Court of Justice 22-06-1982 ECLI:EU:C:1982:239

I — Facts and written procedure

1. Belgian Royal Decree No 80 of 28 November 1939 supplementing and amending the Law of 5 June 1868 on freedom to work gold and silver materials, establishing a compulsory guarantee as to the fineness of articles made of precious metals, confirmed by the Law of 16 June 1947 and amended by the Decree-Law of 28 February 1947 lays down in Article 1 that:

“Manufacturers of gold, silver and platinum articles shall guarantee the fineness of the alloy used by stamping the articles with two hallmarks.

One of those hallmarks shall constitute the manufacturer's own hallmark. The other shall indicate the fineness.

...

Importers of and traders in articles made of precious metals shall be treated as manufacturers in respect of articles sold by them which do not bear the hallmarks prescribed by this decree.”

Article 10 provides that the silver-plated ware which is at issue in the present case “shall bear two hallmarks, one constituting the manufacturer's own mark prescribed by Article 1 and the other bearing a numeral indicating the number of grams of pure silver with which the article is coated ...”.

Article 17 provides for the imposition of criminal penalties in the event of infringements of the provisions of the decree, without prejudice however to the application of the more severe provisions of the Criminal Code.

The Royal Decree was supplemented by the Regent's Decree of 13 July 1948 laying down detailed rules for the implementation of the former. It provides, in Article 7, inter alia, that both the manufacturer's hallmark and the hallmark as to fineness or weight must be in the prescribed form (a barrel for the former; a rectangle for the latter), that the number of grams of silver used to plate an article must be specified in arabic numerals and the indications must be set out lengthwise.

2. The main proceedings pending before the Tribunal de Première Instance, Brussels [hereinafter referred to as “the Tribunal”] are concerned with prosecutions initiated against importers of silver-plated articles partly as a result of a complaint from a consumer information and defence association, UFIDEC, a non-profitmaking body. The accused, Robertson, Declercq, Konijn, Haas, Lambeets and Demeuldre-Coche sold silver-plated cutlery imported from other Member States bearing hallmarks which did not satisfy the requirements of the Belgian rules. Accordingly, they are charged with two offences :

• Having fraudulently misled the buyer as to the quality of the goods sold and in the present case, in particular, having sold cutlery with a pure silver content inferior in weight to that indicated on the hallmark;

• Being, manufacturers of gold, silver and platinum articles, having stamped or caused to be stamped, in particular, cutlery with hallmarks indicating a pure silver content higher than the real weight in grams contrary to Articles 1, 10 and 17 of Royal Decree No 80.

Taking the view that its decision depended on the question whether the Belgian rules produce effects equivalent to quantitative restrictions and that, consequently, an interpretation of Article 30 et seq. of the EEC Treaty is necessary to enable it to give judgment, the Tribunal stayed the proceedings and referred to the Court of Justice, pursuant to Article 177 of the EEC Treaty, the following question for a preliminary ruling:

“Must Articles 30 to 36 of the Treaty establishing the European Economic Community be interpreted as prohibiting in the precious metals sector provisions such as Royal Decree No 80 of 28 November 1939 supplementing and amending the Law of 5 June 1868, confirmed by the Law of 16 June 1947 and amended by the Decree-Law of 28 February 1947, which determine, in accordance with particular methods, the fineness of an alloy containing pure silver and govern the form and the details of hallmarks guaranteeing the fineness so determined?”

3. The judgment making the reference was received at the Court Registry on 20 July 1981.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the accused in the main proceedings, Mr Declercq, represented by G. Kirschen and P. Verheirstraeten, of the Brussels Bar; Mr Konijn, represented by J. Perlberger, of the Brussels Bar; Mr Lambeets, represented by Claude Andries, of the Brussels Bar; Mr Demeuldre-Coche, represented by Jean-Pierre Clauwaert, of the Brussels Bar; by the party acting in a civil capacity, UFIDEC, a non-profitmaking body, represented by Jean de Bock, of the Brussels Bar; by the Belgian Government, represented by L. Janssen, administrative director, on behalf of the Ministry of Foreign Affairs, acting as Agent; by the United Kingdom, represented by R. N. Ricks, of the Treasury Solicitor's Department, acting as Agent; and by the Commission of the European Communities, represented by its Legal Adviser, Michel van Ackere, assisted by Michel Waelbroeck, Advocate.

Upon hearing the repon of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. However, it requested the Commission to inform it in writing of the provisions relating to the hallmarking of articles made of precious metals and silver-plated articles which are applicable in the other Member States.

II — Written observations

1. The accused in the main proceedings, Declercq, Konijn, Lambeets and Demeuldre-Coche contend that the effect of the Belgian rules requiring articles to be stamped with two hallmarks is to make it impossible for an importer or a foreign manufacturer to sell on the Belpian market precious metals manufactured abroad unless he complies with the Belgian legislation as well as his national legislation. The importer or foreign manufacturer must therefore ensure that the articles bear two hallmarks and offer a product which is in conformity, as regards its precious metal content, with his national legislation and the Belgian legislation. The accused maintain in that connection that the off it. I rules in force in the Federal Republic of Germany differ from the Belgian rules inasmuch as they refer to a ratio between the weight of pure metal and the surface area covered, namely 90 grams for a surface area of 24 square decimetres.

The rules in question thus constitute a technical barrier to free trade within the Community which the Council has proposed to remove in accordance with its general programme of 28 May 1969 (Official Journal, English Special Edition, Second Series 1974 (IX)) and its Resolution of 17 December 1973 on industrial policy (Official Journal C 117, p.1)

The Belgian rules must, in the light of the case-law of the Court, be classified as a measure having equivalent effect. That case-law covers all measures which are capable of hindering, directly or indirectly, actually or potentially, trade between Member States without necessarily rendering all importation impossible. Mr Konijn adds that the Belgian rules hinder the importation and exportation of goods inasmuch as they make such operations more costly or more difficult than the sale of national products.

Accordingly, the accused in the main proceedings propose that the answer to the question submitted for a preliminary ruling should be that national legislation, such as Royal Decree No 80, constitutes a measure having an effect equivalent to a quantitative restriction on imports, prohibited by Article 30 of the EEC Treaty, in so far as it makes importers subject to formalities and controls the effect of which is to render impossible or more difficult the sale on the national market of imported products and thus promotes the sale of national products.

2. The party claiming damages in the main proceedings, UFIDEC, a nonprofit-making body, observes in the first place that, contrary to what is stated in the question put to the Court, this case does not concern articles made of pure silver, that is to say solid silver, but solely silver-plated articles, in other words those made of base metal coated with a fine layer of silver.

After briefly considering the Belgian rules, UFIDEC refers to a proposal for a directive submitted in 1975 concerning the approximation of the laws of the Member Sutes relating to anides made of precious metals. However, silverz-plated metal has not been the subject of any proposal for a directive.

Next, UFIDEC analyses the case-law of the Court relating to measures having equivalent effect commencing with the judgment of 20 February 1979 in Case 120/78 Rewe [1979] ECR 649. UFIDEC is of the opinion, in the present case, that the Belgian rules seek to achieve an objective which is in the public interest and is such as to override the requirements of the free movement of goods, within the meaning of the Rewe judgment. By seeking both to eliminate the abuses which might result from the system establishing freedom as to the fineness of the metal used and to suppress frauds more effectively, those rules ensure both fairness in commercial transactions and the protection of consumers. Their aim is not protectionist in nature.

More particularly, the hallmark specifying the silver content constitutes essential information for the consumer, preventing him from being misled. However, the hallmark constituting the manufacturer's own mark, authenticates the article and precludes the manufacturer from disclaiming liability in respect of it.

The obligation to stamp hallmarks on the product itself constitutes a measure which is absolutely necessary and quite appropriate since the hallmark is indelible and inseparable from the product and thus serves as an indispensable means of identification in commercial transactions. On the other hand, the provision of documentation at the time of purchase or the affixing of a label which may be removed from the product cannot provide the same guarantees.

UFIDEC therefore considers that the contested rules seek to achieve the legitimate objective of ensuring fairness in commercial transactions and protecting consumers. They are justified, appropriate and commensurate with the advantages which they offer whilst such constraints as they may involve are not onerous by comparison with the guarantee provided. In view of the fact that there are no such rules in any other Member Sute, it is easy for manufacturers and importers to comply with the rules of Belgian law.

UFIDEC therefore proposes that the answer to the question should be that Articles 30 to 36 of the EEC Treaty must not be interpreted as prohibiting, in the specific case of silver-plated metal, legal provisions such as those contained in Royal Decree No 80, as supplemented by the Regent's Decree of 13 July 1948 which determine, in accordance with particular methods, the indication of the amount of pure silver with which an article is coated and govern the form and the detail of the hallmarks guaranteeing the weight so determined.

3. In the opinion of the Belgian Government, the legislation in question does not constitute a measure having equivalent effect, as defined in the Court's judgment of 11 July 1974 in Case 8/74 Dassonvilie [1974] ECR 837. It does not create any technical barriers to the importation from other Member States of products made of precious metals since it permits articles from abroad to be sold in Belgium provided that they bear the official hallmarks prescribed by their country of origin. Accordingly, products manufactured in another Member State in which the required fineness of a precious metal is lower than that prescribed by Belgium for the grant of official hallmarks may circulate in Belgium without having to comply with any formalities.

The Belgian Government maintains, in the alternative, that, even on the assumption that the contested rules impose certain restrictions on freedom of movement within the Community, those restrictions are in any event in conformity with Community law. They are necessary to satisfy overriding requirements relating, in particular, to the fairness of commercial transactions and the defence of the consumer, within the meaning of the judgment of 20 February 1979 in Case 120/78 Rewe. As is apparent from the Rapport du Roi [Royal Report] on Royal Decree No 80, the rules were adopted in order to meet “the needs of the consumers concerned and of the members of the corporation of watchmakers, jewellers and goldsmiths...”.

Furthermore, the Belgian rules do not create any obstacles to the free movement of articles made of precious metals which have not been stamped with the official hallmarks of the country in which they were manufactured. Admittedly, such articles must be hallmarked by the importer in accordance with the Belgian legislation. However, that legislation is not discriminatory and is necessary in so far as products which do not satisfy rhe criteria laid down by the country of o..:gin must at least satisfy the criteria of tht country in which they are offered for sale.

4. The United Kingdom points out that in the United Kingdom there are no legal provisions analogous to the Belgian rules as regards either the methods used to calculate the precious metal content of the products or the determination of fineness in the case of silver-plated articles. However, the Hallmarking Act 1973 lays down that most other articles supplied for commercial or industrial purposes in the United Kingdom and described as made, either wholly or in pan, of gold, silver or platinum, must be hallmarked.

Next, the United Kingdom Government analyses the Court's recent decisions on measures having equivalent effect, in particular, its judgment of 20 February 1979 in Case 120/78 Rewe. It maintains, in the light of that judgment, that even on the assumption that the obligation to hallmark articles constitutes an obstacle to the free movement of goods within the Community, it falls outside the scope of Article 30 of the EEC Treaty on the ground that it is necessary in order to satisfy overriding requirements relating to the fairness of commercial transactions and the defence of the consumer.

Precious metals, namely gold, silver and platinum are usually alloyed with a base metal which hardens them. It is possible to establish the actual proportion of pure precious metal only by means of highly technical tests which most consumers and traders are incapable of carrying out. Thus consumers and traders might easily fall victim to frauds, misrepresentations or misunderstandings as regards the fineness of the precious metal which to a large extent determines the value of the anieles. It is therefore viul for consumers and traders to be provided with a specific and reliable guarantee as to fineness.

Compulsory hallmarking of anieles made wholly or in pan of precious metal therefore affords the consumer a high degree of protection. It is the most effective way of protecting the interests of consumers and honest traders in their commercial dealings as well as for the public at large. Permanent marking is particularly suitable in the case of articles made of precious metals which are designed to have a long lifespan and often pass through many hands. However, alternative methods which are less durable, such as the use of wrapping paper or labelling are insufficient to provide a permanent guarantee.

The United Kingdom concludes that in the absence of Community rules in the matter, a Member State may adopt its own rules as regards the hallmarking of articles made wholly or in pan of precious metals. National rules of that kind are designed to achieve objectives which satisfy the criteria established by the Court in its recent decisions. Since they are in the public interest and are such as to override the principle of the free movement of goods, they are not prohibited by Article 30 of the Treaty if they are applied without discrimination to domestic products and to imported products alike.

5. According to the Commission, the question referred to the Court for a preliminary ruling seeks in substance to ascertain whether a provision applicable to national products and to imported products without distinction which determines, according to specific rules and subject to criminal penalties, the methods of hallmarking metals, is compatible with Article 30 of the Treaty.

In accordance with a consistent line of decisions of the Coun, the concept of measures having equivalent effect covers all commercial legislation adopted by the Member States which is capable of hindering directly or indirectly intra-Community trade. The Court has pointed out that in the absence of rules common to all the Member States, it is for each Sute to regulate the production and marketing of products. In the case of national rules applicable to national products and to imported products without distinction, the Court considers that the obstacles to free movement within the Community must be accepted in so far as such rules may be recognized as being necessary in order to satisfy overriding requirements relating, in particular, to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer.

In that regard, the Commission observes that if an article made of precious metal or a silver-plated article is to be imported into Belgium, it should be hallmarked either in conformity with the Belgian rules in the country in which it is manufactured — which would entail the production of articles specially intended for Belgium — or by the importer, in which case it would be necessary, inter alia, for the latter to possess the requisite equipment.

The Belgian legislation also has the effect of hindering parallel imports, in view of the fact that a parallel importer is not usually the proprietor of a hallmark and does not possess the equipment needed to stamp hallmarks in conformity with the Belgian rules.

That barrier to imports cannot be justified by Article 36 of the Treaty which, according to the case-law of the Court, is to be strictly interpreted and does not permit the exceptions exhaustively listed therein to be extended to other cases.

However, it is necessary to determine the extent to which the Belgian legislation satisfies the need to ensure fairness in commercial transactions and to protect the consumer. In that connection, the Commission draws a distinction between a hallmark as to fineness or weight and a manufacturer's own hallmark.

As regards the hallmark as to fineness or weight, the Commission considers that it is legitimate to require the seller of an article made of precious metal or a silver-plated article to inform buyers, by means of such a hallmark, of the fineness of the alloy or of the amount of pure metal used to coat it.

In view of the value of the articles in question, their average lifespan and the importance which buyers attach to the conformity of such articles with the indications displayed, the system of hallmarking appears to afford guarantees which cannot be provided merely, by a system of labelling, description or other wording on the external packaging.

It is also legitimate to make provision, in the case of silver-plated articles, for a specific method of indicating the amount of pure silver with which they are coat- d (in grams per article or batch of 2 articles). That also holds true to thr extent to which another country of the Community adopts a different method of calculation, as in the case of Germany which requires the number of grams per unit of 24 square decimetres of surface area to be specified. In view of their necessary conciseness, the indications set out on the hallmark are not complete, as regards their informative content, but invariably refer to a specific system of rules. Accordingly, foreign hallmarks which refer to a different method of calculation from the one prescribed by the Belgian rules do not, in the terms of the judgment of 16 December 1980 in Case 27/80 Fietje [1980] ECR 3839“have as their content information on the nature of the product ... [which] ... includes at least the same information, and is just as capable of being understood by consumers in the importing State, as the description prescribed by the rules of that Sute”.

However, it is questionable whether a Member State may require, in the case of articles imported from other Member States, that the indications relating to the fineness of the metal used or to the weight in grams be set out on a hallmark of a given form. Nor may a Member Sute impose an obligation to register the impression of a hallmark as to fineness and to use only a hallmark which is in conformity with that impression.

As regards the manufacturer's own hallmark, the Commission is of the opinion that the restrictions resulting from the rules in that field are more difficult to justify than those relating to the hallmark as to fineness. Although the Member States retain the right to require the indication of the manufacturer's identity by means of a hallmark, that right may not be extended to cover the imposition of an obligation to use, in the case of imported products, a hallmark corresponding to a model registered in Belgium. Such a restriction on trade would not be justified by an objective which is in the public interest and which is such as to override the requirements laid down in the rules of the Treaty.

Therefore the Commission proposes that the question raised should be answered as follows:

“The legal provisions of a Member Sute laying down that articles made of precious meuls and silver-plated articles, whether domestically-produced or imported from other Member Sutes, must bear hallmarks which make it possible to identify the manufacturer and to determine, according to the circumsunces, the fineness of the alloy or the number of grams of precious metal with which they have been coated by reference, where appropriate, to a specific method of calculation, are not covered by the concept of measures having equivalent effect to quantitative restrictions on imports within the meaning of Article 30 of the EEC Treaty.

The legal provisions of a Member State requiring manufacturers of such articles in other Member Sutes or importers of such articles from other Member Sutes to use hallmarks which are in a specific form or the impression of which must correspond to a model registered beforehand, constitute measures having equivalent effect, prohibited by the Treaty, to the extent to which the application of such provisions creates an obsucle to intra-Community trade and in so far as the hallmarks already imprinted on the articles at the time of their importation do not provide buyers, sellers and public authorities with sufficient information.

III — Oral procedure

The accused in the main proceedings, represented by P. Verheirstraeten of the Brussels Bar, UFIDEC, civil party in the main proceedings, represented by Jean de Bock of the Brussels Bar, the United Kingdom, represented by Mr Donaldson, and the Commission of the European Communities represented by its Legal Adviser, Michel van Ackere, assisted by Michel Waelbroeck, presented oral argument and answered questions put by the Court at the sitting on 31 March 1982.

The Advocate General delivered his opinion at the sitting on 13 May 1982.

Costs

15 The costs incurred by the Belgian Government, the United Kingdom and by the Commission of the European Communities which have submitted observations to the Court are not recoverable. As these proceedings are in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.