## Facts

- European Union legislation required Member States to conduct veterinary inspections of live animals transported between Member States or in transit.
- Certain German Länder imposed a fee on live animals entering Germany from other Member States or transiting Germany.
- The fee was levied at the frontier, intended to cover the costs of the mandatory inspections, and did not exceed the inspections’ actual cost.
- The European Commission brought an infringement action alleging the fee was a charge having equivalent effect to a customs duty prohibited by the Treaty rules banning customs duties and equivalent charges.
- Germany argued the fee was permissible cost recovery for inspections required by EU law in the general interest.

## Issues

1. Whether a frontier-linked fee imposed on intra-EU importation and transit of live animals to fund compulsory veterinary inspections required by EU legislation constitutes a prohibited charge having equivalent effect to a customs duty.
2. Under what conditions a pecuniary charge connected to frontier inspections falls outside the prohibition on customs duties and equivalent charges when the inspections are mandated by EU law.

## Decision

- The court dismissed the Commission’s action and held Germany had not breached the Treaty prohibition on customs duties and equivalent charges.
- A charge imposed because goods cross a frontier is generally prohibited regardless of its label, but specific categories of charges fall outside that prohibition.
- The challenged fee qualified as a permissible charge because it was tied to inspections required by EU law and satisfied all required conditions.
- The Commission, as the unsuccessful party, was ordered to pay costs.

## Legal Principles

- A charge having equivalent effect includes any unilateral pecuniary charge imposed on goods because they cross a frontier, other than a customs duty in the strict sense.
- A frontier-linked charge is not treated as a prohibited customs-equivalent charge when it falls into a recognized exception, including:
  - a charge forming part of a system of internal dues applied to domestic and imported products by the same criteria;
  - payment proportionate to a specific service actually rendered to the operator; or
  - a fee for inspections required by EU law, provided all of the following conditions are met:
    - the fee does not exceed the real cost of the inspections;
    - the inspections are obligatory and uniform for the products concerned throughout the EU;
    - the inspections are prescribed by EU law in the general interest of the EU; and
    - the inspections facilitate free movement of goods, including by reducing obstacles arising from unilateral national inspection measures.

## Conclusion

The court held that Germany could levy a cost-based fee for EU-mandated, uniform veterinary inspections on live animals crossing its frontier because the fee met strict conditions ensuring it was limited to cost recovery for harmonized inspections that support, rather than impede, intra-EU trade.


Commission v. Germany, Case C-18/87, 1988 E.C.R. 5427 (C.J.E.C. 1988)