Over on chemicals imported from Germany by the

Over half a century after the European Court of
Justice delivered its ruling in Van Gend en Loos, the case is regarded as
remaining one of, the most important cases, if not the most important case that
the Court has ever decided. Explain what the Court decided in the case and why a decision by the Court on a case concerning the
customs classification of an obscure chemical is regarded as being of such
fundamental importance to the European Union legal order.

The direct
effect of European Union law is now an established facet of European
jurisprudence. The judgment of the European Court of Justice (ECJ) in Van Gend en Loos (VGL) case is
accredited for laying the doctrinaire foundations for the primacy of EU law.
The VGL case is regarded as remaining one of, the most important cases of the
European Court of Justice, because it created provisions of the Treaty Establishing the European Economic
Community, which were capable of establishing legal rights, which allowed
to be enforced by legal persons before the courts of the Community’s members
states.

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The paper
attempts to explain what the Court decided in the VGL case and why a decision
by the Court on a case concerning the customs classification of an obscure
chemical is regarded as being such fundamental importance to the European Union
legal order.

In the case (Van
Gend en Loos v Nederlandse Administratie der Belastinge (Case 26/62) 1963), Van
Gend en Loos (VGL) was a company, which transported a chemical from Germany to
Netherlands. Upon entry on September 1960, the company was charged an import
duty on chemicals imported from Germany by the Dutch authorities. It was held
that there had been a breach of Article 30 TFEU, which states that customs
duties on imports and exports and charges having equivalent effect might be
prohibited between Member States. Under Article
12 of the Treaty of Rome 1957, the VGL argued that the Article 12 was
violated and filed a complaint, stating that it shall be acceptable for Members
States to ‘refrain from introducing between themselves new customs duties on
exports, imports or any charges having equivalent effect, and from increasing
those which they already apply in their trade with each other’. The case was
dismissed and VGL company made an appeal again with the same legal reason to
the Tariefcommissie, a Netherlands administrative
tribunal having final jurisdiction involving revenue cases. The second
appeal also focused on Article 12, in which VGL’s opinion, it had a direct
applicability (the EC law must be applied equally to all Members States) and a
‘direct effect’ without such right being granted by National law. Without
classifying chemical substances, the Netherlands tribunal stated VGL’s raised
many questions of Treaty interpretation and thus, decided to half the
proceeding and send it to the European Court of Justice (ECJ) for a preliminary
ruling on the following two concerns:

1)      Whether Article 12 of the Treaty of Rome would be applicable to persons (direct effect) rather
than to Member States, and if complaints would be filed in National Courts and,
if so;

2)      Was the increased existing duty a violation under Article 12 of the
Treaty of Rome?

The Dutch
government stated that the European Court of Justice was not in the position to
hear the case as it was not a matter of interpretation, but rather one of
application, while the European Economic Community stated it was a concern of
interpretation. The Dutch government further stated that the European Community
law must first be equally applied to all of its Member States before a person
can appeal a case to the National Court and that the person is allowed to have
direct applicability when it is the contracting parties’ intention. It has been
stated that, there can not be ‘direct effect’, as there was never ‘direct
applicability’. The Dutch government also contended that the concern of whether
or not Article 12 of the Treaty of Rome was direct applicable was definitely a
question of national law. The ECJ disagreed.

On February
1963, the European Court of Justice delivered its decision in VGL case, in
response to a request for a preliminary ruling made by the Netherlands
administrative tribunal. That tribunal was to determine between the Netherlands
transport undertaking VGL and the tax authorities in Netherlands regarding
customs duties which that undertaking had to pay for the importation of
products from German to the Netherlands. The transport undertaking agreed that
the rate adopted was contrary to the rule in the European Economic Community
(EEC) Treaty prohibiting all its Member States of the European Union from
increasing customs duty in their commercial relations. However, the tax
authorities  took the view that the
undertaking would not depend on that principle since the obligation it
established was  towards only the other
Member States.

 

Decision

The national
court, Tariefcommissie, then turned to the European Court of Justice (ECF) via
preliminary ruling to debate the imposed tariff. The duty declared a violation
of art 12 by the ECJ in that it was a direct result from 1) either though an
increase in the tariff rate, or 2) though the reclassification of the
transported chemical into a higher taxed category. The ECF further argued that
it was possible under Article 12 to create personal rights for VGL company,
even though this was not clearly stated.

The ECF argued
in the case, therefore, that the Article 12 of the Treaty of Rome confer
directly on persons in application against national actors.  The final decision that was drawn from the
ECF rules that:

 ”             The Community law establishes a new
legal order of international law for the advantage of which the Member States
have limited their sovereign rights within limited fields as well as the
subjects of which comprise not only Member States but also their nationals.
Independently of the legislation law approved by the Member States, community
therefore not only puts obligations in place on persons but also intends to
confer upon them rights which become significant part of their heritage. Such
rights derive not only where they are clearly granted by the treaty, but also
because of obligations which the treaty imposes in an expressly defined way
upon persons, Members States and the institutions of the EEC.  …. The Article 12 not only contains an
unqualified prohibition which is not just a positive but an absolute negative
obligation. This obligation is not qualified by any reservation on the part of
Member States which would make its implementation conditional upon an
advantageous legislative measure established under National law. The nature of
this prohibition makes it adapted to produce direct effects in the legal
relationship between States and their subjects. ”

VGL was the
first to raise the concern of whether a provision of a EU treaty “could be a
source of individual rights that national courts should protect”. The decision
of the ECF creates a fundamental principle of direct effect and rules that
Community law in fact allows individual within Member States to invoke a
provision of EU law before not only European, but also National courts. The
effect of the decision arising from this case is not only significant on
individual citizens but also on EU Member States. It is fundamental that direct
effects require National Court to properly interpret National laws ‘in the
light of’ EU law. The direct effect principle requires that International
Treaty law as dictated by the Community’s extant Treaty step into the field of
private law, thus positively contributing to the “constitutionalization of
private law.”

 

                                               

 

 

Perhaps most
obviously, the decision by the Court on the VGL case concerning the customs
classification of an obscure chemical is regarded as being of such fundamental
importance to the European Union legal order is because, firstly, the Court of
Justice of the European Union dared to read the idea of ‘direct effect’ into
Community law. (More specifically, as Bruno de Witte has argued, the Court
determined that the doubt whether some provisions of Community law had direct
effect was to be determined directly by the Court itself rather by the national
courts. (“Direct Effect, Supremacy, and the Nature of the Legal Order” in Craig
& De Burca (eds) The Evolution of EU Law (OUP, 1998), 177, 181).). In the
face of arduous reasons to the contrary by the only Dutch and Belgian Governments
to intervene, and against of its Advocate General (Roemer), the Court decided
that the Community established ‘a new legal order of international law, for the
advantage of which the Member States have confined sovereign rights’ and whose matters
comprised not only the Member States but also their nationals; Community law thus,
not only applied responsibilities on the contracting states but was also “contemplated
to confer upon individuals rights which become fundamental part of their legal
heritage”.  This final reasoning was
based on just two parts of teleological reasoning and without reference to any
of the travaux préparatoires which, one might expect, could have some light on
the founders’ true intentions.

Secondary, the
case is regarded as being important to the European Union legal order, because the
‘discovery’ of direct effect led to a ‘discovery’ of other fundamental key
principles of European law, which include both supremacy and Member State
liability in damages for breach of European law. The European Court of Justice was
right to state in VGL that ‘The vigilance of individuals concerned to protect
their rights amounts to an effective supervision in addition to the supervision
entrusted … to the diligence of the Commission and of the Member States’:
realistically, it would not be possible for the Commission, as guardian of the
Treaty, to assure compliance with other Member States’ obligations under EU
law.

In related vein,
the case is also regarded as being of an importance to the European Union legal
order because, it led to an explosion of litigation around the European Union,
which continues to today’s day, in which both persons and companies seek to
protect their European Union law rights. 
Moreover, that litigation, some of which has spawned references to the Court
of Justice of the European Union under the Article 267 TFEU for preliminary rulings
on the interpretation of European Union law, has significantly benefited in shaping
and developing the substantive law.

 

 

 

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