NV Algemene Transport-en Expeditie Onderneming Van Gend en Loos v Nederlandse Administratie Der Belastingen

• Jurisdiction: European Union
• Date: 05 February 1963
• Court: European Court of Justice

Court of Justice of the European Communities.

(Donner, President; Delvaux, Rossi, Riese, Hammes, Trabucchi, Lecourt, Judges; Roemer, Advocate-General)

N V Algemene Transport en Expeditie Onderneming van Gend en Loos

and

Nederlandse Administratie der Belastingen (Netherlands Inland Revenue Administration)

Relationship of international law and municipal law — Treaties — Effect in municipal law — European Economic Community Treaty, 1957 — Article 12 — Direct effect — Whether Treaty conferring rights on individuals — Whether rights of individuals can be protected in national courts — Supremacy of Community law over conflicting national legislation — New legal order — Member States relinquishing sovereign rights in limited spheres

Economics, trade and finance — European Communities — Customs duties — Interpretation of Article 12 of EEC Treaty, 1957 — Increase in duty after entry into force of EEC Treaty, due to reclassification of product — Whether illegal increase contravening Article 12

International organizations — Whether EEC an international organization — EEC Treaty, 1957, founding Community — Aim of Treaty to create common market — Citizens of Member States intended to benefit from creation of common market — Individuals also intended to benefit from legal rights inherited from EEC Treaty, 1957

International tribunals — Court of Justice of the European Communities — Jurisdiction to interpret EEC Treaty, 1957 — Netherlands administrative tribunal asking Court of Justice to interpret Article 12 — Whether within jurisdiction of Court of Justice of the European Communities

Treaties — Effect in municipal law — Enforcement by municipal courts — EEC Treaty, 1957 — Whether conferring rights upon individuals — The law of the European Economic Community

Summary: The facts:—On 9 September 1960 the applicant company (‘Van Gend en Loos’) imported a quantity of a product called ureafonnaldehyde from the Federal Republic of Germany into the Netherlands. The Dutch revenue authorities charged an import duty of 8 per cent under the 1960 Tariefbesluit, the customs tariff which came into force in the Netherlands on 1 March 1960. Van Gend en Loos challenged the level of duty on the ground that the 1960 Tariefbesluit had effected an increase in the duty on goods imported from another European Community Member State, contrary to Article 12 of the European Economic Community Treaty, which provided that:

Member States shall refrain from introducing, as between themselves, any new customs duties on imports or exports or any charges having equivalent effect, and from increasing those which they already levy on their trade with each other.

The import duty for ureaformaldehyde on the date of entry into force of the EEC Treaty, 1 January 1958, would have been 3 per cent under the Dutch legislation then in force. However, the 1960 Tariefbesluit had reclassified ureaformaldehyde. The Dutch Government argued that the change in tariff after the freeze on duties under Community law was due to reclassification only and did not constitute an increase for EEC purposes.

The Inspector of Customs and Excise dismissed the objection of Van Gend en Loos on grounds of inadmissibility. Van Gend en Loos sought an annulment of this decision in an appeal to the Tariefcommissie, an administrative tribunal with final jurisdiction in revenue cases. The Tariefcommissie found that the application raised a question regarding the interpretation of the EEC Treaty and, in accordance with Article 177(3) of the EEC Treaty, made a preliminary reference to the Court of Justice of the European Communities seeking a ruling on the following two questions:

1. Whether Article 12 of the EEC Treaty has direct application within the territory of a Member State, in other words, whether nationals of such a State can, on the basis of the article in question, lay claim to individual rights which the courts must protect;

2. In the event of an affirmative reply, whether the application of an import duty of 8 per cent to the import into the Netherlands by the applicant in the main action of ureaformaldehyde originating in the Federal Republic of Germany represented an unlawful increase within the meaning of Article 12 of the EEC Treaty or whether it was in this case a reasonable alteration of the duty applicable before 1 March 1960; an alteration which, although amounting to an increase from the arithmetical point of view, is nevertheless not to be regarded as prohibited under the terms of Article 12.

Opinion of the Advocate-General:—In his submissions to the Court of Justice the Advocate-General argued that the Court should answer only the first question. He concluded that Article 12 was not intended to extend to individuals the obligation for Member States.

The European Community had the power to create rights and impose obligations on individuals through its own legal order. However, while no further implementation was necessary for Article 12, it did not have direct internal effect but applied only to the governments of Member States and not to individuals. The wording of the provision was that which was used for provisions which only laid down obligations for Member States, and there was no exact description of legal effects as was usually the case with those provisions meant to be applied directly by the administrative authorities of the Member States.

Held:—Article 12 of the EEC Treaty was directly effective in national law and applied to individuals as well as to Member States. The reclassification effected by the Tariefbesluit amounted to an increase in duty contrary to Article 12.

(1) The reference by the Tariefcommissie for a preliminary ruling under Article 177(3) of the EEC Treaty on two questions involved the interpretation of Article 12 of the EEC Treaty within Community law, not the application of the Treaty in the context of Dutch Constitutional law, and was thus within the jurisdiction of the Court of Justice (pp. 16–17 and 20).

(2) Article 12 also had direct application within the territory of a Member State. This meant that, although addressed to Member States, Article 12 also conferred rights and imposed obligations on nationals of those States. No national legislation was needed to implement Article 12 of the EEC Treaty as it produced direct effects. It would thus take priority over inconsistent national legislation (pp. 18–19).

(3) Community law constituted a new legal order of international law, for which Member States had curtailed a certain number of their own rights. The aim of the EEC Treaty was the creation of a common market which was intended to affect and benefit citizens of the Member States as well as the States themselves (p. 18).

(4) Direct effect arose out of the nature of each provision. An individual would benefit from a provision which was clear and precise, which contained a negative and not a positive obligation, which was unconditional and which needed no further action to be taken under national law (p. 19).

(5) An increase in customs duty contravened Article 12 of the EEC Treaty even though it was due to the reclassification of a substance rather than to a direct increase. The customs duty applied at the date of entry into force of the EEC Treaty was relevant in determining any increase which might have occurred. The national court was to decide whether the import duty charged on the substance in question was higher than that which was charged on 1 January 1958 (pp. 20–1).

The text of the judgment of the Court of Justice of the European Communities commences at p. 10. The following is the text of the relevant parts of the opinion of Advocate-General Roemer delivered on 12 December 1962:

The present proceedings originate in an action before the Tariefcommissie, a Dutch administrative court. This action is for the annulment of a decision of the Nederlandse administratie der belastingen (the Netherlands Inland Revenue Administration) of 6 March 1961 concerning the application of a particular customs duty to the import of ureaformaldehyde from the Federal Republic of Germany. The decision is based on

the new Netherlands customs tariff which entered into force on 1 March 1960 and which was fixed by the Brussels Protocol of 25 July 1958 by the Kingdom of Belgium, the Grand Duchy of Luxembourg and the Kingdom of the Netherlands and was ratified in the Netherlands by the Law of 16 December 1959.

The parties to the proceedings are in agreement with the Tariefcommissie that at the date of importation (9 September 1960) the imported goods were correctly classified under a particular tariff heading of the customs tariff in force. But this tariff differs from the previous tariff (which came into force in the three Benelux countries by virtue of the Customs Convention of 5 September 1944) fixed by the Brussels nomenclature (laid down in the Agreement of 15 December 1950 on the Tariff Nomenclature for the Classification of Goods in the Customs Tariffs), which entailed an alteration of the former tariff headings.

Whereas before 1 March 1960 the product in question—as can be seen from two decisions of the Tariefcommissie—was classified in a category subject to a duty of 3% under the Dutch customs tariff (Tariefbesluit 1947), after the Brussels nomenclature was introduced it became subject to a higher duty resulting from the re-arrangement of previous tariff numbers.

That is why the plaintiff in the main action considered that this alteration of the customs tariff by the Brussels Protocol contravened Article 12 of the EEC Treaty, and that the decision made by the customs authorities should be annulled in view of the provisions of the EEC Treaty.

The Tariefcommissie has not decided this question but referred it to the Court of Justice on 16 August 1962 under Article 177 of the Treaty, asking the Court to give a preliminary ruling on two questions. It wished to know:

• “1. Whether Article 12 of the EEC Treaty has direct application as it is...