Court of Justice of the European Communities (including Court of First Instance Decisions)

1 . ACCESSION OF NEW MEMBER STATES TO THE COMMUNITIES - HELLENIC REPUBLIC - FREE MOVEMENT OF GOODS - DEROGATIONS - STRICT INTERPRETATION .

( EEC TREATY , ART . 30 ; ACT OF ACCESSION , ARTS 35 AND 38 )
2 . MEMBER STATES - OBLIGATIONS - FAILURE TO FULFIL - JUSTIFICATION - NOT ACCEPTABLE .

( EEC TREATY , ART . 169 )

1 . THE GENERAL SCHEME OF ARTICLE 30 OF THE EEC TREATY AND ARTICLE 35 OF THE ACT OF ACCESSION OF THE HELLENIC REPUBLIC PROVIDES FOR THE FREE MOVEMENT OF GOODS . IN SO FAR AS ARTICLE 38 CONSTITUTES A DEROGATION FROM THAT PRINCIPLE IT MUST BE RESTRICTIVELY INTERPRETED .

2 . A MEMBER STATE MAY NOT PLEAD ADMINISTRATIVE DIFFICULTIES EXISTING IN THAT STATE IN ORDER TO JUSTIFY A FAILURE TO COMPLY WITH ITS OBLIGATIONS .

IN CASE 58/83
COMMISSION OF THE EUROPEAN COMMUNITIES , REPRESENTED BY XENOPHON YATAGANAS , A MEMBER OF ITS LEGAL DEPARTMENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO , ALSO A MEMBER OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,
APPLICANT ,
V
HELLENIC REPUBLIC , REPRESENTED BY YANNIS KRANIDIOTIS , A SPECIAL ADVISER TO THE STATE SECRETARY FOR FOREIGN AFFAIRS , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE GREEK EMBASSY ,
DEFENDANT ,

APPLICATION FOR A DECLARATION UNDER ARTICLE 169 OF THE EEC TREATY THAT THE HELLENIC REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 30 ET SEQ . OF THE EEC TREATY AND ARTICLES 35 AND 38 OF THE ACT OF ACCESSION OF THE HELLENIC REPUBLIC TO THE EUROPEAN COMMUNITIES ,

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 24 MARCH 1983 THE COMMISSION BROUGHT AN ACTION UNDER ARTICLE 169 OF THE TREATY FOR A DECLARATION THAT BY SUBJECTING THE IMPORTATION OF CERTAIN PRODUCTS FROM OTHER MEMBER STATES TO THE REQUIREMENT TO PAY FOR THEM WHOLLY IN CASH , THE HELLENIC REPUBLIC , HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 30 ET SEQ . OF THE EEC TREATY AND UNDER ARTICLES 35 AND 38 OF THE ACT OF ACCESSION .

2 ARTICLE 38 OF THE ACT OF ACCESSION PROVIDES THAT CASH PAYMENTS WITH REGARD TO IMPORTS FROM THE OTHER MEMBER STATES ARE TO BE REDUCED IN ACCORDANCE WITH THE FOLLOWING TIMETABLE : 1 JANUARY 1981 , 25% , 1 JANUARY 1982 , 25% , 1 JANUARY 1983 , 25% AND 1 JANUARY 1984 , 25% .

3 BY DECISION OF 23 JANUARY 1981 THE GREEK MINISTER FOR COMMERCE DECIDED THAT CERTAIN PRODUCTS IN RESPECT OF WHICH AS AT 31 DECEMBER 1980 PAYMENT IN CASH WAS REQUIRED IN FULL UPON IMPORTATION COULD THEREAFTER BE IMPORTED WITHOUT HAVING TO SATISFY THAT CONDITION . ON THE OTHER HAND CERTAIN OTHER PRODUCTS WOULD CONTINUE TO BE SUBJECT TO THE REQUIREMENT TO PAY FOR THEM WHOLLY IN CASH .

4 THE COMMISSION CONSIDERED THAT BY ADOPTING THAT DECISION THE HELLENIC REPUBLIC HAD FAILED PROPERLY TO FULFIL ITS OBLIGATIONS . INSTEAD OF COMPLETELY LIBERALIZING A CERTAIN NUMBER OF PRODUCTS IT OUGHT TO HAVE REDUCED BY 25% THE AMOUNT REQUIRED TO BE PAID IN CASH WITH REGARD TO ALL THE PRODUCTS TO WHICH ARTICLE 38 APPLIES .

5 THE HELLENIC REPUBLIC CONTESTS THAT INTERPRETATION . IN ITS VIEW THE WORDING OF ARTICLE 38 IS ABSTRACT AND DOES NOT DEAL WITH THE QUESTION WHETHER THE REDUCTION OF 25% IN THE AMOUNT TO BE PAID IN CASH REFERS TO EACH INDIVIDUAL TRANSACTION .

6 THE HELLENIC REPUBLIC CONTENDS THAT IT FULFILLED ITS OBLIGATION BY TRANSFERRING TO THE LIST OF PRODUCTS FOR THE IMPORTATION OF WHICH DEFERRED PAYMENT WAS AUTHORIZED A NUMBER OF PRODUCTS THE VOLUME OF WHICH COULD BE DETERMINED IN ADVANCE AND REPRESENTED 25% OF THE SUMS PAID IN CASH .

7 IN SUPPORT OF ITS INTERPRETATION THE GREEK GOVERNMENT REFERS TO THE NEGOTIATIONS PRECEDING THE ACT OF ACCESSION . THE VIEW OF THE SIXTH MINISTERIAL CONFERENCE WAS THAT THE REQUIREMENT OF PAYMENTS IN CASH SHOULD BE PROGRESSIVELY ELIMINATED OVER A PERIOD OF THREE YEARS AFTER ACCESSION SUBJECT TO AN AGREEMENT ON THE DETAILED ARRANGEMENTS TO BE ADOPTED IN THAT RESPECT . IN THE ABSENCE OF SUCH AN AGREEMENT THE HELLENIC REPUBLIC IS FREE TO ADOPT THE DETAILED ARRANGEMENTS WHICH BEST SUIT ITS INTERESTS .

8 THE GREEK GOVERNMENT ALSO CONSIDERS THAT THE PROVISION IN QUESTION WAS INCLUDED FOR ITS BENEFIT AND IT THUS ENJOYS A DEGREE OF DISCRETION WITH REGARD TO ITS INTERPRETATION . THE ACT OF ACCESSION WAS NOT INTENDED TO ADOPT THE INTERPRETATION PROPOSED BY THE COMMISSION . IN VIEW OF THE COMPLEX PRACTICAL AND ADMINISTRATIVE DIFFICULTIES WHICH WOULD ARISE IF THE INTERPRETATION PROPOSED BY THE COMMISSION WERE ADOPTED , IT IS APPROPRIATE TO ADOPT THAT PROPOSED BY THE GREEK GOVERNMENT .

9 THAT ARGUMENT CANNOT BE ACCEPTED . THE GENERAL SCHEME OF ARTICLE 30 OF THE EEC TREATY AND ARTICLE 35 OF THE ACT OF ACCESSION PROVIDES FOR THE FREE MOVEMENT OF GOODS . IN SO FAR AS ARTICLE 38 CONSTITUTES A DEROGATION FROM THAT PRINCIPLE IT MUST BE RESTRICTIVELY INTERPRETED . THE AIM OF ARTICLE 38 IS PROGRESSIVELY TO DISMANTLE THE MACHINERY PROTECTING NATIONAL INDUSTRY IN ORDER TO ENABLE IT TO USE THE TRANSITIONAL PERIOD TO ADAPT TO THE INCREASED COMPETITION ARISING FROM THE OPENING OF GREECE ' S FRONTIERS . THE METHOD ADOPTED BY THE GREEK GOVERNMENT DOES NOT ALLOW THAT AIM TO BE ACHIEVED SINCE IT PROVIDES , DEPENDING ON THE PRODUCTS INVOLVED , EITHER FOR TOTAL MAINTENANCE OR FOR IMMEDIATE REMOVAL OF THE PROTECTIVE MACHINERY WITHOUT A GRADUAL CHANGE FROM ONE SITUATION TO THE OTHER . MOREOVER , THE RISK OF ARBITRARINESS INHERENT IN THAT METHOD IS NOT TO BE UNDERESTIMATED .

10 THE RECORDS OF THE REGISTRATIONS PRECEDING THE ACT OF ACCESSION IN NO WAY CONTRADICT THAT INTERPRETATION SINCE THE DETAILED ARRANGEMENTS FOR THE PROGRESSIVE ABOLITION OF THE SYSTEM OF PAYMENTS IN CASH IN RESPECT OF WHICH AGREEMENT WAS TO BE REACHED ARE DEFINED IN ARTICLE 38 ITSELF IN SO FAR AS IT PROVIDES FOR FOUR SUCCESSIVE REDUCTIONS OF 25% .

11 LIKEWISE , THE INTERPRETATION WHICH THE GREEK GOVERNMENT ADVOCATES CANNOT BE ACCEPTED MERELY BECAUSE OF ADMINISTRATIVE DIFFICULTIES . ACCORDING TO WELL-ESTABLISHED CASE-LAW OF THE COURT , A MEMBER STATE MAY NOT PLEAD ADMINISTRATIVE DIFFICULTIES EXISTING IN THAT STATE IN ORDER TO JUSTIFY A FAILURE TO COMPLY WITH ITS OBLIGATIONS .

12 CONSEQUENTLY , THE COMMISSION HAS ESTABLISHED THE FAILURE TO FULFIL OBLIGATIONS ALLEGED BY IT AND ITS APPLICATION MUST THEREFORE BE UPHELD .

COSTS
13 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .

14 SINCE THE HELLENIC REPUBLIC HAS FAILED IN ITS SUBMISSIONS IT MUST BE ORDERED TO PAY THE COSTS .

ON THOSE GROUNDS ,
THE COURT
HEREBY :
1 . DECLARES THAT BY CONTINUING IN 1981 TO SUBJECT THE IMPORTATION OF CERTAIN PRODUCTS FROM OTHER MEMBER STATES TO THE REQUIREMENT TO PAY FOR THEM WHOLLY IN CASH , THE HELLENIC REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 38 OF THE ACT OF ACCESSION ;

2 . ORDERS THE HELLENIC REPUBLIC TO PAY THE COSTS .