In Joined Cases 267 to 269/81
REFERENCE to the Court under Article 177 of the EEC Treaty by the Corte Suprema di Cassazione [Supreme Court of Cassation], Italy, for a preliminary ruling in the proceedings pending before that court between
Amministrazione delle Finanze dello Stato [State Finance Administration]
Società Petrolifera Italiana SpA (SPI), whose registered office is in Fornovo Taro (Case 267/81),
and
SpA Michelin Italiana (SAMI), whose registered office is in Turin (Cases 268 and 269/81),
on the jurisdiction of the Court of Justice to interpret the General Agreement on Tariffs and Trade (GATT), the effects of the substitution of the Community for the Member States with regard to the fulfilment of the obligations laid down by that agreement and the interpretation of several provisions of GATT with regard to the duty for administrative services levied on goods imported into Italy under Law No 330 of
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, O. Due, K. Bahlmann and Y. Galmot, Judges,
Advocate General: G. Reischl
Registrar: P. Heim
gives the following
The facts of the case, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
The General Agreement on Tariffs and Trade (GATT) was provisionally brought into force between the original Contracting Parties from
The Italian Republic acceded to GATT by a Protocol signed at Annecy on
According to Article 11 of GATT, the tariff concessions which each Contracting Party grants to the other parties to GATT are set out in a schedule of concessions. On its accession under the Protocol of Annecy, the Italian Republic negotiated its schedule of concessions, which was annexed to GATT as Schedule XXVII.
Article I of Italian Law No 330 of
According to the first paragraph of Article 4 of the Law, the duty for administrative services was to take effect from the date of the entry into force of the new customs tariff; by virtue of the second paragraph of Article 4, however, from
At the end of the fifth conference on multilateral trade negotiations held in the framework of GATT in Geneva from September 1960 to July 1962 (the
There were fresh negotiations on the XL (EEC) Schedule during the 1964 to 1967 Trade Conference (the
On
In accordance with Decision 66/532 of the Council of
Since the Italian Republic did not abolish the duty for administrative services by
By its judgment of
The duty for administrative services was abolished by Law No 447 of
Previously, the Amministrazione delle Finanze dello Stato [hereinafter referred to as
A sum of LIT
A sum of LIT
A sum of LIT
The two companies brought actions before the competent Italian courts for the refund of those payments, claiming essentially that the duty for administrative services was higher than the duties bound in the framework of GATT first by Italy and then by the Community.
Petrolifera and Michelin (in relation to the imports effected in 1963) succeeded at first instance; Michelin's claim was dismissed at first instance in relation to the imports effected from 1965 to 1971. On appeal, the Corte d'Appello [Court of Appeal], Genoa, by judgments of
The Administration lodged an appeal in cassation against those judgments before the Corte Suprema di Cassazione. The three appeals were initially assigned to the First Civil Division but were then transferred to the Combined Divisions.
Before them, the Administration contended that the prohibition laid down in Article II (1) (b) of GATT on increasing ordinary customs duties and all other duties or charges of any kind imposed on or in connexion with importation could not apply to products which had not been included in the schedule of original concessions applicable to Italy (Schedule XXVII). Thus the introduction in 1950 of a duty for administrative services could not constitute an increase in taxation in relation to the customs binding which was the subject of the Protocol of 1962 containing the results of the Dillon Round, by which the schedules of the Member States which were parties to GATT were replaced by the single Community XL (EEC) Schedule.
The defendants in cassation stated that in any event the introduction of new charges such as the duty for administrative services provided for by the Law of
The three orders dated
The orders of the Corte Suprema di Cassazione of
In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted as follows: on
Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decised to open the oral procedure without any preparatory inquiry. However, it requested the Italian Government and the Commission to reply in writing to certain questions. Those requests were complied with; Petrolifera also gave its views thereon.
By order of
There are two aspects to the first question put by the Corte Suprema di Cassazione and these should be distinguished: the first concerns the jurisdiction of the Court to interpret international agreements, and the second concerns the effects of international agreements with regard to the law applied by the courts of the Member States.
It is clear from the case-law of the Court that its jurisdiction to interpret international law is justified by the need for uniform interpretation and application of Community law, which may be jeopardized by a rule of international law which is applicable within the Community legal order, where it might have priority over a provision of Community law. That may be the case only if the Community is bound by the provision of international law in question and if that provision is capable of conferring on those subject to Community law the right to rely upon it before the courts. In view of Article 234 of the EEC Treaty, the Court, when reference is made to it concerning the interpretation of a provision of an international agreement, has jurisdiction to interpret that agreement in order to determine its effect in the Community legal order.
Agreements concluded directly by the Community either under Articles 113 and 114 or under Articles 238 and 228 of the EEC Treaty bind the Community and the Member States thereof; they create directly-applicable rules, intended to confer personal rights on individuals. The same applies to
The Court of Justice would in any event have jurisdiction to interpret the international agreements concluded under Article 234 of the EEC Treaty by one or more Member States before the entry into force of the Treaty, regardless of whether the Community had been substituted for the Member States in relation to the obligations incumbent on them under those agreements. However, that jurisdiction exists only in so far as according to the general scheme of the EEC Treaty the rule of international law is bound to have priority over Community rules contained in the Treaty or in measures of secondary Community law; it is a matter of avoiding the possibility that a rule of international law may be interpreted differently in the various Member States, in contrast to a rule of Community law, which should itself be applied in a uniform manner throughout the Community.
So far as
It would therefore be absurd in the framework of the main action in Case 267/81 to ask the Court to give a ruling even indirectly on the compatibility of the duty for administrative services with the rules contained in GATT; that problem should be solved exclusively on the basis of criteria which may be drawn from Italian national case-law.
The duty for administrative services is charged on imports from nonmember countries of products other than agricultural products; thus, according to the case-law of the Court, Community law is wholly inapplicable: it is for the Italian State to decide exclusively on the basis of its own legislation and case-law whether to maintain or abolish the duty.
Moreover, in its case-law the Court has not accepted that the provisions of GATT are capable of creating personal rights within the Community, inasmuch as they may be relied upon before a national court to defeat a rule contained in a Community regulation. The problem raised before the Corte Suprema di Cassazione is on the contrary that of the scope of a provision of GATT in relation to a national duty introduced before the entry into force of the EEC Treaty; that question does not fall within the Court's jurisdiction: under the general scheme of the EEC Treaty, the Member States are free to maintain or abolish such a duty, under their own national law, without infringing any provision of Community law.
In any event, it should be stated that the relevant provisions of GATT introduce a
In its preamble, GATT imposes on the Contracting Parties an obligation substantially to reduce customs tariffs and other trade barriers; that obligation, which admittedly is in the nature of a programme, nevertheless involves a directly-applicable prohibition on the introduction of new customs duties or new charges having equivalent effect. The system of the EEC Treaty, which contains directly-applicable rules giving rise to personal rights which must be protected by the national courts, is identical.
Article II (1) (b) of GATT prohibits the Contracting States from imposing on imported products duties or charges in excess of the customs duties applicable at the date of accession of GATT. That prohibition is defined more closely in Article II (2), which provides that the Contracting States may impose on the importation of a product only countervailing duties, antidumping duties and fees for services rendered; none of these cases applies to the duty for administrative services, which constitutes a classic example of a charge having an effect equivalent to a customs duty.
The provisions of GATT referred to in the question put by the Corte Suprema di Cassazione lay down a
The
The Court has on several occasions stated that, in so far as by virtue of the EEC Treaty the Community, in the application of GATT, exercises powers which previously belonged exclusively to the Member States, it has been substituted for the Member States in relation to the fulfilment of the commitments provided for by GATT; the other Contracting Parties have accepted that position.
In so far as such substitution has actually taken place, the Court must have jurisdiction to give preliminary rulings concerning the interpretation of the provisions of GATT affected by the substitution, in order to check whether competing rules are compatible with one another; it must therefore, by analogy and in order to meet the obvious requirement of uniform application of the law, be regarded as having jurisdiction directly to interpret those provisions when they are directly relevant to the settlement of a dispute.
The Corte Suprema di Cassazione considered that Articles II and III of GATT must, in view of their selfexecuting character, be regarded as capable of conferring on individuals, in the framework of and by virtue of their incorporation into the Italian legal order, rights upon which they may rely before the courts; on the other hand, the Court of Justice has ruled that, regard being had to the spirit, general scheme and terms of GATT, its provisions are not capable of conferring rights on citizens of the Community upon which they may rely before the courts.
The reply to the question put in this case by the Corte Suprema di Cassazione must be sought in the light of the need for a uniform application of GATT in the Community.
The preamble to GATT makes it clear that it seeks to achieve, by means of reciprocal and mutually advantageous arrangements, on the one hand, the substantial reduction of tariffs and other barriers to trade and, on the other, the elimination of discriminatory treatment in international commerce. In relation to the first point, Article II of GATT first of all fixes, in relation to the products described in the national schedules of each of the Contracting Parties, the maximum level of customs duties, which may not exceed the level provided for in the corresponding schedules annexed to GATT, and then prohibits for the same products any increase in all other import duties in force in the wording of those provisions that the prohibition of the imposition on products of any new customs duties or other charges on importation applies only to products included in those schedules.
International practice in negotiations in the framework of GATT shows that the Contracting Parties have always, albeit tacitly, regarded Article II as applying exclusively to products which are covered by tariff concessions and as such are included in the schedules annexed to GATT or to the protocols of accession of new Contracting States.
Furthermore, in relation to a systematic interpretation of the provisions of GATT, a special place should be given to the rules laid down in Articles XXVII (Withholding or withdrawal of concessions) and XXVIII (Modification of schedules).
Article XXVII seeks to ensure the constant application of the principle of reciprocity and balance between the sum of the tariff concessions granted by one party in relation to imports into its territory and the sum of the concessions obtained by it for exports of its own products into the territory of the other parties; the machinery of GATT, resulting from the combined provisions of Articles II and XXVII, is therefore indissoluble from the schedule of Concessions.
Article XXVIII of GATT, which provides for the withdrawal of substantially equivalent concessions, points to the same conclusion.
Thus the prohibition on the introduction of any new customs duties or the incresse of those in force on a certain date applies under the provisions of GATT exclusively to the products appearing in the schedules of tariff concessions.
Article II (1) (b) of GATT, after fixing the ceiling for customs duties which may be imposed on the importation of products described in Part I of the schedule of any Contracting Party, provides that:
The schedule of tariff concessions was indeed modified and extended on the occasion of the accession of other countries to GATT, and there was a corresponding change in the number of products subject to the rules laid down in GATT; however, all the protocols whose object or effect is to extend the rules contained in GATT to products which were not previously subject thereto contain a clause which is wholly identical to Article 5 (a) of the Annecy Protocol and defers to the date of the respective protocols the entry into force of the prohibition on the increase of customs duties on products which by virtue of those protocols are for the first time covered by tariff concessions. In relation to the products which did not appear in the original Schedule XXVII but were later included, for example, in the schedule annexed to the Torquay Protocol of
In order to determine the level of charge which may not, according to Article II (1) (b) of GATT, be imposed on imports into Italy, it is therefore necessary to refer to
The answer to the third question should therefore be that, in the case of products which were included for the first time in the so-called common schedules and which did not appear in the national schedules, previously negotiated by each of the States which later became Members of the Community, the date to be taken into consideration with regard to Article II of GATT is that of the protocols signed on conclusion of the tariff negotiations in the Dillon Round and the Kennedy Round.
The
According to Article 113 of the EEC Treaty, jurisdiction with regard to the common commercial policy has been exercised by the Community since the end of the transitional period. From that internal jurisdiction, an external jurisdiction has been inferred, which enables the Commission to negotiate in the framework of GATT on behalf of the Member States which have remained Contracting Parties. However, it has been possible to exercise that jurisdiction only with effect from
The question of interpretation submitted by the Corte Suprema di Cassazione therefore has no bearing on Cases 267/81 and 269/81, in which the facts arose before 1968; in relation to Case 268/81, the interpretation given by the Court may apply only to the facts which arose between 1968 and 1971.
With regard to the parties, it should be remembered that the disputes are between the Italian State and legal persons; the question referred to the Court relates to the relations between individuals and is therefore irrelevant to the determination of the disputes.
More generally, it should be noted that the Court of Justice has frequently stated that it has jurisdiction to interpret agreements concluded by the Member States in a sphere in which the Community has since become competent or agreements signed and then ratified in the framework of the Community; in a long line of cases the Court has developed the principle of the external jurisdiction of the Communities in spheres governed by the Treaties. It has also stated that it has jurisdiction to interpret GATT; in order to found that jurisdiction, it has developed two conditions referring to criteria peculiar to Community law: the Community must be bound by a provision of international law which may affect the validity of a Community measure and that provision must be capable of conferring on citizens of the Community the right to reply on it before the courts.
With regard to the first condition, it may be inferred that, conversely, in the absence of any disputed Community measure the Court has no jurisdiction of interpretation; that is the case here.
In relation to the second condition, the Court has already decided that, in view of
In fact, GATT is based according to its preamble on the principle of negotiation undertaken
The fact that GATT does not create any rights for individuals follows more particularly from :
The decision-making process: Decisions within the framework of GATT are taken by agreement, on the basis of negotiations of a political nature; without prejudice to the need for judicial review of the legality of measures, a decision of a court cannot affect a political decision adopted by an international body;
The method of settlement of disputes: this is by negotiation between States.
It follows from the inter-State nature of the decision-making process and the method of settlement of disputes under GATT that the rules of GATT do not produce any effects upon which individuals may rely; therefore in application of the conditions laid down in the case-law of the Court, the latter cannot regard itself as having jurisdiction to interpret GATT. Since the first question put by the Corte Suprema di Cassazione must be answered in the negative, the two other questions have no purpose.
The
The Community legal system is an open system: certain provisions of international agreements concluded by the Community with nonmember countries or with international organizations, by which the Community as such is bound, may form part of Community law, in so far as they are capable of direct applications and may
Article 228 (2) of the EEC Treaty, which provides that international agreements concluded by the Community are to be binding on the institutions óf the Community, apply
If the Community is bound by an international agreement and if the provisions of that agreement which must be specifically relied upon have a direct effect on relations within. the Community, the provisions in question may be regarded as forming part of Community law and must therefore be interpreted and applied by the Court of Justice.
The Court of Justice has ruled that it has jurisdiction to interpret international agreements which
The jurisdiction of the Court to interpret a particular provision of an international agreement cannot be made conditional upon the existence of a measure of Community law.
In this case, since the Community is bound by the provisions of GATT, the Court has jurisdiction to interpret the relevant provisions thereof and to apply them, in so far as they have direct effect within the meaning of the case-law of the Court.
The question whether the provisions of GATT concerning tariff concessions and bindings are
The
The provisions of GATT generally and the provisions referred to in the questions submitted to the Court in particular do not have direct effect because of the language and the intention of GATT itself and because of the case-law of the Court of Justice.
GATT is primarily concerned with reciprocal arrangements for the reduction of tariffs and other barriers to trade; by contrast, the intention and purpose of the EEC Treaty is not merely to facilitate trade between Member States but also to create a single economic Community with its own legal order, its own institutions and its own machinery for its interpretation and implementation.
When the effect of an international agreement is considered, the ordinary meaning must be given to the terms of the Treaty in their context and in the light of its object and purpose. In several of its judgments, applying that principle, the Court stated that the provisions of GATT are not capable of conferring on citizens of the Community rights which they may invoke before the courts.
To give direct effect to a treaty such as GATT would lead to wholly undesirable results which were not intended by the parties thereto: the consequence would be unilaterally to enlarge the EEC, so far as Member States only are concerned, to countries which have not accepted the obligations inherent in membership of the EEC.
There is no reason for the Court to depart from its previous rulings, whereby the provisions of GATT in question in the main action cannot confer on nationals of Member States of the Community rights which may be invoked in national courts.
The
That substitution of the Community for the Member States in relation to the fulfilment of commitments arising out of GATT creates a situation in the Community legal order comparable to that in which an international agreement was originally concluded by the Community itself.
Within the framework of GATT substitution is in fact very widely accepted and practised, without having been formally set out.
In the Community's internal order, as a result of the substitution of the Community for the Member States, GATT must be treated, like all agreements concluded by the Community, as a measure of the institutions of the Community, within the meaning of subparagraph (b) of the first paragraph of Article 177 of the EEC Treaty. The internal effect of GATT cannot depend on the legal system of each of the Member States; it would be inconsistent and illogical to permit the provisions of GATT to have an effect in the Community differing according to the legal system of each of the Member States, when within GATT the Community acts as one unit and develops an important part of the common commercial policy, exercising the competence and powers which have been transferred to it under the Treaty.
Under those circumstances the existence, effect and scope of a Member State's obligation to comply with GATT have undoubtedly become questions of Community law, as a result of the substitution of the Community for the Member States, those questions must necessarily fall within Article 177 of the EEC Treaty, since otherwise part of Community law would be deprived of the guarantee of uniform interpretation provided by the procedure for preliminary rulings.
That provision contains two obligations, one of which relates to ordinary customs duties and the other to all other duties or charges of any kind imposed on or in connexion with importation.
In relation to ordinary customs duties, the Community was substituted for the Member States in relation to the fulfilment of the commitments arising out of the binding for the products described in Schedule XL resulting from the Dillon Round, which was held during the transitional period; intended to enter into force at the end of that period, the Common Customs Tariff at that time constituted the common tariff with which the customs tariffs of the Member States were to be progressively aligned, within the limits and conditions provided for in the Treaty. In the Community's internal order, competence was shared; the result of this in the sphere of external relations was that the protocol of the Dillon Round was concluded by the Member States as well as by the Community.
The fact nevertheless remains that in the Community's internal order the Member States were subject, in relation to customs tariffs, to procedural and substantive rules which at international level had a counterpart in the negotiation and conclusion by the Community of the protocol of the Dillon Round.
The position is different in relation to the obligation laid down in Article II (1) (b) concerning other duties or charges imposed on or in conexión with importation.
The schedules of concessions of the Member States, that is to say the bound customs duties, were withdrawn and replaced by Schedule XL of the Community. The obligation concerning charges on importation other than ordinary customs duties is linked to the obligation concerning the latter to such an extent that the withdrawal of a concession (the
Moreover, within the Community the Member States were still able to use charges on importation as an instrument in trade with nonmember countries, except in relation to agricultural products. The Court held that the prohibition on the modification of duties in the Common Customs Tariff by the Member States by means of charges added to those duties applied only with effect from the introduction of the Common Customs Tariff on
In the sphere of external relations, the commitments regarding tariffs were negotiated and accepted by the Community alone. The tariff protocol of the Kennedy Round was, admittedly, concluded by both the Community and the Member States; but it was so concluded by each within the limits of its own jurisdiction. For the Member States, it was a matter exclusively of the withdrawal of the former concessions on products falling within the ECSC Treaty and the determination of a single common schedule (XL (A)) for those products.
The situation also changed within the Community: after the Dillon Round, according to the provisions of the Treaty themselves, no proper common customs tariff yet existed during the transitional period and, although the Member States were obliged progressively to align their tariffs with the common tariff, within the limits and conditions provided for by the Treaty, they retained some room for manoeuvre; on the other hand, after the Kennedy Round, the bound duties which had been negotiated were reproduced in the Common Customs Tariff, which was fully to enter into force on
The existence, effect and scope of Article II (1) (b) of GATT in relation to charges on importation other than customs duties therefore became questions of Community law as from
In Cases 267/81 and 269/81:
Before
In Case 268/81:
In relation to duties and charges other than customs duties imposed on or in connexion with the importation of industrial products, the Community was substituted for the Member States with regard to the fulfilment of commitments arising out of Article II (1) (b) of GATT only with effect from the introduction of the Common Customs Tariff. It is only from that date that the legal effect of those commitments must be assessed with regard to the relevant provisions of the Community legal order and that their interpretation falls within the jurisdiction to give a preliminary ruling laid down in Article 117 of the EEC Treaty.
It is necessary to approach with great caution the problem of the direct effect of international agreements concluded by the Community and agreements such as GATT, for the purpose of whose implementation the Community has been substituted for the Member States; that caution is based, on the one hand, on the nature and objectives of such agreements, which differ from those of the EEC Treaty, and, on the other, on the need to maintain a proper balance of advantages and disadvantages between the parties to agreements such as GATT, which are based on reciprocity.
In interpreting a provision of GATT, the court of one Contracting Party might be induced to give to it a wider scope than that which the Contracting Parties attribute or might be induced to attribute thereto; judicial interpretation relates to a subject which the signatories of GATT left to subsequent bilateral or multilateral negotiations or to questions capable of being settled by a procedure for the settlement of disputes, which also includes negotiation.
In relation to
There is apparently no well-established interpretation, accepted by the Contracting Parties, of Articles VIII and II. In order to ascertain their scope, it is not possible to have recourse to a criterion as decisive as that developed by the Court of Justice in relation to the related concept of a
The second question put to the Court in Case 268/81 should be answered as follows:
So far as duties and charges on importation other than customs duties are concerned, Article II (1) (b) of GATT is not a provision with which an individual may enforce compliance by a Member State in the courts by virtue of Community law.
That provision sets out the objective of GATT: the object of the sentence concerning other charges on importation is to prevent a Contracting Party from introducing such charges so as to reduce the value of the concessions set out in its schedule; the second paragraph of Article 4 of Law No 330 introducing the duty for administrative services shows that that was indeed the idea of the Italian legislature.
GATT does not contain any implied obligation not to introduce new customs duties or new charges on importation, in addition to the express obligation not to increase customs duties on the products bound by a Contracting Party's schedule.
Articles V and VIII tend rather to contradict the idea of a
Moreover,
The preamble also fails to support the argument of a
With regard to the special case of the withdrawal of the concessions of the Member States — which the establishment of a customs union such as the EEC involved — and the offer of concessions by the Community, it was agreed in the Dillon Round that the date applicable for each product which was covered by a concession described in the Community schedule was to be, on importation into one of the Member States, the date of the instrument by which the product, if it appeared in Part 1 of a schedule applicable on
The agreement concluded in the Dillon Round was not expressly renewed in the framework of the Kennedy Round, probably because a special clause was no longer regarded as necessary in relation to the obligations of the Community. The general clause in the protocol of the Kennedy Round provides that:
In relation to duties and charges on importation other than customs duties, Article II (1) (b) of GATT covers only the products included in the schedules referred to in Article II. The date which must be used as a reference in order to determine the level of those duties and charges is that of the protocol introducing the new concession. Having regard to the commitments undertaken by the Community on conclusion of the Dillon Round and the Kennedy Round, for the products in Schedule XL (EEC) which already appeared in a Member State's schedule and for imports into that Member State, the date which must be used as a reference is that of the protocol whereby those products were included in that Member State's schedule for the first time.
At the sittings on
It claimed that this case concerned a conflict between GATT and a national Law rather than between GATT and a Community measure. The argument that the determination of the compatibility of the contested charge with GATT was governed by Italian law in relation to imports effected before
In addition, the dispute in the main action did not involve any Community interest and an examination at Community level of the substantive questions raised by the dispute would amount to interference in an area falling within national jurisdiction.
The Advocate General delivered his opinion at the sitting on
On the one hand, the interpretation of Article 177 of the EEC Treaty; On the other hand, the effect within the Community of the General Agreement on Tariffs and Trade (GATT) of
The Corte Suprema di Cassazione submitted the questions in order to enable it to determine the compatibility with those provisions of the imposition of the
On those grounds,
THE COURT,
in answer to the questions submitted to it by the Corte Suprema di Cassazione by orders of
Mertens de Wilmars
Pescatore
O'Keeffe
Everling
Mackenzie Stuart
Bosco
Due
Bahlmann
Galmot
Delivered in open court in Luxembourg on
P. Heim
Registrar
J. Mertens de Wilmars
President