C-41/70

JUDGMENT OF 13. 5. 1971 — JOINED CASES 41 TO 44/70

regulations can only be adopted in so the sphere of agriculture'. The Treaty far as they are strictly necessary for attaches very great importance to the the attainment of the objectives attainment of this latter objective in specified in Article 39 of the Treaty, the sphere of agriculture, devoting and impair as little as possible the Article 39 to it and making the functioning of the common market. reservation contained in the first para­ 5. Article 3 of the Treaty lists several graph of Article 42. Where protective general objectives, towards the attain­ measures prove to be necessary with ment and harmonization of which the a view to preventing, in the market Community has to direct its activity. in the products in question, serious Amongst these objectives, Article 3 disturbances capable of endangering prescribes not only 'the institution of the objectives of Article 39, an a system ensuring that competition explicit statement of the reasons for in the common market is not dis­ such measures, in relation to Articles torted', but also in subparagraph (d) 85 and 86 of the Treaty, is not indis­ 'the adoption of a common policy in pensable.

In Joined Cases

41/70: NV INTERNATIONAL FRUIT COMPANY, Rotterdam,

42/70: NV VELLEMAN & TAS, Rotterdam,

43/70: JAN VAN DEN BRINK'S IM- EN EXPORTHANDEL, Rotterdam,

Application for the annulment of decisions refusing to issue import licences for dessert apples coming from third countries,

FRUIT COMPANY v COMMISSION

THE COURT

composed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, Presidents of Chambers, R. Monaco (Rapporteur), J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges,

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

gives the following

I — Summary of facts and mented by Regulation No 686/70 of 15 procedure April 1970 (JO L 84 1970). By Regulation No 983/70 of the Com­ 1. On the basis of the principles laid mission (JO L 116 1970) of 28 May down in Regulation No 23 of 4 April 1970 this system, in relation to applica­ 1962 (OJ, English Special Edition 1959 tions for import licences made to the to 1962, p. 97), the Council on 9 national authorities, was continued until December 1969 adopted Regulation No 22 May 1970. 2513/69 (JO L 318 1969) on the co­ By a letter received by the Produktschap ordination and standardization of the voor Groenten en Fruit (produce cor­ treatment accorded by each Member poration for vegetables and fruit, herein­ State to imports of fruit and vegetables after referred to as 'the PGF) on 19 from third countries. Article 2 of that May 1970, each of the applicant com­ regulation comprises a safeguard clause panies submitted an application for by virtue of which appropriate measures licences for the import of dessert apples may be applied so as to counteract a coming from third countries. disturbance or threatened disturbance of In its replies the PGF informed them the market in the Community. either that 'the application must be The conditions for the application of rejected', or that it has been decided to these measures were specified in Regula­ reject it'. tion No 2514/69 of the Council of the On 5 August 1970 the applicants made same date (JO L 318 1969). the present applications against these On 11 March 1970 the Commission refusals. The applications were joined approved Regulation No 459/70 (JO for the purposes of procedure and judg­ L 57 1970) adopting protective measures ment by an order of the Court of 10 applicable to the import of dessert November 1970. apples. 2. In an application or a procedural Within the framework of these measures issue made in each case on 11 Septem­ the Commission decided inter alia to ber 1970, the Commission asked for a introduce a system of export licences; decision as to the admissibility of the the administration of this system was original applications pursuant to Article specified in Regulation No 565/70 of 91 of the Rules of Procedure, without 26 March 1970 (JO L 69 1970), supple­ going into the substance of the cases,

sary. The only 'decision' of the Commission The parties presented oral argument at which could be in question is that rela­ the hearing on 16 March 1971. ting to the provisions of Regulations The Advocate-General delivered his Nos 459/70, 565/70 and 686/70 which' opinion at the hearing on 1 April 1971. the applicants criticize. However an action against these provisions under Article 173 of the Treaty would in the II — Conclusions of the par­ present case also be inadmissible since ties they are general in nature. The applicants point out that by the Each of the applicants claims that the system established by Regulation No Court should: 459/70, only the Commission has the — annul the decision of the Commission power to decide on the issue of an of the European Communities con­ import licence and that the Commission tested in the application and of bears the responsibility for the contents which the applicant was informed on of that decision. Member States have 2 June 1970 by a letter from the no discretionary power in this respect, PGF bearing the same date (refer­ they can only adopt merely implement­ ence: FA/IM), principally on the ing measures to support this decision ground of the Commission's lack of and are only liable for the way in which competence, but in addition on the they notify the parties concerned. grounds of infringement of an essen­ In addition they observe that in these tial procedural requirement, and in­ circumstances it should be asked whether fringement of the EEC Treaty and and to what extent domestic law is the regulations implementing it applicable in deciding whether the noti­ (especially Regulations Nos 2513/69 fication made by the national authorities and 2514/69), and lastly for misuse to the parties concerned informing them of powers by the Commission, of the negative decision in respect of — order the Commission of the Euro­ their applications is an internal admini­ pean Communities to pay the costs. strative measure capable of being con­ The defendant contends that the Court tested before the courts. should: If this communication cannot be con­ — dismiss the applications as inadmis­ sidered an internal administrative meas­ sible and in any case as unfounded; ure capable of being contested under — order the applicants to bear the costs national law, the decisions relating to in accordance with the relevant pro­ the issue of import licences run the visions. risk of being subject to no judicial

scrutiny, if the persons concerned are measure of the Member State is limited also denied the right of access to the to being a purely technical implementing Court of Justice. measure, it is the Community measure On the other hand if the decision of the which directly governs the legal situa Commission can only be examined from tion of those concerned, the present the point of view of national law, the applications are equally inadmissible by danger would arise, because of the virtue of the second paragraph of Arti divergencies between the national laws cle 173 of the Treaty since in any event or the opinions of the national courts, the decisions of the Commission per that different solutions would be arrived mitting imports up to a certain volume at in relation to identical or similar and allowing the maximum quantities for decisions, made in response to identical import to be apportioned are in the or similar requests. nature of regulations: a decision of The defendant replies as follows: this kind therefore cannot be of indivi — The Commission does not adopt the dual concern to the applicant. decision provided for by Article 2 (2) of — Finally the argument as to the con Regulation No 459/70 on the basis of sequences which might follow if the individual applications which, indeed, application before the national court it does not even examine. Only the were inadmissible and if these applica quantity resulting from all the applica tions were also inadmissible before the tions, which is notified to it by the Court of Justice is based on a miscon Member States, is of some importance ception of the problem.

Treaty. On the other hand, if the able quantity to be apportioned objec actions were admissible before the tively. It follows that the individual national courts the risk of contradictory applications have no influence, as such, decisions given by these courts would on the decision permitting imports up be inherent not only in the situation to a given amount and on the method envisaged by the applicants but also in of apportioning this amount. Thus the all cases of actions brought against a administrative measure which, within national administrative measure imple the framework of this system, gives menting a Community rule if the specific content to the rights and duties mechanism of Article 177 did not exist of the importer is that issued by the or were abolished. competent authorities of the Member

JUDGMENT OF 13. 5. 1971 — JOINED CASES 41 TO 44/70

and which do not sufficiently state the and the market for the latter is in no reasons on which they are based. way affected by imports of apples from These regulations should be declared third countries.

previously. At this time of the year 1. With regard to Regulation No 459/70 they are a luxury article whose price is fixed by their relative scarcity and (a) According to the general provisions by the particular quality of the pro of Regulation No 2513/69 protective duct. The difference in price between measures may be applied where the the imported products and the domestic common market (for dessert apples) products is however not influenced by experiences or is threatened with seri the sale of imported apples and evolves ous disturbances likely to endanger the independently of these imports. objectives of Article 39 of the Treaty by Secondly there is no relationship be reason of imports. To assess whether tween the quantities of domestic apples such a situation exists, the factors Usted of all qualities available during the refer in Article 1 of Regulation No 2514/69, ence period and the quantities of im in particularly those in subparagraphs ported apples which are a luxury article (c) and (d) are to taken into account. whose price is explained by its quality Regulation No 459/70 does not clearly and its comparative scarcity. show that the Commission took account Thirdly the demand for imported apples in particular of the tendency of thе of better quality and at higher prices is price of domestic dessert apples to fall from consumers who tend to buy luxury excessively in relation to the base price articles and is therefore not comparable

cular. During the period in question ence in this case since the import prices imported dessert apples are no longer of dessert apples had for the period in 'interchangeable' for domestic apples question remained so substantially above

the reference price fixed for the months 3. With regard to Regulations Nos 459/ of April and May that no reference price 70 and 686/70 had been fixed for the month of June 1970. (a) The applicants maintain that the However, there is no risk of serious Commission did not have the power to disturbance so long as the price of the adopt the system of import licences in imported product is at a substantially question since such a system was not higher level than the reference price and mentioned in Article 2 (1) of Regula the price of domestic products. tion No 2514/69 amongst the measures The applicants therefore submit that which could be taken pursuant to Article Regulation No 459/70 is contrary to the 2 (2) and (3) of Regulation No 2513/69. Treaty and to Regulation No 2514/69 (b) In addition they maintain that the and that the reasons for it are insuffici Commission misused its powers in adopt

2. With regard to Regulations Nos. that the question whether grave dis 565/70 and 686/70 turbances exist or threaten to arise is linked to an economic assessment of In applying the system of reference various aspects of the market and that quantities set out in these regulations such an assessment cannot be restricted the Commission is in breach of the ob to the finding of a certain number of ligations imposed upon it under Articles facts which automatically lead to cer 155 and 3 (f) of the Treaty and is in tain consequences fixed by a legal text. breach of the provisions relating to com It then goes on to observe: petition rules, in particular Articles 85 and 86 of the Treaty. In fact by this 1. With regard to Regulation No 459/70 system competition between undertak ings which import into the EEC domes Regulation 459/70 is well founded in tic apples from third countries was law and sufficient reasons for it are crystallized according to the competition stated. The fact that the preamble giv which existed during the reference ing the reasons for its adoption does

In this respect Treaty and no sufficient reasons for them moreover it should be emphasized that are given. The Commission did not in the 'tendency to fall . . . excessively in dicate the reasons which made the sys relation to the basic price' comports an tem of import licences permissible in indication of the probable development view of Articles 3 (f), 85 and 86 of the which is itself only one of the factors in Treaty. the alternative 'recorded prices for

domestic products on the Community evitably have had the effect of increasing market'. subsequently the number of domestic Moreover in view or the situation then apples sent to the intervention agencies existing, as described in the preamble (b) As to inter changeability it should be to Regulation 459/70 (cf. statement of observed that the factor of quantity may defence, pp. 17 and 18) it would have hardly be considered separately from been difficult to speak of an excessive the other factors (quality and price) as fall since the level of these prices is a factor indicating 'the existence of two near to the minimum limit fixed for separate markets. In addition the dif intervention measures. ferences in quality between imported The third recital to the regulation in apples and domestic apples must not be question mentions in addition the tend

case. In addition the Commission had the market for domestic apples and that every reason to believe on the basis of for imported apples. the information at its disposal regarding As to prices, it should immediately be the 1967 to 1968 season, when the mar stated that those of imported apples are ket situation was comparable to the one influenced by the price level of domes in this case, that this unfavourable price tic apples: their level is higher or lower trend was exaggerated by imports since according to whether the prices of (fourth recital) the liberalization of these domestic apples rise or fall.

Be prices and countervailing charges. The cause of the critical situation which process of working out the rules for existed in this respect within the Com trade with third countries in the sector munity, the unlimited importation of in question shows that the two systems foreign apples which are in fact inter are independent of each other because changeable for domestic apples would in they have different functions. That of

the reference prices and of the counter graph f) but also for 'the adoption of vailing charges is intended to stabilize a common policy in the sphere of agri prices and consists of the normal sys culture' (subparagraph d); it does not, tem of automatic levies as in the other however, establish any priority between organizations of the market. The pro the two objectives. Apart from the pro tection resulting from the safeguard visions of the Treaty relating to com clause is not an additional factor in the petition contained under the title 'Agri scheme operated at the frontiers of the culture' (Article 38) that it is for the Community but is a totally different Community, weighing up all the in factor. terests at stake and taking account of Moreover, although the system of refer the objectives of the Treaty, to har ence prices does apply to apples it was monize as far as possible the two tasks as a matter of fact quite inadequate in and to grant a certain priority to one the present case. The reference price or the other according to the require which is drawn from an averaging of ments of the case. prices is relatively low while the price Furthermore the system in question is of apples freshly picked in the southern based on two essential requirements: the hemisphere and imported into the Com rejection of any idea of national appor munity after a voyage of about 3 weeks tionment of a Community quota and is at a substantially higher level.

While it recognizes that the shortness of the period does not 3. As regards Regulation Nos 459/70, relieve it of the obligation to state its 565/70 and 686/70 reasons, it believes that such a factor may influence the extent of particulars (a) As to the allegation of its lack of given in the reasons stated. competence, the Commission replies that for this argument to be upheld it would 2. As regards Regulations Nos 565/70 have to be accepted that the system of and 686/70 import licences may not be considered as 'a suspension of imports' within the Article 3 of the Treaty provides not meaning of Article 2 (1) of Regulation only for 'the institution of a system No 2514/69. However this was not in ensuring that competition in the Com fact the case since this system and the mon Market is not distorted' (subpara manner in which it is applied imply

Admissibility

2 The defendant submits that no decision was addressed to the applicants, and that the refusal to grant them import licences emanates from the PGF and is in reality an administrative measure governed by national law.

3 It states that the only 'decisions' of the Commission concerning the grant of import licences were contained in Regulation No 565/70 and the subsequent amending regulations.

4 These 'decisions' were of general application and in the nature of regulations, and the defendant submits that they could not therefore be of individual concern to the applicants within the meaning of the second paragraph of Article 173.

5 By Regulation No 459/70, adopted on the basis of Regulations Nos 2513/69 and 2514/69 of the Council, protective measures were taken with the object of limiting the import of dessert apples from third countries into the Com­ munity in the period from 1 April 1970 to 30 June 1970.

6 This regulation provides for a system of import licences, which are granted to the extent to which the state of the Community market allows.

12 By these postponements the said measures were periodically extended and made applicable to applications for import licences submitted within each period.

13 By virtue of Article 1 of Regulation No 983/70 of 28 May 1970, this system was applied in the period in which the applications for licences were sub­ mitted by the applicants.

14 Hence, the issue of admissibility in the present cases must be determined in the light of the lastmentioned regulation.

15 For this purpose, it is necessary to consider whether the provisions of that regulation—in so far as they make the system established by Article 1 of Regulation No 565/70 applicable—are of direct and individual concern to the applicants within tie meaning of the second paragraph of Article 173 of the Treaty.

16 It is indisputable that Regulation No 983/70 was adopted with a view on the one hand to the state of the market and on the other to the quantities of dessert apples for which applications for import licences had been made in the week ending on 22 May 1970.

JUDGMENT OF 13. 5. 1971 — JOINED CASES 41 TO 44/70

23 Moreover, it is clear from the system introduced by Regulation No 459/70, and particularly from Article 2 (2) thereof, that the decision on the grant of import licences is a matter for the Commission.

24 According to this provision, the Commission alone is competent to assess the economic situation in the light of which the grant of import licences must be justified.

25 Article 1 (2) of Regulation No 459/70, by providing that 'the Member States shall in accordance with the conditions laid down in Article 2, issue the licence to any interested party applying for it', makes it clear that the national authorities do not enjoy any discretion in the matter of the issue of licences and the conditions on which applications by the parties concerned should be granted.

26 The duty of such authorities is merely to collect the data necessary in order that the Commission may take its decision in accordance with Article 2 (2) of that regulation, and subsequently adopt the national measures needed to give effect to that decision.

27 In these circumstances as far as the interested parties are concerned, the issue of or refusal to issue the import licences must be bound up with this decision.

FRUIT COMPANY v COMMISSION

33 In particular, it is said that the Cornmission failed to justify those measures by reference to the 'expected trend' of prices for domestic products on the Community market and 'in particular their tendency to fall excessively', such prices having in fact been quite stable.

34 Article 1 (c) of Regulation No 2514/69 provides that in applying protective measures, the Commission must take into account in relation to domestic products 'recorded prices on the Community market or the expected trend of such prices, and in particular their tendency to fall excessively'.

35 This provision must be read in the light of the organization of the market resulting from the regulations in force.

36 These regulations provide, for the market in question, for price-support mechanisms, especially intervention measures, as soon as the prices of the products fall below a certain level.

37 Thus, on a market in which the level of prices is low, a downward trend in prices cannot lead to an excessive fall in the strict sense of the word, but only to an increased offer of domestic products to the intervention agencies.

JUDGMENT OF 13. 5. 1971 — JOINED CASES 41 TO 44/70

44 They argue that since, moreover, the imported products, because of their pnce and quality, were not interchangeable for the domestic products during the period under consideration, it was not open to the Commission to find, on the basis of imports from third countries, a disturbance or threatened disturbance within the meaning of the first paragraph of Article 1 of Regulation No 2514/69.

45 By virtue of Article 1 (d) of Regulation No 2514/69, the Commission, in a case where the state of crisis referred to in the first paragraph of that article arises as a result of imports from third countries, must take into account in particular 'the quotations recorded on the Community market... in particular their tendency to fall excessively', and 'the quantities for which withdrawal transactions are taking place or might take place'.

FRUIT COMPANY v COMMISSION

46 The scope of this provision must be determined in the light of the whole of Article 1, so that not only the factors already exarnined above, and contained in subparagraph (c), but also those mentioned in subparagraphs (a) and (b), must be taken into account.

47 In weighing up the importance of each of these factors for an assessment of the situation referred to in the first paragraph of Article 1 of that regulation, in the case of imports from third countries, the Commission must in particu­ lar take account of the results which such imports have or may have on the market situation.

48 When a feature of this situation is that the normal marketing of products presents difficulties, the prices of domestic products tend to become stabilized around the intervention price and can no longer be influenced by the higher prices of the imported products.

JUDGMENT OF 13. 5. 1971 — JOINED CASES 41 TO 44/70

extent directed towards domestic products, might have led in any event to an increase in the quantities which would have to be taken off the market.

55 Although the difficulties in disposing of domestic products did not affect all Member States in the same way, and were particularly acute in certain ones, nevertheless they affected the whole common market, where the machinery for stabilizing prices, such as the national intervention arrangements, is based on the financial participation of all Member States and upon a Community responsibiilty.

56 In view of the situation on the market for the products in question at that time, an appreciable increase in imports after the introduction of the new trading system on 1 March 1970 might have increased the difficulties in dis­ posing of these products subsequently, and might thus have brought about a disturbance of the market.

57 It does not appear, therefore, that the Commission has wrongly applied Article 1 of Regulation No 2514/69 by basing its decision on the consequences which imports from third countries might have had for the 'quantities to be taken off the market'.

58 (3) The applicants further maintain that the Commission exceeded the limits of its authority by taking protective measures when the machinery of reference prices had not led to the imposition of countervailing charges on imports and the Commission had failed to fix any reference price for the month of June 1970.

64 In accordance with the general objectives of the Treaty, the protective meas­ ures permitted by Regulations Nos 2513/69 and 2514/69 can only be adopted in so far as they are strictly necessary for the attainment of the objec­ tives specified in Article 39 of the Treaty, and impair as little as possible the functioning of the common market.

65 Since the Commission was entitled to take protective measures leading to a complete suspension of imports from third countries, it was, a fortiori, entitled to adopt less restrictive measures.

66 (5) Finally, the applicants claim that Regulations Nos 565/70 and 686/70 are void or at least are not applicable to them, inasmuch as they establish a system of import licences which is in conflict with Articles 3 (f), 85 and 96 of the Treaty.

67 Moreover, these regulations are said to be insufficiently supported by reasons, inasmuch as the grounds on which the system was necessary or at least per­ missible under the said articles and under Article 39 of the Treaty are not stated.

68 Article 3 of the Treaty lists several general objectives, towards the attainment and harmonization of which the Commission has to direct its activities.

69 Amongst these objectives Article 3 specifies not only 'the institution of a system ensuring that competition in the common market is not distorted', but also (subparagraph (d)) 'the adoption of a common policy in the sphere of agriculture'.

75 For these reasons, the submissions directed against Regulations Nos 459/70, 565/70 and 686/70 must be rejected.

76 (6) The applicants seek the annulment of the decisions contained in Article 1 of Regulation No 983/70 on the ground that the regulations on which those decisions are based, namely Regulations Nos 459/70, 565/70 and 686/70, infringe the Treaty.

77 In particular they claim that, in so far as these regulations are illegal in the sense of the second paragraph of Article 174, or not applicable to them under Article 184 of the Treaty, the Commission had no legal basis for adopting such decisions.

78 Examination of the submissions directed against these regulations has not made it possible to find that the regulations are illegal and these submissions must accordingly be rejected.

Costs

79 According to the first subparagraph of Article 69 (2) of the Rules of Pro­ cedure of the Court, the unsuccessful party shall be ordered to pay the costs if they have been asked for in the successful party's pleading.

hereby:

1. Declares the applications to be admissible but dismisses them as unfounded;

2. Orders the applicants to bear the costs of the proceedings.

Lecourt Donner Trabucchi

Monaco Mertens de Wilmars Pescatore Kutscher

Delivered in open court in Luxembourg on 13 May 1971.