Opinion of Advocate General Sharpston delivered on 5 July 2018.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2018:536
• Date: 05 July 2018
• Docket Number: C-305/17
• Procedure Type: Reference for a preliminary ruling

Provisional text

OPINION OF ADVOCATE GENERAL

SHARPSTON

delivered on 5 July 2018(1)

Case C‑305/17

FENS spol. s r.o.

v

Slovenská republika — Úrad pre reguláciu sieťových odvetví

(Request for a preliminary ruling from the Okresný súd Bratislava II (District Court Bratislava II, Slovakia))

(Free movement of goods — Customs duties on exports — Charges having equivalent effect to customs duties — Internal taxation — Charge for network services for the transmission of electricity)

1. This reference for a preliminary ruling concerns one of the pillars of the internal market, namely free movement of goods. The questions referred relate to the core of the internal and external dimensions of that freedom — the customs union. The particular interest of this case is that it gives this Court the opportunity to revisit two classic elements of the internal market, that is to say, charges having an equivalent effect to customs duties and the rules on internal taxation, in the specific context of the electricity market.

Legal framework

The Treaty on the Functioning of the European Union

2. Article 28(1) TFEU provides that ‘the Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries’.

3. Article 30 TFEU states that ‘customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature’.

4. According to Article 110 TFEU ‘no Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products’.

Directive 2003/54

5. Directive 2003/54 established common rules for the generation, transmission, distribution and supply of electricity. (2)

6. According to Article 2(3), transmission meant ‘the transport of electricity on the extra high-voltage and high-voltage interconnected system with a view to its delivery to final customers or to distributors, but not including supply’.

7. Article 9(c) provided that transmission system operators were responsible ‘for ensuring a secure, reliable and efficient electricity system’. In that context, ‘the rules adopted by transmission system operators for balancing the electricity system shall be objective, transparent and non-discriminatory, including rules for the charging of system users of their networks for energy imbalance’. (3)

Directive 2005/89

8. Directive 2005/89 establishes measures aimed at safeguarding the security of electricity supply so as to ensure the proper functioning of the internal market for electricity and to ensure an adequate level of generation capacity, an adequate balance between supply and demand and an appropriate level of interconnection between Member States for the development of the internal market. It also establishes a framework within which Member States are to define transparent, stable and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive internal market for electricity. (4)

9. According to Article 5 of that directive, Member States are to take appropriate measures to maintain a balance between the demand for electricity and the availability of generation capacity.

National law

10. Article 12(9) of the Nariadenie vlády Slovenskej republiky č. 317/2007 Z. z., ktorým sa ustanovujú pravidlá pre fungovanie trhu s elektrinou (Regulation No 317/2007 of the Government of the Slovak Republic laying down rules for the functioning of the market in electricity — ‘the Electricity Regulation’), as in force at the material time, provided that when electricity was exported, the exporter had to pay a charge for the network services, unless it could prove that the electricity exported had previously been imported into what the legislation termed ‘the specified territory’. (5)

Facts, procedure and the questions referred

11. FENS spol. S.r.o., the current applicant in the main proceedings, is the successor in title in those proceedings to the original applicant, Korlea Invest a.s. (‘Korlea’).

12. Korlea was authorised to operate as a supplier in the Slovakian electricity sector and its activities included the purchase, marketing and export of electricity. In that context it concluded with Slovenské elektrárne a.s. (a Slovak company involved in the electricity manufacturing sector) a framework contract for the sale and purchase of electricity, with effect from 15 August 2006, as well as individual supply contracts. On 16 January 2008, Korlea concluded a transmission agreement with Slovenská elektrizačná prenosová sústava a.s. (a Slovak company concerned with the national electricity transmission network) for the transmission of electricity via the interconnection lines and the management and provision of transmission services. The transmission agreement provided for Korlea to pay an amount in the form of a charge for the provision of network services for the export of electricity, calculated in accordance with Article 12(9) of the Electricity Regulation, unless it could demonstrate that the electricity exported had first been imported into Slovakia.

13. Korlea paid EUR 6 815 853.415 to the transmission company, representing the charge for network services for the export of electricity for the period from 1 January 2008 to 31 December 2008. The amount was calculated on the basis of a decision of 4 December 2007 of the Úrad pre reguláciu sieťových odvetví (the Energy Regulation Authority; ‘the ÚRSO’), the defendant in the main proceedings together with the Slovak Republic.

14. By letter of 13 October 2008, Korlea requested the transmission company and the competent authority to suspend collection of the charge and refund the monies already paid. By letter of 30 October 2008, the transmission company refused that request.

15. Korlea brought an action for damages against the ÚRSO. It argued that the charge for the provision of network services is a charge having an equivalent effect to a customs duty. It was levied exclusively on electricity produced in Slovakia that was exported and not on electricity that had been previously imported into Slovakia and then re-exported. The ÚRSO maintained that the charge at issue was temporary and that its purpose was to guarantee the operational security, reliability and stability of the Slovak energy network.

16. The action was dismissed by judgment of 4 February 2011. Korlea appealed before the Krajský súd (Regional Court, Slovakia), which annulled that judgment and remitted the case to the Okresný súd Bratislava II (District Court Bratislava II, Slovakia, ‘the referring court’).

17. Against that background, the referring court wishes to ascertain whether Article 12(9) of the Electricity Regulation is compatible with Articles 28 and 30 TFEU. Therefore it requests a preliminary ruling on the following questions:

‘(1) Must Article 30 TFEU be interpreted as precluding a national rule such as Article 12(9) of [the Electricity Regulation] which introduces a specific pecuniary charge for the export of electricity from the territory of the Slovak Republic, regardless of whether that electricity is exported from Slovak territory to the Member States of the European Union or to third countries, in circumstances in which the electricity exporter fails to demonstrate that the electricity exported has been imported into the Slovak Republic, that is to say, a pecuniary charge levied solely on electricity generated in the Republic of Slovakia and exported from it?

(2) Does a pecuniary charge, such as the charge introduced by Article 12(9) of the Electricity Regulation, namely: a charge applied solely to electricity generated in the Slovak Republic and at the same time exported from the territory of the Slovak Republic, regardless of whether it is exported to third countries or to the Member States of the European Union, also constitute a charge having equivalent effect to a customs duty within the meaning of Article 28(1) TFEU?

(3) Is a national rule such as Article 12(9) of the Electricity Regulation compatible with the principle of free movement of goods laid down by Article 28 TFEU?’

18. Written observations were submitted by FENS, the Netherlands and Slovak Governments and the European Commission. FENS and the Commission made oral submissions at the hearing on 19 April 2018.

Assessment

Preliminary observations

Electricity as ‘goods’

19. In order to fall within the scope of the provisions of the TFEU on free movement of goods, the product at issue must come within the category of ‘goods’. The Court has defined ‘goods’ as ‘products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions’. (6)

20. The Court has already recognised that electricity, despite its intangible character, represents ‘goods’ within the meaning of the TFEU. (7) It follows that electricity is subject to the rules laid down in that Treaty concerning free movement of goods and the Customs Union.

21. The Court has also held that a charge which is imposed not on a product as such but on a necessary activity in connection with a product (such as network services in the present case) may fall within the scope of the provisions on free movement of goods. When the charge is calculated on the number of kWh transmitted and not on the basis of the distance for which the electricity is transmitted or according to any other criterion directly connected with transmission, it is to be treated as having been imposed on the product itself. (8)

Applicable law

22. The fact that a national court has, formally speaking, worded its request for...