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The Bichel Committee 1999

Report from the Sub-committee on Legislation

Preface

The Sub-committee on Legislation, which is part of the Bichel Committee, was appointed in September 1997 to assess the legal consequences of phasing out the use of pesticides in agriculture. In the spring of 1998, the sub-committee’s mandate was expanded to cover the legal consequences of a total restructuring of Danish agriculture for organic production.

This report contains the sub-committee’s assessment of a number of legal questions concerning a phase-out of the use of pesticides in agriculture. The legal questions concerning a total restructuring of Danish agriculture for organic production are dealt with in a supplementary report.

The sub-committee has based its assessment of the legal questions on EU law, WTO law and the Danish Constitution’s rules on expropriation.

The sub-committee’s report and supplementary report are one of five technical background reports forming the basis for the Bichel Committee’s final report to the Danish Minister of Environment and Energy.

The other background reports cover the consequences of phasing out the use of pesticides for agriculture, environment and health, production, economy and employment, and total restructuring for organic production.

1. The sub-committee’s composition and mandate

The Bichel Committee was appointed in July 1997. The Sub-Committee on Legislation was appointed in September 1997.

The composition of the sub-committee was as follows:
Professor Karsten Revsbech, LLD, Aarhus University, chairman
Nina Holst-Christensen, Chief of Section, Ministry of Justice
Peter Gjørtler, lawyer, Advokatfirmaet Dragsted og Helmer Nielsen (law firm)
Lisbeth Arboe Jakobsen, Principal, Ministry of Food (March 1998 – February 1999)
Morten Damkjær Nielsen, Principal, Ministry of Food (February 1999 – March 1999)

The sub-committees work on the legal consequences of phasing out the use of pesticides in agriculture has been based on the following mandate, which was laid down by the Bichel Committee's Main Committee:

"In its assessment of the legal consequences, the sub-committee shall consider the legal involved in phasing out the use of pesticides in different sectors, including the legal issues relating to the EU."

The secretariat comprised Marianne Lassen, Head of Section, Nina Herskind, Head of Section, Kaj Juhl Madsen, PhD., and Anne Marie Linderstrøm, Head of Department, all from the Danish Environmental Protection Agency, and Hanne Friis Bøtte, MSc., PhD., from the Ministry of Food.

The sub-committee has obtained an expert opinion from Professor Jens Peter Christensen, LLD, on section 73 of the Danish Constitution, which concerns expropriation.

In the summer of 1998, Professor Ellen Margrethe Basse, LLD, and Lector Peter Pagh, LLD, participated in the sub-committee’s discussions concerning certain questions relating to EU law.

The sub-committee began its work in the autumn of 1997 and has held 10 meetings.

2. The sub-committee’s conclusions

This report is intended to shed light on the extent to which it is legally possible to implement a total or partial phase-out of pesticide use in agriculture.

The main task is to clarify whether EU law, WTO law (the World Trade Organisation) or the Danish Constitution contains rules that prevent the implementation of Danish legislation on such a phase-out.

Relevant rules

Chapter 5 contains a general review of the relevant EU rules, WTO rules and section 73 of the Danish Constitution, which concerns expropriation. The EU Treaty’s rules on technical trade barriers, state aid, and taxes, and the rule in article 100A, clause 4 (the environmental guarantee) are discussed. With respect to the EU legislative acts, particular mention is made of directive 91/414/EEC on marketing of plant protection products. One implication of this directive is that Denmark may only in certain special circumstances refuse to authorise a plant protection product for sale here in Denmark when it is authorised in another EU Member State. A number of other directives, e.g. on drinking water quality are discussed, together with a number of directives on pesticide residues in food products. In the latter case there has been almost total harmonisation. Concerning WTO law, it is generally the case that if action against the sale or use of plant protection products is acceptable in relation to other EU countries under EU rules, then similar action in this area against third countries is acceptable under WTO law.

Assessment

Chapter 6 gives the sub-committee’s assessment of Denmark’s freedom of action with respect to implementing national legislation on a total or partial phase-out of pesticides.

The transitional period

Section 6.1 contains an assessment of the possibilities in a transitional period set in directive 91/414/EEC. In principle, this transitional period expires in the year 2003. In the opinion of the sub-committee, Denmark may lay down both general and specific prohibitions of the sale or use of plant protection products during the transitional period provided the individual active ingredients are not on the EU’s so-called Positive List. However, any rules of the said nature must be in conformity with the EU Treaty, particularly articles 30 and 36 on technical trade barriers (section 6.1.7).

Prohibition of sale of specific plant protection products

Section 6.2 deals with the question of whether, after the expiry of the transitional period set by the EU (the year 2003), Denmark will be able to prohibit the sale of specific plant protection products. The main conclusion is that, after the transitional period, Denmark will only exceptionally, and only with certain limits, be able to refuse to authorise a specific plant protection product for sale here in Denmark if it is authorised in accordance with the EU’s uniform principles in another EU Member State (section 6.2.5). In the case of a first authorisation (i.e. if the product has not yet been authorised in other EU Member States or if mutual recognition is not invoked by the applicant), Denmark will have greater freedom of action but must also in the case of such authorisation, respect the uniform principles for assessment and authorisation of plant protection products laid down in directive 97/57/EC (section 6.2.6)

General prohibition of sale

The sub-committee has come to the conclusion, see section 6.3, that directive 91/414/EEC regulates only matters relating to specific authorisation for the sale of specific plant protection products. The directive does thus not regulate the question of a completely general prohibition of the sale of plant protection products as such in the individual Member State. However, a general prohibition of the sale of plant protection products in Denmark is deemed to be a purely theoretical possibility and would be difficult to implement in practice.

Restrictions on use

The sub-committee concludes in section 6.4 that, in connection with authorisation of a specific plant protection product for sale here in Denmark, certain restrictions can be imposed on use of the product on certain areas and in certain crops etc. However, if the plant protection product in question has been authorised for sale in another EU Member State, the right to impose such restrictions is relatively limited (section 6.4.3).

Regulation of marketing

The sub-committee concludes in section 6.6 that Denmark has some freedom of action with respect to regulating by means of general rules how plant protection products are to be sold – e.g. through requirements concerning points of sale and advertising.

General prohibition of use

The aforementioned conclusions concern primarily regulation of the actual sale of plant protection products. In section 6.7, the sub-committee considers the possibility of totally or partially prohibiting the use of plant protection products. Its conclusion, given in section 6.7.4, is that in relation to the EU rules, the WTO rules and section 73 of the Danish Constitution, it would in principle be possible to implement a (normally compensation-free) prohibition of the use of plant protection products. A prohibition of that kind could cover all plant protection products as such or groups of plant protection products. It could also, in principle, cover the whole of Denmark or smaller parts thereof. However, there would have to be sound environmental and/or health grounds for a prohibition of use, and the burden of proof would lie with Denmark. In that connection, the larger the areas covered by the prohibition and the greater the degree to which the prohibition affected plant protection products already authorised in other EU countries, the more difficult it would be for Denmark to prove its case.

Changing safety factors

In section 6.8, the sub-committee considers whether the authorisation scheme could be tightened by using particularly high safety factors here in Denmark (so that fewer plant protection products could be authorised). The sub-committee concludes that directive 91/414/EEC would prevent Denmark from using higher safety factors than those set in directive 97/57/EC in assessing the environmental impacts of plant protection products. Denmark could, on the other hand, in assessing the health impacts of plant protection products, use its own safety factors for the time being since there are not at Community level at the present time either generally or specifically binding rules on health safety factors. National rules on these must be in conformity with articles 30-36 of the EU Treaty.

Integrated prevention and control

Section 6.9 deals with integrated prevention and control, in which a combination of biological, plant-cultivation and chemical methods is used, whereby the use of chemical plant protection products can be reduced without unacceptable economic consequences. Directive 91/414/EEC and directive 97/57/EC contain rules on integrated prevention and control. In the view of the sub-committee, the principle concerning integrated prevention and control could give Denmark some limited freedom of action with respect to stricter authorisation practice. Denmark might possibly be able to influence how the EU directives’ vague provisions on integrated prevention and control are interpreted and thus influence the actual content of the EU rules on marketing in the direction of lower consumption of plant protection products.

Pesticide residues in food products

Section 6.10 addresses the question of limit values for pesticide residues in food products. The sub-committee’s conclusion is that, in reality, Denmark has no independent freedom of action with respect to setting different limit values in food products from those set by the EU.

Taxes

The question of taxes on plant protection products is dealt with in section 6.11. Such taxes can be an instrument in reducing the use of plant protection products. Taxes are already used and are thus a known instrument that has not hitherto caused any problems in relation to the EU. It is difficult to determine whether there is an upper legal limit for the size of such taxes. On the other hand, returning the taxes collected to farmers etc. would be covered by the EU rules on state aid and would therefore require EU authorisation.

Agreements with the various agricultural industries

Section 6.13 deals with the possibility of voluntary agreements between the Minister of Environment and Energy and the various agricultural industries on phasing out or reducing the use of plant protection products. Since a minister would be a party to such agreements, the agreements would, depending on the circumstances, have to be notified to the EU. It is not clear whether agreements involving both private and public parties are covered by articles 30-36 of the EU Treaty, but the Commission would have to decide on this in connection with the notification.

Self-regulation

In section 6.14, the sub-committee looks at the question of self-regulation, which should be understood to mean that the agricultural industries impose on themselves a duty to phase out or reduce the use of plant protection products. There are already examples of this in the case of grain used for bread.

Options

On the basis of the analysis in chapters 5 and 6, chapter 7 contains a discussion of Denmark’s options with respect to a total or partial phase-out of pesticide use in agriculture.

Within current EU rules

In section 7.1, the sub-committee sets out what it considers to be Denmark’s options to be within the framework of current EU rules. It stresses that, during the transitional period, Denmark could expand the Danish list of prohibited substances provided there were well-founded environmental and health grounds for this. It also mentions that a prohibition of the use of plant protection products on areas that might be of interest from a drinking water supply point of view could be an option. The possibility of influencing how the EU rules on integrated prevention and control is also discussed.

The section also deals with the possibility of requirements concerning marketing (for example, requirements concerning points of sale or advertising) and of tightening the requirements concerning education. Additional taxes on plant protection products could also lie within the framework of the EU and WTO rules.

An alternative to statutory rules on phasing out or reducing the use of plant protection products could be an agreement between the minister and the agricultural sector on phasing out or reducing the use of these products. Such an agreement could give rise to control problems because of the large number of production units within agriculture.

Changing EU rules

In section 7.2, the sub-committee considers the changes, particularly in the EU rules, that it might be relevant for Denmark to work for in order to have a better possibility of reducing pesticide consumption. It is mentioned here that the ideal solution would be to get a Community-wide pesticide policy implemented with a view to reducing pesticide consumption, as has been done in the case of growth regulators. The sub-committee has also considered what effect it would have to get the EU rules on plant protection products covered by Article 100a of the EU Treaty and thus by the environmental guarantee. It is pointed out that such a change would give Denmark only relatively limited possibilities for action. It is also pointed out that Denmark would gain most with respect to freedom of action from abolition of the general requirement under directive 91/414/EEC to authorise plant protection products for sale in Denmark when they have been authorised in another EU Member State. Another possibility would be to work to get the provisions on exemption from the general rule concerning mutual recognition expanded. Lastly, Denmark could try to get the totally harmonised regulations concerning pesticide residues in food products tightened, so that the international limit values are lower than they are today or – alternatively – so that the individual Member State in the EU has greater freedom of action to set its own – stricter – limits with respect to pesticide residues in food products.

3. Problems

3.1 The sub-committee’s main task

According to the sub-committee’s mandate, its main task is to determine:

whether there are rules of law that prevent implementation of Danish legislation or other national regulation aimed at a total or partial phase-out of the use of pesticides in agriculture,

and, if there are,

what initiatives can be taken to overcome the legal obstacles to a total or partial phase-out of the use of pesticides in agriculture.

The sub-committee has therefore assessed these questions in relation to the following bodies of law:

	EU law
	WTO law (World Trade Organisation)
	The Danish Constitution, section 73 on Right to Property, Expropriation.

3.2 Specific problems

The specific problems considered by the sub-committee include:

4. Definitions

The expressions pesticides, plant protection products and active ingredients appear in many places in the following. They and a few other terms are therefore explained below.

Pesticides (which are also called control products) is an inclusive term for plant protection products and biocides.

Plant protection products (or spray products) are the products used in the agricultural industries (farming, forestry, market gardening and fruit production) for prevention and control of weeds, pests and fungal diseases and for regulating plant growth (including straw shortening). Plant protection products may also be used on uncultivated land.

Biocides include wood protection products, rat poisons and slimicides for use in paper pulp production etc.

A pesticide consists of one or more active ingredients and some coformulants. The active ingredient is the substance that is specifically aimed at pests etc. The coformulants are substances that are added to enhance the intended effect.

According to its mandate, the Bichel Committee has the task of assessing the consequences of phasing out the use of pesticides in the agricultural industries, which in practice means the use of plant protection products in farming, forestry, market gardening and fruit production.

This report therefore does not cover biocides or the use of plant protection products outside the agricultural industries.

For that reason, the term plant protection products is generally used in this report.

5. The rules of law - general

As mentioned in chapter 3 of this report, the questions to be answered by the sub-committee concern three bodies of law : EU law, WTO law and the Danish Constitution.

In this section the relevant EU rules, WTO rules and section 73 of the Danish Constitution are discussed in general terms as a basis for a more specific analysis in section 6 of the legal possibilities of using different instruments to reduce the use of pesticides in the agricultural industries. The latter analysis leads on in chapter 7 to considerations concerning Denmark’s options with respect to action.

5.1 EU rules

The EU rules that are of relevance for the Bichel Committee’s work are to be found partly in the EU Treaty and partly in EU directives.

5.1.1 The EU Treaty, Articles 30 and 36 on technical barriers to trade

Danish legislation or other regulation that totally or partially restricts the marketing and/or use of plant protection products in agriculture must be assessed in relation to articles 30 and 36 of the EU Treaty, which deal with barriers to trade, including technical barriers to trade, where the area in question is not thoroughly regulated by EU legislative acts. Articles 30 and 36 are worded as follows:

"Article 30

Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between Member States."

"Article 36

The provisions of Arts. 30 to 34 shall not preclude prohibitions of or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction of trade between Member States."

National regulations that imply so-called technical barriers to trade are covered by Article 30, which it will be seen prohibits quantitative import restrictions and all measures with equivalent effect.

However, it will also be seen, from Article 36, that national regulations that imply technical barriers to trade are in accordance with the EU Treaty’s provisions provided they are justified on certain specified grounds, which include the protection of health and life of humans, animals or plants. Environmental considerations can also be taken on certain conditions, see below on the European Court of Justice (ECJ)’s practice.

It must be added that according to Article 36, second sentence, of the EU Treaty, such regulations must not constitute a means of arbitrary discrimination or a disguised restriction of trade between Member States. This implies that, according to ECJ practice, the regulations are subject to a requirement of proportionality. This means that a regulation based on the grounds mentioned in Article 36 or on other, compelling common considerations (as discussed below) must not constitute greater restrictions on trade than needed for the consideration or considerations in question.

The ECJ has clarified the provisions in Articles 30 and 36 in a large number of decisions:

The ECJ has defined the concept restriction of trade in, for example, the cases 8/74 (Dassonville), 120/78 (Cassis de Dijon), 272/80 (Frans-Nederlandse Maatschappij) and 174/84 (Reinheitsgebot), together with the joined cases 267/91 and 268/91 (Bernhard, Keck and Mithouard).

In case 8/74 (Dassonville) the ECJ established in ground 5 the well-known definition of a restriction of trade:

"Any trade regulations of Member States likely to obstruct Community internal trade directly or indirectly, actually or potentially, is to be regarded as a measure having equivalent effect to a quantitative restriction"

Regulation of domestic production by the Member States will not normally affect import and will therefore, simply from application of the Dassonville judgment, fall outside Article 30. Only in special circumstances could there be any question of trade-regulating rules constituting a restriction of trade because they make indirect product requirements or discriminate against imported products.

In case 120/78 (Cassis de Dijon), the ECJ established that the concept restriction of trade in Article 30 covers both discriminatory and non-discriminatory national measures and that a product that is lawfully made and sold in an EU Member State must also be able to be sold in another Member State (the principle of reciprocity).

In cases 267/91 and 268/91,(Keck and Mithouard) the ECJ reconsiders its earlier delimitation of the concept of restriction of trade and establishes the following in grounds 16 and

"By contrast, contrary to what has previously been decided [by the ECJ], the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment (..), so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States".

"Provided that those conditions are fulfilled, the application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article 30 of the Treaty."

The basis concerning mutual recognition, including the obligation not to require identical analyses in connection with national authorisation procedures is defined in, for example, case 272/80 (Frans-Nederlandse Maatschappij), in which the ECJ states as follows in ground 16:

"... it follows from Article 30 in conjunction with Article 36 of the Treaty that a Member State is not prohibited from requiring plant protection products to be subject to prior approval, even if those products have already been approved in another Member State. The authorities of the importing state are however not entitled unnecessarily to require technical or chemical analyses or laboratory tests when the same analyses and tests have already been carried out in another Member State and their results are available to those authorities or may at their request be placed at their disposal."

With respect to the duty of mutual recognition, the ECJ also established the following in ground 44 in case 178/84 (Reinheitsgebot):

"It must be borne in mind, in the first place, that in its judgments in the Sandoz, Motte and Muller cases, cited above, the court inferred from the principle of proportionality underlying the last sentence of article 36 of the treaty that prohibitions on the marketing of products containing additives authorized in the member state of production but prohibited in the member state of importation must be restricted to what is actually necessary to secure the protection of public health. The court also concluded that the use of a specific additive which is authorized in another member state must be authorized in the case of a product imported from that member state where, in view, on the one hand, of the findings of international scientific research, and in particular of the work of the Community's Scientific Committee for Food, the Codex Alimentarius Committee of the Food and Agriculture Organisation of the United Nations (FAO) and the World Health Organisation, and, on the other hand, of the eating habits prevailing in the importing member state, the additive in question does not present a risk to public health and meets a real need, especially a technical one."

In the aforementioned case 120/78 (Cassis de Dijon), the ECJ established that national regulations may also be justified on grounds that are not listed in Article 36 provided they are formulated in a non-discriminatory manner. Protection of health is included in Article 36, whereas protection of the environment can only be acknowledged under this Cassis de Dijon practice.

In its judgment in case 302/86, The Commission versus Denmark (on the Danish bottle-return system), the ECJ has recognised that protection of the environment can justify national technical barriers to trade. In case 2/90, The Commission versus Belgium, the ECJ established that environmental considerations can be so weighty that they justify national restrictions on trade that could, on the face of it, seem discriminatory, but that are interpreted by the ECJ as non-discriminatory precisely on account of the special conditions for protection of the environment.

To the foregoing on restrictions on trade (as defined in ECJ case law) it must be added that national regulations that are covered by Council Directive 98/34/EC on an information procedure, as last amended by Council Directive 98/48/EC, must be sent to the Commission in accordance with the rules laid down in the directive before adoption.

In this connection, it must be mentioned that the Danish list of prohibited substances, which is linked to Act No. 438 of 1 June 1994 amending Act on Chemical Substances and Products, was not notified in accordance with Directive 98/34/EC (at that time, Directive 83/189/EEC). The reason for omitting notification in accordance with Directive 98/34/EC is that the obligation to provide information in Article 12 of Directive 91/414/EEC replaces the general obligation to notify according to Directive 98/34/EC.

Insofar as the trade in plant protection products is thoroughly regulated in EU legislative acts, these provisions replace Articles 30-36 of the EU Treaty.

However, the EU Treaty’s provisions on free trade cannot be deviated from by means of a directive. In the opinion of the sub-committee, Directive 91/414/EEC is in accordance with the provisions of the EU Treaty.

5.1.2 The EU Treaty, Article 92 on state aid

The EU Treaty’s main provision prohibiting government subsidization is Article 92(1), which is worded as follows:

"Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market."

Article 92 covers national regulations that imply a grant of aid to certain undertakings of production of certain goods. The provision thus covers, for example, reimbursement schemes established in connection with tax adjustments.

As will be seen, according to Article 92, any aid granted through State resources in any form whatsoever which distorts or threatens to distort competition is incompatible with the common market and is thus covered by the prohibition of state aid in Article 92(1). Article 92(2) and (3) contain a number of exceptions that imply that state aid can be lawfully granted.

It follows from Article 93(3) of the EU Treaty that the Member States must notify the Commission of both planned state aid schemes and alterations to existing schemes. The Commission must be informed in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. The requirement concerning notification does not apply to state aid that is covered by the so-called "de minimis rules", i.e. aid that does not exceed 100,000 ECU over a period of three years, commencing with the payment of the first de minimis aid, cf. the Commission’s communication of 6 March 1996. If the Commission finds that a planned state aid scheme is incompatible with the common market having regard to Article 92, the procedure in Article 93(2) is initiated. Article 93(2) states that the Commission can decide whether the state aid scheme in question shall be abolished or altered.

State aid for environmental measures can distort the competition between undertakings and is therefore, according to Article 92, only justified if the aid’s beneficial effects on the environment outweigh the adverse effects on competition.

In the Community’s Framework Regulations of 10 March 1994 for state aid for environmental protection, an explanation is given of the Commission’s procedure in connection with assessment in accordance with Article 92 of state aid for the following purposes in the environment field: investments, information activities, temporary operating grants and purchase or use of environment-friendly products.

The assessment of whether a regulation that comprises state aid is in conformity with the Article 92 of the EU Treaty depends on the actual content of the regulation.

5.1.3 The EU Treaty, Articles 9-12 and 95 on taxes on products

Articles 9-12 of the EU Treaty prohibit the imposition of duty on trade within the Community’s borders or taxes with equivalent effect (see also section 6.11 below on taxes on plant protection products).

If a tax is imposed on both imported products and nationally produced products, it is treated as a so-called internal taxation, the legality of which must be judged in accordance with the rules of Article 95 of the EU Treaty, which prohibits fiscal discrimination against products from other countries Member States. Article 95 is worded as follows:

"No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.

Member States shall, not later than at the beginning of the second stage, repeal or amend any provisions existing when this Treaty enters into force which conflict with the preceding rules."

In the six joined cases C-78/90-C-83/90, which concerned parafiscal charges on mineral oil products, the ECJ established the following concerning Articles 12 and 95 of the EU Treaty:

"A parafiscal charge applied under the same conditions as regards its collection to both domestic and imported products, the revenue from which is used for the benefit of domestic products only, so that the advantages accruing from it wholly offset the charge borne by those products, constitutes a charge having an effect equivalent to customs duties prohibited by Article 12 of the EEC Treaty. If, on the other hand, those advantages only partly offset the charge borne by domestic products, the charge in question constitutes discriminatory taxation prohibited by Article 95 of the Treaty, the collection of which is prohibited as regards the proportion of it used to offset the burden of the charge borne by domestic products."

Similar pronouncements appear from case C-266/91, which concerns a parafiscal charge on chemical substances.

As far as concerns the discrimination mentioned in Article 95, reference is made to the ECJ’s judgment in case 106/84, The Commission versus Denmark. In that decision the ECJ pointed out that a tax does not constitute discrimination simply because it is only other Member States’ products on which the biggest taxes are imposed if this is due to use of objective and non-discriminatory criteria.

When the ECJ is judging whether a case is one of lawful tax differentiation or unlawful discrimination/protection, one of the vital questions considered is how imported and domestic products are distributed in the different tax categories. In case 171/78, The Commission versus Denmark, the ECJ stated that a scheme has

"contains incontestable discriminatory or protective characteristics. Although it does not establish any formal distinction according to the origin of the products, it has been adjusted so that the bulk of the domestic production of spirits comes within the most favourable tax category whereas almost all imported products come within the most heavily taxed category."

A tax regulation that is covered by the tax concept in Article 9 or Article 95 of the EU Treaty cannot normally also be covered by Article 30, which prohibits quantitative restrictions on imports and all measures having equivalent effect.

However, in case 47/88, The Commission versus Denmark, the ECJ established that Article 95 does not provide authority for intervention, even against an extremely high level of taxation when the taxation is not discriminatory or does not have protective effects. The ECJ added that the effect of extremely high taxes could in such case be judged in the light of the prohibition of non-fiscal obstacles to trade in Article 30 of the EU Treaty.

As far as concerns environmental taxes, reference can also be made to "Communication from the Commission on environmental taxes in the common market" (COM(97) 9 final version).

National regulations concerning taxes, including raising of existing taxes, are covered by Council directive 98/34/EC (previously directive 83/189/EEC) on an information procedure if the regulation includes technical specifications or other requirements to which fiscal or financial measures are attached that affect consumption of the products by prompting compliance with these technical specifications or other requirements, cf. article 1 of the directive. A tax regulation that is not linked to technical specifications or other requirements is not covered by the information procedure.

In the case of regulations which introduce taxes or increase existing taxes, and to which reimbursement schemes are linked, the reimbursement scheme must be judged in relation to the EU Treaty’s provisions on state aid (see section 5.1.2 above).

5.1.4 Article 100a(4) of the EU Treaty (the environmental guarantee)

Article 100a of the EU Treaty

The so-called environmental guarantee has been inserted in Article 100a(4). The provision is worded as follows:

"If, after the adoption of a harmonisation measure by the Council acting by a qualified majority, a Member State deems it necessary to apply national provisions on grounds of major needs referred to in Article 36, or relating to protection of the environment or the working environment, it shall notify the Commission of these provisions.

The Commission shall confirm the provisions involved after having verified that they are not a means of arbitrary discrimination or a disguised restriction of trade between Member States. ......"

However, this environmental guarantee is linked only to EU legislative acts that have been adopted in pursuance of Article 100a of the EU Treaty (on the internal market).

Article 43 of the EU Treaty

It therefore cannot be applied in relation to legislative acts issued with authority in treaty provisions that do not concern the internal market. For example, the environmental guarantee cannot be used in relation to directives and regulations issued with authority in Article 43 of the EU Treaty, concerning the common agricultural policy.

Regulation of plant protection products is at present based on the authority provided in Article 43 of the EU Treaty, concerning the common agricultural policy. This provision does not permit more extensive national regulation.

It is therefore natural to consider whether it is appropriate to work to get the regulation of plant protection products based instead on the authority provision in Article 100a, which concerns the harmonisation of the common market, and which contains an environmental guarantee in Article 100a(4).

Content of the environmental guarantee

It appears from ECJ practice that when deciding on which provision a legislative act shall be based, an objective assessment must be carried out of the content of the legislative act. The court’s own practice has sometimes appeared to deviate from this point of departure, with importance being attached instead to the right to majority decisions or influence from the European Parliament.

It can therefore be difficult to judge whether a regulation of plant protection products could be moved from its basis in Article 43 to Article 100a. The main difference between the provisions in this context is that Article 100a permits more restrictive national regulation (provided the conditions are fulfilled), whereas Article 43 does not.

The Amsterdam Treaty

However, it follows from Article 100a(4) and (5), as amended by the Amsterdam Treaty, that use of more restrictive national regulation requires acceptance by the Commission. It has not yet been finally clarified whether this acceptance must be obtained in advance, but ECJ practice concerning the obligation to notify in the case of technical specifications could point in this direction.

The considerations that can be invoked in connection with more restrictive national provisions are partly the considerations listed in Article 36 and partly protection of the environment and the working environment. This could, for example, include an ecological requirement based on protection of the environment.

In the case of existing, more restrictive national provisions that are based on the said considerations, according to Article 100a, it is only necessary to weigh the considerations invoked against the consideration for free trade, paying particular attention to the requirement of proportionality between objective and means.

However, in the case of new national regulations introduced after the adoption of the harmonised regulations, according to Article 100a(5), documentation must be provided that the factors requiring new national regulations:

	were not recognised at the time the harmonised regulations were adopted,
	are specific in relation to the Member States in question and thus do not constitute a common Community problem,
	are scientifically documented so that, as mentioned in section 5.5.4, stricter requirements are at least made concerning application of the precautionary principle.

Assessment

An alteration of the regulation of plant protection products in the EU in the form of changing its statutory basis from Article 43 to Article 100a would hardly be of any great practical importance. Since the change is intended to pave the way for the adoption of more restrictive national regulation, one would be talking about new national legislation and not a continuation of existing legislation, so the more restrictive requirements in Article 100a(5) would apply.

An example of application of the environmental guarantee

An example of use of the environmental guarantee, the food additives directive, Council directive No. 95/21/EC of 20 February 1995 on other additives for food products than colouring products and sweeteners, is based on Article 100a of the EU Treaty. Denmark has applied the environmental guarantee in relation to the provisions in that directive on nitrate and nitrite in meat products and sulphite.

5.1.5 Directive 91/414/EEC on plant protection products and directive 97/57/EC (the uniform principles)

Of the so-called secondary legislative acts, Council directive 91/414/EEC concerning the placing of plant protection products on the market is by far the most important for the Bichel Committee’s work. This directive is examined below together with other legislative acts issued in pursuance of it.

The main principles in directive 91/414/EEC

Directive 91/414/EEC concerning the placing of plant protection products on the market contains the EU’s basic regulation of the marketing/sale of the specific commodity group plant protection products. Directive 91/414/EEC went into force on 26 July 1991 and was to be implemented not later than 26 July 1993.

The directive was adopted under reference to Article 43 of the EU Treaty concerning the establishment of a common agricultural policy.

Directive 91/414/EEC covers the following three main areas:

	establishment of a common EU authorisation scheme for active ingredients
	establishment of common rules concerning national authorisation of plant protection products, including mutual recognition of authorisations
	a transitional period set to expire not later than 2003.

The directive introduces a common EU authorisation scheme for the active ingredients use in plant protection products (Articles 5 and 6). All new active ingredients, i.e. ingredients that were not on the market on 26 July 1993 and all old ingredients must be assessed with a view to possible inclusion in Annex I to the directive (the Positive List). The decision on inclusion will be made at community level. Up to 1.1.1999 this happened three times, namely in the Commission’s Directive 97/73/EC of 15 December 1997 on inclusion of an active ingredient (imazalil) in Annex 1 to Council directive 91/414/EEC, directive 98/47/EC of 25 June 1998 (azoxystrobin) and directive 99/1/EC of 21 January 1999 (kresoximmethyl).

The directive also lays down rules on national authorisation of the plant protection products in which the active ingredients are used (Article 4). The general principle is that only plant production products that contain active ingredients that are included in Annex I to the directive (the Positive List) may be authorised. Directive 97/57/EC, which constitutes Annex VI to 91/414/EEC establishes uniform principles for assessment and authorisation of plant protection products in order to ensure uniform treatment of authorisation cases by the national authorities.

The directive also lays down rules on mutual recognition of plant protection products that are authorised in another Member State in accordance with the directive (Article 10) after the transitional period. Mutual recognition is thus mandatory if the agricultural, plant health and environmental conditions, including climatic conditions, in which the product is used are comparable in the regions in question. Refusal of mutual recognition is subject to a committee procedure.

Lastly, the directive sets a transitional period of not more than 12 years from the communication of the directive, which means until 2003 (Article 8(2)). For this period the directive lays down certain procedural and some very limited substantive rules concerning the placing of plant protection products on the market.

The Standing Committee for Plant Health, which was appointed in pursuance of the directive is constantly working to supplement the rules laid down in directive 91/414/EEC. For example, through a number of Commission directives, supplementary rules to the directive’s Annex 2 on data requirements concerning active ingredients and Annex III on data requirements concerning plant protection products have been introduced. Similarly, the directive’s Annex VI concerning uniform principles for assessment and authorisation of plant protection products was supplemented by Council directive 97/57/EC. However, further supplementary legislative acts are expected to be adopted in a number of areas, including, for example, adoption of Annex IV on phrases concerning special risks, and Annex V on phrases concerning the precautions to be taken in relation to the products. The directive was implemented in Danish legislation through Act No. 1067 of 23 December 1992 amending Act on Chemical Substances and Products, Act No. 1111 of 22 December 1993, and Ministry of Environment Order No. 584 of 9 July 1993.

The directive’s preamble

The directive’s preamble includes the following whereas clauses:

"Whereas, in view of the hazards, there are rules in most Member States governing the authorization of plant health products; whereas these rules present differences which constitute barriers not only to trade in plant protection products but also to trade in plant products, and thereby directly affect the establishment and operation of the internal market;

Whereas it is therefore desirable to eliminate such barriers by harmonizing the provisions laid down in the Member States;

Whereas uniform rules on the conditions and procedures for the authorization of plant protection products must be applied by the Member States;

Whereas such rules should provide that plant protection products should not be put on the market or used unless they have been officially authorized and should be used properly having regard to the principles of good plant protection practice and of integrated pest control;

Whereas the provisions governing authorization must ensure a high standard of protection, which, in particular, must prevent the authorization of plant protection products whose risks to health, groundwater and the environment and human and animal health should take priority over the objective of improving plant production;

Whereas it is necessary, at the time when plant protection products are authorized, to make sure that, when properly applied for the purpose intended, they are sufficiently effective and have no unacceptable effect on plants or plant products, no unacceptable influence on the environment in general and, in particular, no harmful effect on human or animal health or on groundwater;

Whereas authorization should be limited to plant protection products containing certain active substances specified at Community level on the basis of their toxicological and ecotoxicological properties;

Whereas it is therefore necessary to establish a Community list of authorized active substances;

Whereas a Community procedure must be laid down for assessing whether an active substance can be entered on the Community list; whereas the information that interested parties must submit with a view to admission of a substance to the list should be specified;"

Scope and definitions

Article 1 of the directive defines the scope of the directive as follows:

"This Directive concerns the authorisation, placing on the market, use and control within the Community of plant protection products in commercial form and the placing on the market and control within the Community of active substances intended for a use specified in Article 2(1)."

One can thus say that the directive deals with the actual authorisation of actual plant protection products with a view to sale ¹.

Article 2, No. 1, of the directive defines "Plant protection products". This definition includes plant protection products that are used in agriculture.

Article 2, No. 11, of the directive defines "authorisation of a plant protection product" thus:

"An administrative action by which the competent authority of a Member State authorises, following an application submitted by an applicant, the placing on the market of a plant protection product in its territory or in a part thereof."

General provisions

Article 3, No. 1, states that the Member States shall prescribe that plant protection products may not be placed on the market and used in their territory unless they have authorised the product in accordance with the directive. Special rules are laid down concerning research and development.

Article 3, No. 3, states that the Member States shall prescribe that plant protection products must be used properly. Proper use shall include compliance with the conditions established in accordance with Article 4 and specified on the labelling, and the application of the principles of good plant protection practice as well as, whenever possible, the principles of integrated control.

Integrated control

Integrated control is defined in Article 2, No. 13, as follows:

"The rational application of a combination of biological, biotechnological, chemical, cultural or plant-breeding measures whereby the use of chemical plant protection products is limited to the strict minimum necessary to maintain the pest population at levels below those causing economically unacceptable damage or loss. ²"

Authorisation of active ingredients

The directive, cf. Articles 5 and 6, established an EU authorisation scheme for active ingredients. Authorisation of an active ingredient means that the substance is included in Annex I to the directive.

In pursuance of Article 8(2) of the directive, a programme of work has been initiated, through supplementary legislative acts, concerning assessment of the so-called old active ingredients, cf. the Commission’s Regulation 3600/92 with subsequent amendments. The intention is for about 800 old active ingredients to be reassessed with a view to possible inclusion in Annex I before the year 2003. Article 7 of Regulation 3600/92 sets out the types of decisions that can be made on the basis of the assessment concerning the active ingredients.

Up to 1.1.1999 one old active ingredient, imazalil, was included in Annex I (together with two new substances, azoxystrobin and kresoximmethyl, which were not, however, covered by Regulation No. 3600/92). This was done by the Commission’s Directive 97/73/EC of 15 December 1997 concerning insertion of imazalil in Annex I to Council Directive 91/414/EEC.

It is stated in Article 5(4) of Directive 91/414/EEC that inclusion of an active ingredient in Annex I may be subject to requirements with respect to, among other things, agricultural, plant health and environmental conditions, including climatic conditions, and manner of use.

In directive 97/73/EC concerning inclusion of imazalil, it is stated that "imazalil may only be permitted for use as a fungicide", and special conditions are laid down for a number of defined applications.

Authorisation for sale of plant protection products

It follows from the general provision in Article 3 of directive 91/414/EEC that plant protection products may only be placed on the market and used provided they have been authorised in accordance with the directive.

The directive lays down several rules concerning the placing on the market of plant protection products: firstly, in Article 8(2) on the placing on the market of plant protection products that contain active ingredients that are not included in Annex I; secondly, in Article 4 concerning authorisation of plant protection products whose active ingredient is included in Annex I; and thirdly, in Article 10 on mutual recognition of authorisations issued by other Member States, cf. below. These three rules are discussed in the following.

Sale during the transitional period

It is stated in Article 8(2) of directive 91/414/EEC that the Member States may, during a transitional period, authorise the placing on the market of plant protection products with old active ingredients that are not listed in Annex I. As stated in Article 8(3), the Member States, when reviewing plant protection products containing an active ingredient in accordance with paragraph 2, and before such review has taken place, shall apply the requirements laid down in Article 4(1) (b) (i) to (v) and (c) to (f) in accordance with national provisions concerning the data to be provided. However, the Member States may, in pursuance of Article 8(1), permit temporary placing on the market of plant protection products that include new active ingredients that are not listed in Annex I on the conditions mentioned in the article. It should be noted that "the transitional period" should be understood in the following to mean the period mentioned in Article 8(2) and (3), which in principle runs to 2003, but which ends individually for the individual substance when a decision is made as to whether it shall be included in Annex I.

Sale after the transitional period

It is stated in Article 4 that the Member States shall ensure that a plant protection product is not authorised unless its active ingredients are listed in Annex I and any conditions laid down therein are fulfilled and that, applying the uniform principles in Annex I, the provisions given in Article 4(1) (b) to (e) are fulfilled.

Directive 97/57/EC – the uniform principles

Council directive 97/57/EC constitutes Annex VI and lays down the uniform principles for assessment and authorisation of plant protection products.

The directive is being constantly supplemented with a view to more detailed regulation of how its manifold sub-assessments can be carried out. The supplementation is partly in the form of planned or already commenced guidelines for the Member States’ assessment of plant protection products and partly taking place in connection with the practice that is being developed by the Member States’ experts in connection with the common assessment of specific active ingredients with a view to inclusion in Annex I to Directive 91/414/EEC.

The guidelines in directive 97/57/EC imply that a very large number of evaluations must be carried out in connection with the assessment of the results of tests on the effects of both an active ingredient and the plant protection product in which it is used. In addition, for a wide range of effects, the directive include a general rule concerning the conditions on which an established effects must lead to authorisation or not – followed by exceptions from these conditions. Up to the present time, supplementary guidelines have not been provided for these exceptions either.

The uniform principles thus in various ways leave it to the Member States to decide, within this framework, whether a plant protection product can be authorised.

It is stated in the preamble to directive 97/57/EC that:

"Whereas Annex VI to Directive 91/414/EEC lays down uniform principles aiming to ensure that the Member States, in deciding on authorizations for plant protection products, apply the requirements of Article 4 (1) (b), (c), (d) and (e) of that Directive in an equivalent manner ..."

Directive 97/57/EC, point C, 1, on the general principles concerning the decision-making process states:

"1. Where appropriate, Member States shall impose conditions or restrictions with the authorizations they grant. The nature and severity of these measures must be selected on the basis of, and be appropriate to, the nature and extent of the expected advantages and the risks likely to arise.

2. Member States shall ensure that, where necessary, decisions taken with respect to the granting of authorizations take account of the agricultural, plant health or environmental (including climatic) conditions in the areas of envisaged use. Such considerations may result in specific conditions and restrictions on use, and, where necessary, in authorization being granted for some but not other areas within the Member State in question."

Mutual recognition

For plant protection products containing active ingredients that are listed in Annex I, there is an obligation of mutual recognition of authorisations. That follows from Article 10 of Directive 91/414/EEC. This provision is crucial for the work of the Sub-committee on Legislation.

The introductory provisions in Article 10(1) read as follows:

"At the request of the applicant, who must substantiate the claim to comparability with documentary evidence, a Member State to which an application is made for the authorization of a plant protection product already authorized in another Member State must:

- refrain from requiring the repetition of tests and analyses already carried out in connection with the authorisation of the product in that Member State, and to the extent that agricultural, plant health and environmental (including climatic) conditions relevant to the use of the product are comparable in the regions concerned, and

- to the extent that the uniform principles have been adopted in accordance with Article 23, where the product contains only active substances listed in Annex I, also authorise the placing of that product on the market in its territory, to the extent that agricultural, plant health and environmental (including climatic) conditions relevant to the use of the product are comparable in the regions concerned."

It will be seen that it follows from the provision that a Member State that receives an application for authorisation of a plant protection product that is already authorised in another Member State must also authorise the placing of the product on the market in its territory if the agricultural, plant health and environmental (including climatic) conditions in which the product is used are comparable.

In Article 10(2) and (3) it is stated that if a Member State refuses to recognise comparability or refuses to recognize an authorisation, the matter shall be subjected to a committee procedure.

In Article 10(1) it is stated that authorisation may be made subject to the conditions and restrictive provisions on use mentioned in sections 2 and 3.

Furthermore, Article 10(1), section 4, states:

"Authorisation may be subject, with the agreement of the applicant, to changes in the conditions of use in order to render, in the regions concerned, any non-comparable agricultural, plant health or environmental (including climatic) conditions irrelevant for the purpose of comparability."

Use of plant protection products

A number of the directive’s chapters contain provisions concerning use of plant protection products in agriculture. Although some of the provisions have already been mentioned in connection with the foregoing sections, we here take an overall look at the provisions on use.

It is important to note that the provisions on use should here be understood narrowly. As mentioned, Directive 91/414/EEC basically deals with the actual authorisation for sale of actual plant protection products. The provisions on use discussed here are therefore those relating to the individual, actual plant protection products. Broader regulations on use, for example prohibiting the use of plant protection products in private gardens, are not covered by Directive 91/414/EEC (see also section 6.7 below) on prohibition of use ³.

In Article 3(3) on the general provisions it is stated that plant protection products must be used in accordance with their purpose.

As far as concerns inclusion of active ingredients in Annex 1, it is stated in Article 5(4) that inclusion of an active ingredient can be linked to requirements concerning, among other things, the sphere of application of the active ingredients.

Concerning authorisation of plant protection products, Article 4(2) states that "The authorization must stipulate the requirements relating to the placing on the market and use of the product or at least those aimed at ensuring compliance with the provisions of paragraph 1 (b)."

Furthermore, in the case of authorisation of plant protection products in pursuance of Article 4, which refers to Directive 97/57/EC on the uniform principles for assessment and authorisation of plant protection products, it is stated in point C1 in Directive 97/95/EC that, in relevant cases, the Member States shall impose conditions or restrictions in connection with the granting of authorisation. This can give rise to special conditions or restrictions concerning use and, if necessary, authorisation for use in some places, but not others, in the Member State in question.

As far as concerns mutual recognition of authorisations, it is stated in Article 10(1) 2 and 3, that when a Member State, on the basis of recognition of an authorisation issued by another Member State, issues a corresponding authorisation for its own territory, it may attach a number of conditions, including conditions concerning use, to the authorisation.

Lastly, it is stated in Article 10(1) 4 that, with the consent of the applicant, the conditions concerning use that are attached to the authorisation can be changed in order, for the sake of comparability, to reduce the importance in the regions in question of agricultural, plant health and environmental factors that are not comparable. Article 10 has not (yet) been used in practice and there are no common guidelines for its interpretation, including the interpretation of the comparability concept. It has thus not been clarified what information an applicant must supply to document comparability.

It will be seen from Article 10(2) and (3) that a Member State’s refusal to accept comparability or denial of mutual recognition of an authorisation shall be sent to the Commission for a final decision on the matter in accordance with the committee procedure laid down in Article 19 of the directive.

The procedure in Article 19 means that the Commission presents a draft decision concerning the matter to the Standing Committee for Plant Health. The committee adopts an opinion on the Commission’s draft decision by qualified majority in pursuance of Article 148 of the Treaty. The Commission adopts the draft decision if this is in accordance with the committee’s opinion. If the Commission’s draft decision is not in accordance with the Committee’s opinion, the matter is submitted to the Council.

Labelling of plant protection products

In relation to an assessment of the possibilities of imposed restrictions on use and areas in connection with authorisations, rules on labelling can also be of importance. In section 14 of Executive Order on Pesticides, it is stated that restrictions on use, including area restrictions, must appear from the product’s label.

Concerning packaging and labelling of plant protection products, Article 16 of Directive 91/414/EEC states that the packaging for plant protection products must fulfil the following requirements with respect to labelling:

"1. All packaging must show clearly and indelibly the following:"

"g) the nature of any special risks for humans, animals or the environment, by means of standard phrases selected as appropriate from those given in Annex IV;"

"h) safety precautions for the protection of humans, animals or the environment, in the form of standard phrases selected as appropriate from those given in Annex V;"

"k) the uses for which the plant protection product has been authorised and any specific agricultural, plant health and environmental conditions under which the product may be used or should not be used;"

"m) where necessary, the safety interval for each use between application and:

- sowing or planting of the crop to be protected

- sowing or planting of succeeding crops

- access by humans or animals

- harvesting

- use or consumption;"

"3. Taking account of the rules in force within their territories regarding the supply of certain plant protection products to certain categories of users, pending Community harmonisation, the Member States shall require that it be indicated on the label whether a product is restricted to certain categories of users."

"5. By way of derogation from paragraph 1 (g) and (h), Member States may require additional phrases to be clearly and indelibly marked on packaging where they are deemed to be necessary for the protection of human beings, animals or the environment; in that event they shall notify the other Member States and the Commission forthwith of each derogation granted and shall forward the additional phrases or phrases and the reasons for these requirements.

In accordance with the procedure laid down in Article 19, a decision shall be taken that the additional phrase or phrases is or are justified and hence that Annexes IV and V must be amended accordingly, or that the Member States concerned must no longer require such phrase(s). The Member State shall be entitled to maintain its requirement until such time as a decision has been taken."

It should be noted that Annexes IV and V contain nothing at present. Completion of them awaits proposals from the Commission.

Withdrawal and temporary prohibitions

In the case of authorisations issued under reference to Article 4, the following is laid down in Article 4 (5):

"Authorisation may be reviewed at any time if there are indications that any of the requirements referred to in paragraph 1 are no longer satisfied."

The following is laid down in Article 4(6):

"Without prejudice to Decisions already taken pursuant to Article 10, authorization shall be cancelled if it is established that:

a) the requirements for obtaining the authorization are not or are no longer satisfied;

b) false or misleading particulars were supplied concerning the facts on the basis of which the authorization was granted;

or modified if it is established that

c) on the basis of developments in scientific and technical knowledge the manner of use and amounts used can be modified."

If a Member State decides to withdraw an authorisation, it must inform the Commission and the other Member States accordingly, cf. Article 12.

In the case of authorisations granted under reference to Article 10 on mutual recognition, the following is laid down in Article 11:

"Where a Member State has valid reasons to consider that a product which it has authorised or is bound to authorise under Article 10 constitutes a risk to human or animal health or the environment, it may provisionally restrict or prohibit the use and/or sale of that product on its territory. It shall immediately inform the Commission and the other Member States of such action and give reasons for its decision."

The Member State’s decision on this is subject to a committee procedure, cf. Article 11(2).

Exchange of information

It is stated in Article 12 of Directive 91/414/EEC that the Member States shall inform each other and the Commission quarterly of any plant protection produces authorised or withdrawn in accordance with the provisions of the directive.

5.1.6 Directive 67/548/EEC on classification, packaging and labelling of dangerous substances

Council Directive 67/548/EEC has been revised eight times, the last major revision being the seventh, cf. Council Directive 92/32/EEC. The directive was adopted under reference to Article 100A of the EU Treaty.

Among other things, this directive concerns the active ingredients used in plant protection products, cf. Article 2.

In Articles 5, 22 and 23 of the directive it is stated that the Member States shall ensure that the substances covered by the directive are only marketed provided the provisions on classification, packaging and labelling are fulfilled.

In Article 30 of the directive it is stated that:

"Member States may not prohibit, restrict or impede the placing on the market of substances which comply with the requirements of this Directive, on grounds relating to notification, classification, packaging or labelling within the meaning of this Directive."

It is established in Article 1(2) of Directive 91/414/EEC that this provision remains in force.

Directive 67/548/EEC with subsequent revisions regulates only questions concerning notification, classification, packaging and labelling in connection with the marketing of the active ingredients used in plant protection products.

In Case 278/85 (The Commission versus Denmark concerning labelling of dangerous substances), the ECJ pronounced on the interpretation of Directive 67/548/EEC, including the scope of the directive’s provisions.

5.1.7 Directive 78/631/EEC on classification, packaging and labelling of dangerous preparations (pesticides)

Directive 78/631/EEC, which was adopted pursuant to Article 100 of the EU Treaty, covers plant protection products used in agriculture, cf. Article 2.

The directive requires the Member States to take necessary measures to ensure that the plant protection products covered by the directive may only be marketed provided the rules given in the directive concerning classification, packaging and labelling are fulfilled, cf. Articles 3, 4, 5 and 6.

Directive 78/631/EEC also establishes that the Member States must not – on grounds of classification, packaging or labelling in pursuance of the directive – prohibit, restrict or prevent the placing of plant protection products on the market that fulfil the provisions of the directive, cf. Article 9.

Directive 78/631/EEC will be revoked if the proposal presented by the Commission for a directive on approximation of the Member States’ laws and administrative rules on classification, packaging and labelling of dangerous preparations is adopted.

5.1.8 Directive 79/117/EEC concerning prohibition of the marketing and use of plant protection products containing certain active ingredients

Directive 79/117/EEC, which was adopted in pursuance of Article 100 of the EU Treaty, covers plant protection products that are used in agriculture, cf. Article 2.

Approx. 20 active ingredients used in different plant protection products have so far been included in the annex to the directive (the list of prohibited substances).

The directive requires the Member States to ensure that the plant protection products included in the annex to the directive can neither be marketed nor used on the Member States’ respective territories, cf.. Article 3.

In Case 125/88, the ECJ pronounced on some questions of interpretation concerning Directive 79/117/EEC. The ECJ said, among other things, that Directive 79/117/EEC concerns only the products listed in the annex. A national court is therefore not obliged to base decisions on the directive in connection with the use of products that are not listed in the annex.

5.1.9 Directive 75/440/EEC concerning the quality required of surface water intended for the abstraction of drinking water in the Member States and Directive 76/464/EEC on pollution caused by discharge of certain dangerous substances into the Community’s aquatic environment

Directive 75/440/EEC contains provisions concerning minimum requirements for the quality of surface water used for drinking water. The directive divides surface water into three main categories, all of which comprise surface water used for drinking water, but which require different forms of treatment.

A limit value for pesticides is set in Annex II to the directive. According to Article 4(1), the Member States must take all necessary measures to ensure that the content of pesticides in surface water does not exceed the limit values for pesticides set in the directive. If the pesticide content does exceed the limit value set in the directive, the directive implies as a general rule that use of the surface water for production of drinking water is prohibited.

Furthermore, in Article 4(2) of the directive, it is stated that, within the framework of the directive’s objectives, the Member States must take all necessary measures to ensure continued improvement of the environment.

Lastly, it is established in the preamble that the growing use of drinking water resources makes it necessary to reduce pollution of the water and to protect it against further pollution.

Directive 75/440/EEC will be revoked and replaced by a new directive if the Commission’s proposal for a directive on the framework of the Community’s water policy measures (COM (97) 49 final version) is adopted. At Council meeting (environment) on 16-17 June 1998, political agreement was reached on the proposal in question.

Directive 76/464/EEC is a minimum directive, the aim of which is to ensure action against the many forms of land-based pollution of surface water (rivers, seas and lakes) with specific dangerous substances, including plant protection products. The core area for the scope of the directive is "discharges", which are defined in Article 1(2)d as any supply of dangerous substances to the aquatic environment. Two preliminary cases, (C-231/97 and C-232/97) are at present before the ECJ to clarify whether the term "discharge" can be assumed to include so-called diffuse discharges, i.e. the supply of, for example, plant protection products to the aquatic environment through spray drift from treated fields. After a prolonged transitional period, Directive 76/464/EEC will be revoked and replaced by a new directive if the Commission’s proposal for a directive on the framework of the Community’s water policy measures (COM (97) 49 final version) is adopted. At the Council meeting (environment) on 16 – 17 June 1998, political agreement was reached on the proposal in question.

5.1.10 Directive 80/68/EEC on protection of groundwater against pollution caused by certain dangerous substances

This directive covers direct and indirect discharges to groundwater. Direct and indirect discharges are to be understood mainly as discharges from, for example, refuse tips and sewage discharges. Normal agricultural use of pesticides and the consequences of that are not covered by this directive. However, pesticides are relevant in the sense that discharge of pesticides can occur from, for example, refuse tips.

It is established in Article 5(2) of the directive that the Member States have a duty to take such appropriate measures as they deem necessary to limit any indirect discharge of substances mentioned in list II, where biocides are mentioned under point 2. It is assumed that the designation biocides in this context refers to all plant protection products, i.e. pesticides and biocides.

It will be seen from the 6th whereas clause in the preamble that the directive does not cover discharges that contain very little of the substances included in lists I and II, or in which they occur in very low concentrations, because of the limited risk of pollution and the difficulty of controlling these discharges.

Directive 80/68/EEC will be revoked and replaced by a new directive if the Commission’s proposal for a directive on the framework for the Community’s water policy measures (COM(97) 49 final version) is adopted. At the Council meeting (environment) on 16 – 17 June 1998, political agreement was reached on the proposal in question.

5.1.11 Directive 98/83/EC on the quality of drinking water

This directive covers all water that is used for drinking water and for the preparation of food for human beings, either in its original form or after treatment, with the exception of mineral water.

The directive lays down minimum requirements concerning a number of biological, physical and chemical properties. The directive thus contains a limit value for the content of pesticides and related products in drinking water.

However, the limit value for pesticides set in the directive applies to drinking water as the finished product. The directive thus does not contain direct requirements concerning the quality of the resources, such as groundwater.

The directive therefore does not imply direct requirements concerning the use of pesticides.

However, in Directive 97/57/EC on the uniform principles, point 2.5.1.2., it is explicitly stated that authorisation may not be granted for the marketing of a plant protection product if the concentration of the active ingredient, relevant metabolites, degradation products or reaction products in groundwater exceeds the limit values set in the Drinking Water Directive for plant protection products in drinking water.

5.1.12 The Commission’s proposal for a directive on the framework for the Community’s water policy measures (the water framework directive)

On 26 February 1997, and with amendment tabled on 26 November 1997, the Commission presented a proposal for the Council’s directive on the framework for the Community’s water policy measures. Political agreement was reached on the proposal at the Council’s meeting in June 1998.

If adopted, the directive will result in the revocation of a number of directives after some years, including – of relevance to pesticides - Directives 75/440/EEC, 76/464/EEC and 80/68/EEC.

The overall aim of the directive is to establish a framework for protection of the Community’s aquatic environment, including surface water and groundwater.

The directive firstly establishes an environmental objective that implies that surface water and groundwater must be able to achieve good status within a specified period of time. The Member States will be required to draw up action plans and implement measures that will ensure achievement of the directive’s objective concerning good status. If necessary, the Member States must prevent all serious, negative impacts on the water’s status that will prevent achievement of the objectives.

Decisions to initiate measures will be based on the results of mapping and monitoring or other data showing whether the objective can be expected to be achieved. If the established measures prove insufficient for achievement of the objective, the Member States will be required to tighten them.

Good status is defined in Annex V to the directive, which, with respect to plant protection products, among other things, lays down physical and chemical requirements for the water resources covered by the directive.

According to Annex V, it is a requirement for "good status" that the concentrations of specific synthetic pollutants do not exceed the standards set in pursuance of a procedure specified in point 1.2.6 of the Annex, which is followed by the words: "but see Directive 91/414/EEC". It should be noted that negotiations on the proposal have not yet been completed, so the proposal may be changed during the continuing negotiations.

The broad reference to Directive 91/414/EEC must be understood to mean that, in the case of plant protection products, it is the assessment of the active ingredients properties in accordance with Article 5 of Directive 91/414 and the products properties in accordance with Directive 97/57/EC that must form the basis for standards for the concentrations of plant protection products in the water resources in question.

With this interpretation, "good status" according to Annex V in the proposal for the water framework directive must be assumed to imply, in the case of plant protection products, that the concentrations in the water resources must not exceed what follows from the requirements for inclusion of the active ingredient in question in Annex I to Directive 91/414/EEC and for national authorization of products containing the active ingredient in accordance with Directive 97/57/EC.

Secondly, the directive states that a prioritised list of environmentally dangerous substances must be established at Community level and be periodically updated. For substances on the prioritised list, the Commission will be required to draw up proposals for measures to reduce the supply of the substances in question to the aquatic environment. These measures will be directed against emissions of the substances and will thus be able to include restrictions on both discharge and use. The Commission must also set environmental quality requirements for these substances not later than two years after they have been included in the list.

It appears from Article 21(2) of the water framework directive that the environmentally dangerous substances must be prioritised according to the risk to the aquatic environment or via the aquatic environment ascertained in a risk assessment carried out in accordance with Directive 91/414/EEC, inter al. In the case of plant protection products, this must be interpreted to mean that assessment according to the rules given in Directive 91/414/EEC when determining the environmental risk posed by the substance in question. It is not known at the present time to what extent pesticides will be included in the list.

The Member States will be obliged to set quality requirements for the Community-prioritised substances if the Commission has not done so within seven years of the entry into effect of the Directive.

5.1.13 Relationship between Directive 91/414/EEC and the directives in the field of chemicals and the aquatic environment

While Directive 91/414/EEC contains a product regulation that concerns only the specific commodity group plant protection products, the other directives in the field of chemicals contain a product regulation that generally concerns chemical substances and products, including plant protection products.

The Water Directives, on the other hand, do not contain any product regulation, but mainly an environmental quality regulation. Simultaneous use of product and environmental quality regulation basically implies that the product regulation must respect the requirements behind the environmental quality regulation. However, actual determination of the relationship between product and environmental quality directives must depend on an interpretation of the relevant provisions in the directives in question.

In Directive 91/414/EEC, Article 1(2), it is stated that Directive 91/414/EEC does not alter the provisions of Directive 78/631/EEC concerning classification, packaging and labelling of pesticides or the provisions of Directive 67/548/EEC on classification, packaging and labelling of active ingredients. Furthermore, it is stated in Article 3(4) that active ingredients may only be marketed provided they are classified, packaged and labelled in accordance with Directive 67/548/EEC. As far as plant protection products are concerned, Article 16 contains references to various provisions in Directive 67/5488/EEC and Directive 78/631/EEC.

Plant protection products and the active ingredients used in them are thus still covered by the provisions of Directives 67/548/EEC and 78/631/EEC. Directive 91/414/EEC thus supplements provisions in the earlier Directives.

As far as concerns the transitional period, in Directive 91/414/EEC, Article 8 (2), reservation is made for Directive 79/117/EEC (the Directive prohibiting the placing on the market and use of plant protection products containing certain active substances). Furthermore, it is stated in Directive 91/414/EEC, Article 4(1) that, after the transitional period, plant protection products may only be authorised provided the active ingredients are listed in Annex I (the Positive List). Since Directive 79/117/EEC implies a prohibition of the placing on the market of the regulated plant protection products, it must be presumed that a specific plant protection product cannot be covered by both Directive 79/117/EEC and Directive 91/414/EEC (Positive List) at the same time.

Directive 91/414/EEC has thus not changed but supplemented Directive 79/117/EEC in such a way that there is no overlap between the scopes of the directives.

Similarly, it is stated in Directive 91/414/EEC, Article 1(4), that Directive 91/414/EEC does not alter the provisions of Council Regulation (EEC) No. 1734/88, as later amended by 2455/92, on export from and import into the Community of certain dangerous chemicals, including plant protection products. This regulation concerns import and export and thus does not touch upon the question of marketing and use in the Community.

As will be seen from the foregoing, the chemical directives, including Directive 91/414/EEC, have been coordinated in such a way that, in the vast majority of cases, there is no overlap between the different regulations, and where there is, the directives take account of it. This means that the general chemical directives are of only limited significance with respect to the Member States’ right to regulate the sale and use of plant protection products.

Concerning the relationship between Directive 91/414/EEC and the water directives, see section 6.7.5.

5.1.14 Directives on maximum limit values for pesticide residues on and in food products (Directive 76/895/EEC et al.)

As will be seen from section 3.2 above, one of the questions addressed by the sub-committee is whether Denmark is able independently to set lower limit values for pesticide residues in food products than those now applying. This is assessed in section 6.10.

With a view to this assessment, an account follows of the EU rules on pesticide residues in food products. For the WTO rules on this subject, see section 6.10.2 below.

In Denmark, the content of pesticide residues in food products is regulated by means of maximum limit values set in Executive order No. 659 of 14 August 1997 (the Pesticide Order), as amended by Executive order No. 13850 of 22 January 1998 and Executive order No. 986 of 17 December 1998. The legal basis for the rules is the Food Act (including section 13, which provides the legal basis for issuing rules on pollutants in food products).

Framework directives

The Danish rules are almost entirely an implementation of EU Directives. EU maximum limit values for the residual content of pesticides in food products have been harmonised in pursuance of the following five Framework Directives:

- Council Directive 76/895/EEC of 23 November 1976 relating to the fixing of maximum levels for pesticide residues on and in fruit and vegetables.

- Council Directive 86/362/EEC of 24 July 1986 on the fixing of maximum levels for the content of pesticide residues in and on cereals.

- Council Directive 86/363/EEC of 24 July 1986 on the fixing of maximum levels for the content of pesticide residues in and on food products of animal origin.

- Council Directive 90/642/EEC of 27 November 1990 on the fixing of maximum levels for pesticide residues on and in certain products of vegetable origin, including fruit and vegetables.

- Council Directive 97/41/EC of 25 June 1997 amending directives 76/895/EEC, 86/362/EEC, 86/363/EEC and 90/642/EEC on the fixing of maximum levels for pesticide residues on and in fruit and vegetables, cereals, food products of animal origin and certain products of vegetable origin, including fruit and vegetables, respectively.

Directive 97/41/EC, which was communicated in August 1997 for implementation not later than 31 December 1998, brings certain provisions in Directives 76/895/EEC, 86/362/EEC and 86/363/EEC into line with the corresponding provisions in Directive 90/642/EEC. It also gives new Community provisions to ensure uniform rules for all regulated products of vegetable origin, including fruit and vegetables, cereals and animal products.

The framework directives were issued on the basis of Article 43 of the EU Treaty. All the framework directives contain a free trade clause. For example, Article 5 of Directive 90/642/EEC reads as follows:

"Member States may not prohibit or impede the putting into circulation within their territories of the products referred to in Article 1 on the grounds that they contain pesticide residues, if the quantity of such residues in and on the products or parts of products concerned does not exceed the maximum levels specified in the list referred to in Article 1."

The framework directives contain a health clause that provides the possibility of fixing temporary, lower maximum limit values. In Article 8 of Directive 90/642/EEC the health clause is worded thus:

"Where a Member State, as a result of new information or of a reassessment of existing information, considers that a maximum level fixed in the list referred to in Article 1 endangers human or animal health, and therefore requires swift action to be taken, that Member State may temporarily reduce the level in its own territory. In that case, it shall immediately notify the other Member States and the Commission of the measures, attaching a statement of the reasons therefor."

It will be seen from the free trade clause that the Member States may not fix lower limit values for the pesticides and food products where a limit value has been fixed in the EU. The rules must thus be regarded as an expression of total harmonisation.

National limit values

Where there are no EU maximum limit values, according to Directive 97/41/EC – for example, Article 4(6), with the addition of Article 5b(2) to Directive 90/642/EEC – a Member State is obliged, if so requested by another Member State, to fix national limit values for products produced in the other Member State. This rule has been introduced to facilitate trade. The limit value in question must be fixed having regard for good agricultural practice in the Member State of origin and for the health of the consumers.

In those cases in which two Member States cannot agree on the size of a maximum limit value fixed in accordance with the above-mentioned rule, or if unharmonised national limit values become a barrier to trade between two Member States, there is a mediation procedure in Directive 97/41/EC that leads to the fixing of EU limit values. The procedure can be initiated in certain circumstances laid down in Directive 97/41/EC, for example in Article 4(6), which adds, among other things, Article 5b(3) to Directive 90/642/EEC.

This provision has the following main content:

If the Member State of destination has either fixed new maximum limit values or changed the values fixed in its national legislation or has changed its control measures in a disproportionate and/or discriminatory manner in relation to its national production, or if its maximum limit values differ significantly from the corresponding values in other Member States or provide a disproportionate level of protection compared with the Member State’s level of protection for pesticides presenting a similar risk, or for corresponding agricultural products or food products, a mediation procedure is required in the form of bilateral negotiations.

If bilateral negotiations between the two Member States lead to agreement on a new limit value, the Commission shall be informed of this. If agreement is not reached, the Commission will propose a limit value. The proposal for an EU maximum limit value must be adopted by a qualified majority in the Standing Committee for Plant Health in a III b procedure. If there is not a qualified majority, the Commission must submit the matter to the Council, which can reject the proposal by simple majority or can adopt the proposal unchanged by a qualified majority, or change it provided there is unanimity.

Groups of food products covered by the framework directives

The product groups of fruit and vegetable origin to which the rules apply are listed in the Annex to Directive 90/642/EEC as amended by Directive 95/38/EC. They are the main groups citrus fruits, tree nuts, pome fruits, stone fruits, berries and small fruits, various exotic fruits such as the products pineapples, olives, bananas, etc., the main groups root and tuber crops, onions, vine vegetables such as tomatoes, cucumber, melons, etc., the main groups cabbage, leaf vegetables such as lettuce, chervil, etc., the main groups pulses, stemmed vegetables such as artichokes, asparagus, rhubarb, etc., the main groups fungi, oil seed such as linseed, peanuts, mustard seed, sunflower seed, etc., potatoes, tea, hops and spices.

The product groups of animal origin to which the rules apply are given, with the latest amendments, in Directive 86/363/EEC and comprise everything of animal origin that is edible – with the exception of fish and shellfish.

The cereals covered by the rules were last listed in Directive 93/57/EEC and comprise wheat, rye, barley, oats, maize, rice, sorghum, buckwheat, millet, etc. The three last-mentioned directives are supplementary directives to the above-mentioned framework directives.

Pesticides covered by the framework directives

At the present time, around 120-140 pesticides are included in supplementary directives. A limit value has not yet been fixed for all the combinations of pesticide/product now covered, but according to present plans this will be done in 2003.

According to Directive 91/414/EEC, Article 8(2), all active ingredients that were on the market in the EU before 26 July 1993 must be reviewed before 2003 (see section 5.1.5 above), and EU limit values must be fixed for these pesticides, cf. also Article 8(3).

In the case of new active ingredients that are placed on the market after the above-mentioned date, Article 4(1)f of the Directive states that EU limit values must be fixed for them as a condition for authorisation.

All the said EU limit values will be listed in supplementary directives to the above-mentioned framework directives as the active ingredients are reviewed/authorised. The number of pesticides covered by the rules will thus constantly grow. The aim is for maximum limit values to be fixed for all pesticides marketed in the EU.

Market shares

It is not possible today to indicate how large a part of the Danish market for fruit and vegetables, animal products and cereals is in practice covered by EU regulation, i.e. which products, and how many, contain residual concentrations of pesticides for which EU maximum limit values have been fixed.

Danish, unharmonised maximum limit values

For those pesticides and products or combinations thereof for which an EU maximum limit value has not been fixed it is possible to fix national limit values, which must be notified both in the EU (Directive 83/189/EEC, as amended by Directives 88/182/EEC and 94/10/EC) and the WTO (Article 7 of the SPS Agreement). (Concerning the WTO rules, see section 6.10.2 below).

Today, there are a limited number of Danish national limit values, namely for the pesticides listed in Annex 7 to The Pesticide Order, and for which the Annex to the Executive order of 1988 has been maintained. Examples are fenitrothion and pirimicarb. These pesticides are not subject to EU regulation or are as yet only partially subject to it. Other Danish maximum limit values are listed in Annex 6 to The Pesticide Order, which concerns pesticides authorized by the Danish Environmental Protection Agency for use in Denmark, for which provisional Danish maximum limit values have been fixed in accordance with Directive 91/414/EEC.

For the remaining pesticide/product combinations, for which neither a national limit value nor an EU limit value has been fixed, an individual health assessment is carried out by the Veterinary and Food Directorate’s Institute for Food Safety and Toxicology in accordance with section 12 of the Danish Food Act, which states that food products must not be sold if they "must be assumed to be able to transmit or cause disease or cause poisoning, or if the food products must be regarded as unsuitable for human consumption because of … contamination … or for some other reason. ⁴"

Other, unharmonised maximum limit values

For the unharmonised residual group of pesticides, some EU Member States – Germany, for example – have instead of the above-mentioned individual health assessment introduced a general maximum limit value of 0.01 mg/kg, which, in some cases, is so low that use of the pesticide on some crops is not possible. Germany has notified its general limit value in accordance with Directive 83/189/EEC under the code 94/79/D. A scheme like the German one has not only advantages but also disadvantages. One of the disadvantages is that a general maximum limit value of 0.01 mg/kg may in some cases be too high compared with a health assessment.

5.2 WTO rules (World Trade Organisation)

Denmark is a member of the World Trade Organisation (WTO) both directly and through the EU.

Denmark’s obligations in relation to WTO affect our possibility of phasing out the use of pesticides in agriculture through national legislation.

5.2.1 Introduction

WTO law is a relatively new body of law. The following is based on a report from the Ministry of Justice’s Law Department. However, the sub-committee has made some changes on the basis of its discussions.

With a view to a general introduction to certain WTO rules that are of relevance to the Bichel Committee a discussion follows of the system of WTO law, the basic rules in the General Agreement on Tariffs and Trade 1994 (GATT 1994) with associated Agreements and Understandings, together with, particularly, the Agreement on Sanitary and Phytosanitary Measures (the SPS Agreement) and the Agreement on Technical Barriers to Trade (the TBT Agreement), all of which are to be found in Annex 1 A to the WTO Agreement. The relationship between EU law and WTO law is also discussed.

5.2.2 The system of WTO law

WTO (World Trade Organization) was created by the WTO Agreement on 1 January 1995 as a result of the Uruguay round. Unlike its predecessor, GATT, WTO is an international organisation. Its highest authority is the Conference of Ministers, the tasks of which between the conferences are taken care of by a General Council composed of representatives of the Member States. WTO’s secretariat is headed by a Director General.

WTO law consists of three main elements: GATT, GATS and TRIPs.⁵

The GATT Agreement (General Agreement on Trade in Goods) concerns trade in goods. The agreement, as amended following the Uruguay round, is called GATT 1994 (GATT) and is one of the agreements covered by WTO’s authority in accordance with the WTO Agreement. Attached to the GATT Agreement are a number of agreements on specific areas, including technical barriers to trade (the TBT Agreement), subsidies and countervailing measures, and sanitary and phytosanitary measures (the SPS Agreement), together with a number of understandings concerning specific GATT rules.

The GATT Agreement (General Agreement on Trade in Services) concerns trade in services.

TRIPs Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) concerns intellectual property rights.

All disputes between WTO's Member States concerning WTO law must be settled by WTO's special body for that purpose (Dispute Settlement Body - DSB). The rules for DSB’s activities are laid down in a Dispute Settlement Understanding (DSU).

The system consists of a consultation phase, a panel report and possibly a report from the so-called Appellate Body. The procedural time limits for this procedure are very short, and a case must normally be concluded within 15 months. Many cases are concluded in the consultation phase. DSB adopts reports from panels and from the Appellate Body unless all Member States vote against that. Unlike this, adoption under GATT 1947 required consensus.

All WTO Member States are subject to DSU’s jurisdiction. Unilateral determination of violations or initiation of sanctions within the scope of WTO law is not permitted.⁶ Unlike normal international law, the administration of justice thus assumes an obligatory character. WTO or private parties do not have the option of using WTO’s conflict resolution system. There are no procedures for reference of a preliminary question.⁷

DSB’s decisions must be implemented within a fixed time limit of – usually – 15 months. WTO law obliges the member states to bring violations to an end or, secondarily, to pay compensation for the losses that other member states then suffer. In cases of incompatibility between national regulation and WTO rules, this must be determined by a decision from DSB.

In the first 2½ years of the new WTO dispute settlement system, almost 200 cases have been started. Of this, 14 reports from the Appellate Body were finally adopted on 1 July 1998. In none of these 14 cases has a member state refused to comply with the Appellate Body’s decision.

5.2.3 Basic GATT rules

GATT regulates two fundamental problems for free trade: discrimination and barriers to trade. In the case of discrimination, GATT distinguishes between discrimination against other countries (NT) and between other countries (MFN). With regard to barriers, GATT contains a general distinction between tariff barriers and non-tariff barriers (technical barriers to trade).

Discrimination is basically prohibited. Barriers to trade are generally permitted within agreed limits. These limits appear from each member’s list of concessions, which are generally revised in connection with the rounds (the Tokyo round, the Uruguay round, etc.).⁸

Article XVI(3) of the WTO Agreement states that, in the event of conflicting rules, the WTO Agreement takes precedence over GATT, GATS, TRIPs and DSU (lex superior). Within GATT it follows from an introductory, interpretive note to Annex 1 A that, in the event of conflicting rules, the agreements attached to GATT, including SPS, TBT and the Agreement on Agriculture, take precedence over GATT (lex specialis).

It appears from Article 1(5) of the TBT Agreement that this agreement does not apply within the scope of the SPS Agreement. It appears from Annex 1, No. 2, to the Agreement on Agriculture that the scope of this agreement does not imply restrictions on the products covered by the SPS Agreement.

The National Treatment principle (the NT principle) appears from GATT, Article III. Article III(1) contains the general principle. The provision is worded as follows:

"The contracting parties recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal qualitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production".

This general principle is specified in Article III(2) with respect to internal taxes and other internal charges of every kind and in Article III(4) with respect to any other internal regulation. Article III(2) and (4) apply to any discrimination between identical products. Article III(1) also applies to similar products, but only if the discrimination affords protection to domestic production.

Rules prohibiting discrimination between WTO’s Member States are to be found in several places in GATT. The main provision, in Article I(1) reads:

"With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation ... and with respect to all matters referred to in paragraphs 2 ⁹ and 4 ¹⁰ of article III, any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties".

GATT, Article I, thus basically prohibits any discrimination between like products from different WTO members. This applies irrespective of whether the discrimination is offset by reverse discrimination concerning other goods.

Article XXIV enables the removal of barriers to trade between, among others, the EU Member States without respecting the MFN principle. It must also be assumed that the provision exempts internal rules that discriminate between countries within and outside the EU and other areas from the MFN principle.

If import of a given product cannot be prevented under EU rules, this thus does not mean that the EU Member States must permit import from all WTO members as a consequence of the MFN principle.

However, if import of a given product cannot be prevented under EU rules, the EU – as a member of WTO – is basically obliged not to prevent import from other WTO members, cf. the NT principle.¹¹

The general exceptions as a consequence of non-economic conditions, are given in GATT, Article XX.¹² This provision commences as follows:

"Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction of international trade, nothing in this Agreement shall be constructed to prevent the adoption or enforcement by any contracting party of measures necessary to protect".

The provision then lists 10 points, including:

(a) public morals,
(b) human, animal or plant life or health, and
(c) intellectual property rights.

According to practice, the application of Article XX requires that national rules seek objectively to achieve one of these aims and do not have the purpose of consequence of creating unnecessary barriers to international trade.¹³ The application of Article XX must not exceed what is needed to fulfil a lawful objective, but the provision is not subject to the same stringent proportionality assessment as, for example, the similar rule in Article 36 of the EU Treaty.

Technical barriers to trade are regulated in the TBT agreement – see section 5.2.4.3. Use of Article XX(b) is specially regulated in the SPS Agreement – see section 5.2.4.2 below. As indicated above in section 5.2.3, the TBT and SPS Agreements take precedence over GATT in the event of conflicting rules.¹⁴

5.2.4 WTO rules relating to regulation of plant protection products

Particularly the SPS Agreement sets standards for the possibility of national regulation of plant protection products. The SPS Agreement is discussed below in section 5.2.4.2. It may also be relevant to assess the framework for national regulation, which is laid down in the TBT agreement and in GATT, Article XI (quantitative restrictions). These rules are briefly reviewed in sections 5.2.4.3 and 5.2.4.4. First, however, we shall look at the demarcation between the SPS agreement and the TBT Agreement.

The TBT Agreement concerns technical regulations and standards,¹⁵ as defined in Annex 1, points 1 and 2, to the Agreement (TBT measures). The TBT Agreement is superseded by the SPS Agreement, cf. Article 1(5). A technical regulation is:

"Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process or production method."

The SPS Agreement (Agreement on the Application of Sanitary and Phytosanitary Measures) applies to the measures defined in Annex A to the agreement (SPS measures).¹⁶ These are: Any measure, regardless of its nature,

"applied:

It should be noted that the SPS Agreement does not use the word "environment", but instead, in relation to additives and pollutants, speaks only about human and animal health (Annex A, No. 2). A regulation whose sole or paramount purpose is to protect the environment without at the same time aiming to protect human beings and animals against the risk originating from additives, pollutants, toxins or pathogenic organisms in food products, beverages or feedstuffs is thus not covered by the SPS Agreement.

Measures that are motivated by a desire to protect human or animal health in Denmark against the risks originating from additives, pollutants, toxins or pathogenic organisms would be covered by the SPS Agreement, cf. Annex A, b).

Measures that make requirements concerning goods, processes or production methods and that are based on other considerations than those mentioned above, including considerations of an environmental nature, would be covered by the TBT Agreement. Import prohibitions are covered by the prohibition of quantitative restrictions in GATT Article XI (see section 3.4 below).

Measures,¹⁸ including regulation of use, that are not in the nature of requirements concerning goods, processes or production methods, and that are not motivated by a desire to protect human or animal health in Denmark against pollution of food products, beverages or feedstuff that originates from the use of pesticides, are covered only by GATT’s other rules, including rules on non-discrimination.

The SPS Agreement is a separate agreement that takes precedence over GATT’s general rules. According to the 4th whereas clause in the preamble, the Agreement seeks, among other things, "… the establishment of a multilateral framework of rules and disciplines to guide the development, adoption and enforcement of sanitary and phytosanitary measures in order to minimize their negative effects on trade; …"

The fundamental rights and obligations in relation to the SPS Agreement appear from Article 2 of the Agreement. Article 2(2) lays down the general principle for SPS measures. The provision in question reads as follows:

"Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5."

Article 2(3) contains a rule of the same nature as the MFN and NT principles. It is worded as follows:

"Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade."

Article 2's principles are defined in Articles 3 and 5. The specific rules in Articles 3-5 must thus basically be applied rather than Article 2. The actual relationship between the general principle in Article 2 and the more specific rules has not yet been established in practice. The Appellate Body has only said:

"Article 2.2. informs Article 5.1., and ... similarly Article 2.3. informs Article 5.5. - but further ... analysis of their relationship should await another case."¹⁹

The SPS Agreement contains an incentive for harmonisation. According to Article 3(2), SPS measures that are in accordance with international standards, guidelines or recommendations are assumed to be in accordance with the SPS Agreement.

Interest is therefore mainly focused on those cases in which a Member wishes to introduce measures that result in a higher level of protection than the international standards. This possibility is regulated in Article 3(3), which states:

"Members may introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a Member determines²⁰ to be appropriate²¹ in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5 (2) ²². Notwithstanding the above, all measures which result in a level of sanitary or phytosanitary protection different from that which would be achieved by measures based on international standards, guidelines or recommendations shall not be inconsistent with any other provision of this Agreement."

The right to introduce a higher level of protection is also recognised in the 6th whereas clause in the Agreement’s preamble. In practice, this right does not constitute an exception to the general rule in Article 3(1), but is an independent right that is subject to the usual principles of interpretation and burden of proof.²³

However, this right to introduce a higher level of protection is obviously not an absolute right. A higher level of protection may only be introduced respecting Article 3(3), including the rules in Article 5(1)-(8).

The formulation of Article 3(3) ("or") could indicate that the possibility of introducing a higher level of protection can be divided into two cases:

The EU’s position has been that an SPS measure for which there are objective grounds (the first case) does not have to fulfil Article 5’s requirement concerning risk assessment. However, it follows from the Appellate Body’s practice that Article 5 must also be observed in the first case.²⁴ The Appellate Body refers in that connection to Article 3(3), last sentence, and the note cited above to Article 3(3) (note 24), both of which refer to the Agreement’s other provisions, together with the requirement concerning "adequate objective grounds" in Article 3(2).²⁵

Risk assessment²⁶ is regulated in Article 5(1), which reads:

"Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques²⁷ developed by the relevant international organizations."

In the risk assessment, the Members must also consider the relevant scientific and economic factors. In the risk assessment, the considerations mentioned in Article 5(2)^{28 29} and 3³⁰ are regarded as particularly relevant. According to Article 5(4), the Members should also consider the aim of minimising the negative effects on trade.

It is thus stated in Article 5(1) that a member wishing to introduce an SPS measure shall base this on a suitable risk assessment. This risk assessment need not be carried out by the Member in question itself, but there must be a rational relationship between the SPS measure and a risk assessment. It appears from practice that a Member State must first identify the conclusion of the risk assessment and the conclusions that are implicit in the SPS measure and must then judge whether there is a rational relationship between the two.³¹ The Appellate Body words it thus:

"... the risk assessment must sufficiently warrant - that is to say, reasonably support - the SPS measure at stake. The requirement that an SPS measure be "based on" a risk assessment is a substantive requirement that there be a rational relationship between the measure and the risk assessment.

...

The risk assessment could set out both the prevailing view representing the "mainstream" of scientific opinion, as well as the opinion of scientists taking a divergent view. ...

Determination of the presence or absence of that relationship can only be done on a case-to-case basis, after account is taken of all considerations rationally bearing upon the issue of potential adverse health effect."³²

An SPS measure must thus be rationally, scientifically based, but not necessarily in all cases on the scientific "mainstream" view.

In connection with the risk assessment, the possibility is not excluded of including the risks that can occur through lack of control of the use of certain substances (pesticides, hormones, etc.). Whether, and the extent to which, this is warranted must depend on a concrete assessment.³³ This assessment must presumably include the health consequences of uncontrolled use and the possibilities of the importing state’s authorities of protecting against these in other ways.³⁴

It thus seems that it can be concluded that SPS measures in accordance with Article 5(1) must be based on a suitable risk assessment that takes account of both scientific and other relevant factors. Depending on the circumstances, importance can be attached in that connection to the possibility and risk of misuse of the regulated substances.

According to Article 2(3), SPS measures must not be discriminatory or be used as a disguised restriction of trade. This is specifically regulated in Article 5(5), which reads:

"With the objective of achieving consistency in the application of the concept of appropriate level of sanitary or phytosanitary protection against risks to human life or health, or to animal and plant life or health, each Member shall avoid arbitrary or unjustifiable distinctions in the levels it considers to be appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade."

To demonstrate disregard of Article 5(5), three cumulative requirements must be satisfied.³⁵ They are:

The situations in which different levels of protection lead to discrimination must obviously be comparable. Such comparable situations can, for example be the limit value for pesticide residues in comparable food products or the limit value for a pesticide and other comparable substances in the same food product.³⁷

The three elements must be analysed separately. A difference in, for example, limit value between two comparable food products thus does not per se constitute disregard of Article 5(5).

The hormone case illustrates the application of Article 5(5). In this case, the EU prohibited the use of growth hormones for cattle although it had not even at the time fixed limit values for the comparable substances "carbadox" and "olquindox"³⁸, which are used for pigs. The first two requirements were thus satisfied.³⁹

The Appellate Body then had to decide on the third requirement. It rejected the use of its practice in relation to the similar question in GATT, Article III(2) (discriminatory internal taxes) and pronounced as follows:

"... we do not think that the difference between a "no residues" level and "unlimited residues" level is, together with a finding of an arbitrary or unjustifiable difference, sufficient to demonstrate that the third, and most important, requirement of Article 5, stk. 5, has been met."

The difference in level of protection is thus not just one of several factors in the assessment of whether there is a case of discrimination or disguised restriction of international trade. The Appellate Body then carried out a detailed analysis of the purpose and structure of the relevant EU Directives. The Appellate Body found that the EU’s prohibition had not been introduced simply to protect beef producers.

In the case in question there were a number of factors that might indicate a disguised restriction of trade – among them, that the EU regulation had the purpose of counteracting a surplus of beef produced in the EU and that the use of hormones was far more widespread in the USA and Canada than in the EU before the prohibition, and the prohibition therefore acted as de facto discrimination. Even so, the Appellate Body decided that it was not sufficiently proven that the EU’s hormone prohibition did not have the intention of protection against cancer risks but was instead a disguised restriction of trade. The Appellate Body thereby attached importance to the considerable fears that a number of general studies of the risks of hormones had created, the risk of misuse and the necessity of harmonising the relevant rules within the Internal Market.⁴⁰

It thus seems that it can be concluded that the SPS measures in accordance with Article 5(5) must be applied with some consistency in relation to different comparable situations, although certain considerations of a more subjective or potential nature, including consumer fears, the risk of misuse and the necessity of internal harmonisation, seem to be of some importance.⁴¹

Besides Article 5(1) and (5), the use of a higher level of protection is limited by a special technical and economic proportionality principle that is specifically defined in Article 5(6).⁴²

In Article 5(7) there is a special exception from Article 5(1) that concerns the situation in which the scientific basis for the risk assessment is not yet sufficient. In this situation the Members may adopt SPS measures temporarily on the basis of available, relevant data. This rule is thus a special implementation of Article 5(1)’s principle that SPS measures must be based on an appropriate risk assessment in the situation in which the basis for them is still sparse. The use of this exception is also limited by the fact that Members must then seek to obtain such additional data as are necessary for a more objective risk assessment and, in the light thereof, carry out an assessment within a reasonable time limit of the SPS measures introduced.

According to Article 5(8), any WTO Member may request grounds for an SPS measure that is not based on relevant international standards. Incidentally, the Member State introducing the SPS measure should give such grounds of its own accord, cf. Article 12(4)4 and 5.

Article 7 of the SPS Agreement and Annex B to the Agreement contain provisions concerning the notification procedure.

Article 8 of the SPS Agreement and Annex C to the Agreement contain requirements concerning the Member’ rules and procedures for control, inspection and authorisation procedures, including national schemes for authorisation of additives and for fixing limit values.

The TBT Agreement contains a wide range of procedural rules concerning the preparation, adoption, application, including conformity assessment, of technical regulations and standards. The Agreement also contains provisions on the notification procedure, including requirements concerning enquiry points (Article 2(9)-(12) and Article 10).

The substantive requirements concerning technical regulations and standards are given in Article 2(1)-(4). Article 2(1) refers to the NT principle. Article 2(4) requires technical regulations to be based on international standards except where these would be: "an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued, for instance, because of fundamental climatic or geographical factors of fundamental technological problems."

For those cases in which a relevant international standard does not exist or – in accordance with Article 2(4) – is ineffective or inappropriate, Article 2(2) is relevant. Article 2(2) reads as follows:

"Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create.⁴³ Such legitimate objectives are, inter alia, national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia, available scientific and technical information, related processing technology or intended end uses of products."

That technical regulations must not be maintained if they can be achieved in a less trade-restrictive manner is repeated in Article 2(3).

A prohibition or any restriction of import is covered by the prohibition of quantitative restrictions in GATT, Article XI.⁴⁴ Article XI permits only tariff and fiscal restrictions within – in the case of Denmark – the concessions and restrictions (schedules) agreed through the EU. In contrast to this, internal regulation shall be judged in accordance with Articles I and III (the MFN and NT principles).

Import restrictions beyond the agreed concessions are thus, regardless of whether a prohibition of internal production is attached to them, basically at variance with GATT, Article XI. SPS and TBT measures must, however, be judged on the basis of these Agreements, and GATT’s other exceptions, including Article XX, also apply. In the case of agricultural products, special exceptions also apply in accordance with GATT, Article XI(2)c.

5.2.5 The relationship between WTO law and EU law

The WTO Agreement of 15 April 1994 has been ratified by both the EU⁴⁵ and the EU Member States without the respective obligations to the other contracting parties having been distributed between them.⁴⁶

The EU was not a contracting party in GATT 1947. The distribution of authority within the Community is established in the ECJ’s Judgment 1/94.⁴⁷

It appears from this that the Community has the sole authority in pursuance of Article 113 of the EU Treaty to enter into GATT 1994 with associated agreements and understandings. The ECJ arrived at this conclusion regardless of the fact that the Member States have a certain independent internal authority in relation to the EU, particularly with respect to technical barriers to trade and SPS measures.

The authority to enter into the GATT and TRIPs Agreements belongs partly to the Member States and partly to the EU. It has not been clarified which parts of the GATT and TRIPs Agreements the EU has entered into, and which parts the Member States have entered into.⁴⁸

Both the EU Member States and the EU are responsible to WTO’s other Members for compliance with WTO law. WTO’s dispute settlement procedure concerning, for example, the Danish authorities’ administration of the EU’s customs code can thus in theory be instituted against Denmark.

The GATT, with associated Agreements and Understandings, together with the other areas of WTO law, insofar as the external authority according to the EU Treaty rests with the EU, have been entered into by the Community in accordance with the procedure laid down in Article 228 of the EU Treaty. According to Article 228(7) of the EU Treaty, these areas of WTO law are "binding on the Community’s institutions and on the Member States". Therefore, both the Community’s institutions and the Member States have an obligation in international law and EU law to ensure that the obligations resting on the EU in relation to the other WTO Members are fulfilled.⁴⁹

Pursuant to Article 155 of the EU Treaty, the Commission must see to it that the provisions of the EU Treaty, including observance of the international agreements entered into by the Community, are implemented. The Commission’s authority under Article 155 means that the Commission can use the procedure laid down in Article 169 in the event of a Member State disregarding the obligation resting on it in pursuance of those areas of WTO law where the EU has authority.

It rests with the CCJ, within the framework of its authority, to interpret those parts of WTO law that the Community has entered into and to ensure that they are implemented uniformly within the Community.⁵⁰

As far as concerns those parts of WTO where the distribution of authority between the EU and the Member States has not been fixed (GATT and TRIPs), it follows from ECJ practice in Hermès International, C-53/96, Judgment of 16 June 1998, that the ECJ regards itself as competent in relation to rules outside the EU’s exclusive external authority (TRIPs, Article 50 (1)) in a 177-case on application of national rules of procedure for enforcing national trade mark rights.⁵¹

The ECJ gave as its grounds for its authority in this area that:

"The WTO Agreement has been entered into by the Community and ratified by its Member States without their respective obligations to the other contracting parties having been distributed between them" (pr. 24), that the Community has rules (EU trade mark),⁵² that are enforced in accordance with the same national rules of procedure (pr. 28 and 31), and on grounds of the uniform interpretation of rules that can be applied to situations that belong under both national law and international law (pr. 32)."

The ECJ must thus be assumed to have the authority to interpret those parts of WTO law that, at the time of the dispute in question, belong under the Community’s exclusive external authority or that concerns the uniform application of the Community’s rules.⁵³

It follows from ECJ practice that international obligations that are assumed by the EU and that are clear and unconditional can have direct effect within the Community.⁵⁴ However, direct effect of international agreements also depends on whether, as a consequence of the purpose and nature of the international agreement, a clear and precise obligation can be derived from the rule, the fulfilment and legal effect of which do not depend on the implementation of any subsequent measure.⁵⁵

There is as yet no case law from the ECJ concerning any immediate applicability of WTO rules within the EU.

There is, on the other hand, such case law in relation to the GATT 1947. The ECJ has thus recently, in Case C-280/93 (Germany versus the Council, European Court Reports (ECR) 1994, I-5042) held⁵⁶ that the provisions in the GATT 1947:

"... are not unconditional and that spirit, structure or wording cannot give grounds for an obligation to assign to the provisions effect as provisions in international law that are directly applicable in the contracting parties’ judicial systems." (pr. 110).

This led the ECJ to conclude that it could not test the legality of a Community act in relation to rules in the GATT 1947 unless the Community act expressly referred to precise provisions in the GATT 1947 or the Community had desired to fulfil a particular obligation within the framework of the GATT 1947.⁵⁷

It is doubtful whether this legal practice can be used in relation to WTO law – and whether WTO rules are directly applicable within the EU. The ECJ has recently, in Case C-53/96, judgment of 16 June 1998, pr. 35, expressly omitted to give an opinion on the direct effect of WTO rules.

It should be noted, however, that a large number of WTO obligations are clear and unconditional and that WTO's dispute settlement system has a far more obligatory and binding character than formerly under the GATT 1947. Lacking direct effect creates a preferential position for the Commission, which can enforce WTO rules vis-a-vis the Member States via the Treaty Violation Procedure laid down in Article 169,⁵⁸ whereas there are no remedies against violation of WTO rules by the Community’s institutions. Even though the GATT is the basis for the EU Treaty, and the ECJ has on several occasions gained inspiration from it,⁵⁹ it is remarkable that the GATT is the only international agreement that the ECJ has refused to give direct effect.⁶⁰

On the other hand, a number of the Community’s trading partners do not, or only to a limited extent, regard WTO law as directly applicable in their national judicial systems.⁶¹ This led to the inclusion in the preamble to the Union’s ratification of the WTO Agreement of a statement to the effect that the WTO is, by its nature, "not susceptible to being directly invoked in Community of Member States courts".⁶² However, that does not seem to preclude the ECJ from arriving at the conclusion that certain rules within WTO law do not have direct effect.^{63 64} However, WTO has its own mechanism for dispute settlement, the task of which should not be taken over by the ECJ.

Particularly in view of the fact that the USA does not accept direct effect, and also in view of the complexity of WTO law, the ECJ can hardly be expected to accept direct effect unless clear and precise rules have been interpreted by the Appellate Body in a like, actual situation.

However, if the Appellate Body has clearly established the interpretation of a WTO rule in a concrete situation – and particularly if it has does so in relation to the EU – there seems to exist "a clear and precise obligation, the fulfilment and legal effects of which do not depend on further measures being implemented."⁶⁵

If direct effect is then still not recognised, the ECJ must abandon its earlier, monistically inspired practice and its clear and repeated references to international agreements entered into the Community being binding on the Community’s institutions and Member States, cf.. OJ, Article 228(7).⁶⁶

The situation is increasingly occurring in which the Community has published measures with a view to fulfilling its obligations under WTO law. In this situation, it follows directly from ECJ practice after the Kupferberg judgment⁶⁸ that the Community has a duty to respect WTO law.⁶⁷ This is made especially clear in relation to GATT rules in the Nakajima case,⁶⁹ in which the ECJ stated that relevant Community rules (Anti-dumping):

"... have been issued with a view to fulfilling the Community’s international obligations. Consequently, in accordance with the Court’s constant jurisprudence, the Community is bound not only by GATT, but also by the GATT Anti-Dumping Code which has been adopted for the purpose of its implementation." (premise 31).TAKEN FROM "The international practice of the European Communities: I. Nakajima

In this situation, the ECJ is only determining whether the Community legislators:

"have exceeded the legal frames thereby laid down and whether the Community legislators have disregarded the relevant GATT rules". (premise 32).

The opinions given in the Nakajima case must be assumed also to apply in relation to WTO law.

Thus, when a Community measure seeks to fulfil the Community’s WTO obligations, it can be contested directly on grounds of inconsistency with WTO rules.

However, regardless of whether WTO rules are directly applicable or implemented by the Community, WTO law is far from being of no significance to the application of national and EU law.

As in the case of other international agreements entered into by the Community, WTO rules take precedence over the derived Community law. This is directly expressed in relation to the International Milk Agreement under GATT (now under WTO). The ECJ thus stated in the Commission versus Germany, Case C-61/94 (ECR 1996 I-4006), pr. 52:

"When a provision in the derivative AFLEDTE# Community law requires interpretation, it must as far as possible be so interpreted as to bring it into accordance with the EU Treaty. A implementation regulation must similarly as far as possible be interpreted in accordance with the basis regulation (cf. judgment of 24.6.1993, case C-90/92, Dr. Tretter, ECR I, p.3569, premise 11). In the same way, the fact that the international agreements entered into by the Community take precedence over the derivative Community law means that the latter must as far as possible be interpreted in accordance with those agreements."

Since the EU has entered into the GATT with associated Agreements and Understandings, all EU measures that fall within the scope of these international agreements must thus be interpreted in accordance with these agreements.

This seems to have the consequence that all national legal instruments that implement EU measures must also be interpreted in the light of the relevant WTO rules. The ECJ thus stated in the Marleasing case,⁷⁰ that all national authorities, including courts:

"... when making use of national legal instruments, whether older or younger than the directive, must interpret them in the light of the directive’s wording and purpose and produce the result that was intended with the directive ..." (premise 8).

The duty to interpret in conformity with WTO law was last maintained and developed in Hermès International, C-53/96, Judgment of 16 June 1998, in which the ECJ, in connection with the grounds for its authority, declared that this was admittedly an internal case concerning enforcement of national trade mark rights but that:

? OK "However, since the Community is a party to the TRIPs agreement, and since this agreement concerns the EU trademark, the legal authorities mentioned in article 99 of Regulation No. 40/94, when using national provisions with a view to deciding on temporary measures to protect rights that follow from an EU trademark, must as far as possible do this in the light of the wording and purpose of article 50 of the TRIPs agreement (cf. corresponding judgment of 24.11.92, case 286/90, Poulsen and Diva Navigation, ECR I, p. 6019, premise 9, and of 10.9.1996, case C-61/94, The Commission versus Germany, ECR I, p. 3989, premise 52)." (premise 28).

Since the ECJ thus under all circumstances regarded itself as having authority to interpret the provision in question in the TRIPs Agreement, national authorities were also obliged to interpret the corresponding national provisions in conformity with WTO law (pr. 29 og 35).

All authorities within the EU, including courts, are thus in EU law to exercise their interpretation activities in the light of the wording and purpose of the WTO rules within the area in question when interpreting:

5.2.6 WTO and state aid

The relevant WTO rules on state aid are:

According to Article 93(3) of the EU Treaty, planned aid measures covered by Article 92(1) must be notified to the Commission. Approval of aid within the framework of Article 92(3) is covered by the Commission's sole authority. In this connection, The Commission is allowed considerable discretion.

It follows from Article 228(7) of the EU Treaty that, within the EU’s area of authority, WTO law "… is binding on the Community’s institutions...".

The Commission’s obligations under Article 155 of the EU Treaty include compliance within the Community’s area of authority. This obligation to interpret in accordance with WTO law was last made clear in ECJ Judgment of 16 June 1998, Hermés International, C-53/96.

When exercising its authority in accordance with the Community’s rules on state aid, the Commission is thus obliged to do so as far as possible in the light of the wording of the purpose of the relevant WTO rules. The Commission has adapted its framework provisions within the state aid area to take account of the WTO rules.

The Commission’s sole authority to approve state aid in accordance with Article 92(3) of the EU Treaty, combined with its obligation to exercise this authority in the light of the wording and purpose of WTO law, means that national authorities that have notified a state aid scheme and had it approved in accordance with Article 92(3) may assume that the scheme is in accordance with WTO law.

No position has thereby been taken with respect to aid that does not affect trade between the Member States and that, on this basis, is granted without the Commission’s approval. Such a state aid scheme can, in theory, be at variance with WTO rules, since not all these rules presuppose an effect on trade. This could be envisaged, purely theoretically, within the agricultural sector if the aid leads to exceedance of the EU’s "aggregated goal for aid", and the exemption conditions in Annex 2 to the Agreement on Agriculture are not satisfied. This is hardly likely to be relevant in practice.

It is thus not advisable – also for reasons of WTO law – to initiate state aid schemes before the procedure laid down in Article 93 of the EU Treaty has led to a final decision. This procedure must be assumed to clarify the relationship with WTO’s rules on subsidies.

5.3 The Danish Constitution, Section 73 on Right to Property, Expropriation

If legislation were introduced to reduce the use of pesticides, it would constitute intervention against farmers. It will therefore be assessed in the following (sections 6.1.6, 6.2.4 and, particularly, 6.7.3) whether such legislation might be at variance with section 73 of the Danish Constitution if it were implemented without compensation and whether, in such case, claims would be made for compensation directly on the basis of section 73 of the Constitution.⁷¹

For that reason, a general explanation will be needed of the content and scope of Article 73 of the Constitution.⁷²

5.3.1 Section 73 of the Danish Constitution – general

Section 73(1) of the Danish Constitution is worded as follows:

"The right of property shall be inviolable. No person shall be ordered to cede his property except where required by the public weal. It can be done only as provided by Statute and against full compensation."

It is difficult to determine the scope of Article 73 of the Danish Constitution. It is particularly difficult to draw a line between, on the one hand, intervention that is in the nature of "cession" within the meaning of the Constitution and therefore implies payment of compensation and, on the other hand, intervention that falls outside the cession concept and can therefore be carried out without compensation. As will be seen from the following, where the line is drawn depends on a complete assessment based on many criteria for which there is no simple formula.

The legislature has some latitude as to where the line between expropriative and non-expropriative intervention should be drawn, and case law is characterized by considerable reluctance to disregard the legislature’s judgment in that respect. In case there are only two examples of final judgments that have disregarded the legislature’s assessment of whether a legislative intervention was expropriative, cf. U 1971.299 H (the Icelandic Saga case) and U 1980.955 Ø (the Greendane case). The effect in both cases was that the courts meted out compensation directly on the basis of section 73(1) of the Constitution. Case practice shows that the courts do not reject the legislature’s assessment without a high degree of certainty that the legislature’s assessment is incorrect, cf. most particularly U 1921.644 H.

It must be added that in the Supreme Court’s judgment U 1997.157, compensation was awarded on the basis of section 73 of the Constitution for loss incurred due to rejection of an application for permission for continued production of mineral resources. The judgment had a special background in that Section 22(2) of the Danish Mineral Resources Act of 1997 stated that all old gravel-digging rights granted in pursuance of the 1972 Act were to lapse on 1 July 1988, but it was assumed in the legislative material that permission for continued production would normally be granted. It was also stated in the legislative material that the owner of a notified right could be entitled to compensation in accordance with section 73 of the Constitution if permission were not granted. Furthermore, the Court did not find it proved probable that the production of the mineral resources had contributed significantly to an ascertained pollution of the groundwater or that continued production would imply an obvious risk of pollution of the water supply.

Whether intervention is in the nature of expropriation and therefore, in pursuance of section 73(1) of the Constitution, entitles the party suffering the expropriation to full compensation depends primarily on two factors: firstly, the intervention must imply intervention in "property" and, secondly, the intervention must imply "cession".

5.3.2 Is there a case of intervention in "property"?

There is agreement, in theory and in practice, that the concept property must be understood broadly, so that not just the full, direct right to an object, but also limited, partial rights, such as right of use and easements, are included. The same applies to the right to claim and the right to trade. It does not matter whether the right is based on private or public law.

An owner’s actual or potential possibility of using his property for agricultural purposes is undoubtedly a right that is covered by the protection afforded in section 73 of the Danish Constitution.

5.3.3 Is there a case of "cession"?

The decision as to whether there is a case of cession depends on an overall assessment based on several different criteria. In recent theory and case law, interest has focused on four criteria:

The transference criterion: If the right that the owner loses is transferred to another legal person, the situation tends to be regarded as expropriation.

The cause criterion: If the reason for the intervention is that the property is dangerous or similar, the situation tends not to be regarded as expropriation. One can take as an example the slaughter of livestock that are suffering from an infectious disease or the demolition of a house that is in a tumbledown state and that is therefore a danger to the surroundings. Conversely, the cause criterion implies that if the intervention is in distinctly third-party and special interests, then this is an argument in itself that the situation is one of expropriation.

The intensity criterion: If an intervention is a slight intensity, it will not normally be regarded as expropriation. Conversely, if it is of considerable intensity, it tends to be regarded as expropriation.

The "general-specific" criterion: If an intervention has a general impact, it tends not to be regarded as expropriation, whereas it does tend to be regarded as expropriation if it has a specific impact. The legal formulation of an intervention cannot be critical in itself. A generally formulated intervention can in reality affect individuals in such a way that there are grounds for regarding the intervention as expropriative. Closely connected with the "general-specific" criterion is the view expressed by Bent Christensen that the courts will pay compensation "where one or some within the category of owners whose disposal over their property is restricted is/are hit atypically or unintentionally hard", cf. Bent Christensen: Dansk Miljøret (Danish Environment Law), vol. I (1978), p. 153. Persons that are hit atypically hard by a generally formulated legal instrument should thus be covered by the protection against expropriation, cf. also Peter Germer: Statsforfatningsret (Constitutional Law) II, 2 ed. (1995), p. 235, with reference to W.E. von Eyben: Miljøret (1980), p. 107.

It should be noted that none of the four criteria determines on its own that there is a case of expropriation. The question of whether an intervention is of an expropriative nature must be decided on the basis of a complete assessment of the circumstances of the intervention in question.

It must be stressed, however, that the last of the four criteria – "general-specific" is the criterion to which most importance has been attached in case law and legal theory.

5.3.4 A Supreme Court judgment (the Buffer Zone case)

The above considerations can to some extent be elucidated still further by judgment U 1998.1669 (the Buffer Zone case).

In 1992, a provision was inserted in section 69(1) of the Act on Watercourses prohibiting, in rural zones, cultivation in a 2-metre wide buffer zone along natural watercourses or watercourses that are highly targeted in the regional plan. Acting as the agents for two farmers, two agricultural organisations claimed that section 69(1) of the Act on Watercourses was an expropriative intervention that could only be done with full compensation. However, neither the High Court nor the Supreme Court found for the said organisations.

The High Court gave as its opinion:

"The judgment in this case must take into account the fact that some restriction of the right of disposal has existed for many years with respect to cultivation etc. by certain watercourses and lakes and that the general extension thereof that has now taken place with the adoption of Section 69 of the Act on Watercourses, and that affects all riparian owners, is of limited scope. Since, moreover, the intervention must be regarded as warranted on weighty social grounds, the court finds that the defendant’s plea that the provision has been inserted as an element of compensation-free regulation of the right of ownership should be upheld" (Translation)

The Supreme Court (the majority) gave as its opinion:

"The mere fact that that the provision in Section 69(1) of the Act on Watercourses concerning 2-m wide uncultivated protection borders undoubtedly implies intervention of such low intensity that it would not expropriative intervention, means that the appellants cannot be upheld in their claim as formulated.

We agree that the amendment of the Act on Watercourses is not expropriative intervention in relation to NN and NN, either, who, in this connection, both represent riparian interests. Importance has thereby been attached to the fact that the intervention must be regarded as well founded since cultivation of land close to watercourses – as also assumed in connection with the passing of the Act - implies a substantially increased risk of pollution of watercourses and consequently considerable treatment costs. Accordingly and for the reasons otherwise given by the High Course, we also vote to affirm the judgment." (Translation)

5.4 Act on Chemical Substances and Products

Act on Chemical Substances and Products (Consolidation Act No. 21 of 16 January 1996) regulates the sale and use of chemical substances and products for the purpose of preventing health hazards and environmental damage from those sources. The provisions of the Act thus cover all chemical substances and products, including pesticides (biocides and plant protection products). The Act contains the following rules:

The Act also includes an Annex 1, which is a list of the substances and products that are covered by Part 7 of the Act and an Annex 2, which is divided in two lists, list A and list B. List A is a list of active ingredients that must not be used in plant protection products or groups thereof in Denmark, and list B is a list of pesticides that must not be placed on the market or used in plant protection products or groups thereof in pursuance of international obligations or agreements.

Plant protection products differ from other chemical substances and products by being covered by an approval scheme, cf. Part 7 of the Act on Approval of Chemical Substances and Products for Specific Purposes. The rules given in Part 7 of the Act set out the requirements that manufacturers and importers of plant protection products must meet in order to achieve approval and the authorities’ right to regulate the import, sale and use of plant protection products. More detailed rules on the approval scheme, sale, storage, handling, disposal, etc. are given in Executive Order on Plant Protection Products (No. 241 of 27 April 1998 from the Ministry of Environment and Energy).

Besides the specific rules on the approval scheme for plant protection products given in Part 7 of the Act, plant protection products are covered by the rules in the other Parts of the Act with the exception of Part 3, which regulates the so-called notification scheme for new chemical substances. These are substances that are not covered by the rules on plant protection products.

The EU rules on the placing of plant protection products on the market, given in Directive 91/414/EEC, were implemented in Act on Chemical Substances and Products by Act No. 1067 of 23 December 1992, Act No. 1111 of 22 December 1993 and Executive Order No. 584 of 9 July 1993.

In relation to an assessment of the possibility of a total or partial phase-out of plant protection products in Danish agriculture, it may be useful to see whether the Act on Chemical Substances and Products contains rules that could be used with a view to that:

Section 35(1) has the following wording:

"Approval cannot be granted to substances or products which in connection with use or related handling and storage present, or on the basis of available investigations or experience are assumed to present particular hazards to health or damage to the environment, cf., however, subsection (3) below."

The provision was inserted in the Act in 1987 and specifies the cases in which a plant protection product must not be authorised. The purpose of the provision is to establish that if an active ingredient or the product in which it is used is inherently so harmful to health or the environment that it must be described as particularly hazardous/harmful, the product cannot be authorised even if the actual risk could be limited by laying down regulation and even if there are no alternative products for the same purpose. In practice, this means, for example, that if an active ingredient is found to be carcinogenic, authorisation cannot be granted for the plant protection product in question.

The words, "cf., however, subsection 3 below" were inserted in connection with the implementation of Directive 91/414/EEC in 1993.

Section 35(3) has the following wording:

"Plant protection products are, however, approved on the basis of principles set up by the Council of Ministers of the European Communities."

Section 35(1), cf. 35(3), is accordingly assumed to cover those cases in which a Member State cannot permit a plant protection product to be marketed because the product does not fulfil the substantive conditions in Article 4 of Directive 91/414/EEC. The words, "cf., however, subsection 3" are intended to indicate that Directive 91/414/EEC does not offer the possibility of refusing authorisation of a plant protection product simply on account of the inherent properties of the active ingredient or the product.

Article 4(3) of the directive thus states that the Member States shall ensure compliance with the material requirements by official or officially recognised tests and analyses carried out under agricultural, plant health and environmental conditions relevant to use of the plant protection product in question and representative of those prevailing where the product is intended to be used.

From this it follows that besides determining the inherent properties of the active ingredient and the product, an assessment shall be made of the actual risk with the intended "normal" use of the product in question, taking account of whether the harmful effects can be avoided by means of protection measures. If it is found that the harmful effects cannot be minimised by use of, for example, a breathing mask or other protection measures, the plant protection product cannot be authorised.

Act 35(1) thus does not imply regulation beyond the regulation in pursuance of Directive 91/414/EEC of the right to refuse authorisation for the placing of plant protection products on the market.

Section 35(2) is worded as follows:

"Approval cannot be granted to a specific substance or product if substances, products or methods exist in the same field of application which present, or on the basis of available investigations or experience are assumed to present, significantly less hazards to health or damage to the environment, cf., however, subsection (3) below."

This provision gives the right to perform a so-called alternative assessment in connection with the assessment of a plant protection product. If it is found that there is a significantly less hazardous or environmentally harmful alternative for the same use, authorisation can be refused with reference to that – even in cases where the product under assessment is not covered by the conditions given in Section 35(1), but could be authorised.

The words "cf., however, subsection (3) below" are intended to indicate in the case of plant protection products, the possibility of refusing authorisation by reference to an alternative assessment no longer exists after the implementation of Directive 91/414/EEC, which does not contain a corresponding provision. However, Directive 91/414/EEC does contain rules on integrated prevention and control, cf. sections 5.1.5, 6.9 and 7.1.4.

Section 35(2) of the Act thus does not imply regulation beyond the regulation in pursuance of Directive 91/414 of the right to refuse authorisation of the placing of plant protection products on the market.

Section 35 c is worded as follows:

"Pesticides containing the active substances listed in Annex 2, list A or B to this Act, shall not be sold or used in Denmark."

Section 35 d is worded as follows:

"The Minister for Environment and Energy can enter other active substances on Annex 2 to the Act,

1) when products containing the substance are considered unacceptable to health and the environment, cf. section 35(1), or
2) in accordance with international agreements or obligations.
(2) The Minister can remove active substances from Annex 2 to the Act,
1) in accordance with international agreements or obligations, or
2) when new information changing the assessment in accordance with subsection (1), point 1, of substances entered on list A is available."

The provisions refer to the prohibition lists in Annex 2 to the Act. List 1 comprises active ingredients that must not be used in plant protection products or groups thereof in Denmark, while list B comprises active ingredients that must not be placed on the market or used in plant protection products or groups thereof in pursuance of an international obligation or agreement. The active ingredients currently included in list B are prohibited in the EU in pursuance of Directive 79/117/EEC with later amendments. Concerning this directive, see also section 5.1.8.

The condition for inclusion of an active ingredient in list A is that products containing the substances are judged to be unacceptable for health or environmental reasons in pursuance of section 35(1), which, as mentioned above, is assumed to cover those cases in which a plant protection product does not fulfil the conditions for authorisation, cf. Article 4 of Directive 91/414.

The provision in section 35 d(2), No. 1) takes account of the situation in which an active ingredient that is included in Annex 2 is authorised in the EU for inclusion in Annex 1 (the Positive List) to Directive 91/414.

Section 38(4) is worded as follows:

"The Minister for Environment and Energy may issue a temporary ban on import, sale and use of plant protection products already approved in an EC Member State, the active substance of which is included in the EC List, cf. section 35a(1). Such temporary ban can only be issued if there is reason to believe that human or animal health or the environment is at risk."

This provision expresses Danish implementation of the safety clause in Article 11 of Directive 91/414 and can be applied to plant protection products for which mutual recognition has been requested in accordance with Article 10 of the directive. The provision will thus first gain significance when the requirement concerning mutual recognition of other countries’ authorisations has entered into force. That will happen not later than one year after Directive 97/57/EC on Annex VI – the uniform principles – has been adopted, i.e. 22 September 1998, cf. Article 23(2) of Directive 91/414/EEC. Since, at the time of implementation of Directive 91/414/EEC in Danish law in 1992, it was uncertain when a directive on Annex VI – the uniform principles – would be adopted, the Minister was authorised to put Section 38(4) into effect. That has not yet happened.

Section 38 a reads as follows:

"To reduce the overall consumption of approvable substances and products the Minister for Environment and Energy can lay down rules restricting or prohibiting the use of such substances and products in specific areas of land."

The authorisation concerning spray-free buffer zones was inserted into the Act in 1987 and is not used. According to the motives, the intended areas of land are the so-called marginal areas, and with its present wording, the provision thus does not open the way for the introduction of rules on spray-free buffer zones on other types of areas.

5.4.1 Coformulants

Plant protection products contain a number of chemical coformulants, including carriers, solvents, surfactants, spreaders, adhesives, fillers and perfume. The coformulants comprise a very mixed bag of chemicals, some of which are more toxic than the product’s active ingredient itself. In addition, part of the quantity of coformulants is water.

In 1997, a start was made on phasing out the so-called oestrogen-like coformulants in plant protection products – the alkylphenols and alkylphenolethosylates, which have had hormone-like effects on mammals.

Coformulants are not notifiable under the rules of plant protection products in the Act on Chemical Substances and Products, but are only covered by the Act’s rules on (other) chemicals. This means that real analyses to determine possible effects of coformulants on health or the environment are not required. However, the exact composition of the individual plant protection products must be known, so that all the constituents can be identified. In addition, manufacturers can be required to supply so-called data sheets for the individual coformulants. The data sheets include brief information about the substances’ physical and chemical properties and toxicological properties, where these have been determined. The assessment of coformulants in a plant protection product includes any information from the Executive Order on Dangerous Substances, which prescribes how the substances’ properties are to be classified.

If a coformulant has serious effects on health or the environment, it can be recommended that the product in which the coformulant is used be entered in Annex 2, list A (the Prohibition List) in the Act on Chemical Substances and Products.

The Act on Chemicals’ rules and the practice described above for assessing coformulants in plant protection products are in accordance with the current rules in Directive 91/414/EEC with subsequent amendments.

According to the EU rules, the data to be provided by the applicant must include the applicant’s proposal for classification and labelling of the product. The rules also require additional information to be called for in the case of coformulants. The manufacturer is also required to state the content of coformulants and how they are to be identified and explain the function of the coformulants in the products.

Directive 97/57/EC on the uniform principles for assessment and authorisation of plant protection products states that, in connection with all assessment of the product’s properties, the product must be assessed on the basis of knowledge about the active ingredient and the product. Knowledge concerning the product can include knowledge concerning the properties of coformulants. Lastly, it is stated in the directive that any EU limit values for the content of the active ingredient and/or toxicologically relevant coformulants must be complied with.

According to Section 33(2) of the Act, the Minister of Environment and Energy may lay down rules to the effect that groups of chemical substances and products shall be treated in according with the same rules as plant protection products. The provision was inserted into the Act in connection with Denmark’s implementation of Directive 91/414/EEC – i.e. before data requirements concerning active ingredient and product were laid down in Annexes II and III of the directive. According to the explanatory notes to the bill that the substances in question could, for example, be coformulants etc. that are added to the plant protection product immediately before use – the so-called tank mixtures. The authorisation has not been used.

The sub-committee believes that, in accordance with Directive 91/414/EEC, it is possible, in the so-called transitional period, to lay down rules to the effect that coformulants shall be assessed on the basis of the same rules as plant protection products. The sub-committee has not carried out an assessment of whether it is possible to set such rules after the transitional period.

5.5 The precautionary principle

An important point of discussion in connection with the use of pesticides and regulation thereof is the precautionary principle.

The legal aspects of the precautionary principle are discussed below with the emphasis on the precautionary principle in EU law.

5.5.1 The Community’s environment policy

According to Article 130R, the object of the Community’s environment policy is to achieve a high level of protection, taking account of local differences within the Community’s territory when setting the level.

According to Article 130R, the principles to be applied in that connection include the precautionary principle, the prevention principle, the local principle and the polluter pays principles.

The polluter pays principle is an expression of placing of liability, so that it is the polluter who must pay the cost of a case of pollution. This principle can be seen as an approach to the individual citizen with the aim of encouraging environment-friendly behaviour through the threat of financial liability for pollution. However, the principle can hardly in itself form the basis for assigning liability, but must be implemented in legislation.

The other principles seem clearer simply by addressing legislators and making requirements concerning the mechanisms to be used in the legislation.

The prevention principle expresses a requirement that pollution be prevented rather than remedied, and the local principle, a requirement that the action mainly take place at the source of pollution with a view to reducing the risk of dispersal.

The Treaty text does not contain any real definition of the precautionary principle, and from the wording, the principle could be understood as a general principle for the approach to questions of environment law, in which the prevention principle and the local principle are seen more as concrete manifestations of the desire for caution.

Similarly, the prevention principle and the local principle were already inserted into the EU Treaty through The Single European Act in 1986, while the precautionary principle was first added by the Maastricht Treaty in 1992, at the same time as the legislative process in the environment field was changed from unanimity to qualified majority voting.

However, there are hardly grounds for regarding the precautionary principle only as a general concept. Instead, also within the framework of the EU Treaty, it must be given the content assigned to it in several international contexts, including the Rio Declaration from 1992.

5.5.2 Content of the precautionary principle

The main content of the precautionary principle can be construed as a weighing up of risks: who is to bear the drawback of the uncertainty that must exist scientifically concerning the pollutant effect of a specific type of behaviour?

The precautionary principle suggests that it is not the environment that must suffer from this drawback, but the businessman who wishes to adopt a form of behaviour about which there is scientific doubt.

The precautionary principle must thus be seen against the backdrop of a liberalistic conception of the legislative system, in which the individual’s freedom of action can only be restricted by legislation in those situations in which the legislator has reason to believe that the actions can harm other interests, including through pollution.

The precautionary principle allows the authorities to reduce the requirements concerning evidence of the polluting effect of the behaviour and to take behaviour-regulating action even if there is only a risk of pollution.

Since the principle has been established as a principle of Community law, the loyalty principle in Article 5 of the EU Treaty must mean that the principle not only provides authority for intervention at an early stage of a risk assessment, but also imply an obligation to take early action.

This obligation applies primarily to the Community legislators, but must also apply to national authorities when adopting legislation that can affect the realisation of Community goals, including the goal of ensuring sustainable development, as laid down in Article 2 of the EU Treaty.

5.5.3 Relationship with the rule of law

As a general phenomenon, increasing the rights of one party necessarily implies restricting the rights of other parties, except in the case of regulation of an area with inexhaustible resources.

The fact that the legislators’ right and obligation to take action against behaviour that involves a risk of pollution are expanded thus means that companies’ freedom of action is restricted. The fact that the action can be taken on the basis of unclarified evidence with respect to the risk of pollution means that the possibility of intervention can be perceived as a reduction of the rule of law for companies.

The perception of this issue as a problem of the rule of law presupposes that companies should basically have a legal right of freedom of action. Such a legal right is not directly fixed in Community law and is therefore hardly likely to be advanced as an argument against harmonised Community law adopted on the basis of the precautionary principle.

In relation to national, special rules outside the harmonised area or in extension of minimum harmonisation, on the other hand, Community law will in many instances imply a right to freedom of action.

This would, for example, be the case where national rules constitute an obstacle to the free movement of goods. On the basis of the Cassis de Dijon principle, such obstacles can only be accepted on grounds of the environment provided the fundamental principle of proportionality is respected.

Precisely because the principle of proportionality is a fundamental principle of EU law, the general, harmonised Community law must also be required to be in proportion to its purpose.

With that, the apparent difference in the assessment of harmonised Community law and national, special rules is erased, since there would in both cases be an obligation to assess whether invoking the precautionary principle fulfils the proportionality principle.

5.5.4 The proportionality principle

The fundamental content of the proportionality principle is that any regulation must serve a specific purpose, that the regulation must be necessary in order to achieve the purpose, that it must not go further than necessary to achieve the purpose and that, in relation to those subject to the law, it must be the least radical way of achieving the purpose.

This must imply that the proportionality principle forms the limit on discretion in the application of the precautionary principle. Although the precautionary principle relieves the legislator of the need to provide direct evidence of a risk of pollution, the principle must imply requirements concerning the degree of probability of the risk of pollution that must be established as a basis for intervention.

This weighing up is mostly clearly expressed in Article 100a(5) of the EU Treaty, as amended by the Amsterdam Treaty. The provision concerns the so-called environmental guarantee and regulates the Member States’ ability to introduce stricter national rules despite an implemented total harmonisation.

Unlike the situation in which existing rules are continued, which, according to Article 100a(4), can be freely done for environmental reasons, subsection 5 makes restrictive requirements concerning the introduction of new rules.

These rules must thus be based on an environmental problem that was unknown at the time of the Community harmonisation and that is specific to the Member State in question, and that, lastly is based on scientific evidence.

This requirement concerning scientific proof can be seen either as a departure from the precautionary principle that can be justified on the grounds that the adoption of the common harmonised rules should in itself be based on the precautionary principle or simply as a clarification of the limits imposed by the proportionality principle on application of the precautionary principle.

On the face of it, the provision seems to make most sense as an expression of the weighing up between the precautionary principle and the proportionality principle, such that it expresses the fact that the precautionary principle does not imply a free right of regulation but only allows a risk to be shifted in favour of the environment.

Although Article 100a(5) should thus not be seen as a real deviation from the precautionary principle, it must imply a limit on the extent to which the risk can be shifted.

5.5.5 Legislation on the basis of the precautionary principle

As mentioned, Article 130r of the EU Treaty mentions the precautionary principle together with the prevention principle. In many countries’ systems of justice, the two principles are also regarded as synonymous.

Irrespective of whether one chooses to regard the principles as separate, many initiatives can be construed as based on both caution and prevention.

That applies, for example, to such procedural rules as the EIA Directive and product rules such as the Directive on Plant Protection Products. Both are based on the principle that an assessment must be carried out before an action is initiated.

This can naturally be construed as a case of prevention since the prior assessment is intended to prevent the occurrence of subsequent pollution. However, it can also be construed as a reflection of caution, since clarification of the risk conditions is required before the behaviour is permitted.

In the EIA Directive, requirements are thus not made concerning the substantive risk of pollution that can be accepted but only concerning the procedure to be used in clarifying the risk.

Similarly, in Danish legislation, we see the precautionary principle implemented particularly as a requirement concerning the process that is intended to lead to possible intervention. It is thus stated in Section 3(2) of the Environmental Protection Act that account must be taken not only of the recognised effects of pollution on the environment but also of its probable effects. The precautionary principle in the Act on Chemical Substances and Products is discussed in section 5.5.8 below.

5.5.6 The precautionary principle’s legal consequences for companies

It will be seen that the precautionary principle contains mainly authority for – and a duty on – legislators to take account not only of recognised pollution risks but also of potential pollution risks when assessing intervention, although with respect for the proportionality principle’s requirement concerning the weighing up of risks.

The question is, whether the precautionary principle can also affect the individual company’s behaviour as a general principle of EU law with direct or indirect effect.

The wording of Article 130r of the EU Treaty does not provide grounds for regarding the principle as a rule that directly obliges the individual company to choose behaviour on a precautionary basis.

On the other hand, there could well be an indirect effect in the same way as the prohibition of trade-restricting measures by the Member States affect companies’ possibility of invoking intellectual property rights.

The ECJ’s interpretation is thus that if a company invokes intellectual property rights and this could lead to a division of the market, then it is a trade-restrictive phenomenon if the Member States’ legislation permits such invoking, and the Member States are therefore obliged to interpret their legislation in such a way that this is not possible.

It could thus be argued that if several lawful forms of behaviour are open to a company, the precautionary principle must imply that national liability rules concerning pollution are interpreted in such a way that, in the determination of liability, importance is attached to the fact that the company has not chosen the form of behaviour that best accords with the precautionary principle.

Similarly, it could be argued that in such a liability case there has to be an obligation to interpret national law of procedure and law of torts such that requirements concerning proof of causality between behaviour and pollution are relaxed on the basis of the precautionary principle.

5.5.7 Conclusion concerning the precautionary principle in EU law

It will be seen from the foregoing that the proportionality principle means that the legislator and the administrator must weigh up whether the scientific evidence for probability of causality is sufficient to warrant intervention based on the precautionary principle.

The situation thus corresponds to the other use of expert opinions in the administration, where the scientific expert does not have the right to make the administrative decision, but only to present the information that will be used in coming to the decision.

In many situations, respect for the scientific contribution will mean that the scope for the administrative decision is found to be very narrow.

The main feature of the precautionary principle is thus that the close relationship between the scientific evidence and the administration is here weakened, whereby the administrative scope is widened. This applies correspondingly to the national legislative process.

With respect to companies, a possible indirect effect of the precautionary principle, with shifting of the rules on liability and evidence in cases of pollution, will be that industry, too, will find it necessary to adapt to the precautionary principle.

The central message of the precautionary principle is precisely that what is required is not a close weighing-up of precisely recognised pollution risks in relation to production or social benefits, but a freer and more comprehensive assessment of the pollution risks that a specific form of behaviour could imply and of the reasonableness of society having to agree to bear these risks.

However, it should be noted that if this assessment is carried out in connection with the adoption of harmonised Community legislation, it will in practice be difficult for an individual Member State to invoke the precautionary principle as grounds for deviating from the harmonised rules. In this situation, reference must, rather, be made to exemption provisions in the harmonised rules or in the EU Treaties.

5.5.8 The precautionary principle in the Act on Chemical Substances and Products

The object clause in Section 1 of Act on Chemical Substances and Products reads as follows:

"1(1) The objective of this Act is to prevent hazards to health and damages to the environment in connection with manufacture, storage, use and disposal of chemical substances and products.

(2) In connection with the administration of the Act the possibilities of promoting cleaner technology and of limiting problems of waste disposal can be stressed."

Section 2(1) reads:

"1) The Act aims at ensuring that the necessary information is provided on chemical substances and products which are sold in Denmark, and that the sale and use of chemical substances and products which present, or on the basis of available investigations or experience are suspected to present, hazards to health or the environment can be regulated.

(2) The scope and nature of measures taken under this Act to prevent damages to the environment shall consider on the one hand the environmental damage which the substance or product may cause, and on the other hand the technical and economic consequences, including the costs, of such measures to the society in general and to the manufacturers, importers and users involved."

It will be seen that the precautionary principle is not directly mentioned in the Act. However, the thinking is reflected in the requirement that attention shall be paid in the administration of the Act to preventing health hazards and damage to the environment in all phases of the cycle through which chemical substances and products pass. It is thus stressed that the assessment of the possible health hazards and environmental damage shall be based on a holistic perspective and that the concept of harm to health and the environment must be seen in a broad framework. Furthermore, the sale and use of chemical substances and products can be regulated simply on grounds of a suspected harmful effect on health or the environment.

¹ See also section 6.2.1 below.   [Back]

² See also section 6.9 below on integrated control.   [Back]

³ A draft bill prohibiting the use of plant protection products in certain areas (including private gardens) has been notified to the Commission in pursuance of Directive 98/34/EC on information procedure. The Commission has given a detailed opinion from which it appears that such a ban will, in particular, be at variance with Articles 4 and 8 of Directive 91/414/EEC. The Commission takes the view that the directive, through Article 2, No. 1, covers every use, agricultural and non-agricultural, of the products in question. However, the Commission does not argue in detail for this view. As will be seen from section 6.7 below, the sub-committee is of the opinion that the directive does not regulate all cases of regulations concerning use.   [Back]

^4. In connection with the review of pesticides in accordance with Directive 91/414/EEC, limit values must be fixed concerning food products and feed used in Denmark. This linkage between the said directive and food products etc. appears from Article 4(1)f of the directive (91/414/EEC), in which reference is made to some of the aforementioned framework directives on limit values in food products.   [Back]

^5. The Council Decision on the EU’s entry into the WTO Agreement, with the principal agreements attached to it, including the SPS Agreement and the TBT Agreement, with the exception of GATT 1994, is to be found in the Official Journal of the European Communities 1994, L 336. GATT 1994 is to be found on the Internet (WWW.WTO.org with links) or in Edmond McGovern: International Trade Regulation, 1995.   [Back]

^6. Article 23 of DSU thus states: "When members seeks to rectify an infringement of obligations ... they shall use and observe the rules and procedures in this Understanding".   [Back]

^7. At the moment (2nd half of 1998) a so-called "review" of DSU is under way with a view to possible changes in the rules and procedures for settlement of disputes. The EU has taken a number of initiatives in this connection, which are reviewed within the framework of the 113-Committee.   [Back]

^8. These rounds have led to considerable liberalisation and consequent international specialisation, including reduction of the average tariff rates for industrial goods from more than 40% in 1947 to less than 5% today; Trebilcock and Howse; The Regulation of International Trade, 1995, p. 21.   [Back]

^9. Article III(2) concerns internal taxes and other charges of any kind.   [Back]

^10. Article III(4) concerns "all laws, regulations and requirements affecting internal sale, offering for sale, purchase, transportation, distribution or use".   [Back]

^11. This implies that if Denmark, for example, lays down rules on import of a given product from a third country that represent a tightening of the EU’s internal rules, then besides usually constituting a breach of the EU’s internal rules, this will also mean that Denmark forces the EU into a situation in which the EU breaches the principle of WTO law (same treatment of internal and imported goods). This is not without relevance, partly because WTO’s dispute settlement mechanism works faster than the EU’s internal treaty violation procedure in accordance with Article 169 of the EU Treaty.   [Back]

^12. Article XXI contains an exception concerning national security. The GATT also contains exceptions of an economic nature: Subsidies, Anti-dumping and sector protection. Special agreements were entered into on this during the Uruguay round.   [Back]

^13. See, for example, Report of Panel on Thailand - restrictions on importation of and internal taxes on cigarettes, BISD 37S/200 (1991), par. 77 ff., or Report of the Appelate Body in United States - standards for reformulated and conventional gasoline, DS/2. See also the TBT agreement, Article 2.2.-2.3.   [Back]

^14. The eighth whereas clause in the SPS Agreement’s preamble states that WTO’s members have desired with this Agreement: "to elaborate rules for the application of the provisions of the GATT 1994 which relate to the use of sanitary or phytosanitary measures, in particular the provisions of Article XX(b)".   [Back]

^15. A non-obligatory technical regulation laid down by a recognized organization.   [Back]

¹⁶ According to Annex A, No. 1, d), i.f. SPS measures comprise: "all relevant laws, decrees, regulations, requirements and procedures including inter alia end product criteria; processes and production methods; testing, inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labelling requirements directly related to food safety."   [Back]

¹⁷ "Contaminants" include pesticide and veterinary drug residues and foreign bodies, cf. note (1) to Annex A.   [Back]

^18. With the exception of subsidies, which are regulated separately in the Agreement on Subsidies and, in the case of agricultural products, in the Agreement on Agriculture, which concerns quantitative restrictions and subsidies.   [Back]

^19. Appellate Body - EC Measures Concerning Meat and Meat Products (Hormones) -report dated 16 January 1998, pr. 250.   [Back]

^20. The word "determines" does not appear in the Danish text in OJ 1994 L 336/41. The Danish translation is not authentic and is characterised by many such errors.   [Back]

^21. An appropriate level of sanitary and phytosanitary protection is defined in Annex A, 5, as: "The level of protection regarded as appropriate by the Member introducing a sanitary and phytosanitary measure to protect human, animal or plant life or health within its territory."   [Back]

^22. A note to Article 3(3) states: "With a view to the application of Article 3(3), scientific grounds exist when a Member State, having reviewed and evaluated the available scientific data in accordance with the relevant provisions in this Agreement, ascertains that the international standards, guidelines or recommendations in question are insufficient to achieve a suitable level of protection of human and plant health."TRANSLATED! ok   [Back]

^23. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 172.   [Back]

²⁴ Appellate Body - (Hormones) - report dated 16 January 1998, pr. 175.   [Back]

^25. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 177.   [Back]

^26. Risk assessment is defined in Annex A, point 4. This includes evaluating  the negative consequences for human or animal health that additives or pollutants, including pesticides, in food products, beverages or feedstuff could have.   [Back]

²⁷ The words "risk assessment techniques" do not appear in the Danish text. The Danish translation is not authentic and is characterised by many such errors.   [Back]

^28. Article 5(2) reads: "In the assessment of risks, Members shall take into account available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions; and quarantine or other treatment."   [Back]

^29. In Appellate Body - (Hormones) – report dated 16 January 1998, pr. 187, it is stated that Article 5(2) is not exhaustive and is not limited to conditions that can be analysed purely scientifically.   [Back]

^30. Article 5(3) reads: "In assessing the risk to animal or plant life or health and deter-mining the measure to be applied for achieving the appropriate level of sanitary or phytosanitary protection from such risk, Members shall take into account as relevant economic factors: the potential damage in terms of loss of production or sales in the event of the entry, establishment or spread of a pest or disease; the costs of control or eradication in the territory of the importing Member; and the relative cost-effectiveness of alternative approaches to limiting risks."   [Back]

^31. Report of Panel - EC Measures Concerning Meat and Meat Products (Hormones) -report dated 18 August 1998 (US) pr. 8.117, as affirmed by the Appellate Body, pr. 192.   [Back]

^32. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 193-194.   [Back]

^33. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 206.

^34. In the hormone case, ibid., there were no concrete risk assessments that proved a relationship between growth hormones given to animals in accordance with "good practice" and health risks. However, as mentioned, the Appellate Body expressed the view that it was not impermissible in the risk assessment to take account of the risk of "good practice" not being used. However, the EU has not presented any riskassessment that touched upon this question. The EU had therefore disregarded Article 5(1).   [Back]

^35. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 214.

^36. The first two requirements can be compared to ECJ’s analysis form in relation to Article 36 of the EU Treaty in, for example, the Reinheitgebot case (C-178/84), in which there was also a different level of protection in different (but comparable) situations, which led to arbitrary and unwarranted differences in the treatment of beer (where additives were not allowed) and other beverages (where additives were allowed). However, ECJ’s analysis form operates only with two factors: international standards and eating habits in the importing state. As will be seen, the SPS Agreement’s regulation of the risk analysis is more intensive but allows other factors than eating habits to be included.   [Back]

^37. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 218.   [Back]

³⁸ "Anti-microbial agents" or "compounds", which are mixed in the feed for piglets. Carbadox is presumably carcinogenic.   [Back]

^39. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 235.   [Back]

^40. Appellate Body - (Hormones) - report dated 16 January 1998, pr. 245 og 246.   [Back]

⁴¹ Lack of consistency does not in itself constitute a violation of Article 5(5). Violation can only be demonstrated when the lack of consistency results in discrimination or concealed restriction of international trade. It should be noted that WTO’s Member States are obliged to cooperate on the drawing-up of guidelines for the practical application of the Agreement’s provisions (Article 5(5)) on uniformity in the individual country’s choice of level of protection in different situations. The Member States have not yet been able to reach agreement on the guidelines.   [Back]

^42. A note to Article 5(6) states, in relation to this provision, that: "a measure restricts trade more than necessary if there is another measure that is relatively easy to implement, both technically and economically, and that results in an appropriate sanitary and phytosanitary protection level, while at the same time restricting trade considerably less." This proportionality principle seems less restrictive with respect to the Member States’ regulation than the general principle in Article 2(2) i.f. or the usual principle in GATT, Article XX, on "minimum derogation".   [Back]

⁴³ The authentic English version of Article 2(2) reads: "For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risk non-fulfilment would create."   [Back]

⁴⁴ This does not include duty and other charges that can be demanded within the agreed framework.   [Back]

^45. The EU’s ratification came with Council Decision of 22 December 1994 (94/800/EC). This Decision, together with the main results from the Uruguay round, are to be found in Official Journal of the European Communities 1994 L 336/l.   [Back]

^46. According to Article IX(1) of the WTO Agreement, the EU has a number of votes corresponding to the number of Member States. Whether the EU can exercise this right, in relation to the Member States, depends on the distribution of authority within the EU.   [Back]

^47. Reprinted in ECR 94, I-5267-5422.   [Back]

^48. This must be assumed to imply that the ECJ’s authority depends on a concrete evaluation of the distribution of authority between the EU and the Member States at the time the dispute arises. See Eeckhout, CML Rev, 1/97, p. 22 f.   [Back]

^49. Kupferberg, Case 104/81, ECR I-3541, pr. 11 ff.   [Back]

^50. The Commission versus Germany, C-41/94, ECR 1996, I-4006, pr. 16, with reference to Kupferberg, pr. 14.   [Back]

^51. Apart from a single regulation on wilful trademark counterfeiting of goods (Regulation 3842/86), the EU has not exercised its authority under Article 100 of the EU Treaty within the area "enforcement of intellectual property rights".   [Back]

^52. Regulation 40/94. In pursuance of Article 99 herein, the rights that follow from the EU trademark can be protected by deciding on "provisional and protective measures".   [Back]

^53. The ECJ’s authority is being extended as the EU adopts rules that are affected by WTO rules.   [Back]

^54. Kupferberg,Case 104/81, ECR 1982, I-3641, pr. 27.   [Back]

^55. C-277/94, Taflan-Met, ECR 1994, I-4085, pr. 24, with reference to Case 12/86, Demirel, ECR 1989, 3717, pr. 14.   [Back]

^56. This view comes from the International Fruit Company case, Case 9/73, ECR 1973 1135, pr. 27 ff., and since repeated in a large number of cases. See Eeckhout, CML Rev, 1/97, p. 26 with note 40.   [Back]

^57. On the increasingly relevant case where the Community has "implemented" a WTO obligation – and direct effect is therefore unnecessary, see, for example, Nakajima, C-69/ 89, ECR 1991, I-2069, and section 7.3.1 below.   [Back]

^58. The Commission versus Germany, C-61/94, ECR 1995, I-4007, together with Germany verses the Council, case C-280/93, ECR 1994, I-5042.   [Back]

^59. See, for example, the Werner case, C-70/94, ECR 1995, I-3189, pr. 23, and Lifer, C-83/ 94, ECR 1995, I-3231, pr. 24.    [Back]

^60. See Lee and Kennedy, The potential direct effect of GATT 1994 in European Community Law, JWT 96/1, p. 67 ff.    [Back]

^61. However, in the opinion of the ECJ, this is not decisive in the Kupferberg case, op cit., pr. 18 i.f.   [Back]

^62. Council Decision of 22 December 1994 (94/800/EC), OJ 1994 L 336/1.   [Back]

^63. This seems particularly relevant for certain rules within the GATT 1994, the SPS Agreement and TRIPs. GATS rules, on the other hand, can hardly have direct effect. See, in this connection, the EU's direct rejection of that in the introduction to its GATS "schedule of commitments", cf. Eeckhout, op.cit., p. 34 with note 65.   [Back]

^64. For a review of the arguments for and against direct effect, see Eeckhout, CML Rev., 1/97, pp. 24-40.   [Back]

^65. It can thus not be objected that a decision from DSB can be implemented through compensation since compensation is an alternative option and since WTO law does not thereby differ from other international agreements – on the contrary.   [Back]

^66. The judgment of WTO’s Appellate Body in the banana case thus seems, for example, able to lead to direct effect for the WTO rules interpreted therein.   [Back]

^67. See, for example, OJ 1994, L 349.   [Back]

^68. Case 253/83, Kupferberg, ECR 1979 p. 935.   [Back]

^69. Nakajima, C-69/89, ECR 1991, I-2069, pr. 31.   [Back]

^70. Case C-106/89, ECR 1990, p. I-4135.

⁷¹ See also the sub-committee's supplementary report: "Legal questions concerning total restructuring of Danish agriculture for organic production", March 1999, section 4.1.   [Back]

^72. The following is based on a report dated 7 September 1998 that Professor Jens Peter Christensen, LLD, prepared for the Sub-Committee on Legislation. A few additions and editorial changes have been made to the report.   [Back]

6. Assessment of regulatory instruments