JUDGMENT OF 2. 3. 1983 — CASE 155/82 COMMISSION v BELGIUM

In Case 155/82

THE COURT composed of: J. Mertens de Wilmars, President, P. Pescatore, A. O'Keeffe and U. Everling (Presidents of Chambers), Lord Mackenzie Stuart, G. Bosco, T. Koopmans, O. Due and K. Bahlmann, Judges, Advocate General: S. Rozès Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

I — Facts

II — Written procedure

III — Conclusions of the parties

IV — Submissions and arguments

V — Oral procedure

Decision

Costs

I —. Facts

II —. Written procedure

III —. Conclusions of the parties

IV —. Submissions and arguments

(a). That obligation impedes commercial transactions connected with importation and marketing, inasmuch as an exporter, who is nearly always the producer, from another Member State is prevented from himself applying for the necessary authorizations in Belgium. The necessity of acting through the intermediary of an undertaking established in Belgium inevitably entails costs and imposes a burden which is not imposed on domestic producers. Under Directive 70/50/EEC such measures are to be regarded as measures having an effect equivalent to quantitative restrictions.

(b). The necessity and legality of organizing in the sector concerned a system of monitoring, inspection and checks and of adopting the measures necessary for the protection of public health is not disputed. The requirement of establishment in Belgium is by no means a necessary element in such preventive legislation.

(c). According to the case-law of the Court, it is for the party who relies on one of the grounds for exemption contained in Article 36 of the Treaty to establish that the measures in question are necessary and conform to the principle of proportionality. In this case that has not been established.

(a). The Belgian legislation in question is intended to provide every possible safeguard in order to avoid accidents and the extremely serious consequences thereof. The holder of the approval established in Belgium is unquestionably in a better position than a holder living abroad, perhaps at some considerable distance from the place where the product is used, to verify that the product satisfies the requirements. In order to ensure real safety, it is necessary, after the authorization has been issued, to take other measures. Such measures may include checks on the composition and labelling of consignments, restrictions on sales, a requirement that the most toxic products be used by persons with the appropriate qualifications and insistence on the immediate availability of the person with responsibility. In the event of an accident, it is for the holder of the approval, as the person who has knowledge of the total composition of the product and its particular toxic properties, to provide the doctor in attendance with the necessary information. Moreover, in order to effect the withdrawal from circulation of the toxic product, it is easier to discover the identity of the distributors of the product if the person with responsibility is established in Belgium. Moreover, the holder of the approval is liable for the harmful effects on health which result from the product's nonconformity with the specifications of the approval.

(b). The fact that a foreign producer must satisfy conditions for approval, fixed in the absence of a harmonized system of approval within the Community by each Member State, and that he must apply to each individual government to obtain the national approval in itself amounts to an obstacle to trade. The requirement of having a representative within the national territory is, in that respect, only one element of the system of national approval considered as a whole.

(c). The requirement has only a slight effect on trade. The foreign undertaking is completely at liberty to appoint a representative and the expense of so doing is not excessive. The fact of having a representative in the Member State may, moreover, have commercial advantages for the foreign undertaking. In practice, even in States which do not require the establishment of a representative within the national territory, all undertakings have a local representative. Undertakings are not required to establish a new representative in Belgium, as the application for approval may be submitted by a concessionnaire who is already established.

(d). In view of the potential danger to public health of phyto-pharmaceutical products and pesticides for nonagricultural use, every attempt should be made to impose liability on the undertaking. The requirement provided for by Article 12 of the Royal Decree should be regarded as safeguarding a public interest which takes precedence over the demands of free trade.

(e). In any event, the disputed measure may be justified under Article 36 of the Treaty on the ground of the protection of the health and the life of humans.

(f). Article 12 of the Royal Decree is compatible with the principle of proportionality. The objective consists in establishing the best protection for public health, in particular, by ensuring the enforceability of a criminal penalty which is both punitive and preventive. The nomination by a foreign undertaking of an intermediary residing in Belgium may scarcely be regarded as a commercial restriction likely to hinder intra-Community trade.

(g). The disputed measure does not constitute either a means of arbitrary discrimination or a disguised restriction on trade between Member States.

V —. Oral procedure

1. By application lodged at the Court Registry on 17 May 1982, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by restricting the right to apply for authorization or approval for pesticides for nonagricultural use and phyto-pharmaceutical products to persons established in Belgium, the Kingdom of Belgium has failed to fulfil its obligations under Article 30 et seq. of the EEC Treaty.

2. By the Royal Decree of 5 June 1975 on the storage, marketing and use of pesticides and phyto-pharmaceutical products (Moniteur Belge, p. 13864), Belgium made the marketing on its territory of pesticides for nonagricultural use and phyto-pharmaceutical products, more fully defined in the abovementioned Royal Decree, subject to governmental authorization. Article 12 of the decree provides that authorization may be obtained only by a person established in Belgium who has responsibility for the marketing of one of those products as a producer, importer, proprietor or concessionnaire.

3. The Commission considers that the provision, by making the admission of such products conditional on the requirement of having a representative in Belgium, has the effect of placing non-Belgian producers at a disadvantage and, consequently, constitutes an obstacle to intra-Community trade which is incompatible with Article 30 of the Treaty. It points out in particular that, according to Article 2 (3) (g) of Commission Directive 70/50/EEC of 22 December 1969, based on the provisions of Article 33 (7), on the abolition of measures which have an effect equivalent to quantitative restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty (Official Journal, English Special Edition 1970 (I), p. 17), measures which make access of imported products to the domestic market conditional upon having an agent or representative in the territory of the importing Member State are to be considered measures having an equivalent effect to quantitative restrictions.

4. Consequently, the Commission commenced the procedure under Article 169 of the Treaty and, on 23 October 1981, issued a reasoned opinion in which it requested the Kingdom of Belgium to remove from its legislation the requirement that the recipient of the authorization to market one of the products in question be established on national territory.

5. In its statement of 18 February 1982, the Belgian Government declared that it considered the disputed measure to be justified, in view of the dangerous nature of the products concerned, on the ground of the protection of public health.

6. Following that statement, on 17 May the Commission brought an action under Article 169.

7. It is not disputed that the requirement imposed by the Belgian legislation constitutes an obstacle to the importation of the products concerned into Belgium, inasmuch as it compels undertakings established in other Member States to incur the cost of establishing a representative in Belgium, and that it may, as a result, make it difficult, if not impossible, for certain undertakings, in particular small or medium-sized undertakings to enter the Belgian market.

8. The Belgian Government acknowledges that the requirement constitutes an impediment to trade within the Community, but argues that it is justified on the ground of the protection of public health, as recognized by Article 36 of the Treaty.

9. It points out that there is, as yet, no harmonized system of approval at Community level in the sphere in question, so that each Member State lays down the rules for approval for its own territory. The requirement of having a representative on national territory is, in that respect, only one element of the system of national approval, taken as a whole.

10. It maintains that, in view of the considerable increase in the use of the products concerned and of the high degree of toxicity of certain of them, strict measures are necessary for their control and for the imposition of liability. In that respect, the requirement that any producer wishing to market a specified product must have a representative on Belgian territory who is responsible for the product is justified by a number of considerations relating to:

11. In addition, the Belgian Government claims that only the establishment on national territory of a person with responsibility for the product ensures the effectiveness of prosecutions for infringements of public health legislation.

12. The principle behind the arguments put forward by the Belgian Government can not be disputed, inasmuch as each Member State is entitled to take within its territory, in particular in a sphere in which the objective of the harmonization of health control measures has not yet been achieved, appropriate measures in order to ensure the protection of public health. However, such measures are justified only if it is established that they are necessary in order to attain the objective of protection referred to in Article 36 and that such protection cannot be achieved by means which place less of a restriction on the free movement of goods within the Community.

13. In that connection two observations should be made concerning the arguments put forward by the Belgian Government.

14. On the one hand, it seems that the objectives pursued by the Belgian Government with regard to the completion of the approval formalities, the rules on labelling, the verification of the conformity of the product marketed with the product approved and the availability of information in the event of an accident or a complaint may be fully satisfied by appropriate administrative measures taken when the application is examined and the approval is issued, without its being necessary to require the establishment of a representative on national territory.

15. On the other hand, questions of criminal liability are relevant to the objective of Article 36 only in so far as the application of criminal provisions may have a preventive effect. In that respect it is clear that, as far as effective prevention is concerned, only the preliminary formalities connected with the issue of the approval and the checks carried out at that stage and, possibly, at the moment when the goods are placed on the market can provide an adequate safeguard for the attainment of the objective pursued by Article 36. Even though criminal penalties may have a deterrent effect as regards the conduct which they sanction, that effect is not guaranteed and, in any event, is not strengthened, in the case of a manufacturer in another Member State who has been issued with an approval, solely by the presence on national territory of a person who may legally represent the manufacturer.

16. The requirement that a representative be established on national territory is not therefore such as to provide, with a view to the attainment of the objective of the protection of public health, sufficient additional safeguards to justify an exception to the prohibition contained in Article 30.

17. It must therefore be concluded that the requirement imposed by the Belgian legislation, according to which the right to apply for approval for pesticides for nonagricultural use and phyto-pharmaceutical products is restricted to persons established in Belgium, is not justified under Article 36 and therefore constitutes a restriction on intra-Community trade which is incompatible with Article 30 of the Treaty.

18. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the defendant has failed in its submissions it must be ordered to pay the costs.

On those grounds, THE COURT hereby:

1 Declares that, by restricting the right to apply for authorization or approval for pesticides for nonagricultural use and phyto-pharmaceutical products to persons established in Belgium, the Kingdom of Belgium has failed to fulfil its obligations under Article 30 et seq. of the EEC Treaty;

2 Orders the defendant to pay the costs.