Important legal notice

61995C0223

European Court reports 1997 Page I-02379

Opinion of the Advocate-General

1 This reference for a preliminary ruling, submitted by the Finanzgericht (Finance Court), Hamburg, must be seen in the political context arising from the events of 1989, which led to the reunification of Germany.

2 Those tumultuous events resulted in changes in the legal order, with at times uncertain implications, particularly for commercial transactions of the kind under way in this case.

3 The case before the Court is concerned with the export, prior to the reunification of Germany, from the German Democratic Republic (hereinafter `the GDR') to the Federal Republic of Germany (hereinafter `the FRG'), of cattle (`the animals', `the products' or `the goods') intended for subsequent re-exportation to the Soviet Union. Essentially, the question is whether the undertaking which set the operation in motion may claim payment of export refunds on the ground that the animals acquired a Community origin as a result of reunification which took place while they were in store in the FRG.

I - Facts of the case, national proceedings and the question referred for a preliminary ruling

4 On 9 May 1990, A. Moksel AG (`Moksel'), established in Bavaria, purchased some 20 000 cattle from an East German company, with a view to having them slaughtered in the FRG and then re-exporting them to the Soviet Union.

5 On 15 May 1990, Moksel received from the competent authorities of Upper Bavaria a transit licence which permitted the animals to be slaughtered in the FRG and which was granted on condition that they were placed under customs supervision until the meat and offals were exported.

6 Some 3 500 of those animals were imported into the FRG during the period from 24 May to 22 June 1990. The animals, and subsequently the slaughter products, remained under customs supervision (customs warehousing procedure), as had been anticipated.

7 The two Germanies concluded an economic and monetary union by the State Treaty (Staatsvertrag) of 18 May 1990. Following the introduction of a `de facto agricultural union' on 1 August 1990, the Treaty on the Establishment of German Unity entered into force on 3 October 1990. (1)

8 On 10 January 1991, Moksel completed the formalities for exporting the slaughter products to the former Soviet Union and, on 15 January 1991, it submitted to the Hauptzollamt (Principal Customs Office), Hamburg-Jonas an application for export refunds.

9 By decision of 10 April 1991, the Hauptzollamt Hamburg-Jonas refused to grant the refunds applied for. Moksel accordingly brought an action before the Finanzgericht Hamburg, which referred to the Court the following question:

`Is Article 8(1) of Regulation (EEC) No 3665/87 in the version of 27 November 1987, as amended on 8 December 1988, in conjunction with Article 9(2) of the EC Treaty to be interpreted as meaning that those provisions also cover products which were imported into the Federal Republic of Germany from the former German Democratic Republic in the period from 24 May to 22 June 1990 pursuant to an exceptional authorization for the processing of transit-trade goods and exported to a third country on 10 January 1991?'

10 The point on which the German court seeks clarification, in particular, is apparent from the order for reference. In the national court's view, initially `no export refunds could be granted in respect of the cattle originating in the GDR or for the products obtained therefrom ...'. (2) The national court's question is therefore concerned with a possible change in the status of the goods as a result of the change in the law following reunification between the GDR and the FRG. (3) It is that aspect of the case, concerning the temporal application of the law, that will have to be examined.

II - Legislation

11 Export refunds are linked to the prices of agricultural products in the Member States, which are in general higher than world market prices. They are therefore adjusted, for reasons of economic competitiveness, to the prices charged by third countries, which thus makes it necessary to modify the payments made in the form of export refunds, the conditions for the grant of which now fall to be considered.

12 The law applicable in this area is set out in a number of measures, most of which are in the form of Community regulations.

13 Article 18(1) of Council Regulation (EEC) No 805/68 of 27 June 1968 on the common organization of the market in beef and veal, (4) provides as follows:

`To the extent necessary to enable the products listed in Article 1 to be exported on the basis of quotations or prices for those products on the world market, the difference between those quotations or prices and prices within the Community may be covered by an export refund.'

14 Article 6(1) of Council Regulation (EEC) No 885/68 of 28 June 1968 laying down general rules for granting export refunds on beef and veal and criteria for fixing the amount of such refunds (5) provides as follows:

`The refund shall be paid upon proof:

- that the products have been exported from the Community, and

- that the products are of Community origin, unless an exception is made pursuant to Article 7.'

15 Article 7 of Regulation No 885/68 provides:

`Unless an exception is made in accordance with [the] procedure laid down in Article 27 of Regulation (EEC) No 805/68, (6) no export refund shall be granted on products listed in Article 1 of that regulation (7) which are imported from third countries and re-exported to third countries.'

16 The first subparagraph of Article 8(1) of Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products (8) lays down the following rule:

`A refund shall be granted only in respect of products which come within the terms of Article 9(2) of the Treaty, even if the packaging does not come within those terms.'

17 Finally, according to Article 9(2) of the Treaty:

`The provisions of Chapter 1, Section 1, and of Chapter 2 of this title shall apply to products originating in the Member States and to products coming from third countries which are in free circulation in Member States'. (9)

18 A comparison of those two provisions with Articles 6(1) and 7 of Regulation No 885/68 reveals a degree of uncertainty as regards the conditions for the grant of export refunds. Articles 6 and 7 of Regulation No 885/68 restrict export refunds to products of Community origin and prohibit the grant of refunds upon exportation of products imported from third countries whereas, according to Article 8 of Regulation No 3665/87, refunds may also be granted upon exportation of products from third countries which are in free circulation in the Member States.

19 However, that contradiction can be resolved in favour of Commission Regulation No 3665/87, inasmuch as Article 7 of Regulation No 885/68, by referring to the procedure under Article 27 of Regulation No 805/68, (10) expressly recognizes that the Commission is entitled to derogate from the principle that prohibits refunds in respect of products imported from third countries.

20 The Commission has been able to alter the conditions for the grant of export refunds by resorting to the Article 27 procedure, since that procedure is also referred to in Article 18(6) of Regulation No 805/68 as the framework for laying down detailed rules for the application of the whole of Article 18, which was in fact the basis on which Regulation No 3665/87 (11) was adopted.

21 Regulation No 3665/87, the first subparagraph of Article 8(1) of which must in my view take precedence over Articles 6 and 7 of Regulation No 885/68, was adopted by the Commission on the basis of `Council Regulation (EEC) No 2727/75 of 29 October 1975 on the common organization of the market in cereals, as last amended by Regulation (EEC) No 1900/87, and in particular Articles 16(6) and 24 thereof, and [of] the corresponding provisions of the other regulations on the common organization of the markets in agricultural products'. (12) The `corresponding provisions' designated in that recital are, in particular, those referred to in Article 18(6) of Regulation No 805/68.

22 Furthermore, in stating that `the measures provided for in this regulation are in accordance with the opinion ... of all the relevant Management Committees', the last recital in the preamble to Regulation No 3665/87 is referring to the opinion of the Management Committee for Beef and Veal provided for by Article 27, cited above, thereby confirming both recourse to the corresponding procedure and its legality.

23 In my view, therefore, Regulation No 3665/87 laying down common detailed rules for the application of the system of export refunds on agricultural products lawfully amended the conditions for the grant of refunds by setting forth the derogation in the first subparagraph of Article 8(1), which permits export refunds to be granted in respect of products imported from third countries.

24 Thus the relevant rules would seem to me to be those referred to by that provision, to the effect that, in order for Moksel to be able to claim export refunds, it must be shown either that the animals may be regarded as originating in the Community, as a result of the GDR's integration into the Community, even though the commercial transaction in question commenced before Germany was reunified, or else that, since the animals originated in the GDR which was a third country at the time, they satisfy the conditions for release into free circulation laid down by the Treaty.

III - Origin of the goods

25 Before classifying for legal purposes the origin of the animals exported to the Soviet Union, it is necessary to determine their proper geographical origin.

A - Geographical origin of the animals

26 According to Article 4(1) of Council Regulation (EEC) No 802/68 of 27 June 1968 on the common definition of the concept of the origin of goods: (13)

`Goods wholly obtained or produced in one country shall be considered as originating in that country.'

27 In particular, Article 4(2)(d) of that regulation states that:

`The expression "goods wholly obtained or produced in one country" means ... products derived from live animals raised therein.'

28 It is undisputed that the animals whose meat and offals were subsequently exported to the Soviet Union were raised in the territory of the GDR.

29 The effect of the place where the animals were slaughtered, in this case the territory of the FRG, on the determination of their origin is defined by Regulations No 802/68 and No 3620/90. (14)

30 Article 5 of Regulation No 802/68 provides as follows:

`A product in the production of which two or more countries were concerned shall be regarded as originating in the country in which the last substantial process or operation that is economically justified was performed, having been carried out in an undertaking equipped for the purpose, and resulting in the manufacture of a new product or representing an important stage of manufacture.'

31 Under Article 1 of Regulation No 3620/90, however, the slaughter of domestic animals confers `the origin of the country where it took place on the edible meat and offals, fresh, chilled or frozen, which are thus obtained, only if the animals in question have been fattened in that country during a period of at least three months in the case of ... bovine animals ... '. There is nothing in the file to indicate, nor do the parties contend, that the animals were fattened for a longer period in the FRG before they were slaughtered.

32 In the light of those considerations, I am inclined, like the national court, to consider the animals as originating in the GDR.

33 That accordingly raises the question of the effect which the GDR's integration into the Community may have had on the origin of the animals.

B - The effects of the Unification Treaty on the origin of the animals

34 As the national court has pointed out, the GDR was not a Member State of the Community prior to unification, as is clear from Article 227 of the EEC Treaty. The Court itself has taken the view, on the subject of economic relations between the GDR and the Community, with regard to Article 1 of the Protocol on German internal trade, (15) that `these rules aim only at exonerating the Federal Republic of Germany from applying the rules of Community law to German internal trade ... the dispensation thus granted does not have the result of making the German Democratic Republic part of the Community, but only that a special system applies to it as a territory which is not part of the Community'. (16)

35 Moksel considers, however, that the reference to Fleischkontor is not relevant, on the ground that that decision relates to a factual situation in which the goods from the GDR originated in that country at the time of export and of submission of the application for export refunds, whereas in this case, at the corresponding stages, the GDR had disappeared.

36 The plaintiff maintains that on 3 October 1990 at the latest, that is to say at the time of the accession of the former GDR to the FRG, an automatic change in origin occurred in the case of all goods from the former GDR and that goods in the territory of the former GDR automatically acquired the origin conferred on them by the legal system of the country incorporating the GDR and of the Community legal system which overrides it. (17) The plaintiff states that the change in the legal status of the territory of the former GDR following the entry into force of the Unification Treaty, established by Council Regulation (EC) No 2684/90 of 17 September 1990, (18) does not allow for any exception in customs matters, in particular in so far as concerns the provisions concerning the customs territory and the origin of goods. (19)

37 The Unification Treaty postdates the period in which the animals were transported into the territory of the FRG, with the result, it seems to me, that only a retroactive statutory provision would be capable of conferring a Community origin on goods coming from East German territory prior to unification.

38 Accordingly, in order to determine their temporal scope, it is necessary to examine the statutory provisions whereby the territory of the GDR became an integral part of the Community.

39 The integration of the GDR into the customs territory of the Community was achieved by the Treaty of 31 August 1990, cited above; Article 10(1) and (2) of that Treaty provide as follows:

`(1) Upon the accession taking effect, the Treaties on the European Communities together with their amendments and supplements as well as the international agreements, treaties and resolutions which have come into force in connection with those Treaties shall apply in the territory [of the Länder of the GDR].

(2) Upon the accession taking effect, the legislative acts enacted on the basis of the Treaties of the European Communities shall apply in the territory [of the Lnder of the GDR] unless the competent institutions of the European Communities enact exemptions. These exemptions are intended to take account of administrative requirements and help avoid economic difficulties.' (20)

40 Drafted in those terms, the Treaty renders Community law in its entirety applicable to the Länder of the GDR as from that State's accession to the FRG. In the absence of any provision which gives it retroactive effect on legal situations predating its entry into force, it must, in my view, be regarded as making provision only for the future and therefore as having no retroactive effect capable of affecting the origin of the animals or their legal status.

41 Moksel's contention, which presupposes that the origin of goods in the territory of the FRG at the time of unification was retroactively amended, is not based therefore on any express provision of Community law. As the Court has held, in order to take effect, retroactivity must be clearly stated: `the principle of legal certainty requires that a regulation should not be applied retroactively, regardless of whether such an application might produce favourable or unfavourable effects for the person concerned, unless a sufficiently clear indication can be found, either in the terms of the regulation or in its stated objectives, which allows the conclusion to be drawn that the regulation was not merely providing for the future'. (21)

42 Similarly, I endorse the view expressed by Advocate General Fennelly in Allain, to the effect that: `while the case-law on the absence of any retroactive effect of Community law in general refers to measures adopted by the institutions, the principle of legal certainty would ... equally militate against according such effect to the reinterpretation of the [ECSC] Treaty to take account of the unification of Germany'.

43 Accordingly, even if determined on the date of export or the date of the application for export refunds, that is to say, after reunification, the origin of the animals remains unchanged in the absence of any amending provision.

44 Admittedly, in its communication of 24 October 1990 addressed to the delegations of the Management Committee on Trade Mechanisms, the Commission took a different view. However, that document does not strike me as being capable of altering the status of the goods. In the first place, its pedagogical nature, expressed by the fact that it claims `to summarize the legal situation', deprives it of any legislative force. Secondly, even on the assumption that it is designed to produce legal effects, the Commission's action is, in the absence of any legal basis for its powers, lacking in any justification. Accordingly, the Commission's communication cannot derogate from the aforesaid provisions of the EC Treaty and of the relevant Community regulations, applied to the territory of the former GDR by virtue of the Treaty of 31 August 1990.

45 Moreover, no breach of the principle of legal certainty may be relied upon since the communication recognizing the right to export refunds was drawn up on 24 October 1990, whereas Moksel's decision to export the animals to the Soviet Union, after having them slaughtered in the FRG, was adopted no later than 15 May 1990. Accordingly, the prospect of qualifying for those refunds by virtue of the rights described in that communication cannot have contributed to the organization of the commercial transaction.

46 Thus the origin of the animals is not in doubt and in my view there is no express rule providing for, nor any general principle authorizing, its retroactive amendment. Not having a Community origin, therefore, the goods must, in order to confer entitlement to the export refunds sought by Moksel, satisfy the conditions for their release into free circulation.

IV - Status of the goods released into free circulation

47 Release into free circulation of a product originating in a third country enables it to come within the scope of the principle of the free movement of goods within the Community customs territory, as if it came from a Member State.

48 The conditions for that status are laid down in Article 10(1) of the EEC Treaty, which provides as follows:

`Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State, and if they have not benefited from a total or partial drawback of such duties or charges'.

49 Moksel claims that the goods that were in the FRG before 3 October 1990 have the status of goods in free circulation. It argues that a special system, that resulting from the Protocol on German internal trade, applied to relations between the GDR and the FRG, whereby the goods moving between those two countries were not subject to any customs formality. According to the plaintiff, the change in origin as a result of reunification simultaneously entailed the transition to the status of goods in free circulation both in the case of goods within the territory of the GDR and of those, previously originating in the GDR, in store in the FRG. The plaintiff considers that the change in status which necessarily resulted from reunification could have been avoided only by the adoption of a special provision of Community law providing that goods originating in the former GDR, in store in the FRG at a particular date, would retain the status of goods originating in the GDR. The plaintiff considers that no provision of that kind has been adopted and would, in any event, be discriminatory. Consequently, it claims that export refunds are payable to it.

50 We have seen that, at the time of the entry into force of the Unification Treaty on 3 October 1990, the origin of the goods was unchanged, nor could it have been changed otherwise than by means of an express statutory provision, which is lacking to this date.

51 Assessment of the status of goods released into free circulation depends on the consequences to be drawn from the specific aspects of the transaction in question, which was carried out partly in the context of German internal trade. Furthermore, at the customs level, a particular feature of the animals is that they entered the FRG by virtue of a transit licence and were then placed under customs supervision with a view to being slaughtered and dispatched to a third country.

A - Export of the animals in the context of German internal trade

52 The cattle were exported from the GDR to the FRG within the legal framework of German internal trade. Article 1 of the Protocol on German internal trade provides as follows:

`Since trade between the German territories subject to the Basic Law for the Federal Republic of Germany and the German territories in which the Basic Law does not apply is a part of German internal trade, the application of this Treaty in Germany requires no change in the treatment currently accorded this trade'.

53 In view of the derogation thus made in favour of trade between the two German States before their reunification, it seems to me to be essential to determine whether the GDR, whose territory was not part of the Community, could nevertheless be regarded as a third country, having regard to the obligations set out in Article 10(1) of the Treaty as regards the export of its products.

54 In Fleischkontor, the Court stated its position on that point, holding that, although the GDR is not a Member State of the Community, nor is it a third country `as regards German internal trade'. However, the transaction in this case cannot be regarded as being confined to the field of inter-German relations alone since entry into West German territory is - and has been from the outset, regard being had to the export obligation - only a stage in a commercial transaction relating to products bound for a third country.

55 According to the Protocol, goods originating in the GDR which enter the FRG directly are not subject either to the customs duties in the Common Customs Tariff, or to agricultural levies, or to the import quotas fixed under the Community's common commercial policy. The national court has confirmed, moreover, that `customs clearance for free circulation did not take place and customs duties and charges having equivalent effect were not levied'.

56 Accordingly, the goods cannot be regarded as having been released for free circulation since they do not fulfil the conditions laid down in Article 10(1) of the Treaty.

57 Furthermore, as the Court clearly stated in Fleischkontor, `the main principle here is that only products originating in the Community are entitled to a refund, and what is granted to products imported from third countries and re-exported to third countries is only a "repayment" of a levy already exacted.'

58 Furthermore, `the scope of the Protocol is ... misconceived if it is sought to infer from it that the Community must extend the guarantees of prices under the common agricultural policy to products originating in the German Democratic Republic'.

59 The GDR was not a Member State of the Community, involved in that capacity in financing the common agricultural policy. It could not therefore qualify, even indirectly, through inter-German trade, for the payments granted to traders in the customs territory of the Community.

60 In addition, it is clear from the date of the sale, which preceded the political events of 1989-1990, that the purchase price could not have been fixed on the basis of factors other than those specific to the East German market for identical products and comparable transactions. Accordingly, there would be no justification, irrespective of any legal consideration, for undertakings to qualify both for exemptions granted under the Protocol on German internal trade and for export refunds, where the level of the purchase price charged is not that of the Community.

61 There is a further reason which leads me to conclude that the provisions referred to in the question submitted for a preliminary ruling cannot be applied to the commercial transaction in question. That reason, which concerns the consequences resulting from the customs status of the goods, could moreover, in my view, be sufficient to justify the solution proposed.

B - The customs procedure applied when the animals were exported

62 It is apparent from the question raised by the national court that the products were imported into the FRG on the basis of a derogation granted for the processing of goods in transit and were then exported to a third country. It is pointed out in the order for reference that the transit licence was granted on condition that the animals were placed under customs supervision in the FRG until the meat and offals were exported.

63 Where, as in this case, goods from one third country are bound for another third country, the transit operation enables them to be consigned through the customs territory of the Community without the need to subject them to duties and other measures normally imposed on importation. That customs status conferred on the animals therefore confirms that they could not be regarded as being required to remain in the territory of the FRG.

64 Above all, the fact that the animals were placed under customs supervision shows that the effects of political change occurring between their entry into the territory of the FRG and their departure therefrom have their limits. Indeed, the customs warehousing procedure may be defined as a legal fiction whereby the goods are not regarded as being on customs territory.

65 As the Commission has shown, the animals bought by Moksel therefore left the economic circuit of the former GDR once and for all, and the resultant slaughter products were not at any time brought into the economic circuit of the FRG or the Community. They were only placed in store in West German territory for strictly economic reasons, namely processing before export.

66 Thus, there was no change whatsoever in the origin of the goods, nor were they released into free circulation, since they were not affected by the changes in the law resulting from political upheavals in the State in which they originated, or in that which they crossed.

67 It follows from the foregoing that the provisions laying down the conditions for the grant of export refunds, referred to in the question submitted for a preliminary ruling, cannot be applied to the animals imported from the GDR and then re-exported by Moksel.

V - Conclusion

68 In the light of those considerations, I propose that the Court should answer the question submitted as follows:

Article 8(1) of Commission Regulation (EEC) No 3665/87, in the version of 27 November 1987, laying down common detailed rules for the application of the system of export refunds on agricultural products, as amended on 8 December 1988, in conjunction with Article 9(2) of the EC Treaty, must be interpreted as being inapplicable to products which were imported between 24 May and 22 June 1990 into the Federal Republic of Germany from the former German Democratic Republic on the basis of a derogation granted for the processing of goods in transit and which were exported on 10 January 1991 to a third country.

(1) - Treaty of 31 August 1990, published on 6 September 1990 in the Bulletin, Presse und Informationsamt der Bundesregierung, No 104, p. 877.

(2) - Page 15 of the English translation of the order for reference.

(3) - Ibid.

(4) - Official Journal, English Special Edition 1968 (I), p. 187.

(5) - Official Journal, English Special Edition 1968 (I), p. 237.

(6) - Article 27 lays down a procedure which gives the Commission the power to adopt measures which apply immediately, in accordance with the opinion of the Management Committee for Beef and Veal, a body consisting of representatives of Member States and presided over by a representative of the Commission. In the case of measures which are not in conformity with the Committee's opinion, this provision allows the Council to take a different decision within one month.

(7) - Article 1 of the aforesaid regulation lists the goods governed by the common organization of the markets in beef and veal and defines the terms `bovine animals' and `adult bovine animals' for the purposes of that regulation.

(8) - OJ 1987 L 351, p. 1.

(9) - Emphasis added.

(10) - For a description of this procedure, see footnote 6 to this Opinion.

(11) - Article 1.

(12) - Second recital in the preamble, emphasis added.

(13) - Official Journal, English Special Edition 1968 (I), p. 165.

(14) - Commission Regulation (EEC) No 3620/90 of 14 December 1990 on determining the origin of the meat and offals, fresh, chilled or frozen, of certain domestic animals (OJ 1990 L 351, p. 25).

(15) - Protocol of 25 March 1957 on German internal trade and connected problems (Bundesgesetzblatt 1957, II, p. 984), annexed to the EEC Treaty, of which it forms an integral part, in accordance with Article 239 of the Treaty.

(16) - Judgment in Case 14/74 Fleischkontor [1974] ECR 899, paragraph 6, emphasis added.

(17) - Section 49 et seq. of the plaintiff's observations, emphasis added.

(18) - Second recital in the preamble to the regulation (OJ 1990 L 263, p. 1).

(19) - Section 18 et seq. of the plaintiff's observations.

(20) - Unofficial translation.

(21) - Judgment in Case 234/83 Duisburg [1985] ECR 327, paragraph 20.

(22) - Opinion delivered on 7 March 1996 in Case C-341/94 Allain [1996] ECR I-4631, point 46. The question there was, in particular, whether importation in 1985 and 1986 into the territory of a Member State of iron and steel products from the GDR could, for the purposes of interpreting the provisions of Community law likely to affect the application of domestic legislation, be treated as if it was subsequent to the reunification of Germany.

(23) - According to point 1 of that communication, all agricultural products originating in the former GDR must be regarded as from 3 October 1990 as goods of Community origin. Accordingly, so far as concerns Community export refunds in particular, all agricultural products originating in the territory of the former GDR fulfil as from 3 October the conditions referred to in Article 8(1) of Regulation (EEC) No 3665/87 (Directorate-General for Agriculture, No D17478).

(24) - See, for instance, the judgment in Joined Cases 281/85, 283/85, 284/85, 285/85 and 287/85 Germany and Others v Commission [1987] ECR 3203, paragraph 9 et seq.

(25) - See point 5 of this Opinion.

(26) - Section 53 et seq. of the French translation of the plaintiff's observations.

(27) - See point 34 et seq. of this Opinion.

(28) - See point 34 of this Opinion.

(29) - Paragraph 8, emphasis added.

(30) - See, on a comparable problem, the Opinion of Advocate General Jacobs in Case 12/88 Schäfer Shop [1989] ECR 2937, point 19, according to whom `the precise status of goods imported into the Federal Republic from the GDR under the special system of trade appears indeterminate. While it is the clear intention of Paragraph 1 of the Protocol that such goods are to be assimilated, for the purposes of circulation in the Federal Republic, to goods originating in the Federal Republic, they cannot be regarded as being in free circulation in the Community, since the requirements of Article 10(1) of the Treaty ... have not been fulfilled'. Furthermore, `where such goods are re-exported, they have a special status which lies somewhere between that of goods which are in free circulation within the meaning of Article 10(1), and that of goods which are not in free circulation and which are therefore in principle not capable of benefiting from the rules relating to the free movement of goods'. The issue in that case was the re-exportation from the FRG to other Member States, and not to a third country, of goods originating in the GDR, although in my view the reasoning of Advocate General Jacobs can be applied here. In the first place, he points out that the aim of the Protocol is to permit the free movement of goods from the GDR in the territory of the FRG. Secondly, he points out that this freedom does not extend beyond the territory of the two States, so that, once they have left the FRG, they once again become goods of non-Community origin.

(31) - Page 14 of the English translation of the order for reference.

(32) - Paragraph 10 of the judgment.

(33) - Paragraph 11 of the judgment.

(34) - Page 2 of the English translation of the order for reference.

(35) - On the transit procedure, see in particular J.R. Nassiet, La réglementation douanière, 1988, p. 208 et seq., and C.J. Berr and H. Tremeau, Le droit douanier, 1988, p. 378 et seq.

(36)- On the customs warehousing procedure, see in particular La réglementation douanière, cited above, p. 158 et seq., and Le droit douanier, cited above, p. 288 et seq.

(37)- Sections 78 to 81 of the French translation of the written observations.