JUDGMENT OF 16. 5. 1979 — CASE 2/78 COMMISSION v BELGIUM

In Case 2/78

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

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

IV — Information supplied at the request of the Court

V — Oral procedure

Decision

The national provisions and practices in question

Procedure prior to commencement of legal proceedings

Admissibility

Substance

Costs

I —. Facts and procedure

1. Spirits bearing a designation of origin and imported directly from the country of origin in containers intended for sale to consumers, provided that:

2. Spirits bearing a designation or origin, other than those referred to in paragraph (1) above, imported from a Member State of the EEC, provided that they are accompanied by one of the following official documents:

II —. Conclusions of the parties

(a). declare that, by making the importation of potable spirits bearing a designation of origin and lawfully in free circulation in Member States other than the country of origin subject to more onerous conditions than those referred to in Article 1(1) of the Arrêté Ministériel of 2 December 1976 with regard to the same products imported directly from the country of origin, the Kingdom of Belgium has failed to fulfil its obligations under Article 30 of the EEC Treaty;

(b). order the Kingdom of Belgium to pay the costs.

III —. Submissions and arguments of the parties

(a). Elimination of the requirement of a statement of the name of a Belgian consignee in the certificate of origin.

(b). Acceptance of certificates issued by the United Kingdom authorities for countries other than Belgium.

(c). Abolition of the rejection at the frontier of consignments of spirits bearing a designation but submitted without the necessary document and provision of opportunity for importers of one or more periods in order to obtain the document.

(a). allowing a dealer in an intermediate Member State to obtain a retrospective certificate in respect of a part consignment destined for reexport to a third Member State, on provision of documentary evidence to the competent authorities in the United Kingdom, and

(b). making it possible for any dealer to obtain a certificate directly from HM Customs and Excise in confidence should his commercial situation so require.

IV —. Information supplied at the request of the Court

V —. Oral procedure

1. By application dated 28 December 1977, which was received at the Court on 3 January 1978 the Commission brought an action under the second paragraph of Article 169 of the EEC Treaty against the Kingdom of Belgium for a declaration that, by making the importation of potable spirits bearing a designation of origin and lawfully in free circulation in Member States other than the country of origin subject to more onerous conditions in respect of proof of entitlement to that designation than those referred to in Article 1 (1) of the Arrêté Ministériel of 2 December 1976 (Moniteur Beige of 11 February 1977) with regard to the same products imported directly from the country of origin, the Kingdom of Belgium has failed to fulfil its obligations under Article 30 of the EEC Treaty.

2. Article 1 (1) of the above-mentioned Arrêté Ministériel provides that the conditions therein referred to shall be treated as satisfied when spirits bearing a designation of origin are imported directly from the country of origin in containers intended for sale to consumers which are equipped with a special closure, the latter as well as the label bearing certain particulars regarding the name and registered trade-mark of the manufacturer and the notice bottled in the country of origin.

3. The above-mentioned provisions must be placed within the context of the whole body of provisions laid down by law, regulation or administrative action by the Kingdom of Belgium in relation to the protection of the authenticity of designations of origin.

4. The Belgian Law of 18 April 1927 treats as designations of origin such as are notified to the Belgian Government by the governments concerned as being designations of origin officially and finally adopted.

5. Article 1 (1) of the Royal Decree No 57 of 20 December 1934 states that it is prohibited to import, sell, display for sale, have possession of or transport for the purposes of sale or delivery, spirits bearing a designation of origin duly adopted by the Belgian Government when such spirits are not accompanied by an official document certifying their right to such designation.

6. The designation of origin Scotch whisky is included among those adopted by the Belgian Government and the difficulties in obtaining the above-mentioned official document experienced by certain Belgian importers of this product in particular from a Member State other than that of origin have given rise to various complaints to the Commission.

7. Article 1 of the above-mentioned Arrêté Ministériel of 2 December 1976 published in the Moniteur Beige on 11 February 1977 provides as follows:

1. Spirits bearing a designation of origin and imported directly from the country of origin in containers intended for sale to consumers, provided that:

2. Spirits bearing a designation of origin, other than those referred to in paragraph (1) above, imported from a Member State of the EEC, provided that they are accompanied by one of the following official documents:

8. That Arrêté Ministériel was repealed by the Arrêté Ministériel of 27 February 1978 published in the Moniteur Belge of 15 April 1978, so that as from the latter date only the provisions of Article 1 of the Royal Decree No 57 of 20 December 1934 apply to spirits imported both directly and indirectly.

9. The Kingdom of Belgium has, however, referred to a certain flexibility introduced since 1974 into the administrative procedure in relation to the application of the above-mentioned provisions.

10. In particular, the importation into Belgium of spirits bearing a designation of origin is not subject to the requirement that the certificate of origin should state the name of the consignee of the goods (cf. in particular circular of 8 February 1974 sent to customs offices and published by the Administration des Douanes et Accises).

11. Further, as regards the importation of spirits described as Scotch whisky, the Belgian customs are allowed to accept as an official document either the document known as the customs and excise certificate for Scotch whisky exported to Belgium — C & E 94 A or a certificate of origin issued for delivery to a country other than Belgium by the United Kingdom Customs and Excise administration (cf. in particular circular of 4 August 1978 sent to customs offices and published by the Administration des Douanes et Accises).

12. Further, the Belgian Customs have been instructed not to object to the importation of spirits on the ground of failure to produce the certificate of origin on presentation of the goods but to invite the importer to put the matter in order within a period of 20 days.

13. It should further be observed that according to statements of the Government of the United Kingdom, intervening in the present case, additional measures have been introduced by that Member State to make it easier to obtain certificates of origin relating to Scotch whisky.

14. On the one hand, it is possible for a purchaser of that product in an intermediate Member State to obtain a retrospective certificate in respect of a part-consignment intended for re-export to a third Member State, on provision of documentary evidence to the competent authorities in the United Kingdom.

15. On the other hand, any purchaser may obtain a certificate directly from HM Customs and Excise without going through the direct importer.

16. The Belgian Government has confirmed that in the latter case such a certificate would be accepted by the competent Belgian authorities.

17. The Government of the United Kingdom has nevertheless stated that the above-mentioned arrangements cannot dispose of the difficulty with regard to Scotch whisky imported in bulk into a Member State, then brought to the proper strength by dilution and bottled prior to transit to another Member State.

18. By letter dated 20 March 1974 the Commission expressed the opinion to the Belgian Government that Article 1 of the Royal Decree of 20 December 1934 was likely to make imports of spirits from Member States other than the producer State impossible and that the lawful objective of the Belgian authorities, namely the protection of the designation of origin of its products pursuant to Article 36 of the Treaty, could be achieved as effectively by other means which would not prevent such parallel imports.

19. By letter dated 7 November 1974 the Belgian Government declared itself ready to amend its legislation.

20. After numerous unsuccessful discussions between the relevant departments of the Belgian administration and those of the Commission the latter on 16 October 1975 gave the Belgian authorities a period of 15 days within which to give their answer to various proposals for a solution which the Commission had made at a meeting with representatives of the Belgian departments concerned on 10 November 1974.

21. Only by letter dated 5 March 1976 did the Belgian Government inform the Commission of the amendments which it proposed to make to the system of supervision of designations of origin.

22. Since, however, the Commission took the view that the amendments contemplated were not likely to render the Belgian rules in question compatible with Article 30 of the Treaty, by letter dated 14 October 1976 if formally requested the Belgian Government under the first paragraph of Article 169 of the Treaty to submit its observations within a period of 15 days, which was subsequently extended to a month.

23. Since there was no answer to that formal request the Commission delivered a reasoned opinion dated 8 December 1976 under Article 169 of the Treaty, which was notified to the Belgian Government on 16 December 1976, inviting it to take the requisite measures to comply with the said opinion within a period of a month.

24. On 8 December 1976 the Belgian Government replied to the letter containing the formal request stating that the problem would soon be resolved by the forthcoming publication of an Arrêté Ministériel, the text of which it sent to the Commission, being the above-mentioned Arrêté Ministériel of 2 December 1976.

25. It also stated that the repeal of the provisions of the Royal Decree No 57 of 20 December 1934 on spirits was provided for in a draft law concerning the control of foodstuffs and other products, the discussion of which in Parliament was almost concluded.

26. The Kingdom of Belgium states that having regard to the wording of the conclusions in the application, the action relates to the Arrêté Ministériel of 2 December 1976 and not to the Royal Decree No 57 of 20 December 1934.

27. Since the Arrêté Ministériel was repealed after the action was brought, it is claimed that the latter has lost its purpose and is therefore inadmissible.

28. In this respect it should be remembered in the first place that the action taken by the Commission prior to institution proceedings, including the delivery of the reasoned opinion of 8 December 1976, indeed referred to the provisions of Article 1 of the Royal Decree No 57 of 20 December 1934.

29. It was not until after the said opinion had been issued that the Belgian Government sent the Commission the text, at that time not yet published in the Moniteur Belge, of the Arrêté Ministériel of 2 December 1976 which consisted not of independent rules but was confined to rendering more explicit the provisions of Article 1 of the Royal Decree No 57 in relation to proof of the entitlement to the designation of origin of spirits imported into Belgium.

30. As appears from the wording of Article 1 of the Arrêté Ministériel, it established two systems of proof, according to whether the products in question were imported directly or indirectly from the country of origin.

31. Since the Commission took the view that all that those provisions did was to render more explicit the amendments to Article 1 of the Royal Decree No 57 contemplated by the Belgian Government in its letter of 5 March 1976, it brought the present action against the Kingdom of Belgium for failure to fulfil its obligations.

32. In view of the above-mentioned circumstances it is right to consider the conclusions of the Commission as referring not only to the Arrêté Ministériel of 2 December 1976 but also to the Royal Decree No 57.

33. Repeal of the Arrêté Ministériel after the action was brought has therefore not deprived the latter of its purpose.

34. It therefore follows that the action is admissible.

35. It should be recalled that the provisions of Article 1 of the said Royal Decree were at the root of the reference for a preliminary ruling by the Tribunal de Premiere Instance of Brussels in Case 8/74 Procureur du Roi v Benoît and Gustave Dassonville, which asked whether a national provision prohibiting the import of goods bearing a designation of origin where such goods are not accompanied by an official document issued by the government of the exporting country certifying their right to such designation constitutes a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 of the Treaty.

36. In its judgment of 11 July 1974 given in that case ([1974] ECR 837) the Court ruled:

37. In the grounds of that judgment the Court added that in the absence of a Community system guaranteeing for consumers the authenticity of a product's designation of origin, if a Member State takes measures to prevent unfair practices in this connexion it is, however, subject to the condition that those measures should be reasonable and that the means of proof required should not act as a hindrance to trade between Member States and should, in consequence, be accessible to all Community nationals.

38. The essential question to be resolved is therefore whether the measures taken by the Kingdom of Belgium to ensure the authenticity of spirits bearing a designation of origin imported into Belgium are unreasonable in that they are disproportionate in relation to that objective.

39. It should be stressed, on the one hand, that it is for the Court to settle not the question as to which method of checking authenticity is the most effective, but rather the question whether the method adopted by the Belgian Government, the effectiveness of which is not questioned and which is based on the examination of certificates of origin issued in the exporting Member State, causes a trader, who wishes to import into Belgium from a Member State other than that of origin spirits bearing a designation of origin, difficulties in obtaining certificates which are unreasonable in relation to those which that State imposes on a direct importer, even where it is assumed that this method creates more difficulties for both types of import than result from the system of sealing and labelling provided for in Article 1 (1) of the Arrêté Ministériel of 2 December 1976.

40. On the other hand, the Commission is not asking the Court to settle the question whether the Arrêté Ministériel which has now been repealed gave rise to such discrimination or whether in refraining from incorporating into laws or regulations the liberalizing measures provided for inter alia in the above-mentioned administrative circulars the Kingdom of Belgium failed to fulfil its obligations under Article 30 of the Treaty.

41. Confining consideration to the question which the Commission has brought before the Court, it is not possible to say that to check the authenticity of a product bearing a designation of origin by the expedient of examining certificates of origin issued in the producer Member State constitutes an unreasonable measure in relation to the objective of guaranteeing the authenticity of the product.

42. In this respect it is appropriate to observe that a similar system has been adopted in various Community regulations as a means of proving the authenticity of certain products such as Bourbon whisky, port, Madeira, sherry, Setubal muscatel and Tokay and wines, juices and grape musts imported into the Community from third countries and that the Belgian system, as a method of control, has not been challenged by the Commission in so far as it applies to spirits imported directly into Belgium from the producer Member State.

43. Further, at least as regards Scotch whisky, according to information supplied to the Court by the Belgian Government and the Government of the United Kingdom, the requisite certificates are available not only to importers importing spirits directly into Belgium from the producer Member State but also to traders wishing to import such products from an intermediate Member State, as a result of the above-mentioned liberalizing administrative measures adopted both by the Belgian Government and by the Government of the United Kingdom.

44. The Commission has not satisfactorily refuted the argument of the Belgian Government that those liberalizing measures have contributed to an appreciable improvement in the position in relation to direct importers of traders wishing to import spirits bearing a protected designation of origin into Belgium from another Member State where they are in free circulation, but has confined itself to stating that in spite of the said measures the system of control adopted by the Belgian Government still involves the importer of those products into Belgium in more difficulties than would result from the system of sealing and labelling which it advocates.

45. That fact relied on by the Commission nevertheless cannot in itself constitute a failure by the Kingdom of Belgium to fulfil its obligations under Article 30 of the Treaty.

46. It is clear from those considerations that, even if the system for checking the authenticity of products bearing a designation of origin as applied by the Belgian Government involves the importer of those products into Belgium in more difficulties than would result from a system of sealing and labelling, that fact cannot in itself constitute a failure by the Kingdom of Belgium to fulfil its obligations under Article 30 of the Treaty.

47. For those reasons the action must be dismissed.

48. It is necessary, however, to emphasize that the Kingdom of Belgium has a duty to ensure, seeking if necessary in this respect the assistance of the Commission, that traders wishing to import into Belgium spirits bearing a designation of origin duly adopted by the Belgian Government and in free circulation in a regular manner in a Member State other than that of origin are able to effect such imports and are not placed at a disadvantage in relation to direct importers, save in so far as appears reasonable and strictly necessary to ensure the authenticity of those products.

49. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs if they have been asked for in the successful party's pleading. Since the Commission has failed in its submissions it must be ordered to pay the costs, save those caused by the interventions, in respect of which the Commission and the interveners shall each pay their own costs since the interveners have not asked for costs.

On those grounds; THE COURT hereby:

(1) Dismisses the action;

(2) Orders the Commission to pay the costs of the main action;

(3) Orders the Commission and the interveners to pay their own costs in relation to the intervention.