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26/62 Van Gend en Loos [1963] ECR 1

By Oxbridge Law TeamUpdated 07/01/2024 05:41

Judgement for the case 26/62 Van Gend en Loos

KEY POINTS

  • European Court has jurisdiction (Article 177) for E.E.C. Treaty interpretation. Article 12 of the E.E.C. Treaty bars the introduction or increase of customs duties. Article 12 creates a direct, enforceable right for citizens in national courts.

  • An increase in customs duties due to new product classification violates Article 12. The court referred a case on formaldehyde import to determine duty exceeding the 1958 rate.

  • Article 12 applies directly within a member-state's territory. Safeguards individual rights, enforceable in national courts. Determining customs duty increases involves assessing duties at Treaty inception.

FACTS

  • On November 9, 1960, the company 'van Gend en Loos’ imported ureaformaldehyde from the Federal Republic of Germany into The Netherlands. The product was classified in group 39.01-a-1 of the tariff of import duties.

  • Based on this classification, Dutch revenue authorities applied an 8% ad valorem import duty.

  • On September 20, 1960, 'Van Gend en Loos' appealed the duty imposition, arguing a violation of Article 12 of the E.E.C. Treaty.

  • The appeal was dismissed on March 6, 1961, by the Inspector of Import and Excise Duties at Zaandam. 'Van Gend en Loos' appealed to the Tariefcommissie at Amsterdam on April 4, 1961.

  • The Tariefcommissie referred two preliminary questions to the Court of Justice on August 16, 1962. The questions revolved around the effect of Article 12 within a member-state's territory and the legality of the 8% duty.

  • The Court received written observations from the parties and governments of Belgium, Germany, and The Netherlands. The November 29, 1962, public hearing included oral submissions from 'van Gend en Loos' and the E.E.C. Commission.

  • The Advocate General proposed the Court decide only the first question, stating that Article 12 imposes a duty only on members.

JUDGEMENT

  • The Court acknowledged the procedural regularity in the preliminary decision request under Article 177 by the Tariefcommissie, finding no objections.

  • Disputes arose with the Governments of The Netherlands and Belgium over the Court's jurisdiction, particularly concerning the application of Dutch constitutional law. The Court clarified that it interpreted the meaning of Article 12 within Community law and its impact on individuals, rejecting objections and emphasizing its role in Treaty interpretation rather than Dutch internal law.

  • First Question - Immediate Effect of Article 12:

    • The Court examined whether Article 12 had an immediate effect on internal law. It concluded that the spirit, economic aspect, and terms of the Treaty produced direct effects, creating individual rights protected by internal courts.

  • Second Question - Increase of Customs Duties:

    • A dispute arose over the wording, with Belgium and Dutch Governments suggesting a specific application of Dutch customs law. The Court interpreted the real meaning as whether an effective increase from a new classification contravened Article 12, affirming jurisdiction as it involved Treaty interpretation.

  • Emphasizing the importance of considering duties and taxes applied at the Treaty's entry into force to determine an increase, the Court noted that an illegal increase could result from rearranging the tariff, causing a product's classification in a more heavily taxed group. The significance lay in a product facing a higher tax within a member state since the Treaty's entry into force, with verification left to national courts.

  • Costs of the E.E.C. Commission and participating Governments were not recoverable. The decision on costs regarding the parties was left to the Tariefcommissie.

  • Article 12 had direct application, benefiting citizens within a member state. Determination of an increase required consideration of duties and taxes at the Treaty's entry into force. The decision on costs was left to the Tariefcommissie.

COMMENTARY

  • In 1960, “van Gend en Loos” faced an 8% import duty on imported ureaformaldehyde in the Netherlands. Their appeal under Article 12 of the E.E.C. Treaty led to the Tariefcommissie referring two questions to the Court of Justice in 1962. 

  • The Court clarified jurisdiction, highlighting Treaty interpretation over Dutch law. It ruled that Article 12 immediately created individual rights. The second question addressed customs duty increases, stressing the importance of considering duties at the Treaty's entry into force. Costs of the E.E.C. Commission and participating Governments were unrecoverable, with the decision left to the Tariefcommissie. 

  • This affirmed Article 12's direct application and the need to consider initial duties for determining increases.

ORIGINAL ANALYSIS

  • A Dutch company importing chemicals from Germany were forced to pay a higher tariff than article 12 of the EEC Treaty allowed.

  • They appealed against payment of the tariff, on the basis that individuals could derive rights from EC treaties.

  • Against the company, Belgium argued that this was a question of constitutional law for the domestic courts to determine, while Netherlands govt argued that it was never the intentions of those who created the treaty that there would be direct effect. Similarly most international treaties did not confer rights on individuals.

  • The Dutch Court asked the ECJ whether the article had direct effect. The ECJ allowed the company’s appeal and held that this provision had direct effect.

ECJ

  • ECJ had 4 main arguments for rejecting these arguments and allowing the appeals of the company:

    1. The EC founded a new type of treaty in which individuals were the subjects of a treaty and therefore a different order was formed so that treaty articles could have direct effect.

    2. Because there was no EC article prohibiting direct effect it must be presumed that individuals have direct effect.

    3. The particular article (article 12 of EEC Treaty) was well suited to direct effect.

    4. Just because public enforcement exists, doesn’t mean private enforcement can’t also exist (private enforcement will make treaties easier to enforce).

  • Evidence for argument one is that the EEC treaty created a common market that directly affected individuals as well as government, evidence by the reference to “peoples” in the preamble of the treaty.

  • Thus this great project confers obligations and rights on individuals, making a treaty directly applicable to ordinary people. This = a new order of treaty and thus direct effect is needed.

  • Evidence for argument 3 is that it was enacted without the need for national legislation to enact it under national law.

  • The reasoning throughout the ECJ’s judgement was “purposive”: it looked at the treaties and the aims for the EC as a whole and made its rulings in accordance with the political and economic aims of the Community. For a treaty article to be justiciable it should be negative, clear, unconditional, containing no reservation on part of Member States, and should not be dependent on any implementing measure.

  • The fact that the company could rely on treaty rights to avoid paying the higher import tax established by national law must lead to conclusion that EC law is supreme.

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