C-16/65

THE COURT

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

Advocate-Gneral: J. Gand Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of f­act and of law

Republic basis Com­ Federal of Germany which criteria on 'the of which the

grants applications for import licences mission fixes the free-at-frontier price

and then fixes the rate of levy under for each individual Member State. Article 2 of Regulation No 19 of the In this case the Commission issued a

Council on the progressive establish­ decision on 24 January 1964 fixing the ment of a common organization of the free-at-frontier price for the import of

market in cereals (Official Journal, 1962, barley from the Netherlands to the

p. 933). Federal Republic of Germany at a rate

of levy should be reduced by about DM in cereals of 4 April 1962 (Official 15 per 1 000 kg. It submitted that the Journal, German edition, 1962, p.

Commission's decision fixing the free-at- 933)? frontier illegal owing de­ 3. If price was to it is correct that the Commission, fects of both form and substance and in fixing the prices referred to in could not therefore be applied. Question 1, relied on the market

The EVSt dismissed the appeal in a quotations for barley harvested out­

decision of 2 June 1964. The applicant side the Member States of the Euro­ brought an action before the Finanzger­ pean Economic Community, in par­

icht. Both the plaintiff in the main act­ ticular outside the Netherlands:

ion and the EVSt agreed that the ques­ should Articles 2 and 3 of Regula­

'coming ('en provenance de') Economic Community of 24 January in Articles 2 and 3 Regula­ used of 1964 (Official Journal, German tion No 19 mean that the fixing of edition, 1964, p. 69) fixing the free- to state the the free-at-frontier may also be price at-frontier price reasons based on the quotations for cereals upon which it was based under from third countries negotiated in Article 190 of the Treaty establish­

the exporting Member State? European Economic Com­ ing the free-at- 4. If the decision fixing the munity of 25 March 1957? frontier price mentioned in Question 2. If so, is it sufficient for the pur­ 1 does not give an adequate state­

poses of Article 190 of the Treaty ment of the reasons on which it is

establishing the European Economic based, or if it is incorrectly based Community if a decision fixing the on prices for cereals harvested in a

free-at-frontier price, preceding the third country, and if none the less decision referred to in Question 1, the Federal Republic of Germany has gives a general statement of the allowed the time-limit fixed by considerations which influenced the Article 173 of the EEC Treaty for Commission Econ­ of the European contesting this decision to expire, is omic Community when it fixes the this decision void, voidable or bind­ de­ ing German importers? prices; alternatively, must every on

cision fixing a free-at-frontier price 5. If the answer to Question 4 is that

pean Economic Community on the The observations submitted under the

ground that the amount of the levy second paragraph of Article 20 of the

is based on prices which have been Statute of the Court may be summar­

incorrectly fixed? ized as follows: 6. If the answer to Quesuon 5 is in The plaintiff in the main action alleges the affirmative: thatthe decision of 24 January 1964 does an action such as that men­ fixing the free-at-frontier price is void

tioned in Question 5 comply with the and of no effect. In support of this

time-limits imposed by the second allegation it argues as folows:

of reasons. —

by the plaintiff in the main action In addition, even were the decision sup­ on 5 May 1965; plied with a statement of the reasons —

by the French Republic on 29 June on which it was based, notification of

1965; them exclusively to. Member States —

by the EEC Commission on 30 June would not have satisfied the require­

1965; ments of a State governed by the rule of law ('Rechtstaat') since the importers, —

and the Government of the Federal Re­ sure that Member States and nationals

public of Germany were heard in open of the latter affected by the decision court on 5 October 1965. The Advocate- may know how the Commission has General delivered his opinion at the applied the Treaty. hearing on 28 October 1965. The claim made by the EVSt to the

SCHWARZE v EINFUHR- UND VORRATSSTELLE GETREIDE

effect that Regulation No 89 sets out the quotations for the price of barley reasons on which all the free-at-frontier harvested in the Netherlands but prices fixed under it are to he based is on those for barley imported into wholly without foundation. AM the Regu­ the Netherlands from third coun­

lation contains is the criteria accord­ tries

ing to which the Commission has to

Journal, 1963, p. 121 et seq., contains of importations into the Federal Repub­ 'in advance'

the reasons on which later lic of Germany (see Article 2 of Regula­ decisions fixing free-at-frontier prices tion No 19) did not, therefore, corres­

were based is misconceived. pond to the price for which a German equally Article 190 of the Treaty does not importer in the Netherlands could buy recognize 'statements of reasons given barley of Netherlands origin. in advance'. In fact there is nothing in In giving the reasons tor its decision, the decision of 21 December 1962 to the Commission claimed that it had had show what were the quotations on the to take into account also the price quo­

basis of which the Commission fixed its tations for cereals not harvested in the

prices, and why it decided on the prices exporting Member State. According to

it did. Basically, the statement of reas­ Article 3 of Regulation No 19 and

(d) the sources ot information, 30 June 1962 (Official Journal 1962, p. on the basis or which the Commission 1583); this, too, makes it clear, says the fixed its free-at-frontier prices. Government, that in fixing the levy for products processed from cereals there B — Infringement of Articles 2 and 3 is no need to know whether the basic of Regulation No 19, Article 1 of product was produced in the importing Regulation No 86 and Articles 1 Member State or not.

and 2 of Regulation No 89, in This argument, says the plaintiff in the

that the decision was based not on main action, is misconceived.

JUDGMENT OF 1. 12. 1965 — CASE 16/65

Neither Article 3 of Regulation No 19, validity of the decision. It explains that

nor Article 2 of Regulation No 89 states the grounds on which Schwarze and the what must be the place of origin of the Finanzgericht believe the decision of

According to Article 1 (1) of Regula­ ation of a reference for a preliminary tion No 86, the rates of levy for intra- ruling as to validity, prompted, during Community trade to cereals proceedings in a national by a court, apply only harvested in the exporting Member person not capable of instituting pro­

State. Consequently the free-at-frontier ceedings under the second paragraph of

prices areonly calculated and fixed for Article 173 of the Treaty (and after the cereals harvested in the exporting Mem­ time-limit prescribed by the third para­

ber States. It follows from this that by graph of that Article has elapsed), shows virtue of Articles 1 and 2 of Regula­ it to be illegal. The Commission does tion No 89 the Commission should have not contest this view.

regard solely to quotations for cereals

of the latter kind. 1. Statement of reasons In the last part of its submissions the Significance of the Commission's plaintiff in the main action states that

Regula­ questions asked by the Finanzgericht in sentative markets (Article 3 of

the guise of request for an interpre­ tion No 89), for exports to that State, a

tation of the Treaty are in faot intended plus freight charges (Article 5 of Regu­ to make the Court pronounce on the lation No 89). validity of the decision of 24 January In practice the prices are fixed in me

1964. The Commission proposes to ex­ following man er: Member States trans­ amine the questions in the light of this mit their estimates by telex, based on

its the facts Com- view and give opinion as to the available to them, to the

SCHWARZE v EINFUHR- UND VORRATSSTELLE GETREIDE

is notified The decision proper consists of a pre­ price to the permanent repre­

the Member States in ac­ amble and three Articles. It refers to the sentatives of Commission's decis­ cordance with the second paragraph of Treaty and to the

Article 191 ion of 21 December 1962 fixing the of the Treaty; at the same

time the abovementioned authorities cif prices for cereals, flour, groats and of

Member States meal. This latter decision mentions all the are advised by telex the provisions from which the Commis­ of the proposal.

The free-at-frontier for sion derives its power to fix free-at-fron­ prices cereals tier prices, enumerates the criteria to are fixed at least once a week; approxi­

mission is obliged to observe, because decisions should fix: the task is entrusted to a highly special­ — as quickly as possible, ized group of officials who work in — after calculations which are some­

special­ times complex. close collaboration with equally extremely

ized officials in the various Member — a large number of prices.

States. But such dispatch would be im­ the conditions In these circumstances

possible if they had to devote their at­ to be satisfied in stating the reasons for tention to drawing up for every price- price-fixing decisions should be kept to

fixing decision a statement of reasons the strict minimum required by the

appropriate authorities in the Member under the common transport policy.

States which supply the Commission Furthermore, revealing the facts might

with the necessary proposals. In addi­ help some importers or exporters to

tion the detailed information on the gain a dominant position in the mar­

basis of which prices are fixed is avail­ ket. able to Member States since their repre­ The Commission observes that it is

sentatives sit on the Management Com­ the fact that it is difficult for aware of

importers. imported into Nether­ as The price-fixing is done barley the

exclusively (in the case of cif prices lands for cereals, for instance) or at least par­

tially (as in the case of free-at-frontier The Finanzgericht considers that the

prices for cereals) on the basis of in­ disputed decision is illegal if, as

formation supplied by importers and Schwarze states, the Commission cal­

exporters. This information is a com­ culated the free-at-frontier price for mercial secret and Article 214 of the imports into Germany of barley from Treaty obliges the Commission not to the Netherlands on the basis of the disclose such confidential information. price for barley imported into the

SCHWARZE v EINFUHR- UND VORRATSSTELLE GETREIDE

The system introduced by Regulation to be annulled by national courts. But No 19 means that all cereals in free the Court has power to annul only in circulation in the exporting Member the context of the procedure set out

State intra-Commun­ Article Article are subject to the under 173, not that of

ity levy, whether or not harvested in 177. that country. The text and general tenor Questions 5 6 and of Regulation No 89 do not imply any The scope of application of Article 173 restriction on the system set up under has been clearly defined. Accordingly a Regulation No 19. ruling given under the Article 177 pro­

Nor does No 86 afford justi­ Regulation

ap­ cedure cannot open the way to an fication for a strict interpretation of plication on the basis of Article 173, Regulation No 89. Regulation No 86, since the respective areas of application on the adoption of a basic criterion for of these two Articles must be sharply the application of intra-Community distinguished. Question 6 is irrelevant levies, does not apply to the fixing of if Question 5 is held inadmissible. free-at-frontier prices; its purpose has In the light of the above considerations, nothing to do with the question at the French Government submits that issue. the reference from the Finanzgericht for The Commission concludes that the de­

and 6 shows them

fall outside the terms of Article 177. a judgment of the Court in order to to decide in national proceedings Question 2 questions of law which, under the Whether or not a decision contains an conditions and in accordance with adequate statement of reasons is not a laid down the procedures by the question of interpretation. In replying Treaty of Rome, are exclusively the to 'this question the Court would be province of the Community Court.

evaluating a specific measure adopted As to the substance of the questions, by a Community institution and expres­

the Government of the French Republic, sing a view on a problem which must as also the Governments of the Federal be determined in the context of annul­ Republic of Germany and of the King­ ment proceedings. dom of the Netherlands have come to Question 4 the same conclusions as the Commis­

A reply by the Court to this question sion. The three governments place par­

is likely either to trespass on the pro­ ticular emphasis on the need to safe­

pretation of the Treaty or of a measure adopted by a Community institution than with obtaining a preliminary ruling on the validity of such a measure, which the Court is empowered to give by subparagraph (b) of the first para­

graph of Article 177. In Questions 1 to 3 the Finanzgericht indicates the

points which in its view militate against the legality of the Commission's decision and in Questions 4 to 6 it asks the Court what would be the con­

sequences if the decision were held to be invalid. The form taken by the dis­ pute in the main action as set out in the reference to this Court confirms this view as the plaintiff in the main action has based its conclusions on the

alleged illegality of the Commission's decision.

The Government of the French Republic objects in its observations that

cision. Any other approach would have the effect of allowing the national

courts to decide themselves on the validity of Community measures.

SCHWARZE v EINFUHR- UND VORRATSSTELLE GETREIDE

There are, therefore, no grounds for alleging that the parties to the main action have circumvented the provisions of Article 173 of the Treaty. The

national court did not intend to determine, on a national level, questions of law exclusively reserved for the Court of the Communities; the parties applied for a reference to the Court of Justice and the Finanzgericht agreed,

and complied with the conditions and procedure laid down by the Treaty.

The second question put by the Finanzgericht is whether the disputed

decision, which merely refers to an earlierdecision giving only a general indication of the considerations which guided the Commission when fixing

the free-at-frontier prices, satisfies the requirements of Article 190 or whether it should have contained specific reasons showing the prices, the markets, the

quality and the quantities in fact available which the Commission had taken into consideration and the differences in quality upon which it based the

decision.

The decision of 24 January 1964 appears, in the form in which it was notified to the Member States to which it was addressed, to be a modification of

JUDGMENT OF 1. 12. 1965 — CASE 16/65

The course adopted by the Commission, of publishing only the original de­ cision in full and, in the case of later decisions, confining itself to publishing

the tables which they contained in the Agricultural Supplement to the Official Journal was an appropriate means of making it known to all parties concerned incor­ that the reasons upon which the original decision was based were

porated without modification so far as the subsequent adjustments were

concerned.

The next question to be considered is whether the statement of reasons thus incorporated in the decision of 24 January 1964 was sufficient to support the decision. The objection is that this statement of reasons did not give the con­

frontier price resulting from it forthwith. The Commission is in turn to fix the free-at-frontier price before the normal date should this prove necessary

on the basis of the data furnished by a Member State or of information de­ riving from its own resources.

The degree of precision of the statement of reasons for such a decision must be weighed against practical realities and the time and technical facilities available for making such a decision. A specific statement of reasons for each individual decision fixing a free-at-frontier price as envisaged by the Finanz­ gericht would mean the publication and technical evaluation af all the facts submitted by the exporting Member State or gathered by the Commission's staff for several hundreds of prices requiring to be fixed. In view, first, of the time available for the issue of the decisions and, secondly, of the number of prices to be fixed, the requirement of such a specific statement of reasons

would be incompatible with the proper functioning of the machinery provided for in Regulation No 19 of the Council and Regulation No 89 of the Com­ mission. The preparation and drafting of this kind of statement of reasons would take up so much time that the determination of prices would run the

risk of being, to some extent, out of date by the time it was issued.

SCHWARZE v EINFUHR- UND VORRATSSTELLE GETREIDE

It must therefore be concluded that the points raised by the Finanzgericht in Questions 1 2 Commis­ and are not capable of affecting the validity of the sion's decision.

Question 3

The Finanzgericht's third question is whether the Commission infringed Articles 2 and 3 of Regulation No 19 by basing its decision upon market quotations for barley harvested outside the Member States, and in particular outside the Netherlands. This question must be considered because the Com­ mission has admitted in its written observations that the decision was based on such quotations.

The German version of these Articles, which says that the free-at-frontier from' price is the price for products 'coming ('stammend aus') the exporting Member State, does seem to be ambiguous. The three other versions of the Articles however, in which the expression 'stammend aus'

corresponds to 'en de' provenance de', 'proveniente and 'afkomstig uit', show that it was not the intention in Regulation No 19 to distinguish between products harvested in the exporting Member State and those in free circulation within it. This interpretation is also compatible with the principles laid down in Article 9 (2)

of the Treaty extending the customs union to 'products corning from third countries which are in free circulation in Member States'.

Questions 4 to 6 only apply if the Court holds the statement of reasons to be

inadequate, or the decision to be unlawful because it is based on quotations for cereals coming from third countries. It is not, therefore, necessary to give an answer to them.

Costs

The costs incurred by the Government of the French Republic, the EEC Commmission, the Government of the Kingdom of the Netherlands and the Government of the Federal Republic of Germany which have submitted

observations to the Court are not recoverable, and as these proceedings are,

in so far as the parties to the main action are concerned, a step in the actions

Having regard to the Rules of Procedure of the Court of Justice of the

European Communities;

SCHWARZE v EINFUHR- UND VORRATSSTELLE GETREIDE

THE COURT

in answer to the questions referred to it by the Hessisches Finanzgericht hereby rules:

I. Examination of the questions referred by the Hessisches Finanz­ gericht to the Court reveals no factor capable of affecting the validity of the decision of the EEC Commission of 24 January 1964 fixing free-at-frontier prices for cereals;

DELIVERED ON 28 OCTOBER 1965<apnote>1</apnote>

Mr President, The facts are simple. On 31 January Members of the Court, 1964 the Schwarze undertaking of Bremen obtained from the Einfuhr- und The six questions put to you by the Vorratsstelle für Getreide und Futter­ Hessisches Finanzgericht will give you mittel (EVSt) import certificates for an opportunity not only to give your 1 100 metric tons of barley to be im­ opinion on a problem of great impor­ ported from the Netherlands during the tance for the efficient functioning of the course of February. At this point the common organization of the markets EVSt set a rate of DM 96.75 per within the framework of the European metric ton for the levy prescribed by Economic Community. They will also Article 2 of Regulation No 19 of the induce you to give some precise answers Council, on the progressive establish­ on the position and the effect of Article ment of a common organization of the 177 in the complex of the rules of the market in cereals. It is known that the Treaty fixing your jurisdiction and the levy rate equals the difference between judicial guarantees accorded to the the free-at-frontier price for the export­ nationals of Member States. ing Member State calculated and fixed

1 — Translated from the French.