Internationale Handelsgesellschaft mb H v Einfuhr und Vorratsstelle für Getreide und Futtermittel (Case 11:70) PDF

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Internationale Handelsgesellschaft mb H v Einfuhr und Vorratsstelle für Getreide und Futtermittel (Case 11:70)...

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Internationale Handelsgesellschaft mbH v Einfuhr und Vorratsstelle für Getreide und Futtermittel (Case 11/70) [1970] ECR 1125, CJEU The claimant (then called the ‘plaintiff’), a German company, had to obtain a licence to export corn flour. The EU provisions required a performance deposit, that is, if a licensee failed to export the full amount permitted in the licence then the deposit would be forfeit. The claimant failed to export the full amount specified in the licence and so forfeited the deposit. The claimant challenged this in the administrative court, the Verwaltungsgericht. The German court sought a preliminary ruling on the EU provisions, as the court thought that they were in conflict with the basic rights guaranteed in the West German constitution. [2] … It appears from the grounds of the order referring the matter that the Verwaltungsgericht has until now refused to accept the validity of the provisions in question and that for this reason it considers it to be essential to put an end to the existing legal uncertainty. According to the evaluation of the Verwaltungsgericht, the system of deposits is contrary to certain structural principles of national constitutional law which must be protected within the framework of Community law, with the result that the primacy of supranational law must yield before the principles of the German Basic Law. More particularly, the system of deposits runs counter to the principles of freedom of action and of disposition, of economic liberty and of proportionality arising in particular from Articles 2 (1) and 14 of the Basic Law. The obligation to import or export resulting from the issue of the licences, together with the deposit attaching thereto, constitutes an excessive intervention in the freedom of disposition in trade, as the objective of the regulations could have been attained by methods of intervention having less serious consequences. The protection of fundamental rights in the Community legal system [3] Recourse to the legal rules or concepts of national law in order to judge the validity of measures adopted by the institutions of the Community would have an adverse effect on the uniformity and efficacy of Community law. The validity of such measures can only be judged in the light of Community law. In fact, the law stemming from the Treaty, an independent source of law, cannot 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 in question. Therefore the validity of a Community measure or its effect within a Member State cannot be affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of the State or the principles of a national constitutional structure. [4] However, an examination should be made as to whether or not any analogous guarantee inherent in Community law has been disregarded. In fact, respect for fundamental rights forms 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, must be ensured within the framework of the structure and objectives of the Community. It must therefore be ascertained, in the light of the doubts expressed by the Verwaltungsgericht, whether the system of deposits has infringed rights of a fundamental nature, respect for which must be ensured in the Community legal system. The CJEU upheld the provisions creating the system of performance deposits. NOTE: So far we have looked at conflicts between the municipal law of Member States and EU law where the CJEU, in its rulings, has affirmed the supremacy of the latter. The CJEU has

even declared that EU law prevails over any conflicting provisions of Bills of Rights in Member States’ constitutions. The declaration of the supremacy of EU law by the CJEU creates a problem for national courts: they are supposed to protect the rights conferred by EU law even where they conflict with the law of Member States. How can this be done if a national court cannot strike down a municipal statute, as where, for example, only the Member State’s Constitutional Court can carry out such action? Advice was offered in the following case. Amministrazione delle Finanze dello Stato v Simmenthal SpA (Case 106/77) [1978] ECR 629, CJEU Simmenthal imported beef into Italy. In an earlier case, Simmenthal SpA v Italian Minister of Finance (Case 35/76) [1976] ECR 1871, the ECJ had ruled that the Italian law requiring importers to pay for public health and veterinary checks at the border was contrary to Arts 30 and 12 of the EEC Treaty (now Arts 34 and 30 of the TFEU). The Italian court ordered the refund of these fees paid by Simmenthal, and the Ministry argued that until the Constitutional Court set aside the legislation it had a good defence. The Italian court sought a preliminary ruling. [13] The main purpose of the first question is to ascertain what consequences flow from the direct applicability of a provision of Community law in the event of incompatibility with a subsequent legislative provision of a Member State. [14] Direct applicability in such circumstances means that rules of Community law must be fully and uniformly applied in all the Member States from the date of their entry into force and for so long as they continue in force. [15] These provisions are therefore a direct source of rights and duties for all those affected thereby, whether Member States or individuals, who are parties to legal relationships under Community law. [16] This consequence also concerns any national court whose task it is as an organ of a Member State to protect, in a case within its jurisdiction, the rights conferred upon individuals by Community law…. [21] It follows from the foregoing that every national court must, in a case within its jurisdiction, apply Community law in its entirety and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it, whether prior or subsequent to the Community rule. [22] Accordingly any provision of a national legal system and any legislative, administrative, or judicial practice which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions which might prevent Community rules from having full force and effect are incompatible with those requirements which are the very essence of Community law…. The CJEU ruled: ‘A national court which is called upon, within the limits of its jurisdiction, to apply provisions of Community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provisions of national legislation, even if adopted subsequently, and it is not necessary for the court to request or await the prior setting aside of such provisions by legislation or other constitutional means.’

NOTE: While the CJEU states that any national court may set aside municipal legislation, this does not mean that such legislation is entirely void. It is only of no effect where there is a conflict between it and EU law. (b) EU supremacy in the United Kingdom courts The traditional view of the legislative sovereignty of Parliament would appear to conflict with the CJEU’s rulings on the supremacy of Union law. For Parliament’s legislation would seem to take effect subject to EU rules, with any domestic court required to reject the provisions of an Act of Parliament which violated EU law. We must now consider how the UK courts have responded to this challenge. In order for EU law (known at the time of the UK’s accession as European Community, or EC, law) to become part of the United Kingdom’s domestic law, it had to be incorporated by legislation. This was done by the following provisions....