Internationale Handelsgesellschaft MBH v Einfuhr-und-Vorratsstelle fur getreide und Futtermittel (Solange I) (Case 11/70)

• Jurisdiction: European Union
• Court: European Court of Justice
• Date: 29 May 1974

Court of Justice of the European Communities.

Federal Republic of Germany, Federal Constitutional Court. (BVerfG)

(Lecourt, President; Donner, Trabucchi, Monaco, Mertens de Wilmars, Pescatore, Kutscher, Judges; Dutheillet de Lamothe, Advocate-General)

(Seuffert, Presiding; Schlabrendorff, Rupp, Geiger, Hirsch, Rinck, Rottmann and Wand, Judges)

Internationale Handelsgesellschaft mbH

and

Einfuhr-und-Vorratsstelle für Getreide und Futtermittel (Solange I)

Treaties — Effect in municipal law — EEC Treaty, 1957 — Legislation enacted by EEC institutions — Status under municipal law — Regulations — Primacy of EEC law over contrary municipal law — Whether provisions of EEC law take precedence over fundamental rights under national constitutions

Relationship of international law and municipal law — Treaties — Effect in municipal law — EEC Treaty, 1957 — Nature of legal order established by Treaty — Fundamental rights under national Constitution — Reference to Constitutional Court alleging unconstitutionality of EEC provisions — Whether provisions of EEC law prevailing over fundamental constitutional rights

Treaties — Conclusion and operation — Constitutional limitations — Acts of institutions established by EEC Treaty — Whether subject to constitutional review by municipal courts

International organizations — EEC — Legal status — Powers — Regulations enacted by Council and Commission — Whether subject to constitutional review by municipal courts of Member States — Institutions — Court of Justice of European Communities — Effect of decisions in municipal legal order of Member States Human rights — Procedure for enforcement — Scope of protection of human rights within the Community — Whether human rights law part of Community law — Case law of the Court of Justice of the European Communities — Whether adequately ensuring protection of fundamental rights — Whether any requirement upon Community to secure enactment of bill of rights by democratically elected European Parliament

Human rights — Procedure for enforcement — Fundamental rights under Constitution of Federal Republic of Germany — EEC Treaty, 1957 and secondary legislation — Possible conflict with fundamental rights under Constitution of Federal Republic — Whether EEC provisions subject to constitutional review by municipal courts to establish compatibility with fundamental constitutional rights — Whether such proceedings jeopardizing EEC legal system

Economics, trade and finance — Import and export licences — Cereals — EEC Treaty, 1957 — Period of validity of licences — Expiry — Forfeiture of deposits — Whether violating fundamental rights — The law of the European Economic Community — The law of the Federal Republic of Germany

Summary: The facts:—Under an export licensing system operated pursuant to regulations of the EEC Council and Commission, a licence was required to export certain cereal products from the EEC. The system provided that, upon obtaining an export licence, a deposit was to be lodged with the appropriate authority which, in the Federal Republic, was the Einfuhr-und Vorratsstelle für Getreide und Futtermittel (‘evgf’). If the full quota of exports granted under the licence was not fulfilled within a given time limit the deposit was forfeited, except in cases of force majeure.

In 1970 Internationale Handelsgesellschaft applied to the Administrative Court (Verwaltungsgericht) of Frankfurt am Main for the annulment of the decision of the evgf that it should forfeit its deposit for non-fulfilment of the obligation to export within the period of validity of its export licence. The Court determined that the EEC regulations creating the export licensing system constituted a violation of certain fundamental rights guaranteed by the Constitution of the Federal Republic and, with a view to putting an end to the existing legal uncertainty, stayed the proceedings and referred the case to the Court of Justice of the European Communities (‘the Court of Justice’) under Article 177 of the EEC Treaty, for a preliminary ruling as to the validity of the provisions in question.

Opinion of the Advocate-General:—In his submissions to the Court of Justice the Advocate-General argued that, according to the Court's case-law, the legality of Community measures could only be judged on the basis of Community law and not national law or even national constitutional laws such as the Federal Constitution (Basic Law). The fundamental principles of the national legal systems had the function of enabling Community law to find from within itself the resources necessary for ensuring respect for the fundamental rights which formed the common heritage of the Member States.

The Court of Justice was urged to reaffirm that Community law ensured, by itself and in all circumstances, the protection of those human rights recognized as fundamental. In fact, the fundamental right of the individual not to have his freedom of action limited beyond the degree necessary for the general interest, at issue in this case, was already guaranteed both by the general principles of Community law and by the express provisions of Article 40 of the EEC Treaty.

The system of deposits was strictly necessary for the normal functioning of the Community cereals market and was probably the least restraining measure which could be applied to guarantee the correct functioning of the market. Accordingly the system fully complied with Article 40 since it was ‘a measure required to attain the objectives of the common agricultural market set out in Article 39 of the Treaty’ (pp. 369–70).

Held (by the Court of justice of the European Communities):—Examination of the questions revealed no factor capable of affecting the validity of the provisions of the regulations at issue.

(1) The validity of measures adopted by the institutions of the Community could only be judged in the light of Community law. The law stemming from the Treaty, an independent source of law, could not because of its very nature be overridden by rules of national law, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called into question. Therefore the validity of a Community measure, or its effect in a Member State, could not be affected by allegations that it ran counter to fundamental rights enshrined in a national constitution (p. 378).

(2) Respect for fundamental rights formed an integral part of the general principles of law protected by the Court of Justice. The protection of such rights, whilst inspired by the constitutional traditions common to the Member States, had to be ensured within the framework of the structure and objectives of the Community (p. 378).

(3) The requirement laid down in the Community agricultural regulations for import and export licences, involving an undertaking by the licensees to effect the proposed transactions under the guarantee of a deposit, constituted a method which was both necessary and appropriate, for the purposes of Articles 40(3) and 43 of the EEC Treaty, to enable the competent authorities to determine in the most effective manner their intervention on the cereals market. The system of deposits did not violate any right of a fundamental nature (pp. 379–81).

(4) By limiting the cancellation of the undertaking to export and the release of the deposit to cases of force majeure, the Community legislature had adopted a provision which, without imposing an undue burden on importers or exporters, was appropriate for ensuring the normal functioning of the organization of the cereals market, in the general interest as defined in Article 39 of the Treaty (p. 382).

Upon notification of the judgment of the Court of Justice, the Administrative Court once again stayed the proceedings and referred the case to the Federal Constitutional Court for a ruling on the constitutional validity of the EEC regulations at issue, pursuant to Article 100(1) of the Federal Constitution. In its reference, the Administrative Court stated that it could not agree with the decision of the Court of Justice and considered that the provisions in question infringed fundamental rights and were therefore unconstitutional.1

Held (by the Federal Constitutional Court, by five votes to three):—The reference was admissible but the EEC provisions in question were not incompatible with the Federal Constitution.

(1) There was at present nothing to support the view that rules contained in the EEC Treaty (primary Community law) could be in conflict with the provisions of the Constitution of the Federal Republic of Germany. Community law was a part neither of the national legal system nor of international law, but formed an independent system of law flowing from an autonomous source. The Community was not a State but ‘a sui generis community in the process of progressive integration’ and ‘an inter-State institution’ within the meaning of Article 24(1) of the Federal Constitution (pp. 387–9).

(2) Since, in principle, the two legal orders stood independent of and side by side with one another, it was for the competent Community organs, including the European Court, to rule on the binding force, interpretation and observance of Community law, whereas those same matters with regard to national law were reserved to the competent national organs including the

Federal Constitutional Court. In the event of a conflict between the two legal orders, it was not enough to speak of the ‘precedence’ of Community law in order to justify the conclusion that Community law should always prevail over national law. The Member States were not bound by the Treaty in a one-sided way. The Community itself was also bound to resolve any conflict which might arise between Community law and the entrenched precepts of the constitutional law of the Member States. Invoking such a conflict was therefore not of itself a violation of the Treaty (pp. 388–90).

(3) Article 24(1) of the Constitution dealt...