in the
     Community legal order. Since those requirements are also binding on the Member States when they implement
     Community rules, the Member States must, as far as possible, apply those rules in accordance with those
     requirements.
20   In the present case, it is clear from Article 7(4 ) of Regulation No 857/84, as amended, that in the case of rural
     leases due to expire where the lessee is not entitled to an extension of the lease, the Member States may decide to
     allow the departing lessee to keep all or part of the reference quantity if he intends to continue milk production.
     It is also clear from Article 4(1)(a ) of Regulation No 857/84 that in order to complete the restructuring of milk
     production Member States may grant compensation to producers who undertake to discontinue milk production
     definitively. It is true that, if that provision is read in conjunction with Article 4(2 ) of the same regulation,
     pursuant to which the reference quantities thereby freed are to be added, as necessary, to the national reserve, it
     may be inferred that, in so far as the reference quantity corresponding to the holding returns to the lessor, it
     cannot be taken into account when compensation is granted.
21   However, that conclusion does not preclude the possibility for a departing lessee to obtain compensation
     calculated on the basis of all or part of the relevant reference quantity when that is justified by the extent of the
     lessee' s contribution to the building-up of milk production on the holding. In that event, the quantity taken into
     consideration for the purposes of calculating the compensation must be treated as a freed quantity and,
     consequently, may not be put at the disposal of the lessor who repossesses the holding.
22   The Community regulations in question accordingly leave the competent national authorities a sufficiently wide
     margin of appreciation to enable them to apply those rules in a manner consistent with the requirements of the
     protection of fundamental rights, either by giving the lessee the opportunity of keeping all or part of the
     reference quantity if he intends to continue milk production, or by compensating him if he undertakes to abandon
     such production definitively.
23   The submission that the rules in question conflict with the requirements of the protection of fundamental rights
     in the Community legal order must therefore be rejected.
24   It follows from all the foregoing considerations that the reply to the second question must be that Article 5(3 ) of
     Commission Regulation No 1371/84 of 16 May 1984 must be interpreted as applying to the surrender, upon the
     expiry of the lease, of all the agricultural production units leased, even if those units, as leased, had neither dairy
     cows nor the technical facilities necessary for milk production and the lease provided for no obligation on the
     part of the lessee to engage in milk production.
     On those grounds, THE COURT ( Third Chamber ),
     in answer to the questions submitted to it by the Verwaltungsgericht Frankfurt am Main by order of 17
     December 1987, hereby rules:
     ( 1 ) The term "holding" in Article 12(d ) of Council Regulation No 857/84 of 31 March 1984 covers all the
     agricultural production units which are the subject of a lease, even if those units, as leased, had neither dairy
     cows nor the technical facilities necessary for milk production and the lease provided for no obligation on the
     part of the lessee to engage in milk production.
     ( 2 ) Article 5(3 ) of Commission Regulation No 1371/84 of 16 May 1984 must be interpreted as applying to the
     surrender, upon the expiry of the lease, of all the agricultural production units leased, even if those units, as
     leased, had neither dairy cows nor the technical facilities necessary for milk production and the lease provided
     for no obligation on the part of the lessee to engage in milk production.
                                                                                                                               59
    Case 16
    ECJ, Judgment of 13 November 1990. Marleasing SA v La Comercial Internacional de
    Alimentacion SA. Reference for a preliminary ruling: Juzgado de Primera Instancia e
    Instruccion no 1 de Oviedo - Spain. Directive 68/151/CEE - Article 11 - Consistent
    interpretation of national law. Case C-106/89. European Court reports 1990 Page I-
    04135
    …
    In Case C-106/89,
    …
    THE COURT (Sixth Chamber),
    …
    gives the following
    Judgment
1   By order of 13 March 1989, which was received at the Court on 3 April 1989, the Juzgado de Primera Instancia e
    Instrucción No 1, Oviedo, referred a question to the Court pursuant to Article 177 of the EEC Treaty for a
    preliminary ruling on the interpretation of Article 11 of Council Directive 68/151/EEC of 9 March 1968 on
    coordination of safeguards which, for the protection of the interests of members and others, are required by
    Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a
    view to making such safeguards equivalent throughout the Community.
2   Those questions arose in a dispute between Marleasing SA, the plaintiff in the main proceedings, and a number
    of defendants including La Comercial Internacional de Alimentación SA (hereinafter referred to as "La
    Comercial“). The latter was established in the form of a public limited company by three persons, including
    Barviesa SA, which contributed its own assets.
3   It is apparent from the grounds set out in the order for reference that Marleasing‟s primary claim, based on
    Articles 1261 and 1275 of the Spanish Civil Code, according to which contracts without cause or whose cause is
    unlawful have no legal effect, is for a declaration that the founders' contract establishing La Comercial is void on
    the ground that the establishment of the company lacked cause, was a sham transaction and was carried out in
    order to defraud the creditors of Barviesa SA, a co-founder of the defendant company. La Comercial contended
    that the action should be dismissed in its entirety on the ground, in particular, that Article 11 of Directive 68/151,
    which lists exhaustively the cases in which the nullity of a company may be ordered, does not include lack of
    cause amongst them.
4   The national court observed that in accordance with Article 395 of the Act concerning the Conditions of
    Accession of Spain and the Portuguese Republic to the European Communities (Official Journal 1985 L 302, p.
    23) the Kingdom of Spain was under an obligation to bring the directive into effect as from the date of accession,
    but that that had still not been done at the date of the order for reference. Taking the view, therefore, that the
    dispute raised a problem concerning the interpretation of Community law, the national court referred the
    following question to the Court: "Is Article 11 of Council Directive 68/151/EEC of 9 March 1968, which has not
    been implemented in national law, directly applicable so as to preclude a declaration of nullity of a public limited
    company on a ground other than those set out in the said article?"
5   Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the
    procedure and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so
    far as is necessary for the reasoning of the Court.
6   With regard to the question whether an individual may rely on the directive against a national law, it should be
    observed that, as the Court has consistently held, a directive may not of itself impose obligations on an
    individual and, consequently, a provision of a directive may not be relied upon as such against such a person
    (judgment in Case 152/84 Marshall v Southampton and South-West Hampshire Area Health Authority [1986]
    ECR 723).

                                                                                                                             60
7    However, it is apparent from the documents before the Court that the national court seeks in substance to
     ascertain whether a national court hearing a case which falls within the scope of Directive 68/151 is required to
     interpret its national law in the light of the wording and the purpose of that directive in order to preclude a
     declaration of nullity of a public limited company on a ground other than those listed in Article 11 of the
     directive.
8    In order to reply to that question, it should be observed that, as the Court pointed out in its judgment in Case
     14/83 Von Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891, paragraph 26, the Member
     States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under
     Article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of
     that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction,
     the courts. It follows that, in applying national law, whether the provisions in question were adopted before or
     after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light
     of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby
     comply with the third paragraph of Article 189 of the Treaty.
9    It follows that the requirement that national law must be interpreted in conformity with Article 11 of Directive
     68/151 precludes the interpretation of provisions of national law relating to public limited companies in such a
     manner that the nullity of a public limited company may be ordered on grounds other than those exhaustively
     listed in Article 11 of the directive in question.
10   With regard to the interpretation to be given to Article 11 of the directive, in particular Article 11(2)(b), it should
     be observed that that provision prohibits the laws of the Member States from providing for a judicial declaration
     of nullity on grounds other than those exhaustively listed in the directive, amongst which is the ground that the
     objects of the company are unlawful or contrary to public policy.
11   According to the Commission, the expression "objects of the company" must be interpreted as referring
     exclusively to the objects of the company as described in the instrument of incorporation or the articles of
     association. It follows, in the Commission‟s view, that a declaration of nullity of a company cannot be made on
     the basis of the activity actually pursued by it, for instance defrauding the founders' creditors.
12   That argument must be upheld. As is clear from the preamble to Directive 68/151, its purpose was to limit the
     cases in which nullity can arise and the retroactive effect of a declaration of nullity in order to ensure "certainty
     in the law as regards relations between the company and third parties, and also between members" (sixth recital).
     Furthermore, the protection of third parties "must be ensured by provisions which restrict to the greatest possible
     extent the grounds on which obligations entered into in the name of the company are not valid“. It follows,
     therefore, that each ground of nullity provided for in Article 11 of the directive must be interpreted strictly. In
     those circumstances the words "objects of the company" must be understood as referring to the objects of the
     company as described in the instrument of incorporation or the articles of association.
13   The answer to the question submitted must therefore be that a national court hearing a case which falls within the
     scope of Directive 68/151 is required to interpret its national law in the light of the wording and the purpose of
     that directive in order to preclude a declaration of nullity of a public limited company on a ground other than
     those listed in Article 11 of the directive.
     Costs
     …
     On those grounds,
     THE COURT (Sixth Chamber), in answer to the question referred to it by the Juzgado de Primera Instancia e
     Instrucción No 1, Oviedo, by order of 13 March 1989, hereby rules :
     A national court hearing a case which falls within the scope of Council Directive 68/151/EEC of 9 March 1968
     on coordination of safeguards which, for the protection of the interests of members and others, are required by
     Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a
     view to making such safeguards equivalent throughout the Community, is required to interpret its national law in
     the light of the wording and the purpose of that directive in order to preclude a declaration of nullity of a public
     limited company on a ground other than those listed in Article 11 of the directive.




     Case 17

                                                                                                                                  61
     ECJ, Judgment of 26 February 1991. Commission of the European Communities v
     Italian Republic. Case C-120/88. EC Rep. 1991, I-621
     A Member State fails to fulfil its obligations under Article 95 of the EEC Treaty if it does not adopt the measures
     necessary to permit persons not subject to VAT who import into its national territory goods on which VAT has
     already been charged in another Member State, without the possibility of obtaining a refund of that tax, to
     deduct from the VAT due on importation the amount of VAT paid in the Member State of exportation which is
     still contained in the value of the goods at the time of their importation, when the supply of similar goods by non-
     taxable persons within the national territory is not subject to VAT. The full and complete application of the
     prohibition of discrimination laid down in Article 95 cannot be ensured solely by the fact that that provision,
     being directly effective, may be relied on before national courts, since that is no more than a minimum guarantee
     and cannot resolve the difficulties, regarding the requirements of legal certainty, created by the retention in
     domestic legislation of provisions which do not provide for account to be taken of the residual amount of tax. A
     defence based on the absence at present of a common system applicable to the imports in question can be of no
     avail in denying the failure to fulfil obligations. While the establishment of such a system is a matter for the
     Community legislature, so long as such a system is not established, Article 95 precludes a Member State from
     applying its own system of VAT to imported products in a manner contrary to the principle of non-discrimination
     in matters of taxation.
     In Case C-120/88,
     …
     THE COURT
     …
     gives the following
     Judgment
14   By an application lodged at the Court Registry on 19 April 1988, the Commission of the European Communities
     brought an action under Article 169 of the EEC Treaty for a declaration that, by not adopting the measures
     necessary to permit persons not subject to value added tax (VAT) who import into Italy goods on which VAT
     has already been charged in another Member State, without the possibility of obtaining a refund of that tax, to
     deduct from the VAT due on importation the amount of VAT paid in the Member State of exportation which is
     still contained in the value of the goods at the time of their importation, the Italian Republic has failed to fulfil its
     obligations under Article 95 of the EEC Treaty.
15   The Commission claims that the failure by the Italian Republic to adopt measures allowing non-taxable persons
     to deduct such amounts in accordance with the established case-law of the Court creates an unclear situation at
     variance with the principle of legal certainty and leads to double taxation in breach of the prohibition of
     discriminatory taxation, a directly applicable principle laid down in Article 95 of the Treaty, as interpreted by the
     Court, in so far as the supply within Italy of similar goods by non-taxable persons is not subject to VAT.
16   The Italian Republic submits that the principle of the prohibition of double taxation is not sufficient in itself to
     resolve all the technical fiscal problems involved and that the proposal for a Sixteenth Council Directive on VAT
     designed to establish a common scheme for certain goods on which value added tax has been finally paid and
     which are imported by a final consumer in one Member State from another Member State (Official Journal 1986,
     C 96, p. 5) ought to be adopted without delay in order to allow for the adoption of uniform procedures and rules
     of application. Furthermore, the uncertainty in which Community citizens are left as regards the extent of their
     rights is attributable to the Community legislation and cannot be blamed on the Italian Republic.
17   Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and
     the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is
     necessary for the reasoning of the Court.
18   It ought to be noted at the outset that, according to the established case-law of the Court, Article 95 of the Treaty
     lays downs a prohibition of discriminatory taxation of imported goods. That prohibition produces direct effects
     and creates for individuals personal rights which national courts are bound to protect (see, in particular,
     paragraph 46 of the judgment in Case 15/81 Gaston Schul Douane Expediteur BV v Inspecteur der Invoerrechten
     en Accijnzen, Roosendaal [1982] ECR 1409 - the first Gaston Schul case).
19   According to equally well-established case-law (see the judgment in Case 47/84 Staatssecretaris van Financiën v
     Gaston Schul Douane-Expediteur BV [1985] ECR 1491 - Gaston Schul II - and the judgment in Case 299/86
     Drexl [1988] ECR 1213), Article 95 must be interpreted as meaning that the VAT charged on the importation of
     goods supplied by a non-taxable person, where such tax is not charged on the supply by individuals of similar
                                                                                                                                 62
     goods within the Member State of importation, must take into account the amount of VAT paid in the Member
     State of exportation which is still contained in the value of the goods at the time of importation, in such a way
     that that amount is not included in the taxable amount and is also deducted from the VAT payable on
     importation.
20   It follows that the relevant provisions of Community law do not, contrary to the assertions of the Italian
     Republic, leave Community citizens in uncertainty as to the scope of their rights with regard to the principle of
     equal taxation of imported goods.
21   It is not disputed that the provisions of national law in question provide for the imposition of VAT on the
     importation by non-taxable persons of goods on which VAT has already been paid in the Member State of
     exportation, without allowing the persons concerned to deduct the residual VAT from the amount of VAT
     payable on importation, even though the supply of similar goods by non-taxable persons within Italy is not
     subject to VAT.
22   Such provisions are incompatible with the prohibition of discriminatory taxation of imported goods since,
     despite the direct effect of Article 95, they keep non-taxable importers in a state of uncertainty as to their right to
     rely on that article and may induce officials of national authorities responsible for collecting VAT to refrain from
     applying the principle that residual VAT is to be deducted.
23   The right of non-taxable importers to rely on the directly applicable provisions of Article 95 before national
     courts is only a minimum guarantee and is not sufficient in itself to ensure the full and complete implementation
     of the Treaty (see the judgment in Case 168/85 Commission v Italy [1986] ECR 2945, at paragraph 11).
24   Furthermore, the principles of legal certainty and the protection of individuals require that, in areas covered by
     Community law, the Member States' legal rules should be worded unequivocally so as to give the persons
     concerned a clear and precise understanding of their rights and obligations and to enable national courts to
     ensure that those rights and obligations are observed (see the judgment in Case 257/86 Commission v Italy
     [1988] ECR 3249).
25   The Italian Republic‟s defence submission based on the absence at present of a common system of VAT
     applicable to the imports in question must be rejected.
26   It is sufficient to recall in this regard that, whilst the establishment of a common system of VAT applicable to
     such operations is a matter for the Community legislature, so long as such a system is not established Article 95
     of the Treaty precludes a Member State from applying its system of VAT to imported products in a manner
     contrary to the principle of non-discrimination in matters of taxation (see the judgement in Gaston Schul I, cited
     above).
27   The implementation of the programme of harmonization of tax legislation pursuant to Article 99 of the Treaty
     cannot be made into a prerequisite for the application of Article 95, which requires Member States, with
     immediate effect, to apply their tax legislation in a non-discriminatory manner prior to any harmonization (see
     the judgment in Case 171/78 Commission v Denmark [1980] ECR 447).
28   It follows that the arguments of the Italian Republic cannot be accepted.
29   In the light of all the preceding considerations, it must be held that, by not adopting the measures necessary to
     permit persons not subject to VAT who import into Italy goods on which VAT has already been charged in
     another Member State, without the possibility of obtaining a refund of that tax, to deduct from the VAT due on
     importation the amount of VAT paid in the Member State of exportation which is still contained in the value of
     the goods at the time of their importation, when the supply of similar goods by non-taxable persons within Italy
     is not subject to VAT, the Italian Republic has failed to fulfil its obligations under Article 95 of the EEC Treaty.
     …
     On those grounds,
     THE COURT
     hereby:
     (1) Declares that, by not adopting the measures necessary to permit persons not subject to VAT who import into
     Italy goods on which VAT has already been charged in another Member State, without the possibility of
     obtaining a refund of that tax, to deduct from the VAT due on importation the amount of VAT paid in the
     Member State of exportation which is still contained in the value of the goods at the time of their importation,
     when the supply of similar goods by non-taxable persons within Italy is not subject to VAT, the Italian Republic
     has failed to fulfil its obligations under Article 95 of the EEC Treaty;
     (2) Orders the Italian Republic to pay the costs.

                                                                                                                               63
     Case 18
     Judgment of the Court of 18 June 1991. - Elliniki Radiophonia Tiléorassi AE and
     Panellinia Omospondia Syllogon Prossopikou v Dimotiki Etairia Pliroforissis and
     Sotirios Kouvelas and Nicolaos Avdellas and others. - Reference for a preliminary
     ruling: Monomeles Protodikeio Thessalonikis - Greece. - Exclusive rights in the matter
     of radio and television broadcasting - Free movement of goods - Freedom to provide
     services - Rules on competition - Freedom of expression. - Case C-260/89.


     In Case C-260/89,


     ...


     THE COURT


     ...


     gives the following


     Judgment


     ...


19   Article 59 of the Treaty provides that restrictions on freedom to provide services within the Community are to be
     progressively abolished during the transitional period in respect of nationals of Member States who are
     established in a State of the Community other than that of the person for whom the services are intended. The
     requirements of that provision entail, in particular, the removal of any discrimination against a person providing
     services who is established in a Member State other than that in which the services are to be provided.


20   As has been indicated in paragraph 12 of this judgment, although the existence of a monopoly in the provision of
     services is not as such incompatible with Community law, the possibility cannot be excluded that the monopoly
     may be organized in such a way as to infringe the rules relating to the freedom to provide services. Such a case
     arises, in particular, where the monopoly leads to discrimination between national television broadcasts and
     those originating in other Member States, to the detriment of the latter.


21   As regards the monopoly in question in the main proceedings, it is apparent from Article 2(2) of Law No
     1730/1987 and the case-law of the Hellenic Council of State that ERT' s exclusive franchise comprises both the
     right to broadcast its own programmes (hereinafter referred to as "broadcasts") and the right to receive and
     retransmit programmes from other Member States (hereinafter referred to as "retransmissions").


22   As the Commission has observed, the concentration of the monopolies to broadcast and retransmit in the hands
     of a single undertaking gives that undertaking the possibility both to broadcast its own programmes and to
     restrict the retransmissions of programmes from other Member States. That possibility, in the absence of any
     guarantee concerning the retransmission of programmes from other Member States, may lead the undertaking to
                                                                                                                          64
     favour its own programmes to the detriment of foreign programmes. Under such a system equality of opportunity
     as between broadcasts of its own programmes and the retransmission of programmes from other Member States
     is therefore liable to be seriously compromised.


23   The question whether the aggregation of the exclusive right to broadcast and the right to retransmit actually leads
     to discrimination to the detriment of programmes from other Member States is a matter of fact which only the
     national court has jurisdiction to determine.


24   It should next be pointed out that the rules relating to the freedom to provide services preclude national rules
     which have such discriminatory effects unless those rules fall within the derogating provision contained in
     Article 56 of the Treaty to which Article 66 refers. It follows from Article 56, which must be interpreted strictly,
     that discriminatory rules may be justified on grounds of public policy, public security or public health.


     ...


41   With regard to Article 10 of the European Convention on Human Rights, referred to in the ninth and tenth
     questions, it must first be pointed out that, as the Court has consistently held, fundamental rights form an integral
     part of the general principles of law, the observance of which it ensures. For that purpose the Court draws
     inspiration from the constitutional traditions common to the Member States and from the guidelines supplied by
     international treaties for the protection of human rights on which the Member States have collaborated or of
     which they are signatories (see, in particular, the judgment in Case C-4/73 Nold v Commission [1974] ECR 491,
     paragraph 13). The European Convention on Human Rights has special significance in that respect (see in
     particular Case C-222/84 Johnston v Chief Constable of the Royal Ulster Constabulary [1986] ECR 1651,
     paragraph 18). It follows that, as the Court held in its judgment in Case C-5/88 Wachauf v Federal Republic of
     Germany [1989] ECR 2609, paragraph 19, the Community cannot accept measures which are incompatible with
     observance of the human rights thus recognized and guaranteed.


42   As the Court has held (see the judgment in Joined Cases C-60 and C-61/84 Cinéthèque v Fédération Nationale
     des Cinémas Français [1985] ECR 2605, paragraph 25, and the judgment in Case C-12/86 Demirel v Stadt
     Schwaebisch Gmund [1987] ECR 3719, paragraph 28), it has no power to examine the compatibility with the
     European Convention on Human Rights of national rules which do not fall within the scope of Community law.
     On the other hand, where such rules do fall within the scope of Community law, and reference is made to the
     Court for a preliminary ruling, it must provide all the criteria of interpretation needed by the national court to
     determine whether those rules are compatible with the fundamental rights the observance of which the Court
     ensures and which derive in particular from the European Convention on Human Rights.


43   In particular, where a Member State relies on the combined provisions of Articles 56 and 66 in order to justify
     rules which are likely to obstruct the exercise of the freedom to provide services, such justification, provided for
     by Community law, must be interpreted in the light of the general principles of law and in particular of
     fundamental rights. Thus the national rules in question can fall under the exceptions provided for by the
     combined provisions of Articles 56 and 66 only if they are compatible with the fundamental rights the
     observance of which is ensured by the Court.


44   It follows that in such a case it is for the national court, and if necessary, the Court of Justice to appraise the
     application of those provisions having regard to all the rules of Community law, including freedom of
     expression, as embodied in Article 10 of the European Convention on Human Rights, as a general principle of
     law the observance of which is ensured by the Court.


45   The reply to the national court must therefore be that the limitations imposed on the power of the Member States
     to apply the provisions referred to in Articles 66 and 56 of the Treaty on grounds of public policy, public security
     and public health must be appraised in the light of the general principle of freedom of expression embodied in
     Article 10 of the European Convention on Human Rights.


                                                                                                                             65
    Case 19
    Judgment of the Court of 4 October 1991. The Society for the Protection of Unborn
    Children Ireland Ltd v Stephen Grogan and others. Reference for a preliminary ruling:
    High Court - Ireland.
    Freedom to provide services - Prohibition on the distribution of information on clinics
    carrying out voluntary terminations of pregnancy in other Member States.
    In Case C-159/90,

    REFERENCE to the Court under Article 177 of the EEC Treaty by the High Court of Ireland for a preliminary
    ruling in the action pending before that Court between

    The Society for the Protection of Unborn Children Ireland Ltd and Stephen Grogan and Others

    on the interpretation of Articles 59 to 66 of the EEC Treaty,

    THE COURT (Sixth Chamber), gives the following Judgment

1   By order dated 5 March 1990, which was received at the Court on 23 May 1990, the High Court of Ireland
    referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty three questions on the
    interpretation of Community law, in particular Article 60 of the EEC Treaty.
2   The questions arose in proceedings brought by the Society for the Protection of Unborn Children Ireland Ltd
    ("SPUC") against Stephen Grogan and fourteen other officers of students associations in connection with the
    distribution in Ireland of specific information relating to the identity and location of clinics in another Member
    State where medical termination of pregnancy is carried out.
3   Abortion has always been prohibited in Ireland, first of all at common law, then by statute. The relevant
    provisions at present in force are Sections 58 and 59 of the Offences Against the Person Act 1861, as reaffirmed
    in the Health (Family Planning) Act 1979.
4   In 1983 a constitutional amendment approved by referendum inserted in Article 40, Section 3, of the Irish
    Constitution a third subsection worded as follows: "The State acknowledges the right to life of the unborn and,
    with due regard to the equal right to life of the mother, guarantees in its laws to respect, and, as far as
    practicable, by its laws to defend and vindicate that right."
5   According to the Irish courts (High Court, judgment of 19 December 1986, and Supreme Court, judgment of 16
    March 1988, The Attorney General (at the relation of the Society for the Protection of Unborn Children Ireland
    Ltd) v Open Door Counselling Ltd and Dublin Wellwoman Centre Ltd [1988] Irish Reports 593), to assist
    pregnant women in Ireland to travel abroad to obtain abortions, inter alia by informing them of the identity and
    location of a specific clinic or clinics where abortions are performed and how to contact such clinics, is
    prohibited under Article 40.3.3 of the Irish Constitution.
6   SPUC, the plaintiff in the main proceedings, is a company incorporated under Irish law whose purpose is to
    prevent the decriminalization of abortion and to affirm, defend and promote human life from the moment of
    conception. In 1989/90 Stephen Grogan and the other defendants in the main proceedings were officers of
    students associations which issued certain publications for students. Those publications contained information
    about the availability of legal abortion in the United Kingdom, the identity and location of a number of abortion
    clinics in that country and how to contact them. It is undisputed that the students associations had no links with
    clinics in another Member State.
7   In September 1989 SPUC requested the defendants, in their capacity as officers of their respective associations,
    to undertake not to publish information of the kind described above during the academic year 1989/90. The
    defendants did not reply, and SPUC then brought proceedings in the High Court for a declaration that the
    distribution of such information was unlawful and for an injunction restraining its distribution.
8   By a judgment of 11 October 1989 the High Court decided to refer certain questions to the Court of Justice for a
    preliminary ruling under Article 177 of the EEC Treaty before ruling on the injunction applied for by the
    plaintiff. An appeal was brought against that judgment and, on 19 December 1989, the Supreme Court granted
                                                                                                                         66
     the injunction applied for but did not overturn the High Court' s decision to refer questions to the Court of Justice
     for a preliminary ruling. Moreover, each of the parties was given leave to apply to the High Court in order to
     vary the decision of the Supreme Court in the light of the preliminary ruling to be given by the Court of Justice.
     First question
16   In its first question, the national court essentially seeks to establish whether medical termination of pregnancy,
     performed in accordance with the law of the State where it is carried out, constitutes a service within the
     meaning of Article 60 of the EEC Treaty.
17   According to the first paragraph of that provision, services are to be considered to be "services" within the
     meaning of the Treaty where they are normally provided for remuneration, in so far as they are not governed by
     the provisions relating to freedom of movement for goods, capital or persons. Indent (d) of the second paragraph
     of Article 60 expressly states that activities of the professions fall within the definition of services.
18   It must be held that termination of pregnancy, as lawfully practised in several Member States, is a medical
     activity which is normally provided for remuneration and may be carried out as part of a professional activity. In
     any event, the Court has already held in the judgment in Luisi and Carbone (Joined Cases 286/82 and 26/83
     Luisi and Carbone v Ministero del Tesoro [1984] ECR 377, paragraph 16) that medical activities fall within the
     scope of Article 60 of the Treaty.
19   SPUC, however, maintains that the provision of abortion cannot be regarded as being a service, on the grounds
     that it is grossly immoral and involves the destruction of the life of a human being, namely the unborn child.
20   Whatever the merits of those arguments on the moral plane, they cannot influence the answer to the national
     court' s first question. It is not for the Court to substitute its assessment for that of the legislature in those
     Member States where the activities in question are practised legally.
21   Consequently, the answer to the national court' s first question must be that medical termination of pregnancy,
     performed in accordance with the law of the State in which it is carried out, constitutes a service within the
     meaning of Article 60 of the Treaty.
     Second and third questions
22   Having regard to the facts of the case, it must be considered that, in its second and third questions, the national
     court seeks essentially to establish whether it is contrary to Community law for a Member State in which
     medical termination of pregnancy is forbidden to prohibit students associations from distributing information
     about the identity and location of clinics in another Member State where medical termination of pregnancy is
     lawfully carried out and the means of communicating with those clinics, where the clinics in question have no
     involvement in the distribution of the said information.
23   Although the national court' s questions refer to Community law in general, the Court takes the view that its
     attention should be focused on the provisions of Article 59 et seq. of the EEC Treaty, which deal with the
     freedom to provide services, and the argument concerning human rights, which has been treated extensively in
     the observations submitted to the Court.
24   As regards, first, the provisions of Article 59 of the Treaty, which prohibit any restriction on the freedom to
     supply services, it is apparent from the facts of the case that the link between the activity of the students
     associations of which Mr Grogan and the other defendants are officers and medical terminations of pregnancies
     carried out in clinics in another Member State is too tenuous for the prohibition on the distribution of
     information to be capable of being regarded as a restriction within the meaning of Article 59 of the Treaty.
25   The situation in which students associations distributing the information at issue in the main proceedings are not
     in cooperation with the clinics whose addresses they publish can be distinguished from the situation which gave
     rise to the judgment in GB-INNO-BM (Case C-362/88 GB-INNO-BM v Confédération du Commerce
     Luxembourgeois [1990] I-667), in which the Court held that a prohibition on the distribution of advertising was
     capable of constituting a barrier to the free movement of goods and therefore had to be examined in the light of
     Articles 30, 31 and 36 of the EEC Treaty.
26   The information to which the national court' s questions refer is not distributed on behalf of an economic
     operator established in another Member State. On the contrary, the information constitutes a manifestation of
     freedom of expression and of the freedom to impart and receive information which is independent of the
     economic activity carried on by clinics established in another Member State.
27    It follows that, in any event, a prohibition on the distribution of information in circumstances such as those
     which are the subject of the main proceedings cannot be regarded as a restriction within the meaning of Article
     59 of the Treaty.
28   Secondly, it is necessary to consider the argument of the defendants in the main proceedings to the effect that the
                                                                                                                             67
     prohibition in question, inasmuch as it is based on a constitutional amendment approved in 1983, is contrary to
     Article 62 of the EEC Treaty, which provides that Member States are not to introduce any new restrictions on the
     freedom to provide services in fact attained at the date when the Treaty entered into force.
29   It is sufficient to observe, as far as that argument is concerned, that Article 62, which is complementary to
     Article 59, cannot prohibit restrictions which do not fall within the scope of Article 59.
30   Thirdly and lastly, the defendants in the main proceedings maintain that a prohibition such as the one at issue is
     in breach of fundamental rights, especially of freedom of expression and the freedom to receive and impart
     information, enshrined in particular in Article 10(1) of the European Convention on Human Rights.
31   According to, inter alia, the judgment of 18 June 1991 in Elliniki Radiophonia Tileorasi (Case C-260/89 Elliniki
     Radiophonia Tileorasi v Dimotiki Etairia Pliroforissis [1991] ECR I-2951, paragraph 42), where national
     legislation falls within the field of application of Community law the Court, when requested to give a
     preliminary ruling, must provide the national court with all the elements of interpretation which are necessary in
     order to enable it to assess the compatibility of that legislation with the fundamental rights - as laid down in
     particular in the European Convention on Human Rights - the observance of which the Court ensures. However,
     the Court has no such jurisdiction with regard to national legislation lying outside the scope of Community law.
     In view of the facts of the case and of the conclusions which the Court has reached above with regard to the
     scope of Articles 59 and 62 of the Treaty, that would appear to be true of the prohibition at issue before the
     national court.
32   The reply to the national court' s second and third questions must therefore be that it is not contrary to
     Community law for a Member State in which medical termination of pregnancy is forbidden to prohibit students
     associations from distributing information about the identity and location of clinics in another Member State
     where voluntary termination of pregnancy is lawfully carried out and the means of communicating with those
     clinics, where the clinics in question have no involvement in the distribution of the said information.
     On those grounds, THE COURT, in reply to the questions submitted to it by the High Court of Ireland, by order
     of 5 March 1990, hereby rules:
     1. Medical termination of pregnancy, performed in accordance with the law of the State in which it is carried out,
     constitutes a service within the meaning of Article 60 of the Treaty;
     2. It is not contrary to Community law for a Member State in which medical termination of pregnancy is
     forbidden to prohibit students associations from distributing information about the identity and location of clinics
     in another Member State where voluntary termination of pregnancy is lawfully carried out and the means of
     communicating with those clinics, where the clinics in question have no involvement in the distribution of the
     said information.




     Case 20
     ECJ, Judgment of 10 November 1992. Hansa Fleisch Ernst Mundt GmbH & Co. KG v
     Landrat des Kreises Schleswig-Flensburg. Reference for a preliminary ruling:
     Schleswig-Holsteinisches Verwaltungsgericht - Germany. Heatlh inspections - Fees -
     Directive 85/73/EEC - Decision 88/408/EEC - Direct effect. Case C-156/91. European
     Court reports 1992 Page I-05567
     …
     In Case C-156/91,
     …
     gives the following Judgment
1    By order of 15 March 1991, which was received at the Court Registry on 13 June 1991, the Verwaltungsgericht
     (Administrative Court) Schleswig Holstein, referred to the Court of Justice for a preliminary ruling under Article
     177 of the EEC Treaty three questions on the interpretation of Council Directive 85/73/EEC of 29 January 1985
     on the financing of health inspections and controls of fresh meat and poultrymeat (OJ 1985 L 32, p. 14) and
     Council Decision 88/408/EEC of 15 June 1988 on the levels of the fees to be charged for health inspections and
     controls of fresh meat pursuant to Directive 85/73/EEC (OJ 1988 L 194, p. 24).
2    Those questions were raised in proceedings between Hansa Fleisch Ernst Mundt GmbH & Co. KG ("Hansa
     Fleisch") and Landrat des Kreises Schleswig-Flensburg ("the Landrat") concerning the fees payable by Hansa
                                                                                                                            68
     Fleisch to the Landrat for the health inspections carried out at its premises.
3    Hansa Fleisch operates a slaughterhouse, a cutting plant and a meat-refrigeration unit in Schleswig Holstein. The
     meat from animals slaughtered at Hansa Fleisch‟s premises is inspected by staff of the Veterinary and Food
     Inspection Department under the authority of the Landrat.
4    Pursuant to Article 1(1) of Directive 85/73, fees are to be collected in respect of the costs occasioned by health
     inspections. Article 2(1) of Directive 85/73 required the Council to fix standard levels for those fees before 1
     January 1986, that date marking the end of the period granted to the Member States, other than the Hellenic
     Republic, for the transposition of Directive 85/73 into national law.
5    The standard levels for the fees were fixed by Decision 88/408. Article 2(1) of that decision lays down one or
     more levels of fees for each animal species. However, Article 2(2) of the decision provides that 'Member States
     where salary costs, the structures of establishments and the ratio between veterinarians and inspectors differ from
     those of the Community average adopted for the calculation of the standard amounts... may depart from them
     through increases or reductions up or down to the real figure for inspection costs'. By virtue of Article 11 of
     Decision 88/408, that decision was to be implemented by the Member States no later than 31 December 1990.
6    In Germany, the collection of fees for health inspections and controls of animals for slaughter is based on
     Paragraph 24 of the Fleischhygienegesetz (Law on meat hygiene, BGBl. I, 1987, new publication, p. 649), which
     was inserted in that Law by the Law of 13 April 1986 (BGBl. I, p. 398). Pursuant to Paragraph 24(2) of the
     Fleischhygienegesetz, it is the responsibility of the Laender to specify which measures give rise to the collection
     of fees and to fix the amount of the fees. The same provision states, however, that the fees must be calculated in
     accordance with Directive 85/73.
7    In the case of Schleswig Holstein, the amount of the fee payable for the health inspections and controls provided
     for in Directive 85/73 is fixed by the Regulation of 3 April 1987 amending the regulation on administrative fees
     relating to veterinary administration (Gesetz- und Verordnungsblatt fuer Schleswig Holstein 1987, p. 173). The
     fee fixed by that regulation exceeds the standard levels provided for in Article 2(1) of Decision 88/408.
8    The Landrat took the 1987 Schleswig Holstein regulation as the basis for the fees which it invoiced to Hansa
     Fleisch for inspections carried out at the latter‟s premises. Hansa Fleisch lodged complaints against the demands
     for fees issued as from 23 May 1989. Those complaints were rejected by the Landrat, whereupon Hansa Fleisch
     instituted proceedings before the Verwaltungsgericht, Schleswig Holstein. Before that court, it claimed that the
     demands for fees by the Landrat were unlawful, inter alia because the fees invoiced exceeded those provided for
     in Article 2(1) of Decision 88/408.
9    Considering that the dispute before it raised questions of interpretation of Community law, the national court
     decided to stay the proceedings pending a preliminary ruling by the Court of Justice on the following questions:
     …
10   Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the written
     observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary
     for the reasoning of the Court.
     The first and second questions
11   It is apparent from the order for reference that the national court‟s first two questions essentially seek to
     determine, first, whether Article 2(1) of Decision 88/408 has direct effect and, secondly, if it does, whether it can
     be relied on by an individual as against a Member State before the expiry of the period specified in Article 11 of
     Decision 88/408 in order to resist the collection of fees of an amount greater than that provided for in Article
     2(1).
12   It must be borne in mind that, as the Court held in its judgment in Case 9/70 Grad v Finanzamt Traunstein [1970]
     ECR 825, paragraph 5, it would be incompatible with the binding effect attributed to decisions by Article 189 to
     exclude in principle the possibility that persons affected may invoke the obligation imposed by the decision.
13   In that judgment the Court also held that a decision addressed to a Member State could be relied on as against
     that Member State where the provision in question imposed on its addressee an obligation which was
     unconditional and sufficiently clear and precise (paragraph 9).
14   The German Government and the Landrat contend that the Member States' obligation to fix the fee at the levels
     provided for in Article 2(1) of Decision 88/408 was not an unconditional obligation, in view of the possibility
     granted to the Member States by Article 2(2) of the decision of derogating from the standard levels of fees.
15   However, the fact that a decision allows the Member States to which it is addressed to derogate from clear and
     precise provisions of it does not in itself deprive those provisions of direct effect. In particular, such provisions
     may have direct effect where recourse to the possibilities of derogation thus provided for is subject to judicial
                                                                                                                             69
     review (see, to the same effect, the judgment in Case 41/74 Van Duyn v Home Office [1974] ECR 1337,
     paragraph 7).
16   That is precisely the situation in the present case as regards the possibility of derogating from the standard levels
     of the fees laid down by Article 2(1) of Decision 88/408. As may be seen from Article 2(2) and the annex to
     Decision 88/408, the amount of the fee may be increased to that of the actual inspection costs where the latter
     exceed the levels of fees fixed by Article 2(1) of the decision. The possibility of increasing the fee is thus made
     subject to conditions the fulfilment of which may be the subject of review by the Court.
17   Consequently, the fact that Article 2(2) of Decision 88/408 allows the Member States the possibility of setting
     higher fees by way of derogation from the standard levels of fees provided for by Article 2(1) of that decision
     cannot deprive that provision of direct effect.
18   It must be noted, however, that Article 11 of Decision 88/408 grants the Member States a specific period for
     implementing the decision.
19   Where a decision addressed to the Member States contains precise and unconditional provisions which must be
     implemented within a specified period, the provisions may be relied on by individuals as against a Member State
     only if that State fails to implement the decision before the expiry of the period prescribed or implements it in
     time, but incorrectly.
20   The possibility granted to individuals of relying on a decision as against the Member States to which it is
     addressed is based on the binding nature of the decision vis-à-vis its addressees. Consequently, where the
     decision grants the Member States a specified period in which to comply with the obligations resulting from it,
     the decision may not be relied on by individuals as against the Member States before the expiry of the period in
     question.
21   The answer to the first and second questions must therefore be that Article 2(1) of Council Decision 88/408/EEC
     of 15 June 1988 on the levels of the fees to be charged for health inspections and controls of fresh meat pursuant
     to Directive 85/73/EEC may be relied on by a private individual as against a Member State in order to oppose
     the collection of fees in excess of the amount provided for by that provision where the conditions to which
     Article 2(2) of the decision subjects the possibility of increasing the level of fees laid down by Article 2(1) are
     not satisfied. However, Article 2(1) of Decision 88/408 may be relied on only in order to oppose demands for the
     payment of fees issued after the expiry of the period laid down by Article 11 of the decision.
     The third question
22   As indicated in paragraph 17 above, the possibility of derogating from the standard levels of fees fixed in Article
     2(1) of Decision 88/408 under the conditions and within the limits laid down in Article 2(2) of that decision
     cannot deprive Article 2(1) of direct effect.
23   It must next be made clear that each Member State is free to allocate powers internally and to implement
     Community acts which are not directly applicable by means of measures adopted by regional or local authorities,
     provided that that allocation of powers enables the Community legal measures in question to be implemented
     correctly.
24   In the present case, no provision of Decision 88/408 precludes the Member States from entrusting to regional or
     local authorities the powers to derogate from the standard levels of fees, under the conditions and within the
     limits laid down by Article 2(2) of that decision.
25   Furthermore, it is apparent from Article 7 of and the annex to the decision that any derogations from the standard
     levels of fees may be applicable to all the establishments in a Member State or to only one of them.
26   It must therefore be stated in reply to the third question that Article 2(2) of Decision 88/408 is to be interpreted
     as allowing a Member State to delegate to regional or local authorities the exercise of the power conferred on it
     by that provision.
     Costs
     …
     On those grounds, THE COURT (Second Chamber) in answer to the questions referred to it by the
     Verwaltungsgericht Schleswig Holstein, by order of 15 March 1991, hereby rules:
     1. Article 2(1) of Council Decision 88/408/EEC of 15 June 1988 on the levels of the fees to be charged for health
     inspections and controls of fresh meat pursuant to Directive 85/73/EEC may be relied on by a private individual
     as against a Member State in order to resist the collection of fees in excess of the amount provided for by that
     provision where the conditions to which Article 2(2) of the decision subjects the possibility of increasing the
     level of fees laid down by Article 2(1) are not satisfied. However, Article 2(1) of Decision 88/408 may be relied

                                                                                                                             70
    on only in order to oppose demands for the payment of fees issued after the expiry of the period laid down by
    Article 11 of the decision.
    2. Article 2(2) of Decision 88/408 must be interpreted as allowing a Member State to delegate to regional or
    local authorities the exercise of the power conferred on it by that provision.




    Case 21
    ECJ, Judgment of 14 July 1994. Paola Faccini Dori v Recreb Srl. Reference for a
    preliminary ruling: Giudice conciliatore di Firenze - Italy. Consumer protection in the
    case of contracts negotiated away from business premises - Availability in disputes
    between private individuals. Case C-91/92. European Court reports 1994 Page I-03325
    …
    In Case C-91/92,
    …
    THE COURT
    …
    gives the following
    Judgment
1   By order of 24 January 1992, received at the Court on 18 March 1992, the Giudice Conciliatore di Firenze
    (Judge-Conciliator, Florence), Italy, referred to the Court for a preliminary ruling under Article 177 of the EEC
    Treaty a question on the interpretation of Council Directive 85/577/EEC, concerning protection of the consumer
    in respect of contracts negotiated away from business premises (OJ 1985 L 372, p. 31, hereinafter "the
    directive"), and on the possibility of relying on that directive in proceedings between a trader and a consumer.
2   The question was raised in proceedings between Paola Faccini Dori, of Monza, Italy, and Recreb Srl ("Recreb").
3   It appears from the order for reference that on 19 January 1989, without having been previously approached by
    her, Interdiffusion Srl concluded a contract with Miss Faccini Dori at Milan Central Railway Station for an
    English language correspondence course. Thus the contract was concluded away from Interdiffusion‟s business
    premises.
4   Some days later, by registered letter of 23 January 1989, Miss Faccini Dori informed that company that she was
    cancelling her order. The company replied on 3 June 1989 that it had assigned its claim to Recreb. On 24 June
    1989, Miss Faccini Dori wrote to Recreb confirming that she had cancelled her subscription to the course,
    indicating inter alia that she relied on the right of cancellation provided for by the directive.
5   As is apparent from its preamble, the directive is intended to improve consumer protection and eliminate
    discrepancies between national laws providing such protection, which may affect the functioning of the common
    market. According to the fourth recital in the preamble, where contracts are concluded away from the business
    premises of the trader, it is as a rule the trader who initiates the negotiations, for which the consumer is wholly
    unprepared and is therefore often taken by surprise. In most cases, the consumer is not in a position to compare
    the quality and price of the offer with other offers. According to the same recital, that surprise element generally
    exists not only in contracts made on the doorstep but also in other forms of contract for which the trader takes the
    initiative away from his business premises. The purpose of the directive is thus, as indicated by the fifth recital in
    its preamble, to grant the consumer a right of cancellation for a period of at least seven days in order to enable
    him to assess the obligations arising under the contract.
6   On 30 June 1989, Recreb asked the Giudice Conciliatore di Firenze to order Miss Faccini Dori to pay it the
    agreed sum with interest and costs.
7   By order of 20 November 1989, the judge ordered Miss Faccini Dori to pay the sums in question. She lodged an
    objection to that order with the same judge. She again stated that she had withdrawn from the contract under the
    conditions laid down by the directive.
8   However, it is common ground that at the material time Italy had not taken any steps to transpose the directive
    into national law, although the period set for transposition had expired on 23 December 1987. It was not until the

                                                                                                                             71
     adoption of Decreto Legislativo No 50 of 15 January 1992 (GURI, ordinary supplement to No 27 of 3 February
     1992, p. 24), which entered into force on 3 March 1992, that Italy transposed the directive.
9    The national court was uncertain whether, even though the directive had not been transposed at the material time,
     it could nevertheless apply its provisions.
10   It therefore referred the following question to the Court for a preliminary ruling: "Is Community Directive
     85/577/EEC of 20 December 1985 to be regarded as sufficiently precise and detailed and, if so, was it capable, in
     the period between the expiry of the 24-month time-limit given to the Member States to comply with the
     directive and the date on which the Italian State did comply with it, of taking effect as between individuals and
     the Italian State and as between individuals themselves?"
11   The directive requires the Member States to adopt certain rules intended to govern legal relations between
     traders and consumers. In view of the nature of the dispute, which is between a consumer and a trader, the
     question submitted by the national court raises two issues, which should be considered separately. The first is
     whether the provisions of the directive concerning the right of cancellation are unconditional and sufficiently
     precise. The second is whether a directive which requires the Member States to adopt certain rules specifically
     intended to govern relations between private individuals may be relied on in proceedings between such persons
     in the absence of measures to transpose the directive into national law.
     Whether the provisions of the directive concerning the right of cancellation are unconditional and sufficiently
     precise
12   Article 1(1) of the directive provides that the directive is to apply to contracts concluded between a trader
     supplying goods and services and a consumer, either during an excursion organized by the trader away from his
     business premises or during a visit by him to the consumer‟s home or place of work, where the visit does not
     take place at the express request of the consumer.
13   Article 2 states that "consumer" means a natural person who, in transactions covered by the directive, is acting
     for purposes which can be regarded as outside his trade or profession and that "trader" means a natural or legal
     person who, for the transaction in question, acts in his commercial or professional capacity.
14   Those provisions are sufficiently precise to enable the national court to determine upon whom, and for whose
     benefit, the obligations are imposed. No specific implementing measure is needed in that regard. The national
     court may confine itself to verifying whether the contract was concluded in the circumstances described by the
     directive and whether it was concluded between a trader and a consumer as defined by the directive.
15   In order to protect consumers who have concluded contracts in such circumstances, Article 4 of the directive
     provides that traders are to be required to give consumers written notice of their right of cancellation, together
     with the name and address of a person against whom that right may be exercised. It adds that, in the case of
     Article 1(1), that information must be given to the consumer at the time of conclusion of the contract. Finally, it
     provides that Member States are to ensure that their national legislation lays down appropriate consumer
     protection measures for cases where the information in question is not supplied.
16   Furthermore, pursuant to Article 5(1) of the directive, the consumer is to have the right to renounce the effects of
     his undertaking by sending notice within a period of not less than seven days from the time at which the trader
     informed him of his rights in accordance with the terms and conditions laid down by national law. Article 5(2)
     provides that the giving of such notice is to have the effect of releasing the consumer from any obligations under
     the contract.
17   Admittedly, Articles 4 and 5 allow the Member States some latitude regarding consumer protection when
     information is not provided by the trader and in determining the time-limit and conditions for cancellation. That
     does not, however, affect the precise and unconditional nature of the provisions of the directive at issue in this
     case. The latitude allowed does not make it impossible to determine minimum rights. Article 5 provides that the
     cancellation must be notified within a period of not less than seven days after the time at which the consumer
     received the prescribed information from the trader. It is therefore possible to determine the minimum protection
     which must on any view be provided.
18   As regards the first issue therefore, the answer to be given to the national court must be that Article 1(1), Article
     2 and Article 5 of the directive are unconditional and sufficiently precise as regards determination of the persons
     for whose benefit they were adopted and the minimum period within which notice of cancellation must be given.
     Whether the provisions of the directive concerning the right of cancellation may be invoked in proceedings
     between a consumer and a trader
19   The second issue raised by the national court relates more particularly to the question whether, in the absence of
     measures transposing the directive within the prescribed time-limit, consumers may derive from the directive
     itself a right of cancellation against traders with whom they have concluded contracts and enforce that right
                                                                                                                             72
     before a national court.
20   As the Court has consistently held since its judgment in Case 152/84 Marshall v Southampton and South-West
     Hampshire Health Authority [1986] ECR 723, paragraph 48, a directive cannot of itself impose obligations on an
     individual and cannot therefore be relied upon as such against an individual.
21   The national court observes that if the effects of unconditional and sufficiently precise but untransposed
     directives were to be limited to relations between State entities and individuals, this would mean that a
     legislative measure would operate as such only as between certain legal subjects, whereas, under Italian law as
     under the laws of all modern States founded on the rule of law, the State is subject to the law like any other
     person. If the directive could be relied on only as against the State, that would be tantamount to a penalty for
     failure to adopt legislative measures of transposition as if the relationship were a purely private one.
22   It need merely be noted here that, as is clear from the judgment in Marshall, cited above (paragraphs 48 and 49),
     the case-law on the possibility of relying on directives against State entities is based on the fact that under Article
     189 a directive is binding only in relation to "each Member State to which it is addressed". That case-law seeks
     to prevent "the State from taking advantage of its own failure to comply with Community law".
23   It would be unacceptable if a State, when required by the Community legislature to adopt certain rules intended
     to govern the State‟s relations ° or those of State entities ° with individuals and to confer certain rights on
     individuals, were able to rely on its own failure to discharge its obligations so as to deprive individuals of the
     benefits of those rights. Thus the Court has recognized that certain provisions of directives on conclusion of
     public works contracts and of directives on harmonization of turnover taxes may be relied on against the State
     (or State entities) (see the judgment in Case 103/88 Fratelli Costanzo v Comune di Milano [1989] ECR 1839 and
     the judgment in Case 8/81 Becker v Finanzamt Muenster-Innenstadt [1982] ECR 53).
24   The effect of extending that case-law to the sphere of relations between individuals would be to recognize a
     power in the Community to enact obligations for individuals with immediate effect, whereas it has competence
     to do so only where it is empowered to adopt regulations.
25   It follows that, in the absence of measures transposing the directive within the prescribed time-limit, consumers
     cannot derive from the directive itself a right of cancellation as against traders with whom they have concluded a
     contract or enforce such a right in a national court.
26   It must also be borne in mind that, as the Court has consistently held since its judgment in Case 14/83 Von
     Colson and Kamann v Land Nordrhein-Westfalen [1984] ECR 1891, paragraph 26, the Member States'
     obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article 5
     of the Treaty to take all appropriate measures, whether general or particular, is binding on all the authorities of
     Member States, including, for matters within their jurisdiction, the courts. The judgments of the Court in Case C-
     106/89 Marleasing v La Comercial Internacional de Alimentación [1990] ECR I-4135, paragraph 8, and Case C-
     334/92 Wagner Miret v Fondo de Garantía Salarial [1993] ECR I-6911, paragraph 20, make it clear that, when
     applying national law, whether adopted before or after the directive, the national court that has to interpret that
     law must do so, as far as possible, in the light of the wording and the purpose of the directive so as to achieve the
     result it has in view and thereby comply with the third paragraph of Article 189 of the Treaty.
27   If the result prescribed by the directive cannot be achieved by way of interpretation, it should also be borne in
     mind that, in terms of the judgment in Joined Cases C-6/90 and C-9/90 Francovich and Others v Italy [1991]
     ECR I-5357, paragraph 39, Community law requires the Member States to make good damage caused to
     individuals through failure to transpose a directive, provided that three conditions are fulfilled. First, the purpose
     of the directive must be to grant rights to individuals. Second, it must be possible to identify the content of those
     rights on the basis of the provisions of the directive. Finally, there must be a causal link between the breach of
     the State‟s obligation and the damage suffered.
28   The directive on contracts negotiated away from business premises is undeniably intended to confer rights on
     individuals and it is equally certain that the minimum content of those rights can be identified by reference to the
     provisions of the directive alone (see paragraph 17 above).
29   Where damage has been suffered and that damage is due to a breach by the State of its obligation, it is for the
     national court to uphold the right of aggrieved consumers to obtain reparation in accordance with national law on
     liability.
30   So, as regards the second issue raised by the national court, answer must be that in the absence of measures
     transposing the directive within the prescribed time-limit consumers cannot derive from the directive itself a
     right of cancellation as against traders with whom they have concluded a contract or enforce such a right in a
     national court. However, when applying provisions of national law, whether adopted before or after the directive,
     the national court must interpret them as far as possible in the light of the wording and purpose of the directive.


                                                                                                                               73
    Costs
    …
    On those grounds,
    THE COURT, in answer to the question referred to it by the Giudice Conciliatore di Firenze, by order of 24
    January 1992, hereby rules:
    Article 1(1), Article 2 and Article 5 of Council Directive 85/577/EEC of 20 December 1985, concerning
    protection of the consumer in respect of contracts negotiated away from business premises, are unconditional
    and sufficiently precise as regards determination of the persons for whose benefit they were adopted and the
    minimum period within which notice of cancellation must be given. In the absence of measures transposing
    Directive 85/577 within the prescribed time-limit, consumers cannot derive from the directive itself a right of
    cancellation as against traders with whom they have concluded a contract or enforce such a right in a national
    court. However, when applying provisions of national law, whether adopted before or after the directive, the
    national court must interpret them as far as possible in the light of the wording and purpose of the directive.




    Case 22
    ECJ, Judgment of 11 August 1995. Commission of the European Communities v Federal
    Republic of Germany. Failure to fulfil obligations - Failure by public authorities to
    apply a directive which has not yet been transposed - Council Directaiave 85/337/EEC -
    Assessment of the effects of projects on the environment - Großkrotzenburg thermal
    power station - Consent for the construction of a new block. Case C-431/92. European
    Court reports 1995 Page I-02189
    …
    In Case C-431/92,
    …
    THE COURT gives the following Judgment
1   By application lodged at the Court Registry on 23 December 1992, the Commission of the European
    Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by granting
    development consent by decision of 31 August 1989 for the construction of a new block at the Grosskrotzenburg
    thermal power station without a preliminary environmental impact assessment, the Federal Republic of Germany
    has failed to comply with its obligations under Articles 5 and 189 of the EEC Treaty read in conjunction with
    Council Directive 85/377/EEC of 27 June 1985 on the assessment of the effects of certain public and private
    projects on the environment (OJ 1985 L 175, p. 40), and in particular Articles 2, 3 and 8 of the directive.
2   The directive was adopted on the basis of Articles 100 and 235 of the Treaty. According to the first recital in the
    preamble, "the... action programmes of the European Communities on the environment... affirm the need to take
    effects on the environment into account at the earliest possible stage in all the technical planning and decision-
    making processes..." The eleventh recital states further that "the effects of a project on the environment must be
    assessed in order to take account of concerns to protect human health, to contribute by means of a better
    environment to the quality of life, to ensure maintenance of the diversity of species and to maintain the
    reproductive capacity of the ecosystem as a basic resource for life".
3   Article 1 of the directive provides:
    "1. This directive shall apply to the assessment of the environmental effects of those public and private projects
    which are likely to have significant effects on the environment.
    2. For the purposes of this directive: “project” means: the execution of construction works or of other
    installations or schemes,... “development consent” means: the decision of the competent authority or authorities
    which entitles the developer to proceed with the project.
    3. The competent authority or authorities shall be that or those which the Member States designate as responsible
    for performing the duties arising from this directive...."
4   Article 2 provides:

                                                                                                                          74
     "1. Member States shall adopt all measures necessary to ensure that, before consent is given, projects likely to
     have significant effects on the environment by virtue inter alia, of their nature, size or location are made subject
     to an assessment with regard to their effects. These projects are defined in Article 4.
     2. The environmental impact assessment may be integrated into the existing procedures for consent to projects in
     the Member States, or, failing this, into other procedures or into procedures to be established to comply with the
     aims of this directive...."
5    Article 3 provides:
     "The environmental impact assessment will identify, describe and assess in an appropriate manner, in the light of
     each individual case and in accordance with Articles 4 to 11, the direct and indirect effects of a project on the
     following factors: human beings, fauna and flora, soil, water, air, climate and the landscape, the interaction
     between the factors mentioned in the first and second indents, material assets and the cultural heritage."
6    Article 4 provides:
     "1.... projects of the classes listed in Annex I shall be made subject to an assessment in accordance with Articles
     5 to 10.
     2. Projects of the classes listed in Annex II shall be made subject to an assessment, in accordance with Articles 5
     to 10, where Member States consider that their characteristics so require...."
7    Paragraph 2 of Annex I refers in particular to "Thermal power stations... with a heat output of 300 megawatts or
     more". Paragraph 12 of Annex II refers in particular to "Modifications to development projects included in
     Annex I".
8    Article 5 concerns the measures which the Member States must adopt to ensure that the developer supplies
     certain information specified in Annex III to the directive. Article 6 refers to the measures which the Member
     States must take to ensure that the national authorities likely to be concerned by the project in question are
     consulted and that the public concerned is informed and has the opportunity to express an opinion. Article 8
     provides that "Information gathered... must be taken into consideration in the development consent procedure."
9    Pursuant to Article 12(1) of the directive, the Member States were required to take the measures necessary to
     comply with the directive within three years of its notification. Since the directive was notified on 3 July 1985,
     that period expired on 3 July 1988.
10   According to the documents before the Court, in Germany the directive was belatedly transposed into national
     law by the Law of 12 February 1990 which came into force on 1 August 1990 (BGBl. I, p. 205).
11   Following a complaint that the Regierungspraesidium (District Office) Darmstadt as competent authority had
     granted consent on 31 August 1989 for the construction of a new block with a heat output of 500 megawatts at
     the Grosskrotzenburg thermal power station without carrying out the preliminary environmental impact
     assessment required by the directive, the Commission on 15 May 1990 sent Germany a letter before action under
     Article 169 of the Treaty. In that letter it observed that the consent concerned a project for the construction of a
     thermal power station within the meaning of paragraph 2 of Annex I to the directive and that an assessment of its
     effects on the environment was therefore mandatory by virtue of Article 4(1) of the directive.
12   The Commission‟s reservations were not dispelled by the information given in Germany‟s letters in response of
     16 and 17 August 1990. It therefore delivered a reasoned opinion on 25 September 1991 to which Germany
     replied by letter of 27 January 1992. Not content with Germany‟s reply, the Commission accordingly brought the
     present action.
     Admissibility
13   Germany raises a preliminary plea that the action is inadmissible on the ground that the form of order sought in
     the application is too imprecise since what is sought is a declaration that the directive and "in particular" Articles
     2, 3 and 8 thereof have been infringed. Germany considers that only the infringement of the provisions of the
     directive expressly referred to, and not a general complaint that the directive has been breached, may be taken
     into account.
14   That plea cannot be accepted.
15   The express reference to Articles 2, 3 and 8 of the directive in form of order sought in the application enabled
     Germany to understand unequivocally that an infringement of those specific provisions was alleged. In its
     context, the adverbial phrase "in particular" was used in the sense of "specifically" in order to designate precisely
     those articles of the directive which had been infringed. It could not therefore have led Germany to believe that
     the application also concerned infringements of other unspecified provisions of the directive and thus have given
     rise to uncertainty as to the scope of the proceedings.

                                                                                                                              75
16   Secondly, Germany submitted at the hearing before the Court that the infringement of Article 2 of the directive is
     not referred to in the conclusions arrived at in the reasoned opinion and was raised for the first time in the
     application. Since the subject-matter of the action is determined, according to settled case-law, by the pre-
     litigation procedure, Germany considers that the complaint concerning the infringement of that provision is
     inadmissible.
17   That plea must be rejected.
18   Although Article 2 of the directive is not formally referred to in the conclusions arrived at in the reasoned
     opinion, it is none the less mentioned in the body of the opinion among the provisions invoked by the
     Commission.
19   Thirdly, Germany submits that the action is inadmissible on the ground that proceedings can be initiated under
     Article 169 of the Treaty only in respect of failure to implement or incorrect implementation of a directive and
     not simply, as in this case, in respect of failure in a specific case to apply a directive which has not yet been
     implemented. The object of proceedings for a declaration of failure by a Member State to fulfil its obligations is
     to encourage the Member State concerned to put an end to existing infringements of the Treaty. Since Germany
     has implemented the directive in the meantime, it considers that the Commission no longer has any legal interest
     in bringing proceedings, particularly since the procedure which the Commission initiated simultaneously for a
     declaration that Germany has incorrectly implemented the directive is not yet before the Court.
20   That plea of inadmissibility must also be rejected.
21   In exercising its powers under Articles 155 and 169 of the Treaty, the Commission does not have to show that
     there is a specific interest in bringing an action. Article 169 is not intended to protect the Commission‟s own
     rights. The Commission‟s function, in the general interest of the Community, is to ensure that the Member States
     give effect to the Treaty and the provisions adopted by the institutions thereunder and to obtain a declaration of
     any failure to fulfil the obligations deriving therefrom with a view to bringing it to an end (Case 167/73
     Commission v France [1974] ECR 359, paragraph 15, and Case C-422/92 Commission v Germany [1995] ECR
     I-1097, paragraph 16).
22   Given its role as guardian of the Treaty, the Commission alone is therefore competent to decide whether it is
     appropriate to bring proceedings against a Member State for failure to fulfil its obligations and to determine the
     conduct or omission attributable to the Member State concerned on the basis of which those proceedings should
     be brought. It may therefore ask the Court to find that, in not having achieved, in a specific case, the result
     intended by the directive, a Member State has failed to fulfil its obligations.
23   In this case, Germany‟s submissions as to the inadmissibility of the action essentially come down to the fact that
     at the material time it had not yet implemented the directive. A Member State may not, however, plead the fact
     that it has not taken the necessary measures to implement a directive in order to prevent the Court from dealing
     with an application for a declaration that it has failed to fulfil a specific obligation flowing from that directive.
24   Finally, Germany submits that the case-law of the Court of Justice recognizes the direct effect of the provisions
     of a directive only where they confer specific rights on individuals. Articles 2, 3 and 8 of the directive, however,
     do not confer such rights. Since the Commission itself does not argue that the contested decision granting
     development consent failed to take account of the legal position of individuals protected by the directive, the
     latter‟s provisions cannot have direct effect irrespective of whether they are unconditional and sufficiently
     precise. The German authorities were not therefore required to apply them directly before implementing the
     directive. In their view, the action is consequently inadmissible.
25   That argument cannot be accepted either.
26   In its application, the Commission complains that Germany has not observed, in a specific case, the obligation
     flowing directly from the directive to assess the environmental impact of the project concerned. The question
     which arises is thus whether the directive is to be construed as imposing that obligation. That question is quite
     separate from the question whether individuals may rely as against the State on provisions of an unimplemented
     directive which are unconditional and sufficiently clear and precise, a right which has been recognized by the
     Court of Justice.
27   Since none of the pleas of inadmissibility has been accepted, the action must be held to be admissible.
     Substance Application of the directive in time
28   In Case C-396/92 Bund Naturschutz in Bayern and Others v Freistaat Bayern [1994] ECR I-3717, paragraphs 19
     and 20, the Court of Justice ruled that, regardless of whether the directive permits a Member State to waive the
     obligations concerning the environmental impact assessment in respect of consent procedures already initiated
     before the deadline for implementation, namely 3 July 1988, the directive in any case precludes such a waiver
     for procedures initiated after that date.
                                                                                                                             76
29   In this case, the documents before the Court show that the application for consent for the project at issue was
     lodged with the Regierungspraesidium Darmstadt by PreussenElektra AG, the developer, on 26 July 1988, and
     thus after 3 July 1988. Consequently, the obligation imposed by the directive to carry out an environmental
     impact assessment could not in principle be waived in respect of the consent procedure for the project at issue.
30   The German Government argues, however, that the formal application for consent of 26 July 1988, accompanied
     by the complete file on the project, had been preceded by a preliminary stage which was a significant part of the
     consent procedure. During that preliminary stage, which was initiated on 18 May 1987, the competent authority
     was to advise the developer on the content and lodging of the application for consent. A series of meetings took
     place at which specialist departments were also represented. In addition the project is said to have been notified
     on 7 March 1988 to the competent authority in accordance with the Landesplanungsgesetz (Law of the Land of
     Hesse on planning).
31   That argument cannot be accepted.
32   Informal contacts and meetings between the competent authority and the developer, even relating to the content
     and proposal to lodge an application for consent for a project, cannot be treated for the purposes of applying the
     directive as a definite indication of the date on which the procedure was initiated. The date when the application
     for consent was formally lodged thus constitutes the sole criterion which may be used. Such a criterion accords
     with the principle of legal certainty and is designed to safeguard the effectiveness of the directive. The Court
     moreover followed this approach in Bund Naturschutz, cited above (paragraph 16).
33   The consent procedure for the project at issue must accordingly be regarded as having been initiated after the
     deadline of 3 July 1988, with the result that the project was required to undergo an assessment of its effects on
     the environment in accordance with the directive.
     Categorization of the project at issue
34   Germany, supported by the United Kingdom, submits that the new block at the Grosskrotzenburg thermal power
     station is not a project within the meaning of Article 4(1) of the directive but a modification to a project. It
     cannot be regarded as in any way self-contained, but at a functional level is part of the power station as a whole.
     The consent at issue accordingly concerns a modification to a pre-existing power station. What is at issue is a
     modification to a project within the meaning of paragraph 12 of Annex II to the directive, a modification which
     in accordance with Article 4(2) of the directive the Member States may, rather than must, make subject to an
     environmental impact assessment.
35   By virtue of paragraph 2 of Annex I to the directive, projects for thermal power stations with a heat output of
     300 megawatts or more must undergo a systematic assessment. For the purposes of that provision, such projects
     must be assessed irrespective of whether they are separate constructions, are added to a pre-existing construction
     or even have close functional links with a pre-existing construction. Links with an existing construction do not
     prevent the project from being a "thermal power station with a heat output of 300 megawatts or more" so as to
     bring it within the category headed "Modifications to development projects included in Annex I", mentioned in
     paragraph 12 of Annex II.
36   In this case, it is common ground that the construction at issue is a block of a thermal power station with a heat
     output of 500 megawatts. It is therefore a project within the meaning of Article 4(1) of, and Annex I to, the
     directive. That project was required to undergo an assessment of its effects on the environment in accordance
     with the directive. Obligation to carry out an assessment in accordance with the directive
37   Germany submits that Articles 2, 3 and 8 of the directive, which it is alleged to have infringed, are not so clear
     and precise as unequivocally to lay down a specific obligation and thus for their application by the national
     authorities to be mandatory.
38   That argument cannot be accepted.
39   Article 2 of the directive lays down an unequivocal obligation, incumbent on the competent authority in each
     Member State for the approval of projects, to make certain projects subject to an assessment of their effects on
     the environment. Article 3 prescribes the content of the assessment, lists the factors which must be taken into
     account in it, and leaves the competent authority a certain discretion as to the appropriate way of carrying out the
     assessment in the light of each individual case. Article 8 furthermore requires the competent national authorities
     to take into consideration in the development consent procedure the information gathered in the course of the
     assessment.
40   Regardless of their details, those provisions therefore unequivocally impose on the national authorities
     responsible for granting consent an obligation to carry out an assessment of the effects of certain projects on the
     environment.
     The question whether there has been a failure to fulfil the obligation to carry out an assessment
                                                                                                                            77
41   Germany submits, finally, that an assessment of the effects of the project at issue on the environment was carried
     out by the competent authority on the basis of the national legislation then in force, namely the
     Bundesimmissionsschutzgesetz of 15 March 1974 (German Federal Law on the protection of the environment).
     Although that assessment was not formally based on the directive, it is said by Germany to have complied with
     all its requirements.
42   The Commission does not deny that there was an assessment of the effects on the environment of the project at
     issue. However, that assessment does not satisfy the present requirements of the directive, which are stricter than
     the national legislation then in force. In particular, it did not comply with the obligation to take account of the
     interaction between the factors referred to in the first and second indents of Article 3 of the directive (human
     beings, fauna, flora, soil, water, air, climate and the landscape), an obligation which requires an overall
     assessment of those factors.
43   According to the documents before the Court, an environmental impact assessment was carried out in the course
     of the procedure for the grant of consent for the project by the Regierungspraesidium Darmstadt. The developer
     provided in particular information on the environmental impact of the project which was considered by the
     Commission itself as sufficient from the point of view of the requirements of Article 5 of, and Annex III to, the
     directive. That information also concerned the interrelationship between the factors referred to in Article 3 of the
     directive. Finally, it is common ground that the information was made available to the public concerned who had
     the opportunity to express an opinion. In those circumstances, the objective of making the public aware of the
     environmental implications of a project on the basis of specific information provided by the developer was
     attained.
44   It is also apparent from the disputed decision of the Regierungspraesidium Darmstadt of 31 August 1989 and its
     report of 11 November 1991 drawn up in response to the reasoned opinion that the authority in question
     integrated the information gathered and the reactions of the sectors concerned in the consent procedure, and took
     that into account in its decision approving the project.
45   In the light of those considerations, the Commission should have specified on what specific points the
     requirements of the directive were not complied with during the procedure for consent for the project at issue
     and should have provided appropriate evidence of non-compliance. Its application does not include such details
     backed by specific evidence. It must therefore be dismissed as unfounded.
     Costs
     …
     On those grounds,
     THE COURT hereby:
     1. Dismisses the application;
     2. Orders the parties, including the intervener, to bear their own costs.


     Case 23
     ECJ, Judgment of 20 March 1997. Land Rheinland-Pfalz v Alcan Deutschland GmbH.
     Reference for a preliminary ruling: Bundesverwaltungsgericht - Germany. State aid -
     Recovery - Application of national law - Limits. Case C-24/95. European Court reports
     1997 Page I-01591
     …
     Case C-24/95,
     …
     THE COURT
     …
     gives the following Judgment
1    By order of 28 September 1994, which was received at the Court on 2 February 1995, the
     Bundesverwaltungsgericht (Federal Administrative Court) referred to the Court for a preliminary ruling under
     Article 177 of the EC Treaty three questions on the interpretation of Articles 92 and 93(3) of the EC Treaty with

                                                                                                                            78
     regard to the obligation of national authorities to recover unlawful State aid where national rules protecting the
     recipient of aid give rise to difficulties.
2    The questions were raised in the course of a dispute between Land Rheinland-Pfalz and Alcan Deutschland
     GmbH (hereinafter `Alcan').
3    Between 1979 and 1987 Alcan operated an aluminium plant in Ludwigshafen which was threatened by closure
     in 1982 as a result of a substantial rise in the cost of electricity. After Alcan had indicated that it intended to shut
     down the plant and terminate the contracts of 330 employees, the Rheinland-Pfalz Government proposed to pay
     Alcan transitional aid of DM 8 million to compensate for electricity costs.
4    After learning of the proposed aid from the press, the Commission sent a telex to the Federal Government on 7
     March 1983 requesting information.
5    Land Rheinland-Pfalz granted the first tranche of aid, amounting to DM 4 million, by decision of 9 June 1983.
6    The Federal Government confirmed the intention of Land Rheinland-Pfalz to grant aid in a telex to the
     Commission of 25 July 1983, and provided additional details in response to a supplementary request for
     information from the Commission of 3 August.
7    On 7 November 1983 the Commission acknowledged receipt of the information from the Federal Government,
     and stated that the 30-day period for examining the proposed aid therefore began to run on 11 October 1983. By
     a telex dated 24 November 1983, received by the Commission on 28 November 1983, the German Government
     informed the Commission that, since the prescribed period had expired, it presumed that the transitional aid
     could be paid.
8    By a letter of 25 November 1983 the Commission informed the Federal Government that it had decided to open
     the procedure under the first paragraph of Article 93(2) of the EEC Treaty.
9    Land Rheinland-Pfalz was informed of this on 28 November 1983. Nevertheless, by a decision of 30 November
     1983, it paid Alcan the remaining DM 4 million of aid.
10   On 13 December 1983 Alcan was informed by the national authorities that the aid had not been notified to the
     Commission.
11   By Decision 86/60/EEC of 14 December 1985 on aid which Land Rheinland-Pfalz of the Federal Republic of
     Germany has provided to an undertaking producing primary aluminium situated in Ludwigshafen (OJ 1986 L
     72, p. 30), the Commission found the aid granted to Alcan to be illegal, having been granted in breach of Article
     93(3) of the Treaty, and incompatible with the common market under Article 92 of the Treaty; it accordingly
     ordered its recovery. Alcan was informed of that decision on 15 January 1986.
12   Neither the German Government nor Alcan has contested Decision 86/60.
13   On 12 February and 21 April 1986 the Federal Government informed the Commission that there were substantial
     political and legal obstacles to the recovery of the aid. By letter of 27 June 1986 the Commission insisted on the
     recovery, and since the time-limit for bringing an action challenging Decision 86/60 had expired, it lodged an
     application under the second paragraph of Article 93(2) of the EEC Treaty.
14   In its judgment of 2 February 1989 in Case 94/87 Commission v Germany [1989] ECR 175, the Court held that
     Germany had failed to fulfil its obligations under the Treaty by not complying with Decision 86/60.
15   By a decision of 26 September 1989, Land Rheinland-Pfalz revoked the decisions of 9 June and 30 November
     1983 granting the aid and demanded repayment of the sums paid out. Alcan brought an action for the annulment
     of that decision, which succeeded before the Verwaltungsgericht (Administrative Court) Mainz. An appeal to the
     Oberverwaltungsgericht (Higher Administrative Court) Rheinland-Pfalz having been dismissed, Land
     Rheinland-Pfalz appealed on a point of law to the Bundesverwaltungsgericht, which made this reference.
16   In opposing recovery, Alcan relies on Paragraph 48 of the Verwaltungsverfahrensgesetz (Law on Administrative
     Procedure applicable in the Land pursuant to Article 1(1) of the Landesverwaltungsverfahrensgesetz, hereinafter
     the `VwVfG'), which provides:
     “(1) An unlawful administrative measure, even after it is no longer open to challenge, may be revoked, wholly or
     in part, with prospective or retrospective effect. An administrative measure which has founded or confirmed a
     right or a legally material advantage (administrative measure granting a benefit) may be revoked only subject to
     the restrictions of subparagraphs (2) and (4) hereof.
      (2) An unlawful administrative measure which grants a non-recurring or continuous monetary payment or a
     divisible payment in kind or forms the basis thereof, may not be revoked, in so far as the beneficiary has relied
     upon the administrative measure's being maintained in force and that expectation, weighed against the public
     interest in revocation, requires protection. Expectation in general requires protection where the beneficiary has
                                                                                                                                79
     used the benefits granted or has made some disposition of them affecting his resources which he either cannot
     reverse or can reverse only by incurring unreasonable disadvantages. The beneficiary cannot rely on expectation
     where he
     1. has secured the administrative measure by intentional deception, threats or corrupt practices;
     2. has secured the administrative measure by giving information which was incorrect or incomplete in a material
     respect;
     3. knew, or did not know as a result of gross negligence, that the administrative measure was unlawful. In the
     circumstances referred to in sub-subparagraph 3 hereof the administrative measure shall in general be revoked
     with retroactive effect. In so far as the administrative measure has been revoked, payments already made
     thereunder shall be reimbursed. As to the amount of restitution, the provisions of the Bürgerliches Gesetzbuch
     (Civil Code) relating to the restitution of unjust enrichment shall apply so far as relevant. If the conditions
     mentioned in sub-subparagraph 3 hereof are satisfied the person liable to make the restitution cannot plead loss
     of the enrichment if he knew, or did not know as a result of gross negligence, the circumstances leading to the
     illegality of the administrative measure. The amount of restitution shall be determined by the authority at the
     time of the revocation of the administrative measure....
      (4) If the authority receives knowledge of facts justifying the revocation of an unlawful administrative measure,
     revocation shall be permissible only within a period of one year from the time at which such facts came to its
     notice, save in the circumstances referred to in the third sentence of subparagraph (2) hereof, sub-subparagraph
     1....”
17   The national court considers that, on the basis of those provisions, the appeal should be dismissed. First, the
     time-limit referred to in the first part of Paragraph 48(4) of the VwVfG has expired, since the aid was found to
     be unlawful by Decision 86/60, dated 14 December 1985, or at the latest in the Commission's letter of 27 June
     1986, and revocation of the measure took place only on 26 September 1989. National law therefore precludes
     such revocation. However, Community law could restrict the provisions of national law, in particular where the
     time-bar has been used for an improper purpose by the administration in order to prevent the recovery required
     by Community law. The Bundesverwaltungsgericht refers in this connection to the Court's judgment in Joined
     Cases 205/82 to 215/82 Deutsche Milchkontor and Others v Germany [1983] ECR 2633, from which it follows
     that where unduly paid aid must be recovered, first, national law must be applied in such a way that the recovery
     of sums unlawfully granted is not rendered practically impossible, and, secondly, the interests of the Community
     must be taken fully into consideration.
18   The Bundesverwaltungsgericht then states that the recipient of aid may, under domestic law, challenge
     revocation of aid where the discretionary powers of the State authorities have been exercised unlawfully. Those
     conditions are probably satisfied in the case at issue, inasmuch as the aid was practically imposed on Alcan in
     order to safeguard jobs during a period preceding important elections. Land Rheinland-Pfalz is thus responsible
     for the illegality of the decision to grant aid to such an extent that the plea of misuse of powers would, under
     domestic law, prevent revocation of the said decision. However, application of the principles set out in Deutsche
     Milchkontor, cited above, could lead to a different assessment at Community level.
19   Lastly, the Bundesverwaltungsgericht points out that, under national law, Alcan can also rely on the fact that the
     gain has ceased to exist, pursuant to Paragraph 48(2), sixth and seventh sentences, of the VwVfG, read in
     conjunction with Paragraph 818(3) of the German Civil Code, which provides that the obligation to repay or
     compensate is excluded where it appears that the recipient is no longer enriched.
20   In those circumstances, the Bundesverwaltungsgericht referred to the Court of Justice for a preliminary ruling
     the following questions:
     “…”
21   The three questions concern the interpretation of Community law with regard to certain national rules of
     procedure applicable to the recovery, required by a decision of the Commission, of State aid granted unlawfully
     and declared incompatible with the common market. It is therefore appropriate to recapitulate first the rules of
     Community law on the matter.
22   Article 93(2) of the Treaty provides that if the Commission finds that aid granted by a State or through State
     resources is not compatible with the common market it is to decide that the State concerned shall abolish or alter
     such aid within a period of time to be determined by the Commission. Where, contrary to the provisions of
     Article 93(3), the proposed aid has already been granted, the decision may take the form of an order to the
     national authorities to recover the aid (Case 310/85 Deufil v Commission [1987] ECR 901, paragraph 24, and
     Joined Cases C-278/92, C-279/92 and C-280/92 Spain v Commission [1994] ECR I-4103, paragraph 78).
23   The purpose of the obligation of States to abolish aid regarded by the Commission as incompatible with the

                                                                                                                          80
     common market is to re-establish the previously existing situation (see inter alia Case C-348/93 Commission v
     Italy [1995] ECR I-673, paragraph 26).
24   In principle the recovery of aid must take place in accordance with the relevant procedural provisions of national
     law, subject however to the proviso that those provisions are to be applied in such a way that the recovery
     required by Community law is not rendered practically impossible (Case C-142/87 Belgium v Commission
     [1990] ECR I-959, paragraph 61; Case C-5/89 Commission v Germany [1990] ECR I-3437, paragraph 12; the
     same applies as regards recovery of Community aid, see Deutsche Milchkontor, cited above). In particular, the
     interests of the Community must be taken fully into consideration in the application of a provision which
     requires the various interests involved to be weighed up before a defective administrative measure is withdrawn
     (Case 94/87 Commission v Germany, cited above, paragraph 12).
25   In that connection, although the Community legal order cannot preclude national legislation which provides that
     the principles of the protection of legitimate expectations and legal certainty are to be observed with regard to
     recovery, it must be noted that, in view of the mandatory nature of the supervision of State aid by the
     Commission under Article 93 of the Treaty, undertakings to which aid has been granted may not, in principle,
     entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the
     procedure laid down in that article. A diligent businessman should normally be able to determine whether that
     procedure has been followed (Case C-5/89 Commission v Germany, cited above, paragraphs 13 and 14, and
     Case C-169/95 Spain v Commission, [1997] ECR I-0000, paragraph 51).
26   The questions referred by the national court must be answered in the light of those considerations.
     Question 1
27   By its first question, the national court is asking, essentially, whether the competent authority is obliged to
     revoke a decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid
     incompatible with the common market and ordering its recovery, even if the authority has allowed the time-limit
     which exists for that purpose under national law in the interest of legal certainty to elapse.
28   The national court considers that the date from which that period began to run was the date on which the
     Commission decision declaring the aid incompatible with the common market and requiring recovery was
     adopted or, at the latest, the date on which the Commission repeated that demand in a letter addressed to the
     Member State.
29   Land Rheinland-Pfalz, the German and Austrian Governments and the Commission consider that the
     requirement that account must be taken of Community interests, as stated in Deutsche Milchkontor, cited above,
     must prevail over the application of such a time-limit. Alcan, however, considers that legal certainty, which the
     setting of such a time-limit serves to ensure, is a fundamental principle which Community law must safeguard,
     as do the national legal orders. Unlawful State aid should therefore cease to be recoverable on the expiry of such
     a time-limit.
30   It appears from the file on the case that the aid was paid without prior notification to the Commission, so that it
     was unlawful under Article 93(3) of the Treaty. The first tranche was paid on 9 June 1983, without prior advice
     to the Commission, and the second on 30 November 1983, after the Commission's letter of 25 November 1983
     informing the Federal Government that the grant of the first tranche had been unlawful and that the second
     tranche should not be paid.
31   In accordance with the principle set out in paragraph 25 of this judgment, the recipient of aid could not,
     therefore, have had at that time a legitimate expectation that its grant was lawful.
32   Decision 86/60, which found the aid incompatible with the common market and expressly and unconditionally
     ordered the sums paid out to be recovered, was adopted on 14 December 1985 and Alcan knew of the decision
     by 15 January 1986 at the latest.
33   It is also clear from the file that the national administration allowed the one-year time-limit provided for in
     national law which began to run from the date on which it became aware of the Commission's decision to elapse.
34   It must be noted that where State aid is found to be incompatible with the common market, the role of the
     national authorities is, as the Advocate General stated in point 27 of his Opinion, merely to give effect to the
     Commission's decision. The authorities do not, therefore, have any discretion as regards revocation of a decision
     granting aid. Thus, where the Commission, in a decision which has not been the subject of legal proceedings,
     orders the recovery of unduly paid sums, the national authorities are not entitled to reach any other finding.
35   Where the national authorities nevertheless allow the time-bar provided for in national law in respect of
     revocation of the decision granting the aid to come into effect, that situation cannot be treated in the same way as
     the situation where a trader does not know whether the competent administrative authorities are going to reach a
     decision, and where the principle of legal certainty requires that such uncertainty be brought to an end after a
                                                                                                                            81
     certain period has elapsed.
36   Since the national authorities have no discretion in the matter, the recipient of unlawfully granted aid ceases to
     be in a state of uncertainty once the Commission has adopted a decision finding the aid incompatible with the
     common market and requiring recovery.
37   The principle of legal certainty cannot therefore preclude repayment of the aid on the ground that the national
     authorities were late in complying with the decision requiring such repayment. If it could, recovery of unduly
     paid sums would be rendered practically impossible and the Community provisions concerning State aid
     deprived of effectiveness.
38   The answer to Question 1 must therefore be that Community law requires the competent authority to revoke a
     decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid
     incompatible with the common market and ordering recovery, even if the authority has allowed the time-limit
     laid down for that purpose under national law in the interest of legal certainty to elapse.
     Question 2
39   By its second question the national court asks essentially whether the competent authority is obliged to revoke a
     decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid
     incompatible with the common market and ordering its recovery, even if that authority is responsible for the
     illegality of the aid decision to such a degree that revocation appears to be a breach of good faith towards the
     recipient.
40   Land Rheinland-Pfalz, the German and Austrian Governments and the Commission consider that that question
     also calls for a reply in the affirmative; Alcan, however, claims in particular that the circumstances of the case in
     the main proceedings were highly exceptional, since the national authorities had practically compelled it to
     accept the aid in order to prevent its closure. Accordingly, an objection based on good faith, in a very specific
     case, would not have the effect of automatically or nearly always preventing the implementation of Community
     law.
41   Wthout its being necessary to examine the conduct of the German authorities in the case at issue in the main
     proceedings, which is a task for the national courts alone and not for the Court in the context of proceedings
     under Article 177 of the Treaty, it must be stated that, as is clear from paragraphs 30 and 31 of this judgment, the
     recipient of the aid cannot claim that it had a legitimate expectation that the aid was lawful. The recipient's
     obligation to ensure that the procedure set out in Article 93(3) of the Treaty has been complied with cannot, in
     fact, depend on the conduct of the State authorities, even if the latter were responsible for the illegality of the aid
     decision to such a degree that revocation appears to be a breach of good faith.
42   In circumstances such as those in the main proceedings, failure to revoke the decision granting aid would
     seriously and adversely affect the Community interest and render practically impossible the recovery required by
     Community law.
43   The answer to Question 2 must therefore be that Community law requires the competent authority to revoke a
     decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid
     incompatible with the common market and ordering recovery, even if the competent authority is responsible for
     the illegality of the aid decision to such a degree that revocation appears to be a breach of good faith towards the
     recipient, where the latter could not have had a legitimate expectation that the aid was lawful because the
     procedure laid down in Article 93 of the Treaty had not been followed.
     Question 3
44   By its third question, the national court asks essentially whether the competent authority is obliged to revoke a
     decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid
     incompatible with the common market and ordering its recovery, even if that would be excluded by national law
     because the gain no longer exists, in the absence of bad faith on the part of the recipient of the aid.
45   In this connection Alcan claims that the aid was used, as intended, to compensate for part of the electricity costs
     incurred between March 1983 and February 1984, which, under national law, could be regarded as a gain that no
     longer exists.
46   It also considers that it follows from the judgment in Deutsche Milchkontor, cited above, that the principle
     underlying the plea that a gain no longer exists, which flows from the principle of proportionality, is also part of
     Community law and must therefore be complied with. Moreover, cases concerning State aid where the gain has
     disappeared are very rare since, in most cases, the aid will continue to have an effect on the assets of the
     recipient. In this case, the circumstances were highly exceptional and were not such as to render practically
     impossible the implementation of Community law.


                                                                                                                               82
47   Land Rheinland-Pfalz, the German and Austrian Governments and the Commission consider that the Court's
     case-law as set out in Case C-5/89 Commission v Germany, cited above, also applies to this case, so that the
     recipient of aid cannot claim that the gain has ceased to exist.
48   On this point it should be noted that according to the national court, the fact that under national law account is
     taken of the disappearance of the gain, in the absence of bad faith on the part of the recipient, falls under the
     general principle of protection of the legitimate expectations of the addressee of an unlawful administrative act.
49   It has already been pointed out, in paragraph 25 of this judgment, that undertakings receiving aid cannot have a
     legitimate expectation as to the lawfulness of the aid unless it has been granted in compliance with the procedure
     laid down in Article 93 of the Treaty.
50   The same conclusion therefore applies to the plea that the gain has ceased to exist, which would in this case
     render the recovery required by Community law practically impossible.
51   Contrary to Alcan's claims, the fact that the gain has ceased to exist is not unusual from an accounting point of
     view; it is in fact the rule in the case of State aid, which is generally granted to undertakings in difficulty, whose
     balance sheet, when aid is recovered, no longer reveals the added value indisputably resulting from the aid.
52   Moreover, as the Advocate General emphasized in point 38 of his Opinion, an undertaking which incurs losses
     after the grant of aid may nevertheless obtain ongoing benefits from its temporary survival in terms of, for
     instance, retention of its place on the market, reputation and goodwill. Accordingly, it cannot be maintained that
     the gain no longer exists simply because the benefit resulting from the grant of State aid no longer appears on the
     recipient undertaking's balance sheet.
53   Consequently, Alcan's argument that the Court should take its exceptional situation into consideration because
     the gain has allegedly ceased to exist is without foundation.
54   Accordingly, the answer to Question 3 must be that Community law requires the competent authority to revoke a
     decision granting unlawful aid, in accordance with a final decision of the Commission declaring the aid
     incompatible with the common market and ordering recovery, even where such recovery is excluded by national
     law because the gain no longer exists, in the absence of bad faith on the part of the recipient of the aid.
     Costs
     …
     On those grounds,
     THE COURT, in answer to the questions referred to it by the Bundesverwaltungsgericht by order of 28
     September 1994, hereby rules:
     1. Community law requires the competent authority to revoke a decision granting unlawful aid, in accordance
     with a final decision of the Commission declaring the aid incompatible with the common market and ordering
     recovery, even if the authority has allowed the time-limit laid down for that purpose under national law in the
     interest of legal certainty to elapse.
     2. Community law requires the competent authority to revoke a decision granting unlawful aid, in accordance
     with a final decision of the Commission declaring the aid incompatible with the common market and ordering
     recovery, even if the competent authority is responsible for the illegality of the aid decision to such a degree that
     revocation appears to be a breach of good faith towards the recipient, where the latter could not have had a
     legitimate expectation that the aid was lawful because the procedure laid down in Article 93 of the Treaty had
     not been followed.
     3. Community law requires the competent authority to revoke a decision granting unlawful aid, in accordance
     with a final decision of the Commission declaring the aid incompatible with the common market and ordering
     recovery, even where such recovery is excluded by national law because the gain no longer exists, in the absence
     of bad faith on the part of the recipient of the aid.



     Case 24
     Judgment of the Court of 13 May 1997. - Federal Republic of Germany v European
     Parliament and Council of the European Union. - Directive on deposit-guarantee
     schemes - Legal basis - Obligation to state reasons - Principle of subsidiarity -
     Proportionality - Consumer protection - Supervision by the home Member State. - Case
     C-233/94.
                                                                                                                              83
     In Case C-233/94


     ...


     THE COURT


     ...


     gives the following


     Judgment


     ...


     The plea alleging infringement of the obligation to state reasons


35   The German Government claims that the 14th recital, which is the only relevant recital in this context, contains
     only a general statement of reasons and does not explain why the Council and the Parliament took the view that
     it was necessary that the level and scope of the guarantee should not become an instrument of competition. In
     particular, they should have specified the circumstances which, in their view, were of such a nature as to cause
     the market disturbances referred to therein.


36   In the light of the case-law referred to in paragraph 25 of this judgment, the Court finds that the Community
     institutions complied with their obligation to give reasons for the export prohibition. In the 14th recital they
     explained that market disturbances could be caused by branches of credit institutions offering levels of cover
     higher than those offered by credit institutions authorized in the host Member State and also stated that the level
     and the scope of cover offered by the guarantee scheme should not become an instrument of competition. They
     concluded that it was necessary, at least during an initial period, to stipulate that the level and scope of cover
     offered by a home Member State scheme to depositors at branches located in another Member State should not
     exceed the maximum level and scope offered by the corresponding scheme in the host Member State.


37   Those considerations clearly show the reasons for which the legislature adopted the second subparagraph of
     Article 4(1) of the Directive.


38   The plea of infringement of the obligation to state reasons must therefore be rejected.


     The plea of infringement of Article 57(2) of the Treaty


39   The German Government claims that, by requiring branches to reduce the amount of their guarantee to that of
     the host Member State, the export prohibition makes it more difficult, and even impossible, for them to pursue
     their activities in that State and, accordingly, is contrary to the aim of Article 57(2), which is precisely to
     facilitate the taking-up and pursuit of activities as self-employed persons. The export prohibition also hinders the
     process of reducing differences between national guarantee schemes and is necessarily contrary to the objective
     of the Directive, which is to introduce deposit-guarantee schemes into all the Member States and to harmonize
     those which already exist. Those objectives should be achieved by a minimum level of harmonization and the
     mutual recognition of national schemes.

                                                                                                                            84
40   The German Government states that the German deposit-guarantee scheme applicable to the protection of savers
     in branches situated in other Member States is not recognized in those States, so that the level of protection there
     must be reduced. The resultant obligation on German credit institutions to establish different contribution rates
     for branches in other Member States gives rise to considerable difficulties and even prevents those institutions
     from setting up networks of subsidiaries in those other Member States, as they would have done had there been
     no export prohibition. According to the German Government, Italian, Danish and French credit institutions are
     also concerned since, pursuant to the Directive, they must reduce the level of protection for deposits made in
     branches situated in certain other Member States.


41   First of all, it should be noted that Article 57(2) of the Treaty authorizes the Parliament and the Council to issue
     directives concerning the taking-up and pursuit of activities as self-employed persons, with a view to abolishing
     obstacles to the right of establishment and the freedom to provide services. It was apparent that such an obstacle
     was to be found in the fundamental differences between the deposit-guarantee systems existing in the various
     Member States. Consequently, the laws on those systems were harmonized in order to facilitate the activity of
     credit institutions at Community level.


42   In those circumstances, the export prohibition cannot be considered to be contrary to Article 57(2) solely on the
     ground that there are situations which are not to the advantage of the branches of credit institutions authorized in
     one particular Member State. When harmonization takes place, traders established in one Member State may lose
     the advantage of national legislation which was particularly favourable to them.


43   Second, it is true that the export prohibition is an exception to the minimum harmonization and mutual
     recognition which the Directive generally seeks to achieve. However, in view of the complexity of the matter
     and the differences between the legislation of the Member States, the Parliament and the Council were
     empowered to achieve the necessary harmonization progressively (see, to that effect, Case C-193/94 Skanavi and
     Chryssanthakopoulos [1996] ECR I-929, paragraph 27).


44   Finally, according to the Commission Recommendation, the deposit-guarantee systems of the host Member State
     should protect depositors of branches of credit institutions that have their head offices in other Member States.
     The second Council Directive of 15 December 1989, 89/646/EEC, on the coordination of laws, regulations and
     administrative provisions relating to the taking-up and pursuit of the business of credit institutions and amending
     Directive 77/780/EEC (OJ 1989 L 386, p. 1, hereinafter `the Second Banking Directive') did not subsequently
     deal with the question of deposit-guarantee schemes. In those circumstances, it was conceivable that the pursuit
     of banking business by branches of institutions authorized in Germany would be affected by the obligation to
     join a guarantee scheme in another Member State set up in accordance with the Commission Recommendation.
     The second subparagraph of Article 4(1) of the Directive serves to diminish that barrier by reducing generally
     the influence of the host Member State's guarantee scheme to a mere limit on the maximum level of cover for
     depositors in branches set up by credit institutions authorized in other Member States, where that cover exceeds
     ECU 20 000 or, possibly, ECU 15 000. In any event, that limitation is much less onerous than the obligation to
     comply with different bodies of legislation on deposit-guarantee schemes in the various host Member States. It
     follows that the second subparagraph of Article 4(1) facilitated the taking-up and pursuit of banking activities in
     other Member States even in regard to branches of credit institutions authorized in Germany.


45   The plea of infringement of Article 57(2) of the Treaty must therefore be rejected.


     The plea of incompatibility with the objective of a high level of consumer protection, as set out in Article 3(s)
     and Article 129a of the Treaty


46   The German Government states that, under Article 3(s) of the Treaty, consumer protection is a mandatory
     objective of the Community and that with the adoption of Article 129a a specific title, `Consumer protection',
     was added to the Treaty. Moreover, it also follows from the first and sixteenth recitals in the preamble to the
     Directive that the Directive aims to increase protection for savers and that protection is greater where the amount
     of the guarantee is high.
                                                                                                                            85
47   According to the German Government, the export prohibition laid down in the second subparagraph of Article
     4(1) is to the disadvantage not only of savers in a Member State in which cover is minimal and who have
     deposits in a branch of a credit institution authorized in a Member State requiring a high level of protection but
     also of savers who have deposits in a Member State with a high level of protection and who wish to transfer
     them to a branch in a Member State where the protection is lower. Consequently, the abovementioned provision
     is contrary to the objective of the Treaty.


48   In that regard it suffices to point out that, although consumer protection is one of the objectives of the
     Community, it is clearly not the sole objective. As has already been stated, the Directive aims to promote the
     right of establishment and the freedom to provide services in the banking sector. Admittedly, there must be a
     high level of consumer protection concomitantly with those freedoms; however, no provision of the Treaty
     obliges the Community legislature to adopt the highest level of protection which can be found in a particular
     Member State. The reduction in the level of protection which may thereby result in certain cases through the
     application of the second subparagraph of Article 4(1) of the Directive does not call into question the general
     result which the Directive seeks to achieve, namely a considerable improvement in the protection of depositors
     within the Community.


49   On those grounds, the plea of incompatibility of the second subparagraph of Article 4(1) with the objective, set
     out in Article 3(s) and Article 129a of the Treaty, of a high level of consumer protection must also be rejected.


     The plea of infringement of the principle of proportionality


50   The German Government claims that, even in the case of harmonization measures, the Community legislature
     must remain within the discretion available to it, which is limited, in particular, by the principle of
     proportionality. That principle has not been complied with in the present case.


51   The German Government states that the export prohibition laid down in the second subparagraph of Article 4(1)
     of the Directive is, in principle, incompatible with Article 52 of the Treaty since it restricts the right of
     establishment. Branches are deprived of an element of competition as against the national banks of the host
     Member State to such an extent that, in certain cases, financial institutions may even be forced for that reason to
     refrain from establishing a network of branches in another Member State.


52   According to the German Government, the export prohibition is not necessary in order to achieve the objective
     of the Directive, namely to prevent the market disturbances which arise if customers withdraw their deposits
     from their national credit institutions in order to transfer them to the branches of approved credit institutions in
     other Member States, since there are alternatives to that prohibition which would result in a less severe
     disturbance to the business of credit institutions. It would thus, for example, have been possible to insert a
     protective provision for the benefit of credit institutions in the Member States where the protection of depositors
     is less extensive authorizing intervention only where a disturbance in a Member State is imminent.


53   Such a protective provision for periods of crisis would have been in conformity with the concept of safeguard
     measures in Community law and would have been wholly sufficient in this case. There was no reason to fear
     market disturbances on account of monetary transfers by depositors in branches of banks authorized in other
     Member States, since Article 9(3) of the Directive restricted the use of advertising of information concerning the
     deposit-guarantee schemes. In the absence of advertising, depositors would have become aware only gradually
     of more advantageous guarantee schemes and would not have all immediately made large withdrawals, so that
     the authorities concerned would have had time to adopt safeguard measures.


54   In response to those arguments it must be recalled that the Court has held that, in order to establish whether a
     provision of Community law complies with the principle of proportionality, it must be ascertained whether the
     means which it employs are suitable for the purpose of achieving the desired objective and whether they do not
     go beyond what is necessary to achieve it (see, in particular, Case C-84/94 United Kingdom v Council [1996]
                                                                                                                            86
     ECR I-5755, paragraph 57).


55   In assessing the need for the measure in question, it should be emphasized that the Community legislature was
     seeking to regulate an economically complex situation. Before the adoption of the Directive, deposit-guarantee
     schemes did not exist in all the Member States; moreover, most of them did not cover depositors with branches
     set up by credit institutions authorized in other Member States. The Community legislature therefore needed to
     assess the future, uncertain effects of its action. In so doing, it could choose between the general prevention of a
     risk and the establishment of a system of specific protection.


56   In such a situation the Court cannot substitute its own assessment for that of the Community legislature. It could,
     at most, find fault with its legislative choice only if it appeared manifestly incorrect or if the resultant
     disadvantages for certain economic operators were wholly disproportionate to the advantages otherwise offered.


57   According to the 14th recital in the preamble to the Directive, the Parliament and the Council chose to avoid,
     from the very beginning, any market disturbance resulting from the offer by branches of some credit institutions
     of higher cover than that offered by credit institutions authorized by the host Member State. Since the possibility
     of such a disturbance could not be wholly ruled out, it follows that the Community legislature has shown to the
     requisite legal standard that it was pursuing a legitimate objective. Moreover, the restriction constituted by the
     export prohibition on the activities of the credit institutions concerned is not manifestly disproportionate.


58   It follows that the plea of infringement of the principle of proportionality must also be rejected.


59   On those grounds, the application for annulment of the second subparagraph of Article 4(1) of the Directive must
     be rejected.


     Article 4(2)


60   According to the German Government, the obligation under Article 4(2) of the Directive to include branches in
     the host Member State's guarantee scheme in order to supplement the guarantee provided in the home Member
     State is contrary to the principle of supervision by the home Member State and to the principle of
     proportionality.


     The plea of infringement of the principle of supervision by the home Member State


61   The German Government submits that at the time when the Directive was adopted the Community legislature
     was already bound by the principle that supervision should be carried out by the home Member State. That
     principle, definitively laid down by the Second Banking Directive which the Member States were required to
     transpose by 1 January 1993, had been designated since 1985 in the Commission's White Book as an essential
     means of harmonizing and coordinating national provisions in the field of financial services. That White Book
     had been expressly approved by the European Council in 1985.


62   According to the German Government, by adopting Article 4(2) the Parliament and the Council infringed that
     principle. If use is made of the supplementary guarantee, then supervision of banks, the power of audit and the
     guarantee of deposits are no longer exclusively matters for the authorities or the guarantee scheme of the host
     Member State, but those competences are shared between the home State and the host State. As a result, the host
     Member State's deposit-guarantee scheme, which bears the risk of a branch's insolvency, is prevented by the
     Second Banking Directive from adequately reviewing the liquid assets and solvency of that branch.


63   The German Government also submits that, according to the case-law of the Court, the Community legislature
     may not, when exercising its powers, depart from its previous practice without stating reasons.

                                                                                                                            87
64   The Court finds, first, that it has not been proved that the Community legislature laid down the principle of home
     State supervision in the sphere of banking law with the intention of systematically subordinating all other rules in
     that sphere to that principle. Second, since it is not a principle laid down by the Treaty, the Community
     legislature could depart from it, provided that it did not infringe the legitimate expectations of the persons
     concerned. Since it had not yet acted in regard to the guarantee of deposits, no such legitimate expectations could
     exist.


65   On those grounds, the plea of infringement of the principle of supervision by the home State must be rejected.


     The plea of infringement of the principle of proportionality


66   According to the German Government, Article 4(2) of the Directive is contrary to the principle of proportionality
     because the measure which it enacts is not indispensable to the attainment of the objective pursued.


67   The German Government claims that the deposit-guarantee schemes of the host Member State should assume
     responsibility for the difference between the lower cover provided in the home Member State and the higher
     cover granted in the host Member State, and even, in certain cases, for the entire guarantee.


68   The supplementary guarantee therefore contains considerable risks for the deposit-guarantee schemes of the host
     Member State, since they are required to compensate depositors even though the host State is no longer in a
     position adequately to supervise the liquid assets and solvency of the branch and, therefore, to foresee or prevent
     the possible insolvency of a branch of a foreign institution. Those risks are in no way removed by the fact that, in
     accordance with the guiding principles set out in Annex II to the Directive, each guarantee scheme can require
     the provision of all relevant information and has the right to verify such information with the home Member
     State's competent authorities. No provision requires the supervisory authorities of the home Member State to
     provide the necessary information.


69   The German Government therefore considers that a provision under which the deposit-guarantee schemes of the
     home Member State provides a supplementary guarantee for branches established in another Member State so as
     to enable them to meet the level of guarantee in the host Member State would have been a less radical solution.
     The advantage of those rules, which were moreover referred to in the 13th recital in the preamble to the
     Directive as an alternative to the supplementary guarantee, is that the risk of insolvency - and therefore the
     obligation to compensate depositors - is no longer transferred to the guarantee scheme of the host Member State
     but remains the responsibility of the home State, which has a far greater possibility of supervision.


70   The Court notes that, according to the 13th recital, Article 4(2) of the Directive seeks to remedy the
     disadvantages resulting from disparities in compensation and different conditions of competition, within the
     same territory, between national institutions and branches of institutions from other Member States. Moreover, in
     the 16th recital, the Community legislature states that the cost of funding guarantee schemes should be taken into
     account and that it would appear reasonable to set the harmonized minimum guarantee level at ECU 20 000.
     Article 7 of the Directive provides for the possibility of derogating from that minimum amount until 31
     December 1999; until that date the security does not have to exceed ECU 15 000.


71   It is clear from those recitals and those provisions that the Community legislature did not wish to impose an
     excessive burden on home Member States which did not yet have deposit-guarantee schemes or which had only
     schemes providing for a lower guarantee. In those circumstances, it could not require them to bear the risk
     associated with an additional cover resulting from a political decision of a particular host Member State. The
     alternative solution proposed by the German Government, namely compulsory supplementary cover by the
     schemes of the home Member State, would not therefore have achieved the intended aim.


72   Moreover, as the Advocate General observes in points 136 to 146 of his Opinion, the obligation imposed on the
                                                                                                                            88
     host State is subject to various conditions that are intended to ease its task. Thus, under Article 4(3), the host
     Member State may require branches wishing to join one of its guarantee schemes to pay a contribution and, by
     virtue of point (a) of Annex II to the Directive, require the home State to provide information on those branches.
     Furthermore, Article 4(4) of the Directive aims to ensure compliance with the obligations incumbent on such a
     branch as a member of the deposit-guarantee scheme. It follows from these various provisions that Article 4(2)
     does not have the effect of causing an excessive burden for the guarantee schemes of host Member States.


73   In view of all the foregoing considerations, the plea of infringement of the principle of proportionality must be
     rejected.


74   It follows that the application for annulment of Article 4(2) of the Directive must also be rejected.


     The second sentence of the first subparagraph of Article 3(1)


75   The German Government claims that the membership obligation arising from the second sentence of the first
     subparagraph of Article 3(1) of the Directive is contrary to the third subparagraph of Article 3b of the Treaty and
     to the general principle of proportionality.


76   First of all, the German Government claims that the principle of proportionality laid down in the third
     subparagraph of Article 3b of the Treaty was specifically set out, in particular, in the conclusions of the
     European Council in Edinburgh relating to that provision, which provide that, when adopting legislative
     measures, the Community will endeavour to take account of well-established national practices and that the
     measures adopted by the Community must offer to the Member States alternative solutions to achieve the
     objectives pursued.


77   However, according to the German Government, when drawing up the second sentence of the first subparagraph
     of Article 3(1) of the Directive, the Parliament and the Council did not take account of the scheme existing in
     Germany as a `well-established national practice' within the meaning of the guidelines of the European Council.
     Since 1976 there has been a deposit-guarantee fund of the Association of German Banks, membership of which
     is voluntary and which has always functioned effectively.


78   Likewise, the obligation under the Directive to join a scheme does not leave any room for the Member States to
     adopt `different approaches' in regard to the application of the Directive, such as a voluntary deposit-guarantee
     scheme. The German Government considers that, since voluntary membership constitutes an advantage for credit
     institutions at a competitive level, they would join a deposit- guarantee scheme without being compelled to do so
     by the State. Thus, in Germany in October 1993 only five institutions, whose deposits are slight overall, had
     remained outside such a scheme.


79   Finally, the membership obligation imposes an excessive burden on the credit institutions. As is proved by the
     German scheme, depositors can be protected by other less restrictive measures, such as the obligation on a bank
     to inform its clients of its membership of a deposit-guarantee scheme.


80   Without it being necessary to determine the precise legal value of the conclusions of the European Council in
     Edinburgh on which the German Government relies in this context, it should be pointed out, first of all, that
     when the Community legislature harmonizes legislation all `well-established national practices' cannot be
     respected.


81   Second, it appears that in the present case the Federal Republic of Germany is the sole Member State to invoke
     the voluntary membership of a deposit-guarantee scheme as such a practice.



                                                                                                                           89
82   Third, it is common ground that the Community legislature considered it to be necessary to ensure a harmonized
     minimum level of deposit-guarantee, wherever those deposits were located within the Community. Having
     regard to that requirement and to the fact that in some Member States there was no deposit- guarantee scheme,
     the legislature cannot be criticized for having provided for an obligation to join a scheme, despite the proper
     functioning of a voluntary membership scheme in Germany.


83   Finally, the German Government itself accepts that in October 1993 only five credit institutions out of 300 were
     not members of a deposit-guarantee scheme. The membership obligation therefore merely compels those few
     credit institutions to join and consequently cannot be considered to be excessive.


84   On those same grounds, the legislature cannot be criticized for not having provided for an alternative approach to
     compulsory membership, such as an obligation to inform customers of any membership of a scheme. That
     obligation would not have made it possible to achieve the objective of ensuring a harmonized minimum level of
     guarantee for all deposits.


85   Consequently, the application for annulment of the second sentence of the first subparagraph of Article 3(1) of
     the Directive must be rejected.


86   It follows from all the above considerations that the application must be dismissed.

     ...




     Case 25
     Judgment of the Court of 22 October 1998. Ministero delle Finanze v IN.CO.GE.'90 Srl,
     Idelgard Srl, Iris'90 Srl, Camed Srl, Pomezia Progetti Appalti Srl (PPA), Edilcam Srl,
     A. Cecchini & C. Srl, EMO Srl, Emoda Srl, Sappesi Srl, Ing. Luigi Martini Srl, Giacomo
     Srl and Mafar Srl. Reference for a preliminary ruling: Pretura circondariale di Roma -
     Italy. Recovery of sums paid but not due - Treatment of a national charge incompatible
     with Community law. Joined cases C-10/97 to C-22/97.


     In Joined Cases C-10/97 to C-22/97,


     ...


     THE COURT


             ...


     gives the following


     Judgment


     ...


                                                                                                                          90
18   The Commission points out that, in its judgment in Case 106/77 Amministrazione delle Finanze dello Stato v
     Simmenthal [1978] ECR 629, the Court held, inter alia, that the provisions of the Treaty and the directly
     applicable measures of the institutions have the effect, in their relationship with the domestic law of the Member
     States, not only of rendering automatically inapplicable any conflicting provision of national law in force but
     also of precluding the valid adoption of new national legislative measures which would be incompatible with
     Community provisions. From this, the Commission infers that a Member State has no power whatever to adopt a
     fiscal provision that is incompatible with Community law, with the result that such a provision and the
     corresponding fiscal obligation must be treated as non-existent.


19   That interpretation cannot be accepted.


20   In Simmenthal, the issue facing the Court related in particular to the consequences of the direct applicability of a
     provision of Community law where that provision was incompatible with a subsequently adopted provision of
     national law. The Court had already stressed, in its previous decisions (see, in particular, Case 6/64 Costa v
     ENEL [1964] ECR 585), that it was impossible for a Member State to accord precedence to a national rule over a
     conflicting rule of Community law, but did not draw any distinction between pre-existing and subsequently
     adopted national law. So, in Simmenthal, the Court held that every national court must, in a case within its
     jurisdiction, apply Community law in its entirety and protect rights which the latter confers on individuals,
     setting aside any provision of national law which may conflict with it, whether prior or subsequent to the
     Community rule (Simmenthal, paragraphs 21 and 24). That case-law has been reaffirmed on numerous occasions
     (see, in particular, Debus, cited above, paragraph 32; Case C-158/91 Levy [1993] ECR I-4287, paragraph 9; and
     Case C-347/96 Solred v Administración General del Estado [1998] ECR I-937, paragraph 30).


21   It cannot therefore, contrary to the Commission's contention, be inferred from the judgment in Simmenthal that
     the incompatibility with Community law of a subsequently adopted rule of national law has the effect of
     rendering that rule of national law non-existent. Faced with such a situation, the national court is, however,
     obliged to disapply that rule, provided always that this obligation does not restrict the power of the competent
     national courts to apply, from among the various procedures available under national law, those which are
     appropriate for protecting the individual rights conferred by Community law (see Case 34/67 Lück v
     Hauptzollamt Köln-Rheinau [1968] ECR 245).
     ...


     Case 26
     ECJ, Judgment of 26 September 2000. Unilever Italia SpA v Central Food SpA.
     Reference for a preliminary ruling: Pretore di Milano - Italy. Technical standards and
     regulations - Obligations of notification and postponement of adoption - Applicability in
     civil proceedings. C-443/98. European Court reports 2000 Page I-07535
     …
     In Case C-443/98
     …
     THE COURT
     …
     gives the following Judgment
1    By order of 6 November 1998, received at the Court on 7 December 1998, the Pretore di Milano (Magistrate,
     Milan) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) a
     question on the interpretation of Council Directive 83/189/EEC of 28 March 1983 laying down a procedure for
     the provision of information in the field of technical standards and regulations (OJ 1983 L 109, p. 8), as amended
     by Directive 94/10/EC of the European Parliament and the Council of 23 March 1994 materially amending for
     the second time Directive 83/189/EEC (OJ 1994 L 100, p. 30).
2    That question was raised in proceedings between Unilever Italia SpA (Unilever) and Central Food SpA (Central
                                                                                                                            91
    Food) concerning payment by Central Food for a consignment of olive oil supplied by Unilever. Community law
3   Article 1(1), (2) and (9) of Directive 83/189 provide: For the purposes of this directive, the following meanings
    shall apply :
    1. "product", any industrially manufactured product and any agricultural product;
    2. "technical specification", a specification contained in a document which lays down the characteristics required
    of a product such as levels of quality, performance, safety or dimensions, including the requirements applicable
    to the product as regards the name under which the product is sold, terminology, symbols, testing and test
    methods, packaging, marking or labelling and conformity assessment procedures; The term "technical
    specification" also covers production methods and processes used in respect of agricultural products as referred
    to in Article 38(1) of the Treaty, products intended for human and animal consumption, and medicinal products
    as defined in Article 1 of Directive 65/65/EEC, as well as production methods and processes relating to other
    products, where these have an effect on their characteristics.... 9. "technical regulation", technical specifications
    and other requirements, including the relevant administrative provisions, the observance of which is compulsory,
    de jure or de facto, in the case of marketing or use in a Member State or a major part thereof, as well as laws,
    regulations or administrative provisions of Member States, except those provided for in Article 10, prohibiting
    the manufacture, importation, marketing or use of a product.
    ...
4   Article 8(1) to (3) of Directive 83/189 provide:
    1. Subject to Article 10, Member States shall immediately communicate to the Commission any draft technical
    regulation, except where it merely transposes the full text of an international or European standard, in which case
    information regarding the relevant standard shall suffice; they shall also let the Commission have a statement of
    the grounds which make the enactment of such a technical regulation necessary, where these have not already
    been made clear in the draft.... The Commission shall immediately notify the other Member States of the draft
    and all documents which have been forwarded to it; it may also refer this draft, for an opinion, to the Committee
    referred to in Article 5 and, where appropriate, to the committee responsible for the field in question....
    2. The Commission and the Member States may make comments to the Member State which has forwarded a
    draft technical regulation; that Member State shall take such comments into account as far as possible in the
    subsequent preparation of the technical regulation.
    3. Member States shall communicate the definitive text of a technical regulation to the Commission without
    delay.
5   Article 9 of Directive 83/189 provides:
    1. Member States shall postpone the adoption of a draft technical regulation for three months from the date of
    receipt by the Commission of the communication referred to in Article 8(1).
    2. Member States shall postpone: - for four months the adoption of a draft technical regulation in the form of a
    voluntary agreement within the meaning of Article 1(9), second indent, - without prejudice to paragraphs 3, 4
    and 5, for six months the adoption of any other draft technical regulation, from the date of receipt by the
    Commission of the communication referred to in Article 8(1) if the Commission or another Member State
    delivers a detailed opinion, within three months of that date, to the effect that the measure envisaged may create
    obstacles to the free movement of goods within the internal market. The Member State concerned shall report to
    the Commission on the action it proposes to take on such detailed opinions. The Commission shall comment on
    this reaction.
    3. Member States shall postpone the adoption of a draft technical regulation for 12 months from the date of
    receipt by the Commission of the communication referred to in Article 8(1) if, within the three months following
    that date, the Commission announces its intention to propose or adopt a Directive, Regulation or Decision on the
    matter in accordance with Article 189 of the Treaty.
    4. Member States shall postpone the adoption of a draft technical regulation for 12 months from the date of
    receipt by the Commission of the communication referred to in Article 8(1) if, within the three months following
    that date, the Commission announces its finding that the draft technical regulation concerns a matter which is
    covered by a proposal for a Directive, Regulation or Decision presented to the Council in accordance with
    Article 189 of the Treaty.
    5. If the Council adopts a common position during the standstill period referred to in paragraphs 3 and 4, that
    period shall, subject to Article 9(6), be extended to 18 months.
    6. The obligations referred to in paragraphs 3, 4 and 5 shall lapse: - when the Commission informs the Member
    States that it no longer intends to propose or adopt a binding Community act, - when the Commission informs
                                                                                                                            92
     the Member States of the withdrawal of its draft or proposal, - when the Commission or the Council has adopted
     a binding Community act.
     7. Paragraphs 1 to 5 shall not apply in those cases where, for urgent reasons, occasioned by serious and
     unforeseeable circumstances, relating to the protection of public health or safety, the protection of animals or the
     preservation of plants, a Member State is obliged to prepare technical regulations in a very short space of time in
     order to enact and introduce them immediately without any consultations being possible. The Member State shall
     give, in the communication referred to in Article 8, the reasons which warrant the urgency of the measures taken.
     The Commission shall give its views on the communication as soon as possible. It shall take appropriate action
     in cases where improper use is made of this procedure. The European Parliament shall be kept informed by the
     Commission.
6    Pursuant to the first indent of Article 10(1) of Directive 83/189: Articles 8 and 9 shall not apply to those laws,
     regulations and administrative provisions of the Member States or voluntary agreements by means of which
     Member States: - comply with binding Community acts which result in the adoption of technical specifications.
7    In paragraphs 54 and 55 of its judgment in Case C-194/94 CIA Security v Signalson and Securitel [1996] ECR I-
     2201 (hereinafter CIA Security) the Court held that Directive 83/189 was to be interpreted as meaning that
     breach of the obligation to notify rendered the technical regulations concerned inapplicable, so that they were
     unenforceable against individuals and that individuals might therefore rely on Articles 8 and 9 of Directive
     83/189 before the national court, which must decline to apply a national technical regulation which has not been
     notified in accordance with that directive.
8    As the Court made clear in paragraph 35 of its judgment in Case C-226/97 Lemmens [1998] ECR I-3711, failure
     to notify technical regulations, which constitutes a procedural defect in their adoption, renders such regulations
     inapplicable inasmuch as they hinder the use or marketing of a product which is not in conformity therewith.
     The Italian legislation and the notification procedure
9    According to the documents before the Court, a draft law to govern labelling indicating the geographical origin
     of the various kinds of olive oil was submitted to the Italian Parliament on 27 January 1998. It was given
     readings in the Senate in February and March of the same year and in the Chamber of Deputies in April and
     June.
10   In the meantime, having been informed of the existence of the draft, the Commission called on the Italian
     authorities to notify it in accordance with Article 8(1) of Directive 83/189, and they did so on 4 May 1998. The
     Commission then brought the draft law to the notice of the Member States and, on 10 June 1998, it published in
     the Official Journal of the European Communities a notice indicating that the three-month period of suspension
     provided for in Article 9(1) of Directive 83/189 ran until 5 August 1998. The notice drew attention to the fact
     that, in accordance with the judgment in CIA Security, national courts must decline to apply any national
     technical regulation which had not been notified in accordance with Directive 83/189, so that the technical
     regulations concerned can no longer be enforced against individuals (OJ 1998 C 177, p. 2)
11   On 23 July 1998, the Commission informed the Italian authorities of its intention to legislate in the field covered
     by the draft law and called on them to postpone its adoption for a period of 12 months as from the date of the
     notice, in accordance with the Article 9(3) of Directive 83/189.
12   After the definitive approval thereof by both Chambers of the Italian Parliament, Law No 313 on the labelling of
     origin of extra virgin olive oil, virgin olive oil and olive oil (hereinafter the contested Law) was signed on 3
     August 1998 by the President of the Republic, the Prime Minister and the Minister for Agriculture.
13   The next day the Commission informed the permanent representative for Italy to the European Union that it
     would initiate a procedure under Article 169 of the Treaty (now Article 226 EC) if the Law were published in the
     Gazzetta Ufficiale della Repubblica Italiana and declared that that Law would be unenforceable against
     individuals if it was published before 4 May 1999.
14   On 4 August 1998, the Commission received detailed opinions from the Spanish and Portuguese Governments
     within the meaning of Article 9(2) of Directive 83/189, to the effect that the draft law should be amended. On 5
     August, it received observations from the Netherlands Government under Article 8(2).
15   On 29 August 1998, the contested Law was published in Gazzetta della Repubblica Italiana No 201 and it
     entered into force the following day.
16   Article 1 of that the Law provides, in essence, that the oils concerned may not be marketed with a written
     indication that they have been produced or manufactured in Italy unless the entire cycle of harvesting,
     production, processing and packaging took place in Italy. Labelling of oils produced in Italy, when derived
     wholly or in part from oils originating in other countries, must mention that fact, indicating the relevant
     percentages and the country or countries of provenance; any such oil which does not bear those indications must
                                                                                                                            93
       be disposed of within four months after the entry into force of the Law or, after that date, withdrawn from the
       market.
17     On 22 December 1998, the Commission adopted the legislation which it had announced to the Italian authorities,
       in the form of Regulation (EC) No 2815/98 concerning marketing standards for olive oil (OJ 1998 L 349, p. 56),
       which, in particular, lays down rules governing the designation of origin of virgin and extra virgin olive oils on
       their labels or packaging.
       The main proceedings and the question referred to the Court
18     On 29 September 1998, in response to an order from Central Food, Unilever supplied it with 648 litres of extra
       virgin olive oil for the price of ITL 5 330 708.
19     By letter of 30 September 1998, Central Food informed Unilever that the olive oil supplied to it was not labelled
       in accordance with the contested Law. Consequently, it refused to pay the amount due and called on Unilever to
       remove the goods from its warehouse.
20     On 2 October 1998, Unilever contested Central Food's position. On the ground that, under the procedure for
       notification and examination of draft technical regulations established by Directive 83/189, the Commission had
       called on the Italian Republic not to legislate in relation to the labelling of oil until 5 May 1999 and referring to
       the CIA Security judgment, Unilever contended that the contested Law should not be applied. Asserting that the
       olive oil supplied was therefore wholly in conformity with the Italian legislation in force, it called on Central
       Food to accept the consignment and to pay for it.
21     Central Food refused to do so and on 21 October 1998 Unilever commenced proceedings before the Pretore di
       Milano for an order requiring Central Food to pay a sum corresponding to the price of the consignment.
22     In those circumstances, the Pretore di Milano decided to stay proceedings pending a preliminary ruling from the
       Court of justice on the following question: May a national provision which has been promulgated and entered
       into force in the Member State (Law No 313 of 3 August 1998) be disapplied by a national court called upon to
       issue an order for payment in relation to the supply of extra virgin olive oil labelled in a manner not in
       accordance with the provisions of the aforementioned national provision, in circumstances where, following the
       notification and the subsequent examination of a draft national Law concerning the labelling of extra virgin olive
       oil, virgin olive oil and olive oil, the European Commission, on the basis of Article 9(3) of Council Directive
       83/189/EEC laying down a procedure for the provision of information in the field of technical standards and
       regulations, formally requested the notifying State not to legislate during a prescribed period (until [5 May]
       1999) in relation to the marketing rules for olive oil, pending adoption of a Community regulation on the matter
       at issue?


The question referred to the Court The status as technical regulations of the rules on labelling contained in the contested
      Law
       …
The question from the national court seeks, in essence, to ascertain whether a national court is required, in civil
      proceedings between individuals concerning contractual rights and obligations, to refuse to apply a national
      technical regulation which was adopted during a period of postponement of adoption prescribed by Article 9 of
      Directive 83/189.
23     Unilever contends that the Court has confirmed, in its judgment in CIA Security, that a national technical
       regulation adopted in breach of the obligations imposed by Articles 8 and 9 of Directive 83/189 cannot in any
       circumstances be relied on against individuals.
       …
37     In view of those submissions, it is appropriate, first, to consider whether the legal consequence of failure to fulfil
       the obligations imposed by Directive 83/189 is the same in relation both to the obligation to observe periods of
       postponement under Article 9 of Directive 83/189 and to the obligation of notification under Article 8 of
       Directive 83/189.
38     CIA Security related to a technical regulation which had not been notified in accordance with Article 8 of
       Directive 83/189. This explains why the operative part of that judgment confines itself to finding that technical
       regulations which have not been notified in accordance with that article are inapplicable.
39     However, in the statement of the grounds on which that finding was based, the Court also examined the
       obligations deriving from Article 9 of Directive 83/189. The Court's reasoning shows that, having regard to the
       objective of Directive 83/189 and to the wording of Article 9 thereof, those obligations must be treated in the

                                                                                                                                94
     same way as those deriving from Article 8 of the same directive.
40   Thus, in paragraph 40 of CIA Security, it was emphasised that Directive 83/189 is designed, by means of
     preventive control, to protect freedom of movement for goods, which is one of the foundations of the
     Community, and that, in order for such control to be effective, all draft technical regulations covered by the
     directive must be notified and, except in the case of those regulations whose urgency justifies an exception, their
     adoption or entry into force must be suspended during the periods laid down in Article 9.
41   Next, in paragraph 41 of that judgment, the Court held that notification and the period of postponement afford
     the Commission and the other Member States an opportunity to examine whether the draft regulations in
     question create obstacles to trade contrary to the EC Treaty or obstacles which were to be avoided through the
     adoption of common or harmonised measures and also to propose amendments to the national measures
     envisaged. That procedure also enables the Commission to propose or adopt Community rules regulating the
     matter dealt with by the envisaged measure.
42   In paragraph 50 of CIA Security the Court indicated that the aim of the directive was not simply to inform the
     Commission but is also, more generally, to eliminate or restrict obstacles to trade, to inform other States of
     technical regulations envisaged by a State, to give the Commission and the other Member States time to react
     and to propose amendments for lessening restrictions to the free movement of goods arising from the envisaged
     measure and to afford the Commission time to propose a harmonising directive.
43   The Court went on to hold that the wording of Articles 8 and 9 of Directive 83/189 was clear in that they provide
     a procedure for Community control of draft national regulations, the date of their entry into force being subject
     to the Commission's agreement or lack of opposition.
44   Although, in paragraph 48 of CIA Security, after reiterating that the aim of Directive 83/189 was to protect
     freedom of movement for goods by means of preventive control and that the obligation to notify was essential
     for achieving such Community control, the Court found that the effectiveness of such control would be that
     much greater if the directive were interpreted as meaning that breach of the obligation to notify constituted a
     substantial procedural defect such as to render the technical regulations in question inapplicable to individuals, it
     follows from the considerations set out in paragraphs 40 to 43 of this judgment that breach of the obligations of
     postponement of adoption set out in Article 9 of Directive 83/189 also constitutes a substantial procedural defect
     such as to render technical regulations inapplicable.
45   It is therefore necessary to consider, secondly, whether the inapplicability of technical regulations adopted in
     breach of Article 9 of Directive 83/189 can be invoked in civil proceedings between private individuals
     concerning contractual rights and obligations.
46   First, in civil proceedings of that nature, application of technical regulations adopted in breach of Article 9 of
     Directive 83/189 may have the effect of hindering the use or marketing of a product which does not conform to
     those regulations.
47   That is the case in the main proceedings, since application of the Italian rules is liable to hinder Unilever in
     marketing the extra virgin olive oil which it offers for sale.
48   Next, it must be borne in mind that, in CIA Security, the finding of inapplicability as a legal consequence of
     breach of the obligation of notification was made in response to a request for a preliminary ruling arising from
     proceedings between competing undertakings based on national provisions prohibiting unfair trading.
49   Thus, it follows from the case-law of the Court that the inapplicability of a technical regulation which has not
     been notified in accordance with Article 8 of Directive 83/189 can be invoked in proceedings between
     individuals for the reasons set out in paragraphs 40 to 43 of this judgment. The same applies to non-compliance
     with the obligations laid down by Article 9 of the same directive, and there is no reason, in that connection, to
     treat disputes between individuals relating to unfair competition, as in the CIA Security case, differently from
     disputes between individuals concerning contractual rights and obligations, as in the main proceedings.
50   Whilst it is true, as observed by the Italian and Danish Governments, that a directive cannot of itself impose
     obligations on an individual and cannot therefore be relied on as such against an individual (see Case C-91/92
     Faccini Dori [1994] ECR I-3325, paragraph 20), that case-law does not apply where non-compliance with
     Article 8 or Article 9 of Directive 83/189, which constitutes a substantial procedural defect, renders a technical
     regulation adopted in breach of either of those articles inapplicable.
51   In such circumstances, and unlike the case of non-transposition of directives with which the case-law cited by
     those two Governments is concerned, Directive 83/189 does not in any way define the substantive scope of the
     legal rule on the basis of which the national court must decide the case before it. It creates neither rights nor
     obligations for individuals.
52   In view of all the foregoing considerations, the answer to the question submitted must be that a national court is
                                                                                                                             95
     required, in civil proceedings between individuals concerning contractual rights and obligations, to refuse to
     apply a national technical regulation which was adopted during a period of postponement of adoption prescribed
     in Article 9 of Directive 83/189.
     Costs
     On those grounds, THE COURT, in answer to the question referred to it by the Pretore di Milano by order of 6
     November 1998, hereby rules:
53   A national court is required, in civil proceedings between individuals concerning contractual rights and
     obligations, to refuse to apply a national technical regulation which was adopted during a period of
     postponement of adoption prescribed in Article 9 of Council Directive 83/189/EEC laying down a procedure for
     the provision of information in the field of technical standards and regulations, as amended by Directive
     94/10/EC of the European Parliament and the Council of 23 March 1994 materially amending for the second
     time Directive 83/189.



     Case 27
     Judgment of the Court of 5 October 2000. - Federal Republic of Germany v European
     Parliament and Council of the European Union. - Directive 98/43/EC - Advertising and
     sponsorship of tobacco products - Legal basis - Article 100a of the EC Treaty (now, after
     amendment, Article 95 EC). - Case C-376/98.


     In Case C-376/98,


     ...


     THE COURT


     ...


     gives the following


     Judgment:


     ...


     The choice of Articles 100a, 57(2) and 66 of the Treaty as a legal basis and judicial review thereof


76   The Directive is concerned with the approximation of laws, regulations and administrative provisions of the
     Member States relating to the advertising and sponsorship of tobacco products. The national measures affected
     are to a large extent inspired by public health policy objectives.


77   The first indent of Article 129(4) of the Treaty excludes any harmonisation of laws and regulations of the
     Member States designed to protect and improve human health.


78   But that provision does not mean that harmonising measures adopted on the basis of other provisions of the
     Treaty cannot have any impact on the protection of human health. Indeed, the third paragraph of Article 129(1)
     provides that health requirements are to form a constituent part of the Community's other policies.

                                                                                                                      96
79   Other articles of the Treaty may not, however, be used as a legal basis in order to circumvent the express
     exclusion of harmonisation laid down in Article 129(4) of the Treaty.


80   In this case, the approximation of national laws on the advertising and sponsorship of tobacco products provided
     for by the Directive was based on Articles 100a, 57(2) and 66 of the Treaty.


81   Article 100a(1) of the Treaty empowers the Council, acting in accordance with the procedure referred to in
     Article 189b (now, after amendment, Article 251 EC) and after consulting the Economic and Social Committee,
     to adopt measures for the approximation of the provisions laid down by law, regulation or administrative action
     in Member States which have as their object the establishment and functioning of the internal market.


82   Under Article 3(c) of the EC Treaty (now, after amendment, Article 3(1)(c) EC), the internal market is
     characterised by the abolition, as between Member States, of all obstacles to the free movement of goods,
     persons, services and capital. Article 7a of the EC Treaty (now, after amendment, Article 14 EC), which
     provides for the measures to be taken with a view to establishing the internal market, states in paragraph 2 that
     that market is to comprise an area without internal frontiers in which the free movement of goods, persons,
     services and capital is ensured in accordance with the provisions of the Treaty.


83   Those provisions, read together, make it clear that the measures referred to in Article 100a(1) of the Treaty are
     intended to improve the conditions for the establishment and functioning of the internal market. To construe that
     article as meaning that it vests in the Community legislature a general power to regulate the internal market
     would not only be contrary to the express wording of the provisions cited above but would also be incompatible
     with the principle embodied in Article 3b of the EC Treaty (now Article 5 EC) that the powers of the
     Community are limited to those specifically conferred on it.


84   Moreover, a measure adopted on the basis of Article 100a of the Treaty must genuinely have as its object the
     improvement of the conditions for the establishment and functioning of the internal market. If a mere finding of
     disparities between national rules and of the abstract risk of obstacles to the exercise of fundamental freedoms or
     of distortions of competition liable to result therefrom were sufficient to justify the choice of Article 100a as a
     legal basis, judicial review of compliance with the the proper legal basis might be rendered nugatory. The Court
     would then be prevented from discharging the function entrusted to it by Article 164 of the EC Treaty (now
     Article 220 EC) of ensuring that the law is observed in the interpretation and application of the Treaty.


85   So, in considering whether Article 100a was the proper legal basis, the Court must verify whether the measure
     whose validity is at issue in fact pursues the objectives stated by the Community legislature (see, in particular,
     Spain v Council, cited above, paragraphs 25 to 41, and Case C-233/94 Germany v Parliament and Council
     [1997] ECR I-2405, paragraphs 10 to 21).


86   It is true, as the Court observed in paragraph 35 of its judgment in Spain v Council, cited above, that recourse to
     Article 100a as a legal basis is possible if the aim is to prevent the emergence of future obstacles to trade
     resulting from multifarious development of national laws. However, the emergence of such obstacles must be
     likely and the measure in question must be designed to prevent them.


87   The foregoing considerations apply to interpretation of Article 57(2) of the Treaty, read in conjunction with
     Article 66 thereof, which expressly refers to measures intended to make it easier for persons to take up and
     pursue activities by way of services. Those provisions are also intended to confer on the Community legislature
     specific power to adopt measures intended to improve the functioning of the internal market.


88   Furthermore, provided that the conditions for recourse to Articles 100a, 57(2) and 66 as a legal basis are
     fulfilled, the Community legislature cannot be prevented from relying on that legal basis on the ground that
     public health protection is a decisive factor in the choices to be made. On the contrary, the third paragraph of
                                                                                                                           97
      Article 129(1) provides that health requirements are to form a constituent part of the Community's other policies
      and Article 100a(3) expressly requires that, in the process of harmonisation, a high level of human health
      protection is to be ensured.


89    It is therefore necessary to verify whether, in the light of the foregoing, it was permissible for the Directive to be
      adopted on the basis of Articles 100a, 57(2) and 66 of the Treaty.


      ...


      Elimination of obstacles to the free movement of goods and the freedom to provide services


96    It is clear that, as a result of disparities between national laws on the advertising of tobacco products, obstacles to
      the free movement of goods or the freedom to provide services exist or may well arise.


97    In the case, for example, of periodicals, magazines and newspapers which contain advertising for tobacco
      products, it is true, as the applicant has demonstrated, that no obstacle exists at present to their importation into
      Member States which prohibit such advertising. However, in view of the trend in national legislation towards
      ever greater restrictions on advertising of tobacco products, reflecting the belief that such advertising gives rise
      to an appreciable increase in tobacco consumption, it is probable that obstacles to the free movement of press
      products will arise in the future.


98    In principle, therefore, a Directive prohibiting the advertising of tobacco products in periodicals, magazines and
      newspapers could be adopted on the basis of Article 100a of the Treaty with a view to ensuring the free
      movement of press products, on the lines of Directive 89/552, Article 13 of which prohibits television
      advertising of tobacco products in order to promote the free broadcasting of television programmes.


99    However, for numerous types of advertising of tobacco products, the prohibition under Article 3(1) of the
      Directive cannot be justified by the need to eliminate obstacles to the free movement of advertising media or the
      freedom to provide services in the field of advertising. That applies, in particular, to the prohibition of
      advertising on posters, parasols, ashtrays and other articles used in hotels, restaurants and cafés, and the
      prohibition of advertising spots in cinemas, prohibitions which in no way help to facilitate trade in the products
      concerned.


100   Admittedly, a measure adopted on the basis of Articles 100a, 57(2) and 66 of the Treaty may incorporate
      provisions which do not contribute to the elimination of obstacles to exercise of the fundamental freedoms
      provided that they are necessary to ensure that certain prohibitions imposed in pursuit of that purpose are not
      circumvented. It is, however, quite clear that the prohibitions mentioned in the previous paragraph do not fall
      into that category.


      ...


105   In those circumstances, it must be held that the Community legislature cannot rely on the need to eliminate
      obstacles to the free movement of advertising media and the freedom to provide services in order to adopt the
      Directive on the basis of Articles 100a, 57(2) and 66 of Treaty.


      …




                                                                                                                                98
     Case 28
     ECJ, Judgment of 14 December 2000. Masterfoods Ltd v HB Ice Cream Ltd. Reference
     for a preliminary ruling: Supreme Court - Ireland. Competition - Articles 85 and 86 of
     the EC Treaty (now Articles 81 EC and 82 EC) - Parallel proceedings before national
     and Community courts. Case C-344/98. European Court reports 2000 Page I-11369
     In Case C-344/98,
     …
     gives the following Judgment
1    By order of 16 June 1998, received at the Court on 21 September 1998, the Supreme Court referred to the Court
     of Justice for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) three questions on
     the interpretation of Articles 85, 86 and 222 of the EC Treaty (now Articles 81 EC, 82 EC and 295 EC).
2    Those questions were raised in two sets of proceedings between Masterfoods Ltd (`Masterfoods') and HB Ice
     Cream Ltd, now Van Den Bergh Foods Ltd (`HB'), in connection with an exclusivity clause contained in
     agreements for the supply of freezer cabinets concluded between HB and retailers of impulse ice cream. The
     disputes in the main proceedings
3    HB, a wholly owned subsidiary of the Unilever group, is the leading manufacturer of ice cream in Ireland. For a
     number of years HB has supplied ice cream retailers with freezer cabinets free of charge or at a nominal rent,
     while retaining ownership of the cabinets, provided that they are used exclusively for HB products (`the
     exclusivity clause').
4    Masterfoods, a subsidiary of the U.S. corporation Mars Inc., entered the Irish ice cream market in 1989.
5    From the summer of 1989 numerous retailers began to stock and display Masterfoods products in cabinets
     supplied to them by HB. HB demanded that the exclusivity clause be complied with.
6    In March 1990 Masterfoods brought an action before the High Court of Ireland seeking, inter alia, a declaration
     that the exclusivity clause was null and void in domestic law and under Articles 85 and 86 of the EC Treaty. HB
     brought a separate action for an injunction to restrain Masterfoods from inducing retailers to breach the
     exclusivity clause. Damages were claimed by both Masterfoods and HB.
7    In April 1990 the High Court granted HB an interlocutory injunction.
8    On 28 May 1992 the High Court gave judgment in the actions brought by Masterfoods and HB respectively,
     dismissing Masterfoods‟claim and granting HB a permanent injunction restraining Masterfoods from inducing
     retailers to store its products in freezers belonging to HB. However, HB's claim for damages was dismissed.
9    On 4 September 1992 Masterfoods appealed against those judgments to the Supreme Court.
10   In parallel with those contentious proceedings, on 18 September 1991 Masterfoods lodged with the Commission
     of the European Communities a complaint against HB under Article 3 of Council Regulation No 17 of 6
     February 1962, First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition
     1959-62, p. 87). That complaint concerned the supply by HB, to a large number of retailers, of freezer cabinets
     to be used exclusively for HB products.
11   On 29 July 1993 the Commission, in a statement of objections addressed to HB, concluded that the distribution
     system operated by it infringed Articles 85 and 86 of the Treaty.
12   On 8 March 1995, following discussions with the Commission, HB notified the Commission of proposals for
     alterations to its distribution arrangements with a view to exemption under Article 85(3) of the Treaty. On 15
     August 1995, pursuant to Article 19(3) of Regulation No 17, the Commission announced its intention to take a
     favourable view of HB's distribution arrangements.
13   On 22 January 1997, however, finding that the changes had not achieved the expected results in terms of opened
     outlets, the Commission sent a new statement of objections to HB.
14   By Decision 98/531/EC of 11 March 1998 relating to a proceeding under Articles 85 and 86 of the Treaty (Case
     Nos IV/34.073, IV/34.395 and IV/35.436 - Van den Bergh Foods Limited) (OJ 1998 L 246, p. 1), the
     Commission ruled that: - the exclusivity provision in the freezer-cabinet agreements concluded between HB and
     retailers in Ireland, for the placement of cabinets in retail outlets which have only one or more freezer cabinets
     supplied by HB for the stocking of single-wrapped items of impulse ice cream, and not having a freezer cabinet
     either procured by themselves or provided by another ice-cream manufacturer constitutes an infringement of
     Article 85(1) of the Treaty (Article 1 of Decision 98/531) and that - HB's inducement to retailers in Ireland to
                                                                                                                          99
     enter into freezer-cabinet agreements subject to a condition of exclusivity by offering to supply them with one or
     more freezer cabinets for the stocking of single-wrapped items of impulse ice cream and to maintain the
     cabinets, free of any direct charge, constitutes an infringement of Article 86 of the Treaty (Article 3 of Decision
     98/531).
15   The Commission also rejected the request for exemption pursuant to Article 85(3) of the Treaty (Article 2 of
     Decision 98/531) and gave HB notice to cease the infringements found immediately and to refrain from taking
     any measure having the same object or effect (Article 4 of Decision 98/531). HB was also given notice to
     inform retailers with whom it had freezer-cabinet agreements constituting infringements as described in Article 1
     of Decision 98/531 of the full wording of Articles 1 and 3 of that Decision and to notify them that the exclusivity
     provisions in question were void (Article 5 of Decision 98/531).
16   By application lodged at the Registry of the Court of First Instance of the European Communities on 21 April
     1998, which was registered as Case No T-65/98, HB, acting under its present name of Van den Bergh Foods Ltd,
     brought an action under the fourth paragraph of Article 173 of the EC Treaty (now, after amendment, the fourth
     paragraph of Article 230 EC) for the annulment of Decision 98/531.
17   By separate document lodged at the Registry of the Court of First Instance on the same day, HB also applied,
     pursuant to Article 185 of the EC Treaty (now Article 242 EC), for application of Decision 98/531 to be
     suspended until the Court of First Instance had given judgment on the substance.
18   Under those circumstances the Supreme Court decided to stay the proceedings and to refer the following
     questions to the Court of Justice for a preliminary ruling:
     “1. In the light of the judgment and orders of the High Court of Ireland dated 28 May 1992, the decision of the
     Commission of the European Communities dated 11 March 1998 and the applications by Van den Bergh Foods
     Ltd pursuant to Articles 173, 185 and 186 of the Treaty establishing the European Economic Community ("EC
     Treaty") to annul and suspend the latter decision:
      (a) Does the obligation of sincere cooperation with the Commission as expounded by the Court of Justice
     require the Supreme Court to stay the instant proceedings pending the disposal of the appeal to the Court of First
     Instance against the aforesaid decision of the Commission and any subsequent appeal to the Court of Justice?
      (b) Does a decision of the Commission which is addressed to an individual party (and which is the subject of an
     application for annulment and suspension by that party) declaring such party's freezer cabinet agreement to be
     contrary to Article 85(1) and/or Article 86 of the EC Treaty thereby prevent such party from seeking to uphold a
     contrary judgment of the national court in that party's favour on the same or similar issues falling under Articles
     85 and 86 of the Treaty where that decision of the national court is appealed to the national court of final appeal?
     Questions 2 and 3 only arise in the event of a negative answer to Question 1(a).
     2. Having regard to the legal and economic context of the cabinet agreements at issue in the market for single-
     wrapped items of impulse ice cream, does the practice whereby a manufacturer and/or supplier of ice cream
     provides a freezer to a retailer at no direct charge - or otherwise induces the retailer to accept the freezer - subject
     to the condition that the retailer stock no ice cream in such freezer other than that supplied by the said
     manufacturer and/or supplier constitute an infringement of the provisions of Article 85(1) and/or Article 86 of
     the EC Treaty?
     3. Are freezer exclusivity agreements protected from challenge Articles 85 and 86 of the EC Treaty by reason of
     the provisions of Article 222 of the EC Treaty?'
19   By order of 7 July 1998 in Case T-65/98 R Van den Bergh Foods v Commission [1998] ECR II-2641, the
     President of the Court of First Instance suspended the operation of Decision 98/531 until the Court of First
     Instance had given judgment terminating the proceedings in Case T-65/98.
20   By order of 28 April 1999, the President of the Fifth Chamber of the Court of First Instance, pursuant to the third
     paragraph of Article 47 of the EC Statute of the Court of Justice, stayed proceedings in Case T-65/98 until the
     Court of Justice has delivered judgment in the present case.
     Question 1
     Observations of the parties
     …
     Findings of the Court
21   First of all, the principles governing the division of powers between the Commission and the national courts in
     the application of the Community competition rules should be borne in mind.
22   The Commission, entrusted by Article 89(1) of the EC Treaty (now, after amendment, Article 85(1) EC) with the
                                                                                                                                10
                                                                                                                                0
     task of ensuring application of the principles laid down in Articles 85 and 86 of the Treaty, is responsible for
     defining and implementing the orientation of Community competition policy. It is for the Commission to adopt,
     subject to review by the Court of First Instance and the Court of Justice, individual decisions in accordance with
     the procedural rules in force and to adopt exemption regulations. In order effectively to perform that task, which
     necessarily entails complex economic assessments, it is entitled to give differing degrees of priority to the
     complaints brought before it (Delimitis, paragraph 44, and Case C-119/97 P Ufex and Others v Commission
     [1999] ECR I-1341, paragraph 88).
23   The Commission has exclusive competence to adopt decisions in implementation of Article 85(3) of the Treaty,
     pursuant to Article 9(1) of Regulation No 17 (Delimitis, paragraph 44). However, it shares competence to apply
     Articles 85(1) and 86 of the Treaty with the national courts ((Delimitis, paragraph 45). The latter provisions
     produce direct effects in relations between individuals and create direct rights in respect of the individuals
     concerned which national courts must safeguard (BRT I, paragraph 16). The national courts thus continue to
     have jurisdiction to apply the provisions of Articles 85(1) and 86 of the Treaty even after the Commission has
     initiated a procedure in application of Articles 2, 3 or 6 of Regulation No 17 (BRT I, paragraphs 17 to 20).
24   Despite that division of powers, and in order to fulfil the role assigned to it by the Treaty, the Commission
     cannot be bound by a decision given by a national court in application of Articles 85(1) and 86 of the Treaty.
     The Commission is therefore entitled to adopt at any time individual decisions under Articles 85 and 86 of the
     Treaty, even where an agreement or practice has already been the subject of a decision by a national court and
     the decision contemplated by the Commission conflicts with that national court's decision.
25   It is also clear from the case-law of the Court that the Member States' duty under Article 5 of the EC Treaty to
     take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising from
     Community law and to abstain from any measure which could jeopardise the attainment of the objectives of the
     Treaty is binding on all the authorities of Member States including, for matters within their jurisdiction, the
     courts (see, to that effect, Case C-2/97 IP v Borsana [1998] ECR I-8597, paragraph 26).
26   Under the fourth paragraph of Article 189 of the Treaty, a decision adopted by the Commission implementing
     Articles 85(1), 85(3) or 86 of the Treaty is to be binding in its entirety upon those to whom it is addressed.
27   The Court has held, in paragraph 47 of Delimitis, that in order not to breach the general principle of legal
     certainty, national courts must, when ruling on agreements or practices which may subsequently be the subject of
     a decision by the Commission, avoid giving decisions which would conflict with a decision contemplated by the
     Commission in the implementation of Articles 85(1) and 86 and Article 85(3) of the Treaty.
28   It is even more important that when national courts rule on agreements or practices which are already the subject
     of a Commision decision they cannot take decisions running counter to that of the Commission, even if the
     latter's decision conflicts with a decision given by a national court of first instance.
29   In that connection, the fact that the President of the Court of First Instance suspended the application of Decision
     98/531 until the Court of First Instance has given judgment terminating the proceedings before it is irrelevant.
     Acts of the Community institutions are in principle presumed to be lawful until such time as they are annulled or
     withdrawn (Case C-137/92 P Commission v BASF and Others [1994] ECR I-2555, paragraph 48). The decision
     of the judge hearing an application to order the suspension of the operation of the contested act, pursuant to
     Article 185 of the Treaty, has only provisional effect. It must not prejudge the points of law or fact in issue or
     neutralise in advance the effects of the decision subsequently to be given in the main action (order in Case C-
     149/95 P(R) Commission v Atlantic Container Line and Others [1995] ECR I-2165, paragraph 22).
30   Moreover, if a national court has doubts as to the validity or interpretation of an act of a Community institution it
     may, or must, in accordance with the second and third paragraphs of Article 177 of the Treaty, refer a question to
     the Court of Justice for a preliminary ruling.
31   If, as here in the main proceedings, the addressee of a Commission decision has, within the period prescribed in
     the fifth paragraph of Article 173 of the Treaty, brought an action for annulment of that decision pursuant to that
     article, it is for the national court to decide whether to stay proceedings until a definitive decision has been given
     in the action for annulment or in order to refer a question to the Court for a preliminary ruling.
32   It should be borne in mind in that connection that application of the Community competition rules is based on an
     obligation of sincere cooperation between the national courts, on the one hand, and the Commission and the
     Community Courts, on the other, in the context of which each acts on the basis of the role assigned to it by the
     Treaty.
33   When the outcome of the dispute before the national court depends on the validity of the Commission decision,
     it follows from the obligation of sincere cooperation that the national court should, in order to avoid reaching a
     decision that runs counter to that of the Commission, stay its proceedings pending final judgment in the action
     for annulment by the Community Courts, unless it considers that, in the circumstances of the case, a reference to
                                                                                                                              10
                                                                                                                              1
     the Court of Justice for a preliminary ruling on the validity of the Commission decision is warranted.
34   If a national court stays proceedings, it is incumbent on it to examine whether it is necessary to order interim
     measures in order to safeguard the interests of the parties pending final judgment.
35   In this case it appears from the order for reference that the maintenance in force of the permanent injunction
     granted by the High Court restraining Masterfoods from inducing retailers to store its products in freezers
     belonging to HB depends on the validity of Decision 98/531. It therefore follows from the obligation of sincere
     cooperation that the national court should stay proceedings pending final judgment in the action for annulment
     by the Community Courts unless it considers that, in the circumstances of the case, a reference to the Court of
     Justice for a preliminary ruling on the validity of the Commission decision is warranted.
36   The answer to Question 1 must therefore be that, where a national court is ruling on an agreement or practice the
     compatibility of which with Articles 85(1) and 86 of the Treaty is already the subject of a Commission decision,
     it cannot take a decision running counter to that of the Commission, even if the latter's decision conflicts with a
     decision given by a national court of first instance. If the addressee of the Commission decision has, within the
     period prescribed in the fifth paragraph of Article 173 of the Treaty, brought an action for annulment of that
     decision, it is for the national court to decide whether to stay proceedings pending final judgment in that action
     for annulment or in order to refer a question to the Court for a preliminary ruling.
     Questions 2 and 3
37   Questions 2 and 3 were raised only in the event that Question 1 should be answered in the negative. In the light
     of the reply to Question 1, there is no need to answer the other questions.
     Costs
     …
     On those grounds,
     THE COURT, in answer to the questions referred to it by the Supreme Court by order of 16 June 1998, hereby
     rules:
     Where a national court is ruling on an agreement or practice the compatibility of which with Articles 85(1) and
     86 of the EC Treaty (now Articles 81(1) EC and Article 82 EC) is already the subject of a Commission decision,
     it cannot take a decision running counter to that of the Commission, even if the latter's decision conflicts with a
     decision given by a national court of first instance. If the addressee of the Commission decision has, within the
     period prescribed in the fifth paragraph of Article 173 of the EC Treaty (now, after amendment, the fifth
     paragraph of Article 230 EC), brought an action for annulment of that decision, it is for the national court to
     decide whether to stay proceedings pending final judgment in that action for annulment or in order to refer a
     question to the Court for a preliminary ruling.



     Case 29
     Judgment of the Court (Grand Chamber) of 5 October 2004. Bernhard Pfeiffer (C-
     397/01), Wilhelm Roith (C-398/01), Albert Süß (C-399/01), Michael Winter (C-400/01),
     Klaus Nestvogel (C-401/01), Roswitha Zeller (C-402/01) and Matthias Döbele (C-403/01)
     v Deutsches Rotes Kreuz, Kreisverband Waldshut eV. Reference for a preliminary
     ruling: Arbeitsgericht Lörrach - Germany. Social policy - Protection of the health and
     safety of workers - Directive 93/104/EC - Scope - Emergency workers in attendance in
     ambulances in the framework of an emergency service run by the German Red Cross -
     Definition of 'road transport' - Maximum weekly working time - Principle - Direct effect
     - Derogation - Conditions. Joined cases C-397/01 to C-403/01.


     In Joined Cases C-397/01 to C-403/01,


     ...


     THE COURT (Grand Chamber)
                                                                                                                           10
                                                                                                                           2
      ...


      gives the following


      Judgment


      ...


108   In that regard, the Court has consistently held that a directive cannot of itself impose obligations on an individual
      and cannot therefore be relied upon as such against an individual (see, inter alia, Case 152/84 Marshall [1986]
      ECR 723, paragraph 48; Case C-91/92 Faccini Dori [1994] ECR I-3325, paragraph 20; and Case C-201/02 Wells
      [2004] ECR I-0000, paragraph 56).


109   It follows that even a clear, precise and unconditional provision of a directive seeking to confer rights or impose
      obligations on individuals cannot of itself apply in proceedings exclusively between private parties.


110   However, it is apparent from case-law which has also been settled since the judgment of 10 April 1984 in Case
      14/83 Von Colson and Kamann [1984] ECR 1891, paragraph 26, that the Member States‟ obligation arising from
      a directive to achieve the result envisaged by the directive and their duty under Article 10 EC to take all
      appropriate measures, whether general or particular, to ensure the fulfilment of that obligation is binding on all
      the authorities of Member States including, for matters within their jurisdiction, the courts (see, inter alia, Case
      C-106/89 Marleasing [1990] ECR I-4135, paragraph 8; Faccini Dori, paragraph 26; Case C-126/96 Inter-
      Environnement Wallonie [1997] ECR I-7411, paragraph 40; and Case C-131/97 Carbonari and Others [1999]
      ECR I-1103, paragraph 48).


111   It is the responsibility of the national courts in particular to provide the legal protection which individuals derive
      from the rules of Community law and to ensure that those rules are fully effective.


112   That is a fortiori the case when the national court is seised of a dispute concerning the application of domestic
      provisions which, as here, have been specifically enacted for the purpose of transposing a directive intended to
      confer rights on individuals. The national court must, in the light of the third paragraph of Article 249 EC,
      presume that the Member State, following its exercise of the discretion afforded it under that provision, had the
      intention of fulfilling entirely the obligations arising from the directive concerned (see Case C-334/92 Wagner
      Miret [1993] ECR I-6911, paragraph 20).


113   Thus, when it applies domestic law, and in particular legislative provisions specifically adopted for the purpose
      of implementing the requirements of a directive, the national court is bound to interpret national law, so far as
      possible, in the light of the wording and the purpose of the directive concerned in order to achieve the result
      sought by the directive and consequently comply with the third paragraph of Article 249 EC (see to that effect,
      inter alia, the judgments cited above in Von Colson and Kamann, paragraph 26; Marleasing, paragraph 8, and
      Faccini Dori, paragraph 26; see also Case C-63/97 BMW [1999] ECR I-905, paragraph 22; Joined Cases
      C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores [2000] ECR I-4941, paragraph 30; and Case
      C-408/01 Adidas-Salomon and Adidas Benelux [2003] ECR I-0000, paragraph 21).


114   The requirement for national law to be interpreted in conformity with Community law is inherent in the system
      of the Treaty, since it permits the national court, for the matters within its jurisdiction, to ensure the full
      effectiveness of Community law when it determines the dispute before it (see, to that effect, Case C-160/01 Mau
      [2003] ECR I-4791, paragraph 34).


                                                                                                                               10
                                                                                                                               3
115   Although the principle that national law must be interpreted in conformity with Community law concerns chiefly
      domestic provisions enacted in order to implement the directive in question, it does not entail an interpretation
      merely of those provisions but requires the national court to consider national law as a whole in order to assess to
      what extent it may be applied so as not to produce a result contrary to that sought by the directive (see, to that
      effect, Carbonari, paragraphs 49 and 50).


116   In that context, if the application of interpretative methods recognised by national law enables, in certain
      circumstances, a provision of domestic law to be construed in such a way as to avoid conflict with another rule
      of domestic law or the scope of that provision to be restricted to that end by applying it only in so far as it is
      compatible with the rule concerned, the national court is bound to use those methods in order to achieve the
      result sought by the directive.


117   In such circumstances, the national court, when hearing cases which, like the present proceedings, fall within the
      scope of Directive 93/104 and derive from facts postdating expiry of the period for implementing the directive,
      must, when applying the provisions of national law specifically intended to implement the directive, interpret
      those provisions so far as possible in such a way that they are applied in conformity with the objectives of the
      directive (see, to that effect, the judgment in Case C-456/98 Centrosteel [2000] ECR I-6007, paragraphs 16 and
      17).


118   In this instance, the principle of interpretation in conformity with Community law thus requires the referring
      court to do whatever lies within its jurisdiction, having regard to the whole body of rules of national law, to
      ensure that Directive 93/104 is fully effective, in order to prevent the maximum weekly working time laid down
      in Article 6(2) of the directive from being exceeded (see, to that effect, Marleasing, paragraphs 7 and 13).


119   Accordingly, it must be concluded that, when hearing a case between individuals, a national court is required,
      when applying the provisions of domestic law adopted for the purpose of transposing obligations laid down by a
      directive, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light
      of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued
      by the directive. In the main proceedings, the national court must thus do whatever lies within its jurisdiction to
      ensure that the maximum period of weekly working time, which is set at 48 hours by Article 6(2) of Directive
      93/104, is not exceeded.


      Case 30
      Judgment of the Court (First Chamber) of 14 October 2004 in Case C36/02 (reference
      for a preliminary ruling from the Bundesverwaltungsgericht): Omega Spielhallen- und
      Automatenaufstellungs-GmbH v Oberbürgermeisterin der Bundesstadt Bonn (Freedom
      to provide services — Free movement of goods — Restrictions — Public policy —
      Human dignity — Protection of fundamental values laid down in the national
      constitution — ‘Playing at killing’)


      In Case C-36/02


      ...


      THE COURT (First Chamber)


      ...


      gives the following
                                                                                                                               10
                                                                                                                               4
     Judgment


     ...


28   Concerning justification for the restriction of the freedom to provide services imposed by the order of 14
     September 1994, Article 46 EC, which applies here by virtue of Article 55 EC, allows restrictions justified for
     reasons of public policy, public security or public health. In this case, the documents before the Court show that
     the grounds relied on by the Bonn police authority in adopting the prohibition order expressly mention the fact
     that the activity concerned constitutes a danger to public policy. Moreover, reference to a danger to public policy
     also appears in Paragraph 14(1) of the OBG NW, empowering police authorities to take necessary measures to
     avert that danger.


     ...


30   However, the possibility of a Member State relying on a derogation laid down by the Treaty does not prevent
     judicial review of measures applying that derogation (Case 41/74 Van Duyn [1974] ECR 1337, paragraph 7). In
     addition, the concept of „public policy‟ in the Community context, particularly as justification for a derogation
     from the fundamental principle of the freedom to provide services, must be interpreted strictly, so that its scope
     cannot be determined unilaterally by each Member State without any control by the Community institutions (see,
     by analogy with the free movement of workers, Van Duyn, paragraph 18; Case 30/77 Bouchereau [1977] ECR
     1999, paragraph 33). Thus, public policy may be relied on only if there is a genuine and sufficiently serious
     threat to a fundamental interest of society (Case C-54/99 Église de Scientologie [2000] ECR I-1335, paragraph
     17).


31   The fact remains, however, that the specific circumstances which may justify recourse to the concept of public
     policy may vary from one country to another and from one era to another. The competent national authorities
     must therefore be allowed a margin of discretion within the limits imposed by the Treaty (Van Duyn, paragraph
     18, and Bouchereau, paragraph 34).


32   In this case, the competent authorities took the view that the activity concerned by the prohibition order was a
     threat to public policy by reason of the fact that, in accordance with the conception prevailing in public opinion,
     the commercial exploitation of games involving the simulated killing of human beings infringed a fundamental
     value enshrined in the national constitution, namely human dignity. According to the Bundesverwaltungsgericht,
     the national courts which heard the case shared and confirmed the conception of the requirements for protecting
     human dignity on which the contested order is based, that conception therefore having to be regarded as in
     accordance with the stipulations of the German Basic Law.


33   It should be recalled in that context that, according to settled case-law, fundamental rights form an integral part
     of the general principles of law the observance of which the Court ensures, and that, for that purpose, the Court
     draws inspiration from the constitutional traditions common to the Member States and from the guidelines
     supplied by international treaties for the protection of human rights on which the Member States have
     collaborated or to which they are signatories. The European Convention on Human Rights and Fundamental
     Freedoms has special significance in that respect (see, inter alia, Case C-260/89 ERT [1991] ECR I-2925,
     paragraph 41; Case C-274/99 P Connolly v Commission [2001] ECR I-1611, paragraph 37; Case C-94/00
     Roquette Frères [2002] ECR I-9011, paragraph 25; Case C-112/00 Schmidberger [2003] ECR I-5659, paragraph
     71).


34   As the Advocate General argues in paragraphs 82 to 91 of her Opinion, the Community legal order undeniably
     strives to ensure respect for human dignity as a general principle of law. There can therefore be no doubt that the
     objective of protecting human dignity is compatible with Community law, it being immaterial in that respect
     that, in Germany, the principle of respect for human dignity has a particular status as an independent
     fundamental right.
                                                                                                                           10
                                                                                                                           5
35   Since both the Community and its Member States are required to respect fundamental rights, the protection of
     those rights is a legitimate interest which, in principle, justifies a restriction of the obligations imposed by
     Community law, even under a fundamental freedom guaranteed by the Treaty such as the freedom to provide
     services (see, in relation to the free movement of goods, Schmidberger, paragraph 74).

36   However, measures which restrict the freedom to provide services may be justified on public policy grounds
     only if they are necessary for the protection of the interests which they are intended to guarantee and only in so
     far as those objectives cannot be attained by less restrictive measures (see, in relation to the free movement of
     capital, Église de Scientologie, paragraph 18).



37   It is not indispensable in that respect for the restrictive measure issued by the authorities of a Member State to
     correspond to a conception shared by all Member States as regards the precise way in which the fundamental
     right or legitimate interest in question is to be protected. Although, in paragraph 60 of Schindler, the Court
     referred to moral, religious or cultural considerations which lead all Member States to make the organisation of
     lotteries and other games with money subject to restrictions, it was not its intention, by mentioning that common
     conception, to formulate a general criterion for assessing the proportionality of any national measure which
     restricts the exercise of an economic activity.


38   On the contrary, as is apparent from well-established case-law subsequent to Schindler, the need for, and
     proportionality of, the provisions adopted are not excluded merely because one Member State has chosen a
     system of protection different from that adopted by another State (see, to that effect, Läärä, paragraph 36;
     Zenatti, paragraph 34; Case C-6/01 Anomar and Others [2003] ECR I-0000, paragraph 80).


39   In this case, it should be noted, first, that, according to the referring court, the prohibition on the commercial
     exploitation of games involving the simulation of acts of violence against persons, in particular the
     representation of acts of homicide, corresponds to the level of protection of human dignity which the national
     constitution seeks to guarantee in the territory of the Federal Republic of Germany. It should also be noted that,
     by prohibiting only the variant of the laser game the object of which is to fire on human targets and thus „play at
     killing‟ people, the contested order did not go beyond what is necessary in order to attain the objective pursued
     by the competent national authorities.


40   In those circumstances, the order of 14 September 1994 cannot be regarded as a measure unjustifiably
     undermining the freedom to provide services.


     …




     Case 31
     Judgment of the Court (Full Court) of 19 October 2004. Kunqian Catherine Zhu and
     Man Lavette Chen v Secretary of State for the Home Department. Case C-200/02.


     …


18   The Irish and United Kingdom Governments‟ contention that a person in Catherine‟s situation cannot claim the
     benefit of the provisions of Community law on free movement of persons and residence simply because that
     person has never moved from one Member State to another Member State must be rejected at the outset.


19   The situation of a national of a Member State who was born in the host Member State and has not made use of
                                                                                                                           10
                                                                                                                           6
     the right to freedom of movement cannot, for that reason alone, be assimilated to a purely internal situation,
     thereby depriving that national of the benefit in the host Member State of the provisions of Community law on
     freedom of movement and of residence (to that effect, see, in particular, Case C-148/02 Garcia Avello [2003]
     ECR I-11613, paragraphs 13 and 27).


20   Moreover, contrary to the Irish Government‟s contention, a young child can take advantage of the rights of free
     movement and residence guaranteed by Community law. The capacity of a national of a Member State to be the
     holder of rights guaranteed by the Treaty and by secondary law on the free movement of persons cannot be made
     conditional upon the attainment by the person concerned of the age prescribed for the acquisition of legal
     capacity to exercise those rights personally (to that effect, see, in particular, in the context of Regulation (EEC)
     No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community (OJ,
     English Special Edition, Series I, 1968 (II), p. 475), Joined Cases 389/87 and 390/87 Echternach and Moritz
     [1989] ECR 723, paragraph 21, and Case C-413/99 Baumbast and R [2002] ECR I-7091, paragraphs 52 to 63,
     and, in relation to Article 17 EC, Garcia Avello , paragraph 21). Moreover, as the Advocate General made clear
     in points 47 to 52 of his Opinion, it does not follow either from the terms of, or from the aims pursued by,
     Articles 18 EC and 49 EC and Directives 73/148 and 90/364 that the enjoyment of the rights with which those
     provisions are concerned should be made conditional upon the attainment of a minimum age.


     …


26   As regards the right to reside in the territory of the Member States provided for in Article 18(1) EC, it must be
     observed that that right is granted directly to every citizen of the Union by a clear and precise provision of the
     Treaty. Purely as a national of a Member State, and therefore as a citizen of the Union, Catherine is entitled to
     rely on Article 18(1) EC. That right of citizens of the Union to reside in another Member State is recognised
     subject to the limitations and conditions imposed by the Treaty and by the measures adopted to give it effect
     (see, in particular, Baumbast and R , paragraphs 84 and 85).


27   With regard to those limitations and conditions, Article 1(1) of Directive 90/364 provides that the Member States
     may require that the nationals of a Member State who wish to benefit from the right to reside in their territory
     and the members of their families be covered by sickness insurance in respect of all risks in the host Member
     State and have sufficient resources to avoid becoming a burden on the social assistance system of the host
     Member State during their period of residence.


28   It is clear from the order for reference that Catherine has both sickness insurance and sufficient resources,
     provided by her mother, for her not to become a burden on the social assistance system of the host Member
     State.


29   The objection raised by the Irish and United Kingdom Governments that the condition concerning the
     availability of sufficient resources means that the person concerned must, in contrast to Catherine‟s case, possess
     those resources personally and may not use for that purpose those of an accompanying family member, such as
     Mrs Chen, is unfounded.


30   According to the very terms of Article 1(1) of Directive 90/364, it is sufficient for the nationals of Member
     States to „have‟ the necessary resources, and that provision lays down no requirement whatsoever as to their
     origin.


31   The correctness of that interpretation is reinforced by the fact that provisions laying down a fundamental
     principle such as that of the free movement of persons must be interpreted broadly.


     ...



                                                                                                                            10
                                                                                                                            7
     The right of residence of a person in Mrs Chen‟s situation


42   Article 1(2)(b) of Directive 90/364, which guarantees „dependent‟ relatives in the ascending line of the holder of
     the right of residence the right to install themselves with the holder of the right of residence, regardless of their
     nationality, cannot confer a right of residence on a national of a non-member country in Mrs Chen‟s situation
     either by reason of the emotional bonds between mother and child or on the ground that the mother‟s right to
     enter and reside in the United Kingdom is dependent on her child‟s right of residence.


43   According to the case-law of the Court, the status of „dependent‟ member of the family of a holder of a right of
     residence is the result of a factual situation characterised by the fact that material support for the family member
     is provided by the holder of the right of residence (see, to that effect, in relation to Article 10 of Regulation No
     1612/68, Case 316/85 Lebon [1987] ECR 2811, paragraphs 20 to 22).


44   In circumstances such as those of the main proceedings, the position is exactly the opposite in that the holder of
     the right of residence is dependent on the national of a non-member country who is her carer and wishes to
     accompany her. In those circumstances, Mrs Chen cannot claim to be a „dependent‟ relative of Catherine in the
     ascending line within the meaning of Directive 90/364 with a view to having the benefit of a right of residence in
     the United Kingdom.


45   On the other hand, a refusal to allow the parent, whether a national of a Member State or a national of a non-
     member country, who is the carer of a child to whom Article 18 EC and Directive 90/364 grant a right of
     residence, to reside with that child in the host Member State would deprive the child‟s right of residence of any
     useful effect. It is clear that enjoyment by a young child of a right of residence necessarily implies that the child
     is entitled to be accompanied by the person who is his or her primary carer and accordingly that the carer must
     be in a position to reside with the child in the host Member State for the duration of such residence (see, mutatis
     mutandis , in relation to Article 12 of Regulation No 1612/68, Baumbast and R , paragraphs 71 to 75).


46   For that reason alone, where, as in the main proceedings, Article 18 EC and Directive 90/364 grant a right to
     reside for an indefinite period in the host Member State to a young minor who is a national of another Member
     State, those same provisions allow a parent who is that minor‟s primary carer to reside with the child in the host
     Member State.


     ...


     Case 32
     Judgment of the Court (Grand Chamber) of 16 June 2005. Criminal proceedings against
     Maria Pupino. Reference for a preliminary ruling: Tribunale di Firenze - Italy. Police
     and judicial cooperation in criminal matters - Articles 34 EU and 35 EU - Framework
     Decision 2001/220/JHA - Standing of victims in criminal proceedings - Protection of
     vulnerable persons - Hearing of minors as witnesses - Effects of a framework decision.
     Case C-105/03.


     In Case C-105/03,


     ...


     THE COURT (Grand Chamber)



                                                                                                                             10
                                                                                                                             8
     ...


     gives the following


     Judgment


     ...


     Jurisdiction of the Court of Justice


19   Under Article 46(b) EU, the provisions of the EC, EAEC and ECSC Treaties concerning the powers of the Court
     of Justice and the exercise of those powers, including the provisions of Article 234 EC, apply to the provisions of
     Title VI of the Treaty on European Union under the conditions laid down by Article 35 EU. It follows that the
     system under Article 234 EC is capable of being applied to the Court‟s jurisdiction to give preliminary rulings by
     virtue of Article 35 EU, subject to the conditions laid down by that provision.


20   As stated in paragraph 5 of this judgment, the Italian Republic indicated by a declaration which took effect on 1
     May 1999, the date on which the Treaty of Amsterdam came into force, that it accepted the jurisdiction of the
     Court of Justice to rule on the validity and interpretation of the acts referred to in Article 35 EU in accordance
     with the rules laid down in paragraph 3(b) of that article.


21   Concerning the acts referred to in Article 35(1) EU, Article 35(3)(b) provides, in terms identical to those of the
     first and second paragraphs of Article 234 EC, that „any court or tribunal‟ of a Member State may „request the
     Court of Justice to give a preliminary ruling‟ on a question raised in a case pending before it and concerning the
     „validity or interpretation‟ of such acts, „if it considers that a decision on the question is necessary to enable it to
     give judgment‟.


22   It is undisputed, first, that the judge in charge of preliminary enquiries in criminal proceedings, such as those
     instituted in this case, acts in a judicial capacity, so that he must be regarded as a „court or tribunal of a Member
     State‟ within the meaning of Article 35 EU (see to that effect, in relation to Article 234 EC, Joined Cases
     C-54/94 and C-74/94 Cacchiarelli and Stanghellini [1995] ECR I-391, and Joined Cases C-74/95 and C-129/95
     X [1996] ECR I-6609) and, secondly, that the Framework Decision, based on Articles 31 EU and 34 EU, is one
     of the acts referred to in Article 35(1) EU, in respect of which the Court may give a preliminary ruling.


23   Whilst in principle, therefore, the Court of Justice has jurisdiction to reply to the question raised, the French and
     Italian Governments have nevertheless raised an objection of inadmissibility against the application that has been
     made, arguing that the Court‟s answer would not be useful in resolving the dispute in the main proceedings.


24   The French Government argues that the national court is seeking to apply certain provisions of the Framework
     Decision in place of national legislation, whereas, in accordance with the very wording of Article 34(2)(b) EU,
     Framework Decisions cannot have such a direct effect. It further points out that, as the national court itself
     acknowledges, an interpretation of national law in accordance with the Framework Decision is impossible. In
     accordance with the case-law of the Court of Justice, the principle that national law must be given a conforming
     interpretation cannot lead to an interpretation that is contra legem, or to a worsening of the position of an
     individual in criminal proceedings, on the basis of the Framework Decision alone, which is precisely what would
     happen in the main proceedings.


25   The Italian Government argues as its main argument that framework decisions and Community directives are
     completely different and separate sources of law, and that a framework decision cannot therefore place a national
     court under an obligation to interpret national law in conformity, such as the obligation which the Court of

                                                                                                                                10
                                                                                                                                9
     Justice has found in its case-law concerning Community directives.


26   Without expressly querying the admissibility of the reference, the Swedish and United Kingdom Governments
     generally argue in the same way as the Italian Government, insisting in particular on the inter-governmental
     nature of cooperation between Member States in the context of Title VI of the Treaty on European Union.


27   Finally, the Netherlands Government stresses the limits imposed on the obligation of conforming interpretation
     and poses the question whether, assuming that obligation applies to framework decisions, it can apply in the case
     in the main proceedings, have regard precisely to those limits.


28   As stated in paragraph 19 of this judgment, the system under Article 234 EC is capable of being applied to
     Article 35 EU, subject to the conditions laid down in Article 35.


29   Like Article 234 EC, Article 35 EU makes reference to the Court of Justice for a preliminary ruling subject to the
     condition that the national court „considers that a decision on the question is necessary in order to enable it to
     give judgment‟, so that the case-law of the Court of Justice on the admissibility of references under Article 234
     EC is, in principle, transposable to references for a preliminary ruling submitted to the Court of Justice under
     Article 35 EU.


30   It follows that the presumption of relevance attaching to questions referred by national courts for a preliminary
     ruling may be rebutted only in exceptional cases, where it is quite obvious that the interpretation of Community
     law sought bears no relation to the actual facts of the main action or to its purpose, or where the problem is
     hypothetical and the Court does not have before it the factual or legal material necessary to give a useful answer
     to the questions submitted. Save for such cases, the Court is, in principle, required to give a ruling on questions
     concerning the interpretation of the acts referred to in Article 35(1) EU (see for example, in relation to Article
     234 CE, Case C-355/97 Beck and Bergdorf [1999] ECR I-4977, paragraph 22, and Case C-17/03 VEMW and
     Others [2005] ECR I-0000, paragraph 34).


31   Having regard to the arguments of the French, Italian, Swedish, Netherlands and United Kingdom Governments,
     it has to be examined whether, as the national court presupposes and as the French, Greek and Portuguese
     Governments and the Commission maintain, the obligation on the national authorities to interpret their national
     law as far as possible in the light of the wording and purpose of Community directives applies with the same
     effects and within the same limits where the act concerned is a framework decision taken on the basis of Title VI
     of the Treaty on European Union.


32   If so, it has to be determined whether, as the French, Italian, Swedish and United Kingdom Governments have
     observed, it is obvious that a reply to the question referred cannot have a concrete impact on the solution of the
     dispute in the main proceedings, given the inherent limits on the obligation of conforming interpretation.


33   It should be noted at the outset that the wording of Article 34(2)(b) EU is very closely inspired by that of the
     third paragraph of Article 249 EC. Article 34(2)(b) EU confers a binding character on framework decisions in
     the sense that they „bind‟ the Member States „as to the result to be achieved but shall leave to the national
     authorities the choice of form and methods‟.


34   The binding character of framework decisions, formulated in terms identical to those of the third paragraph of
     Article 249 EC, places on national authorities, and particularly national courts, an obligation to interpret national
     law in conformity.


35   The fact that, by virtue of Article 35 EU, the jurisdiction of the Court of Justice is less extensive under Title VI
     of the Treaty on European Union than it is under the EC Treaty, and the fact that there is no complete system of
     actions and procedures designed to ensure the legality of the acts of the institutions in the context of Title VI,

                                                                                                                             11
                                                                                                                             0
     does nothing to invalidate that conclusion.


36   Irrespective of the degree of integration envisaged by the Treaty of Amsterdam in the process of creating an ever
     closer union among the peoples of Europe within the meaning of the second paragraph of Article 1 EU, it is
     perfectly comprehensible that the authors of the Treaty on European Union should have considered it useful to
     make provision, in the context of Title VI of that treaty, for recourse to legal instruments with effects similar to
     those provided for by the EC Treaty, in order to contribute effectively to the pursuit of the Union‟s objectives.


37   The importance of the Court‟s jurisdiction to give preliminary rulings under Article 35 EU is confirmed by the
     fact that, under Article 35(4), any Member State, whether or not it has made a declaration pursuant to Article
     35(2), is entitled to submit statements of case or written observations to the Court in cases which arise under
     Article 35(1).


38   That jurisdiction would be deprived of most of its useful effect if individuals were not entitled to invoke
     framework decisions in order to obtain a conforming interpretation of national law before the courts of the
     Member States.


39   In support of their position, the Italian and United Kingdom Governments argue that, unlike the EC Treaty, the
     Treaty on European Union contains no obligation similar to that laid down in Article 10 EC, on which the case-
     law of the Court of Justice partially relied in order to justify the obligation to interpret national law in conformity
     with Community law.


40   That argument must be rejected.


41   The second and third paragraphs of Article 1 of the Treaty on European Union provide that that treaty marks a
     new stage in the process of creating an ever closer union among the peoples of Europe and that the task of the
     Union, which is founded on the European Communities, supplemented by the policies and forms of cooperation
     established by that treaty, shall be to organise, in a manner demonstrating consistency and solidarity, relations
     between the Member States and between their peoples.


42   It would be difficult for the Union to carry out its task effectively if the principle of loyal cooperation, requiring
     in particular that Member States take all appropriate measures, whether general or particular, to ensure fulfilment
     of their obligations under European Union law, were not also binding in the area of police and judicial
     cooperation in criminal matters, which is moreover entirely based on cooperation between the Member States
     and the institutions, as the Advocate General has rightly pointed out in paragraph 26 of her Opinion.


43   In the light of all the above considerations, the Court concludes that the principle of conforming interpretation is
     binding in relation to framework decisions adopted in the context of Title VI of the Treaty on European Union.
     When applying national law, the national court that is called upon to interpret it must do so as far as possible in
     the light of the wording and purpose of the framework decision in order to attain the result which it pursues and
     thus comply with Article 34(2)(b) EU.


44   It should be noted, however, that the obligation on the national court to refer to the content of a framework
     decision when interpreting the relevant rules of its national law is limited by general principles of law,
     particularly those of legal certainty and non-retroactivity.


45   In particular, those principles prevent that obligation from leading to the criminal liability of persons who
     contravene the provisions of a framework decision from being determined or aggravated on the basis of such a
     decision alone, independently of an implementing law (see for example, in relation to Community directives,
     Joined Cases C-74/95 and C-129/95 X [1996] ECR I-6609, paragraph 24, and Joined Cases C-387/02, C-391/02
     and C-403/02 Berlusconi and Others [2005] ECR I-0000, paragraph 74).

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46   However, the provisions which form the subject-matter of this reference for a preliminary ruling do not concern
     the extent of the criminal liability of the person concerned but the conduct of the proceedings and the means of
     taking evidence.


47   The obligation on the national court to refer to the content of a framework decision when interpreting the
     relevant rules of its national law ceases when the latter cannot receive an application which would lead to a result
     compatible with that envisaged by that framework decision. In other words, the principle of conforming
     interpretation cannot serve as the basis for an interpretation of national law contra legem. That principle does,
     however, require that, where necessary, the national court consider the whole of national law in order to assess
     how far it can be applied in such a way as not to produce a result contrary to that envisaged by the framework
     decision.


48   In this case, as the Advocate General has pointed out in paragraph 40 of her Opinion, it is not obvious that an
     interpretation of national law in conformity with the framework decision is impossible. It is for the national court
     to determine whether, in this case, a conforming interpretation of national law is possible.


49   Subject to that reservation, the Court will answer the question referred.


     The question referred for a preliminary ruling


50   By its question, the national court essentially asks whether, on a proper interpretation of Articles 2, 3 and 8(4) of
     the Framework Decision, a national court must be able to authorise young children, who, as in this case, claim to
     have been victims of maltreatment, to give their testimony in accordance with arrangements ensuring them an
     appropriate level of protection, outside the public trial and before it is held.


51   Article 3 of the Framework Decision requires each Member State to safeguard the possibility for victims to be
     heard during proceedings and to supply evidence, and to take appropriate measures to ensure that its authorities
     question victims only insofar as necessary for the purpose of criminal proceedings.


52   Articles 2 and 8(4) of the Framework Decision require each Member State to make every effort to ensure that
     victims are treated with due respect for their personal dignity during proceedings, to ensure that particularly
     vulnerable victims benefit from specific treatment best suited to their circumstances, and to ensure that where
     there is a need to protect victims, particularly those most vulnerable, from the effects of giving evidence in open
     court, victims may, by decision taken by the court, be entitled to testify in a manner enabling that objective to be
     achieved, by any appropriate means compatible with its basic legal principles.


53   The Framework Decision does not define the concept of a victim‟s vulnerability for the purposes of Articles 2(2)
     and 8(4). However, independently of whether a victim‟s minority is as a general rule sufficient to classify such a
     victim as particularly vulnerable within the meaning of the Framework Decision, it cannot be denied that where,
     as in this case, young children claim to have been maltreated, and maltreated, moreover, by a teacher, those
     children are suitable for such classification having regard in particular to their age and to the nature and
     consequences of the offences of which they consider themselves to have been victims, with a view to benefiting
     from the specific protection required by the provisions of the Framework Decision referred to above.


54   None of the three provisions of the Framework Decision referred to by the national court lays down detailed
     rules for implementing the objectives which they state, and which consist, in particular, in ensuring that
     particularly vulnerable victims receive „specific treatment best suited to their circumstances‟, and the benefit of
     special hearing arrangements that are capable of guaranteeing to all victims treatment which pays due respect to
     their individual dignity and gives them the opportunity to be heard and to supply evidence, and in ensuring that
     those victims are questioned „only insofar as necessary for the purpose of criminal proceedings‟.

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55   Under the legislation at issue in the main proceedings, testimony given during the preliminary enquiries must
     generally be repeated at the trial in order to acquire full evidential value. It is, however, permissible in certain
     cases to give that testimony only once, during the preliminary enquiries, with the same probative value, but
     under different arrangements from those which apply at the trial.


56   In those circumstances, achievement of the aims pursued by the abovementioned provisions of the framework
     decision require that a national court should be able, in respect of particularly vulnerable victims, to use a special
     procedure, such as the Special Inquiry for early gathering of evidence provided for in the law of a Member State,
     and the special arrangements for hearing testimony for which provision is also made, if that procedure best
     corresponds to the situation of those victims and is necessary in order to prevent the loss of evidence, to reduce
     the repetition of questioning to a minimum, and to prevent the damaging consequences, for those victims, of
     their giving testimony at the trial


57   It should be noted in that respect that, according to Article 8(4) of the Framework Decision, the conditions for
     giving testimony that are adopted must in any event be compatible with the basic legal principles of the Member
     State concerned.


58   Moreover, in accordance with Article 6(2) EU, the Union must respect fundamental rights, as guaranteed by the
     European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4
     November 1950 („the Convention‟), and as they result from the constitutional traditions common to the Member
     States, as general principles of law.


59   The Framework Decision must thus be interpreted in such a way that fundamental rights, including in particular
     the right to a fair trial as set out in Article 6 of the Convention and interpreted by the European Court of Human
     Rights, are respected.


60   It is for the national court to ensure that – assuming use of the Special Inquiry and of the special arrangements
     for the hearing of testimony under Italian law is possible in this case, bearing in mind the obligation to give
     national law a conforming interpretation – the application of those measures is not likely to make the criminal
     proceedings against Mrs Pupino, considered as a whole, unfair within the meaning of Article 6 of the
     Convention, as interpreted by the European Court of Human Rights (see, for example, ECHR judgments of 20
     December 2001, P.S. v Germany, of 2 July 2002, S.N. v Sweden, Reports of judgments and decisions 2002-V, of
     13 February 2004, Rachdad v France, and the decision of 20 January 2005, Accardi and Others v Italy, App.
     30598/02).


61   In the light of all the above considerations, the answer to the question must be that Articles 2, 3 and 8(4) of the
     Framework Decision must be interpreted as meaning that the national court must be able to authorise young
     children, who, as in this case, claim to have been victims of maltreatment, to give their testimony in accordance
     with arrangements allowing those children to be guaranteed an appropriate level of protection, for example
     outside the trial and before it takes place. The national court is required to take into consideration all the rules of
     national law and to interpret them, so far as possible, in the light of the wording and purpose of the Framework
     Decision.




     Case 33
     Judgment of the Court (Second Chamber) of 7 July 2005. Commission of the European
     Communities v Republic of Austria. Failure of a Member State to fulfil obligations -
     Articles 12 EC, 149 EC and 150 EC - Conditions of access to university education –
     Discrimination. Case C-147/03.


                                                                                                                               11
                                                                                                                               3
     ...


31   Under the first paragraph of Article 12 EC, within the scope of application of the Treaty, and without prejudice
     to any special provisions contained therein, any discrimination on grounds of nationality is to be prohibited.


32   As the Court has already held in paragraph 25 of Case 293/83 Gravier [1985] ECR 593, the conditions of access
     to vocational training fall within the scope of the Treaty (see also Case C-65/03 Commission v Belgium [2004]
     ECR I-6427, paragraph 25).


33   It also follows from the case-law that both higher education and university education constitute vocational
     training (see Case 24/86 Blaizot [1988] ECR 379, paragraphs 15 to 20, and Case 42/87 Commission v Belgium
     [1988] ECR 5445, paragraphs 7 and 8).




34   In the present case, Paragraph 36 of the UniStG lays down the conditions governing access to higher or
     university education in Austria. In that connection, it provides that, in addition to satisfying the general
     requirements for access to higher or university studies, holders of general university entrance qualifications
     awarded in other Member States must prove that they meet the specific requirements governing access to the
     chosen course, which are laid down by the State which issued those qualifications and give entitlement to direct
     admission to those studies.


35   In those circumstances, the provision at issue must be examined in the light of the Treaty and, in particular, in
     the light of the principle of non-discrimination on the grounds of nationality contained in Article 12 EC.


     The plea alleging infringement of Community law


     ...


41   According to settled case-law, the principle of equal treatment prohibits not only overt discrimination based on
     nationality but also all covert forms of discrimination which, by applying other distinguishing criteria, lead in
     fact to the same result (see, in particular, Case 152/73 Sotgiu [1974] ECR 153, paragraph 11; Case C-65/03
     Commission v Belgium , cited above, paragraph 28, and Case C-209/03 Bidar [2005] ECR I-0000, paragraph
     51).


42   In the present case, the national legislation in question provides that students who have obtained their secondary
     education diploma in a Member State other than the Republic of Austria and who wish to pursue their higher or
     university studies in a given area of Austrian education must not only produce that diploma, but also prove that
     they fulfil the conditions of access to higher or university studies in the State where they obtained their diploma,
     such as, in particular, success in an entrance examination or obtaining a sufficient grade to be included in the
     numerus clausus .


43   It appears therefore that Paragraph 36 of the UniStG introduces not only differential treatment to the detriment of
     students who have obtained their secondary education diplomas in a Member State other than the Republic of
     Austria, but also between those same students according to the Member State in which they obtained their
     secondary education diploma.


44   The opportunities offered by the Treaty relating to free movement are not fully effective if a person is penalised
     merely for using them. That consideration is particularly important in the field of education in view of the aims
     pursued by Article 3(1)(q) EC and the second indent of Article 149(2) EC, namely encouraging mobility of
     students and teachers (see Case C-224/98 D‟Hoop [2002] ECR I-6191, paragraphs 30 to 32).
                                                                                                                            11
                                                                                                                            4
45   Case-law has moreover established that Union citizenship is destined to be the fundamental status of nationals of
     the Member States, enabling those who find themselves in the same situation to enjoy the same treatment in law
     irrespective of their nationality, subject to such exceptions as are expressly provided for (Case C-184/99
     Grzelczyk [2001] ECR I-6193, paragraph 31, and D‟Hoop , cited above, paragraph 28).


46   Thus, the legislation in question places holders of secondary education diplomas awarded in a Member State
     other than the Republic of Austria at a disadvantage, since they cannot gain access to Austrian higher education
     under the same conditions as holders of the equivalent Austrian diploma.


47   Thus, although Paragraph 36 of the UniStG applies without distinction to all students, it is liable to have a
     greater effect on nationals of other Member States than on Austrian nationals, and therefore the difference in
     treatment introduced by that provision results in indirect discrimination.


48   Consequently, the differential treatment in question could be justified only if it were based on objective
     considerations independent of the nationality of the persons concerned and were proportionate to the legitimate
     aim of the national provisions (Case C-274/96 Bickel and Franz [1998] ECR I-7637, paragraph 27, and D‟Hoop ,
     cited above, paragraph 36).


     ...


     Justification based on safeguarding the homogeneity of the Austrian higher or university education system


60   It must be borne in mind, as found in paragraph 47 of this judgment, that Paragraph 36 of the UniStG gives rise
     to indirect discrimination, since it is liable to affect students from other Member States more than Austrian
     students. Furthermore, it emerged from the hearing before the Court that the Austrian legislation aims to restrict
     access to Austrian universities for holders of diplomas awarded in other Member States.


61   As the Advocate General points out in point 52 of his Opinion, excessive demand for access to specific courses
     could be met by the adoption of specific non-discriminatory measures such as the establishment of an entry
     examination or the requirement of a minimum grade; thus Article 12 EC would be complied with.


62   Furthermore, it must be observed that the risks alleged by the Republic of Austria are not exclusive to its higher
     or university education system but have been and are suffered by other Member States. Among those Member
     States is the Kingdom of Belgium, which had introduced similar restrictions, which were held to be incompatible
     with the requirements of Community law (see Case C-65/03 Commission v Belgium , cited above).


63   Moreover, it is for the national authorities which invoke a derogation from the fundamental principle of freedom
     of movement for persons to show in each individual case that their rules are necessary and proportionate to attain
     the aim pursued. The reasons which may be invoked by a Member State by way of justification must be
     accompanied by an analysis of the appropriateness and proportionality of the restrictive measure adopted by that
     State and specific evidence substantiating its arguments (see, to that effect, Case C-42/02 Lindman [2003] ECR
     I-13519, paragraph 25, and Case C-8/02 Leichtle [2004] ECR I-2641, paragraph 45).


64   In the present case, the Republic of Austria simply maintained at the hearing that the number of students
     registering for courses in medicine could be five times the number of available places, which would pose a risk
     to the financial equilibrium of the Austrian higher education system and, consequently, to its very existence.


65   It must be pointed out that no estimates relating to other courses have been submitted to the Court and that the
     Republic of Austria has conceded that it does not have any figures in that connection. Moreover, the Austrian
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     authorities have accepted that the national legislation in question is essentially preventive in nature.


66   Consequently, it must be held that the Republic of Austria has failed to demonstrate that, in the absence of
     Paragraph 36 of the UnistG, the existence of the Austrian education system in general and the safeguarding of
     the homogeneity of higher education in particular would be jeopardised. The legislation in question is therefore
     incompatible with the objectives of the Treaty.


     – Justification based on preventing abuse of Community law


67   Second, the Austrian Government has put forward a justification alleging that it is necessary for Member States
     to prevent abuse of Community law and drawing attention to the legitimate interest that a Member State may
     have in preventing certain of its nationals, by means of facilities created under the Treaty, from improperly
     evading the application of their national legislation as regards training for a trade or profession.


68   According to case-law, whether there is abuse or fraudulent conduct must be examined individually on a case-
     by-case basis and must be based on objective evidence (see Centros , paragraphs 24 and 25, and X and Y ,
     paragraphs 42 and 43).


69   It must also be borne in mind that Article 149(2) EC, second indent, expressly provides that Community action is
     to be aimed at encouraging mobility of students and teachers, inter alia by encouraging the academic recognition
     of diplomas and periods of study. Moreover, Article 150(2) EC, third indent, provides that Community action is
     to aim to facilitate access to vocational training and encourage mobility of instructors and trainees and
     particularly young people.


70   In this case, it need merely be observed that the possibility for a student from the European Union, who has
     obtained his secondary education diploma in a Member State other than Austria, to gain access to Austrian
     higher or university education under the same conditions as holders of diplomas awarded in Austria constitutes
     the very essence of the principle of freedom of movement for students guaranteed by the Treaty, and cannot
     therefore of itself constitute an abuse of that right.




     Case 34
     Judgment of the Court of First Instance (Second Chamber, extended composition) of 21
     September 2005. Ahmed Ali Yusuf and Al Barakaat International Foundation v Council
     of the European Union and Commission of the European Communities. Common
     foreign and security policy - Restrictive measures taken against persons and entities
     associated with Usama bin Laden, the Al-Qaeda network and the Taliban - Competence
     of the Community - Freezing of funds -Fundamental rights - Jus cogens - Review by the
     Court - Action for annulment. Case T-306/01.


     In Case T-306/01,


     ...


     THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber, Extended
     Composition)


                                                                                                                        11
                                                                                                                        6
      ...


      gives the following


      Judgment


      ...


107   Regulation No 467/2001 and the contested regulation were adopted on partly different legal bases: Articles 60
      EC and 301 EC for the former, and Articles 60 EC, 301 EC and 308 EC for the latter. Although the applicants‟
      original arguments alleging the lack of a legal basis for Regulation No 467/2001 have become devoid of purpose
      because of the repeal of that act by the contested regulation, the Court considers it appropriate to set out first the
      grounds on which it judges them to be unfounded on any view, since those grounds constitute one of the
      premisses of its reasoning applied to the examination of the legal basis of the contested regulation.


      – Concerning the legal basis of Regulation No 467/2001


108   Regulation No 467/2001 was adopted on the basis of Articles 60 EC and 301 EC, provisions which empower the
      Council to take the necessary urgent measures, particularly with regard to movements of capital and payments,
      where it is provided, in a common position or a joint action adopted according to the provisions of the Treaty on
      European Union relating to the CFSP, for an action by the Community to interrupt or to reduce, in part or
      completely, economic relations with one or more third countries.


109   Now, as is clear from the preamble thereto, Regulation No 467/2001 orchestrated the action by the Community
      provided for by common position 2001/154, which had been adopted under the CFSP and demonstrated the
      intention of the Union and of its Member States to implement certain facets of the sanctions taken by the
      Security Council against the Taliban of Afghanistan.


110   Nevertheless, the applicants maintained, first, that the measures at issue in this case affected individuals who
      were, moreover, nationals of a Member State, whereas Articles 60 EC and 301 EC authorise the Council to take
      measures against third countries only; second, that the measures at issue were not intended to interrupt or reduce
      economic relations with a third country but to combat international terrorism and, more particularly, Usama bin
      Laden and, third, that those measures were on any view disproportionate to the objective pursued by Articles 60
      EC and 301 EC.


111   None of those arguments could have succeeded.


112   With regard, first, to the kind of measures that the Council is empowered to take under Articles 60 EC and 301
      EC, the Court considers that nothing in the wording of those provisions makes it possible to exclude the adoption
      of restrictive measures directly affecting individuals or organisations, whether or not established in the
      Community, in so far as such measures actually seek to reduce, in part or completely, economic relations with
      one or more third countries.


113   As the Council has correctly observed, the measures at issue in this case were among what are conventionally
      known as „smart sanctions‟, which appeared in United Nations practice during the 1990s. Those sanctions
      replace classic general trade embargos aimed at a country with more targeted and selective measures, such as
      economic and financial sanctions, prohibition of travel, embargos on arms or specific goods, so as to reduce the
      suffering endured by the civilian population of the country concerned, while none the less imposing genuine
      sanctions on the targeted regime and those in charge of it.


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114   The practice of the institutions has developed in the same way, the Council having successively considered that
      Articles 60 EC and 301 EC allowed it to take restrictive measures against entities which or persons who
      physically controlled part of the territory of a third country (see, for example, Council Regulation (EC) No
      1705/98 of 28 July 1998 concerning the interruption of certain economic relations with Angola in order to induce
      the „União Nacional para a Independência Total de Angola‟ (UNITA) to fulfil its obligations in the peace
      process, and repealing Council Regulation (EC) No 2229/97 (OJ 1998 L 215, p. 1)) and against entities which or
      persons who effectively controlled the government apparatus of a third country and also against persons and
      entities associated with them and who or which provided them with financial support (see, for example, Council
      Regulation (EC) No 1294/1999 of 15 June 1999 concerning a freeze of funds and a ban on investment in relation
      to the Federal Republic of Yugoslavia (FRY) and repealing Regulations (EC) No 1295/98 and (EC) No 1607/98
      (OJ 1999 L 153, p. 63), and Council Regulation (EC) No 2488/2000 of 10 November 2000 maintaining a freeze
      of funds in relation to Mr Milosevic and those persons associated with him and repealing Regulations (EC) Nos
      1294/1999 and 607/2000 and Article 2 of Regulation (EC) No 926/98 (OJ 2000 L 287, p. 19)). That development
      is fully compatible with the measures provided for in Articles 60 EC and 301 EC.


115   In fact, just as economic or financial sanctions may legitimately be directed specifically at the rulers of a third
      country, rather than at the country as such, they may be directed at the persons or entities associated with those
      rulers or directly or indirectly controlled by them, wherever they may be. As the Commission has rightly pointed
      out, Articles 60 EC and 301 EC would not provide an efficient means of applying pressure to the rulers with
      influence over the policy of a third country if the Community could not, on the basis of those provisions, adopt
      measures against individuals who, although not resident in the third country in question, are sufficiently
      connected to the regime against which the sanctions are directed. Furthermore, as the Council has emphasised,
      the fact that some of those individuals so targeted happen to be nationals of a Member State is irrelevant, for, if
      they are to be effective in the context of the free movement of capital, financial sanctions cannot be confined
      solely to nationals of the third country concerned.


116   That interpretation, which is not contrary to the letter of Article 60 EC or Article 301 EC, is justified both by
      considerations of effectiveness and by humanitarian concerns.


117   With regard, second, to the objective pursued by Regulation No 467/2001, the Council has argued, referring to
      Security Council Resolutions 1267 (1999) and 1333 (2000), Common Position 2001/154 and to the first and
      second recitals in the preamble to that regulation and to its actual title, that the measures at issue were directed
      essentially against the Taliban regime which, at the time, effectively controlled 80% of Afghan territory and
      called itself the „Islamic Emirate of Afghanistan‟ and, incidentally, against persons who and entities which, by
      means of economic or financial transactions, assisted that regime by providing sanctuary and training for
      international terrorists and their organisations, thus in fact acting as agents of that regime or being closely
      connected to it.


118   In so far as the applicants complained that Regulation No 467/2001 was directed at Usama bin Laden and not the
      Taliban regime, the Council has added that Usama bin Laden was in fact the head and „éminence grise‟ of the
      Taliban and that he wielded the real power in Afghanistan. His temporal and spiritual titles of „Sheikh‟ (head)
      and „Emir‟ (prince, governor or commander) and the rank he held beside the other Taliban religious dignitaries
      can leave little doubt on that score. Moreover, even before 11 September 2001, Usama bin Laden had sworn an
      oath of allegiance („Bay‟a‟) making a formal religious bond between him and the Taliban theocracy. He was thus
      in a situation comparable to that of Mr Milosevic and the members of the Yugoslav Government at the time of
      the economic and financial sanctions taken by the Council against the Federal Republic of Yugoslavia (see
      paragraph 114 above). With regard to Al-Qaeda, the Council has observed that it was common knowledge that it
      had many military training camps in Afghanistan and that thousands of its members had fought beside the
      Taliban between October 2001 and January 2002, during the intervention of the international coalition.


119   There are no grounds for challenging the validity of those considerations as to which there exists, within the
      international community, a broad consensus expressed, inter alia, by the several resolutions adopted
      unanimously by the Security Council and which have not been specifically rebutted or even challenged by the
      applicants.



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120   More particularly, the chief object of the sanctions at issue in this case was to prevent the Taliban regime from
      obtaining financial support from any source whatsoever, as is apparent from Paragraph 4(b) of Resolution 1287
      (1999). The sanctions might have been circumvented if the individuals who were thought to maintain that regime
      had not been affected by them. As regards the relations between the former Taliban regime and Usama bin
      Laden, the Security Council considered that the latter, during the period in question, received assistance, at this
      point crucial, from the regime of which he could be regarded as forming part. Thus it is that, in the 10th recital in
      the preamble to Resolution 1333 (2000), the Security Council deplored the fact that the Taliban continued to
      provide safe haven to Usama bin Laden and to allow him and others associated with him to operate a network of
      terrorist training camps from Taliban-controlled territory and to use Afghanistan as a base from which to sponsor
      international terrorist operations. Furthermore, in the seventh recital in the preamble to Resolution 1333 (2000),
      the Security Council reaffirmed its conviction that the suppression of international terrorism was essential for the
      maintenance of international peace and security.


121   Thus, contrary to what the applicants maintained, the measures at issue were indeed intended to interrupt or
      reduce economic relations with a third country, in connection with the international community‟s fight against
      international terrorism and, more specifically, against Usama bin Laden and the Al-Qaeda network.


122   With regard, third, to the proportionality of the measures at issue, that must be assessed in the light of the
      purpose of Regulation No 467/2001. As has been explained above, the imposing of „smart‟ sanctions is intended
      precisely to exert effective pressure on the rulers of the country concerned, while restricting as far as possible the
      impact of those measures on the population of that country, in particular by confining their personal ambit to a
      certain number of individuals referred to by name. Now, in the circumstances of this case, Regulation No
      467/2001 tended to increase the pressure on the Taliban regime, inter alia by freezing the funds and other
      financial assets of Usama bin Laden and the individuals and entities associated with him, as identified by the
      Sanctions Committee. Such measures are in keeping with the principle of proportionality, according to which
      sanctions may not go beyond what is appropriate and necessary to the attainment of the objective pursued by the
      Community legislation imposing them.


123   By contrast, the fact that the measures at issue also affected transactions having no cross-border element is not
      relevant. If it was the legitimate object of those measures to cause the sources of funding for the Taliban and
      international terrorism operating out of Afghanistan to dry up, they necessarily had to affect both international
      and purely internal transactions, given that the latter were just as likely as the former to supply such funding,
      having regard in particular to the free movement of persons and capital and the lack of transparency in
      international financial channels.


124   It follows from the foregoing that, contrary to what the applicants claimed, the Council was indeed competent to
      adopt Regulation No 467/2001 on the basis of Articles 60 EC and 301 EC.


      – Concerning the legal basis of the contested regulation


125   Unlike Regulation No 467/2001, the contested regulation has for its legal basis not only Articles 60 EC and 301
      EC but also Article 308 EC. That reflects the development of the international situation of which the sanctions
      decreed by the Security Council and implemented by the Community successively form part.


126   Adopted in connection with the actions taken for the purpose of suppressing international terrorism, considered
      essential for the maintenance of international peace and security (see the seventh recital in the preamble),
      Resolution 1333 (2000) of the Security Council none the less specifically referred to the Taliban regime which at
      the time controlled the greater part of Afghan territory and offered refuge and assistance to Usama bin Laden and
      his associates.


127   As has been stated above, it is just that expressly established link with the territory and governing regime of a
      third country which made it possible for the Council to base Regulation No 467/2001 on Articles 60 EC and 301
      EC.

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                                                                                                                               9
128   On the other hand, Security Council Resolution 1390 (2002) was adopted on 16 January 2002 after the collapse
      of the Taliban regime following the armed intervention of the international coalition in Afghanistan, launched in
      October 2001. As a result, and although it still expressly refers to the Taliban, the resolution is no longer aimed
      at their fallen regime, but rather directly at Usama bin Laden, the Al-Qaeda network and the persons and entities
      associated with them.


129   The fact that there is nothing to link the sanctions to be taken under that resolution with the territory or
      governing regime of a third country, as pointed out in paragraph 2 of the statement of reasons for the proposal
      for a Council regulation presented by the Commission on 6 March 2002, which is the source of the contested
      regulation [document COM (2002) 117 final], was explicitly acknowledged by the Council in paragraphs 4 and 5
      of its rejoinder.


130   In the absence of such a connection, the Council and the Commission considered that Articles 60 EC and 301 EC
      did not, in themselves, constitute an adequate legal basis allowing for the adoption of the contested regulation.
      Those considerations must be upheld.


131   Indeed, Article 60(1) EC provides that the Council, in accordance with the procedure provided for in Article 301
      EC, may „as regards the third countries concerned‟ take the necessary urgent measures on the movement of
      capital and payments. Article 301 EC expressly permits action by the Community to interrupt or reduce, in part
      or completely, economic relations „with one or more third countries‟.


132   Furthermore, the fact that those provisions authorise the adoption of „smart sanctions‟ against individuals and
      entities associated with the rulers of a third country or controlled by them, directly or indirectly (see paragraphs
      115 and 116 above) does not give grounds for considering that those individuals and entities may still be targeted
      when the governing regime of the third country in question has disappeared. In such circumstances, there in fact
      exists no sufficient link between those individuals or entities and a third country.


133   It follows that on any view Articles 60 EC and 301 EC did not constitute in themselves a sufficient legal basis
      for the contested regulation.


134   Moreover, contrary to the view expressed by the Commission in the proposal for a Council regulation which is
      the source of the contested regulation (see paragraph 129 above), the Council considered that Article 308 EC did
      not on its own constitute an adequate legal basis for the adoption of the regulation either. Those considerations
      must also be approved.


135   On this point, according to the case-law (Case 45/86 Commission v Council [1987] ECR 1493, paragraph 13), it
      follows from the very wording of Article 308 EC that recourse to that provision as the legal basis for a measure
      is justified only where no other provision of the Treaty gives the Community institutions the necessary power to
      adopt the measure in question. In such a situation, Article 308 EC allows the institutions to act with a view to
      attaining one of the objectives of the Community, despite the lack of a provision conferring on them the
      necessary power to do so.


136   As regards the first condition for the applicability of Article 308 EC, it is not disputed that no provision of the
      EC Treaty provides for the adoption of measures of the kind laid down in the contested regulation relating to the
      fight against international terrorism and, more particularly, to the imposition of economic and financial
      sanctions, such as the freezing of funds, in respect of individuals and entities suspected of contributing to the
      funding of terrorism, where no connection whatsoever has been established with the territory or governing
      regime of a third state. The first condition is therefore satisfied in the instant case.


137   In order for the second condition of the applicability of Article 308 EC to be satisfied in the instant case, it is
      necessary, in accordance with the case-law cited in paragraph 135 above, that it should be possible to connect the
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      fight against international terrorism and, more particularly, the imposition of economic and financial sanctions,
      such as the freezing of funds, in respect of individuals and entities suspected of contributing to the funding of
      terrorism, to one of the objects which the Treaty entrusts to the Community.


138   In this instance, the preamble to the contested regulation wastes very few words on that point. At the very most,
      the Council has stated in the fourth recital of the preamble to that regulation that the measures necessary under
      Resolution 1390 (2002) and Common Position 2002/402 fell „under [sic] the scope of the Treaty‟ and that
      Community legislation had therefore to be adopted, „notably with a view to avoiding distortion of competition‟.


139   With regard to the statement that the measures at issue fall within the scope of the Treaty, which begs the
      question, it must on the contrary be held straight away that none of the objectives of the Treaty, as expressly set
      out in Articles 2 EC and 3 EC, appears capable of being attained by the measures at issue.


140   In particular, unlike the measures provided for by Regulation No 3541/92 against certain natural or legal persons
      established in the Community, relied on by the Council in support of its arguments (see paragraph 97 above), the
      measures provided for by the contested regulation could not be authorised by the object of establishing a
      common commercial policy (Article 3(1)(b) EC), in connection with which it has been held that the Community
      has the power to adopt trade embargo measures under Article 133 EC, since the Community‟s commercial
      relations with a third country are not at issue in this case.


141   As regards the objective of creating a system ensuring that competition in the internal market is not distorted
      (Article 3(1)(g) EC), the assertion that there is a risk of competition‟s being distorted, which according to its
      preamble the contested regulation seeks to prevent, fails to persuade.


142   The competition rules of the EC Treaty are addressed to undertakings and Member States when they disturb
      equal competition between undertakings (see, with regard to Article 87 EC, Case 173/73 Italy v Commission
      [1974] ECR 709, paragraph 13, and with regard to Article 81 EC, Case 170/83 Hydrotherm [1984] ECR 2999,
      paragraph 11).


143   Now, in this case, it has not been alleged that the reference to individuals or entities by the contested regulation
      is made to them as undertakings for the purposes of the EC Treaty rules on competition.


144   Nor has any explanation been put forward that might make it possible to understand how competition between
      undertakings could be affected by the implementation, whether at Community level or at the level of its Member
      States, of the specific restrictive measures against certain persons and entities prescribed by Security Council
      Resolution 1390 (2002).


      ...


150   In those circumstances, the measures at issue in this case cannot find authorisation in the objective referred to in
      Article 3(1)(c) and (g) EC.


151   Moreover, the various examples of recourse to the additional legal basis of Article 308 EC adduced by the
      Council (see paragraphs 95 and 97 above) are irrelevant in this instance. First, it is not apparent from those
      examples that the conditions for the application of Article 308 EC, particularly the condition relating to the
      attainment of a Community objective, were not satisfied in the circumstances of the cases concerned. Second, the
      legal acts at issue in those cases were not challenged on that ground before the Court of Justice, particularly in
      the case giving rise to the judgment in Delbar, paragraph 96 above. In any event, it is settled case-law that what
      is merely Council practice cannot derogate from the rules laid down in the Treaty, and cannot therefore create a
      precedent binding on the Community institutions with regard to the choice of the correct legal basis (see, in
      particular, Case 68/86 United Kingdom v Council [1988] ECR 855, paragraph 24, and the Opinion of the Court

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      1/94 of 15 November 1994, ECR I-5267, paragraph 52).


152   It follows from all the foregoing that the fight against international terrorism, more particularly the imposition of
      economic and financial sanctions, such as the freezing of funds, in respect of individuals and entities suspected
      of contributing to the funding of terrorism, cannot be made to refer to one of the objects which Articles 2 EC and
      3 EC expressly entrust to the Community.


153   In addition to the Treaty objectives expressly set out in Articles 2 EC and 3 EC, the Commission has also put
      forward in its written pleadings a more general object of the Community which in the circumstances, it claimed,
      justified recourse to the legal basis of Article 308 EC. The Commission thus infers from the preamble to the EC
      Treaty a „general objective which the Community has to ensure [international] peace and security‟ (see
      paragraph 100 above). That argument cannot be accepted.


154   Contrary to what the Commission maintains, indeed, nowhere in the preamble to the EC Treaty is it stated that
      that act pursues a wider object of safeguarding international peace and security. Although it is unarguably a
      principal aim of that treaty to put an end to the conflicts of the past between the peoples of Europe by creating
      „an ever closer union‟ among them, that is without any reference whatsoever to the implementation of a common
      foreign and security policy. The latter falls exclusively within the objects of the Treaty on European Union
      which, as emphasised in the preamble thereto, seeks to „mark a new stage in the process of European integration
      undertaken with the establishment of the European Communities‟.


155   While, admittedly, it may be asserted that that objective of the Union must inspire action by the Community in
      the sphere of its own competence, such as the common commercial policy, it is not however a sufficient basis for
      the adoption of measures under Article 308 EC, above all in spheres in which Community competence is
      marginal and exhaustively defined in the Treaty.


156   Last, it appears impossible to interpret Article 308 EC as giving the institutions general authority to use that
      provision as a basis with a view to attaining one of the objectives of the Treaty on European Union. In particular,
      the Court considers that the coexistence of Union and Community as integrated but separate legal orders, and the
      constitutional architecture of the pillars, as intended by the framers of the Treaties now in force, authorise neither
      the institutions nor the Member States to rely on the „flexibility clause‟ of Article 308 EC in order to mitigate the
      fact that the Community lacks the competence necessary for achievement of one of the Union‟s objectives. To
      decide otherwise would amount, in the end, to making that provision applicable to all measures falling within the
      CFSP and police and judicial cooperation in criminal matters (PJC), so that the Community could always take
      action to attain the objectives of those policies. Such an outcome would deprive many provisions of the Treaty
      on European Union of their ambit and would be inconsistent with the introduction of instruments specific to the
      CFSP (common strategies, joint actions, common positions) and to the PJC (common positions, decisions,
      framework decisions).


157   It must therefore be concluded that Article 308 EC does not, any more than Article 60 EC or Article 301 EC
      taken in isolation, constitute of itself a sufficient legal basis for the contested regulation.


158   However, both in the recitals in the preamble to the contested regulation and in its pleadings, the Council has
      argued that Article 308 EC, in conjunction with Articles 60 EC and 301 EC, gives it the power to adopt a
      Community regulation relating to the battle against the financing of international terrorism conducted by the
      Union and its Member States under the CFSP and imposing, to that end, economic and financial sanctions on
      individuals, without establishing any connection whatsoever with the territory or governing regime of a third
      country. Those considerations must be accepted.


159   In the circumstances, account has to be taken of the bridge explicitly established at the time of the Maastricht
      revision between Community actions imposing economic sanctions under Articles 60 EC and 301 EC and the
      objectives of the Treaty on European Union in the sphere of external relations.


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160   It must be held that Articles 60 EC and 301 EC are quite special provisions of the EC Treaty, in that they
      expressly contemplate situations in which action by the Community may be proved to be necessary in order to
      achieve, not one of the objects of the Community as fixed by the EC Treaty but rather one of the objectives
      specifically assigned to the Union by Article 2 of the Treaty on European Union, viz., the implementation of a
      common foreign and security policy.


161   Under Articles 60 EC and 301 EC, action by the Community is therefore in actual fact action by the Union, the
      implementation of which finds its footing on the Community pillar after the Council has adopted a common
      position or a joint action under the CFSP.


162   According to Article 3 EU, the Union is to be served by a single institutional framework which is to ensure the
      consistency and the continuity of the activities carried out in order to attain its objectives while respecting and
      building upon the acquis communautaire. The Union is in particular to ensure the consistency of its external
      activities as a whole in the context of its external relations, security, economic and development policies. The
      Council and the Commission are to be responsible for ensuring such consistency and are to cooperate to this end.
      They are to ensure the implementation of these policies, each in accordance with its respective powers.


163   Now, just as the powers provided for by the EC Treaty may be proved to be insufficient to allow the institutions
      to act in order to attain, in the operation of the common market, one of the objectives of the Community, so the
      powers to impose economic and financial sanctions provided for by Articles 60 EC and 301 EC, namely, the
      interruption or reduction of economic relations with one or more third countries, especially in respect of
      movements of capital and payments, may be proved insufficient to allow the institutions to attain the objective of
      the CFSP, under the Treaty on European Union, in view of which those provisions were specifically introduced
      into the EC Treaty.


164   There are therefore good grounds for accepting that, in the specific context contemplated by Articles 60 EC and
      301 EC, recourse to the additional legal basis of Article 308 EC is justified for the sake of the requirement of
      consistency laid down in Article 3 of the Treaty on European Union, when those provisions do not give the
      Community institutions the power necessary, in the field of economic and financial sanctions, to act for the
      purpose of attaining the objective pursued by the Union and its Member States under the CFSP.


165   Thus it is possible that a common position or joint action, adopted under the CFSP, should demand of the
      Community measures for economic and financial sanctions going beyond those expressly provided for by
      Articles 60 EC and 301 EC, which consist of the interruption or reduction of economic relations with one or
      more third countries, especially with regard to movements of capital and payments.


166   In such a situation, recourse to the cumulative legal bases of Articles 60 EC, 301 EC and 308 EC makes it
      possible to attain, in the sphere of economic and financial sanctions, the objective pursued under the CFSP by
      the Union and its Member States, as it is expressed in a common position or joint action, despite the lack of any
      express attribution to the Community of powers to impose economic and financial sanctions on individuals or
      entities with no sufficient connection to a given third country.


167   In this instance, the fight against international terrorism and its funding is unarguably one of the Union‟s
      objectives under the CFSP, as they are defined in Article 11 EU, even where it does not apply specifically to
      third countries or their rulers.


168   Furthermore, it is not disputed that Common Position 2002/402 was adopted by the Council acting unanimously
      in relation to that fight and that it prescribes the imposition by the Community of economic and financial
      sanctions in respect of individuals suspected of contributing to the funding of terrorism, where no connection
      whatsoever has been established with the territory or governing regime of a third country.


169   Against that background, recourse to Article 308 EC, in order to supplement the powers to impose economic and

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      financial sanctions conferred on the Community by Articles 60 EC and 301 EC, is justified by the consideration
      that, as the world now stands, States can no longer be regarded as the only source of threats to international
      peace and security. Like the international community, the Union and its Community pillar are not to be
      prevented from adapting to those new threats by imposing economic and financial sanctions not only on third
      countries, but also on associated persons, groups, undertakings or entities developing international terrorist
      activity or in any other way striking a blow at international peace and security.


170   The institutions and the United Kingdom are therefore right to maintain that the Council was competent to adopt
      the contested regulation which sets in motion the economic and financial sanctions provided for by Common
      Position 2002/402, on the joint basis of Articles 60 EC, 301 EC and 308 EC.


      ...


      Concerning the relationship between the international legal order under the United Nations and the domestic or
      Community legal order


231   From the standpoint of international law, the obligations of the Member States of the United Nations under the
      Charter of the United Nations clearly prevail over every other obligation of domestic law or of international
      treaty law including, for those of them that are members of the Council of Europe, their obligations under the
      ECHR and, for those that are also members of the Community, their obligations under the EC Treaty.


232   As regards, first, the relationship between the Charter of the United Nations and the domestic law of the Member
      States of the United Nations, that rule of primacy is derived from the principles of customary international law.
      Under Article 27 of the Vienna Convention on the Law of Treaties, which consolidates those principles (and
      Article 5 of which provides that it is to apply to „any treaty which is the constituent instrument of an
      international organisation and to any treaty adopted within an international organisation‟), a party may not
      invoke the provisions of its internal law as justification for its failure to perform a treaty.


233   As regards, second, the relationship between the Charter of the United Nations and international treaty law, that
      rule of primacy is expressly laid down in Article 103 of the Charter which provides that, „[i]n the event of a
      conflict between the obligations of the Members of the United Nations under the present Charter and their
      obligations under any other international agreement, their obligations under the present Charter shall prevail‟. In
      accordance with Article 30 of the Vienna Convention on the Law of Treaties, and contrary to the rules usually
      applicable to successive treaties, that rule holds good in respect of Treaties made earlier as well as later than the
      Charter of the United Nations. According to the International Court of Justice, all regional, bilateral, and even
      multilateral, arrangements that the parties may have made must be made always subject to the provisions of
      Article 103 of the Charter of the United Nations (judgment of 26 November 1984, delivered in the case
      concerning military and paramilitary activities in and against Nicaragua (Nicaragua v. United States of
      America), ICJ Reports, 1984, p. 392, paragraph 107).


234   That primacy extends to decisions contained in a resolution of the Security Council, in accordance with Article
      25 of the Charter of the United Nations, under which the Members of the United Nations agree to accept and
      carry out the decisions of the Security Council. According to the International Court of Justice, in accordance
      with Article 103 of the Charter, the obligations of the Parties in that respect prevail over their obligations under
      any other international agreement (Order of 14 April 1992 (provisional measures), Questions of Interpretation
      and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan Arab
      Jamahiriya v United States of America), ICJ Reports, 1992, p. 16, paragraph 42, and Order of 14 April 1992
      (provisional measures), Questions of Interpretation and Application of the 1971 Montreal Convention arising
      from the Aerial Incident at Lockerbie (Libyan Arab Jamahiriya v United Kingdom), ICJ Reports, 1992, p. 113,
      paragraph 39).


235   With more particular regard to the relations between the obligations of the Member States of the Community by
      virtue of the Charter of the United Nations and their obligations under Community law, it may be added that, in

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      accordance with the first paragraph of Article 307 EC, „The rights and obligations arising from agreements
      concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more
      Member States on the one hand, and one or more third countries on the other, shall not be affected by the
      provisions of this Treaty.‟


236   According to the Court of Justice‟s settled case-law, the purpose of that provision is to make it clear, in
      accordance with the principles of international law, that application of the EC Treaty does not affect the duty of
      the Member State concerned to respect the rights of third countries under a prior agreement and to perform its
      obligations thereunder (Case C-324/93 Evans Medical and Macfarlan Smith [1995] ECR I-563, paragraph 27;
      Case 10/61 Commission v Italy [1962] ECR 1; Case C-158/91 Levy [1993] ECR I-4287, and Case C-124/95
      Centro-Com [1997] ECR I-81, paragraph 56).


237   Now, five of the six signatory Sta tes to the Treaty establishing the European Economic Community, signed at
      Rome on 25 March 1957, were already members of the United Nations on 1 January 1958. While it is true that
      the Federal Republic of Germany was not formally admitted as a member of the United Nations until 18
      September 1973, its duty to perform its obligations under the Charter of the United Nations also predates 1
      January 1958, as is apparent from the Final Act of the Conference held in London from 28 September to 3
      October 1954 (known as „The Conference of the Nine Powers‟) and the Paris Agreements signed on 23 October
      1954. Furthermore, all the States that subsequently acceded to the Community were members of the United
      Nations before accession.


238   What is more, Article 224 of the Treaty establishing the European Economic Community (now Article 297 EC)
      was specifically introduced into the Treaty in order to observe the rule of primacy defined above. Under that
      provision, „Member States shall consult each other with a view to taking together the steps needed to prevent the
      functioning of the common market being affected by measures which a Member State may be called upon to
      take … in order to carry out obligations it has accepted for the purpose of maintaining peace and international
      security‟.


239   Resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations are thus
      binding on all the Member States of the Community which must therefore, in that capacity, take all measures
      necessary to ensure that those resolutions are put into effect (Opinions of Advocate General Jacobs in Case C-
      84/95 Bosphorus [1996] ECR I-3953, at I-3956, paragraph 2, and Case C-177/95 Ebony Maritime and Loten
      Navigation [1997] ECR I-1111, at I-1115, paragraph 27).


240   It also follows from the foregoing that, pursuant both to the rules of general international law and to the specific
      provisions of the Treaty, Member States may, and indeed must, leave unapplied any provision of Community
      law, whether a provision of primary law or a general principle of that law, that raises any impediment to the
      proper performance of their obligations under the Charter of the United Nations.


241   Thus, in Centro-Com, cited in paragraph 236 above, the Court of Justice specifically held that national measures
      contrary to Article 113 of the EC Treaty could be justified under Article 234 of the EC Treaty (now, after
      amendment, Article 307 EC) if they were necessary to ensure that the Member State concerned performed its
      obligations under the Charter of the United Nations and a resolution of the Security Council.


242   However, it follows from the case-law ( Dorsch Consult v Council and Commission, paragraph 82 above,
      paragraph 74) that, unlike its Member States, the Community as such is not directly bound by the Charter of the
      United Nations and that it is not therefore required, as an obligation of general public international law, to accept
      and carry out the decisions of the Security Council in accordance with Article 25 of that Charter. The reason is
      that the Community is not a member of the United Nations, or an addressee of the resolutions of the Security
      Council, or the successor to the rights and obligations of the Member States for the purposes of public
      international law.


243   Nevertheless, the Community must be considered to be bound by the obligations under the Charter of the United

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      Nations in the same way as its Member States, by virtue of the Treaty establishing it.


244   In that regard, it is not in dispute that at the time when they concluded the Treaty establishing the European
      Economic Community the Member States were bound by their obligations under the Charter of the United
      Nations.


245   By concluding a treaty between them they could not transfer to the Community more powers than they possessed
      or withdraw from their obligations to third countries under that Charter (see, by analogy, Joined Cases 21/72 to
      24/72 International Fruit Company and Others („ International Fruit ‟) [1972] ECR 1219, paragraph 11).


246   On the contrary, their desire to fulfil their obligations under that Charter follows from the very provisions of the
      Treaty establishing the European Economic Community and is made clear in particular by Article 224 and the
      first paragraph of Article 234 (see, by analogy, International Fruit, paragraphs 12 and 13, and the Opinion of
      Advocate General Mayras in those cases, ECR 1231, at page 1237).


247   Although that latter provision makes mention only of the obligations of the Member States, it implies a duty on
      the part of the institutions of the Community not to impede the performance of the obligations of Member States
      which stem from that Charter (Case 812/79 Burgoa [1980] ECR 2787, paragraph 9).


248   It is also to be observed that, in so far as the powers necessary for the performance of the Member States‟
      obligations under the Charter of the United Nations have been transferred to the Community, the Member States
      have undertaken, pursuant to public international law, to ensure that the Community itself should exercise those
      powers to that end.


249   In this context it is to be borne in mind, first, that in accordance with Article 48(2) of the Charter of the United
      Nations, the decisions of the Security Council „shall be carried out by the Members of the United Nations
      directly and through their action in the appropriate international agencies of which they are members‟ and,
      second, that according to the case-law ( Poulsen and Diva Navigation, paragraph 210 above, paragraph 9, and
      Racke, paragraph 210 above, paragraph 45, and Case 41/74 Van Duyn [1974] ECR 1337, paragraph 22), the
      Community must respect international law in the exercise of its powers and, consequently, Community law must
      be interpreted, and its scope limited, in the light of the relevant rules of international law.


250   By conferring those powers on the Community, the Member States demonstrated their will to bind it by the
      obligations entered into by them under the Charter of the United Nations (see, by analogy, International Fruit,
      paragraph 15).


251   Since the entry into force of the Treaty establishing the European Economic Community, the transfer of powers
      which has occurred in the relations between Member States and the Community has been put into concrete form
      in different ways within the framework of the performance of their obligations under the Charter of the United
      Nations (see, by analogy, International Fruit, paragraph 16).


252   Thus it is, in particular, that Article 228a of the EC Treaty (now Article 301 EC) was added to the Treaty by the
      Treaty on European Union in order to provide a specific basis for the economic sanctions that the Community,
      which has exclusive competence in the sphere of the common commercial policy, may need to impose in respect
      of third countries for political reasons defined by its Member States in connection with the CFSP, most
      commonly pursuant to a resolution of the Security Council requiring the adoption of such sanctions.


253   It therefore appears that, in so far as under the EC Treaty the Community has assumed powers previously
      exercised by Member States in the area governed by the Charter of the United Nations, the provisions of that
      Charter have the effect of binding the Community (see, by analogy, on the question whether the Community is
      bound by the General Agreement on Tariffs and Trade (GATT) of 1947, International Fruit, paragraph 18; see

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      also, in that it recognises that the Community exercises circumscribed powers when giving effect to a trade
      embargo imposed by a resolution of the Security Council Dorsch Consult v Council and Commission, paragraph
      82 above, paragraph 74).


254   Following that reasoning, it must be held, first, that the Community may not infringe the obligations imposed on
      its Member States by the Charter of the United Nations or impede their performance and, second, that in the
      exercise of its powers it is bound, by the very Treaty by which it was established, to adopt all the measures
      necessary to enable its Member States to fulfil those obligations.


255   In this instance, the Council found in Common Position 2002/402, adopted pursuant to the provisions of Title V
      of the Treaty on European Union, that action by the Community within the confines of the powers conferred on
      it by the EC Treaty was necessary in order to put into effect certain restrictive measures against Usama bin
      Laden, members of the Al-Qaeda network and the Taliban and other associated individuals, groups, undertakings
      and entities, in accordance with Security Council Resolutions 1267 (1999), 1333 (2000) and 1390 (2002).


256   The Community put those measures into effect by adopting the contested regulation. As has been held at
      paragraph 170 above, it was competent to adopt that act on the basis of Articles 60 EC, 301 EC and 308 EC.


257   It must therefore be held that the arguments put forward by the institutions, as summarised in paragraph 206
      above, are valid, subject to this reservation that it is not under general international law, as those parties would
      have it, but by virtue of the EC Treaty itself, that the Community was required to give effect to the Security
      Council resolutions concerned, within the sphere of its powers.


258   However, the applicants‟ arguments based, on the one hand, on the autonomy of the Community legal order vis-
      à-vis the legal order under the United Nations and, on the other, on the necessity of transposing Security Council
      resolutions into the domestic law of the Member States, in accordance with the constitutional provisions and
      fundamental principles of that law, must be rejected.


259   The applicants‟ argument alleging that the Security Council resolutions at issue are incompatible with the
      provisions of the Charter of the United Nations itself is inseparable from their arguments relating, first, to the
      judicial review that the Court of First Instance must carry out in respect of Community acts giving effect to those
      resolutions and, second, to the alleged breach of the fundamental rights of the persons concerned. It will,
      therefore, be examined with those other arguments.


      Concerning the scope of the review of legality that the Court must carry out


260   As a preliminary point, it is to be borne in mind that the European Community is based on the rule of law,
      inasmuch as neither its Member States nor its institutions can avoid review of the question whether their acts are
      in conformity with the basic constitutional charter, the Treaty, which established a complete system of legal
      remedies and procedures designed to enable the Court of Justice to review the legality of acts of the institutions
      (Case 294/83 Les Verts v Parliament [1986] ECR 1339, paragraph 23; Case 314/85 Foto-Frost [1987] ECR
      4199, paragraph 16; Case C-314/91 Weber v Parliament [1993] ECR I-1093, paragraph 8; Joined Cases T-
      222/99, T-327/99 and T-329/99 Martinez and Others v Parliament [2001] ECR II-2823, paragraph 48; see also
      Opinion 1/91 of the Court of Justice of 14 December 1991, ECR I-6079, paragraph 21).


261   As the Court has repeatedly held (Case 222/84 Johnston [1986] ECR 1651, paragraph 18; Case C-97/91 Oleificio
      Borelli v Commission [1992] ECR I-6313, paragraph 14, Case C-1/99 Kofisa Italia [2001] ECR I-207, paragraph
      46; Case C-424/99 Commission v Austria [2001] ECR I-9285, paragraph 45, and Case C-50/00 P Unión de
      Pequeños Agricultores v Council [2002] ECR I-6677, paragraph 39), „judicial control … reflects a general
      principle of law which underlies the constitutional traditions common to the Member States … and which is also
      laid down in Articles 6 and 13 of the [ECHR]‟.


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262   In the case in point, that principle finds expression in the right, conferred on the applicants by the fourth
      paragraph of Article 230 EC, to submit the lawfulness of the contested regulation to the Court of First Instance,
      provided that the act is of direct and individual concern to him, and to rely in support of his action on any plea
      alleging lack of competence, infringement of an essential procedural requirement, infringement of the EC Treaty
      or of any rule of law relating to its application, or misuse of powers.


263   The question that arises in this instance is, however, whether there exist any structural limits, imposed by general
      international law or by the EC Treaty itself, on the judicial review which it falls to the Court of First Instance to
      carry out with regard to that regulation.


264   It must be recalled that the contested regulation, adopted in the light of Common Position 2002/402, constitutes
      the implementation at Community level of the obligation placed on the Member States of the Community, as
      Members of the United Nations, to give effect, if appropriate by means of a Community act, to the sanctions
      against Usama bin Laden, members of the Al-Qaeda network and the Taliban and other associated individuals,
      groups, undertakings and entities, which have been decided and later strengthened by several resolutions of the
      Security Council adopted under Chapter VII of the Charter of the United Nations. The recitals of the preamble to
      that regulation refer expressly to Resolutions 1267 (1999), 1333 (2000) and 1390 (2002).


265   In that situation, as the institutions have rightly claimed, they acted under circumscribed powers, with the result
      that they had no autonomous discretion. In particular, they could neither directly alter the content of the
      resolutions at issue nor set up any mechanism capable of giving rise to such alteration.


266   Any review of the internal lawfulness of the contested regulation, especially having regard to the provisions or
      general principles of Community law relating to the protection of fundamental rights, would therefore imply that
      the Court is to consider, indirectly, the lawfulness of those resolutions. In that hypothetical situation, in fact, the
      origin of the illegality alleged by the applicant would have to be sought, not in the adoption of the contested
      regulation but in the resolutions of the Security Council which imposed the sanctions (see, by analogy, Dorsch
      Consult v Council and Commission, paragraph 82 above, paragraph 74).


267   In particular, if the Court were to annul the contested regulation, as the applicants claim it should, although that
      regulation seems to be imposed by international law, on the ground that that act infringes their fundamental
      rights which are protected by the Community legal order, such annulment would indirectly mean that the
      resolutions of the Security Council concerned themselves infringe those fundamental rights. In other words, the
      applicants ask the Court to declare by implication that the provision of international law at issue infringes the
      fundamental rights of individuals, as protected by the Community legal order.


268   The institutions and the United Kingdom ask the Court as a matter of principle to decline all jurisdiction to
      undertake such indirect review of the lawfulness of those resolutions which, as rules of international law binding
      on the Member States of the Community, are mandatory for the Court as they are for all the Community
      institutions. Those parties are of the view, essentially, that the Court‟s review ought to be confined, on the one
      hand, to ascertaining whether the rules on formal and procedural requirements and jurisdiction imposed in this
      case on the Community institutions were observed and, on the other hand, to ascertaining whether the
      Community measures at issue were appropriate and proportionate in relation to the resolutions of the Security
      Council which they put into effect.


269   It must be recognised that such a limitation of jurisdiction is necessary as a corollary to the principles identified
      above, in the Court‟s examination of the relationship between the international legal order under the United
      Nations and the Community legal order.


270   As has already been explained, the resolutions of the Security Council at issue were adopted under Chapter VII
      of the Charter of the United Nations. In these circumstances, determining what constitutes a threat to
      international peace and security and the measures required to maintain or re-establish them is the responsibility
      of the Security Council alone and, as such, escapes the jurisdiction of national or Community authorities and

                                                                                                                                12
                                                                                                                                8
      courts, subject only to the inherent right of individual or collective self-defence mentioned in Article 51 of the
      Charter.


271   Where, acting pursuant to Chapter VII of the Charter of the United Nations, the Security Council, through its
      Sanctions Committee, decides that the funds of certain individuals or entities must be frozen, its decision is
      binding on the members of the United Nations, in accordance with Article 48 of the Charter.


272   In light of the considerations set out in paragraphs 243 to 254 above, the claim that the Court of First Instance
      has jurisdiction to review indirectly the lawfulness of such a decision according to the standard of protection of
      fundamental rights as recognised by the Community legal order, cannot be justified either on the basis of
      international law or on the basis of Community law


273   First, such jurisdiction would be incompatible with the undertakings of the Member States under the Charter of
      the United Nations, especially Articles 25, 48 and 103 thereof, and also with Article 27 of the Vienna
      Convention on the Law of Treaties.


274   Second, such jurisdiction would be contrary to provisions both of the EC Treaty, especially Articles 5 EC, 10
      EC, 297 EC and the first paragraph of Article 307 EC, and of the Treaty on European Union, in particular Article
      5 EU, in accordance with which the Community judicature is to exercise its powers on the conditions and for the
      purposes provided for by the provisions of the EC Treaty and the Treaty on European Union. It would, what is
      more, be incompatible with the principle that the Community‟s powers and, therefore, those of the Court of First
      Instance, must be exercised in compliance with international law ( Poulsen and Diva Navigation, paragraph 210
      above, paragraph 9, and Racke, paragraph 210 above, paragraph 45).


275   It has to be added that, with particular regard to Article 307 EC and to Article 103 of the Charter of the United
      Nations, reference to infringements either of fundamental rights as protected by the Community legal order or of
      the principles of that legal order cannot affect the validity of a Security Council measure or its effect in the
      territory of the Community (see by analogy, Internationale Handelsgesellschaft, paragraph 190 above, paragraph
      3; Case 234/85 Keller [1986] ECR 2897, paragraph 7, and Joined Cases 97/87 to 99/87 Dow Chemical Ibérica
      and Others v Commission [1989] ECR 3165, paragraph 38).


276   It must therefore be considered that the resolutions of the Security Council at issue fall, in principle, outside the
      ambit of the Court‟s judicial review and that the Court has no authority to call in question, even indirectly, their
      lawfulness in the light of Community law. On the contrary, the Court is bound, so far as possible, to interpret and
      apply that law in a manner compatible with the obligations of the Member States under the Charter of the United
      Nations.


277   None the less, the Court is empowered to check, indirectly, the lawfulness of the resolutions of the Security
      Council in question with regard to jus cogens, understood as a body of higher rules of public international law
      binding on all subjects of international law, including the bodies of the United Nations, and from which no
      derogation is possible.


278   In this connection, it must be noted that the Vienna Convention on the Law of Treaties, which consolidates the
      customary international law and Article 5 of which provides that it is to apply „to any treaty which is the
      constituent instrument of an international organisation and to any treaty adopted within an international
      organisation‟, provides in Article 53 for a treaty to be void if it conflicts with a peremptory norm of general
      international law ( jus cogens ), defined as „a norm accepted and recognised by the international community of
      States as a whole as a norm from which no derogation is permitted and which can be modified only by a
      subsequent norm of general international law having the same character‟. Similarly, Article 64 of the Vienna
      Convention provides that: „If a new peremptory norm of general international law emerges, any existing treaty
      which is in conflict with that norm becomes void and terminates‟.



                                                                                                                              12
                                                                                                                              9
279   Furthermore, the Charter of the United Nations itself presupposes the existence of mandatory principles of
      international law, in particular, the protection of the fundamental rights of the human person. In the preamble to
      the Charter, the peoples of the United Nations declared themselves determined to „reaffirm faith in fundamental
      human rights, in the dignity and worth of the human person‟. In addition, it is apparent from Chapter I of the
      Charter, headed „Purposes and Principles‟, that one of the purposes of the United Nations is to encourage respect
      for human rights and for fundamental freedoms.


280   Those principles are binding on the Members of the United Nations as well as on its bodies. Thus, under Article
      24(2) of the Charter of the United Nations, the Security Council, in discharging its duties under its primary
      responsibility for the maintenance of international peace and security, is to act „in accordance with the Purposes
      and Principles of the United Nations‟. The Security Council‟s powers of sanction in the exercise of that
      responsibility must therefore be wielded in compliance with international law, particularly with the purposes and
      principles of the United Nations.


281   International law thus permits the inference that there exists one limit to the principle that resolutions of the
      Security Council have binding effect: namely, that they must observe the fundamental peremptory provisions of
      jus cogens. If they fail to do so, however improbable that may be, they would bind neither the Member States of
      the United Nations nor, in consequence, the Community.


282   The indirect judicial review carried out by the Court in connection with an action for annulment of a Community
      act adopted, where no discretion whatsoever may be exercised, with a view to putting into effect a resolution of
      the Security Council may therefore, in some circumstances, extend to determining whether the superior rules of
      international law falling within the ambit of jus cogens have been observed, in particular, the mandatory
      provisions concerning the universal protection of human rights, from which neither the Member States nor the
      bodies of the United Nations may derogate because they constitute „intransgressible principles of international
      customary law‟ (Advisory Opinion of the International Court of Justice of 8 July 1996, The Legality of the
      Threat or Use of Nuclear Weapons, Reports 1996, p. 226, paragraph 79; see also, to that effect, Advocate
      General Jacobs‟s Opinion in Bosphorus, paragraph 239 above, paragraph 65).




      Case 35
      Judgment of the Court (Grand Chamber) of 22 November 2005. Werner Mangold v
      Rüdiger Helm. Reference for a preliminary ruling: Arbeitsgericht München - Germany.
      Directive 1999/70/EC - Clauses 2, 5 and 8 of the Framework Agreement on fixed-term
      work - Directive 2000/78/EC - Article 6 - Equal treatment as regards employment and
      occupation - Age discrimination. Case C-144/04.


      In Case C-144/04,


      ...


      THE COURT (Grand Chamber)


      ...


      gives the following


      Judgment

                                                                                                                           13
                                                                                                                           0
     ...


55   By its second and third questions, which may appropriately be considered together, the national court seeks in
     essence to ascertain whether Article 6(1) of Directive 2000/78 must be interpreted as precluding a provision of
     domestic law such as that at issue in the main proceedings which authorises, without restriction, unless there is a
     close connection with an earlier contract of employment of indefinite duration concluded with the same
     employer, the conclusion of fixed-term contracts of employment once the worker has reached the age of 52. If
     so, the national court asks what conclusions it must draw from that interpretation.


56   In this regard, it is to be noted that, in accordance with Article 1, the purpose of Directive 2000/78 is to lay down
     a general framework for combating discrimination on any of the grounds referred to in that article, which include
     age, as regards employment and occupation.


57   Paragraph 14(3) of the TzBfG, however, by permitting employers to conclude without restriction fixed-term
     contracts of employment with workers over the age of 52, introduces a difference of treatment on the grounds
     directly of age.


58   Specifically with regard to differences of treatment on grounds of age, Article 6(1) of Directive 2000/78 provides
     that the Member States may provide that such differences of treatment „shall not constitute discrimination, if,
     within the context of national law, they are objectively and reasonably justified by a legitimate aim, including
     legitimate employment policy, labour market and vocational training objectives, and if the means of achieving
     that aim are appropriate and necessary‟. According to subparagraph (a) of the second paragraph of Article 6(1),
     those differences may include inter alia „the setting of special conditions on access to employment and
     vocational training, employment and occupation … for young people, older w orkers and persons with caring
     responsibilities in order to promote their vocational integration or ensure their protection‟ and, under
     subparagraphs (b) and (c), the fixing of conditions of age in certain special circumstances.


59   As is clear from the documents sent to the Court by the national court, the purpose of that legislation is plainly to
     promote the vocational integration of unemployed older workers, in so far as they encounter considerable
     difficulties in finding work.


60   The legitimacy of such a public-interest objective cannot reasonably be thrown in doubt, as indeed the
     Commission itself has admitted.


61   An objective of that kind must as a rule, therefore, be regarded as justifying, „objectively and reasonably‟, as
     provided for by the first subparagraph of Article 6(1) of Directive 2000/78, a difference of treatment on grounds
     of age laid down by Member States.


62   It still remains to be established whether, according to the actual wording of that provision, the means used to
     achieve that legitimate objective are „appropriate and necessary‟.


63   In this respect the Member States unarguably enjoy broad discretion in their choice of the measures capable of
     attaining their objectives in the field of social and employment policy.


64   However, as the national court has pointed out, application of national legislation such as that at issue in the
     main proceedings leads to a situation in which all workers who have reached the age of 52, without distinction,
     whether or not they were unemployed before the contract was concluded and whatever the duration of any period
     of unemployment, may lawfully, until the age at which they may claim their entitlement to a retirement pension,
     be offered fixed-term contracts of employment which may be renewed an indefinite number of times. This
     significant body of workers, determined solely on the basis of age, is thus in danger, during a substantial part of
                                                                                                                             13
                                                                                                                             1
     its members‟ working life, of being excluded from the benefit of stable employment which, however, as the
     Framework Agreement makes clear, constitutes a major element in the protection of workers.


65   In so far as such legislation takes the age of the worker concerned as the only criterion for the application of a
     fixed-term contract of employment, when it has not been shown that fixing an age threshold, as such, regardless
     of any other consideration linked to the structure of the labour market in question or the personal situation of the
     person concerned, is objectively necessary to the attainment of the objective which is the vocational integration
     of unemployed older workers, it must be considered to go beyond what is appropriate and necessary in order to
     attain the objective pursued. Observance of the principle of proportionality requires every derogation from an
     individual right to reconcile, so far as is possible, the requirements of the principle of equal treatment with those
     of the aim pursued (see, to that effect, Case C-476/99 Lommers [2002] ECR I-2891, paragraph 39). Such
     national legislation cannot, therefore, be justified under Article 6(1) of Directive 2000/78.


66   The fact that, when the contract was concluded, the period prescribed for the transposition into domestic law of
     Directive 2000/78 had not yet expired cannot call that finding into question.


67   First, the Court has already held that, during the period prescribed for transposition of a directive, the Member
     States must refrain from taking any measures liable seriously to compromise the attainment of the result
     prescribed by that directive ( Inter-Environnement Wallonie, paragraph 45).


68   In this connection it is immaterial whether or not the rule of domestic law in question, adopted after the directive
     entered into force, is concerned with the transposition of the directive (see, to that effect, Case C-14/02 ATRAL
     [2003] ECR I-4431, paragraphs 58 and 59).


69   In the case in the main proceedings the lowering, pursuant to Paragraph 14(3) of the TzBfG, of the age above
     which it is permissible to conclude fixed-term contracts from 58 to 52 took place in December 2002 and that
     measure was to apply until 31 December 2006.


70   The mere fact that, in the circumstances of the case, that provision is to expire on 31 December 2006, just a few
     weeks after the date by which the Member State must have transposed the directive, is not in itself decisive.


71   On the one hand, it is apparent from the very wording of the second subparagraph of Article 18 of Directive
     2000/78 that where a Member State, like the Federal Republic of Germany in this case, chooses to have recourse
     to an additional period of three years from 2 December 2003 in order to transpose the directive, that Member
     State „shall report annually to the Commission on the steps it is taking to tackle age … discrimination and on the
     progress it is making towards implementation‟.


72   That provision implies, therefore, that the Member State, which thus exceptionally enjoys an extended period for
     transposition, is progressively to take concrete measures for the purpose of there and then approximating its
     legislation to the result prescribed by that directive. Now, that obligation would be rendered redundant if the
     Member State were to be permitted, during the period allowed for implementation of the directive, to adopt
     measures incompatible with the objectives pursued by that act.


73   On the other hand, as the Advocate General has observed in point 96 of his Opinion, on 31 December 2006 a
     significant proportion of the workers covered by the legislation at issue in the main proceedings, including Mr
     Mangold, will already have reached the age of 58 and will therefore still fall within the specific rules laid down
     by Paragraph 14(3) of the TzBfG, with the result that that class of persons becomes definitively liable to be
     excluded from the safeguard of stable employment by the use of a fixed-term contract of employment, regardless
     of the fact that the age condition fixed at 52 will cease to apply at the end of 2006.


74   In the second place and above all, Directive 2000/78 does not itself lay down the principle of equal treatment in

                                                                                                                             13
                                                                                                                             2
     the field of employment and occupation. Indeed, in accordance with Article 1 thereof, the sole purpose of the
     directive is „to lay down a general framework for combating discrimination on the grounds of religion or belief,
     disability, age or sexual orientation‟, the source of the actual principle underlying the prohibition of those forms
     of discrimination being found, as is clear from the third and fourth recitals in the preamble to the directive, in
     various international instruments and in the constitutional traditions common to the Member States.


75   The principle of non-discrimination on grounds of age must thus be regarded as a general principle of
     Community law. Where national rules fall within the scope of Community law, which is the case with Paragraph
     14(3) of the TzBfG, as amended by the Law of 2002, as being a measure implementing Directive 1999/70 (see
     also, in this respect, paragraphs 51 and 64 above), and reference is made to the Court for a preliminary ruling,
     the Court must provide all the criteria of interpretation needed by the national court to determine whether those
     rules are compatible with such a principle (Case C-442/00 Rodríguez Caballero [2002] ECR I-11915, paragraphs
     30 to 32).


76   Consequently, observance of the general principle of equal treatment, in particular in respect of age, cannot as
     such be conditional upon the expiry of the period allowed the Member States for the transposition of a directive
     intended to lay down a general framework for combating discrimination on the grounds of age, in particular so
     far as the organisation of appropriate legal remedies, the burden of proof, protection against victimisation, social
     dialogue, affirmative action and other specific measures to implement such a directive are concerned.


77   In those circumstances it is the responsibility of the national court, hearing a dispute involving the principle of
     non-discrimination in respect of age, to provide, in a case within its jurisdiction, the legal protection which
     individuals derive from the rules of Community law and to ensure that those rules are fully effective, setting
     aside any provision of national law which may conflict with that law (see, to that effect, Case 106/77
     Simmenthal [1978] ECR 629, paragraph 21, and Case C-347/96 Solred [1998] ECR I-937, paragraph 30).


78   Having regard to all the foregoing, the reply to be given to the second and third questions must be that
     Community law and, more particularly, Article 6(1) of Directive 2000/78, must be interpreted as precluding a
     provision of domestic law such as that at issue in the main proceedings which authorises, without restriction,
     unless there is a close connection with an earlier contract of employment of indefinite duration concluded with
     the same employer, the conclusion of fixed-term contracts of employment once the worker has reached the age
     of 52.


     It is the responsibility of the national court to guarantee the full effectiveness of the general principle of non-
     discrimination in respect of age, setting aside any provision of national law which may conflict with Community
     law, even where the period prescribed for transposition of that directive has not yet expired.




     Case 36
     Judgment of the Court (Grand Chamber) of 3 May 2007. Advocaten voor de Wereld
     VZW v Leden van de Ministerraad. Reference for a preliminary ruling: Arbitragehof –
     Belgium. Police and judicial cooperation in criminal matters - Articles 6(2) EU and
     34(2)(b) EU - Framework Decision 2002/584/JHA - European arrest warrant and
     surrender procedures between Member States - Approximation of national laws -
     Removal of verification of double criminality - Validity. Case C-303/05.


     In Case C-303/05,


                                                                                                                            13
                                                                                                                            3
     ...


     THE COURT (Grand Chamber)


     ...


     gives the following


     Judgment


     ...


     Admissibility


17   The Czech Government submits that the first question referred is inadmissible on the ground that it requires the
     Court to examine Article 34(2)(b) EU, which is a provision of primary law not reviewable by the Court.


18   That argument is unfounded. Under Article 35(1) EU, the Court has jurisdiction, subject to the conditions laid
     down in that article, to give preliminary rulings on the interpretation and validity of, inter alia, framework
     decisions, which necessarily implies that it can, even if there is no express power to that effect, be called upon to
     interpret provisions of primary law, such as Article 34(2)(b) EU where, as in the case in the main proceedings,
     the Court is being asked to examine whether a framework decision has been properly adopted on the basis of that
     latter provision.


19   According to the Czech Government, the first question referred is also inadmissible inasmuch as the decision to
     refer fails to indicate clearly the relevant grounds which would justify a finding that the framework decision is
     invalid. It submits that it was for that reason impossible for it to submit any meaningful observations on that
     question. More specifically, in so far as Advocaten voor de Wereld contends that the Framework Decision did
     not bring about approximation of the laws of the Member States, it ought to have substantiated that assertion and
     the Arbitragehof ought to have made a note to that effect in its decision to refer.


20   It should be borne in mind that the information provided in orders for reference must not only be such as to
     enable the Court to reply usefully but must also enable the governments of the Member States and other
     interested parties to submit observations pursuant to Article 23 of the Statute of the Court of Justice (order in
     Case C-422/98 Colonia Versicherung and Others [1999] ECR I-1279, paragraph 5).


21   In the case in the main proceedings, the decision making the reference contains sufficient information to address
     those requirements. As indicated in paragraph 11 of this judgment, it appears from the decision making the
     reference that Advocaten voor de Wereld is submitting that the subject-matter of the European arrest warrant
     ought to have been implemented by way of a convention and not by way of a framework decision on the ground
     that, under Article 34(2)(b) EU, framework decisions may be adopted only „for the purpose of approximation of
     the laws and regulations of the Member States‟, which is not the position in the present case.


22   Information of this kind is sufficient not only to enable the Court to provide a useful reply but also to safeguard
     the possibility open to the parties to the dispute, the Member States, the Council and Commission to submit
     observations pursuant to Article 23 of the Statute of the Court of Justice, as is, moreover, indicated by the
     observations lodged by all of the parties which have intervened in these proceedings, including those submitted
     by the Czech Government.


                                                                                                                             13
                                                                                                                             4
23   The first question referred is therefore admissible.


     Substance


24   Advocaten voor de Wereld submits, in contrast to all of the other parties which have submitted observations in
     these proceedings, that the subject-matter of the European arrest warrant ought, in accordance with Article
     34(2)(d) EU, to have been regulated by way of a convention.


25   In the first place, it argues, the framework decision could not have been validly adopted for the purpose of the
     approximation of laws and regulations as referred to in Article 34(2)(b) EU, inasmuch as the Council is
     empowered to adopt framework decisions only to approximate progressively the rules on criminal matters in the
     cases referred to in the third indent of the second paragraph of Article 29 EU and in Article 31(e) EU. For other
     common action on judicial cooperation in criminal matters, the Council must have recourse to conventions,
     pursuant to Article 34(2)(d) EU.


26   Second, pursuant to Article 31 of the Framework Agreement, the latter was to replace, as from 1 January 2004,
     the convention law in the field of extradition in relations between Member States. Only a measure of the same
     kind, that is to say, a convention within the meaning of Article 34(2)(d) EU, can validly derogate from the
     convention law in force.


27   That argument cannot be accepted.


28   As is clear in particular from Article 1(1) and (2) of the Framework Decision and recitals (5), (6), (7) and (11) in
     its preamble, the purpose of the Framework Decision is to replace the multilateral system of extradition between
     Member States with a system of surrender, as between judicial authorities, of convicted persons or suspects for
     the purpose of enforcing judgments or of criminal proceedings based on the principle of mutual recognition.


29   The mutual recognition of the arrest warrants issued in the different Member States in accordance with the law
     of the issuing State concerned requires the approximation of the laws and regulations of the Member States with
     regard to judicial cooperation in criminal matters and, more specifically, of the rules relating to the conditions,
     procedures and effects of surrender as between national authorities.


30   That is precisely the purpose of the Framework Decision in regard, inter alia, to the rules relating to the
     categories of listed offences in respect of which there is no verification of double criminality (Article 2(2)), to
     the grounds for mandatory or optional non-execution of the European arrest warrant (Articles 3 and 4), to the
     content and form of that warrant (Article 8), to the transmission of such a warrant and the detailed procedures
     governing such transmission (Articles 9 and 10), to the minimum guarantees which must be granted to a
     requested or arrested person (Articles 11 to 14), to the time-limits and procedures for the decision to execute that
     warrant (Article 17) and to the time-limits for surrender of the person sought (Article 23).


31   The Framework Decision is based on Article 31(1)(a) and (b) EU, which provides that common action on
     judicial cooperation in criminal matters is, respectively, to facilitate and accelerate judicial cooperation in
     relation to proceedings and the enforcement of decisions and to facilitate extradition between Member States.


32   Contrary to what Advocaten voor de Wereld contends, there is nothing to justify the conclusion that the
     approximation of the laws and regulations of the Member States by the adoption of framework decisions under
     Article 34(2)(b) EU is directed only at the Member States‟ rules of criminal law mentioned in Article 31(1)(e)
     EU, that is to say, those rules which relate to the constituent elements of criminal offences and the penalties
     applicable within the areas listed in the latter provision.



                                                                                                                            13
                                                                                                                            5
33   Under the fourth indent of the first paragraph of Article 2 EU, the development of an area of freedom, security
     and justice features as one of the objectives of the Union and the first paragraph of Article 29 EU states that, in
     order to provide citizens with a high level of safety within such an area, common action is to be developed
     among the Member States, inter alia in the field of judicial cooperation in criminal matters. According to the
     second indent of the second paragraph of Article 29 EU, „closer cooperation between judicial and other
     competent authorities of the Member States … in accordance with the provisions of Articles 31 [EU] and 32
     [EU]‟ is to contribute to the achievement of that objective.


34   Article 31(1)(a) and (b) EU does not, however, contain any indication as to the legal instruments which are to be
     used for this purpose.


35   Moreover, it is in general terms that Article 34(2) EU states that the Council „shall take measures and promote
     cooperation, …, contributing to the pursuit of the objectives of the Union‟ and, „[to] that end‟, empowers the
     Council to adopt a variety of different types of measures, set out in Article 34(2)(a) to (d) EU, which include
     framework decisions and conventions.


36   Furthermore, neither Article 34(2) EU nor any other provision of Title VI of the EU Treaty draws a distinction as
     to the type of measures which may be adopted on the basis of the subject-matter to which the joint action in the
     field of criminal cooperation relates.


37   Article 34(2) EU also does not establish any order of priority between the different instruments listed in that
     provision, with the result that it cannot be ruled out that the Council may have a choice between several
     instruments in order to regulate the same subject-matter, subject to the limits imposed by the nature of the
     instrument selected.


38   In those circumstances, in so far as it lists and defines, in general terms, the different types of legal instruments
     which may be used in the „pursuit of the objectives of the Union‟ set out in Title VI of the EU Treaty, Article
     34(2) EU cannot be construed as meaning that the approximation of the laws and regulations of the Member
     States by the adoption of a framework decision under Article 34(2)(b) EU cannot relate to areas other than those
     mentioned in Article 31(1)(e) EU and, in particular, the matter of the European arrest warrant.


39   The interpretation to the effect that the approximation of the laws and regulations of the Member States by
     means of the adoption of framework decisions is not only authorised in the areas referred to in Article 31(1)(e)
     EU is corroborated by Article 31(1)(c) EU, which states that common action must also be aimed at „ensuring
     compatibility in rules applicable in the Member States, as may be necessary to improve such [judicial]
     cooperation [in criminal matters]‟, without drawing any distinction between the different types of measures
     which may be used for the purpose of approximating those rules.


40   In the present case, in so far as Article 34(2)(c) EU precludes the Council from using a decision to effect
     approximation of the laws and regulations of the Member States and in so far as the legal instrument of the
     common position within the meaning of Article 34(2)(a) EU must be limited to defining the Union‟s approach to
     a particular matter, the question thus arises as to whether, contrary to the argument put forward by Advocaten
     voor de Wereld, the Council was able validly to regulate the matter of the European arrest warrant by way of a
     framework decision rather than by means of a convention pursuant to Article 34(2)(d) EU.


41   While it is true that the European arrest warran t could equally have been the subject of a convention, it is within
     the Council‟s discretion to give preference to the legal instrument of the framework decision in the case where,
     as here, the conditions governing the adoption of such a measure are satisfied.


42   This conclusion is not invalidated by the fact that, in accordance with Article 31(1) of the Framework Decision,
     the latter was to replace from 1 January 2004, only in relations between Member States, the corresponding
     provisions of the earlier conventions on extradition set out in that provision. Any other interpretation

                                                                                                                             13
                                                                                                                             6
     unsupported by either Article 34(2) EU or by any other provision of the EU Treaty would risk depriving of its
     essential effectiveness the Council‟s recognised power to adopt framework decisions in fields previously
     governed by international conventions.


43   It follows that the Framework Decision was not adopted in a manner contrary to Article 34(2)(b) EU.


     The second question


44   Advocaten voor de Wereld contends, in contrast to all of the other parties which have submitted observations in
     these proceedings, that, to the extent to which it dispenses with verification of the requirement of the double
     criminality of the offences mentioned in it, Article 2(2) of the Framework Decision is contrary to the principle of
     equality and non-discrimination and to the principle of legality in criminal matters.


45   It must be noted at the outset that, by virtue of Article 6 EU, the Union is founded on the principle of the rule of
     law and it respects fundamental rights, as guaranteed by the European Convention for the Protection of Human
     Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and as they result from the
     constitutional provisions common to the Member States, as general principles of Community law. It follows that
     the institutions are subject to review of the conformity of their acts with the Treaties and the general principles of
     law, just like the Member States when they implement the law of the Union (see, inter alia, Case C-354/04 P
     Gestoras Pro Amnistía and Others v Council [2007] ECR I-0000, paragraph 51, and Case C-355/04 P Segi and
     Others v Council [2007] ECR I-0000, paragraph 51).


46   It is common ground that those principles include the principle of the legality of criminal offences and penalties
     and the principle of equality and non-discrimination, which are also reaffirmed respectively in Articles 49, 20
     and 21 of the Charter of Fundamental Rights of the European Union, proclaimed in Nice on 7 December 2000
     (OJ 2000 C 364, p. 1).


47   It is accordingly a matter for the Court to examine the validity of the Framework Decision in the light of those
     principles.


     The principle of the legality of criminal offences and penalties


48   According to Advocaten voor de Wereld, the list of more than 30 offences in respect of which the traditional
     condition of double criminality is henceforth abandoned if those offences are punishable in the issuing Member
     State by a custodial sentence or detention order for a maximum period of at last three years is so vague and
     imprecise that it breaches, or at the very least is capable of breaching, the principle of legality in criminal
     matters. The offences set out in that list are not accompanied by their legal definition but constitute very vaguely
     defined categories of undesirable conduct. A person deprived of his liberty on foot of a European arrest warrant
     without verification of double criminality does not benefit from the guarantee that criminal legislation must
     satisfy conditions as to precision, clarity and predictability allowing each person to know, at the time when an
     act is committed, whether that act does or does not constitute an offence, by contrast to those who are deprived
     of their liberty otherwise than pursuant to a European arrest warrant.


49   The principle of the legality of criminal offences and penalties ( nullum crimen, nulla poena sine lege ), which is
     one of the general legal principles underlying the constitutional traditions common to the Member States, has
     also been enshrined in various international treaties, in particular in Article 7(1) of the European Convention for
     the Protection of Human Rights and Fundamental Freedoms (see in this regard, inter alia, Joined Cases C-74/95
     and C-129/95 X [1996] ECR I-6609, paragraph 25, and Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-
     208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraphs 215 to
     219).



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50   This principle implies that legislation must define clearly offences and the penalties which they attract. That
     condition is met in the case where the individual concerned is in a position, on the basis of the wording of the
     relevant provision and with the help of the interpretative assistance given by the courts, to know which acts or
     omissions will make him criminally liable (see, inter alia, European Court of Human Rights judgment of 22 June
     2000 in Coëme and Others v Belgium, Reports 2000-VII, § 145).


51   In accordance with Article 2(2) of the Framework Decision, the offences listed in that provision give rise to
     surrender pursuant to a European arrest warrant, without verification of the double criminality of the act, „if they
     are punishable in the issuing Member State by a custodial sentence or a detention order for a maximum period of
     at least three years and as they are defined by the law of the issuing Member State‟.


52   Consequently, even if the Member States reproduce word-for-word the list of the categories of offences set out
     in Article 2(2) of the Framework Decision for the purposes of its implementation, the actual definition of those
     offences and the penalties applicable are those which follow from the law of „the issuing Member State‟. The
     Framework Decision does not seek to harmonise the criminal offences in question in respect of their constituent
     elements or of the penalties which they attract.


53   Accordingly, while Article 2(2) of the Framework Decision dispenses with verification of double criminality for
     the categories of offences mentioned therein, the definition of those offences and of the penalties applicable
     continue to be matters determined by the law of the issuing Member State, which, as is, moreover, stated in
     Article 1(3) of the Framework Decision, must respect fundamental rights and fundamental legal principles as
     enshrined in Article 6 EU, and, consequently, the principle of the legality of criminal offences and penalties.


54   It follows that, in so far as it dispenses with verification of the requirement of double criminality in respect of the
     offences listed in that provision, Article 2(2) of the Framework Decision is not invalid on the ground that it
     infringes the principle of the legality of criminal offences and penalties.


     The principle of equality and non-discrimination


55   According to Advocaten voor de Wereld, the principle of equality and non-discrimination is infringed by the
     Framework Decision inasmuch as, for offences other than those covered by Article 2(2) thereof, surrender may
     be made subject to the condition that the facts in respect of which the European arrest warrant was issued
     constitute an offence under the law of the Member State of execution. That distinction, it argues, is not
     objectively justified. The removal of verification of double criminality is all the more open to question as no
     detailed definition of the facts in respect of which surrender is requested features in the Framework Decision.
     The system established by the latter gives rise to an unjustified difference in treatment as between individuals
     depending on whether the facts alleged to constitute the offence occurred in the Member State of execution or
     outside that State. Those individuals will thus be judged differently with regard to the deprivation of their liberty
     without any justification for that difference.


56   The principle of equality and non-discrimination requires that comparable situations must not be treated
     differently and that different situations must not be treated in the same way unless such treatment is objectively
     justified (see, in particular, Case C-248/04 Koninklijke Coöperatie Cosun [2006] ECR I-0000, paragraph 72 and
     the case-law there cited).


57   With regard, first, to the choice of the 32 categories of offences listed in Article 2(2) of the Framework Decision,
     the Council was able to form the view, on the basis of the principle of mutual recognition and in the light of the
     high degree of trust and solidarity between the Member States, that, whether by reason of their inherent nature or
     by reason of the punishment incurred of a maximum of at least three years, the categories of offences in question
     feature among those the seriousness of which in terms of adversely affecting public order and public safety
     justifies dispensing with the verification of double criminality.



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58   Consequently, even if one were to assume that the situation of persons suspected of having committed offences
     featuring on the list set out in Article 2(2) of the Framework Decision or convicted of having committed such
     offences is comparable to the situation of persons suspected of having committed, or convicted of having
     committed, offences other than those listed in that provision, the distinction is, in any event, objectively justified.


59   With regard, second, to the fact that the lack of precision in the definition of the categories of offences in
     question risks giving rise to disparate implementation of the Framework Decision within the various national
     legal orders, suffice it to point out that it is not the objective of the Framework Decision to harmonise the
     substantive criminal law of the Member States and that nothing in Title VI of the EU Treaty, Articles 34 and 31
     of which were indicated as forming the legal basis of the Framework Decision, makes the application of the
     European arrest warrant conditional on harmonisation of the criminal laws of the Member States within the area
     of the offences in question (see by way of analogy, inter alia, Joined Cases C-187/01 and C-385/01 Gözütok and
     Brügge [2003] ECR I-1345, paragraph 32, and Case C-467/04 Gasparini and Others [2006] ECR I-0000,
     paragraph 29).


60   It follows that, in so far as it dispenses with verification of double criminality in respect of the offences listed
     therein, Article 2(2) of the Framework Decision is not invalid inasmuch as it does not breach Article 6(2) EU or,
     more specifically, the principle of legality of criminal offences and penalties and the principle of equality and
     non-discrimination.


61   In the light of all of the foregoing, the answer must be that examination of the questions submitted has revealed
     no factor capable of affecting the validity of the Framework Decision.




     Case 37
     Judgment of the Court (Grand Chamber) of 18 December 2007. Laval un Partneri Ltd v
     Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avdelning
     1, Byggettan and Svenska Elektrikerförbundet. Reference for a preliminary ruling:
     Arbetsdomstolen - Sweden.


     ...


     The first question


51   By its first question, the national court is asking whether it is compatible with rules of the EC Treaty on the
     freedom to provide services and the prohibition of any discrimination on the grounds of nationality and with the
     provisions of Directive 96/71/EC, for trade unions to attempt, by means of collective action in the form of a
     blockade, to force a foreign provider of services to sign a collective agreement in the host country in respect of
     terms and conditions of employment, such as the collective agreement for the building sector, if the situation in
     the host country is characterised by the fact that the legislation to implement that directive has no express
     provision concerning the application of terms and conditions of employment in collective agreements.


52   It is clear from the order of reference that the collective action initiated by Byggnads and Byggettan was
     motivated by Laval‟s refusal to guarantee its workers posted in Sweden the hourly wage demanded by those
     trade unions, even though that Member State does not provide for minimum rates of pay, and Laval‟s refusal to
     sign the collective agreement for the building sector, some terms of which lay down, in relation to certain
     matters referred to in Article 3(1), first subparagraph, (a) to (g) of Directive 96/71, more favourable conditions
     than those resulting from the relevant legislative provisions, while other terms relate to matters not referred to in
     that article.


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53   Accordingly, the national court‟s first question must be understood as asking, in essence, whether Articles 12 EC
     and 49 EC, and Directive 96/71, are to be interpreted as precluding a trade union, in a Member State in which the
     terms and conditions of employment concerning the matters referred to in Article 3(1), first subparagraph, (a) to
     (g) of that directive, save for minimum rates of pay, are contained in legislative provisions, from attempting, by
     means of collective action in the form of blockading sites such as that at issue in the main proceedings, to force a
     provider of services established in another Member State to enter into negotiations with it on the rates of pay for
     posted workers, and to sign a collective agreement, the terms of which lay down, as regards some of those
     matters, more favourable conditions than those resulting from the relevant legislative provisions, while other
     terms relate to matters not referred to in Article 3 of the directive.


     The relevant provisions of Community law


54   In order to ascertain the provisions of Community law applicable to a case such as that in the main proceedings,
     it must be noted that, according to the settled case-law of the Court, Article 12 EC, which lays down the general
     principle of the prohibition of discrimination on grounds of nationality, applies independently only to situations
     governed by Community law for which the Treaty lays down no specific prohibition of discrimination (see Case
     C-100/01 Oteiza Olazabal [2002] ECR I-10981, paragraph 25, and Case C-387/01 Weigel [2004] ECR I-4981,
     paragraph 57).


55   So far as the freedom to provide services is concerned, that principle was given specific expression and effect by
     Article 49 EC (Case C-22/98 Becu and Others [1999] ECR I-5665, paragraph 32, and Case C-55/98 Vestergaard
     [1999] ECR I-7641, paragraph 17). It is for that reason unnecessary to rule on Article 12 EC.


56   As regards the temporary posting of workers to another Member State so that they can carry out construction
     work or public works in the context of services provided by their employer, it is clear from the settled case-law
     of the Court that Articles 49 EC and 50 EC preclude a Member State from prohibiting a person providing
     services established in another Member State from moving freely on its territory with all his staff and also
     preclude that Member State from making the movement of staff in question subject to more restrictive
     conditions. To impose such conditions on the person providing services established in another Member State
     discriminates against that person in relation to his competitors established in the host country who are able to use
     their own staff without restrictions, and moreover affects his ability to provide the service (Case C-113/89 Rush
     Portuguesa [1990] ECR I-1417, paragraph 12).


57   Conversely, Community law does not preclude Member States from applying their legislation, or collective
     labour agreements entered into by management and labour relating to minimum wages, to any person who is
     employed, even temporarily, within their territory, no matter in which country the employer is established (see,
     in particular, Joined Cases 62/81 and 63/81 Seco and Desquenne & Giral [1982] ECR 223, paragraph 14, and
     Case C-164/99 Portugaia Construções [2002] ECR I-787, paragraph 21). The application of such rules must,
     however, be appropriate for securing the attainment of the objective which they pursue, that is, the protection of
     posted workers, and must not go beyond what is necessary in order to attain that objective (see, to that effect,
     inter alia, Joined Cases C-369/96 and C-376/96 Arblade and Others [1999] ECR I-8453, paragraph 35 and Case
     C-341/02 Commission v Germany [2005] ECR I-2733, paragraph 24).


58   In that context, the Community legislature adopted Directive 96/71, with a view, as is clear from recital 6 in the
     preamble to that directive, to laying down, in the interests of the employers and their personnel, the terms and
     conditions governing the employment relationship where an undertaking established in one Member State posts
     workers on a temporary basis to the territory of another Member State for the purposes of providing a service.


59   It follows from recital 13 to Directive 96/71 that the laws of the Member States must be coordinated in order to
     lay down a nucleus of mandatory rules for minimum protection to be observed in the host country by employers
     who post workers there.


60   Nevertheless, Directive 96/71 did not harmonise the material content of those mandatory rules for minimum

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     protection. That content may accordingly be freely defined by the Member States, in compliance with the Treaty
     and the general principles of Community law (Case C-490/04 Commission v Germany [2007] ECR I-0000,
     paragraph19).


61   Consequently, since the facts at issue in the main proceedings, as described in the order of reference, occurred in
     2004, that is to say, on a date subsequent to the expiry of the period allowed to the Member States for
     transposing Directive 96/71, that date being fixed for 16 December 1999, and since those facts fall within the
     scope of that directive, the first question must be examined with regard to the provisions of that directive
     interpreted in the light of Article 49 EC (Case C-60/03 Wolff & Müller [2004] ECR I-9553, paragraphs 25 to 27
     and 45), and, where appropriate, with regard to the latter provision itself.


     The possibilities available to the Member States for determining the terms and conditions of employment
     applicable to posted workers, including minimum rates of pay


62   In the context of the procedure established by Article 234 EC providing for cooperation between national courts
     and the Court of Justice, and in order to provide the national court with an answer which will be of use to it and
     enable it to determine the case before it (C-334/95 Krüger [1997] ECR I-4517, paragraph 22, C-88/99 Roquette
     Frères [2000] ECR I-10465, paragraph 18, and Joined Cases C-393/04 and C-41/05 Air Liquide Industries
     Belgium [2006] ECR I-5293, paragraph 23), it is appropriate to examine the possibilities available to the
     Member States for determining the terms and conditions of employment covering the matters referred to in
     Article 3(1), first subparagraph, (a) to (g), including minimum rates of pay, which undertakings are to guarantee
     workers they post in the framework of the transnational provision of services.


63   It is clear from both the order for reference and the observations submitted in the course of the present
     proceedings that underlying the dispute is, first, as regards the determination of the terms and conditions of the
     employment of posted workers relating to those matters, the fact that minimum rates of pay constitute the only
     term of employment which, in Sweden, is not laid down in accordance with one of the means provided for in
     Directive 96/71 and, second, the requirement imposed on Laval to negotiate with trade unions in order to
     ascertain the wages to be paid to its workers and to sign the collective agreement for the building sector.


64   According to the first and second indents of the first subparagraph of Article 3(1) of Directive 96/71, the terms
     and conditions of employment covering the matters referred to in (a) to (g) thereof are established, in relation to
     the transnational provision of services in the construction sector, either by law, regulation or administrative
     provision, or by collective agreements or arbitration awards which have been declared universally applicable.
     Collective agreements and arbitration awards for the purposes of that provision are those which must be
     observed by all undertakings in the geographical area and in the profession or industry concerned.


65   The second subparagraph of Article 3(8) of Directive 96/71 also gives Member States the possibility, in the
     absence of a system for declaring collective agreements or arbitration awards to be of universal application, to
     base themselves on those which are generally applicable to all similar undertakings in the industry concerned or
     those which have been concluded by the most representative employers‟ and labour organizations at national
     level and which are applied throughout the national territory.


66   It is clear from the wording of that provision that recourse to the latter possibility requires, first, that the Member
     State must so decide, and second, that the application of collective agreements to undertakings which post
     workers should guarantee equality of treatment in the matters listed in Article 3(1), first subparagraph, (a) to (g)
     of Directive 96/71 between the latter undertakings and national undertakings in the profession or industry
     concerned which are in a similar position. Equality of treatment, within the meaning of Article 3(8) of the
     directive, is deemed to exist where national undertakings are subject to the same obligations, as regards those
     matters, as posting undertakings, and where each are required to fulfil such obligations with the same effects.


67   It is common ground that, in Sweden, the terms and conditions of employment covering the matters listed in
     Article 3(1), first subparagraph, (a) to (g) of Directive 96/71, save for minimum rates of pay, have been laid

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     down by law. It is also not disputed that the collective agreements have not been declared universally applicable,
     and that that Member State has not made use of the possibility provided for in the second subparagraph of
     Article 3(8) of that directive.


68   It must be noted, in this respect, that since the purpose of Directive 96/71 is not to harmonise systems for
     establishing terms and conditions of employment in the Member States, the latter are free to choose a system at
     the national level which is not expressly mentioned among those provided for in that directive, provided that it
     does not hinder the provision of services between the Member States.


69   It is clear from the file that the national authorities in Sweden have entrusted management and labour with the
     task of setting, by way of collective negotiations, the wage rates which national undertakings are to pay their
     workers and that, as regards undertakings in the construction sector, such a system requires negotiation on a
     case-by-case basis, at the place of work, having regard to the qualifications and tasks of the employees
     concerned.


70   As regards the requirements as to pay which can be imposed on foreign service providers, it should be recalled
     that the first subparagraph of Article 3(1) of Directive 96/71 relates only to minimum rates of pay. Therefore,
     that provision cannot be relied on to justify an obligation on such service providers to comply with rates of pay
     such as those which the trade unions seek in this case to impose in the framework of the Swedish system, which
     do not constitute minimum wages and are not, moreover, laid down in accordance with the means set out in that
     regard in Article 3(1) and (8) of the directive.


71   It must therefore be concluded at this stage that a Member State in which the minimum rates of pay are not
     determined in accordance with one of the means provided for in Article 3(1) and (8) of Directive 96/71 is not
     entitled, pursuant to that directive, to impose on undertakings established in other Member States, in the
     framework of the transnational provision of services, negotiation at the place of work, on a case-by-case basis,
     having regard to the qualifications and tasks of the employees, so that the undertakings concerned may ascertain
     the wages which they are to pay their posted workers.


72   It is necessary to assess further, the obligations on undertakings established in another Member State which stem
     from such a system for determining wages with regard to Article 49 EC.


     Matters which may be covered by the terms and conditions of work applicable to posted workers


73   In order to ensure that the nucleus of mandatory rules for minimum protection are observed, the first
     subparagraph of Article 3(1) of Directive 96/71 provides that Member States are to ensure that, whatever the law
     applicable to the employment relationship, in the framework of the transnational provision of services,
     undertakings guarantee workers posted to their territory the terms and conditions of employment covering the
     matters listed in that provision, namely: maximum work periods and minimum rest periods; minimum paid
     annual holidays; the minimum rates of pay, including overtime rates; the conditions of hiring-out of workers, in
     particular the supply of workers by temporary employment undertakings; health, safety and hygiene at work;
     protective measures with regard to the terms and conditions of employment of pregnant women or women who
     have recently given birth, of children and of young people; and equality of treatment between men and women
     and other provisions on non-discrimination.


74   That provision seeks, first, to ensure a climate of fair competition between national undertakings and
     undertakings which provide services transnationally, insofar as it requires the latter to afford their workers, as
     regards a limited list of matters, the terms and conditions of employment laid down in the host Member State by
     law, regulation or administrative provision or by collective agreements or arbitration awards within the meaning
     of Article 3(8) of Directive 96/71, which constitute mandatory rules for minimum protection.


75   That provision thus prevents a situation arising in which, by applying to their workers the terms and conditions

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     of employment in force in the Member State of origin as regards those matters, undertakings established in other
     Member States would compete unfairly against undertakings of the host Member State in the framework of the
     transnational provision of services, if the level of social protection in the host Member State is higher.


76   Secondly, that provision seeks to ensure that posted workers will have the rules of the Member States for
     minimum protection as regards the terms and conditions of employment relating to those matters applied to them
     while they work on a temporary basis in the territory of that Member State.


77   The consequence of affording such minimum protection – if the level of protection resulting from the terms and
     conditions of employment granted to posted workers in the Member State of origin, as regards the matters
     referred to in Article 3(1), first subparagraph, (a) to (g) of Directive 96/71, is lower than the level of minimum
     protection afforded in the host Member State – is to enable those workers to enjoy better terms and conditions of
     employment in the host Member State.


78   However, in the case in the main proceedings, it is apparent from paragraph 19 of this judgment that, in respect
     of some of the matters referred to in Article 3(1), first subparagraph, (a) to (g) of Directive 96/71, in particular as
     regards working time and annual leave, certain terms of the collective agreement for the building sector depart
     from the provisions of Swedish law which lay down the terms and conditions of employment applicable to
     posted workers, by establishing more favourable terms.


79   It is true that Article 3(7) of Directive 96/71 provides that paragraphs 1 to 6 are not to prevent application of
     terms and conditions of employment which are more favourable to workers. In addition, according to recital 17,
     the mandatory rules for minimum protection in force in the host country must not prevent the application of such
     terms and conditions.


80   Nevertheless, Article 3(7) of Directive 96/71 cannot be interpreted as allowing the host Member State to make
     the provision of services in its territory conditional on the observance of terms and conditions of employment
     which go beyond the mandatory rules for minimum protection. As regards the matters referred to in Article 3(1),
     first subparagraph, (a) to (g), Directive 96/71 expressly lays down the degree of protection for workers of
     undertakings established in other Member States who are posted to the territory of the host Member State which
     the latter State is entitled to require those undertakings to observe. Moreover, such an interpretation would
     amount to depriving the directive of its effectiveness.


81   Therefore – without prejudice to the right of undertakings established in other Member States to sign of their
     own accord a collective labour agreement in the host Member State, in particular in the context of a commitment
     made to their own posted staff, the terms of which might be more favourable – the level of protection which
     must be guaranteed to workers posted to the territory of the host Member State is limited, in principle, to that
     provided for in Article 3(1), first subparagraph, (a) to (g) of Directive 96/71, unless, pursuant to the law or
     collective agreements in the Member State of origin, those workers already enjoy more favourable terms and
     conditions of employment as regards the matters referred to in that provision.


82   Moreover, it must be pointed out that, pursuant to the first indent of Article 3(10) of Directive 96/71, Member
     States may apply terms and conditions of employment on matters other than those specifically referred to in
     Article 3(1), first subparagraph, (a) to (g), in compliance with the Treaty and, in the case of public policy
     provisions, on a basis of equality of treatment, to national undertakings and to the undertakings of other Member
     States.


83   In the main proceedings, certain terms of the collective agreement for the building sector relate to matters which
     are not specifically referred to in Article 3(1), first subparagraph, (a) to (g) of Directive 96/71. In that regard, it
     follows from paragraph 20 of this judgment that signing that collective agreement entails undertakings accepting
     pecuniary obligations such as those requiring them to pay to Byggettan a sum equal to 1.5% of total gross wages
     for the purposes of the pay review which that section trade union carries out, and to the insurance company,
     FORA, first, 0.8% of total gross wages for the purposes of a charge called the „special building supplement‟,

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     and, second, a further 5.9% for the purposes of a number of insurance premiums.


84   It is common ground, however, that those obligations were imposed without the national authorities‟ having had
     recourse to Article 3(10) of Directive 96/71. The terms of the collective agreement for the building sector in
     question were in fact established through negotiation between management and labour; not being bodies
     governed by public law, they cannot avail themselves of that provision by citing grounds of public policy in
     order to maintain that collective action such as that at issue in the main proceedings complies with Community
     law.


85   It is also necessary to assess from the point of view of Article 49 EC the collective action taken by the trade
     unions in the case in the main proceedings, both in so far as it seeks to force a service provider established in
     another Member State to enter into negotiations on the wages to be paid to posted workers and in so far as it
     seeks to force that service provider to sign a collective agreement the terms of which lay down, as regards some
     of the matters referred to in Article 3(1), first subparagraph, (a) to (g) of Directive 96/71, more favourable
     conditions than those stemming from the relevant legislative provisions, while other terms cover matters not
     referred to in that provision.


     Assessment of the collective action at issue in the case in the main proceedings from the point of view of Article
     49 EC


86   As regards use of the means available to the trade unions to bring pressure to bear on the relevant parties to sign
     a collective agreement and to enter into negotiations on pay, the defendants in the main proceedings and the
     Danish and Swedish Governments submit that the right to take collective action in the context of negotiations
     with an employer falls outside the scope of Article 49 EC, since, pursuant to Article 137(5) EC, as amended by
     the Treaty of Nice, the Community has no power to regulate that right.


87   In this regard, it suffices to point out that, even though, in the areas in which the Community does not have
     competence, the Member States remain, in principle, free to lay down the conditions for the existence and
     exercise of the rights at issue, they must nevertheless exercise that competence consistently with Community law
     (see, by analogy, as regards social security, Case C-120/95 Decker [1998] ECR I-1831, paragraphs 22 and 23,
     and Case C-158/96 Kohll [1998] ECR I-1931, paragraphs 18 and 19; as regards direct taxation, Case C-334/02
     Commission v France [2004] ECR I-2229, paragraph 21, and Case C-446/03 Marks & Spencer [2005] ECR
     I-10837, paragraph 29).


88   Therefore, the fact that Article 137 EC does not apply to the right to strike or to the right to impose lock-outs is
     not such as to exclude collective action such as that at issue in the main proceedings from the domain of freedom
     to provide services.




89   According to the observations of the Danish and Swedish Governments, the right to take collective action
     constitutes a fundamental right which, as such, falls outside the scope of Article 49 EC and Directive 96/71.


90   In that regard, it must be recalled that the right to take collective action is recognised both by various
     international instruments which the Member States have signed or cooperated in, such as the European Social
     Charter, signed at Turin on 18 October 1961 – to which, moreover, express reference is made in Article 136 EC
     – and Convention No 87 of the International Labour Organisation concerning Freedom of Association and
     Protection of the Right to Organise of 9 July 1948 – and by instruments developed by those Member States at
     Community level or in the context of the European Union, such as the Community Charter of the Fundamental
     Social Rights of Workers adopted at the meeting of the European Council held in Strasbourg on 9 December
     1989, which is also referred to in Article 136 EC, and the Charter of Fundamental Rights of the European Union
     proclaimed in Nice on 7 December 2000 (OJ 2000 C 364, p. 1).



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91   Although the right to take collective action must therefore be recognised as a fundamental right which forms an
     integral part of the general principles of Community law the observance of which the Court ensures, the exercise
     of that right may none the less be subject to certain restrictions. As is reaffirmed by Article 28 of the Charter of
     Fundamental Rights of the European Union, it is to be protected in accordance with Community law and national
     law and practices.


92   Although it is true, as the Swedish Government points out, that the right to take collective action enjoys
     constitutional protection in Sweden, as in other Member States, nevertheless as is clear from paragraph 10 of this
     judgment, under the Swedish constitution, that right – which, in that Member State, covers the blockading of
     worksites – may be exercised unless otherwise provided by law or agreement.


93   In that regard, the Court has already held that the protection of fundamental rights is a legitimate interest which,
     in principle, justifies a restriction of the obligations imposed by Community law, even under a fundamental
     freedom guaranteed by the Treaty, such as the free movement of goods (see Case C-112/00 Schmidberger [2003]
     ECR I-5659, paragraph 74) or freedom to provide services (see Case C-36/02 Omega [2004] ECR I-9609,
     paragraph 35).


94   As the Court held, in Schmidberger and Omega , the exercise of the fundamental rights at issue, that is, freedom
     of expression and freedom of assembly and respect for human dignity, respectively, does not fall outside the
     scope of the provisions of the Treaty. Such exercise must be reconciled with the requirements relating to rights
     protected under the Treaty and in accordance with the principle of proportionality (see, to that effect,
     Schmidberger , paragraph 77, and Omega , paragraph 36).


95   It follows from the foregoing that the fundamental nature of the right to take collective action is not such as to
     render Community law inapplicable to such action, taken against an undertaking established in another Member
     State which posts workers in the framework of the transnational provision of services.


96   It must therefore be examined whether the fact that a Member State‟s trade unions may take collective action in
     the circumstances described above constitutes a restriction on the freedom to provide services, and, if so,
     whether it can be justified.


97   It should be noted that, in so far as it seeks to abolish restrictions on the freedom to provide services stemming
     from the fact that the service provider is established in a Member State other than that in which the service is to
     be provided, Article 49 EC became directly applicable in the legal orders of the Member States on expiry of the
     transitional period and confers on individuals rights which are enforceable by them and which the national courts
     must protect (see, inter alia, Case 33/74 Van Binsbergen [1974] ECR 1299, paragraph 26; Case 13/76 Donà
     [1976] ECR 1333, paragraph 20; Case 206/84 Commission v Ireland [1986] ECR 3817, paragraph 16; and Case
     C-208/05 ITC [2007] ECR I-181, paragraph 67).


98   Furthermore, compliance with Article 49 EC is also required in the case of rules which are not public in nature
     but which are designed to regulate, collectively, the provision of services. The abolition, as between Member
     States, of obstacles to the freedom to provide services would be compromised if the abolition of State barriers
     could be neutralised by obstacles resulting from the exercise of their legal autonomy by associations or
     organisations not governed by public law (see Case 36/74 Walrave and Koch [1974] ECR 1405, paragraphs 17
     and 18, Case C-415/93 Bosman [1995] ECR I-4921, paragraphs 83 and 84, and Case C-309/99 Wouters and
     Others [2002] ECR I-1577, paragraph 120).


99   In the case in the main proceedings, it must be pointed out that the right of trade unions of a Member State to
     take collective action by which undertakings established in other Member States may be forced to sign the
     collective agreement for the building sector – certain terms of which depart from the legislative provisions and
     establish more favourable terms and conditions of employment as regards the matters referred to in Article 3(1),
     first subparagraph, (a) to (g) of Directive 96/71 and others relate to matters not referred to in that provision – is
     liable to make it less attractive, or more difficult, for such undertakings to carry out construction work in

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      Sweden, and therefore constitutes a restriction on the freedom to provide services within the meaning of Article
      49 EC.


100   The same is all the more true of the fact that, in order to ascertain the minimum wage rates to be paid to their
      posted workers, those undertakings may be forced, by way of collective action, into negotiations with the trade
      unions of unspecified duration at the place at which the services in question are to be provided.


101   It is clear from the case-law of the Court that, since the freedom to provide services is one of the fundamental
      principles of the Community (see, inter alia, Case 220/83 Commission v France [1986] ECR 3663, paragraph 17,
      and Case 252/83 Commission v Denmark [1986] ECR 3713, paragraph 17), a restriction on that freedom is
      warranted only if it pursues a legitimate objective compatible with the Treaty and is justified by overriding
      reasons of public interest; if that is the case, it must be suitable for securing the attainment of the objective which
      it pursues and not go beyond what is necessary in order to attain it (Case C-398/95 SETTG [1997] ECR I-3091,
      paragraph 21, Case C-451/03 Servizi Ausiliari Dottori Commercialisti [2006] ECR I-2941, paragraph 37, and
      Case C-94/04 Cipolla [2006] ECR I-11421, paragraph 61).


102   The Swedish Government and the defendant trade unions in the main proceedings submit that the restrictions in
      question are justified, since they are necessary to ensure the protection of a fundamental right recognised by
      Community law and have as their objective the protection of workers, which constitutes an overriding reason of
      public interest.


103   In that regard, it must be pointed out that the right to take collective action for the protection of the workers of
      the host State against possible social dumping may constitute an overriding reason of public interest within the
      meaning of the case-law of the Court which, in principle, justifies a restriction of one of the fundamental
      freedoms guaranteed by the Treaty (see, to that effect, Joined Cases C-369/96 and C-376/96 Arblade and Others
      [1999] ECR I-8453, paragraph 36; Case C-165/98 Mazzoleni and ISA [2001] ECR I-2189, paragraph 27; Joined
      Cases C-49/98, C-50/98, C-52/98 to C-54/98 and C-68/98 to C-71/98 Finalarte and Others [2001] ECR I-7831,
      paragraph 33, and Case C-438/05 International Transport Workers‟ Federation and Finnish Seamen‟s Union
      [2007] ECR I-0000, paragraph 77).


104   It should be added that, according to Article 3(1)(c) and (j) EC, the activities of the Community are to include
      not only an „internal market characterised by the abolition, as between Member States, of obstacles to the free
      movement of goods, persons, services and capital‟, but also „a policy in the social sphere‟. Article 2 EC states
      that the Community is to have as its task, inter alia, the promotion of „a harmonious, balanced and sustainable
      development of economic activities‟ and „a high level of employment and of social protection‟.


105   Since the Community has thus not only an economic but also a social purpose, the rights under the provisions of
      the EC Treaty on the free movement of goods, persons, services and capital must be balanced against the
      objectives pursued by social policy, which include, as is clear from the first paragraph of Article 136 EC, inter
      alia, improved living and working conditions, so as to make possible their harmonisation while improvement is
      being maintained, proper social protection and dialogue between management and labour.


106   In the case in the main proceedings, Byggnads and Byggettan contend that the objective of the blockade carried
      out against Laval was the protection of workers.


107   In that regard, it must be observed that, in principle, blockading action by a trade union of the host Member State
      which is aimed at ensuring that workers posted in the framework of a transnational provision of services have
      their terms and conditions of employment fixed at a certain level, falls within the objective of protecting
      workers.


108   However, as regards the specific obligations, linked to signature of the collective agreement for the building
      sector, which the trade unions seek to impose on undertakings established in other Member States by way of

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      collective action such as that at issue in the case in the main proceedings, the obstacle which that collective
      action forms cannot be justified with regard to such an objective. In addition to what is set out in paragraphs 81
      and 83 of the present judgment, with regard to workers posted in the framework of a transnational provision of
      services, their employer is required, as a result of the coordination achieved by Directive 96/71, to observe a
      nucleus of mandatory rules for minimum protection in the host Member State.


109   Finally, as regards the negotiations on pay which the trade unions seek to impose, by way of collective action
      such as that at issue in the main proceedings, on undertakings, established in another Member State which post
      workers temporarily to their territory, it must be emphasised that Community law certainly does not prohibit
      Member States from requiring such undertakings to comply with their rules on minimum pay by appropriate
      means (see Seco and Desquenne & Giral , paragraph 14; Rush Portuguesa , paragraph 18, and Arblade and
      Others , paragraph 41).


110   However, collective action such as that at issue in the main proceedings cannot be justified in the light of the
      public interest objective referred to in paragraph 102 of the present judgment, where the negotiations on pay,
      which that action seeks to require an undertaking established in another Member State to enter into, form part of
      a national context characterised by a lack of provisions, of any kind, which are sufficiently precise and accessible
      that they do not render it impossible or excessively difficult in practice for such an undertaking to determine the
      obligations with which it is required to comply as regards minimum pay (see, to that effect, Arblade and Others ,
      paragraph 43).


111   In the light of the foregoing, the answer to the first question must be that Article 49 EC and Directive 96/71 are
      to be interpreted as precluding a trade union, in a Member State in which the terms and conditions of
      employment covering the matters referred to in Article 3(1), first subparagraph, (a) to (g) of that directive are
      contained in legislative provisions, save for minimum rates of pay, from attempting, by means of collective
      action in the form of a blockade („blockad‟) of sites such as that at issue in the main proceedings, to force a
      provider of services established in another Member State to enter into negotiations with it on the rates of pay for
      posted workers and to sign a collective agreement the terms of which lay down, as regards some of those
      matters, more favourable conditions than those resulting from the relevant legislative provisions, while other
      terms relate to matters not referred to in Article 3 of the directive.


      The second question


112   By the second question, the national court is asking, in essence, whether, where there is a prohibition in a
      Member State against trade unions undertaking collective action with the aim of having a collective agreement
      between other parties set aside or amended, Articles 49 EC and 50 EC preclude that prohibition from being
      subject to the condition that such action must relate to terms and conditions of employment to which the national
      law applies directly, thereby making it impossible for an undertaking which posts workers to that Member State
      in the framework of the provision of services and which is bound by a collective agreement subject to the law of
      another Member State to enforce such a prohibition vis-à-vis those trade unions.


113   That question concerns the application of the provisions of the MBL which introduced a system to combat social
      dumping, pursuant to which a service provider is not entitled, in the Member State in which it provides its
      services, to expect any account to be taken of the obligations under collective agreements to which it is already
      subject in the Member State in which it is established. It follows from such a system that collective action is
      authorised against undertakings bound by a collective agreement subject to the law of another Member State in
      the same way as such action is authorised against undertakings which are not bound by any collective agreement.


114   It is clear from settled case-law that the freedom to provide services implies, in particular, the abolition of any
      discrimination against a service provider on account of its nationality or the fact that it is established in a
      Member State other than the one in which the service is provided (see, inter alia, Case C-154/89 Commission v
      France [1991] ECR I-659, paragraph 12, Case C-180/89 Commission v Italy ECR I-709, paragraph 15, Case
      C-198/89 Commission v Greece ECR I-727, paragraph 16; and Commission v Germany [2007] paragraph 83).


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115   It is also settled case-law that discrimination can arise only through the application of different rules to
      comparable situations or the application of the same rule to different situations (See, inter alia, Case C-279/93
      Schumacker [1995] ECR I-225, paragraph 30, Case C-383/05 Talotta [2007] ECR I-0000, paragraph 18, and
      Case C-182/06 Lakebrink and Peters-Lakebrink [2007] ECR I-0000, paragraph 27).


116   In that regard, it must be pointed out that national rules, such as those at issue in the case in the main
      proceedings, which fail to take into account, irrespective of their content, collective agreements to which
      undertakings that post workers to Sweden are already bound in the Member State in which they are established,
      give rise to discrimination against such undertakings, in so far as under those national rules they are treated in
      the same way as national undertakings which have not concluded a collective agreement.


117   It follows from Article 46 EC, which must be interpreted strictly, that discriminatory rules may be justified only
      on grounds of public policy, public security or public health (see Commission v Germany [2007] paragraph 86).


118   It is clear from the order for reference that the application of those rules to foreign undertakings which are bound
      by collective agreements to which Swedish law does not directly apply is intended, first, to allow trade unions to
      take action to ensure that all employers active on the Swedish labour market pay wages and apply other terms
      and conditions of employment in line with those usual in Sweden, and secondly, to create a climate of fair
      competition, on an equal basis, between Swedish employers and entrepreneurs from other Member States.


119   Since none of the considerations referred to in the previous paragraph constitute grounds of public policy, public
      security or public health within the meaning of Article 46 EC, applied in conjunction with Article 55 EC, it must
      be held that discrimination such as that in the case in the main proceedings cannot be justified.


120   In the light of the foregoing, the answer to the second question must be that, where there is a prohibition in a
      Member State against trade unions undertaking collective action with the aim of having a collective agreement
      between other parties set aside or amended, Articles 49 EC and 50 EC preclude that prohibition from being
      subject to the condition that such action must relate to terms and conditions of employment to which the national
      law applies directly.


      ...


      Case 38
      Judgment of the Court (Grand Chamber) of 20 May 2008. Commission of the European
      Communities v Council of the European Union. Action for annulment - Article 47 EU -
      Common foreign and security policy - Decision 2004/833/CFSP - Implementation of
      Joint Action 2002/589/CFSP - Combating the proliferation of small arms and light
      weapons - Community competence - Development cooperation policy. Case C-91/05.


      In Case C-91/05,


      ...


      THE COURT (Grand Chamber)


      ...



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     gives the following


     Judgment


     ...


     Application of Article 47 EU


56   As stated in paragraphs 31 to 33 of this judgment, under Article 47 EU, it is the task of the Court to ensure that
     the acts which, according to the Council, fall within the scope of Title V of the EU Treaty and which are capable
     of having legal effects do not encroach upon the powers conferred by provisions of the EC Treaty on the
     Community.


57   According to the Commission, the contested decision fails to respect the division of competences between the
     Community and the Union established by Article 47 EU as it could have been adopted on the basis of
     competences conferred on the Community in the area of development cooperation. The same applies to the
     provisions of Title II of the contested joint action, as implemented by the contested decision, which, it claims,
     fall either within Community competences concerning development cooperation or those concerning economic,
     financial and technical cooperation with third countries.


58   It is therefore necessary to determine whether the provisions of the contested decision affect competences
     enjoyed by the Community under the EC Treaty, on the ground that, as the Commission argues, they could have
     been adopted on the basis of that treaty (see, to that effect, Case C-176/03 Commission v Council, paragraph 40,
     and Case C-440/05 Commission v Council, paragraph 54).


59   In providing that nothing in the EU Treaty is to affect the Treaties establishing the European Communities or the
     subsequent Treaties and Acts modifying or supplementing them, Article 47 EU aims, in accordance with the fifth
     indent of Article 2 EU and the first paragraph of Article 3 EU, to maintain and build on the acquis
     communautaire.


60   Contrary to what is submitted by the United Kingdom Government, a measure having legal effects adopted
     under Title V of the EU Treaty affects the provisions of the EC Treaty within the meaning of Article 47 EU
     whenever it could have been adopted on the basis of the EC Treaty, it being unnecessary to examine whether the
     measure prevents or limits the exercise by the Community of its competences. It is apparent from the case-law of
     the Court that, if it is established that the provisions of a measure adopted under Titles V or VI of the EU Treaty,
     on account of both their aim and their content, have as their main purpose the implementation of a policy
     conferred by the EC Treaty on the Community, and if they could properly have been adopted on the basis of the
     EC Treaty, the Court finds that those provisions infringe Article 47 EU (see, to that effect, Case C-176/03
     Commission v Council, paragraphs 51 and 53, and Case C-440/05 Commission v Council, paragraphs 69 to 74).


61   Since the infringement of Article 47 EU arises from the fact that a measure having legal effects adopted by the
     Union on the basis of the EU Treaty could have been adopted by the Community, it is also not relevant whether
     in an area such as development cooperation – which does not fall within Community exclusive competence and
     in which, therefore, the Member States are not precluded from exercising, individually or collectively, their
     competences (see, to that effect, Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission
     [1993] ECR I-3685, paragraph 16, and C-316/91 Parliament v Council [1994] ECR I-625, paragraph 26) – such
     a measure could have been adopted by the Member States in exercise of their competences.


62   Moreover, the question whether the provisions of such a measure adopted by the Union fall within the
     competence of the Community relates to the attribution and, thus, the very existence of that competence, and not
     its exclusive or shared nature (see, to that effect, Case C-459/03 Commission v Ireland [2006] ECR I-4635,

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     paragraph 93).


63   It is therefore necessary to determine whether the contested decision infringes Article 47 EU inasmuch as it
     could have been adopted on the basis of the provisions of the EC Treaty.


     Demarcation of the areas of Community development cooperation policy and the CFSP respectively


64   With regard to Community development cooperation policy, the Court has held that the objectives pursued by
     Article 130u of the EC Treaty (now Article 177 EC) are broad in the sense that it must be possible for the
     measures required for their pursuit to concern various specific matters (Case C-268/94 Portugal v Council [1996]
     ECR I-6177, paragraph 37).


65   Articles 177 EC to 181 EC, which deal with cooperation with developing countries, refer not only to the
     sustainable economic and social development of those countries, their smooth and gradual integration into the
     world economy and the campaign against poverty, but also to the development and consolidation of democracy
     and the rule of law, as well as to respect for human rights and fundamental freedoms, in compliance also with
     commitments in the context of the United Nations and other international organisations (C-403/05 Parliament v
     Commission [2007] ECR I-0000, paragraph 56).


66   In addition, it follows from the Joint Statement by the Council and the representatives of the governments of the
     Member States meeting within the Council, the European Parliament and the Commission on European Union
     Development Policy, entitled „The European Consensus [on Development]‟ (OJ 2006 C 46, p. 1) that there can
     be no sustainable development and eradication of poverty without peace and security and that the pursuit of the
     objectives of the Community‟s new development policy necessarily proceed via the promotion of democracy and
     respect for human rights (C-403/05 Parliament v Commission, paragraph 57).


67   While the objectives of current Community development cooperation policy should therefore not be limited to
     measures directly related to the campaign against poverty, it is none the less necessary, if a measure is to fall
     within that policy, that it contributes to the pursuit of that policy‟s economic and social development objectives
     (see, to that effect, Case C-268/94 Portugal v Council, paragraphs 44, 60, 63 and 73).


68   In that regard, it is apparent from a number of documents emanating from the Union institutions and from the
     European Council that certain measures aiming to prevent fragility in developing countries, including those
     adopted in order to combat the proliferation of small arms and light weapons, can contribute to the elimination or
     reduction of obstacles to the economic and social development of those countries.


69   For example, on 21 May 1999, the „development‟ Council of the European Union adopted a resolution on small
     arms in which it presented the proliferation of those weapons as a problem of global proportions which, in
     particular in crisis zones and countries where the security situation is unstable, has been an obstacle to peaceful
     economic and social development. More recently, in the European Union strategy to combat illicit accumulation
     and trafficking of small arms and light weapons adopted by the European Council on 15 and 16 December 2005
     (Council document No 5319/06 PESC 31 of 13 January 2006), the European Council referred, among the
     consequences of the illicit spread of small arms and light weapons, in particular to those relating to the
     development of the countries concerned, that is, the weakening of State structures, displacement of persons,
     collapse of health and education services, declining economic activity, reduced government resources, the spread
     of pandemics, damage to the social fabric and, in the long term, the reduction or withholding of development aid,
     while adding that those consequences constitute, for sub-Saharan Africa, the region principally affected, a key
     factor in limiting development.


70   Equally, the Joint Statement by the Council and the representatives of the governments of the Member States
     meeting within the Council, the European Parliament and the Commission on European Union development
     policy, mentioned in paragraph 66 of the present judgment, refers, in paragraph 37, to insecurity and violent

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     conflict as amongst the biggest obstacles to the achievement of the Millennium Development Goals, agreed by
     the United Nations, while mentioning, in that context, the fight against the uncontrolled proliferation of small
     arms and light weapons.


71   Nevertheless, a concrete measure aiming to combat the proliferation of small arms and light weapons may be
     adopted by the Community under its development cooperation policy only if that measure, by virtue both of its
     aim and its content, falls within the scope of the competences conferred by the EC Treaty on the Community in
     that field.


72   That is not the case if such a measure, even if it contributes to the economic and social development of the
     developing country, has as its main purpose the implementation of the CFSP.


73   If examination of a measure reveals that it pursues a twofold aim or that it has a twofold component and if one of
     those is identifiable as the main one, whereas the other is merely incidental, the measure must be based on a
     single legal basis, namely that required by the main aim or component (see, to that effect, Case C-211/01
     Commission v Council [2003] ECR I-8913, paragraph 39; Case C-338/01 Commission v Council [2004] ECR I-
     4829, paragraph 55, and Case C-94/03 Commission v Council [2006] ECR I-1, paragraph 35; and see, with
     regard to the application of Article 47 EU, Case C-176/03 Commission v Council, paragraphs 51 to 53, and Case
     C-440/05 Commission v Council, paragraphs 71 to 73).


74   It follows that measures combating the proliferation of small arms and light weapons do not fall within the
     competences conferred on the Community in the field of development cooperation policy if, on account of their
     main aim or component, they are part of the pursuit of the CFSP.


75   With regard to a measure which simultaneously pursues a number of objectives or which has several
     components, without one being incidental to the other, the Court has held, where various legal bases of the EC
     Treaty are therefore applicable, that such a measure will have to be founded, exceptionally, on the various
     corresponding legal bases (see, to that effect, Case C-211/03 Commission v Council, paragraph 40, and Case C-
     94/03 Commission v Council, paragraph 36).


76   However, under Article 47 EU, such a solution is impossible with regard to a measure which pursues a number
     of objectives or which has several components falling, respectively, within development cooperation policy, as
     conferred by the EC Treaty on the Community, and within the CFSP, and where neither one of those
     components is incidental to the other.


77   Since Article 47 EU precludes the Union from adopting, on the basis of the EU Treaty, a measure which could
     properly be adopted on the basis of the EC Treaty, the Union cannot have recourse to a legal basis falling within
     the CFSP in order to adopt provisions which also fall within a competence conferred by the EC Treaty on the
     Community.


78   In the light of the foregoing it must be established whether, as the Commission claims, the contested decision,
     which implements the contested joint action with a view to a European Union contribution to ECOWAS in the
     framework of the Moratorium on Small Arms and Light Weapons, falls, by virtue both of its aim and its content,
     within the policy on development cooperation conferred by the EC Treaty on the Community.


     Aim of the contested decision


79   With regard to the aim of the contested decision, it follows both from its title, from the legal basis relied upon
     and from recitals 2 to 4 in its preamble that, by making a financial and technical contribution to an ECOWAS
     initiative concerning the fight against the proliferation of small arms and light weapons, the decision aims to
     implement the contested joint action which the Council adopted on the basis of Title V of the EU Treaty.

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80   To the extent that the contested decision implements a measure falling within the CFSP, it is necessary at the
     outset to examine whether, because of that fact, the decision must be understood as aiming to achieve the
     objectives of the CFSP rather than those of Community development cooperation policy.


81   In that regard, and without it being necessary, at this stage, to examine the Commission‟s plea as to the alleged
     illegality of the contested joint action, it should be pointed out that the joint action is presented, in its preamble,
     as a measure intended to replace Joint Action 1999/34, in order to include, where appropriate, ammunition for
     small arms and light weapons in the Union joint action.


82   Article 1(1) of the contested joint action sets out as objectives the combating of the destabilising accumulation
     and spread of small arms, the contribution to the reduction of existing accumulations of these weapons and their
     ammunition to levels consistent with countries‟ legitimate security needs and assistance in solving the problems
     caused by such accumulations.


83   Concrete expression is given to these objectives, first, in Title I of the contested joint action, which lists certain
     principles and measures around which the Union is aiming to build a consensus in order to combat the
     destabilising accumulation and spread of small arms and light weapons and, second, in Title II of the joint action,
     which deals with the financial and technical assistance provided by the Union to projects which contribute to
     those principles and measures.


84   However, it cannot be inferred from the contested joint action that the implementation of the campaign against
     the proliferation of small arms and light weapons which it sets out will necessarily take the form of measures
     which pursue CFSP objectives, such as the preservation of peace and the strengthening of international security,
     rather than objectives of Community development policy.


85   In that regard, it should be observed, first, that Joint Action 1999/34, of which the contested joint action is the
     successor and whose objectives, principles listed and type of contribution envisaged are fully reproduced by it,
     stated clearly, in the first recital to its preamble, that the excessive and uncontrolled accumulation and spread of
     small arms and light weapons poses a threat to peace and security and reduces the prospects for sustainable
     development in many regions of the world, thereby from the outset placing the fight against that phenomenon
     within a dual perspective, that is preservation of peace and international security, on the one hand, and
     safeguarding development perspectives, on the other.


86   Second, it follows from the provisions of Title II of the contested joint action – which, while reproducing the
     provisions of Joint Action 1999/34, specify the nature of the contribution the Union will make and how its tasks
     will be divided between the Council and the Commission – that the objectives and the programme of action laid
     down by it can be implemented not only by the Union, acting within the CFSP context, but equally by the
     Community, on the basis of its own competences.


87   Indeed, Article 7 of the contested joint action points out that it is for the Council to decide on the allocation of
     the financial and technical assistance referred to in Article 6 of the joint action, but explains, in Article 7(2), that
     the Council is to decide „without prejudice to … operation of the Community‟, on a case-by-case basis, on the
     principle, arrangements and financing of the projects implementing the joint action. The fact that the contested
     joint action can be implemented both by the Community and the Union is confirmed in Article 8 thereof, in
     which the Council notes that the Commission intends to direct its action towards achieving the objectives and the
     priorities of the joint action, where appropriate by pertinent Community measures, and in Article 9 of the joint
     action, which places in the hands of the Council and the Commission the responsibility for ensuring the
     consistency of the Union‟s activities in the field of small arms, „in particular with regard to its development
     policies‟, and for ensuring implementation of their respective action, each in accordance with its powers. The
     need for consistency of the Union‟s activities in the field of small arms and light weapons is also stated, with an
     identical reference to „development policies [of the Union]‟ in Article 4(2) of the contested decision.



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88   The conclusion that the objectives of the contested joint action can be implemented both by the Union, under
     Title V of the EU Treaty, and by the Community, under its development cooperation policy, corresponds, in the
     end, to the approach advocated by the Union‟s institutions and by the European Council in numerous documents.


89   First, the Council itself, in the resolution on small arms referred to in paragraph 69 of this judgment, while
     alluding to the action undertaken by the Union in the CFSP framework and recalling the need to ensure
     coherence of Union activities in the field of small arms, inter alia in relation to the CFSP, nevertheless
     recommends, in the same document, that, in the field of development cooperation, the Community and the
     Member States devote particular attention to the following measures: „inclusion of the small arms issue in the
     political dialogue with ACP and other development cooperation partner countries of the Union; development
     cooperation support for countries seeking assistance in the control or elimination of surplus small arms …;
     considering support, where necessary, to strengthen appropriate government institutions and legislation to better
     control small arms‟, while adding, concerning the last point, that „[t]he first interventions could be focused on
     Southern … and on West Africa (ECOWAS), where significant progress has been made and frameworks for
     combating small arms proliferation have been developed and agreed‟.


90   Second, in the European Union strategy to combat illicit accumulation and trafficking of small arms and light
     weapons, referred to in paragraph 69 of this judgment, the European Council mentions, among the means at the
     disposal of the Union, the Community and the Member States to react to the threat of the illicit spread of those
     weapons, in particular, apart from civilian and military instruments for managing crises and other diplomatic
     tools, partnership and cooperation agreements with third countries and development and assistance programmes
     which fall within EC-ACP cooperation and include a chapter on small arms and light weapons and their
     ammunition. Having indicated, in paragraph 15, that, according to the European Council, the challenge for a
     Union strategy on small arms and light weapons is to respond to that threat and to ensure that its security policy
     and its development policy are consistent, the document mentions, as the final element of the action plan
     introduced in order to respond to the accumulation of such weapons, the need to „[e]nsure consistency and
     complementarity between Council decisions in the CFSP framework and actions implemented by the
     Commission in the field of development aid in order to promote a consistent approach for all [Union] activities
     in the … area [of small arms and light weapons]‟.


91   Third, paragraph 37 of the joint statement of the Council and the representatives of the governments of the
     Member States meeting within the Council, the European Parliament and the Commission on European Union
     Development Policy, referred to in paragraph 66 of this judgment, announces concrete steps to limit the
     uncontrolled proliferation of small arms and light weapons which will be taken, in line with the European
     strategy against the accumulation and the illicit traffic of such weapons and their ammunition, by „[t]he EU,
     within the respective competences of the Community and the Member States‟.


92   Therefore, since the measure falling within the CFSP which the contested decision is intended to implement does
     not exclude the possibility that its objectives can be achieved by measures adopted by the Community on the
     basis of its competences in the field of development cooperation, it is necessary to examine whether the
     contested decision, as such, must be regarded as a measure which pursues objectives falling within Community
     development cooperation policy.


93   In that regard, recital 1 in the preamble to the contested decision states that the excessive and uncontrolled
     accumulation and spread of small arms and light weapons not only poses a threat to peace and security, but also
     reduces the prospects for sustainable development, particularly in West Africa.


94   According to recital 2 in its preamble, the contested decision is intended to implement the contested joint action
     by which the Union envisages, in particular by promoting confidence-building measures, the pursuit of the
     objectives set out in Article 1 of that joint action, that is, the combating of the destabilising accumulation and
     spread of small arms and light weapons and the reduction of existing accumulations of these weapons.


95   Contrary to what is submitted by the Comm ission and the Parliament, it cannot be denied that the contested
     decision, to the extent that it aims to prevent further accumulation of small arms and light weapons in West
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      Africa capable of destabilising that region, forms part of a general perspective of preserving peace and
      strengthening international security.


96    None the less, it cannot be inferred from the contested decision that in comparison with its objectives of
      preserving peace and strengthening international security its concern to eliminate or reduce obstacles to the
      development of the countries concerned is purely incidental.


97    As confirmed by recitals 3 and 4 in the preamble of the decision, the financial and technical contribution which
      the Union intends to make is designed to help consolidate the initiative taken in the field of small arms and light
      weapons by ECOWAS.


98    The contested decision therefore has the specific goal of strengthening the capacities of a group of African
      developing countries to combat a phenomenon which, according to recital 1 in the preamble to the decision,
      constitutes an obstacle to the sustainable development of those countries.


99    It follows that the contested decision pursues a number of objectives, falling within the CFSP and development
      cooperation policy respectively, without one of those objectives being incidental to the other.


      Content of the contested decision


100   The conclusion drawn in the preceding paragraphs from the examination of the objective of the contested
      decision is not invalidated by the analysis of its content.


101   Article 1(2) of the contested decision provides for a financial contribution and technical assistance to set up a
      Light Weapons Unit within the ECOWAS Technical Secretariat and to convert into a convention the existing
      moratorium between the member states of that organisation concerning small arms and light weapons. To that
      end, Article 4(1) of the contested decision provides for a reference amount of EUR 515 000.


102   Under Article 3 of the contested decision, the financial implementation of that decision is entrusted to the
      Commission and, following conclusion by it of a financing agreement with ECOWAS, is to take the form of a
      grant which, amongst other things, is to cover, over a period of one year, the salaries, travel expenses, supplies
      and equipment necessary for setting up the Light Weapons Unit within the ECOWAS Technical Secretariat and
      for converting the abovementioned moratorium into a convention.


103   With regard to the technical assistance which must be afforded by the Union, the project which is detailed in the
      annex to the contested decision indicates that it involves the putting in place of experts responsible for carrying
      out the studies necessary to draw up a draft convention.


104   As pointed out by the Advocate General in point 211 of his Opinion, it is only in the light of the aims that they
      pursue that a financial contribution or technical assistance can be regarded as falling within the scope of the
      CFSP or of Community development cooperation policy.


105   While there may be some measures, such as the grant of political support for a moratorium or even the collection
      and destruction of weapons, which fall rather within action to preserve peace and strengthen international
      security or to promote international cooperation, being CFSP objectives stated in Article 11(1) EU, the decision
      to make funds available and to give technical assistance to a group of developing countries in order to draft a
      convention is capable of falling both under development cooperation policy and the CFSP.


106   The fact that the contested joint action was implemented by other decisions adopted under Title V of the EU

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      Treaty, the legality of which the Commission has not challenged, cannot determine the outcome of the present
      case. For, according to settled case-law, the legal basis for an act must be determined having regard to its own
      aim and content and not to the legal basis used for the adoption of other Union measures which might, in certain
      cases, display similar characteristics (see, to that effect, Case C-94/03 Commission v Council, paragraph 50).


107   Moreover, as pointed out in paragraph 87 of this judgment, the contested joint action which the contested
      decision aims to implement does not itself exclude the possibility that the objective of the campaign against the
      proliferation of small arms and light weapons can be achieved by Community measures, when it refers, in
      Articles 8 and 9, to the Commission‟s intention to direct its action towards achieving that objective, where
      appropriate by pertinent Community measures, and to the obligation of the Council and the Commission to
      ensure the consistency of the Union‟s activities in the field of small arms, in particular with regard to its
      development policies, and to ensure implementation of their respective action, each in accordance with its
      powers.


108   It follows from the foregoing that, taking account of its aim and its content, the contested decision contains two
      components, neither of which can be considered to be incidental to the other, one falling within Community
      development cooperation policy and the other within the CFSP.


109   Having regard to the reasoning contained in paragraphs 76 and 77 of this judgment, it must be concluded that the
      Council has infringed Article 47 EU by adopting the contested decision on the basis of Title V of the EU Treaty,
      even though it also falls within development cooperation policy.


110   The contested decision must therefore be annulled.


111   As the decision must be annulled because of its own defects, it is not necessary to examine the plea as to the
      alleged illegality of the contested joint action.


      …




      Case 39
      Judgment of the Court (Grand Chamber) of 3 September 2008. Yassin Abdullah Kadi
      and Al Barakaat International Foundation v Council of the European Union and
      Commission of the European Communities. Common foreign and security policy
      (CFSP) - Restrictive measures taken against persons and entities associated with Usama
      bin Laden, the Al-Qaeda network and the Taliban - United Nations - Security Council -
      Resolutions adopted under Chapter VII of the Charter of the United Nations -
      Implementation in the Community - Common Position 2002/402/CFSP - Regulation
      (EC) No 881/2002 Measures against persons and entities included in a list drawn up by a
      body of the United Nations - Freezing of funds and economic resources - Committee of
      the Security Council created by paragraph 6 of Resolution 1267 (1999) of the Security
      Council (Sanctions Committee) - Inclusion of those persons and entities in Annex I to
      Regulation (EC) No 881/2002 - Actions for annulment - Competence of the Community -
      Joint legal basis of Articles 60 EC, 301 EC and 308 EC - Fundamental rights - Right to
      respect for property, right to be heard and right to effective judicial review. Joined cases
      C-402/05 P and C-415/05 P.


      In Joined Cases C-402/05 P and C-415/05 P

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      ...


      THE COURT (Grand Chamber)


      ...


      gives the following


      Judgment


      ...


      Findings of the Court


158   With regard, first, to the challenges made by Al Barakaat to paragraphs 112, 113, 115 and 116 of Yusuf and Al
      Barakaat, it must be held that those paragraphs relate to the legal basis of Regulation No 467/2001.


159   Now, that regulation has been repealed and replaced by the contested regulation. Moreover, as indicated by the
      Court of First Instance in Yusuf and Al Barakaat, paragraph 77, without challenge from Al Barakaat in its
      appeal, the sole object of the action before the Court of First Instance, after Al Barakaat had adjusted its claims
      for relief and pleas in law to the contested regulation, was annulment of that latter regulation, in so far as it
      concerns that applicant.


160   In those circumstances, those claims cannot in any case lead to the setting aside of that judgment and must
      therefore be regarded as immaterial.


161   In any event, the considerations of Yusuf and Al Barakaat to which those claims relate, treated by the Court of
      First Instance as premisses of its reasoning with regard to the legal basis of the contested regulation, are
      reproduced in later paragraphs of that judgment and in Kadi and will be examined during the assessment of the
      grounds of appeal challenging those paragraphs.


162   There is, therefore, no reason to examine those heads of claim in so far as they relate to the legal basis of
      Regulation No 467/2001.


163   It is appropriate to rule in the second place on the merits of the principal argument put forward by the
      Commission, that Articles 60 EC and 301 EC, in the light of their wording and context, are in themselves an
      appropriate and sufficient legal base for the contested regulation.


164   That argument is directed against paragraphs 92 to 97 of Kadi and paragraphs 128 to 133 of Yusuf and Al
      Barakaat, in which the Court of First Instance ruled to the contrary.


165   That argument must be rejected.


166   The Court of First Instance in fact rightly ruled that, having regard to the wording of Articles 60 EC and 301 EC,

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      especially to the expressions „as regards the third countries concerned‟ and „with one or more third countries‟
      used there, those provisions concern the adoption of measures vis-à-vis third countries, since that concept may
      include the rulers of such a country and also individuals and entities associated with or controlled, directly or
      indirectly, by them.


167   The restrictive measures provided for by Resolution 1390 (2002), which the contested regulation was intended to
      put into effect, are measures notable for the absence of any link to the governing regime of a third country.
      Following the collapse of the Taliban regime, those measures were aimed directly at Usama bin Laden, the Al-
      Qaeda network and the persons and entities associated with them, as they appear in the summary list. They do
      not, therefore, as such, fall within the ambit of Articles 60 EC and 301 EC.


168   To accept the interpretation of Articles 60 EC and 301 EC proposed by the Commission, that it is enough for the
      restrictive measures at issue to be directed at persons or entities present in a third country or associated with one
      in some other way, would give those provisions an excessively broad meaning and would fail to take any
      account at all of the requirement, imposed by their very wording, that the measures decided on the basis of those
      provisions must be taken against third countries.


169   In addition, the essential purpose and object of the contested regulation is to combat international terrorism, in
      particular to cut it off from its financial resources by freezing the economic funds and resources of persons or
      entities suspected of involvement in activities linked to terrorism, and not to affect economic relations between
      the Community and each of the third countries where those persons or entities are, always supposing, moreover,
      that their place of residence is known.


170   The restrictive measures provided for by Resolution 1390 (2002) and put into effect by the contested regulation
      cannot be considered to be measures intended to reduce economic relations with each of those third countries, or,
      indeed, with certain Member States of the Community, in which are to be found persons or entities whose names
      are included in the list reproduced in Annex I to that regulation.


171   Nor can the argument supported by the Commission be justified by the expression „in part‟ appearing in Article
      301 EC.


172   In point of fact, that expression refers to the possible limitation of the scope ratione materiae or personae of the
      measures that might, by definition, be taken under that provision. It has, however, no effect on the necessary
      status of the persons to whom those measures might be addressed and cannot, therefore, warrant extending the
      application of the measures to such persons who are in no way linked to the governing regime of a third country
      and who, by the same token, do not fall within the ambit of that provision.


173   The Commission‟s argument relating to the similarity of the words used in Article 41 of the Charter of the
      United Nations and in Article 301 EC, from which it deduces that the latter provision constitutes a platform for
      the implementation by the Community of all measures adopted by the Security Council that call for action by the
      Community, cannot succeed either.


174   Article 301 EC specifically refers to the interruption of economic relations „with one or more third countries‟,
      whereas such an expression is not used in Article 41 of the Charter of the United Nations.


175   What is more, in other respects the ambit of Article 41 of the Charter of the United Nations does not coincide
      with that of Article 301 EC, for the first provision enables the adoption of a series of measures other than those
      referred to by the second, including measures of a fundamentally different nature from those intended to
      interrupt or reduce economic relations with third countries, such as the breaking off of diplomatic relations.


176   The Commission‟s argument that Article 301 EC builds a procedural bridge between the Community and the

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      European Union, so that it must be interpreted as broadly as the relevant Community competences, including
      those relating to the common commercial policy and the free movement of capital, must also be rejected.


177   That interpretation of Article 301 EC threatens to reduce the ambit and, therefore, the practical effect of that
      provision, for, having regard to its actual wording, the subject of that provision is the adoption of potentially very
      diverse measures affecting economic relations with third countries which, therefore, by necessary inference,
      must not be limited to spheres falling within other material powers of the Community such as those in the
      domain of the common commercial policy or of the free movement of capital.


178   Moreover, that interpretation finds no support in the wording of Article 301 EC, which confers a material
      competence on the Community the scope of which is, in theory, autonomous in relation to that of other
      Community competences.


179   It is necessary to examine in the third place the alternative argument raised by the Commission that, if it was not
      possible for the contested regulation to be adopted on the sole legal basis of Articles 60 EC and 301 EC, recourse
      to Article 308 EC would not be justified, for that latter provision is, in particular, applicable only if no other
      provision of the EC Treaty confers the powers necessary to adopt the measure concerned. The restrictive
      measures imposed by the contested regulation fall within the Community‟s powers of action, in particular its
      powers in the sphere of the common commercial policy and free movement of capital.


180   In this connection, the Court of First Instance held, in paragraphs 100 of Kadi and 136 of Yusuf and Al Barakaat,
      that no specific provision of the EC Treaty provides for the adoption of measures of the kind laid down in the
      contested regulation relating to the campaign against international terrorism and, more particularly, to the
      imposition of economic and financial sanctions, such as the freezing of funds, in respect of individuals and
      entities suspected of contributing to the funding of international terrorism, where no connection whatsoever has
      been established with the governing regime of a third State, with the result that the first condition for the
      applicability of Article 301 EC was satisfied in the case in point.


181   That conclusion must be upheld.


182   According to the Court‟s settled case-law, the choice of legal basis for a Community measure must rest on
      objective factors which are amenable to judicial review, including, in particular, the aim and the content of the
      measure (see, inter alia, Case C-440/05 Commission v Council [2007] ECR I-9097, paragraph 61 and the case-
      law there cited).


183   A Community measure falls within the competence in the field of the common commercial policy provided for
      in Article 133 EC only if it relates specifically to international trade in that it is essentially intended to promote,
      facilitate or govern trade and has direct and immediate effects on trade in the products concerned (see, inter alia,
      Case C-347/03 Regione autonoma Friuli-Venezia Giulia andERSA [2005] ECR I-3785, paragraph 75 and the
      case-law there cited).


184   With regard to its essential purpose and object, as explained in paragraph 169 above, the contested regulation is
      intended to combat international terrorism and it provides to that end a series of restrictive measures of an
      economic and financial kind, such as freezing the economic funds and resources of persons or entities suspected
      of contributing to the funding of international terrorism.


185   Having regard to that purpose and object, it cannot be considered that the regulation relates specifically to
      international trade in that it is essentially intended to promote, facilitate or govern trade.


186   Furthermore, although that regulation may indeed produce effects on international trade, it is plainly not its
      purpose to give rise to direct and immediate effects of that nature.

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187   The contested regulation could not, therefore, be based on the powers of the Community in the sphere of the
      common commercial policy.


188   On the other hand, according to the Commission, in so far as the contested regulation prohibits the transfer of
      economic resources to individuals in third countries, it falls within the ambit of the provisions of the EC Treaty
      on free movement of capital and payments.


189   That assertion too must be rejected.


190   With regard, first of all, to Article 57(2) EC, the restrictive measures imposed by the contested regulation do not
      fall within one of the categories of measures listed in that provision.


191   Nor can Article 60(1) EC furnish the basis for the contested regulation, for its ambit is determined by that of
      Article 301 EC.


192   As has earlier been held in paragraph 167 above, that latter provision is not concerned with the adoption of
      restrictive measures such as those at issue, which are notable for the absence of any link to the governing regime
      of a third country.


193   As regards, finally, Article 60(2) EC, this provision does not include any Community competence to that end,
      given that it does no more than enable the Member States to take, on certain exceptional grounds, unilateral
      measures against a third country with regard to capital movements and payments, subject to the power of the
      Council to require a Member State to amend or abolish such measures.


194   In the fourth place it is appropriate to examine the claims directed by Mr Kadi, in the second and third parts of
      his first ground of appeal, against paragraphs 122 to 135 of Kadi, by Al Barakaat against paragraphs 158 to 170
      of Yusuf and Al Barakaat, and the Commission‟s criticisms of those same paragraphs of the judgments under
      appeal.


195   In those paragraphs, the Court of First Instance ruled that it was possible for the contested regulation to be
      adopted on the joint basis of Articles 60 EC, 301 EC and 308 EC, on the ground that, by reason of the bridge
      explicitly established between Community actions imposing economic sanctions under Articles 60 EC and 301
      EC, on the one hand, and the objectives of the EU Treaty in the sphere of external relations, on the other,
      recourse to Article 308 EC in the particular context envisaged by the two former articles is justified in order to
      attain such objectives, in this instance the objective of the CFSP pursued by the contested regulation, that is to
      say, the campaign against international terrorism and its funding.


196   In this regard it must be held that the judgments under appeal are indeed vitiated by an error of law.


197   In point of fact, while it is correct to consider, as did the Court of First Instance, that a bridge has been
      constructed between the actions of the Community involving economic measures under Articles 60 EC and 301
      EC and the objectives of the EU Treaty in the sphere of external relations, including the CFSP, neither the
      wording of the provisions of the EC Treaty nor the structure of the latter provides any foundation for the view
      that that bridge extends to other provisions of the EC Treaty, in particular to Article 308 EC.


198   With specific regard to Article 308 EC, if the position of the Court of First Instance were to be accepted, that
      provision would allow, in the special context of Articles 60 EC and 301 EC, the adoption of Community
      measures concerning not one of the objectives of the Community but one of the objectives under the EU Treaty
      in the sphere of external relations, including the CFSP.
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                                                                                                                            9
199   The inevitable conclusion is that such a view runs counter to the very wording of Article 308 EC.


200   Recourse to that provision demands that the action envisaged should, on the one hand, relate to the „operation of
      the common market‟ and, on the other, be intended to attain „one of the objectives of the Community‟.


201   That latter concept, having regard to its clear and precise wording, cannot on any view be regarded as including
      the objectives of the CFSP.


202   Furthermore, the coexistence of the Union and the Community as integrated but separate legal orders, and the
      constitutional architecture of the pillars, as intended by the framers of the Treaties now in force, referred to by
      the Court of First Instance in paragraphs 120 of Kadi and 156 of Yusuf and Al Barakaat, constitute
      considerations of an institutional kind militating against any extension of the bridge to articles of the EC Treaty
      other than those with which it explicitly creates a link.


203   In addition, Article 308 EC, being an integral part of an institutional system based on the principle of conferred
      powers, cannot serve as a basis for widening the scope of Community powers beyond the general framework
      created by the provisions of the EC Treaty as a whole and, in particular, by those defining the tasks and the
      activities of the Community (Opinion 2/94, paragraph 30).


204   Likewise, Article 3 EU, referred to by the Court of First Instance in paragraphs 126 to 128 of Kadi and 162 to
      164 of Yusuf and Al Barakaat, in particular its second paragraph, cannot supply a base for any widening of
      Community powers beyond the objects of the Community.


205   The effect of that error in law on the validity of the judgments under appeal will be considered later, after the
      evaluation of the other claims raised against the explanations given in those judgments concerning the possibility
      of including Article 308 EC in the legal basis of the contested regulation jointly with Articles 60 EC and 301 EC.


206   Those other claims may be divided into two categories.


207   The first category includes, in particular, the first part of Mr Kadi‟s first ground of appeal, in which he argues
      that the Court of First Instance erred in law when it accepted that it was possible for Article 308 EC to
      supplement the legal basis of the contested regulation formed by Articles 60 EC and 301 EC. In his submission,
      those two latter articles cannot form the legal basis, even in part, of the contested regulation because, according
      to the interpretation given by the Court of First Instance itself, measures directed against persons or entities in no
      way linked to the governing regime of a third country - the only persons to whom the contested regulation is
      addressed - do not fall within the ambit of those articles.


208   That criticism may be compared with that made by the Commission, to the effect that, if it were to be held that
      recourse to Article 308 EC could be allowed, it would have to be as the sole legal basis, and not jointly with
      Articles 60 EC and 301 EC.


209   The second category includes the Commission‟s criticisms of the Court of First Instance‟s decision, in
      paragraphs 116 and 121 of Kadi and 152 and 157 of Yusuf and Al Barakaat, that, for the purposes of the
      application of Article 308 EC, the objective of the contested regulation, namely, according to the Court of First
      Instance, the fight against international terrorism, and more particularly the imposition of economic and financial
      sanctions, such as the freezing of funds, in respect of individuals and entities suspected of contributing to the
      funding of terrorism, cannot be made to refer to one of the objects which the EC Treaty entrusts to the
      Community.


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210   The Commission maintains in this respect that the implementing measures imposed by the contested regulation
      in the area of economic and financial sanctions fall, by their very nature, within the scope of the objects of the
      Community, that is to say, first, the common commercial policy and, second, the free movement of capital.


211   With regard to that first category of claims, it is to be borne in mind that Article 308 EC is designed to fill the
      gap where no specific provisions of the Treaty confer on the Community institutions express or implied powers
      to act, if such powers appear none the less to be necessary to enable the Community to carry out its functions
      with a view to attaining one of the objectives laid down by the Treaty (Opinion 2/94, paragraph 29).


212   The Court of First Instance correctly held that Article 308 EC could be included in the legal basis of the
      contested regulation, jointly with Articles 60 EC and 301 EC.


213   The contested regulation, inasmuch as it imposes restrictive measures of an economic and financial nature,
      plainly falls within the ambit ratione materiae of Articles 60 EC and 301 EC.


214   To that extent, the inclusion of those articles in the legal basis of the contested regulation was therefore justified.


215   Furthermore, those provisions are part of the extension of a practice based, before the introduction of Articles 60
      EC and 301 EC by the Maastricht Treaty, on Article 113 of the EC Treaty (now, after amendment, Article 133
      EC) (see, to that effect, Case C-70/94 Werner [1995] ECR I-3189, paragraphs 8 to 10, and Case C-124/95
      Centro-Com [1997] ECR I-81, paragraphs 28 and 29), which consisted of entrusting to the Community the
      implementation of actions decided on in the context of European political cooperation and involving the
      imposition of restrictive measures of an economic nature in respect of third countries.


216   Since Articles 60 EC and 301 EC do not, however, provide for any express or implied powers of action to
      impose such measures on addressees in no way linked to the governing regime of a third country such as those to
      whom the contested regulation applies, that lack of power, attributable to the limited ambit ratione materiae of
      those provisions, could be made good by having recourse to Article 308 EC as a legal basis for that regulation in
      addition to the first two provisions providing a foundation for that measure from the point of view of its material
      scope, provided, however, that the other conditions to which the applicability of Article 308 EC is subject had
      been satisfied.


217   The claims in that first category must therefore be rejected as unfounded.


218   With regard to the other conditions for the applicability of Article 308 EC, the second category of claims will
      now be considered.


219   The Commission maintains that, although Common Position 2002/402, which the contested regulation is
      intended to put into effect, pursues the objective of the campaign against international terrorism, an objective
      covered by the CFSP, that regulation must be considered to lay down an implementing measure intended to
      impose economic and financial sanctions.


220   That objective falls within the scope of the objectives of the Community for the purpose of Article 308 EC, in
      particular those relating to the common commercial policy and the free movement of capital.


221   The United Kingdom takes the view that the purely instrumental specific objective of the contested regulation,
      namely, the introduction of coercive economic measures, must be distinguished from the underlying CFSP
      objective of maintaining international peace and security. That specific objective contributes to the implicit
      Community objective underlying Articles 60 EC and 301 EC, which is to supply effective means to put into
      effect, solely by coercive economic measures, acts adopted under the CFSP.

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222   The objective pursued by the contested regulation is immediately to prevent persons associated with Usama bin
      Laden, the Al-Qaeda network or the Taliban from having at their disposal any financial or economic resources,
      in order to impede the financing of terrorist activities (Case C-117/06 Möllendorf and Möllendorf-Niehuus
      [2007] ECR I-8361, paragraph 63).


223   Contrary to what the Court of First Instance held in paragraphs 116 of Kadi and 152 of Yusuf and Al Barakaat,
      that objective can be made to refer to one of the objects which the EC Treaty entrusts to the Community. The
      judgments under appeal are therefore vitiated by an error of law on this point also.


224   In this regard it may be recalled that, as explained in paragraph 203 above, Article 308 EC, being an integral part
      of an institutional system based on the principle of conferred powers, cannot serve as a basis for widening the
      scope of Community powers beyond the general framework created by the provisions of the EC Treaty as a
      whole.


225   The objective pursued by the contested regulation may be made to refer to one of the objectives of the
      Community for the purpose of Article 308 EC, with the result that the adoption of that regulation did not amount
      to disregard of the scope of Community powers stemming from the provisions of the EC Treaty as a whole.


226   Inasmuch as they provide for Community powers to impose restrictive measures of an economic nature in order
      to implement actions decided on under the CFSP, Articles 60 EC and 301 EC are the expression of an implicit
      underlying objective, namely, that of making it possible to adopt such measures through the efficient use of a
      Community instrument.


227   That objective may be regarded as constituting an objective of the Community for the purpose of Article 308 EC.


228   That interpretation is supported by Article 60(2) EC. Although the first paragraph thereof provides the power,
      within strict limits, for Member States to take unilateral measures against a third country with regard to capital
      movements and payments, that power may, as provided for by that paragraph, be exercised only so long as
      Community measures have not been taken pursuant to paragraph 1 of that article.


229   Implementing restrictive measures of an economic nature through the use of a Community instrument does not
      go beyond the general framework created by the provisions of the EC Treaty as a whole, because such measures
      by their very nature offer a link to the operation of the common market, that link constituting another condition
      for the application of Article 308 EC, as set out in paragraph 200 above.


230   If economic and financial measures such as those imposed by the contested regulation, consisting of the, in
      principle generalised, freezing of all the funds and other economic resources of the persons and entities
      concerned, were imposed unilaterally by every Member State, the multiplication of those national measures
      might well affect the operation of the common market. Such measures could have a particular effect on trade
      between Member States, especially with regard to the movement of capital and payments, and on the exercise by
      economic operators of their right of establishment. In addition, they could create distortions of competition,
      because any differences between the measures unilaterally taken by the Member States could operate to the
      advantage or disadvantage of the competitive position of certain economic operators although there were no
      economic reasons for that advantage or disadvantage.


231   The Council‟s statement in the fourth recital in the preamble to the contested regulation that Community
      legislation was necessary „notably with a view to avoiding distortion of competition‟ is shown, therefore, to be
      relevant in this connection.


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232   At this point it is appropriate to rule on the effect of the errors of law, recorded in paragraphs 196 and 223 above,
      on the validity of the judgments under appeal.


233   It is to be borne in mind that, according to case-law, if the grounds of a judgment of the Court of First Instance
      reveal an infringement of Community law but its operative part appears well founded on other legal grounds the
      appeal must be dismissed (see, in particular, Case C-167/04 P JCB Service v Commission [2006] ECR I-8935,
      paragraph 186 and the case-law cited).


234   Clearly the conclusion reached by the Court of First Instance in paragraphs 135 of Kadi and 158 of Yusuf and Al
      Barakaat concerning the legal basis of the contested regulation, that is to say, that the Council was competent to
      adopt that regulation on the joint basis of Articles 60 EC, 301 EC and 308 EC, appears justified on other legal
      grounds.


235   Although, as held in paragraphs 196 to 204 above, the inclusion of Article 308 EC in the legal basis of the
      contested regulation cannot be justified by the fact that that measure pursued an objective covered by the CFSP,
      that provision could nevertheless be held to provide a foundation for the regulation because, as shown in
      paragraphs 225 to 231 above, that regulation could legitimately be regarded as designed to attain an objective of
      the Community and as, furthermore, linked to the operation of the common market within the meaning of Article
      308 EC. Moreover, adding Article 308 EC to the legal basis of the contested regulation enabled the European
      Parliament to take part in the decision-making process relating to the measures at issue which are specifically
      aimed at individuals whereas, under Articles 60 EC and 301 EC, no role is provided for that institution.


236   Accordingly, the grounds of appeal directed against the judgments under appeal inasmuch as by the latter the
      Court of First Instance decided that Articles 60 EC, 301 EC and 308 EC constituted the legal basis of the
      contested regulation must be dismissed in their entirety as unfounded.


      Concerning the ground of appeal relating to infringement of Article 249 EC


      ...


      Findings of the Court


241   The Court of First Instance rightly held in paragraphs 184 to 188 of Yusuf and Al Barakaat that the fact that the
      persons and entities who are the subject of the restrictive measures imposed by the contested regulation are
      expressly named in Annex I thereto, so that they appear to be directly and individually concerned by it, within
      the meaning of the fourth paragraph of Article 230 EC, does not mean that that act is not of general application
      within the meaning of the second paragraph of Article 249 EC or that it is not to be classified as a regulation.


242   In fact, while it is true that the contested regulation imposes restrictive measures on the persons and entities
      whose names appear in the exhaustive list that constitutes Annex I thereto, a list which is, moreover, regularly
      amended by the removal or addition of names, so that it is kept in line with the summary list, the fact remains
      that the persons to whom it is addressed are determined in a general and abstract manner.


243   The contested regulation, like Resolution 1390 (2002) which it is designed to put into effect, lays down a
      prohibition, worded exceptionally broadly, of making available funds and economic resources to those persons
      or entities (see, to that effect, Möllendorf and Möllendorf-Niehuus, paragraphs 50 to 55).


244   As the Court of First Instance quite rightly held in paragraphs 186 and 188 of Yusuf and Al Barakaat, that
      prohibition is addressed to whoever might actually hold the funds or economic resources in question.


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245   That is how that prohibition falls to be applied in circumstances such as those of the case giving rise to the
      judgment in Möllendorf and Möllendorf-Niehuus, which concerned the question whether the contested
      regulation forbids the final registration of the transfer of ownership of real property in a land register following
      the conclusion of a contract of sale if one of the purchasers is a natural person appearing in the list in Annex I to
      the regulation.


246   In paragraph 60 of that judgment, the Court decided that a transaction such as that registration is prohibited
      under Article 2(3) of the contested regulation if, in consequence of that transaction, an economic resource would
      be made available to a person entered in that list, which would enable that person to obtain funds, goods or
      services.


247   In the light of the foregoing, Al Barakaat‟s ground of appeal relating to infringement of Article 249 EC must also
      be dismissed as unfounded.


      Concerning the grounds of appeal relating to infringement of certain fundamental rights


      ...


      Findings of the Court


278   Before addressing the substance of the question, the Court finds it necessary to reject the objection of
      inadmissibility raised by the United Kingdom in respect of the line of argument put forward by Mr Kadi in his
      reply, to the effect that the lawfulness of any legislation adopted by the Community institutions, including an act
      intended to give effect to a resolution of the Security Council remains subject, by virtue of Community law, to
      full review by the Court, regardless of its origin.


279   In point of fact, as Mr Kadi has stated, that is an additional argument supplementing the ground of appeal set out
      earlier, at least implicitly, in the notice of appeal and closely connected to that ground, to the effect that the
      Community, when giving effect to a resolution of the Security Council, was bound to ensure, as a condition of
      the lawfulness of the legislation it intended thus to introduce, that that legislation should observe the minimum
      criteria in the field of human rights (see, to that effect, inter alia, the order in Case C-430/00 P Dürbeck v
      Commission [2001] ECR I-8547, paragraph 17).


280   The Court will now consider the heads of claim in which the appellants complain that the Court of First Instance,
      in essence, held that it followed from the principles governing the relationship between the international legal
      order under the United Nations and the Community legal order that the contested regulation, since it is designed
      to give effect to a resolution adopted by the Security Council under Chapter VII of the Charter of the United
      Nations affording no latitude in that respect, could not be subject to judicial review of its internal lawfulness,
      save with regard to its compatibility with the norms of jus cogens, and therefore to that extent enjoyed immunity
      from jurisdiction.


281   In this connection it is to be borne in mind that the Community is based on the rule of law, inasmuch as neither
      its Member States nor its institutions can avoid review of the conformity of their acts with the basic
      constitutional charter, the EC Treaty, which established a complete system of legal remedies and procedures
      designed to enable the Court of Justice to review the legality of acts of the institutions (Case 294/83 Les Verts v
      Parliament [1986] ECR 1339, paragraph 23).


282   It is also to be recalled that an international agreement cannot affect the allocation of powers fixed by the
      Treaties or, consequently, the autonomy of the Community legal system, observance of which is ensured by the
      Court by virtue of the exclusive jurisdiction conferred on it by Article 220 EC, jurisdiction that the Court has,
      moreover, already held to form part of the very foundations of the Community (see, to that effect, Opinion 1/91

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      [1991] ECR I-6079, paragraphs 35 and 71, and Case C-459/03 Commission v Ireland [2006] ECR I-4635,
      paragraph 123 and case-law cited).


283   In addition, according to settled case-law, fundamental rights form an integral part of the general principles of
      law whose observance the Court ensures. For that purpose, the Court draws inspiration from the constitutional
      traditions common to the Member States and from the guidelines supplied by international instruments for the
      protection of human rights on which the Member States have collaborated or to which they are signatories. In
      that regard, the ECHR has special significance (see, inter alia, Case C-305/05 Ordre des barreaux francophones
      et germanophone and Others [2007] ECR I-5305, paragraph 29 and case-law cited).


284   It is also clear from the case-law that respect for human rights is a condition of the lawfulness of Community
      acts (Opinion 2/94, paragraph 34) and that measures incompatible with respect for human rights are not
      acceptable in the Community (Case C-112/00 Schmidberger [2003] ECR I-5659, paragraph 73 and case-law
      cited).


285   It follows from all those considerations that the obligations imposed by an international agreement cannot have
      the effect of prejudicing the constitutional principles of the EC Treaty, which include the principle that all
      Community acts must respect fundamental rights, that respect constituting a condition of their lawfulness which
      it is for the Court to review in the framework of the complete system of legal remedies established by the Treaty.


286   In this regard it must be emphasised that, in circumstances such as those of these cases, the review of lawfulness
      thus to be ensured by the Community judicature applies to the Community act intended to give effect to the
      international agreement at issue, and not to the latter as such.


287   With more particular regard to a Community act which, like the contested regulation, is intended to give effect to
      a resolution adopted by the Security Council under Chapter VII of the Charter of the United Nations, it is not,
      therefore, for the Community judicature, under the exclusive jurisdiction provided for by Article 220 EC, to
      review the lawfulness of such a resolution adopted by an international body, even if that review were to be
      limited to examination of the compatibility of that resolution with jus cogens.


288   However, any judgment given by the Community judicature deciding that a Community measure intended to
      give effect to such a resolution is contrary to a higher rule of law in the Community legal order would not entail
      any challenge to the primacy of that resolution in international law.


289   The Court has thus previously annulled a decision of the Council approving an international agreement after
      considering the internal lawfulness of the decision in the light of the agreement in question and finding a breach
      of a general principle of Community law, in that instance the general principle of non-discrimination (Case
      C-122/95 Germany v Council [1998] ECR I-973).


290   It must therefore be considered whether, as the Court of First Instance held, as a result of the principles
      governing the relationship between the international legal order under the United Nations and the Community
      legal order, any judicial review of the internal lawfulness of the contested regulation in the light of fundamental
      freedoms is in principle excluded, notwithstanding the fact that, as is clear from the decisions referred to in
      paragraphs 281 to 284 above, such review is a constitutional guarantee forming part of the very foundations of
      the Community.


291   In this respect it is first to be borne in mind that the European Community must respect international law in the
      exercise of its powers (Poulsen and Diva Navigation, paragraph 9, and Racke, paragraph 45), the Court having in
      addition stated, in the same paragraph of the first of those judgments, that a measure adopted by virtue of those
      powers must be interpreted, and its scope limited, in the light of the relevant rules of international law.



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292   Moreover, the Court has held that the powers of the Community provided for by Articles 177 EC to 181 EC in
      the sphere of cooperation and development must be exercised in observance of the undertakings given in the
      context of the United Nations and other international organisations (Case C-91/05 Commission v Council [2008]
      ECR I-0000, paragraph 65 and case-law cited).


293   Observance of the undertakings given in the context of the United Nations is required just as much in the sphere
      of the maintenance of international peace and security when the Community gives effect, by means of the
      adoption of Community measures taken on the basis of Articles 60 EC and 301 EC, to resolutions adopted by the
      Security Council under Chapter VII of the Charter of the United Nations.


294   In the exercise of that latter power it is necessary for the Community to attach special importance to the fact that,
      in accordance with Article 24 of the Charter of the United Nations, the adoption by the Security Council of
      resolutions under Chapter VII of the Charter constitutes the exercise of the primary responsibility with which
      that international body is invested for the maintenance of peace and security at the global level, a responsibility
      which, under Chapter VII, includes the power to determine what and who poses a threat to international peace
      and security and to take the measures necessary to maintain or restore them.


295   Next, it is to be noted that the powers provided for in Articles 60 EC and 301 EC may be exercised only in
      pursuance of the adoption of a common position or joint action by virtue of the provisions of the EC Treaty
      relating to the CFSP which provides for action by the Community.


296   Although, because of the adoption of such an act, the Community is bound to take, under the EC Treaty, the
      measures necessitated by that act, that obligation means, when the object is to implement a resolution of the
      Security Council adopted under Chapter VII of the Charter of the United Nations, that in drawing up those
      measures the Community is to take due account of the terms and objectives of the resolution concerned and of
      the relevant obligations under the Charter of the United Nations relating to such implementation.


297   Furthermore, the Court has previously held that, for the purposes of the interpretation of the contested regulation,
      account must also be taken of the wording and purpose of Resolution 1390 (2002) which that regulation,
      according to the fourth recital in the preamble thereto, is designed to implement (Möllendorf and Möllendorf-
      Niehuus, paragraph 54 and case-law cited).


298   It must however be noted that the Charter of the United Nations does not impose the choice of a particular model
      for the implementation of resolutions adopted by the Security Council under Chapter VII of the Charter, since
      they are to be given effect in accordance with the procedure applicable in that respect in the domestic legal order
      of each Member of the United Nations. The Charter of the United Nations leaves the Members of the United
      Nations a free choice among the various possible models for transposition of those resolutions into their
      domestic legal order.


299   It follows from all those considerations that it is not a consequence of the principles governing the international
      legal order under the United Nations that any judicial review of the internal lawfulness of the contested
      regulation in the light of fundamental freedoms is excluded by virtue of the fact that that measure is intended to
      give effect to a resolution of the Security Council adopted under Chapter VII of the Charter of the United
      Nations.


300   What is more, such immunity from jurisdiction for a Community measure like the contested regulation, as a
      corollary of the principle of the primacy at the level of international law of obligations under the Charter of the
      United Nations, especially those relating to the implementation of resolutions of the Security Council adopted
      under Chapter VII of the Charter, cannot find a basis in the EC Treaty.


301   Admittedly, the Court has previously recognised that Article 234 of the EC Treaty (now, after amendment,
      Article 307 EC) could, if the conditions for application have been satisfied, allow derogations even from primary

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      law, for example from Article 113 of the EC Treaty on the common commercial policy (see, to that effect,
      Centro-Com, paragraphs 56 to 61).


302   It is true also that Article 297 EC implicitly permits obstacles to the operation of the common market when they
      are caused by measures taken by a Member State to carry out the international obligations it has accepted for the
      purpose of maintaining international peace and security.


303   Those provisions cannot, however, be understood to authorise any derogation from the principles of liberty,
      democracy and respect for human rights and fundamental freedoms enshrined in Article 6(1) EU as a foundation
      of the Union.


304   Article 307 EC may in no circumstances permit any challenge to the principles that form part of the very
      foundations of the Community legal order, one of which is the protection of fundamental rights, including the
      review by the Community judicature of the lawfulness of Community measures as regards their consistency with
      those fundamental rights.


305   Nor can an immunity from jurisdiction for the contested regulation with regard to the review of its compatibility
      with fundamental rights, arising from the alleged absolute primacy of the resolutions of the Security Council to
      which that measure is designed to give effect, find any basis in the place that obligations under the Charter of the
      United Nations would occupy in the hierarchy of norms within the Community legal order if those obligations
      were to be classified in that hierarchy.


306   Article 300(7) EC provides that agreements concluded under the conditions set out in that article are to be
      binding on the institutions of the Community and on Member States.


307   Thus, by virtue of that provision, supposing it to be applicable to the Charter of the United Nations, the latter
      would have primacy over acts of secondary Community law (see, to that effect, Case C-308/06 Intertanko and
      Others [2008] ECR I-0000, paragraph 42 and case-law cited).


308   That primacy at the level of Community law would not, however, extend to primary law, in particular to the
      general principles of which fundamental rights form part.


309   That interpretation is supported by Article 300(6) EC, which provides that an international agreement may not
      enter into force if the Court has delivered an adverse opinion on its compatibility with the EC Treaty, unless the
      latter has previously been amended.


310   It has however been maintained before the Court, in particular at the hearing, that the Community judicature
      ought, like the European Court of Human Rights, which in several recent decisions has declined jurisdiction to
      review the compatibility of certain measures taken in the implementing of resolutions adopted by the Security
      Council under Chapter VII of the Charter of the United Nations, to refrain from reviewing the lawfulness of the
      contested regulation in the light of fundamental freedoms, because that regulation is also intended to give effect
      to such resolutions.


311   In this respect, it is to be found that, as the European Court of Human Rights itself has noted, there exists a
      fundamental difference between the nature of the measures concerned by those decisions, with regard to which
      that court declined jurisdiction to carry out a review of consistency with the ECHR, and the nature of other
      measures with regard to which its jurisdiction would seem to be unquestionable (see Behrami and Behrami v.
      France and Saramati v. France, Germany and Norway of 2 May 2007, not yet published in the Reports of
      Judgments and Decisions, §151).



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312   While, in certain cases before it the European Court of Human Rights has declined jurisdiction ratione personae,
      those cases involved actions directly attributable to the United Nations as an organisation of universal
      jurisdiction fulfilling its imperative collective security objective, in particular actions of a subsidiary organ of the
      UN created under Chapter VII of the Charter of the United Nations or actions falling within the exercise of
      powers lawfully delegated by the Security Council pursuant to that chapter, and not actions ascribable to the
      respondent States before that court, those actions not, moreover, having taken place in the territory of those
      States and not resulting from any decision of the authorities of those States.


313   By contrast, in paragraph 151 of Behrami and Behrami v. France and Saramati v. France, Germany and Norway,
      the European Court of Human Rights stated that in the case leading to its judgment in Bosphorus Hava Yolları
      Turizm ve Ticaret Anonim Şirketi v. Ireland, concerning a seizure measure carried out by the authorities of the
      respondent State on its territory following a decision by one of its ministers, it had recognised its competence,
      notably ratione personae, vis-à-vis the respondent State, despite the fact that the source of the contested measure
      was a Community regulation taken, in its turn, pursuant to a resolution of the Security Council.


314   In the instant case it must be declared that the contested regulation cannot be considered to be an act directly
      attributable to the United Nations as an action of one of its subsidiary organs created under Chapter VII of the
      Charter of the United Nations or an action falling within the exercise of powers lawfully delegated by the
      Security Council pursuant to that chapter.


315   In addition and in any event, the question of the Court‟s jurisdiction to rule on the lawfulness of the contested
      regulation has arisen in fundamentally different circumstances.


316   As noted above in paragraphs 281 to 284, the review by the Court of the validity of any Community measure in
      the light of fundamental rights must be considered to be the expression, in a community based on the rule of law,
      of a constitutional guarantee stemming from the EC Treaty as an autonomous legal system which is not to be
      prejudiced by an international agreement.


317   The question of the Court‟s jurisdiction arises in the context of the internal and autonomous legal order of the
      Community, within whose ambit the contested regulation falls and in which the Court has jurisdiction to review
      the validity of Community measures in the light of fundamental rights.


318   It has in addition been maintained that, having regard to the deference required of the Community institutions
      vis-à-vis the institutions of the United Nations, the Court must forgo the exercise of any review of the lawfulness
      of the contested regulation in the light of fundamental rights, even if such review were possible, given that, under
      the system of sanctions set up by the United Nations, having particular regard to the re-examination procedure
      which has recently been significantly improved by various resolutions of the Security Council, fundamental
      rights are adequately protected.


319   According to the Commission, so long as under that system of sanctions the individuals or entities concerned
      have an acceptable opportunity to be heard through a mechanism of administrative review forming part of the
      United Nations legal system, the Court must not intervene in any way whatsoever.


320   In this connection it may be observed, first of all, that if in fact, as a result of the Security Council‟s adoption of
      various resolutions, amendments have been made to the system of restrictive measures set up by the United
      Nations with regard both to entry in the summary list and to removal from it [see, in particular, Resolutions 1730
      (2006) of 19 December 2006, and 1735 (2006) of 22 December 2006], those amendments were made after the
      contested regulation had been adopted so that, in principle, they cannot be taken into consideration in these
      appeals.


321   In any event, the existence, within that United Nations system, of the re-examination procedure before the
      Sanctions Committee, even having regard to the amendments recently made to it, cannot give rise to generalised

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      immunity from jurisdiction within the internal legal order of the Community.


322   Indeed, such immunity, constituting a significant derogation from the scheme of judicial protection of
      fundamental rights laid down by the EC Treaty, appears unjustified, for clearly that re-examination procedure
      does not offer the guarantees of judicial protection.


323   In that regard, although it is now open to any person or entity to approach the Sanctions Committee directly,
      submitting a request to be removed from the summary list at what is called the „focal‟ point, the fact remains that
      the procedure before that Committee is still in essence diplomatic and intergovernmental, the persons or entities
      concerned having no real opportunity of asserting their rights and that committee taking its decisions by
      consensus, each of its members having a right of veto.


324   The Guidelines of the Sanctions Committee, as last amended on 12 February 2007, make it plain that an
      applicant submitting a request for removal from the list may in no way assert his rights himself during the
      procedure before the Sanctions Committee or be represented for that purpose, the Government of his State of
      residence or of citizenship alone having the right to submit observations on that request.


325   Moreover, those Guidelines do not require the Sanctions Committee to communicate to the applicant the reasons
      and evidence justifying his appearance in the summary list or to give him access, even restricted, to that
      information. Last, if that Committee rejects the request for removal from the list, it is under no obligation to give
      reasons.


326   It follows from the foregoing that the Community judicature must, in accordance with the powers conferred on it
      by the EC Treaty, ensure the review, in principle the full review, of the lawfulness of all Community acts in the
      light of the fundamental rights forming an integral part of the general principles of Community law, including
      review of Community measures which, like the contested regulation, are designed to give effect to the
      resolutions adopted by the Security Council under Chapter VII of the Charter of the United Nations.


327   The Court of First Instance erred in law, therefore, when it held, in paragraphs 212 to 231 of Kadi and 263 to 282
      of Yusuf and Al Barakaat, that it followed from the principles governing the relationship between the
      international legal order under the United Nations and the Community legal order that the contested regulation,
      since it is designed to give effect to a resolution adopted by the Security Council under Chapter VII of the
      Charter of the United Nations affording no latitude in that respect, must enjoy immunity from jurisdiction so far
      as concerns its internal lawfulness save with regard to its compatibility with the norms of jus cogens.


328   The appellants‟ grounds of appeal are therefore well founded on that point, with the result that the judgments
      under appeal must be set aside in this respect.


329   It follows that there is no longer any need to examine the heads of claim directed against that part of the
      judgments under appeal relating to review of the contested regulation in the light of the rules of international law
      falling within the ambit of jus cogens and that it is, therefore, no longer necessary to examine the United
      Kingdom‟s cross-appeal on this point either.


330   Furthermore, given that in the latter part of the judgments under appeal, relating to the specific fundamental
      rights invoked by the appellants, the Court of First Instance confined itself to examining the lawfulness of the
      contested regulation in the light of those rules alone, when it was its duty to carry out an examination, in
      principle a full examination, in the light of the fundamental rights forming part of the general principles of
      Community law, the latter part of those judgments must also be set aside.




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