Press and Information Division


10 September 2002

Opinion of Advocate General Geelhoed in Case C-491/01

The Queen v Secretary of State for Health, ex parte British American Tobacco (Investments) Ltd and Imperial Tobacco Ltd


According to Advocate General Geelhoed, the Community legislature is empowered, on grounds of the harmonisation of the internal market, to adopt rules governing the manufacture of cigarettes even where that manufacture takes place for the purpose of exporting cigarettes from the European Union.

The Court of Justice has been requested for the second time to rule on an EC directive designed to counter tobacco consumption. After annulling the directive on tobacco advertising on 5 October 2000, 1 the Court is now being called on to examine Directive 2001/37/EC of the European Parliament and of the Council of 5 June 2001, which imposes new requirements on the composition and designation of cigarettes. In regard to composition, the maximum permitted yields for tar are reduced, while maximum yields for nicotine and carbon monoxide are laid down for the first time at EU level. Concerning designation, two obligations are central to the Directive: the warnings which must be carried on cigarette packets are made more severe and must cover a significantly larger portion of packets, while at the same time the use of what are known as "descriptors", such as "light" and "mild", is prohibited. Such descriptors tend to suggest that a particular tobacco product is less harmful than others.

A major new element in the Directive is the fact that in every case the requirements as to composition apply not only to tobacco products placed on the market within the EU itself but also to tobacco products exported to non-member countries. Implementation of the Directive in Member States' national legislation must be completed by 30 September 2002. There is an extension of a further year in the case of the ban on descriptors.

On 3 September 2001 British American Tobacco (Investments) Ltd and Imperial Tobacco Ltd, who are British manufacturers of tobacco products operating on an international scale, brought proceedings before the High Court of Justice (Administrative Court) challenging the intention and/or obligation of the United Kingdom Government to transpose the Directive into national law.

The High Court of Justice (Administrative Court) requested the Court of Justice of the European Communities in December 2001 to deliver a preliminary ruling on the validity of the Directive. 2 The following questions are central to this case:

*    Can a measure be based on the Community law relating to harmonisation of the internal market if that measure: (a) seeks to guarantee the protection of public health and: (b) relates to the manufacture of products intended for export to non-member countries?

*    To what extent is the Community legislature empowered under the EC law on the common commercial policy to impose restrictions on exports of specified products to non-member countries in the context of the risks to public health which those products present?

*    Is the measure appropriate and does no other - less intrusive - measure exist which might provide equally good protection for public health ( principle of proportionality)?

The Advocate General delivers his Opinion in this case today. It is the function of the Advocates General, acting in complete independence, to propose a legal solution in a specific dispute. Opinions of the Advocates General are not binding on the Court.  

Advocate General Geelhoed first points to the particular character of the case, inasmuch as the Court is being called on for the first time to rule on the admissibility of preliminary questions on the validity of a directive which have been raised by affected parties in proceedings before a national court before the directive has been implemented in national legislation. The Advocate General takes the view that the Court has jurisdiction even during the implementation phase.

I Harmonisation of the internal market

A. Protection of public health:

The Community legislature has the power to adopt harmonisation measures which have as their object the establishment and functioning of the internal market. Should a (potential) barrier to trade arise, the Community must be in a position to take appropriate action. The purpose of such a measure is in this regard not material. The measure may follow from the desire to protect public health.

The Advocate General reasons in this regard as follows:

-    barriers to trade frequently arise through action taken by a national legislature for the purpose of protecting a public interest recognised by Community law, such as public health;

-    it must be possible in such a case for the Community legislature to intervene by taking over the protection of that public interest from the national legislature. The EC Treaty in some instances imposes an obligation to act in this regard;

-    this assumption of the task by the Community legislature may not result in less protection being afforded to the matter of public interest (in this case, combating tobacco consumption).

To summarise: were the Community legislature not to exercise its power to harmonise rules in the area of public health, an important instrument for the realisation of the internal market would thereby be rendered ineffective. Indeed, it is frequently the justified national measures intended to protect public health that create barriers to trade.

Once a barrier has been confirmed, the Court must determine whether the measure in fact relates to a matter of public interest recognised by Community law and whether the action taken by the Community legislature is appropriate for contributing to the removal of that barrier.

In the case of Directive 2001/37 - which seeks to counter smoking and to that end regulates the trade in cigarettes - this appraisal leads to a positive result, according to Advocate General Geelhoed. In the absence of action by the Community legislature, it may quite reasonably be assumed that different national legislative authorities would themselves take action, thereby giving rise to divergent legislation within the European Union and thus also creating trade barriers.

B. Manufacture for purposes of exportation to non-member countries:

According to Advocate General Geelhoed, the Community legislature is empowered, on grounds of harmonisation of the internal market, to adopt rules on the manufacture of cigarettes even where such manufacture takes place for the purpose of exporting cigarettes from the European Union.

In this he bases himself on the reasons given by the Community legislature, in particular the desire to prevent the regulation of the internal market from being undermined. It was, he states, clear from the proceedings in the case before the Court that the legislature was concerned about the illegal re-importation of cigarettes which do not satisfy the norms imposed by the Directive and also wished to prevent cigarettes from being directly placed illegally on the market within the European Union.

In the view of Advocate General Geelhoed, the Community legislature is authorised to act in such a situation subject to the following conditions:

*    The damage which circumvention may have on the effect of the measure must be serious. In other words, there must be an appreciable distortion of the internal market.

*    The damage can reasonably be avoided only if there is a guarantee that all Member States are acting in uniformity. In other words, if there is divergence of national implementing provisions and practices, or at least a real risk that national provisions will diverge, it will not be sufficiently certain that genuinely effective action can also be taken against circumvention. Trade will then transfer to those Member States having the least stringent rules.

*    The lack of supplementary rules results in disproportionately heavy charges for implementation and enforcement.

The Advocate General assesses the seriousness of potential damage by estimating the risk that an illicit market may be created. Cigarettes are a stimulant and represent for that reason an element of excitement for smokers. This is particularly the case with regard to young smokers, to whom the anti-smoking policy is in large measure addressed. In such a situation it is entirely reasonable to assume that an illegal market will be established in cigarettes that are banned within the European Union but which can be obtained outside it. The illegal nature may in itself mean that the product concerned will find a market.

II The common commercial policy

Given that the Community legislature was not certain that internal market harmonisation could also serve as a legal basis for regulating cigarettes intended for export from the European Union, the Treaty provision governing the common commercial policy was added as a legal basis for this specific aspect of the Directive.

Advocate General Geelhoed begins by stating that the competence of the Community legislature within the area of the common commercial policy may be exercised for a measure that is primarily designed to protect public health. In this sense, this competence of the Community legislature is nothing other than the competence in regard to the internal market. This is certainly the case in regard to a measure such as Directive 2001/37 opposing the exportation of cigarettes of inferior quality that are banned on the internal market.

However: in that case the addition of this legal basis fails under the principle that reasons must be given. The only reason that the Community legislature gives is that application of the Directive to exports is intended to ensure that the internal market provisions are not undermined. That is not an objective of the common commercial policy.

Advocate General Geelhoed concludes that the Treaty provision governing the common commercial policy was incorrectly included as a legal basis for the Directive. The Community law on harmonisation of the internal market can serve as a legal basis for the applicability of the Directive to the manufacture of cigarettes regardless of their intended destination. That legal basis can thus support the entire Directive. According to the Advocate General, this will not result in invalidity of the Directive as, even after the second legal basis falls, a sufficient legal basis still subsists.

III The principle of proportionality

In regard to the choice of a measure, this principle asks whether the measure is appropriate and whether it is true to say that no other - less intrusive - measure exists which would provide equally good protection for public health. Advocate General Geelhoed answers those questions in the affirmative. He examines in particular the proportionality of two special elements of the Directive: the production ban (in connection with applicability to exports) and the prohibition of the use of descriptors such as "light" and "mild".

For Advocate General Geelhoed it is evident that a production ban is necessary in order to attain the objective pursued by the measure. He points out the following:

*    there is a plausible risk that an illegal market will develop, whether through re- importation or through the fact that products are brought directly on to the illegal market;

*     action at Community level is required to counter this. Unilateral national measures are ineffective for purposes of control;

*    unilateral national measures also result in significant distortion of the internal market.

So far as descriptors are concerned, Advocate General Geelhoed attaches conclusive significance to the fact that the ban applies to a limited number of common designations which may cause confusion among consumers, particularly in regard to the harmfulness of the product. Relevant in this regard, according to the Advocate General, is the serious doubt as to whether a change by consumers to cigarettes having a lower tar yield is beneficial in health terms.

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1 -     Judgment in Case C-376/98 Germany v Parliament and Council [2000] ECR I-8419. 2 -     Observations have been submitted to the Court by the British manufacturers, Japan Tobacco, the European Parliament, the Council and Commission, and by the Governments of Belgium, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, the United Kingdom and Sweden.