Fratelli Zerbone Snc v Amministrazione Delle Finanze Dello Stato: ECJ 31 Jan 1978

ECJ The direct application of a community regulation means that its entry into force and its application in favour of or against those subject to it are independent of any measure adopting it into national law. By reason of the obligations imposed on them by the treaty member states must not impede the direct effect of regulations or other rules of community law. The scrupulous observation of this duty is an indispensable requisite for the simultaneous and uniform application of community regulations throughout the whole of the community. Accordingly member states must not adopt or allow national institutions with a legislative power to adopt a measure by which the community nature of a legal rule and the consequences which arise from it are concealed from the persons concerned. Although it is true that in the event of difficulty of interpretation the national administration may be led to adopt detailed rules for the application of a community regulation and at the same time to clarify any doubts raised, it can do so only in so far as it complies with the provisions of community law and the national authorities cannot issue binding rules of interpretation. Regulations nos 974/71 and 1013/71, as amended by regulation no 2887/71, do not permit member states to adopt provisions laying down specific criteria concerning the applicability or otherwise of compensatory amounts to contracts concluded before 19 December 1971 in order to ‘allow the contract to be executed under the conditions which would have existed had the monetary measures referred to in article 1 of regulation (EEC) no 974/71 not been taken’, as provided for under article 4(2) of regulation no 1013/71. The provisions of article 4(2) of regulation no 1013/71 are fully effective in themselves and must therefore be interpreted as leaving it to the courts of the member state concerned to decide whether the contract was executed under the conditions which would have existed in the absence of the monetary measures referred to in article 1 of regulation no 974/71. As regards the application of article 4(2) of regulation no 1013/71 the question is whether the contract was executed under the conditions which would have existed in the absence of the monetary measures which led to the introduction of the monetary compensatory amounts. Where the contract provides for payment by the opening of an irrevocable documentary credit the answer must depend on the nature of the arrangements agreed between the importer and the issuing bank and these may in turn depend on the provisions of the local law applicable to them. Where the credit is to be opened for a sum in foreign currency (as, in this case, dollars), the crucial date will be that upon which the rate of exchange determining the amount of the importer ‘ s liability to the issuing bank was applicable. For the purpose of determining whether the conditions for applying and determining monetary compensatory amounts are fulfilled reference must be made in respect of each commercial transaction ( importation or exportation ) to the day of the importation or exportation. The regime of trade with non-member countries in the common organization of the market in bananas established by regulation no 404/93, in particular the tariff quota for imports and the way it is subdivided, does not constitute a breach of fundamental rights and general principles of law.
Europa With respect to the prohibition of discrimination, it is true that two different categories of traders, those who previously operated on open national markets and were able freely to obtain supplies of third-country bananas, and those who operated on protected national markets and were ensured the possibility of disposing of community and traditional ACP bananas despite their higher price are not affected in the same way by those measures, since the former now find their import possibilities restricted, whereas the latter may now import specified quantities of third-country bananas. However, that difference in treatment appears to be inherent in the objective of integrating previously compartmentalized markets, bearing in mind the different situations of the various categories of traders before the establishment of the common organization of the market, and permits the striking of a balance between the two categories of traders, necessary for ensuring the disposal of community production and traditional acp production, which the common organization must ensure. The same considerations justify the restriction on the freedom of traders who previously operated on open markets to pursue their trade or business, the substance of that right not being impaired. With respect to those traders’ right to property, the loss of market shares does not impact that right, since the market share held before the establishment of a common organization of a market constitutes only a momentary economic position exposed to the risks of changing circumstances and is not covered by the right to property. Similarly, a position on the market resulting from an existing situation cannot, especially if that situation is contrary to the rules of the common market, benefit from protection on the basis of acquired rights or legitimate expectation. Finally, with respect to the principle of proportionality, it cannot be considered that there was a breach in that the objectives of supporting acp producers and guaranteeing the income of community producers could have been achieved by measures having less effect on competition and on the interests of certain categories of traders, since there is nothing to show that the council, which in establishing a common organization of the markets had to reconcile divergent interests and thus select options within the context of the policy choices which are its own responsibility, adopted measures which were manifestly inappropriate having regard to the objective pursued. With respect to the establishment of a tariff quota, the import of bananas from acp states into the community falls under article 168(2)(a)(ii) of the fourth acp-eec lome convention, protocol 5 on bananas annexed to that convention, and annexes lxxiv and lxxv relating to that protocol. Under those provisions, the community’ s only obligation is to maintain the advantages, with respect to access of acp bananas to the community market, which the acp states had before that convention, so that regulation no 404/93 was able, without being in breach of article 168(1) of the convention, to impose a levy on imports of non-traditional acp bananas exceeding a specified tonnage. The special features of the general agreement on tariffs and trade, which is characterized by the great flexibility of its provisions, in particular those conferring the possibility of derogation, the measures to be taken when confronted with exceptional difficulties and the settlement of conflicts between the contracting parties, precludes the court from taking provisions of gatt into consideration to assess the lawfulness of a regulation in an action brought by a member state under the first paragraph of article 173 of the treaty. Those features show that the gatt rules are not unconditional and that an obligation to recognize them as rules of international law which are directly applicable in the domestic legal systems of the contracting parties cannot be based on the spirit, general scheme or terms of gatt. In the absence of such an obligation following from gatt itself, it is only if the community intended to implement a particular obligation entered into within the framework of gatt, or if the community act expressly refers to specific provisions of gatt, that the court can review the lawfulness of the community act in question from the point of view of the gatt rules. Although the protocol on the tariff quota for imports of bananas is indeed an integral part of the treaty since it is annexed to the implementing convention on the association of the overseas countries and territories with the community, provided for in article 136 of the treaty, it was nevertheless adopted as a transitional measure pending standardization of the conditions for importing bananas into the common market. As part of that system, the third subparagraph of paragraph 4 of the protocol provides that, on a proposal from the commission, the council acting by a qualified majority may abolish or amend that quota, with no reservations as to the temporal extent of a decision to abolish it. That means that the protocol, which moreover cannot have the effect of derogating from a basic provision of the treaty such as article 43(2), and the quota which it provides for can be abolished without having to comply with the rules for amending the treaty laid down in article 236 of the treaty.
C-94/77, R-94/77, [1978] EUECJ R-94/77, [1978] ECR 99
Bailii
European
Cited by:
CitedSony Computer Entertainment Europe Ltd v Customs and Excise ChD 27-Jul-2005
The appellants had imported Playstation computer games. They appealed refusal of a rebate of 50 million euros paid in VAT before a reclassification of the equipment so as to make it exempt from VAT.
Held: ‘The effect of the annulment of a . .

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Updated: 19 January 2021; Ref: scu.214715