The Gazette 1974

automatically inapplicable, at least in so far as it causes discrimination. In the Fink Frucht case the Court was asked to interpret the second paragraph of Article 95, which prohibits Member States from imposing on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other pro- ducts. The difficulty which the Munich Finanzgericht found in applying this provision is clearly demonstrated by the formidable list of questions which it referred to the European Court. Nonetheless, in its judgment the Court of Justice held that : "It may be that the provision in question contains certain elements which make it necessary for discre- tion to be exercised on economic questions, but that does not exclude the right and duty of national Courts to ensure that the Treaty's rules are observed whenever they can ascertain . . . that the conditions nccessary for the application of the Article have occurred in the case before them." The Defrenne case One could continue with many other examples, espe- cially in the fiscal or parafiscal sector. One more must suffice, taken from a very different field in order to demonstrate how diverse may be the direct effect of the Treaty. This concerns Article 119 on the equality of remuneration between the sexes : Defrenne v Belgium in 1971 (Case 80/70, 1971 Rec. 445). The plaintiff, who had been retired against her will as an air hostess by the airline SABENA brought an action against her former employers before the Conseil de Prud-hommes in Brussels. Under the relevant Belgian Royal Decree in force at the time air hostesses were retired at an earlier stage than male stewards and with inferior pension rights. She claimed that she was dis- criminated against financially on the grounds of her sex, in a manner which infringed Article 119. She also brought a separate action before the Belgian Conseil d'Etat for the annulment of the Royal Decree which she said infringed Article 119. In the result on a reference to the European Court it was decided that a social security retirement pension was not remuneration in terms of Article 119. However, the Advocate General, Dutheillet de Lamothe, in giving his opinion on the questions referred by the Belgian Court, considered that there could be no possible doubt that this provision of the Treaty was directly applicable nor that the Belgian decree implementing Article 119 was therefore "super- fluous in law although the intention was much to be praised". As the Belgian Court had raised no doubts as to the direct effects of Article 119 the Court itself was not required to rule on the direct effect of Article 119. It might be helpful at this point to indicate circum- stances in which a provision of a Treaty does not have direct effect. The Capolongo case In the recent case Gapolongo v Maya (Case 77/72 (1973) E.C.R. 611) the plaintiff was required to pay a tax on imported cardboard to a national organisation which was designed to fund State aids for the national production of cardboard, cellulose and paper. The plaintiff argued before the national Court that the aid scheme infringed Article 92 of the Treaty, which pro- vides that certain State aids liable to distort competition are incompatible with the Common Market. 198

the ordinary turnover tax imposed on domestic goods. In an action to recover this tax the plaintiff company argued as follows : Article 95 of the EEC Treaty provides that "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." No turnover tax was imposed on powdered milk pro- duced in Germany. Therefore it was said that the turn- over equalisation tax levied on imported powdered milk infringed Article 95. The tax in question, however, was not a new imposition but ante-dated the commence- ment of the Treaty. The European Court found that Article 95 (1) had direct effect since Article 95 (3) provided that Member States should, by a date then past, repeal or amend any existing provisions which conflicted with the pre- ceding rule. This paragraph obviously left a certain discretion to the Federal Republic. For example, the German Govern- ment could have fulfilled the Treaty provisions by imposing turnover tax on the domestic product or by removing the compensatory amount from the imported product or by imposing equal amounts on both. The Court, however, was not persuaded by this argument. In its analysis Article 95 was not only a requirement not to introduce new discriminatory taxes, but a positive obligation to remove discriminatory effects from the existing tax system by a given date. The Court held, therefore, that Article 95 (1) had direct effect aud conferred on individuals rights which the national Court had to protect but that, with regard to discriminatory taxes existing at the date of entry into force of the Treaty, the rights conferred by Article 95 (1) could only be invoked under Article 95 (3) from the date at which they fell to be eliminated. Two further cases concerned with Article 95 highlight the problems of application which can arise for the national Judge out of what on the face seems fairly simple provisions : Firma Molkerei Zentrale Westfalen Lippe V Hauptzollamt Paderborn (Case 28/67 1968 Rec. 211 (1968) C.M.L.R. 187) and Fink Frucht GmbH v Hauptzollamt Munchen (Case 27/67 1968 Rec. 328 (1968) C.M.L.R. 228). The facts of the first case were substantially similar to the facts of Liitticke but the German Court which made the reference advanced a number of additional reasons why Article 95 could not produce direct effects in the German Fiscal Courts. It argued, in particular, that the interpretation of the European Court in Liitticke would oblige the national Courts to treat the individuals concerned as if the Member State had already performed its duties under Article 95 whereas the rights of the Commission in a direct action was limited to establishing that the Mem- ber State had failed to fulfil its obligations and to requiring the State to fulfil them by such means as seemed appropriate. The Court rejected this argument. "The purpose of an action brought by an individual is to protect his individual rights in a particular case, whereas inter- vention by an EEC institution is intended to ensure general and uniform observation of a rule of Commu- nity law." It may be concluded therefore that a standstill provi- sion does not differ from a provision requiring the modification of national law, such as Article 95 (3), since in the absence of modification the national law is