Report for the Hearing in Case C-312/91

I — Facts and Procedure

1. By a decision of 3 July 1991, in the course of criminal proceedings against Gaetano Lo Presti for offences under Article 2(4) of Decree-Law 746/83 and Articles 292 to 295(c) of Presidential Decree No 43/73, concerning the collection of VAT, the Procura della Repubblica (Public Prosecutor) of the Tribunale di Milano (District Court, Milan) ordered the seizure of nine aluminium ingots weighing 205885 kg imported from Austria by Metalsa Sri, on the ground that Metalsa had not paid the VAT due on importation. In the context of those criminal proceedings, relating to a fraudulent importation from Austria, that seizure is linked to the confiscation to which the goods will be subject if that fraudulent importation is confirmed in the final decision.

2. The first paragraph of Article 18 of the Agreement concluded on 22 July 1972 between the EEC and the Republic of Austria (Regulation (EEC) No 2836/72 of the Council of 19 December 1972 (OJ, English Special Edition 1972 (31 December — JO L 300), p. 1) provides:

3. The Judge responsible for preliminary inquiries, being of the opinion that the resolution of the interlocutory proceedings relating to the seizure of Metalsa's goods raised a delicate problem of interpretation of the Agreement concluded between the EEC and Austria, asked the Court, by an order of 18 November 1991, to make a preliminary ruling under Article 177 of the EEC Treaty on the following question:

4. The order for reference was received at the Court Registry on 3 December 1991.

5. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry, and to assign the case to the Fifth Chamber.

II — Summary of the written observations submitted to the Court

6. According to the Commission, the case raises two preliminary questions.

7. The Commission and the Italian Government claim that the first paragraph of Article 18 of the agreement of 22 July 1972 between the EEC and Austria cannot be interpreted in the same way as Article 95 of the EEC Treaty was interpreted in Drexl. That ruling cannot be transposed to a free trade agreement. That being the case, the fact that Italy penalizes the nonpayment of VAT on the importation of goods from Austria by confiscation but not where the nonpayment pertains to a domestic transaction cannot be regarded as a discriminatory fiscal measure or practice within the meaning of the first paragraph of Article 18 of the EEC-Austria agreement.

8. According to Metalsa, the purpose and the spirit of the EEC-Austria Free Trade Agreement of 22 July 1972 are such that the principle established in the Drexl judgment applies to this case; the Italian Court of Cassation has accepted that principle, to the effect that, where goods originating in a Member State of the Community are concerned, the nonpayment of VAT on importation does not amount to a criminal offence unless the offence on importation is not penalized more severely, to a disproportionate extent, than a VAT offence concerning domestic sales of goods.

1 Language of the case: Icalian.