## Facts

- Internationale Handelsgesellschaft (IH) contested the legality of certain Common Agricultural Policy (CAP) regulations requiring exporters to obtain licenses and provide deposits, which were forfeited if export obligations were unmet.
- IH did not fulfill its export obligation for maize within the relevant license period, leading to forfeiture of its deposit under CAP rules.
- IH argued that this deposit requirement infringed its rights under the German Basic Law, particularly with respect to economic freedom and proportionality.
- The German Constitutional Court queried whether the CAP deposit regime, including limitations on exceptions to forfeiture, conflicted with constitutional protections under the German Basic Law.

## Issues

1. Whether valid EU law, including CAP regulations, may be set aside by conflicting provisions of a member state's constitution.
2. Whether the CAP deposit system imposed a disproportionate restriction on rights protected by national constitutions.
3. Whether national courts are entitled to disapply EU regulations based on national standards of fundamental rights protection.

## Decision

- The Court of Justice ruled that the validity of EU measures is to be assessed only according to EU law, excluding review by national constitutions.
- It held that allowing member states to override EU law would undermine the uniformity and primacy of the EU legal order.
- The Court confirmed that fundamental rights are protected as general principles of EU law, taking inspiration from member states' constitutional traditions.
- The CAP deposit regime was found not to be a disproportionate interference with fundamental rights when viewed in light of its EU objectives.
- National courts may not set aside valid and applicable EU law on the basis of national legal standards.

## Legal Principles

- EU law possesses unconditional supremacy over the laws and constitutions of member states.
- Fundamental rights are recognized as general principles of EU law, reflecting common constitutional traditions.
- The validity and proportionality of EU acts are assessed solely by reference to EU law, not by national constitutional provisions.
- Uniformity and effectiveness of EU law are confirmed as essential to the functioning of the EU legal system.

## Conclusion

The Court of Justice established that EU law enjoys unconditional supremacy over national constitutional law, ensuring that fundamental rights are protected as general principles of EU law and national courts cannot unilaterally set aside valid EU measures.

Handelsgesellschaft v Einfuhr [1970] ECR 1125