Customs Regime between Germany and Austria, advisory opinion

FACTS: Germany and Austria had agreed, in virtue of a Protocol drawn up at Vienna on
March 19th, 1931, conclude a treaty with a view to assimilating the tariff and economic
policies of the two countries on the basis of and according to the principles laid down in the
said Protocol, with the result that a customs union régime would be established. This
Protocol was communicated, in particular, to the British, French and Italian Governments.
Doubts immediately arose as to whether the contemplated régime was compatible with
Article 88 of the Treaty of Peace of Saint-Germain and with Protocol No. 1, signed at Geneva
on October 4th, 1922; these instruments, though not absolutely prohibiting Austria from
alienating her independence or from taking any action likely to compromise it, obliged her,
in brief, to abstain from certain acts, or, in particular cases, to secure the assent of the
Council of the League of Nations. No provision for the obtaining of this assent had been
made in the Protocol of Vienna.
The British Government brought the matter before the Council. The latter, on May 19th,
1931, adopted a resolution requesting the Court, under Article 14 of the Covenant, to give
an advisory opinion upon the following question:
ISSUE: Whether or not a régime established between Germany and Austria on the basis
and within the limits of the principles laid down by the Protocol of March 19th, 1931, the
text of which is annexed to the present request, be compatible with Article 88 of the Treaty
of Saint-Germain and with Protocol No. 1, signed at Geneva on October 4th, 1922
RULING: The independence of Austria, according to Article 88 of the Treaty of Saint-
Germain, must be understood to mean the continued existence of Austria within her
present frontiers as a separate State, with sole right of decision in all matters economic,
political, financial or other; it follows that this independence is violated as soon as there is
any infringement of it, whether in the economic, political, or any other field—since these
different aspects of independence are in practice one and indivisible. By alienation must be
understood any voluntary act by the Austrian State which would cause it to lose its
independence, or would modify its independence, in the sense that its sovereign will would
be subordinated to the will of another Power.
Finally, the undertaking given by Austria to abstain from “any act which might directly or
indirectly by any means whatever compromise her independence” can only be interpreted
to refer to “any act calculated to endanger” that independence, in so far, of course, as can be
reasonably foreseen. In the Geneva Protocol, Austria undertook certain obligations in the
economic sphere. That these obligations fall within the scope of those undertaken by
Austria in Article 88 of the Treaty of Saint-Germain is apparent from the express or implied
reference made in the Protocol to the terms of that Article. Thus, the undertaking given by
Austria not to violate her economic independence by granting any State a special régime or
exclusive advantages calculated to threaten that independence is covered by the
undertaking already given by Austria in Article 88 to abstain from acts which might
compromise her independence.
But this in no way prevents these undertakings, which were assumed by Austria in a
special and distinct instrument, from possessing a value of their own, and on that account a
binding force, complete in itself, and capable of independent application.
The Court next proceeds to analyse the Protocol of Vienna, and observes that the régime it
provides for fulfils the conditions of a Customs Union. In the Court’s view, what has to be
considered is not any particular clause of the Protocol, but the régime, as a whole, which is
to be established in pursuance of the Protocol. The establishment of this régime does not in
itself constitute an act alienating Austria’s independence, and it may be said that, legally,
Austria retains the possibility of exercising her independence. Austria’s independence is
not, strictly speaking, endangered within the meaning of Article 88 of the Treaty of Saint-
Germain, and there is not therefore, from the point of view of law, any inconsistency with
that Article.
On the other hand, the projected system constitutes a special régime, and it affords
Germany, in relation to Austria, “advantages” which are withheld from third Powers.
Finally, it is difficult, in the view of the Court, to maintain that this régime is not calculated
to threaten the economic independence of Austria, and that it is, consequently, compatible
with the undertakings specifically given by Austria in the Protocol of Geneva with regard to
her economic independence.