C-31/69

Italian Republic, represented by Adolfo Maresca, Minister Plenipotentiary, acting as Agent, assisted by Antonio Freni, with an address for service in Luxem­ bourg at the Italian Embassy, defendant,

Application for a declaration that the Italian Republic, by failing to pay promptly to exporters the refunds on products coming under the common organizations of the market established after 1 July 1967, has failed to fulfil an obligation under the Treaty,

THE COURT

composed of: R. Lecourt, President, R. Monaco, President of Chamber, A. M. Donner, W. Strauß and J. Mertens de Wilmars (Rapporteur), Judges,

Advocate-General: J. Gand

Registrar: A. Van Houtte

1 — Article 16 (2) of Regulation No 120/67/EEC of the Council of 13 June 1967, on the common organization of the market in cereals (OJ 1967, Special Edition, p. 33); Article 7 of Regulation No 139/67/EEC of the Council of 21 June 1967, laying down general rules for granting export refunds on cereals and criteria for fixing the amount of such refunds (OJ 1967, Special Edition, p. 88) ; Article 15 (2) of Regulation No 121/67/EEC of the Council of 13 June 1967, on the common organization of the market in pigmeat (OJ 1967, Special Edition, p. 46); Article 6 of Regulation No 177/67/EEC of the Council of 27 June 1967, laying down general rules for granting export refunds on pigmeat and criteria for fixing the amount of such refunds (OJ 1967, Special Edition, p. 146) ; Article 9 (2) of Regulation No 122/67/EEC of the Council, on the common organization of the market in eggs

meat (OJ 1967, Special Edition, p. 63); Article 6 of Regulation No 176/67/EEC of the Council of 27 June 1967, laying down general rules for granting export refunds on poultrymeat and criteria for fixing the amount of such refunds (OJ 1967, Special Edition, p. 144); Article 18 (1) of Regulation No 136/66/EEC of the Council of 22 September 1966, on the establishment of a common organization of the market in oils and fats (OJ 1966, Special Edition, p. 221); Article 2 of Regulation No 171/67/EEC of the Council of 27 June 1967, on export refunds and levies on olive oil

Article 17 (2) of Regulation No 359/67/EEC of the Council of 25 July 1967, on the common organization of the market in rice (OJ 1967, Special Edition, p. 193); Article 6 of Regulation No 366/67/EEC of the Council of 25 July 1967, laying down general rules for granting export refunds on rice and criteria for fixing the amount of such refunds (OJ 1967, Special Edition, p. 213); Article 17 (2) of Regultaion No 1009/67/EEC of the Council of 18 December 1967, on the common organization of the market in sugar (OJ 1967, Special Edition, p. 304); Article 3 (1) of Regulation No 865/68/EEC of the Council of 28 June 1968, on the common organization of the market in products processed from fruit and vegetables (OJ 1968, Special Edition, p. 225); Article 14 of Regulation No 766/68/EEC of the Council of 18 June 1968, laying down general rules for granting export refunds on sugar (OJ 1968, Special Edition, p. 155); Article 17 (2) of Regulation No 804/68/EEC of the Council of 27 June 1968, on the common organization of the market in milk and milk products (OJ 1968, Special Edition, p. 176); Article 6 of Regulation No 876/68/EEC of the Council of 28 June 1968, laying down general rules for granting export refunds on milk and milk products and the criteria for fixing the amount of such refunds (OJ 1968, Special

JUDGMENT OF 17. 2. 1970 — CASE 31/69

In its letter of 20 June 1968 the Commission According to the applicant, those refunds observed that, except in respect of very small have not been promptly paid by the Italian quantities, refunds had not yet been paid authorities. Such delay makes the export for any of the products subject to the single of products from Italy more difficult by market system and exported after 1 July reducing the effectiveness of the machinery 1967. for refunds and distorting competition The Commission declared that it would between Italian exporters and those in other therefore initiate the procedure provided Member States which pay the refunds for in Article 169 of the Treaty and, after promptly.

jurisdiction to find an infringement consti tuted by failure to act in pursuance of a II — Conclusions of the parties directly applicable regulation. The defendant further considers that the The applicant claims that the Court should : application is unfounded because the date (a) Declare that the Italian Republic, by of payment of the refunds is not stated in its failure promptly to pay to exporters the regulations and moreover no proof of the refunds on the export of products the delays has been produced. coming under the common organiza

Commission of the European Commu to them have the necessary preliminaries nities as set out at the beginning of this been fulfilled for any proceedings with statement; regard to a failure by the State to fulfil its — Order the Commission to pay the costs. obligations.

The applicant replies that the above this an identical refund for the whole mentioned letter itself states that it refers Community, which the Member States are not only to the refunds in the cereals sector obliged to pay at the request of the persons but the relevant refunds in other sectors concerned. The corollary of this obligation subject to the single market system. is the right of dealers in the Member State Furthermore the opinion provided for in to receive those refunds. Article 169 has the sole object of giving the The present case is concerned not with Member State concerned the opportunity directives but with regulations which, to submit its observations. taking into account a reasonable period to allow the States to carry out the necessary

This A mere omission in the form of a failure to regulation authorizes Member States to pay comply with such provisions constitutes, as dealers the amount of the refund; the a direct consequence of such direct applica Ministerial Decree of 24 April 1968 bility, an infringement of an internal law (Gazzetta Ufficiale No 142 of 5 June 1968) of the national legal system giving rise to was made in implementation of this remedies before those national courts. regulation. If, on the other hand, as the defendant The applicant deduces from this that, since thinks, the regulations provide for the the basic regulations established that the application of national refund procedures, payment of the refunds to exporters was the application of those procedures cannot compulsory and since the methods and constitute an infringement of the Treaty criteria of repayment were stated in the and can only constitute grounds for pro implementing regulations and in Regulation ceedings under Article 101. Consequently No 1041/67/EEC, there can be no doubt as the Court of Justice has no jurisdiction in to when those payments must be made; in this matter. the interests of the exporters and of the good The applicant replies that the plea of in administration of the market that occasion admissibility must be rejected as it is out cannot be postponed. The fact that in the of time and adds that a failure to fulfil a five other Member States the refunds are provision of the Treaty or of secondary paid within appreciably shorter periods legislation may be constituted by a failure means that the delays occurring in Italy to take action as well as by a positive act. cause distortion of competition harming the exporters in that country who are induced to export their goods through other Member Β — Substance of the case States in order to benefit from the quicker procedure applied there.

JUDGMENT OF 17. 2. 1970 — CASE 31/69

As additional From this the defendant deduces that the proof it produces various documents an regulation must be interpreted as meaning nexed to the reply, in particular requests for that it is at the point when the required payment on account for the various ac conditions are fulfilled that there arises the counting periods providing grounds for the right to the refund, to be complied with by finding in fact that delays occurred in the the various Member States according to payments since each request contains the their national procedures which are left figure corresponding to the payment per untouched by the Community provisions. taining to the current half year and the To say that a State must pay the refunds figure referring to earlier periods. when certain conditions are fulfilled can, Finally an inquiry carried out by the from a legal point of view, only mean that European Agricultural Guidance and Guar it is at this point that there shall be and antee Fund in March 1967 showed that in must be initiated the procedure which, Italy during the period before 1 July 1967 according to the national legal system, since no provision had been made for them governs the State's payments. During this in the budget refunds were sometimes one procedure the periods of repayment may year in arrears. thus vary from State to State.

In fact, the common machinery made against it on the grounds of any delay. for stabilization provided for in Article 40 (3) of the EEC Treaty is based on two 2. Furthermore the defendant claims that principal factors ; the application lacks the factual basis which — a levy aligning the prices of imported would give grounds for establishing actual products with the prices within the delays, their character, causes and still Community market ; less their widespread nature, nor does it — a refund allowing the Community indicate how an average period of repay

COMMISSION ν ITALY

disturbed. Moreover in Italy only long and reflect the diversity of the average periods medium term export credits are granted. both between the request for a refund and The defendantreplies that the proof adduced the actual refund and between the export by the Commission is unconvincing and and the request for a refund. that the delays in other countries are much longer than it claims. The requests for payment on account do IV — Procedure not justify the conclusions arrived at by the Commission. Such requests reflect an The present application was lodged at the objective situation: the amount of refunds Court of Justice on 21 July 1969. The paid in the course of the period examined. procedure followed the normal course. On They give no ground for concluding that hearing the report of the Judge-Rapporteur delays or errors in payment have occurred, and the views of the Advocate-General the and likewise no such conclusion may be Court decided to dispense with any drawn on the basis of the tables summariz­ preparatory inquiry. The oral observations ing the different objective situations ac­ of the parties were presented at the hearing cording to each State. on 14 January 1970. The Advocate-General Finally the replies to the European Agricul­ delivered his opinion at the hearing on 29 tural Guidance and Guarantee Fund merely January 1970.

Grounds of judgment

1 By various regulations which became applicable from July 1967, the Council established for certain agricultural products, in particular oils and fats, pigmeat, eggs, poultrymeat and rice, a common organization of the market involving, inter alia, the fixing by the Commission of refunds on exports to third countries at an identical amount throughout the Community.

б By an application lodged on 21 July 1969 the Commission applied to the Court under Article 169 of the Treaty for a declaration that, by its failure promptly to pay to exporters concerned the export refunds for products coming under the common organizations of the market established after 1 July 1967, the Italian Republic has failed to fulfil its obligations under the provisions of the Community regulations establishing the common organizations of the agricultural markets and of the relevant implementing regulations referred to in the application.

The jurisdiction of the Court and the subject-matter of the dispute

7 The defendant has claimed that if the alleged failure consists in a Member State's failure to implement directly applicable Community legislation and is consequently to be classified as a pure omission the sanction for this omission does not come within the scope of Article 169 but falls within the jurisdiction of the national courts before whom the persons concerned may bring such matters.

8 Although this submission is out of time it relates to the jurisdiction of the Court of Justice and must be examined by the Court of its own motion.

9 A failure to act, like a positive act, may constitute a failure on the part of a Member State to fulfil an obligation.

Furthermore the existence of remedies available through the national courts cannot in any way prejudice the making of the application referred to in Article 169 since the two procedures have different objectives and effects.

Substance

15 The entry into force on 1 July 1967 of an organization of the markets in various agricultural products with a single price and uniform levies and refunds for the entire Community involves for the exporters concerned the right to receive the said refunds and a duty on the part of the Member States to advance them, the sums advanced being reimbursed half-yearly to the States by the Commission. Although those provisions, and especially Regulation No 1041/67/EEC, allow the Member States a certain area of discretion, inter alia, in fixing the documents which con­ stitute proof of the right to the refund, they nevertheless involve a duty for the States to make the payment within a reasonable period in order to avoid treating exporters differently according to the frontier over which their products are exported.

16 The Commission complains that the Italian Government paid the refunds after periods of between 12 and 18 months whilst the other Member States made the payments within much shorter periods.

Nevertheless the factors which it adduces in support of its application do not lead to the conclusion that it is well founded.

17 The first notification which it addressed to the Italian Government was dated

27 February 1968, that is to say, two months after the publication on 23 December 1967 of Regulation No 1041/67/EEC, whereas on 31 January and 20 February 1968 the defendant had taken the first measures intended to facilitate the implementation of the said regulation and paid a certain number of refunds, albeit for very small amounts.

20 Although those facts reveal the existence of delays, which were sometimes con­ siderable, in the payment of the refunds they do not however convey a precise impression of their extent which might in theory have been between one to two months and 18 months.

Furthermore, examination of the figures supplied tends to indicate that the delay fundamentally related to the exports effected in the second half of 1967 and that subsequently these arrears were gradually absorbed.

Finally, although mention has been made of figures greater than those shown by the documents submitted to the Court, no evidence has been supplied capable of proving them.

21 The fact that two undertakings have initiated proceedings against the Italian State in the national courts for the payment of very considerable sums cannot, in the absence of information as to the nature of the disputes, constitute proof of the existence of a failure.

Furthermore the findings in this case cannot prejudice any claims which the persons concerned may be entitled to advance before the national courts of the Member States.

22 In those circumstances, taking into account the fact that the figures supplied do not lead to the conclusion that there were delays as long as those alleged by the Com­ mission, the factors produced by it are insufficient to prove the existence of a failure within the meaning of Article 169.

THE COURT

hereby:

1. Dismisses the application;

2. Orders the Commission of the European Communities to pay the costs.

Lecourt Monaco

Donner Strauß Mertens de Wilmars