Commission v Belgium (Free movement of goods) [2004] EUECJ C-255/03 (17 June 2004)

Judgment By application lodged at the Court Registry on 16 June 2003, the Commission of the European Communities brought an action under Article 226 EC for a declaration that, by adopting and maintaining in force rules under which the -�Walloon label of quality-� is granted to finished products of a certain quality manufactured or processed in Wallonie, the Kingdom of Belgium has failed to fulfil its obligations under Article 28 EC. Legal framework and background to the dispute The Walloon Government adopted the Decree of 7 September 1989 on the grant of the Walloon label of quality, the designation of local origin and the designation of Walloon origin ( Moniteur Belge , 28 November 1989), which institutes a -�Walloon label of quality-�. Under Chapter 1 of that decree, the label is understood as being -�the collective mark determined by the Walloon Regional Executive, attesting that a product manufactured or processed in Wallonie has a distinctive and predetermined set of specific qualities and characteristics and establishing a quality standard-�. According to Article 2 of that decree, the Walloon Regional Executive is to lay down in each case, on the basis of a detailed specification, the conditions which one or more products must meet in order to be manufactured, processed, marketed or sold under the Walloon label of quality. By letter of 8 November 1994, the Commission informed the Belgian authorities that it considered that the Walloon label of quality was contrary, in particular, to Article 30 of the EC Treaty (now, after amendment, Article 28 EC) in that the conditions for obtaining the label include a requirement for processing or manufacture in Wallonie, whereas the requirements giving entitlement to a designation of quality should refer exclusively to the intrinsic characteristics of the product, excluding any reference to its geographical origin. Following an exchange of correspondence and a meeting between the services of the Commission and the Belgian authorities, the latter accepted that the Commission-�s complaints were well founded and undertook to amend their rules in accordance with the Commission-�s request. On 20 December 1999, the Belgian authorities sent to the Commission a preliminary draft decree, drawn up by the Walloon Government, which sought to ensure accessibility to the label in question for products originating in other Member States and complying with the quality criteria laid down. Since it had not been informed of further progress in the adoption procedure, the Commission, in accordance with Article 226 EC, formally called on the Kingdom of Belgium by letter of 24 July 2001 to submit its observations in that connection within a period of two months. On 20 September 2001, the Belgian Government informed the Commission that the preliminary draft previously sent to it had not been adopted. It attached to that letter a new preliminary draft decree drawn up by the Walloon Government which contained, at Article 19, a provision allowing a transitional period of 18 months in favour of products which already held the Walloon label of quality. It stated that that text had been adopted in May 2001 by the Walloon Government and submitted to the Council of State on 22 June 2001. According to the Belgian Government, it was to be placed before the Walloon Parliament in October 2001 and would be adopted rapidly. Since the amending decree had still not been notified to it, the Commission on 27 June 2002 issued a reasoned opinion in which it stated that, by maintaining in force legislation relating to labels and quality designations for agricultural products and foodstuffs, the Kingdom of Belgium had failed to fulfil its obligations under Article 28 EC. In that reasoned opinion, the Commission also stated that it could not accept the transitional period provided for in the latest preliminary draft in light of the situation in regard to the infringement established and notified by it to the Member State in 1994. It requested the Belgian authorities to comply with that opinion within two months of its notification. On 6 June 2003, since the amending decree had, to its knowledge, still not entered into force, the Commission decided to bring the present action. The failure to fulfil obligations In its application, the Commission submits that the national provisions establishing the -�Walloon label of quality-� put in place a scheme intended, on the one hand, to improve the quality of Walloon agricultural products and, on the other, to promote the sale of those products. The label essentially attests that the product on which it appears was manufactured in Wallonie and displays certain characteristics. The national provisions at issue are capable of affecting the free movement of goods inasmuch as they encourage the marketing of goods of national origin to the detriment of imported goods. They therefore constitute a measure having an effect equivalent to a quantitative restriction on imports in breach of Article 28 EC. In its defence, the Belgian Government states that, as a result of the adoption of the decree of the Walloon Government of 19 December 2002 amending the decree of 7 September 1989 ( Moniteur Belge , 5 February 2003, p. 4849), the measures necessary to ensure observance of its obligations under Community law have been taken. In that regard, it is settled case-law that the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion, and that the Court cannot take account of any subsequent changes (see Case C-122/02 Commission v Belgium [2003] ECR I-833, paragraph 11). In the present case, the Kingdom of Belgium does not dispute that it did not adopt the measures necessary in order to comply with Community law within the period prescribed for that purpose in the reasoned opinion. Accordingly, the Commission-�s application must be allowed. It must therefore be held that, by adopting and maintaining in force rules under which -�the Walloon label of quality-� is granted to finished products of a certain quality manufactured or processed in Wallonie, the Kingdom of Belgium has failed to fulfil its obligations under Article 28 EC. Costs Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party-�s pleadings. Since the Commission applied for an order for costs and the Kingdom of Belgium was unsuccessful, it must be ordered to pay the costs. On those grounds, THE COURT (Fifth Chamber) hereby: 1. Declares that, by adopting and maintaining in force rules under which -�the Walloon label of quality-� is granted to finished products of a certain quality manufactured or processed in Wallonie, the Kingdom of Belgium has failed to fulfil its obligations under Article 28 EC; 2. Orders the Kingdom of Belgium to pay the costs. Gulmann von Bahr Silva de Lapuerta Delivered in open court in Luxembourg on 17 June 2004. R. Grass C. Gulmann Registrar President of the Fifth Chamber - Language of the case: French. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII