C-211/01

OPINION OF ADVOCATE GENERAL ALBER delivered on 13 March 2003 (1) Case C-211/01 Commission of the European Communities v Council of the European Union supported by 1. Federal Republic of Germany 2. Grand Duchy of Luxembourg ((Agreements between the European Community and Bulgaria and Hungary establishing certain conditions for the carriage of goods by road and the promotion of combined transport – Legal basis – Articles 71 EC and 93 EC)) I ─ Introduction 1. The present action relates to the choice of the legal basis for Council Decisions 2001/265 and 2001/266 concerning the conclusion of the Agreements between the European Community and Bulgaria and Hungary establishing certain conditions for the carriage of goods by road and the promotion of combined transport. (2) The Commission sees both agreements as instruments implementing common transport policy and had therefore proposed that they should be approved on the legal basis of Article 71 EC. The Council declined to accept that proposal. On account of the rules designated fiscal provisions contained in Article 8 of the Agreement, it additionally used Article 93 EC as legal basis for the adoption of the disputed decisions. II ─ Legal background 2. The two disputed decisions and the agreements appended thereto are broadly speaking identical. 3. In their first recital, the decisions state that the individual agreements provide an appropriate means for the further development of transport relations between the Contracting Parties. The second recital reads as follows: Conclusion of the Agreement contributes to the smooth functioning of the internal market because it will promote transit traffic through the Republic of Bulgaria [or Hungary] for internal transport between Greece and the other Member States and thus enable intra-Community trade to be conducted at the least possible cost to the public at large and to reduce to a minimum the administrative and technical obstacles which affect it. The third recital states that the individual agreements promote combined transport, with a view to protecting the environment. 4. The agreements bear the title Agreement ... establishing certain conditions for the carriage of goods by road and the promotion of combined transport. 5. The first recital of the agreements reads as follows: Considering that it is essential for the Community, in the context of the completion of the internal market and the implementation of the common transport policy, to ensure that Community goods in transit through Bulgaria [or Hungary], can flow as quickly and efficiently as possible without hindrance or discrimination. 6. Article 1 of the agreements defines the objective of the agreement as follows: ... to promote co-operation between the Contracting Parties on the transport of goods, and, in particular, transit traffic by road, and to ensure for this purpose that transport between and through the territories of the Contracting Parties is developed in a co-ordinated manner. 7. Article 2 lays down the scope of the agreement: (1) Co-operation shall cover transport of goods by road and combined transport.(2) In this connection, the scope of this Agreement shall cover in particular: ─ market access for transit traffic in the field of transport of goods by road; market access for transit traffic in the field of transport of goods by road; ─ legal and administrative supporting measures including commercial, taxation, social and technical measures; ─ co-operation in developing a transport system which meets, inter alia, environmental needs; ─ a regular exchange of information on the development of the transport policies of the Contracting Parties . 8. Article 3 contains definitions, which are of no further significance here. Articles 4 and 5 deal with combined transport. Article 6 contains general provisions relating to road transport. Article 7 lays down rules relating to access to the road transport market. 9. Article 8 is headed Fiscal Provisions and reads as follows: In the case of transport operations in accordance with this Agreement: 1. The Contracting Parties shall ensure that the principle of non-discrimination in terms of nationality or place of establishment is applied to road vehicle taxation, fiscal burdens, tolls and any other form of user charges made for the use of road transport infrastructure. 2. Road vehicles registered in one Contracting Party shall be exempted from all vehicle taxes and charges levied on the circulation or possession of vehicles as well as from all special taxes or charges levied on transport operations in the territory of the other Contracting Party. Road vehicles shall not be exempted from payment of taxes and charges on motor fuel, road tolls and user charges levied for the use of infrastructure. (3) 3. The Contracting Parties shall ensure that tolls and any other form of user charges may not be imposed at the same time for the use of a single road section. However, Contracting Parties may also impose tolls on networks where user charges are levied, for the use of bridges, tunnels and mountain passes. 4. The following items shall be exempt from customs duty and from all taxes and charges: (a) fuel contained in the tanks of road vehicles at the time of importation into the territory of the other Contracting Party, where the tanks are those designed by the manufacturer for the type of road vehicle in question; (b) fuel held in the tanks of trailers and semi-trailers used for the cooling systems of refrigerators; (4) (c) lubricants in quantities required for use during the journey; (d) spare parts and tools required for the repair of a vehicle which has broken down while performing an international road transport operation. The spare parts that are replaced should be re-exported or destroyed under the control of the competent customs authority of the other Contracting Party. 5. Without prejudice to the second subparagraph of paragraph 2, if the weights, dimensions or axle load of a vehicle exceed the maximum limits in force in the territory of Bulgaria while the vehicle conforms to the provisions as laid down in Directive 96/53/EC on weights and dimensions, the vehicle shall not be subjected to any special charges provided it keeps to the main transit routes concerned in Bulgaria as specified in Annex 5. (5) 10. Article 9 contains social provisions and Article 10 technical provisions. Article 11 provides for the simplification of formalities. The final provisions in Articles 12 to 19 deal with questions of widening the scope of the Agreement, the formation of a joint committee, the notification of infringements against the Agreement, the duration of the Agreement, its denunciation, the binding nature of the annexes, the equal authenticity of all the language versions and its entry into force. III ─ Facts 11. In December 1995, the Council granted the Commission authority to negotiate agreements on the carriage of goods by road, combined transport and motor vehicle transit. The Agreement with Bulgaria was signed in December 1998 and that with Hungary in April 1999. Negotiations with Romania were still in progress, at least at the time of the application initiating proceedings. 12. The Commission put forward proposals to the Council for decisions concerning the signature of the Agreement between the European Community and the Republics of Bulgaria (6) and Hungary, (7) which cited Article 71 and the first subparagraph of Article 300(3) EC as the legal basis. 13. The Council approved the signature of the agreements in a decision of 19 March 2001. The legal basis on which the approval relied is not evident from the press release of the Council Meeting. (8) In any event the Council added Article 93 EC as a further legal basis for the disputed decisions concerning the signature of the agreements, (9) and amended the provision concerning the referral to the Parliament in the second subparagraph of Article 300(3) EC. IV ─ Submissions of the parties 14. The Commission holds that the disputed decisions should have relied solely on Article 71 EC, the wording of which permits of a broad interpretation. The Community is authorised to produce a comprehensive policy in relation to transport and not simply to adopt individual measures. The fact that Article 71 EC clearly allows the adoption of any other appropriate provisions is, in the view of the Commission, a further argument in favour of a broad interpretation. (10) 15. The Commission supplemented this argument during the hearing by referring to Article 70 EC, according to which Member States pursue the objectives of this Treaty within the framework of a common transport policy. The Commission interprets this provision to mean that the other Treaty objectives are always of contingent relevance within the framework of the transport policy. 16. The Commission adduces Directives 94/58/EC, (11) 2000/59/EC, (12) and 92/14/EEC (13) as examples of measures under which the legislature has adopted rules in relation to vocational training, environmental protection and noise pollution in conjunction with the adoption of provisions implementing common transport policy. It points out that in all these instances the rules were based solely on the legal basis of Article 71 EC. 17. In the context of international agreements, the Commission cites the Agreement between the European Economic Community and the Republic of Slovenia in the field of transport, (14) which was signed on 5 April 1993, and the Agreement between the European Community and the former Yugoslav Republic of Macedonia in the field of transport, (15) which was signed on 29 April 1997. It points out that both agreements were based solely on the legal basis of Article 71 EC and contained a similarly worded Article 14, (16) (17) which is comparable to the Article 8 under examination in this case. 18. As regards Article 8 of the Agreement, the Commission takes the view that it contains only a few, if any, provisions of a fiscal nature. It maintains that the rules relating to customs duties and charges having equivalent effect (paragraph 4) are not in any event fiscal provisions, but rules of the Common Customs Tariff (Article 26 EC). The road use tolls must be viewed as consideration for the service of availability of the road infrastructure. As regards the rule relating to road use tolls, the Commission refers to the judgments in the cases of Commission v France and Commission v Spain, (18) according to which such tolls do not fall within the scope of Article 93 EC. At most the other user charges could be of a fiscal nature, since in their case there is no direct link between the amount owed and the service provided. Article 8(5) contains only the obligation not to levy any special charges on those vehicles which meet the requirements of Directive 96/53/EC. (19) The Commission believes the fiscal nature of these special charges to be highly questionable and considers them to be more in the nature of a fine for damage caused to the roads used. On the basis of this analysis, the Commission comes to the conclusion that Article 8 contains back-up measures, which served solely to achieve the primary objective, namely to simplify the carriage of goods by road and combined transport between Greece and the other Member States. 19. According to the Commission this argument is proven by the negotiation guidelines which the Council adopted on 11 December 1995, from which it is apparent that the Council was concerned with simplification of the carriage of goods to and from Greece through the conclusion of transit agreements with Bulgaria, Hungary and Romania. 20. The Commission holds that the rule in Article 8 serves firstly to avoid discrimination on the ground of nationality and double taxation. It does not contain any harmonisation measure. The subject-matters addressed are furthermore already harmonised at Community level by Directive 99/62/EC (20) concerning the taxation of heavy goods vehicles and Directives 92/12/EEC, (21) 92/81/EEC (22) and 92/82/EEC (23) concerning other charges. The result of the rule in Article 8 is simply that Member States must exempt carriers from non-member countries from certain taxes. 21. The Commission also refers to the case-law of the Court of Justice concerning the choice of legal basis in the context of the conclusion of international agreements, (24) and points out that the Court has always relied on the main emphasis of the agreement in question. 22. The Commission regards the legal bases of Articles 71 and 93 EC as mutually incompatible. It argues that a decision under Article 71 EC requires only qualified majority voting in the Council on conclusion of a co-decision procedure, whereas Article 93 EC requires unanimity in the Council and only consultation of the European Parliament. According to the Court's Titanium Dioxide (25) precedent, the two procedures are incompatible. This line of authority has subsequently been regularly confirmed by the Court. (26) The problem arises both during the co-decision procedure and during the cooperation procedure, to which the Titanium Dioxide judgment relates. The rule in Article 151 EC (Culture), which provides for a unanimous decision in the Council, is an exceptional provision and must as such be interpreted in a narrow sense. It cannot justify a shift in the institutional balance by adding a further legal basis that is incompatible with Article 71 EC. 23. The Commission is of the opinion that the incorrect reference to Article 93 EC has led to a radical change in the procedure, this being so despite the fact that the position of the Parliament has not been affected in this case, through the application of Article 300(3) EC. In fact only a qualified majority is normally required for the conclusion of an international agreement. 24. The Commission claims that the Court should: ─ annul Council Decisions 2001/265/EC and 2001/266/EC of 19 March 2001 concerning the conclusion of the agreement between the European Community and Bulgaria and Hungary on transport inasmuch as they are based on Article 93 EC whereas the necessary and sufficient legal basis is Article 71 EC; annul Council Decisions 2001/265/EC and 2001/266/EC of 19 March 2001 concerning the conclusion of the agreement between the European Community and Bulgaria and Hungary on transport inasmuch as they are based on Article 93 EC whereas the necessary and sufficient legal basis is Article 71 EC; ─ maintain the effects of those agreements until the Council adopts new measures; maintain the effects of those agreements until the Council adopts new measures; ─ order the Council to pay the costs. order the Council to pay the costs. 25. The Council claims that the Court should: ─ dismiss the action; dismiss the action; ─ order the Commission to pay the costs; order the Commission to pay the costs; ─ in the alternative, if the Court annuls the decisions, the Council also claims that the Court should maintain the effects of those agreements until the Council adopts new measures. in the alternative, if the Court annuls the decisions, the Council also claims that the Court should maintain the effects of those agreements until the Council adopts new measures. 26. In the view of the Council it was necessary, on account of the provision in Article 8 of both agreements, to base both decisions on the dual legal basis of Article 71 and Article 93 EC. It argues firstly that the consequence of Article 8 is the harmonisation of the fiscal provisions of Member States and secondly that the content of Article 8 is severable from the remaining provisions of the agreements and is independent, so that it requires a dual legal basis. 27. The Council holds that Article 8 leads to a harmonisation of the provisions of the Member States in the fields of road vehicle taxation and fiscal burdens (paragraph 1), vehicle taxes and charges levied on the circulation or possession of vehicles, special taxes or charges levied on transport operations, taxes and charges on motor fuel (paragraph 2), taxes on fuel contained in the tanks (paragraph 4(a) and paragraph 4(b)), taxes on lubricants (paragraph 4(c)) and taxes on spare parts (paragraph 4(d)). Article 2(2) of the disputed decisions clearly distinguishes this rule contained in the second indent from the rules on transport contained in the first, third and fourth indents. 28. In this context the Council cites a series of measures from the transport sector, in which it has relied for this reason in the past on the dual legal basis of Article 71 and Article 93 EC. (27) It further refers to the judgment in Parliament v Council, (28) in which the Court did not object to the choice of the dual legal basis. 29. In the opinion of the Council, the choice of the dual legal basis is also compatible with case-law concerning international agreements. In Portugal v Council, (29) the Court argued that individual provisions are unimportant for classification of an agreement, ... provided that those clauses do not impose such extensive obligations concerning the specific matters referred to that those obligations in fact constitute objectives distinct from those of development cooperation. (30) The rule in Article 8 of the Agreements with Bulgaria and Hungary however has precisely this effect. 30. The Council holds that the broad interpretation of Article 71 EC upheld by the Commission is incompatible with the concept of limited powers on which the Treaty is founded. It maintains that the right to adopt any other appropriate provisions does not justify overlooking special powers to act such as those of Article 93 EC, where transport policy pursues several objectives. 31. As to the procedural objection that Article 71 EC presupposes a qualified majority, whereas Article 93 EC requires unanimity, the Council contends that the EU Treaty had been amended several times since the Titanium Dioxide judgment. For example under the cultural policy provided for in Article 151 EC and under the research and technological development in Article 166 EC, the Treaty provides for unanimity in the Council even where a co-decision procedure is conducted. It also considers the Titanium Dioxide precedent to be outdated, since the cooperation procedure to which the Titanium Dioxide judgment referred has since been extensively replaced by the co-decision procedure. Indeed any incompatibility between the two procedures has been resolved by the fact that according to Article 300(3) EC the Parliament was in any event only required to be consulted. In this respect the Council accords the Commission's argument purely theoretical value. (31) 32. The Council is not convinced by the comparison with the agreements with Slovenia and the former Yugoslav Republic of Macedonia, put forward by the Commission. Unlike Article 8, Article 14 of those agreements contains no provisions which led to harmonisation of the provisions of Member States. What is more, Article 14 only provides guidelines, which were to be observed by the Contracting Parties in order to guarantee non-discriminatory treatment. Moreover those provisions refer to agreements to be negotiated in the future. 33. The German Government supports the Council's position. It endorses the latter's arguments with respect to the appraisal of the content of Article 8 of the agreements and holds that, in particular, the rules under paragraphs 1, 2 and 4 are of a fiscal nature. They made provision for a uniform reduction in the taxes referred to, with the result that the agreements led to a harmonisation of indirect taxes in Member States. In the opinion of the German Government, this justifies recourse to Article 93 EC as the legal basis. 34. Like the Council, the German Government also holds the rule in Article 8 to be independent and distinct from the remaining content of the agreements and holds that the dual legal basis is also necessary for that reason. 35. The German Government also points out the horizontal nature of fiscal policy and takes the view, unlike the Commission, that Article 93 therefore overrides the sector-based rule of Article 71 EC. It deduces this from a comparison with the relationship between Article 93 and Article 95 EC and generalises this result as meaning that it expresses a fundamental appraisal of the EC Treaty, according to which horizontal empowerment rules always take precedence over sector-based legal bases. 36. Like the Council, the German Government also refers to Article 151 EC and Article 166 EC as examples of bases for empowerment which combined the co-decision procedure with unanimity in the Council. It holds that, as a result, a combination of Article 71 and Article 93 EC as legal basis is not excluded on the basis of the Titanium Dioxide precedent. 37. The Luxembourg Government also supports the Council's reasoning as regards the fiscal content of Article 8 and the resulting need to found the decisions on the dual legal basis. It describes the rule in Article 8 as necessary for achieving the objective pursued by the agreements, of simplifying the carriage of goods by road between Greece and the other Member States. In support of this it refers to the second recital of the disputed decisions. 38. Like the Council and the German Government, it holds the Titanium Dioxide precedent to be outdated in the light of the rules in Article 151 and Article 166 EC. The concurrence of the co-decision procedure and the requirement for unanimity in the Council does not cause the dual legal basis to be unlawful. V ─ Analysis 39. The Court has consistently held that the choice of the legal basis of a legal act is to be founded on objective factors which are capable of review by the Court. These factors include in particular the objective and content of the act in question. If an act has several aims and if one of them can be identified as fundamental or predominant, whilst the others are of secondary importance, then the act is to be founded solely on that legal basis required by the fundamental or predominant aim. If it is established that the act simultaneously pursues a number of objectives, indissociably linked, without one being secondary and indirect in relation to the other, such an act may be founded on the various corresponding legal bases. (32) 40. All the parties submitting observations are in agreement on these principles. They all hold that the agreements serve to simplify the carriage of goods by road and combined transport between Greece and the other Member States. This transport policy aim is illustrated in particular by the aforementioned (33) second recital of the disputed Decisions 2001/265 and 2001/266. It is undisputed that the agreements have a transport policy objective and that they have a transport policy content. The extent to which Article 8 of the agreements have a fiscal content, which justifies the reference to Article 93 EC as a further legal basis for the disputed decisions, is however disputed. 41. I must therefore examine whether the objective and content of the disputed decisions pursue a fiscal policy aim in addition to a transport policy aim, and if one of the two may be identified as fundamental or predominant or whether they are indissociably linked, without one being subordinate to the other and being of an indirect nature. A ─ Do the disputed decisions pursue a fiscal aim? Do the disputed decisions pursue a fiscal aim? 42. According to the first recital of the disputed decisions, their objective is the further development of transport relations between the Contracting Parties. The second recital states that the agreements contribute to the smooth functioning of the internal market, because they seek to promote transit traffic through the Republic of Bulgaria and the Republic of Hungary for internal transport between Greece and the other Member States. The third recital finally draws attention to the promotion of combined transport, with a view to protecting the environment. 43. The disputed decisions, without their annexes, thus make no reference to a fiscal aim. They only speak of transport policy and environmental policy interests. 44. The first recital of the agreements draws attention to the essential nature of goods in transit through Bulgaria and Hungary for completion of the internal market and the implementation of the common transport policy. Both the second and third recitals are concerned with access to the transport market and transit and the further development of transport flow, but neither mention the harmonisation of taxes or charges as objectives of the agreements. 45. Article 1 of the agreements describes their objective as to promote cooperation between the Contracting Parties on the transport of goods, and, in particular, transit traffic by road, and to ensure for that purpose that transport between and through the territories of the Contracting Parties is developed in a coordinated manner. This provision also makes no reference to a fiscal policy aim of the agreements. 46. Following analysis of the objectives of the disputed decisions and of the agreements attached thereto, I find there to be no reference to a fiscal policy aim. This argues against reference to Article 93 EC as a legal basis for the disputed decisions. 47. The content of the disputed decisions is restricted to the expression of approval for the conclusion of the agreements and technical provisions. It provides no information on the question under examination. 48. It must now be examined whether it is possible to infer from the content of the agreements that the disputed opinions pursue a fiscal policy aim. Although the second indent of Article 2(2) of the agreements mentions the fiscal measures amongst the legal and administrative supporting measures, there is no further legislative content, so that this provision is incapable of justifying the reference to Article 93 EC as a legal basis. 49. Article 8 is entitled Fiscal provisions, which suggests a fiscal content. Paragraph 1 contains the principle of non-discrimination in terms of nationality or place of establishment in relation to road vehicle taxation, fiscal burdens, tolls and any other form of user charges. Although this rule relates to taxes, it is not capable of justifying the reference to Article 93 EC. The principle of non-discrimination is covered by Article 90 EC. 50. The first subparagraph of paragraph 2 provides for an exemption from vehicle taxes and charges levied on the circulation or possession of vehicles as well as from all special taxes or charges levied on transport operations in the territory of the other Contracting Party. Subparagraph 2 contains exceptions from this exemption for taxes and charges on motor fuel, road tolls and user charges. According to case-law, road tolls are not a tax, but a consideration for a service. (34) The same applies to other road user charges, on account of the direct link between the charge payable and the availability of the road infrastructure. The fiscal content of paragraph 2 is consequently restricted to the exemption from vehicle taxes and charges levied on the possession or circulation of vehicles, and from the taxes levied on transport operations and the non-exemption from taxes and charges on fuel. 51. Paragraph 3 again relates to road tolls and other user charges which, as determined in the previous paragraph, are not taxes for the purpose of Community law, to the effect that paragraph 3 has no fiscal content. 52. Paragraph 4 contains further exemptions from customs duty and taxes. Customs duties which may be payable on spare parts and tools (see (d)) are not taxes for the purpose of Article 90 to Article 93 EC, but fall within the scope of the rules relating to the Customs Union, Article 25 et seq. EC. The provision implies that the spare parts and tools in question are carried on board. It does not therefore concern their import and consequently does not cover a value added tax for these items. Paragraph 4(d) does not therefore justify the reference to Article 93 EC as a legal basis. The other exemptions under (a), (b) and (c) relate to the tax on the fuel held in the tanks and for cooling systems, and the tax for lubricants in quantities required for use during the journey. These provisions have a fiscal content, with the result that it may be appropriate to consider a reference to Article 93 EC here. 53. Paragraph 5 finally relates to an exemption from special charges for vehicles which exceed certain maximum limits in Bulgaria and Hungary. In this case there is a direct relationship between the charge payable without this rule and the availability of the road infrastructure. It pays for excessive use of the road infrastructure. These charges are therefore closely related to road tolls and other user charges and, like these, should not fall within the definition of tax. 54. Following examination of Article 8 it must be held that paragraphs 2 and 4 do have a certain fiscal content. They include tax exemptions. 55. In the light of these findings, the comparison with Article 14 of the agreements with Slovenia and Macedonia which is put forward by the Commission must be rejected. Although Article 14(1) does contain the principle of non-discrimination, which corresponds to Article 8(1) of the agreements being examined here, Article 14(2) to Article 14(4) of the agreements concluded respectively with Slovenia and Macedonia contain only an obligation to initiate contractual negotiations between the parties. Article 8(2) and Article 8(4) of the agreements concluded respectively with Bulgaria and Hungary on the other hand contain a specific fiscal content which goes beyond this. 56. An exemption from charges, as prescribed in Article 8(2) and Article 8(4), may take place in the form of the elimination of the various provisions of the Member States and consequently in the form of harmonisation (35) of the fiscal provisions of Member States in relation to indirect taxes, to the effect that the prerequisites for a reference to Article 93 EC may be held to be met. 57. It must however be noted that Article 93 EC is the legal basis only for harmonisation measures with respect to indirect taxes which are necessary for the creation and functioning of the internal market. That second condition does not appear to be satisfied in this case. 58. The harmonisation by Article 8(2) and Article 8(4), which may possibly be accepted, relates only to internal market nationals inasmuch as they are involved in the transport of goods. The rule benefits the nationals of both Contracting Parties (EU and Bulgaria or EU and Hungary) in the respective other Contracting Party. The market participants of the European internal market only benefit from this rule outside the European internal market. As a result the second prerequisite for a reference to Article 93 EC is lacking. The rule under Article 8(2) and Article 8(4) of the agreements is not necessary for the establishment and functioning of the internal market. 59. The Council and the governments supporting it hold that the rule does serve the internal market inasmuch as the transport of goods between Greece and the other Member States is promoted. I am in full agreement with their view. This is none the less an argument for reference to the legal basis for transport, Article 71 EC, since as indicated, one is dealing with the internal market for the transport of goods. The argument does not substantiate a reference to Article 93 EC as the legal basis. 60. These reflections on the choice of the applicable legal basis for the disputed decisions are confirmed by the arguments of the Commission in its proposals concerning the signature and conclusion of the agreements, wherein it is stated: The transport operations carried out in Eastern Europe, in general, have at times been subject to excessive, often discriminatory, fiscal and parafiscal charges. New charges or increases in charges have frequently been introduced at very short notice without sufficient information or warning for Community hauliers about the exact rules applying.In order to avoid these aforementioned difficulties, these agreements set out a number of specific provisions regarding the type of charges that can be levied on transport operations carried out under these agreements. These provisions contain both the relevant principles and rules of Community acquis. This entails in principle that only non-discriminatory infrastructure-use related user charges or tolls may be levied, but that transport operations as such may not be subject to special taxes or charges. (36) 61. It is firstly evident from these arguments that the rule in Article 8 of the agreements is designed to avoid discriminatory burdens for Community transport undertakings during transit between Bulgaria and Hungary. Secondly it may be deduced from these arguments that Article 8 of the agreements is not intended to create new Community acquis, but that these provisions contain both the relevant principles and rules of Community acquis. This assertion from the legislative texts consequently militates against a reference to Article 93 EC as the legal basis. 62. It must further be noted in addition to these arguments in the legislative texts that the fiscal criteria in question were already the subject of Community law harmonisation measures, as the Commission correctly states in its reply. Directive 1999/62 (37) harmonises the taxation of certain heavy goods vehicles. Directive 92/12 harmonises the taxation of mineral oil (38) and Directives 92/81 (39) and 92/82 (40) had already achieved a certain degree of harmonisation of the tax systems. Article 8(2) and Article 8(4) of the agreements do not alter these rules and also do not add any form of harmonisation. They solely guarantee non-discrimination of EC nationals vis-à-vis Bulgarian and Hungarian market participants in these countries during transit, and vice versa. This too argues against a reference to Article 93 EC as legal basis for the disputed decisions. 63. It must consequently be held as an interim outcome that the disputed decisions have no fiscal aim which corresponds to the prerequisites for a reference to Article 93 EC, so that this provision is not an appropriate legal basis for the adoption of the disputed decisions. B ─ Can one of the two objectives of the promotion of transport and of fiscal harmonisation be identified as predominant, or are both objectives indissociably linked, without one being secondary or indirect in relation to the other? Can one of the two objectives of the promotion of transport and of fiscal harmonisation be identified as predominant, or are both objectives indissociably linked, without one being secondary or indirect in relation to the other? 64. If one does not accept this interpretation of the disputed decisions and assumes that Article 8(2) and Article 8(4) of the agreements fall within the scope of Article 93 EC, then it must be examined whether the rules justify the reference to Article 93 EC as the legal basis. This presupposes that Article 8 has an independent legislative content, which is not merely secondary or indirect in relation to the transport policy aim. 65. The rule in Article 8(2) provides for exemption from all vehicle taxes and charges levied on the circulation or possession of vehicles as well as from all special taxes or charges levied on transport operations in the territory of the other Contracting Party. The exemption applies only to vehicles that are registered to one Contracting Party, to the effect that this constitutes a rule which is intended to avoid double taxation. As is evident from the exception provided for in the second subparagraph with respect to taxes and charges on motor fuel, road tolls and user charges levied for the use of infrastructure, the first subparagraph also relates to taxes and charges which could possibly fall due, even without this rule, on the occasion of transit through the Contracting States, to the effect that the rule is closely linked with the realisation of the transport policy aim of the agreements, namely simplifying transit through Bulgaria and Hungary. In that respect, Article 8(2) plays a subsidiary role. The rule only makes sense within this transport policy context. 66. The same applies to the criteria of (a), (b) and (c) of Article 8(4). Rules relating to the exemption from tax of the fuel held in the tanks and for cooling systems, and to lubricants in quantities required for use during the journey, are directly related to transit. Such provisions are required only because the agreements are intended to simplify transit. They too are therefore of supportive significance in relation to the primary transport policy aim of the agreements. 67. In the light of these arguments it must be held that it is also not relevant to apply Article 93 EC as legal basis in addition to Article 71 EC because the provisions of Article 8(2) and Article 8(4) of the agreements have no independent fiscal content which may be isolated from the primary objective of simplifying the carriage of goods between Greece and the other Member States through the promotion of transit traffic through Bulgaria or Hungary. The objective of harmonisation of taxes, in so far as one accepts that it is pursued, is merely subordinate to the primary objective of the promotion of the carriage of goods between Greece and the other Member States by simplifying transit traffic through Bulgaria and Hungary. 68. It is therefore no longer necessary to examine the Commission's arguments that Article 70 EC allows the transport policy aims, as a matter of principle, to predominate over the other Treaty aims, and that Article 71 EC has a broad scope, which is also expressed in particular in the rule under subparagraph (d) of paragraph 1, which authorises the Community to lay down any other appropriate provisions. The fiscal rules in Article 8(2) and Article 8(4) are of subordinate significance. 69. Nor is it necessary to examine the argument put forward by the German Government that Article 93 EC, as a horizontal basis of authority, fundamentally predominates over the sector-based basis of authority of Article 71 EC. 70. I therefore find as an intermediate outcome that Article 71 EC forms an adequate legal basis for the adoption of the disputed decisions. 71. Purely for the sake of completeness, I will finally examine the Commission's argument that reference to the dual legal bases of Article 71 and Article 93 EC is also precluded in the light of the incompatibility of the legislative procedures laid down by those two provisions. 72. I firstly find that the reference by the Council to its extensive practice of basing legal measures on the dual legal basis of Article 71 and Article 93 EC is incapable of supporting the legality of this action. It is settled case-law that what is merely Council practice cannot derogate from the rules laid down in the Treaty, and cannot therefore create a precedent binding on the Community institutions with respect to the correct legal basis. (41) 73. Furthermore, the reference to Article 166 EC put forward as a counter-argument by the Council and the governments supporting it, as evidence of the compatibility of the co-decision procedure prescribed in Article 71 EC with the requirement of unanimity in the Council prescribed in Article 93 EC, is not tenable. Since the Treaty of Amsterdam came into force, Article 166 EC requires only a qualified majority in the Council. 74. Besides, in addition to Article 151 EC, the Treaty also contains rules, in Article 18, Article 42 and Article 47 EC, which prescribe the application of a co-decision procedure but which at the same time require unanimity in the Council. The existence of these primary law provisions does not however rebut the Commission's procedural argument. In these provisions, the combination of the co-decision procedure with the requirement of unanimity in the Council arises out of a single provision. In contrast, the combination of the co-decision procedure with unanimity in the Council in the present case arises out of the combination of two different provisions, to the effect that the legal situation cited by the Council is not comparable with that in the present case. 75. Moreover the Titanium Dioxide precedent is not rendered obsolete by the Maastricht and Amsterdam Treaties, as the Council and the governments supporting it contend. The Court only recently confirmed this precedent. In its judgment in British American Tobacco, the Court found that incorrect reference to Article 133 did not affect the legality of the proceedings, since that provision, similarly to the applicable Article 95 EC, required a qualified majority in the Council. (42) The validity of the essential ruling of the Titanium Dioxide judgment, according to which provisions which prescribe the co-decision procedure and provisions which require a unilateral decision in the Council are incompatible, was consequently confirmed. 76. The introduction of the co-decision procedure by the Maastricht Treaty was intended to strengthen the democratic element of the legislation. This approach was strengthened further in the Treaty of Amsterdam, by deleting paragraph 6 of ex Article 189b of the EC Treaty, which permitted the Council to disregard the Parliament's vote. The Parliament has now become a partner of the Council on an entirely equal footing within the co-decision procedure. 77. The co-decision procedure obliges the Parliament and the Council to agree on a legislative text. In some cases this agreement can only be reached in the Conciliation Committee. The conduct of conciliation proceedings however makes little sense if the members delegated by the Council have no scope for negotiation, or in any event only very limited scope for negotiation, due to the requirement of unanimity in the Council. The specific aim of the conciliation is however to reconcile the positions of the European Parliament and the Council and to draw up a compromise, on which both parties within the Community legislature must subsequently agree. In order to avoid counteracting this aim of the co-decision procedure, a combination of the co-decision procedure with unanimity in the Council must as far as possible be avoided. Only this approach complies with the balance between the Community institutions which is established by the Treaty. 78. The individual provisions of the Treaty which have been cited, and which combine the co-decision procedure with unanimity in the Council, are therefore actually in conflict with the intention of the Treaty. As a result therefore, no general conclusions should be drawn from them. As the example of Article 166 EC demonstrates, these provisions are gradually being removed, as soon as it appears politically acceptable to do so. Where unanimity was prescribed in the Maastricht Treaty (formerly Article 130i of the EC Treaty), it was possible in the Treaty of Amsterdam to move to the form of qualified majority, which is more appropriate to the co-decision procedure (Article 166 EC). 79. The Council is of the opinion that application of the procedure laid down in Article 300(3) EC would in the present case lead to any procedural incompatibility between Article 71 and Article 93 EC being of purely theoretical significance. It refers to the judgment in Portugal v Council (43) in support of this argument. The Commission on the other hand takes the view that the requirement of unanimity in the Council leads to a radical change in the procedure, even if the position of the Parliament is not affected in the present case by the application of Article 300(3) EC. In fact normally only a qualified majority is necessary for the conclusion of an international treaty. 80. The present case is characterised by the fact that the combination of the two legal bases of Article 71 and Article 93 EC does not influence the position of the Parliament. The difference between the position of the Parliament firstly according to Article 71 EC (co-decision procedure) and secondly according to Article 93 EC (consultation procedure) is remedied in the present case by the obtaining of its assent in accordance with the second subparagraph of Article 300(3) EC. 81. In letters of 1 and 4 August 2000 the Council sought the assent of the Parliament in relation to the disputed decisions, on the basis of the second subparagraph of Article 300(3) EC, (44) and did not, as stated in its written pleadings, only consult it on the basis of subparagraph 1 of the same provision. On 25 October 2000 the Parliament gave its assent to the proposals on the legal basis of the second subparagraph of Article 300(3) EC. (45) 82. The procedure for adopting the two disputed decisions was however influenced by the reference to Article 93 EC, inasmuch as the Council was required to decide unanimously and not by a qualified majority, as would have sufficed in the case of a reference to Article 71 EC. 83. According to the case-law, it must be assumed in the event of such changes in relation to the majority necessary in the Council that the choice of legal basis could also affect the determination of the content of the contested act. (46) It must therefore be assumed on the basis of this precedent that the incorrect reference to Article 93 EC was able to affect the definition of the content of the disputed decisions, so that the choice of legal basis is not therefore purely of hypothetical significance, so that this objection of the Council must also be rejected. 84. It must therefore be held that the extent to which the decisions fall within the scope of Article 93 EC is highly questionable in the present case. Even if one were to concede the applicability of Article 93 EC, the fiscal rules in Article 8(2) and Article 8(4) must in any event be considered to be subordinate and secondary to the primary transport policy objective of the decisions. As a result Article 71 EC, in addition to the second subparagraph of Article 300(3) EC, must be considered as the sole legal basis of the decisions. The decisions must consequently be annulled in so far as they cite Article 93 EC as the legal basis. VI ─ Restriction of the effects of the judgment 85. Both parties have requested, in the event that the legal basis of Article 93 EC should be considered unsuitable for the disputed decisions, that the effects of the judgment should be restricted in such a way that the effects of the agreements should be retained until the adoption of corresponding new legal acts by the Council. 86. The incorrect reference to Article 93 EC as a second legal basis does not of necessity mean that the disputed decisions are invalid. An error in the legal basis relied on for a Community measure is essentially no more than a purely formal defect, unless it gave rise to irregularity in the procedure applicable to the adoption of that act. (47) 87. By reason of the above arguments, the incorrect reference to Article 93 EC may however have had an influence on the content of the disputed decisions, due to the unanimity in the Council that is required as a result. The procedure must therefore be regarded as illegal. 88. The parties do not however dispute that the substantive content of the disputed decisions should not be called into question by the present proceedings. It appears appropriate, moreover, in the interests of the protection of the legitimate expectations of the market participants in retaining the rule and for reasons of legal certainty in the foreign relations between the Community and Bulgaria and the Community and Hungary, to declare the content of the disputed decisions to be of continuing validity, by analogy with Article 231(2) EC, (48) until the relevant institutions have taken the measures arising from the judgment in this case. VII ─ Costs 89. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Council has been unsuccessful and the Commission has made an application for costs to be awarded against it, the Council must be ordered to bear the costs. 90. The intervening parties are Member States, which are required to bear their own costs in accordance with the first subparagraph of Article 69(4) of the Rules of Procedure. VIII ─ Conclusion 91. In the light of the foregoing I propose that the Court should rule as follows: (1) Council Decisions 2001/265/EC and 2001/266/EC of 19 March 2001 concerning the conclusion of the agreement between the European Community and Bulgaria and Hungary on transport are declared annulled to the extent that they are based on Article 93 EC; (2) The effects of the annulled decisions are upheld until the institutions have taken the necessary measures on the basis of this judgment; (3) The Council shall bear the costs of the proceedings. The Federal Republic of Germany and the Grand Duchy of Luxembourg shall bear their own costs. – Original language: German. – Council Decision 2001/265/EC of 19 March 2001 concerning the conclusion of the Agreement between the European Community and the Republic of Bulgaria establishing certain conditions for the carriage of goods by road and the promotion of combined transport, OJ 2001 L 108, p. 4. Council Decision 2001/266/EC of 19 March 2001 concerning the conclusion of the Agreement between the European Community and the Republic of Hungary establishing certain conditions for the carriage of goods by road and the promotion of combined transport, OJ 2001 L 108, p. 27. – The second subparagraph of the agreement with Hungary reads as follows: Road vehicles shall not be exempted from payment of taxes and charges on motor fuel, without prejudice to paragraph 4, and of road tolls and user charges levied for the use of infrastructure. (Emphasis added). – Paragraph 4(b) of the agreement with Hungary reads as follows: Fuel held in the tanks of trailers and semi-trailers used for the cooling systems of refrigerators, where the tanks are those designed by the manufacturer for the type of road vehicle in question. (Emphasis added). – Paragraph 5 in the agreement with Hungary reads as follows: Without prejudice to the second subparagraph of paragraph 2, if the weights, dimensions or axle load of a vehicle exceed the maximum limits in force in the territory of Hungary while the vehicle conforms to the provisions as laid down in Council Directive 96/53/EC on weights and dimensions, the vehicle shall not be subjected to any special charges provided it keeps to the main transit routes concerned in Hungary as specified in Annex 5. – Proposal for a Council Decision concerning the signature of the Agreement between the European Community and the Republic of Bulgaria establishing certain conditions for the carriage of goods by road and the promotion of Combined Transport and Proposal for a Council Decision concerning the conclusion of the Agreement between the European Community and the Republic of Bulgaria establishing certain conditions for the carriage of goods by road and the promotion of Combined Transport COM/99/0666 final of 10 December 1999. The proposal for a Decision concerning the signature of the Agreement is published in OJ 2000 C 89 E, p. 35. – Proposal for a Council Decision concerning the signature of the Agreement between the European Community and the Republic of Hungary establishing certain conditions for the carriage of goods by road and the promotion of Combined Transport and Proposal for a Council Decision concerning the conclusion of the Agreement between the European Community and the Republic of Hungary establishing certain conditions for the carriage of goods by road and the promotion of Combined Transport COM/99/0665 final of 10 December 1995. The proposal for a Decision concerning the signature of the Agreement is published in OJ 2000 C 89 E, p. 52. – PRES/00/87 of 17 April 2000 on the 2252nd Council meeting ─ Transport on 28 March 2000, which may be viewed at www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.get text=gt&doc=PRES/00/87/0/AGED&lg=EN. – Cited in footnote 2. – The Commission relies on the judgment in Case 22/70 Commission v Council, AETR [1971] ECR 263, in particular paragraphs 20 to 26, Opinion 1/76 of the Court of 26 April 1977 (Draft Agreement establishing a European laying-up fund for inland waterway vessels) [1977] ECR 741 and Opinion 1/94 of the Court of 15 November 1994 (Competence of the Community to conclude international agreements concerning services and the protection of intellectual property) [1994] ECR I-5267. – Council Directive 94/58/EC of 22 November 1994 on the minimum level of training of seafarers, OJ 1994 L 319, p. 28. – Directive 2000/59/EC of the European Parliament and of the Council of 27 November 2000 on port reception facilities for ship-generated waste and cargo residues, OJ 2000 L 332, p. 81. – Council Directive 92/14/EEC of 2 March 1992 on the limitation of the operation of aeroplanes covered by Part II, Chapter 2, Volume 1 of Annex 16 to the Convention on International Civil Aviation, second edition (1988), OJ 1992 L 76, p. 21. – OJ 1993 L 189, p. 161. – OJ 1997 L 348, p. 170. – Article 14 of the Agreement with Slovenia reads as follows: Taxation, tolls and other charges 1. The Contracting Parties accept that the taxation of road vehicles, tolls and other charges on either side must be non-discriminatory. 2. The Contracting Parties shall enter into negotiations with a view to reaching an agreement on road taxation as soon as rules on this matter have been adopted by the Community. The purpose of this agreement shall be, in particular, to ensure the free flow of trans-frontier traffic, to reduce differences between the road taxation systems applied by the two Contracting Parties and to eliminate distortions of competition arising from such differences. 3. Pending the conclusion of the negotiations mentioned in paragraph 2 and Article 13, Slovenia will negotiate bilateral agreements with individual Member States of the Community on a mutual exemption from taxes and charges levied on the circulation and/or possession of heavy goods vehicles as well as from all special taxes or charges levied on transport operations in the territory of the Contracting Parties on a reciprocal basis. This provision does not necessarily include taxes and similar charges on motor fuel, VAT on transport services and tolls or similar charges levied on the use of parts of the respective transport network. 4. Until the conclusion of the agreements mentioned in paragraph 2 and in Article 13, any change proposed after the entry into force of this Agreement to fiscal charges, tolls or other charges which may be applied to Community traffic in transit through Slovenia will be subject to a prior consultation procedure in the Joint Committee. – Article 14 of the Agreement with the former Yugoslav Republic of Macedonia reads as follows: Taxation, tolls and other charges 1. The Contracting Parties accept that the taxation of road vehicles, tolls and other charges on either side must be non-discriminatory. 2. The Contracting Parties shall enter into negotiations with a view to reaching an agreement on road taxation, as soon as possible, on the basis of the rules adopted by the Community on this matter. The purpose of this Agreement shall be, in particular, to ensure the free flow of trans-frontier traffic, to reduce differences between the road taxation systems applied by the Contracting Parties and to eliminate distortions of competition arising from such differences. 3. Pending the conclusion of the negotiations mentioned in paragraph 2, the Contracting Parties will eliminate discrimination between hauliers of the Community or the former Yugoslav Republic of Macedonia when levying taxes and charges on the circulation and/or possession of heavy goods vehicles as well as taxes or charges levied on transport operations in the territory of the Contracting Parties. 4. Until the conclusion of the agreements mentioned in paragraph 2 and in Article 13 any change proposed after the entry into force of this Agreement to fiscal charges, tolls or other charges which may be applied to Community traffic in transit through the former Yugoslav Republic of Macedonia will be subject to a prior consultation procedure in the Joint Committee. – See the judgments in Case C-429/97 Commission v France [2001] ECR I-637, paragraphs 32, 35 and 36 and Case C-83/99 Commission v Spain [2001] ECR I-445, paragraph 11. – Council Directive 96/53/EC of 25 July 1996 laying down for certain road vehicles circulating within the Community the maximum authorised dimensions in national and international traffic and the maximum authorised weights in international traffic, OJ 1996 L 235, p. 59. – Directive 1999/62/EC of the European Parliament and of the Council of 17 June 1999 on the charging of heavy goods vehicles for the use of certain infrastructures, OJ 1999 L 187, p. 42. – Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, OJ 1992 L 76, p. 1. – Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils, OJ 1992 L 316, p. 12. – Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils, OJ 1992 L 316, p. 19. – The Commission quotes Opinion 2/92 of the Court of 24 March 1995, Competence of the Community or one of its institutions to participate in the Third Revised Decision of the OECD on national treatment, [1995] ECR I-521, paragraph 27, Opinion 1/78 of the Court of 4 October 1979, International Agreement on Natural Rubber, [1979] ECR 2871, paragraph 56 and the judgment in Case C-268/94 Portugal v Council [1996] ECR I-6177, paragraph 39. – See the judgment in Case C-300/89 Commission v Council [1991] ECR I-2867, paragraphs 17 to 21. The Commission also refers to the judgment in Joined Cases C-164/97 and C-165/97 Parliament v Council [1999] ECR I-1139, paragraph 14. – The Commission cites the judgments in Case C-155/91 Commission v Council [1993] ECR I-939, paragraph 19, in Case C-209/97 Commission v Council [1999] ECR I-8087, paragraph 35, in Case C-36/98 Spain v Council [2001] ECR I-779, paragraph 59, in Case C-268/94 (cited in footnote 24), paragraph 39, in Joined Cases C-164/97 and C-165/97 (cited in footnote 25), paragraph 19 and in Case C-42/97 Parliament v Council [1999] ECR I-869, paragraph 31. – Cited in footnote 3 of the defence. – See the judgment in Case C-21/94 Parliament v Council [1995] ECR I-1827. – See the judgment in Case C-268/94 (cited in footnote 24). – Paragraph 39 of the judgment (cited in footnote 24). – The Council refers to the judgment in Case C-268/94 (cited in footnote 24), paragraph 79. – See the arguments in Opinion 2/00 of the Court of 6 December 2001 (Cartagena Protocol [2001] ECR I-9713, paragraph 23), the judgment in Case C-491/01 British American Tobacco [2002] ECR I-11453, paragraphs 93 to 94 and the judgment in Case C-281/01 Commission v Council [2002] ECR I-12049, paragraphs 33 to 35. – See point 3 of this Opinion. – See the judgment in Case C-276/97 Commission v France [2000] ECR I-6251, paragraph 36; see also my Opinion of 27 January 2000 on that case [2000] ECR I-6254, point 47. – Concerning the definition of harmonisation, see Voß in Grabitz/Hilf, DasRecht der Europäischen Union, volume I, 19th Supplement, February 2002, before Article 90, paragraph 41. – COM/99/0666 final of 10 December 1999 (cited in footnote 6), under B.2 Infrastructure charges, paragraphs 11 and 12. See also the arguments in the proposal in relation to the signature of the agreement with Hungary, COM/99/0665 final of 10 December 1999 (cited in footnote 7) under B.2 Infrastructure charges, paragraphs 11 and 12. – Cited in footnote 20. – Cited in footnote 21. – Cited in footnote 22. – Cited in footnote 23. – See the judgments in Case 131/86 United Kingdom v Council [1988] ECR 905, paragraph 29, Case 68/86 United Kingdom v Council [1988] ECR 855, paragraph 24, Case C-426/93 Germany v Council [1995] ECR I-3723, paragraph 21, Case C-271/94 Parliament v Council [1996] ECR I-1689, paragraph 34 and Case C-84/94 United Kingdom v Council [1996] ECR I-5755, paragraph 19. – See the judgment in Case C-491/01 (cited in footnote 32), paragraph 109. – See the judgment in Case C-268/94 (cited in footnote 24), paragraph 79. – See report A5-0278/2000 of the Committee on Regional Policy, Transport and Tourism of 11 October 2000 (rapporteur: Konstantinos Hatzidakis), p. 4. – OJ 2000 C 197, p. 171. – See the judgment in Case 45/86 Commission v Council [1987] ECR 1493, paragraph 12; judgment in Case 131/86 (cited in footnote 41), paragraph 11. – See the judgment in Case C-165/87 Commission v Council [1988] ECR 5545, paragraph 19; judgment in Case C-491/01 (cited in footnote 32), paragraph 98. – Concerning the analogous application of this provision to acts other than regulations, see for example the judgment in Case 92/78 Simmenthal v Commission [1979] ECR 777, paragraph 106 et seq. with respect to an individual decision, and the judgment in Case C-295/90 Parliament v Council [1992] ECR I-4193, paragraph 27, with respect to a directive.