JUDGMENT OF 21.3.1972 — CASE 82/71 PUBBLICO MINISTERO ITALIANO v SAIL
In Case 82/71 Reference to the Court of Justice under Article 177 of the EEC Treaty by the Pretore of the district of Bari for a preliminary ruling in the action pending before that court between
THE COURT composed of: R. Lecourt, President, J. Mertens de Wilmars and H. Kutscher, Presidents of Chambers, A. M. Donner, A. Trabucchi, R. Monaco and P. Pescatore (Rapporteur), Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts and procedure
II — Observations submitted to the Court
(a) As regards Article 37 of the EEC Treaty :
(b) As regards Regulations (EEC) Nos 804/68 and 2622/69:
(c) As regards Article 90 of the EEC Treaty:
(d) As regards Article 36 of the EEC Treaty :
(e) As regards the direct applicability of Article 37 of the EEC Treaty:
(f) In conclusion, the Commission suggests that the various questions be given the following answers :
Grounds of judgment
The jurisdiction of the Court
The substance of the case
Costs
I —. Facts and procedure
(a). Must Article 37 of the EEC Treaty be interpreted as meaning that national monopolies which cause discrimination between nationals of the Member States with regard to conditions under which goods are procured and marketed include the milk centres to which the Italian Republic guarantees exclusive rights of importation and sale of drinking milk in the areas reserved to them (zone di pertinenza)?
(b). Must Article 37 of the EEC Treaty be interpreted as meaning that the bodies through which a Member State supervizes or appreciably influences imports between the Member States include the milk centres existing in the Italian Republic?
(c). Does the expiry of the period laid down in Article 22(2) of Regulation (EEC) No 804/68 of 27 June 1968 and extended by Article 2 of Regulation (EEC) No 2622/69 of 21 December 1969 involve a prohibition on restrictions on the importation and sale of milk in view of Articles 5 and 37 of the Treaty?
(d). Do the provisions of Article 90(2) of the Treaty preclude the duty to abolish the restrictions in question?
(e). Have the provisions laid down in Article 37, particularly those in the first paragraph thereof, created direct and immediate rights in the Member States which individuals may assert before a court, as from 31 December 1969 (or at least as from 31 July 1970) (or does this direct effect follow from Article 22 of Regulation (EEC) No 804/68 and Article 2 of Regulation (EEC) No 2622/69)?
II —. Observations submitted to the Court
(a). In the present case, with regard to the EEC Treaty, it is essentially the interpretation of Article 37, considered in relation to the provisions concerning quantitative restrictions and measures having equivalent effect (Article 30 et seq.), dominant positions (Article 86) and public undertakings (Article 90), which is necessary for the solution of the dispute in the main proceedings.
(b). As for the interpretation of Community regulations in respect of the common organization of the markets in milk, the following should be noted:
(c). In conclusion the SAIL undertaking suggests that the Court should reply as follows to the questions which have been referred to it:
(a). At the end of March 1970 there expired the final period during which, according to Article 22(2) of Regulation (EEC) No 804/68 as amended by Article 2 of Regulation (EEC) No 2622/69, the Italian Republic could retain the measures governing the supply of drinking milk to certain areas. Since that period was not extended, the question arises whether the Italian system of milk centres should have ended because of Article 37 of the Treaty (to the extent to which the latter is applicable to them) and because of the expiry of the period laid down by the regulations of the Council.
(b). As for the situation resulting from the application of Regulation (EEC) No 1411/71, Article 9(2) of that regulation which authorizes the Italian Republic to maintain the provisions applying to the milk centres cannot be recognized as having retroactive effect so that there was no interval between the expiry of Regulation (EEC) No 2622/69 and the entry into force of Regulation (EEC) No 1411/71: on the one hand, such retroactive effect is not expressly provided for by the regulation and on the other the provisions of Regulation (EEC) No 1411/71 have not yet been implemented. Furthermore, the system of milk centres, since it was linked to considerations of the protection of public health, did not require for its continued existence the authorization of the Council. There is therefore no reason to confer retroactive effect on Article 9(2) of Regulation (EEC) No 1411/71.
(c). In any event it should be accepted, as regards the present case, that even if the system of Italian milk centres were abolished milk would not circulate freely in the Community. Difficulties concerning public health conditions and control would stand in its way since several Member States have very strict public health rules, difficulties regarding the determination of conditions of quality and sale and, lastly, difficulties presented by the price system, as several Member States practise a system of maximum prices for social reasons. The Commission of the Communities points out first of all that the Pretore di Bari appears wrongly to accept that any conflict between provisions of national law and provisions of Community law may be settled by applying the principle of the priority of the most recent provision: Community law must in any case take precedence over national provisions, even if they are adopted later, and national courts must always, because of the preeminence of Community law, set aside the application of a national provision which is contrary to directly applicable Community provisions.
(a). As regards Article 37 of the EEC Treaty :
(b). As regards Regulations (EEC) Nos 804/68 and 2622/69:
(c). As regards Article 90 of the EEC Treaty:
(d). As regards Article 36 of the EEC Treaty :
(e). As regards the direct applicability of Article 37 of the EEC Treaty:
(f). In conclusion, the Commission suggests that the various questions be given the following answers :
1. Article 37 of the EEC Treaty must be interpreted as meaning that national monopolies of a commercial character or the bodies through which a Member State supervises or appreciably influences trade between the Member States covers bodies
2. The exclusive right of sale may lead to discrimination between the nationals of the Member States regarding the conditions under which goods are procured and marketed if it is reserved to bodies which themselves have interests in the production, treatment or packaging of the product in question.
3. In the case mentioned in the second part of the last subparagraph of Article 22(2) of Regulation (EEC) No 804/68, the expiry of the period laid down by that article, as extended by Article 2 of Regulation (EEC) No 2622/69 included the duty to abolish measures contrary to the principles set out in Article 37(1).
4. Neither the provisions of Article 90(2) nor those of Article 36 of the EEC Treaty precluded that duty.
5. The provisions of Article 37(1) produced direct effects in the legal system of the Member States as regards their fundamental scope as from 1 January 1970. Nevertheless in the case which comes within the application of the second part of the last subparagraph of Article 22(2) of Regulation (EEC) No 804/68 those provisions did not produce a direct effect in the relationships between the State concerned and those subject to its jurisdiction, creating for the latter rights which the national courts must protect, until the expiry of the period laid down by Article 2 of Regulation (EEC) No 2622/69.
1. By an order of 3 July 1971, received at the Court on 20 September 1971, the Pretore di Bari requested the Court, in accordance with Article 177 of the EEC Treaty, to give a preliminary ruling on the interpretation of certain provisions of the EEC Treaty, especially Articles 37 and 90, and on the interpretation of Regulation (EEC) No 804/68 of the Council of 27 June 1968 (OJ English Special Edition 1968 (I), p. 176) on the common organization of the market in milk and milk products and Regulation (EEC) No 2622/69 of the Council of 21 December 1969 (OJ English Special Edition 1969 (II), p. 615) amending the abovementioned regulation. This interpretation is requested in relation to the rules of the market in drinking milk and, more especially, in relation to the legal position of the milk centres set up under Italian legislation.
2. Objections have been raised both by the Government of the Italian Republic and the Commission because the Court is asked to rule directly on the legal position of the milk centres in relation to the Treaty and thus to give a ruling upon the compatibility of that system with the provisions of Community law. The Government of the Italian Republic, in particular, considers that this manner of proceeding would lead to confusion between the legal procedures governed respectively by Articles 177 and 169 and that consequently the questions raised are inadmissible.
3. Although the Court has no jurisdiction within the framework of the application of Article 177 of the Treaty to decide upon the compatibility of a national provision with Community law, it may nevertheless extract from the wording of the questions formulated by the national court, having regard to the facts stated by the latter, those elements which come within the interpretation of Community law for the purpose of enabling that court to resolve the legal problem which it has before it.
4. The Government of the Italian Republic also regards the questions as inadmissible because it could be that the answers to be given by the Court would influence the application of the criminal law of a Member State.
5. Article 177, which is worded in general terms, draws no distinction according to the nature, criminal or otherwise, of the national proceedings within the framework of which the preliminary questions have been formulated. The effectiveness of Community law cannot vary according to the various branches of national law which it may affect. The Court therefore has jurisdiction to reply to the questions submitted.
6. The national court has been requested to apply Italian criminal law to conduct described as a contravention of the legal provisions granting the milk centres the exclusive right of supply and sale within certain geographical limits. In order to resolve that dispute, that court has on the one hand referred questions on the interpretation of Articles 37 and 90 of the Treaty and on the other requested the interpretation of certain provisions of Regulations (EEC) Nos 804/68 and 2622/69.
7. The Council and the Government of the Italian Republic consider that because of its special nature the system of milk centres must be assessed not in the light of Articles 37 and 90, but within a purely agricultural framework, in so far as this system constitutes a national organization of the market the maintenance of which must be ensured as long as it has not been superseded by a common organization of the market. In fact, according to Article 38(2) the general rules laid down for the establishment of the common market shall apply to agricultural products only in so far as the title in the Treaty concerning agriculture does not provide otherwise.
8. In view of this argument and of its possible consequences for the outcome of the main proceedings, it is necessary to consider in the first place the third question on the interpretation of Regulation (EEC) No 804/68 and Regulation (EEC) No 2622/69, adopted within the framework of the common agricultural policy. This question asks whether the expiry of the period laid down in Article 22(2) of Regulation (EEC) No 804/68 and extended by Article 2 of Regulation (EEC) No 2622/69 involves a duty to abolish measures which may be contrary to the principles of the Treaty, and in particular, to abolish the exclusive sales right reserved by a Member State in certain parts of its territory to producer organizations created by legislation.
9. The meaning of the abovementioned provisions can be determined only within the framework of the general context of the regulations of which they form part.
10. (a) After Regulation No 13/64/EEC of the Council of 5 February 1964 on the progressive establishment of a common organization of the market in milk and milk products had been issued, that organization was finally determined in its entirety by Regulation (EEC) No 804/68. Article 22(2) of the latter regulation provides nevertheless that the Community system of supplementary measures for products falling within heading 04.01 of the Common Customs Tariff — including in particular drinking milk — shall be adopted later, but in any case before the end of the transitional period. Under the fourth subparagraph of Article 22(2) the Italian Republic was authorized to retain until 31 December 1969the measures regulating the supply of drinking milk to certain areas. It is plain that that provision referred to the system of milk centres.
11. (b) Under Regulation (EEC) No 2622/69, the Council, taking the view that it did not seem appropriate to abolish, in the course of the milk year, the special national provisions of the Italian Republic, extended to 31 March 1970 the period laid down in the last subparagraph of Article 22(2) of Regulation (EEC) No 804/68.
12. (c) No action was taken by the Council by 31 March 1970 on a proposal to authorize the Italian Republic to retain the provisions in force regarding the milk centres temporarily for a further period until 31 March 1972 which was submitted by the Commission to the Council on 17 March 1970. (OJ C 43, 1970, p. 5).
13. (d) By Regulation (EEC) No 1411/71 of 29 June 1971 which was adopted after the events which are the subject of the proceedings pending before the national court and is therefore inapplicable to those events, the Council laid down additional rules on the common organization of the markets in products falling within tariff heading 04.01 of the Common Customs Tariff (OJ English Special Edition 1971 (II), p. 412). Under Article 4 of that regulation the implementation of that organization remains, however, subject to the subsequent formulation by the Council of certain provisions concerning the marketing of milk intended for human consumption. In the same regulation, the Council, taking into account the fact that Italy has under preparation measures aimed at altering the structure of the milk centres and not wishing to jeopardize that reform, authorized the Italian Republic by Article 9(2) to maintain until 31 March 1973 the provisions applying on 31 March 1970 to the milk centres.
14. It appears from all these provisions that as from the entry into force of Regulation (EEC) No 804/68 the market in milk and milk products has been the subject of a definitive organization, albeit still incomplete in certain respects. Thenceforth it was for the Community authority alone to decide upon the provisional maintenance of any national system of organization, intervention or supervision relating to the products in question. The Council, by limiting to 31 December 1969, the date of the expiry of the transitional period, the concession granted to the Italian Republic with regard to the milk centres, concluded that this system was incompatible with the fundamental principles of the organization of the market envisaged for the sector in question.
15. On the other hand by the terms in which it granted the Italian Republic an extension for three months of the period originally laid down by Regulation No 2622/69, the Council has shown that it only considered the authorization granted as a measure of an essentially temporary nature intended to make the abolition of the sales monopoly coincide with the end of the then current milk marketing season. Although it is possible to elicit from Regulation (EEC) No 1411/71 the intention of the Community legislature to grant Italy a certain additional period to enable the milk centres to be re-structured, nevertheless at the time of the events submitted to the national court, the only provision in force concerning the system of these centres was Regulation (EEC) No 2622/69, Article 2 of which fixed 31 March 1970 as the end of the concessionary period granted. It follows from this that at the time of the events submitted for consideration by the national court, there was a specific provision of a regulation which implied the abolition of the exclusive right of sale granted to the milk centres and, in consequence, the inapplicability of the national legislative provisions granting that exclusive right.
16. Under those circumstances the second subparagraph of Article 40(3) of the Treaty had to be applied in full at that time, from which it follows that whatever the form chosen for the common organization of the agricultural markets, that organization must in any case be understood to exclude any discrimination between producers or consumers within the Community.
17. In view of the answer given to the third question it does not appear necessary to consider the other questions submitted by the Pretore di Bari.
18. The costs incurred by the Commission and by the Council of the European Communities which submitted observations to the Court are not recoverable and as these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the SAIL undertaking, the Government of the Italian Republic, the Council and the Commission of the European Communities ; Upon hearing the opinion of the Advocate-General ; Having regard to the Treaty establishing the European Economic Community, especially Articles 37, 38, 40 and 177; Having regard to Regulation No 13/64 of the Council of 5 February 1964 on the progressive establishment of a common organization of the market in milk and milk products, Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products, Regulation (EEC) No 2622/69 of the Council of 21 December 1969 amending Regulation (EEC) No 804/68 and Regulation (EEC) No 1411/71 of the Council of 29 June 1971 laying down additional rules on the common organization of the market in milk and milk products for products falling within tariff heading 04.01 of the Common Customs Tariff; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT in answer to the questions referred to it by the Pretore of the district of Bari by Order of 3 July 1971, hereby rules: