Internationale Handelsgesellschaft mbH v Einfuhr [1970] EUECJ C-11/70

A German company challenged EU regulations requiring export licence deposits as contrary to German constitutional rights. The Court of Justice ruled that Community law validity cannot be judged by national constitutional standards, but fundamental rights form part of Community law's general principles.

Facts

Internationale Handelsgesellschaft mbH, a company registered in Frankfurt-am-Main, challenged the validity of Community regulations concerning the common organisation of the cereals market. Under Regulation No 120/67/EEC and Regulation No 473/67/EEC, traders were required to obtain import and export licences accompanied by a deposit guaranteeing that the proposed transactions would be effected. If exports did not occur during the licence’s validity period, the deposit would be forfeited unless force majeure could be established.

The Verwaltungsgericht (Administrative Court) Frankfurt-am-Main referred questions to the Court of Justice, expressing the view that the deposit system violated fundamental rights under the German Basic Law, particularly principles of freedom of action, economic liberty, and proportionality arising from Articles 2(1) and 14 of the German constitution.

Issues

Principal Legal Questions

1. Whether the validity of Community measures can be assessed against national constitutional law standards

2. Whether the system of export licences with deposits violated fundamental rights

3. Whether limiting release of deposits to cases of force majeure was lawful

Judgment

Supremacy and Uniformity of Community Law

The Court firmly established the autonomy of Community law from national legal systems:

The validity of such measures can only be judged in the light of Community law. In fact, the law stemming from the Treaty, an independent source of law, cannot because of its very nature be overridden by rules of national law, however framed, without being deprived of its character as Community law and without the legal basis of the Community itself being called in question.

Fundamental Rights in Community Law

The Court recognised that fundamental rights form part of Community law:

Respect for fundamental rights forms an integral part of the general principles of law protected by the Court of Justice. The protection of such rights, whilst inspired by the constitutional traditions common to the Member States, must be ensured within the framework of the structure and objectives of the Community.

Assessment of the Deposit System

The Court found the deposit system to be necessary and proportionate. The system served essential purposes of enabling competent authorities to monitor trade movements and make judicious use of market intervention instruments. The Court noted:

The requirement of import and export licences involving for the licensees an undertaking to effect the proposed transactions under the guarantee of a deposit constitutes a method which is both necessary and appropriate to enable the competent authorities to determine in the most effective manner their interventions on the market in cereals.

Force Majeure

The Court interpreted the concept of force majeure broadly:

The concept of force majeure is not limited to absolute impossibility but must be understood in the sense of unusual circumstances, outside the control of the importer or exporter, the consequences of which, in spite of the exercise of all due care, could not have been avoided except at the cost of excessive sacrifice.

Implications

This landmark judgment established several fundamental principles of EU constitutional law:

1. Supremacy of Community Law: Community law takes precedence over all national law, including constitutional provisions protecting fundamental rights.

2. Autonomous Fundamental Rights Protection: The Court asserted its role in protecting fundamental rights within the Community legal order, drawing inspiration from member states’ constitutional traditions whilst ensuring protection within the Community’s own framework.

3. Proportionality in Agricultural Policy: Measures necessary for implementing the Common Agricultural Policy were upheld where they served legitimate objectives without imposing excessive burdens.

This case represents a pivotal moment in developing the European Court’s fundamental rights jurisprudence and remains foundational to understanding the relationship between EU law and national constitutional orders.

Verdict: The Court ruled that examination of the questions revealed no factor capable of affecting the validity of: (1) Article 12(1) of Regulation No 120/67/EEC making export licences conditional on lodging a deposit, and (2) Article 9 of Regulation No 473/67/EEC limiting release of deposits to cases of force majeure.

Source: Internationale Handelsgesellschaft mbH v Einfuhr [1970] EUECJ C-11/70