JUDGMENT OF 3. 2. 1977 — CASE 53/76 PROCUREUR DE LA RÉPUBLIQUE v BOUHELIER

In Case 53/76 Reference to the Court under Article 177 of the EEC Treaty by the Tribunal Correctionnel (Criminal Court) of Besançon, for a preliminary ruling in the action pending before that court between

THE COURT composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges, Advocate-General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

I — Facts and procedure

II — Written observations submitted under Article 20 of the Protocol on the Statute of the Court

Law

Costs

I —. Facts and procedure

1. A system of rules has been adopted in France which governs the quality inspection of certain types of watches intended for export.

2. The action which led the Tribunal Correctionnel, Besançon, to ask the Court of Justice for a preliminary ruling arose precisely out of a case in which the Cetehor certificates replaced the export licence.

3. The accused have admitted the facts but claim that they do not constitute criminal offences. They requested the Tribunal Correctionnel, Besançon, to release them and referred in support of their request to Articles 34 and 36 of the EEC Treaty and to the restrictive interpretation of the exceptions contained in the latter article, given by the Court of Justice in Joined Cases 51 to 54/71 (International Fruit Company NV and Others v Produktschap voor Groenten en Fruit, jugdment of 15 December 1975 [1971] ECR 1107). Bouhelier and the other defendants maintain that the requirement of the Cetehor certificate solely for watches intended for export constitutes a quantitative restriction which is prohibited by the terms of those articles as interpreted by the Court. The Administration Générale des Douanes, the plaintiff claiming damages, nevertheless requested that the texts governing the export of watches of the type in question be applied. Faced with the foregoing contradictory arguments the Tribunal Correctionnel, Besançon, stayed the proceedings and by a decision of 19 May 1976 requested the Court of Justice to give a preliminary ruling on a question which is in the following form:

4. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate-General the Court decided to open the oral procedure without holding any preparatory inquiry.

II —. Written observations submitted under Article 20 of the Protocol on the Statute of the Court

1. Bouhelier and the other accused in the main action submit that the Court should rule that the provisions of the Code General des Impôts Français (French General Tax Code), which require the production of an export licence for lever watches, are contrary to the provisions of the Treaty of Rome.

2. The Commission refers to the facts and the procedure and emphasizes that, while the procedure is taking place, its departments are preparing a file which will enable them, if necessary, to bring proceedings against the French Republic to establish a failure to take action in relation to the provisions concerning the export of lever escapement watches and watch movements. The Commission sets out the content and the scope of the French legislation whose application is in question. It insists that the system of licences is comparable to the system of Cetehor certificates, whose aim is to guarantee quality in the French watch- and clock-making industry. It emphasizes that, in its opinion, there is no doubt that the provisions in question only apply to goods intended for export, whatever their origin and destination, and that the purpose of the rules applicable to exports of watches and watch movements is to promote the products of the French watch- and clock-making industry in external markets by means of a guarantee of quality.

3. After summarizing the facts and outlining the background to the rules governing the quality inspection of certain watches intended for export, theGovernment of the French Republic examines the compatibility of those rules with the Treaty of Rome. It refers to the case-law of the Court and the arguments put forward before it by the Commission and Mr Advocate-General Roemer in the International Fruit Company case and concludes that quantitative restrictions are:

1. By judgment dated 19 May 1976, received at the Court Registry on 28 June 1976, the Tribunal Correctionnel, Besançon, referred to the Court of Justice under Article 177 of the EEC Treaty a question concerning the interpretation of Article 34 of the Treaty.

2. The French Law No 48-1228 of 22 July 1948 fixed the legal constitution of the technical centres for industry, the principal purpose of which is to guarantee quality in the industry.

3. A Ministerial Decree of 22 April 1949 adopted in implementation of that law established the technical centre for industry (a public utility institution) known as Cetehor.

4. Among its tasks, Cetehor is required to examine the quality of all lever escapement watches and watch movements intended for export.

5. Two notices to exporters from the Ministry for Finance and Economic Affairs of 30 October 1962 and 24 November 1964 require exporters of such watches and watch movements to obtain a licence for all articles except those accompanied by a standards certificate issued by Cetehor, which replaces the export licence.

6. The judgment referring the case shows that the accused forged inspection certificates issued by Cetehor and under cover of the forged documents exported lever escapement watches to other Member States.

7. The accused justified the said forgeries on the ground that the speed of commercial transactions was not compatible with the delays inherent in the preparation of the certificates in question.

8. It is in the light of the factual and legal position described above that the Tribunal Correctionnel referred the following question:

9. The question asks, first, whether the requirement of a licence for the export to a Member State of a product manufactured in another Member State constitutes a quantitative restriction on exports or a measure having equivalent effect.

10. Article 34 provides that Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.

11. The general nature of the principle laid down by that provision, and the interpretation which has already been given to it, mean that in intra-Community trade export licences cannot be required by national legislation, even as factors in a quality inspection.

12. The second part of the question asks whether a quality inspection instituted by a Member State and carrying with it a prohibition on the export of products which do not satisfy the quality standards provided for by the national rules may be regarded as a quantitative restriction on exports or a measure having equivalent effect.

13. However desirable may be the introduction of a policy on quality by a Member State, such policy can only be developed within the Community by means which are in accordance with the fundamental principles of the Treaty.

14. Rules such as those at issue in this instance cannot be regarded as compatible with the aforementioned principles.

15. The fact that the obligatory quality standards only apply to products intended for export and are not imposed on products marketed within the Member State leads to arbitrary discrimination between the two types of products which constitutes an obstacle to intra-Community trade, governed by Article 34 of the Treaty;

16. Thus, apart from the exceptions for which provision is made by Community law, the Treaty precludes the application to intra-Community trade of a national provision which requires export licences or any other similar procedure in respect of exports alone, such as the issue of standards certificates, the requirement of which constitutes a measure having effect equivalent to quantitative restrictions in so far as such certificates are capable of constituting a direct or indirect, actual or potential obstacle to intra-Community trade.

17. Such measures are prohibited, regardless of the purpose for which they have been introduced.

18. The reply to be given to the question referred must therefore be that the expression quantitative restrictions on exports and any measures having equivalent effect contained in Article 34 of the EEC Treaty must be understood as applying to rules adopted by a Member State which require in respect only of the export of certain goods either a licence or a standards certificate which is issued in place of such licence and may be refused if the quality does not conform to certain standards laid down by the body issuing the said certificate, even if such certificate does not give rise to the imposition of a charge.

19. The costs incurred by the Government of the French Republic and the Commission of the European Communities which have submitted observations to the Court are not recoverable.

20. Since the 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 Tribunal Correctionnel, Besançon, a decision as to costs is a matter for that court.

On those grounds, THE COURT in answer to the question referred to it by the Tribunal Correctionnel, Besançon, by judgment of 19 May 1976, hereby rules: