Opinion of Mrs Advocate General Rozès
Mr President,
Members of the Court,
The Commission has brought an action before the Court against the Council under the first paragraph of Article 173 of the Treaty for a declaration that Council Regulation (EEC) No 1699/82 of 24 June 1982 opening, allocating and providing for the administration of a Community tariff quota for rum, arrack and tafia, falling within subheading 22.09 C I of the Common Customs Tariff and originating in the African, Caribbean and Pacific States (ACP) (1982/83) is void.
By virtue of the fact that the contested regulation is a measure giving effect to an international agreement which is binding on the Community, namely Protocol No 5 annexed to the second ACP—EEC Convention signed at Lomé on 31 October 1971, the Commission requests the Court to exercise the power given to it under the second paragraph of Article 174 of that Treaty by stating that the right to import into the Community free of customs duties, from 1 July 1982 to 30 June 1983, the quantities of the products referred to in Article 1 of the regulation is to be considered as definitive.
The Commission is critical of Article 4 (2) of the aforementioned regulation. That provision imposes certain obligations on the United Kingdom in relation to its share of the quota of rum originating in the ACP States and imported free of customs duties into the community but intended for domestic consumption. This case is essentially concerned with the extent of those obligations.
The French version of Article 4 (2) reads as follows: Le Royaume Uni prend les mesures necessaires pour que les quantités importées des États ACP dans les conditions fixées aux articles 1 et 2 soient résewées aux besoins de sa consommation intérieure.
The wording of the English version of that provision is as follows :
which may be translated literally into French as follows:
The conditions laid down in Articles 1 and 2 of the regulation consist of the importation free of customs duties of a quantity of rum originating in the ACP States corresponding to the share of the tariff quota intended for consumption in the United Kingdom. The Communitytariff quota referred to in Article 1 is in fact divided into two instalments: the first is intended for consumption in the United Kingdom whereas the second is to be allocated among the other Member States. From 1 July 1982 to 30 June 1983 the quantity of pure alcohol admitted free of customs duties was 193178 hectolitres. The instalment intended for consumption in the United Kingdom amounted to 125430 hectolitres whilst that allocated among the other Member States amounted to 67748 hectolitres.
With regard to Article 9 any infringement thereof must be considered in conjunction with Article 34 and not separately. Article 9 (2) provides that, in particular, the provisions relating to the elimination of quantitative restrictions between Member States, which include Article 34, apply to products which come from nonmember countries and which are in free circulation in the Community, like the ACP rum comprising the share of the Community quota imported into the United Kingdom.
Thus it is necessary in reality to examine the contested provision in relation to Article 34 in conjunction with Article 9.
I do not think there is any point in dwelling on the differences between the language versions. The two texts seem to me to be sufficiently close to be endowed with a common meaning, whether it is that of the French version which is preferred by the Commission or whether it is that of the English version which is favoured by the Council.
I am firmly of the opinion that even on the basis of the latter version Article 4 (2) is clearly unlawful.
According to the Council's argument, supported by the French Government, Article 4 (2) is confined in its effect to the time when the rum is imported and is not concerned with what happens subsequently. In the view of the Council and the French Government the provision does not contain any prohibition of reexportation to the other countries of the Community.
That seems to me to be an excessively formalistic view. In addition it is inconsistent with the explanations put forward by the Council itself regarding the purpose of Article 4 (2). The Council has not denied that that purpose was to ensure that the imports appropriated to the United Kingdom share of the quota were still actually intended for consumption in that country. It clearly follows that those imports are not intended for consumption in the other Member States and thus may not be exported to them.
Accordingly the effects of the provision are not confined to the external frontiers of the Community as is claimed by the Council, supported by the French Government. If that were the case rum imported duty free into the United Kingdom would be able to move freely across the frontiers of the Member States because it had been put into free circulation. Such a situation is inconsistent with a provision which is intended to ensure that the product is actually consumed in the United Kingdom and is therefore incapable of being exported to other Member States. The provision therefore truly is a measure the aim... of which is specifically to restrict the flow of exports between the United Kingdom and other Member States and thus establish a difference in treatment between the domestic trade of a Member State and its export trade.
It remains to be considered whether that difference may be justified on grounds which render it lawful.
It is true that the system of division referred to by the French Government has the effect of preventing the movement from one Member State to another of the products in respect of which the quotas have been fixed. It is equally true that the system is one used for products other than rum, arrack and tafia. That this is so becomes apparent from a reading of Council Regulations (EEC) No 2787/79 of 10 December 1979 and (EEC) No 3378/82 of 8 December 1982, the first relating to certain wood products and footwear originating in developing countries and the second relating to certain textile products of the same origin.
Yet it is incorrect to state that this Court has held the system to be compatible with the Treaty. The judgments cited by the French Government were given in three cases concerning references made to the Court for a preliminary ruling where the questions referred by the national courts did not relate to the specific problem of the legality of the division of a Community quota amongst all the Member States. That question, which is the sole issue in this case, was not considered by the Court in those judgments.
In those circumstances it is not necessary in my opinion to consider the alternative defence relied upon by the Council, according to which, if the issue is to be regarded as an allegation by the Commission that Article 4 (2) involves the adoption by the United Kingdom of measures prohibiting or limiting exports for the purpose of fulfilling its obligations, such national measures do not in fact have such an effect.
Nevertheless an examination of that argument shows that it rebounds on the Council. In order to ensure that the ACP rum imported duty free is actually consumed in the United Kingdom and not in the other Member States, the United Kingdom Government has adopted the Customs Duties (Quota Relief) Order No 884 of 1982. According to that Order products are regarded as part of the British share of the quota after the acceptance of a declaration of domestic consumption. Upon acceptance of that declaration excise duty is paid. Re-exportation of the imported rum is therefore not prohibited but as the classification of the goods admitted for domestic consumption cannot be amended the excise duties cannot be recovered. In those circumstances, as the Council itself admits, re-exportation offers no economic advantage.
Thus even if the British rules implementing its obligations under Article 4 (2) do not expressly prohibit exports, they do in practice prevent exportation by making it uneconomic.
The whole of the aforementioned considerations lead me to the conclusion that the action brought by the Commission against the Council is well founded.
I therefore propose that the Court should :
1. Declare the regulation in question void;
2. Declare that Article 1 of the regulation is to be considered as definitive;
3. Order the Council to pay the costs.
1 Translated from lhe French.
2 Article 1.
4 Siaicd most recently in the Court's judgment of 15 December 1982 in Case 286/81 Oosthoek [1983] ECR 4575, 4587, paragraph 13.
5 Opinion 1/75 of 11. 11. 1975 on the draft Understanding on a Local Cost Standard, [1975] LCR 1355, at p. 1361.
6 Judgment of 20 April 1978 in Joined Cases 80 and 81/77 Les Commissionnaires Réunis et les Fils de Henri Ramel v Receveur des Douanes [1978] ECR 927, paragraph 37 at p. 947.
7 Case 46/76 [1977] ECR 5, paragraphs 28 to 32 and 42, at pp. 17 to 19.
8 Council Directive 64/432/EEC of 26 June 1961.
9 Judgment of 12 December 1973 in Case 131/73 Grosoli [1973] ECR 1555; judgment of 23 January 1980 in Case 35/79 Crosoli and Others [1980] ECK 177; judgment of 13 March 1980 in Case 124/79 rati Wahim [1980] ECR 813.