C-62/70

JUDGMENT OF 23. 11. 1971 — CASE 62/70

In Case 62/70

Werner A. BOCK, , a limited partnership having its registered office in Hamburg, in the person of Werner A. BOCK, the partner bearing personal liability, represented by Rechtsanwälte Modest, Heeman, Gündisch, Brändel, Rauschning, Landry and Roll, of the Hamburg Bar, with an address for service in Luxembourg at the Chambers of Félicien Jansen, Huissier, 21 rue Aldringen,

applicant,

v

Commission of the European Communities , represented by its Legal Adviser, Claus-Dieter Ehlermann, acting as Agent, with an address for service in Luxembourg at the Chambers of Émile Reuter, Legal Adviser to the Commission, 4 boulevard Royal, defendant,

Issues of fact and of law

I — Facts and procedure products. At the beginning of Septem­ ber 1970 a Netherlands undertaking (1) The applicant undertaking imports offered to sell to it a consignment of foodstuffs, and in particular preserved some 65.5 metric tons of preserved

BOCK v COMMISSION

Common Description of Netherlands. On 9 September 1970 it Customs Tariff goods heading No repeated its application, stressing that the offer made by the vendor remained open for a matter of days only. By letter 20.02 Vegetables prepared dated 8 September the Bundesamt in or preserved other wise than by vinegar formed the applicant that its application or acetic acid: was being considered. By telex message — mushrooms of 11 September 1970 the applicant again requested the Bundesamt to deal immediately with its application. By originating in the People's Republic telex message of the same day the Bun of China and in free circulation in the desamt replied, in particular, as follows:

In for an import licence for preserved the action brought by the applicant mushrooms of a value of DM 125 000 against this decision before the Verwal originating in the People's Republic of tungsgericht Frankfurt that court, by China and in free circulation in the judgment dated 8 December 1970, ruled Netherlands. The Federal Government as follows: requested the Commission to grant: The rejection or the application made authorization, as a matter of urgency, by the plaintiff on 4 September 1970 to exclude from Community treat to obtain an import licence was un ment the import of preserved products lawful.' of tariff heading 20.02, originating in That judgment is based on the provis the People's Republic of China and ions of German law. It states that a in free circulation in any Member 'legitimate necessity to protect the State (in view of the fact that there economy', which alone could have justi is reason to anticipate that the appli fied the rejection of the application, did cant in question will effect the im not exist in the present case in view of ports by other indirect means) in the fact that the quantity which the ap cluding the import contemplated by plicant proposed to import was rela the application already lodged'. tively small. By the contested decision of 15 Septem The Bundesamt appealed against this ber 1970 the defendant, relying on the judgment to the Hessischer Verwal-

(4) The application was filed at the 1. Admissibility Court on 12 November 1970. In its statement of 14 December 1970 the The submissions and arguments of the defendant requested that an initial rul­ parties may be summarized as follows: ing should be given on the admissibility A — The question whether the appli­ of the application in accordance with cant is affected by the contested Article 91 of the Rules of Procedure decision and that the application be declared in­ admissible. After the applicant, in its The defendant maintains that the appli­ statement of 18 January 1971, had re­ cant is not affected by the contested quested principally that the objection decision in view of the fact that that of inadmissibility be rejected and that decision did not empower the Bundes­ the Court deal with the substance of amt to refuse the import licence re­ the case, the Court decided on 3 quested by the applicant. February 1971 to reserve its decision on According to the defendant, the word the preliminary objection for the final 'duly' in the second sentence of Article judgment. 1 of the decision relates neither to the Upon hearing the report of the Judge- form in which applications for import Rapporteur and the views of the Ad­ licences must be made nor to the time- vocate-General the Court decided to limit prescribed for this purpose. Rather open the oral procedure without pre­ does it appear from the words 'imports scribing any measures of inquiry. ... in respect of which applications . . . The parties presented their oral obser­ are . . . duly pending' that the Com­ vations at the hearing on 13 July 1971. munity legislature wished to refer not to The Advocate-General delivered his the rules for lodging applications but opinion at the hearing on 12 October to those which apply to applications al­ 1971. ready pending. Taken in isolation the first sentence or Article 1 of the decision authorizes the II — Conclusions of the prohibition of all imports which had parties not yet been effected at the time when the decision took effect and thus also the The applicant claims that the Court prohibition of imports in respect of should: which applications for licences had al­ (1) Annul Article 1 of the Commission's ready been pending for some time. The defendant maintains that it cer­ Decision of 15 September 1970 in so far as the said decision covers tainly did not seek to legalize unlawful imports of products in respect of delays in the issue of import licences. which applications for licences were According to the defendant the second sentence of Article 1 of the decision did duly pending before the German not therefore extend but restrict the authorities when it came into force; scope of the first sentence of the said (2) Order the defendant to pay the costs. article. Preserved mushrooms come The defendant contends that the Court under the provisions of Regulation should: (EEC) No 865/68 of the Council of 28 declare the application inadmissible June 1968 on the common organization or alternatively dismiss it as un­ of the market in products processed founded; from fruit and vegetables (OJ 1968, — order the applicant to bear the costs. L 153, p. 8), Article 10 (1) of which

prohibits the application of quantitative It follows, according to the applicant, restrictions or measures having equiva that the first sentence of Article 1 of lent effect in intra-Community Trade. this decision refers only to cases in Article 2 (3) (q) of the Commission which the licence was applied for after Directive of 22 December 1969 based the decision had come into effect, while on the provisions of Article 33 (7) of the second sentence of the same article the EEC Treaty (OJ 1970, L 13, p. 29) extends the scope of the authorization requires Member States to abolish to applications on which decisions had measures which 'specify time-limits for not yet been taken, although they were imported products which are insufficient lodged before the decision came into or excessive in relation to the normal effect. According to the applicant, this course of the various transactions to is clear from the following considera which these time-limits apply'.

In the defendant's view in question in the present case extend this lapse of time patently exceeds the to all imports subsequent to the deci period required for the operations sion's taking effect. If the first sentence necessary for the issue of the authoriza of Article 1 also covered imports in tion, especially as the applicant had respect of which valid import licences several times drawn the attention of the had already been issued, the defendant Bundesamt to the urgent nature of its would have violated fundamental prin

It The applicant stresses first of all that the would moreover be incomprehensible Bundesamt has not so far adopted this for the second sentence of Article 1 interpretation in respect of the applicant, merely to have intended to exclude but has rather expressed the opinion in from the retroactive effect those cases its ground of appeal that the contested in which an application for a licence decision took effect retroactively and was then still pending but not cases in gave it the power to dismiss the applica which the importer had already obtained

JUDGMENT OF 23. 11. 1971 — CASE 62/70

the Commission under Article 22 (2) of ed a licence, although he had already Regulation No 19, which were in dis applied for one. Rules which apply to pute in those cases: facts which have not yet materialized, — 'did not merely give approval' to but which are in the process of so doing, national protective measures 'but also give rise—by providing for a so rendered them valid'; called 'incomplete' retroactivity—to — could nave had as their subject- objections based on the rule of law. matter not only the authorization Express provision is required for the but also the amendment or abolition application of an 'incomplete' retro of measures taken by the Member active effect, and this is not contained in State concerned: the first sentence of Article 1 but in — came into force immediately.

cant is 'directly' affected by the contested decision 1970 (Franz Grad v Finanzamt Traun stein, competition in transport, Case The defendant maintains that even if the 9/70, Recueil 1970, p. 825 et seq.). contested decision was of concern to Although a decision which is binding the applicant, it would not however be on a Member State may confer rights of 'direct concern' within the meaning directly on individuals, it does not of the second paragraph of Article 173 follow as a corollary that a decision of the EEC Treaty.

BOCK v COMMISSION

but also on expediency. Annulment of Treaty. the contested decision by the Court Assuming that the decision applies to would restore to the applicant the right the applicant's case it would be the which it has under Article 10 of Regula second sentence and not the first of tion No 865/68. Article 1 which would be of concern In the applicant 's view the present case to the applicant. The defendant observes is fundamentally different from cases in that the first sentence covers a class of which the Member States possessed a persons defined in general terms, that is, discretion antedating the taking of a all those who wish to import preserved decision by the Commission.

national authorities. If such endorsement value of DM 125 000. In its telex is of direct concern to the importer, al message of 11 September 1970 the though his rights have already been Federal Government was referring to affected by the prior measure of the this application and not to that of national authorities, it is even more the applicant. certain that a decision which gives the — The defendant made no investiga national authorities the power to exer tions before the date of the contested cise a discretion is of direct concern to decision as to whether other applica the citizens of the Community. tions had been lodged apart from the The applicant considers that the judg application referred to in the telex ment of the Court in Case 9/70 also message from the Federal Govern confirms its view. ment and therefore it was not aware The difference between the fact of of the application submitted by the being 'immediately' affected by a deci

JUDGMENT OF 23. 11. 1971 — CASE 62/70

The equally relate to imports in respect of applicant observes that it would have which the necessary licences have al been possible effectively to remedy this ready been granted or applied for; it situation and its undesirable conse maintains that such imports, too, may quences by harmonizing the provisions involve deflections of trade. A restrictive governing importation of the goods in interpretation of the first sentence of question in the two Member States. Article 1 of the contested decision is In this respect, the applicant continues, therefore not justified in the defendant's it would have been sufficient for the view. defendant to make a recommendation to In reply to these arguments the applicant those States under the first paragraph maintains that the second sentence of of Article 115 of the EC Treaty.

2. Substance to effect. It cites in this respect the judgment of the Court of 13 December A — The question whether Article 115 1967 in Case 17/67 (Neumann v of the EEC Treaty has been in Hauptzollamt Hof, levy, [1967] ECR fringed 441) and alleges that the statement of The applicant maintains that apart from reasons for the contested decision in the 65.5 metric tons which it wished to dicates only by way of allusion that import into the Federal Republic— deflections of trade might arise in the which represents less than 0.15% of the future. It observes that retroactive annual consumption of preserved mush authorization was justified only if it rooms of that country (45 000 metric could be shown that similar deflections tons)—there were in the Netherlands of trade had already taken place.

BOCK v COMMISSION

employed to cover the domestic require defendant considers it natural that im ments of that country. It thus appears ports originating in Formosa should be from what the defendant says that there replaced by less expensive imports were no deflections of trade to be originating in the People's Republic of feared, at least up to September 1970. China and that the prohibition on im The applicant considers that the defen ports originating in that country should dant should have ascertained the quanti be evaded.

It ob ent route from that which they followed serves that no deflection took place in previously. the present case when the goods were The goods which the applicant wished imported into the Netherlands but that to import were at the time in free it would have taken place if they had circulation in the Netherlands. If there reached the Federal Republic by way of was a 'deflection of trade' this took the Netherlands. place at the time of importation into The defendant denies that large quanti the Netherlands.

relevant. What is decisive is that, at that public of Germany, free from any time, the possibility of buying in the quantitative restrictions in the Benelux Benelux countries preserved mushrooms

originating in the People's Republic of the EEC Treaty and they can therefore China was not limited to quantities no longer ensure their own protection; which were in free circulation in those this fact also reduces the chances of countries; the import arrangements of success of a recommendation. Finally, those countries allow further quantities the Commission on the whole has not of these products to be put into free had much success with the recommenda circulation at any time. During the first tions which it has previously made. nine months of 1970 the Netherlands The defendant observes further that a imported not less than 1 303 metric tons measure prohibiting imports would not of preserved mushrooms, whereas dur have been compatible with Article 110 ing the previous years goods of this kind of the EEC Treaty. Deflections of trade had not been imported, or at least only could have been limited if the Benelux in insignificant amounts. It must be countries had imposed a quota on im concluded that the 1 303 metric tons ports of preserved mushrooms origina in question were not intended exclusive

The Member States how tested decision does not have retroactive ever did not agree either on the system effect. It considers that the first sen proposed by the defendant or on any tence of Article 1 simply authorizes the other system. In the defendant's view Federal Republic of Germany to pro deflections of trade would have ceased hibit future imports; imports effected if the Federal Republic had abolished previously are not affected, in the the prohibition on import or if the defendant's view, by this authorization. Benelux countries had issued a similar The second sentence of the said article prohibition. The fact that the Benelux does not imply an extension but a countries were not disposed to adopt limitation of the authorization granted such measures is due, in the defendant's in the previous sentence.

decision Member States are no longer applying the second paragraph of Article 115 of The applicant considers that this pro-

3 The expression 'duly pending' must be understood as constituting an applica­ tion of Article 10 (1) of Regulation No 865/68/EEC of the Council of 28 June 1968 in conjunction with Article 2 (3) (q) and 4 (1) of the Commission's Directive of 22 December 1969; according to these provisions the Member States are obliged to grant applications for import licences for the products in question within a period which is not 'excessive', otherwise they contravene the prohibition of measures having an effect equivalent to quantitative restrictions.

4 In the present case it is sufficient to note that the Federal Government, which had justified its initiative by reference to an application submitted to it

JUDGMENT OF 23. 11. 1971 — CASE 62/70

at the time, might have assumed that the provision at issue was precisely intended to cover applications which had already been submitted. On 15 September 1970, the date when the contested decision was taken, the defen­ dant was aware that the authorization was to extend, in accordance with the wishes of the Federal Government, to applications for licences which were already pending before the German authorities before 11 September 1970, the date on which the German Government applied to the defendant. There­ fore, if the defendant intended to exclude these applications from the pro­ tective measure it should have expressed this clearly, instead of using the words 'the present authorization likewise covers', with which, by implication, it extended the scope of the first sentence of Article 1 of the decision.

11 The objection of inadmissibility must therefore be dismissed.

BOCK v COMMISSION

II — The substance

12 The applicant complains that the defendant has exceeded its powers under Article 115 of the EEC Treaty and thus violated the principle of the pro­ portionality of administrative measures. It maintains that in view of the small quantity of preserved mushrooms which it wished to import — 65.5 metric tons, that is to say, less than 0.15% of the annual consumption of preserved mushrooms in the Federal Republic—it was not necessary to extend the authorization at issue to applications for import licences pending at the date when the request was submitted to the Commission.

13 According to the first paragraph of Article 115: 'In order to ensure that the execution of measures of commercial policy taken ... by any Member State is not obstructed by deflection of trade, or where differences between such measures lead to economic difficulties in one or more of the Member States,' the Commission may, inter alia, 'authorize Member States to take the neces­ sary protective measures, the conditions and details of which it shall deter­ mine,' it being nevertheless understood that under the third paragraph of the same article: 'In the selection of such measures, priority shall be given to those which cause the least disturbance to the functioning of the common market'.

14 Such authorization may in particular constitute an exception to the provisions of Article 9 of the Treaty in conjunction with-those of Article 30, whereby the prohibition of quantitative restrictions on imports and all measures having equivalent effect applies not only to goods originating in Member States but also to goods in free circulation in Member States which originated in third countries. Because they constitute not only an exception to the afore­ mentioned provisions, which are fundamental to the operation of the common market, but also an obstacle to the implementation of the common com­ mercial policy provided for by Article 113, the derogations allowed under Article 115 must be strictly interpreted and applied.

Therefore it must be ordered to pay the costs.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Com­ munity, especially Article 9, 30 113 and 115; Having regard to Article 10 (1; of Regulation (EEC) No 865/68 of the Council of 28 June 1968 on the common organization of the market in products processed from fruit and vegetables (OJ L 153 of 1.7.1968, p. 8 et seq.); Having regard to Articles 2 (3) (q) and 4 (1) of the Commission Directive No 70/50/EEC of 22 December 1969 'based on the provisions of Article 33 (7), on the abolition of measures which have an effect equivalent to quantitative restrictions on imports and are not covered by other provisions adopted in pursuance of the EEC Treaty' (OJ L 13 of 19.1.1970, p. 29); 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, especially Article 69,

THE COURT

hereby:

I. Annuls the decision of the Commission of 15 September 1970, authorizing the Federal Republic of Germany to exclude from Community treatment certain products originating in the People's Republic of China, which were in free circulation in the Benelux

Registrar President

OPINION OF MR ADVOCATE-GENERAL

DUTHEILLET DE LAMOTHE

DELIVERED ON 12 OCTOBER 1971 1

Mr President, authorization provided for in the first Members of the Court, paragraph of Article 115 of the Treaty, which, in exceptional cases and in In 1970 the Federal Republic of Ger­ particular in cases of deflection of trade, many, for various reasons irrelevant to allows a Member State to exclude from an understanding of the present case, Community treatment certain products prohibited the import into territory of originating in third countries but al­ mushrooms originating in the People's ready in free circulation in one or more Republic of China. of the other Member States. It was easy to enforce this prohibition Such authorization, as regards mush­ when the German importer wanted to rooms originating in China, was not import from China or a third country requested by the Federal Republic of directly into Germany, that is to say, Germany until 11 September 1970 and to effect a 'straight' import, to employ was not given by the Commission until the usual jargon. 15 September. On the other hand, the problem was It is this situation which is the origin much more delicate when the importer of the present proceedings. wanted to buy Chinese mushrooms in On 4 September 1970 the Book com­ free circulation in one of the countries pany applied for an import licence for of the Community. a quantity of Chinese mushrooms Until the issue of Regulation No valued at DM 150 000 in respect of 865/68 of 28 June 1968 the Federal which it had a firm offer and which it authorities normally had automatically claimed to be in free circulation in the to issue the licence requested within a Netherlands. very short period since the goods were On 9 September 1970 it reminded the in free circulation in a Member State. competent Federal authority, that is to They could refuse only if they have pre­ say, the Bundesamt fur Ernährung und viously received from the Commission the Forstwirtschaft, of its application.