C-34/62

Application for the annulment of Decision III/COM (62) 219 def. of the Commission of the European Economic Community of 30 July 1962, refusing to authorize the Federal Republic of Germany to suspend in part customs duties applicable to fresh sweet oranges, imported from third countries,

THE COURT

composed of: A. M. Donner (Rapporteur), President, L. Delvaux and R. Lecourt (Presidents of Chambers), Ch. L. Hammes, R. Rossi, A. Trabucchi and W. Strauß, Judges,

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

JUDGMENT OF 15. 7. 1963 — CASE 34/62

By a letter dated 24 February 1962 the The applicant puts forward three sub­

applicant, having stated its reasons for missions: infringement of an essential

objecting to the refusal of this request, procedural requirement, infringement of

again asked for: the Treaty and misuse of powers. — the partial suspension ot duties appli­

cable to oranges under tariff headings A Infringement an essential pro­ of —

ference is already adequate. repetition of the provisions of the

By letters of 5 and 10 May 1962, the Treaty, because otherwise judicial super­

Commission sent the applicant the ob­ vision of the legality of the measure to

servations of the French and Italian which it refers would be impossible. Governments. The applicant replied to — The defendant's argument that the Com­ these observations by a letter of 8 June statement of the reasons on which

1962. By Decision of 30 July 1962, munity decisions are based, in particu­

notified to the applicant by letter of 22 lar in the case of discretionary decisions, August 1962, the Commission refused can pass in silence over facts which are this new request. of common knowledge, and all the rele­

The defendant contends that the Court of investigating the situation and with­

out establishing the connection which should: should exist between its statement and — dismiss the application and order the the articles quoted. applicant to pay the costs. — The contested Decision does not state whether the proviso, to which the grant

III — Submissions and argu­ of a tariff quota under Article 25 (3) ments of the parties of the Treaty is subject, was found to

have been complied with in this case.

The submissions and arguments of the — The contested Decision confines itself

parties be summarized as fol­ to mentioning some of the objectives set may lows: out in Articles 29 and 39 of the Treaty

tural be 'jeopard­ the relevant findings of fact in the state­ policy which would ized'

by the grant of the tariff quota in ment of reasons becomes clear if one

dispute. In addition the statement of reads the provisions of the Treaty, in reasons discloses a certain number of particular Article 25 (3), from which the in­ Commission derives its inner contradictions and contains discretionary complete or incorrect assessments of the power, and Articles 29 and 39, which

matters of fact upon which the request have been quoted for the sole purpose

Ger­ Decis­ made by the Federal Republic of of showing beyond doubt that the many is based. ion was taken in conformity with the

The defendant replies to the applicant objectives which they lay down. And it with the following arguments: is with the object of not encumbering — In stating the reasons upon which the statement of reasons with unneces­

Moreover Member States are, in this supplied by the Commission do not

case, very familiar with the facts which indicate what it means by 'adjusted level' are the subject matter of the contested price and what rates and prices

Decision, so that many facts, of which are involved is not enough to show that

the administrations of these States are the statement of reasons is incomplete. aware, need not be mentioned. In In fact it is fairly clear, on the one

addition, from the legal point of view, hand, that this part of the statement of the statement of reasons must consist reasons refers to fruit prices and, on 'fruit' of an indication of the provisions upon the other hand, that the word

which it is based and it is not necessary is to be applied to all varieties of im­

sufficient for this purpose to see how With regard to the question what 'the few provisions of the Treaty are price level adjusted to the rates of the

quoted in the statement of reasons. Common Customs Tariff . . .' ought to — It should be noted that the contested be, it must first of all be emphasized

Decision does mention the facts upon that the adjustment towards the rates

JUDGMENT OF 15. 7. 1963 — CASE 34/62

of the Common Customs Tariff appli­ of the same Article. A careful study cable to fruit entails reductions as well should have led the Commission to find as increases of customs duties appli­ that the conditions laid down in Article cable in Member States. Secondly it is 25 (1) have in fact been fulfilled in this clear that this price level will be the case. There is all the more reason why one arrived at by supply and demand, the Commission should have granted

if the import prices are increased by this quota according to the provisions the amount of the customs duties of of Article 25 (3), particularly as no the Common Customs Tariff. There is danger of any serious disturbance of

objectives of the agricultural policy in of a tariff quota under Article 25 (3) the fruit sector, the implementation of would jeopardize the attainment of the

which could be frustrated by an excep­ objectives of the common agricultural

tion to the Common Customs Tariff policy, its argument is inconsistent with duties applicable to oranges. In fact it its previous decisions and fails to grasp

is explained in the preamble to the the relationship of this Article to

contested Decision that the uncertainty Articles 39 to 46 of the Treaty. think­ which such an exception would cause — T he Commission was wrong in

with regard to future conditions of com­ ing that the concept 'products con­

fore clearly visible from the contested duties. Decision that the objective in view is — In addition the Commission has mis­

that laid down by Article 39 (1) (a) of understood the extent of its discretion­

the Treaty. ary powers. Article 29 states the guide­

lines by which it should be influenced

B — Infringement the Treaty or in achieving the tasks laid down by of of law relating to its appli­ Article 25. The Commission must grant rules of the measures referred to in Article 25 cation (3) so far as these guidelines are not in 1. Mistakes of law conflict with them. Moreover the funda­ mental principle of interpretation that

The applicant puts forward the follow­ regard must always be had to the con­

Finally so tar as the objective in

misapplying Article 29 (d) by taking subparagraph is concerned, it must (e) into consideration only one of the factors not be forgotten that the increase in the laid down in this provision, namely the duty applicable, however small it may expansion of consumption within the be, nevertheless represents an additional Community, whereas it should have duty of roughly 10 million DM on a been guided equally by the need to supply of 580 000 metric tons.

avoid serious disturbances in the econ­ — The Commission wrongly relies on omies of Member States. In addition Article 8 of Regulation No 23. Article the Commission should have established 8 merely repeats Article 23 (3) which that the tariff quota applied for does does not limit the application of Articles not jeopardize the rational development 25 and 29. of production, within the Community, —

Finally it must be noted that the

of oranges and other varieties of fruit. defendant did not attach any importance — It the view is held that the Com­ to the fact that the applicant offered

had Articles Member States facili­ mission to take account of other comparable

rules laid down for the establishment of vene in internal decisions of these

the common market, including the pro­ States, which do not adversely affect

visions of Articles 25 (3) and 29, shall Community production. apply to agricultural products 'save as

otherwise provided in Articles 39 to 2. Mistakes of fact 46'. — In addition, so far as Article of With the aid of various statistics and Commis­ documents the Treaty is concerned, the the applicant argues that the

findings of fact in­ Decision has sion's were wholly contested no adequate

it therefore an in­ foundation in fact disputes the adequate and made and

national fruit crops. cision can only be disputed on the

— Imports of oranges, mandarins and ground of misuse of powers. If the

Clementines have not affected imports complaints mean that the Commission of other varieties of fruit. has wrongly exercised its powers, there — In spite of fluctuations of fruit crops is a misuse of powers. According to the imports of other varieties of fruit have defendant this is important, because the increased in the Federal Republic of case law of Member States shows that

Germany during the years under review misuse of powers only occurs' in a

much more than imports of oranges, limited number of cases.

mandarins and Clementines. The applicant replies that the scope of

way that a supply at low prices of one Member States, because in fact the 'Ermessensmissbrauch' of these varieties reduces the demand for concept of under

the others. German law goes further than 'detourne­ de French law, to pouvoir'

—

Oranges, like all citrus fruits, are ment under

primarily intended to satisfy certain the extent that it also includes the con­

specific needs, in particular in vitamins, cept that both a mistake of law and

adopted by certain States in this con­ products concerned can result from such nection proves the contrary. a suspension.

The applicant finally enters into a tech­ — The actions of the commission must

nical discussion with the defendant con­ be guided by the objectives stated in

cerning the evidential value of the Article 29 of the Treaty. These objec­

statistics and data submitted by both tives should be considered as a whole

parties in support of their arguments. but, if it is impossible to reconcile them, The defendant remarks first of all that it is for the Commission to make a

by which the Commission must be were so negligible that they were much

guided in the application of Article 25 to be preferred to the difficulties which

(3). would have been created by the grant

— The common customs Tariff plays applied for. an essential, indeed a unique, part in — In its Decision the Commission re­

the attainment of the objectives of the ferred to Article 8 (2) of Regulation common agricultural policy. The exer­ No 23 of the Council for the simple

cise discretionary power of the confer­ reason that this Article confirms the

in Article 25 (3) draws from them. With the help of a

refers to all products listed in Annex II number of documents and statistics the

to the Treaty. This interpretation is defendant submits a series of conclu­

indirectly by decisions may be sum­ confirmed of the sions the chief of which

Court on Article 65 of the ECSC marized as follows: Treaty. — A continuous increase in the con­

— The argument ot the applicant that sumption of oranges, mandarins and

the agricultural community is ensured clearly that the constant reduction in the by rationalization of production, the prices applicable to citrus fruit com­

Commission considered that it was ob­ pared with the prices of other fresh liged to pursue the objectives laid down fruit is one of the principal reasons for by Article 39 (1) (a) and (b) of the the growing volume of the consumption

Treaty by refusing the grant applied of citrusfruit. for. In this case the objectives laid — The interaction between the supply down in Article 39 (1) (d) and (e) were of apples and imports of citrus fruit is not in conflict with such a refusal. The quite sufficient to prove that these pro­

Commission on the other hand took ducts can be marketed at the same

the view that the increase in time. Moreover facili- consumer the new storage

JUDGMENT OF 15. 7. 1963 — CASE 34/62

cant's second request giving completely all the more so as the increase in duties provided for by this tariff is very modest new reasons. It is thus for the Court in this case. to consider whether the fact that the

Commission suddenly put forward new — Moreover an exception granted when ap­ reasons, with regard to which the the customs duties are first raised would plicant was moreover unable to define discourage Community growers in their Grow­ its position, does not constitute a mis­

efforts to rationalize production. use of powers. ers would, in fact, no longer obtain the based — The contested Decision is on necessary capital if the protection of

in be­ the finding, which is quite incorrect, that fruit-growing the Community oranges on the one hand, and apples, ex­ came uncertain as a result of such pears and peaches on the other hand, ceptions. interchangeable far as consumers'

are so — The tact that in the Federal Republic requirements are concerned. there has been a greater increase in the — The Commission contradicts itself volume of imports of other fresh fruit, in its Decision by stating, on the one compared with the pre-war period, than hand, that the tariff quota would in the volume of imports of oranges, 'jeopardize' ob­ the attainment of the mandarins and Clementines can be easily jectives of the common agricultural accounted for by the extremely low policy and by claiming, on the other level at which this development began. hand, that the increase in the duty On the other hand the amount of fresh to oranges does not hinder applicable fruit, other than citrus fruit, harvested trade with third countries. or imported, available in the Federal — The contested Decision restricts the

'other'

Community products. By its De­ Since in this case the suspension of the

cision the Commission has therefore customs duties in question would not

pursued an objective other than that in have affected the Community preference respect of which it has a discretionary applicable to oranges, the problem

power. which it raised had to be examined hav­ — T he commission exceeds the powers ing regard to the repercussions which

conferred on it by Article 25 (3) of the such a suspension would have had on

on oranges and the question was ways, or only to a small extent, in whether it was possible to authorize pro­ competition with other agricultural such a measure having regard to the ducts. need to protect the production of

oranges in the Community. On the other hand in its second request the appli­

cant had suggested that the customs IV — Procedure duties on oranges in the Federal Re­

public be reduced to the same extent The procedure followed the normal

with regard to other Member States. course.

Grounds of judgment

Com­ of the products concerned. This complaint is unfounded because the

mission does not have to mention expressly that in its opinion there is no

danger of serious disturbance.

In addition the applicant complains that the statement of reasons does not

specifically deal with all the criteria of Article 29 and all the objectives listed in Article 39. As the Commission does not have to take into account the

criteria and objectives not relevant to the case in point, it may be inferred from its silence that it considered that the criteria and objectives not mentioned in the statement of reasons were inapplicable. The omission of the said

It is clear from the statement of reasons that the price level concerned refers to fruit in general and in particular to apples, pears and peaches on the one

hand and oranges on the other hand. It is equally clear that the Commission

by using the words 'adjusted to the rates of the Common Customs Tariff intended to refer to the protective function of the external tariff as a means

ofguaranteeing the level of Community prices against the reduction which might result from the importation of competing products originating in third

countries at prices which are too low. It cannot therefore be said that the

statement of reasons is insufficiently clear.

the effect of the refusal on the prices and quantities of imported oranges will be minimal.

The alleged contradiction is one of appearance only. When the Commission took the view that the refusal of the requested exemption was unlikely to restrict imports of oranges and therefore affect the volume of this trade, it

GERMANY v COMMISSION

merely intended to record that the disadvantages resulting from the need to adjust the duties charged by the Federal Republic to the Common Customs

Tariff were not a determining factor. This view is not inconsistent with the Commission's finding that the reduction in the price of oranges by the applicant government is however capable of impeding the establishment of the price level

necessary for the implementation of the objectives of the agricultural policy for apples, pears and peaches.

provided by paragraphs (1) and (2), that does not imply that the Commission must grant every request which does not create the risk of serious disturbances. 'may' In fact the use of the word in Article 25 (3) shows clearly that the Com­

mission, in the exercise of the powers referred to above, has a wider discretion under this paragraph than under paragraphs (1) and (2). When considering whether a possible grant of tariff quotas is lawful and expedient it is necessary

to bear in mind that the measures authorized by Article 25 are in derogation of the Common Customs Tariff laid down by Articles 3 and 18 and of the provisions of Article 9. Therefore the Commission, guided by the criteria set

out in Article 29 of the Treaty, must have regard to the system and funda­ mental rules of the Common Market.

The applicant complains that the Commission took into consideration the

effect of a possible grant on the market for apples, pears and peaches, instead

the concept of serious disturbance. In considering whether an authorization is

appropriate, the Commission is legitimately entitled to take account of its effects not only on the market for the products mentioned in the request but also on the market for competing products. A restriction of the concept of a

market, which is the applicant's argument, would lead to an artificial separation of the markets for different products. Such a concept would not take account of the interdependence of the various markets and would disregard the facts of economic life.

The applicant complains that the Commission disregarded the criteria set out in Article 29 of the Treaty and by so doing infringed this provision.

These criteria relate to different objectives which may conflict with each other Com­ or not be applicable at time, so that the complaint that the the same

mission has not considered all of them is only valid if they were all relevant to

tion the objectives of the common agricultural policy as laid down in Article 39 of the Treaty.

Although it is true that the provisions laid down for establishing the Common Market are, in the absence of any provision to the contrary, applicable to agri­ cultural products and that Article 39 cannot be regarded as being in conflict with the normal application of Article 25 of the Treaty, it is equally true that, in exercising its power under paragraph (3) of this Article, which only relates to the products listed in Annex II, the Commission cannot ignore the effect of

its decisions on the common agricultural policy and may therefore legitimately

taking any decision which would interfere with this policy. When apply­ avoid

ing Article 25 (3), account must in the first instance be taken of Article 39, although it is not so important as Article 29, because the objectives which it

GERMANY v COMMISSION

cultural products the people would be assured better and less expensive

supplies if an agricultural policy having as one of its objectives the stabilization of the market could be abandoned etc.', the Commission has correctly stressed that the expression 'reasonable prices', has to be considered in the light of an agricultural policy as laid down by the Treaty and cannot be taken to mean the lowest possible prices.

The complaint that Article 39 has been infringed must therefore be dismissed.

According to the applicant the Commission has also infringed the Treaty by relying on Article 8 (2) of Regulation No 23 of the Council referring to the progressive establishment of a common organization of markets in the fruit and

vegetable sector.

The defendant has replied that it quoted this provision because it confirms the great importance of the part played by the Common Customs Tariff in the establishment of a common market in fruit and vegetables.

ization and stabilization of the markets for apples, pears and peaches.

The statement of reasons for the contested Decision is based on the asser­

tion that the said fruits can be sold on the market at the same time and can be

substituted for each other without difficulty. The Commission concludes from this that a reduction in the price of oranges might prevent the attainment of

certain objectives of the agricultural policy with regard to many varieties of

fruit and in particular frustrate the efforts which are being made to obtain a more uniform distribution throughout the year by means of a better system storage, such an improvement requiring substantial investment which pre­ of

varies according to the price level and the quantities available. In the circum­ stances it was open to the Commission to draw the conclusion that an increased

supply of apples out of season caused by better storage increases the con­

sumption of these fruits. It was equally open to the Commission to hold that the price level of oranges, a principal table fruit during the season, is a factor which can indirectly affect the success of a policy of storing apples. Therefore, however extravagant the statement may appear that the grant of the exemption applied for would necessarily frustrate the agricultural policy in the sector of

apples, pears and peaches, it does not appear to be entirely without foundation.

The questions of the extent of and reasons for the over-production of apples in the Community and of the likely trend of the consumption of apples in the Federal Republic have little relevance in this case, more especially since the

object of the contested Decision, as is clear from the statement of reasons, is not to reduce the supply of oranges on the German market, but to simply maintain it at a price level compatible with the Common Customs Tariff.

and already examined, the applicant has stated that the Commission, having by its Decision of 5 January 1962 refused the request for an exemption on the ground that the Community production of oranges must be protected, again

refused the same request, submitted in a form which took into account the interests of this production, for a completely new reason. From this the appli­

cant concludes that the Commission refused its application for reasons which were arbitrary and unconnected with the facts.

The Court, however, holds that the reasons for the Commission's Decision are valid and relevant. Although these reasons are entirely different from those for the earlier Decision, they do not raise the presumption that the Commission acted in an arbitrary way. As the statement of reasons may in fact be limited to the most important aspects of the case, the Commission is entided to base a decision identical with an earlier decision on fresh grounds if the reasons for the earlier decision are no longer valid in the case in point. Moreover, although

it may appear appropriate that governments which have applied for exemptions should be informed at the earliest opportunity of the likely objections, the Court cannot, by using the simple expedient of the concept of misuse of

powers, force the Commission to issue a prior notification of this kind which is not laid down in the relevant provisions.

JUDGMENT OP 15. 7. 1963 — CASE 34/62

Finally the Commission is blamed for being guided by the interests of German producers of apples, pears and peaches, which, as purely national interests, must, according to the applicant, be assessed by the Federal Government alone and cannot therefore be used to oppose a request for an exemption made by this government in the national interest.

Even if this allegation was correct, it would not in itself justify the complaint because the Commission is entitled to take into account the interests of

economic groups no matter to which Member State they belong.

The complaint of misuse of powers must therefore be dismissed.

Costs

Having regard to Articles 2, 3, 9, 18, 25, 29, 39, 173 and 190 of the Treaty establishing the European Economic Community; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community;

Having regard to the rules of procedure of the Court of Justice of the European Communities.

THE COURT

her by:

1. Dismisses the application;

2. Orders the applicant to pay the costs.