Opinion of Mr Advocate General Capotorti
Mr President,
Members of the Court,
1. This reference for a preliminary ruling has arisen in connection with a case concerning the re-exportation of foreign currency previously imported into a Member State by one of its citizens residing in another Member State without such importation having been linked to the provision of specific services. Essentially, the Court has to establish whether and, if the answer is in the affirmative, in what manner an operation of this kind is regulated by Community law and whether not only the restrictions laid down in the matter by the law of a Member State but also the penalties provided for against those who infringe such restrictions are compatible with Community law. As a result, it is necessary to interpret a number of provisions of the EEC Treaty and of secondary legislation relating to movements of capital, a body of rules which raises problems which are very important also in view of their novelty. I would observe that this Court has not so far had an opportunity to express itself on the subject of the movement of capital, apart from some general and incidental dicta contained in the judgment of 23 November 1978 Regina ν Thompson [1978] ECR 2247.
2. To enable the problems raised by the court of trial to be properly understood, I believe a preliminary explanation is called for concerning the Italian rules governing the import and export of foreign currencies on the part of persons who do not reside in Italy. Those rules are based on the criterion that the importation of foreign currencies should be freely permitted whereas their exportation should be subject to strict administrative control. Article 14 of the Decreto Ministeriale [Ministerial Decree] of 7 August 1978 provides that credit notes issued or payable abroad and foreign treasury notes or bank notes which are legal tender may be freely imported, irrespective of the means employed whilst under Article 13 (b) of the same decree, the exportation by non-residents of credit notes issued or payable abroad ..., foreign treasury notes or bank notes ... is permitted up to the amount previously imported ... or the amount lawfully acquired in Italy, in accordance with the formalities laid down by the Ministry for Foreign Trade. Those formalities had already been specified by Circular No A/300 of 3 May 1974 of the Ufficio Italiano dei Cambi [Italian Foreign Exchange Department] Article 11 of which provides, with regard to currencies, that non-residents may reexport foreign treasury notes and bank notes previously imported provided that at the time of importation they completed a declaration concerning the possession of valuables and currencies (on the so-called V2 form). The declaration must be received and endorsed with a visa by the customs authorities and then returned to the traveller upon his entering Italian territory. This means that if a nonresident fails to produce Form V 2 duly endorsed with a visa, he is prohibited from re-exporting the imported foreign currencies unless he obtains an ad hoc authorization from the Ufficio Italiano dei Cambi. Any unauthorized exportation of an amount exceeding LIT 500 000 in value constitutes an offence within the meaning of Article 1 of Decreto Legge [Decree-Law] No 31 of 4 March 1976 (converted into Law No 159 of 30 Aprii 1976 and subsequently amended by Law No 863 of 23 December 1976). The offence is punishable by a term of imprisonment of one to six years and a fine of between two and four times the value of the currencies exported. An attempt to commit the offence is treated as if the offence had actually been committed. In their decisions, the Italian courts have, in applying that provision, treated the reexportation of imported currencies as a criminal offence when the traveller was not in possession of Form V 2, establishing the lawful origin of the currencies, on leaving the territory of the State. In that connection, I would recall the judgments of the Corte di Cassazione (First Criminal Division) No 1879 of 17 December 1979 and No 4779 of 12 April 1980. That approach has recently been confirmed by the Decreto Ministeriale of 12 March 1981 on currency rules and financial relations with foreign countries (published in the Gazzetta Ufficiale Italiana No 82 of 24 March 1981, Supplemento Ordinario) which lays down, in Article 49 (1), that for foreign treasury notes and bank notes to be lawfully re-exported non-residents must, on importing such notes into the territory of the Republic, obtain as proof thereof an appropriate customs certificate which may be used for that purpose within six months of the date of issue.
3. In the course of the oral procedure, the representative of the French Government observed that the present case concerns an attempt to export currency which occurred at the frontier between the Italian Republic and the Austrian Republic. Accordingly, there were grounds for calling in question the applicability of the rules of Community law on the free movement of capital and it might be argued that the answers to the questions formulated by the Tribunale di Bolzano could not have any influence on the decision in the case pending before that court. Consequently, the Court should decline to answer those questions. In support of that argument, the representative of the French Government relied on the judgment of this Court of 11 March 1980 in Case 104/79 Foglio ν Novello [1980] ECR 745, inferring from it that the Court has no jurisdiction to give preliminary rulings when the questions submitted to it by the national court pursuant to Article 177 of the EEC Treaty have no connection with a genuine controversy.
4. In its first question, the Italian court asks: After the end of the transitional period must the restrictions on the movement of capital referred to in Article 67 of the EEC Treaty be deemed to have been abolished regardless of the provisions of Article 69 thereof?
5. If the rule contained in Article 67 (1) is examined in connection with other related provisions of the Treaty on the movement of capital and on economic policy, the argument which I have propounded becomes even more convincing.
6. Therefore I do not share the attitude taken by the Government of the Federal Republic of Germany and by Mr Casati according to which Article 67 (1), where it provides that restrictions on movements of capital are to be abolished only to the extent necessary to ensure the proper functioning of the common market, does not make the time-table for abolition depend on discretionary assessments by the Council but merely restricts the scope of the obligation imposed on Member States from the quantitative point of view. It follows from that argument that private persons might, after the end of the transitional period, assert a personal right to carry out transfers of currency (the Federal Government has explained that its statements refer specifically to the currency aspect of movements of capital) and that the national court would have jurisdiction to determinate, case by case, by reference to the criterion of the necessity of liberalization for the proper functioning of the Common Market, whether a given movement of capital should be regarded as liberalized.
7. It is now time to consider the third question referred to the Court of Justice by the national court. That question is worded as follows: Does any principle or provision of the Treaty guarantee non-residents the right to re-export currency previously imported and not used, even if it has been converted into Italian lire?. To begin with, I would observe in that regard that once the possibility that Article 67 (1) may have direct effect is ruled out, the alleged right of non-residents to re-export currency may certainly not be derived from that provision but could stem from one of the directives on liberalization adopted by the Council. Consequently, our researches must be extended to the provisions of those directives.
8. Before examining in greater detail the directives on this subject, I should mention the problem of the conditions under which they may have direct effect and the limits of that effect. The third question put by the Tribunale di Bolzano in fact concerns an alleged right in favour of individuals. I would merely recall that the case-law of this Court has on numerous occasions recognized the direct effect of directives where a Member State has failed to adopt implementing measures within the prescribed period, provided that the unfulfilled obligation is unconditional and sufficiently precise (see the judgments of 17 December 1970 in Case 33/70 SACE [1970] ECR 1213, 4 December 1974 in Case 41/74 Van Duyn [1974] ECR 1337, 26 February 1976 in Case 52/75, Commission ν Italian Republic [1976] ECR 277, 5 April 1979 in Case 148/78 Ratti [1979] ECR 1629, 6 May 1980 in Case 102/79, Commission ν Belgium [1980] ECR 1473, and 12 June 1980 in Case 88/79 Grunert [1980] ECR 1827). That approach undoubtedly applies also in the case of the directives on the movement of capital.
9. What the fourth to eighth questions have in common is that they refer, in different respects, to the problem of the penal sanctions imposed by the legislation of a Member State for the breach of currency rules. I think it is advisable to begin by examining the sixth question which is related to a matter on which I have already expressed my views in the first part of this opinion. The Tribunale di Bolzano asks: After the end of the transitional period is it possible to consider as being compatible with the stand-still requirements set out in Articles 71 and 106 (3) domestic legislation which increases penalties prescribed by other, previous legislation, as, for example, when infringements which were previously punishable by administrative penalties are made punishable by imprisonment and fines, thereby rendering them criminal offences?
10. The fourth question is put on the basis of an affirmative answer to the third, that is to say, on the assumption that the legal order of the Community recognizes the right of a non-resident tö re-export previously imported currency which was never used. On that basis, the Tribunale di Bolzano asks: If so, may any failure to comply with the formalities prescribed by the currency legislation of the State from which the sums are subsequently re-exported in the above-mentioned circumstances be punished by penalties including confiscation of the currency, a fine of up to five times the amount of that currency and deprivation of personal liberty for a period of up to five years (subject to heavier penalties where a number of persons are involved)?
11. The considerations discussed above concerning the fourth question are also relevant for the purpose of answering the fifth and seventh questions both of which presuppose the existence (which I deny) of a personal right under Community law in favour of non-residents to reexport previously imported currency. It is precisely in its fifth question that the Tribunale di Bolzano asks: If the preceding question is answered in the affirmative, may any failure to comply with the above-mentioned formalities carry penalties on the same scale as those imposed for the unlawful exportation of currency? The seventh question seeks to establish whether the principle in accordance with which dissimilar situations may not be treated in the same way (which is encompassed by the prohibition of discrimination referred to inter alia in Article 7 of the Treaty) permit[s] the same penalties as those imposed by a Member State in respect of the unlawful exportation of currency or of failure to comply with the formalities in relation to currency to be applied without distinction both to residents of that State and to non-residents.
12. The problem raised in the eighth question is: After the end of the transitional period is it possible to consider as compatible with Articles 67, 71 and 106 (3) of the Treaty provisions of national law which prescribe specified formalities in connexion with the exercise of the right, which is however recognized, to re-export previously imported capital, requiring the fulfilment of such formalities as sole proof of prior importation, thereby creating in substance a penalty under criminal law for failing to fulfil them?
13. I shall deal with the second question last inasmuch as it strikes me as being in substance unrelated to the others. The national court asks the Court of Justice: Does the fact that the Italian Government omitted the consultative procedure laid down in Article 73 of the Treaty in relation to Decreto Legge [Decree-Law] No 31 of 4 March 1976, which was converted into Law No 159 of 30 April 1976, constitute an infringement of that Treaty? As it stands, the question falls outside the scope of the Court's jurisdiction to give preliminary rulings since it requests the Court to rule on the legality of a provision of national law. However, I believe it is possible to discern behind the terms used by the court of trial, a request for the interpretation of Article 73 which seeks to ascertain whether or not that article of the Treaty imposes on the Member States an obligation to consult the Commission when one of them adopts in the field of currency transfers national measures of the same type as Decreto Legge No 31 of 1976.
14. In the light of all the considerations set out above, I propose that the questions formulated by the Tribunale di Bolzano in its order of 6 October 1980 in criminal proceedings against Mr Guerrino Casati should be answered by the Court as follows :
1 Translated from the Italian.