C-153/73

Council of the European Communities , represented by its legal adviser Daniel Vignes, acting as agent, assisted by Hans-Jürgen Rabe, and having chosen its address for service in Luxembourg at the offices of J. N. van den Houten, Director of the Legal Service of the European Investment Bank, 2 place de Metz, and

Commission of the European Communities , represented by its legal adviser Peter Kalbe, acting as agent, and having chosen its address for service in Luxembourg at the office of Pierre Lamoureux, legal adviser of the Commis­ sion of the European Communities, 4 boulevard Royal,

defendants,

in the matter of a claim for damages under the second paragraph of Article 215 of the EEC Treaty,

HOLTZ & WILLEMSEN v COUNCIL

THE COURT

The facts of the case and the arguments tion prices are fixed having regard to the developed by the parties in the courses distance between that area and the other of the written procedure may be sum­ intervention eentres, and by adding marized as follows: transport cost to the basic intervention price. The subsidy paid equals the dif­ ference between the target price and the world market price. Since intervention I — Facts and procedure prices are lower than target prices and since producers sell colza at a price 1. Regulation No 136/66/EEC of the which stands between the intervention Council of 22 September 1966 (OJ L 172 price and the target price, it is profitable of 30 September 1966, p. 3025), estab­ to buy and process colza produced with­ lishing a common organization of the in the Community. market in oils and fats has, since 1 July As soon as this organization of the 1967, applied inter alia to the products market became applicable to colza, rape which are the subject of the present and oils manufactured therefrom, the dispute, colza and rape seed and the oils Italian government notified the Com­ produced therefrom. mission on 12 August 1967 of the dif­ Oil mills using colza produced within ficulties it had encountered in the ap­ the Community receive a subsidy which plication of the basic regulation on enables them to obtain that product at oils and fats and requested the Com­ the same cost price as that applied on mission to take urgently protective the world market. Each year the Council measures pursuant to Article 226 of the fixes a target price, a slightly lower EEC Treaty. The Commission did not basic intervention price, together with a take a decision immediately, and Italy range of derived intervention prices the temporarily suspended imports of colza level of which varies according to the and rape oil from the EEC, the reason intervention centre involved. The basic given being that Italian oil mills were intervention price applies to the pro­ very far from the main production areas duction area which shows the largest and were not able to bear the compe­ surplus (Châteauroux). Derived interven­ tition, as the cost of carrying colza seed

Commission stated that it had presented breach of official duty on the part of the to the Council a proposal for the adop­ organs responsible for drafting and tion, within the framework of the com­ enacting Community regulations which mon organization of the market in oils caused it damage which should be made and fats, of appropriate 'transitional' good pursuant to the second paragraph measures intended to enable Italian oil of Article 215 of the EEC Treaty. mills to have an 'additional period' for The applicant wrote to the Council on adjustment. 29 January 1973 calling upon it, in Subsequently, the Council adopted conformity with the provisions of the Regulation No 876/67 of 20 November second paragraph of Article 175 of the 1967 (OJ L 281 of 21 November 1967, Treaty, to enact a regulation for an p. 7) introducing for the 1967/68 additional subsidy of 0.60 u.a. per 100 marketing year an additional subsidy for kg of colza and rape seed processed in colza and rape seed processed in Italy. oil mills in the same position as it was That subsidy was maintained henceforth, itself. At the same time, it asked the and last by Council Regulation No Commission to make use of its right of 1336/72 of 27 June 1972 (OJ L 147 of initiative by submitting a proposal to the 29 June 1972, p. 7) in respect of the Council to that effect. The Commission 1972/73 marketing year and by Council replied on 8 March 1973 and assured the Regulation No 1357/73 of 15 May 1973 applicant that the question would be (OJ L 141 of 28 May 1973, p. 30) in examined closely by its departments. By respect of the 1973/74 marketing year. a letter of 23 March 1973, the Council stated that it considered that the For the 1970/71 marketing year, the main colza production areas in the aforementioned Regulations in were Community were: conformity with the Treaty establishing the EEC. — Schleswig-Holstein: 106 000 metric tons, On 16 May 1973, the applicant commenced before the Court an action — Lower Saxony: 28 000 metric tons, for failure to act, the purpose of which — Bavaria: 18 100 metric tons, was to compel the Council to enact a — Northern and Central France: + non-discriminatory regulation which 300 000 metric tons, would, in future, also apply to oil mills — Provence: about 50 000 metric tons, similarly located in the Land of North — Garonne: about 70 000 metric tons. Rhine-Westphalia. This action was The cultivation area closest to the Italian dismissed as inadmissible by a judgment of the Court of 15 January 1974. oil mills is Provence, whilst that closest to the applicant is Northern France. The present application for damages submitted on 24 July 1973 has another 2. The applicant operates an oil mill in purpose: the application's aim is to Krefeld Uerdingen, in the Land of North obtain compensation for the damage Rhine-Westphalia, and one of its activities caused until now to the applicant by is the production of oil from colza and discirminatory rules. The applicant has

been deprived of subsidies to which only The Council answers to this that, both oil mills located in Italy were entitled owing to the interdependence of the although, in its opinion, all oil mills Community and the world market in oils within the Community should have been and fats, and to the great importance of granted such subsidies in the light of one oil seed production in certain areas, the criterion only: the criterion of distance organization of the market in oils and from the production areas. fats can be distinguished from the other market organizations in that, rather than 3. The written procedure has followed providing for a system of levies collected the normal course. at the frontier, it provides for a system of subsidies consisting of a basic subsidy making good the difference between the Community target price and the world II — Conclusions of the price, and an additional subsidy for seed parties harvested in the Community and refined in Italy. 1. The applicant claims that the Court The reason for the introduction of that should: additional subsidy is that no transitional (a) order the defendants to pay to it stage was provided for in respect of the damages of DM 735 924; market in oils and fats, unlike the situation in the other market (b) order the defendants to bear the organizations, and difficulties arose in costs. Italy at an early stage which led to the fear that the Italian market might be 2. The Council of the European flooded with oil refined in France. The Communities claims that the Court should: applicant had indeed acknowledged the need to remedy the difficulties (a) declare the action inadmissible and encountered by the Italian oil mills. consequently dismiss it; While it is true that the Advisory Com­ mittee on Oils and Fats within the Com­ (b) order the applicant to bear the costs. mission stressed that those measures 3. The Commission of the European should not continue to apply exclusively Communities claims that the Court to Italian oil mills, but should be applied should: to all oil mills in the Community, discus­ sions held within that body had appar­ (a) dismiss the action; ently indicated that a modification of the (b) order the applicant to bear the costs. existing system was difficult, that only Italian oil mills had suffered any real loss, and that the amount of the additional subsidy was not too high III — Submissions and argu­ since it enabled Italian oil mills to export ments of the parties oil in small quantity only. The dispute therefore concerned solely A — Facts the formal and 'apparently discriminat­ ory' character of the additional subsidy, The applicant states that, in so far as the which was said to involve a market in oils and fats is governed by discrimination on grounds of nationality, the provisions of Regulation No 136/66, even though it was not proved that the any additional subsidy for seeds har­ subsidy had harmful consequences for other than Italian oil mills. vested in the Community and processed in Italy cannot form part of the structure The applicant replies that by making the of that organization. additional subsidy for Italian oil mills a

Italian oil mills was still being given. Furthermore, the fact that the subsidy in The fact that there was no transitional question has not yet been declared stage could not in itself warrant unlawful does not prevent the discriminatory rules during eight admissibility of an action for damages. consecutive marketing years. The Besides, the previous action for failure to Commission did not find the difficulties act did not aim at the annulment of the encountered by Italian oil mills to be regulations introducing the additional sufficiently grave when, by its decision subsidy, but the application of similar of 11 October 1967, it rejected the but non-discriminatory rules to certain request for protective measures oil mills. presented by Italy under Article 226 of Finally, the action for damages was not the EEC Treaty. In its statement of a disguised application for annulment. It defence, the Council did not state that could not in itself affect the future, nor such difficulties had occurred, but only could it validly be challenged on the expressed the 'fear' that they might. ground of having an indirect effect, The applicant had never accepted the without involving the abolition of the need for special measures in favour of legal protection confirmed by the second Italian oil mills. Since the latter's paragraph of Article 215 of the Treaty. difficulties were due to their being far The Council answers that the action for from the production areas, only general damages should be declared inadmissible measures, providing for an additional since it aims in actual fact at obtaining subsidy in favour of oil mills far from an amendment to, or an amplification of those areas, were acceptable. a Community regulation which the Finally the minutes of the meetings of applicant could contest neither under the Advisory Committee on Oils and Article 173 nor under Article 175 of the Fats within the Commission did show Treaty. It is true that the Court did not that doubts had been expressed by all in concur with such argument in Case 5/71 respect of the discriminatory measures Zuckerfabrik Schöppensted Rec., 1971, adopted in favour of Italy. The p. 975 nor in Case 4/69 Lütticke Rec. Commission itself expressed the wish 1971, p. 325 nor in Joined Cases 9/71 that the additional subsidy should be and 11/71 Compagnie d'Approvision­ stopped as it had noted its nement v Commission Rec. 1972, p. 391, discriminatory character. in which the respective applicants ques­ tioned legislative acts which they held to B — Admissibility be in error. But, in the present case, what The applicant claims that the fact that is involved is a legislative act which the Council regulations were the source of applicant agrees to be valid and in

accordance with the Treaty and basic prohibition of any discrimination as laid Regulation No 136/66. down in Article 7 which in fact only Furthermore, the Community cannot be becomes effective where a different held responsible for general and abstract treatment constitutes an actual discrimi­ legal acts — i.e. legislative acts such as nation. regulations — where they are not of Furthermore, the applicant was not able direct and individual concern to the to provide any proof whatsoever to applicant. The action claiming liability show that the Council was guilty of a for the financial consequences of such 'sufficiently flagrant' violation of a legislative acts cannot be considered superior rule of law for the protection of admissible, since the acts subject of the the individual. In support of its dispute are not of direct concern to the argument, the applicant states that the applicant and cannot be prejudicial to it reason warranting the grant of an individually, while indeed these are additional subsidy is that its oil mills are prerequisites for liability. located far from the production areas, The applicant replies that at no time did and that it should therefore enjoy the it specifically agree that the regulations same treatment as that accorded to in question were in accordance with the Italian oil mills, since it is located as far organization of the market in oils and as they are from the Community fats. It had only acknowledged that the production areas. However, reference to fact that oil mills were located far from the criterion of distance from the production areas was an important production areas does not in itself show criterion when granting additional that the applicant is in the same position subsidy. as Italian oil mills. A sufficiently flagrant violation of a The difficulties encountered by Italian superior rule of law is not a prerequisite oil mills in obtaining supplies of colza for an action to be admissible, but a and rape at prices taking into account condition for its validity as is shown by conditions of competition, had arisen the position of the recital setting out that and become known only after the entry principle in the abovementioned into force of the organization of the judgment in Case 5/71. Furthermore, market in fats, and led the Community Mr Advocate-General Roemer, in his to adopt corrective measures forthwith. opinion in the Joined Cases 63 to 69/72 The Commission's refusal to take a Werhahn pointed out that infringe­ decision under Article 226 of the EEC ment of the prohibition against discrimi­ Treaty in no way shows that there was nation constituted sufficient grounds to no difficulty as the application was institute proceedings. These are the rejected because it was then already grounds put forward by the applicant in intended to grant an additional subsidy this case. to Italian oil mills.

similar to those clearly encountered by Only a sufficiently flagrant infringement Italian oil mills. can give rise to an action for damages under the second paragraph of Article According to the Commission, a right to 215 of the EEC Treaty, for the legislative compensation under Article 215, second action of the legislator in respect of rules paragraph, arises only where the governing market organs means that he institutions of the European Economic should have a wide margin of discretion, Community, within the framework of and that he should be bound and their non-contractual liabilities and their entitled to set priorities and to put sovereign acts, commit a sufficiently certain interests before others. flagrant breach of an obligation in In Case 5/71 mentioned above the Court respect of the applicant and where, by limited infringement of the discrimi way of normal consequence, serious nation rule to infringements of a financial loss, corresponding exactly to protective norm of superior law, at the the amount of compensation sought, very limit of discretionary powers.

Italian territory. German undertakings supports its case by arguments and processing seed in Italy could be granted documentary evidence. that subsidy. There would be discrimination within the meaning of Article 40 (3) had the The special prohibition against any Community legislator provided, in discrimination laid down in Article substance and not merely formally, for 40 (3) of the EEC Treaty is a limitation different rules in regard to identical which applies only at the end of the situations or had the same rules been transitional period provided for in applied to completely different Article 8, that is 31 December 1969.

Immediate application discrimination on grounds of nationality of such a strict regulation had adverse to anyone processing seeds in an oil mill effects on the competitiveness of Italian located in the Italian territory, is purely oil mills, which were subsequently re a matter of form and irrelevant, since the medied by means of an additional sub additional subsidy is of benefit sidy. Unconditional exclusion of tran 'essentially' to Italian oil mills. sitional measures did not, in any event, meet the objective of Article 40 (3). Furthermore, it was the Council which decided not to introduce a transitional Even if the existing system of subsidy system similar to the system operating were held to be discriminatory, the for other market organizations.

HOLTZ & WILLEMSEN v COUNCIL

made under pressure by that State. In the fundamental tenets of the common any case, Article 8 (1) of the Treaty agricultural policy and is dependent on provides that the transitional system may and interacting with other requirements, extend over a total period of 12 years, e.g. the need for merging existing and the action for damages would in any national markets into a common market event be justified in so far as it relates to organization, and the need to effect this the period after 1 January 1970. change in an economically rational The Council, in its rejoinder, states that manner, so as to avoid causing serious Regulation No 876/67 does indeed form and lasting damage to those concerned. part of the common organization of the To some extent then, the prohibition of market in oils and fats, owing to its any discrimination must be relative. having been adopted on the basis of Article 36 of Regulation No 136/66. In (b) Situation of the applicant in relation the applicant's view, the recitals of to its competitors in Italy Regulation No 136/66 show that additional subsidies granted on a The applicant claims that, since it is national basis or having regard to located far from the production areas, it national criteria are not compatible with is largely in the same position as an the Treaty nor with the organization of Italian oil mill situated at a distance of markets. But it should be noted that 350 km. from the main colza cultivation

Regulation No 876/67 does not provide areas in Southern France. As it is, when for a national subsidy but for a granting a different treatment to Italian Community subsidy which must not be oil mills the basic criterion used in the

JUDGMENT OF 2. 7. 1974 — CASE 153/73

The of colza for oil mills located in Venetia, applicant did not benefit from the it devolves upon the Commission or the Community preference resulting from Council to specify what they are since the fixing of an intervention price lower they state that, although distances are than the target price, since Community the same, transport costs are different. In colza which, could and should normally fact, Italian oil mills enjoy cheaper go towards supplying its oil mill, was means of transport. redirected towards Italy as a result of the It is true that Italy is one of the biggest additional subsidy. colza oil consumers in the Community, It does not devolve upon the applicant but there is also sizeable consumption of to answer the Council's questions.

If the conditions looked at in the abstract 'domains' existed at the national level, which resulted in the applicant being they had to accept competition. The unable to obtain oil seed produced in the Italian oil industry was dependent on neighbouring areas, and the overall imports of oil seeds coming from third market conditions. countries and from French production areas. The applicant was in the same Tha additional subsidy of DM 31.10 for situation: it could cover only about the purchase of colza in Schleswig- 12 % of its colza requirements within Holstein exceeds by far the freight cost North Rhine-Westphalia, and must also differential (DM 13) between transport import either from far distant to Germany from North-Krefeld and Community production areas such as transport to Germany from North-Ra Schleswig-Holstein or Northern France, venna. This suffices to show that there is or from third countries. in fact marked discrimination.

The Council's contention that, having processed from Community seeds regard to market prices, the applicant (problem of competitiveness). could have sold its oil in Milan at DM Guaranteed purchase associated with 110.55 per 100 kg instead of DM 99 in intervention prices for colza seed means Germany, is based on transport cost that such prices have an effect equivalent Krefeld/Italy of DM 5.30 per 100 kg; to minimum market prices. Furthermore this figure however is incorrect.

The or Italian oil mills would normally get subsidy paid for the processing of such their supplies. seeds sould not make up for that Furthermore, during the years from 1969 disadvantage and would furthermore be to 1972, the applicant processed less and likely to worsen it by helping to make less Community oil seeds. In absolute more competitive those oil mills situated terms however the quantity of colza close to production areas. processed by the applicant increased by To ascertain wheter the applicant should by nearly 50 %: have been granted the additional — 1969: 31 000 metric tons subsidy, one should first ascertain how it could transport the Community colza it — 1972: 45 800 metric tons

additional subsidy which is the subject 1704/73, OJ L 175 of 29 June 1973, p. of the dispute was the result of two 1.). competitive disadvantages: The applicant would then be able to buy — the fundamental disadvantage in the colza it needs in the Dijon—Stras regard to prices when purchasing bourg area on terms identical with those Community seeds (problem of existing in Düsseldorf itself. It would supply), then be in the same position as an oil — and the resulting unfavourable price mill of the Dijon—Strasbourg area close position when marketing the oil to the production areas.

Furthermore, the prices actually paid for — Bordeaux: 9.27 u.a./100 kg colza, colza on the market are higher than the — Dunkirk: 9.44 u.a./100 kg colza, intervention prices by about 0.60 u.a. per — Venice: 9.90 u.a./100 kg colza. 100 kg (Commission's calculation) and, consequently, the applicant's cost price These quotations show that an oil mill would be 19.79 + 0.60 = 20.39 u.a. per located near Venice would be clearly 100 kg of Community colza. That price worse off as regards price by comparison is lower by 0.67 per 100 kg than the with sellers having equal capacity but target price (calculated in accordance situated close to production areas.

1.47 u.a. per 100 kg. Also on the basis of treatment is unfounded. the market price plus an average of 0.60 per 100 kg, the cost price would be With regard to transport, the applicant 19.33 + 0.60 + 1.47 = 21.40 u.a. per could without difficulty get supplies by 100 kg. ship from the Dijon—Stras bourg—Chalons s/M region and also This shows an advantage of 1.01 u.a. per from Schleswig-Holstein.

of Community colza. And, instead of which involves transport cost between enjoying, as does the applicant, a 1.30 and 1.60 u.a. per 100 kg colza. preferential price when buying Com munity seeds in comparison with colza In any event, the full significance of for processing bought at world price, a transport costs in regard to the Venetian oil mill would be obliged to competitiveness of each oil mill only buy on the world market. emerges if related to possible cost prices of Community colza; therefore even a The initial conditions created by the similarity in transport costs does not common organizations of the market would then, when buying Community automatically mean, in the existing context, that there is a discrimination colza, be fundamentally different and detrimental to the applicant. more favourable for the applicant than for an oil mill in the Venice Region. The applicant claims that ruling prices prevented it from getting an adequate The Commission then compares the supply of Community colza.

processed at applicant which thus finds itself in a — Hamburg: 9.41 u.a./100 kg colza, much more favourable position.

Furthermore, the common organization 33 512 metric tons of Community seeds. of the market in oil seeds allows The figure of 0.60 u.a. per 100 kg, was effective market price developments and worked out on the assumption that the existing demand to depend freely on distance between its own oil mill and a supply and demand trends, and it is given Italian oil mill in relation to a therefore quite possible that at a given given point constituted sufficient proof. moment the applicant was unable to find But, in the absence of any other the quantity of Community colza it evidence, it would be impossible simply wanted at the place and at the price that to assume that the loss for which

In any event, it involved consists in the fact that it did could prove the point only by showing not receive any subsidy corresponding to its books so as to enable a meaningful the distance between its oil mill and comparison to be made between its production areas. The loss it incurred is present position and its previous then equal to the total quantity of EEC position. The particulars given in its colza used by it as follows: application are quite inadequate, and the — 1969: 21 700 metric tons, attempt to assess colza oil cake has no

0.60 u.a. per 100 kg. Italian oil mills corresponds only to The Council points out that for the transport costs from the Italian frontier. 33 512 metric tons of Community colza Another point to consider, since Italian seed it processed between 1969 and oil mills worked mainly for the Italian 1972, the applicant calculated a subsidy market, is to what extent the granting of of 0.60 u.a. per 100 kg, or a loss of an additional subsidy in Italy was 201 072 u.a., or DM 735 924, while in its actually the cause of the supposed loss letter of 29 January 1973, it stated that to the applicant, and to what extent its the loss incurred was of 20 072 u.a., that losses were abnormal.

JUDGMENT OF 2. 7. 1974 — CASE 153/73

the beginning of 1973 to draw the Finally, the applicant furnished evidence Commission's attention to that state of concerning the processing in its mills of affairs, although the applicant was aware 33 512 metric tons of Community seeds. of the whole problem since 1967. The Council retorts that it is not

The applicant answers that apparently admissible that the applicant should seek to confine itself to an abstract there was a misunderstanding as to its assessment of the damage, the reason for calculation of the damage caused. the damage lying in fact in a marked Mr Advocate-General Roemer, in his discrimination. opinion in the Joined Cases 63 to 69/72, stated that the concept of an In its assessment of the damage caused, abstract calculation of a damage did not it used as a basis for reference the exist in international law. The subsidy recitals of the Regulations introducing equal to 0.60 u.a. per 100 kg of an additional subsidy. The conclusive processed oil seeds results from a question when assessing the damage is theoretical calculation. It is for the not to find out how losses should be Community organs competent in the calculated but only whether its field of economic policy to work out the arguments are well founded. amount of the additional subsidy. As to None of the questions put by the the Commission's proposal for a Council Council and by the Commission is Regulation providing for the granting of relevant apart from the question: 'Has a subsidy of 0.60 u.a. per 100 kg of oil the applicant taken into account the fact seeds to oil mills located in the region of that the compensation offered to Italian Trentino-Alto Adige. This provides for oil mills corresponds solely to the the regionalization of the additional transport costs by rail from the Italian subsidy only in respect of Italy. Equal frontier?' to which the answer had to be distances as the crow flies from an oil

HOLTZ & WILLEMSEN v COUNCIL

on them. The sole purpose of this case is in such a way that the actual cost of to obtain that an additional subsidy transport from the frontier was reimbursed almost in full, while the total should be paid to it in respect of past activities. The purpose of the action is amount paid in Italy did not exceed the therefore to secure recognition of its authorized amount of the subsidy. right to the additional subsidy and not to obtain damages. A so-called 'abstract' (d) Culpability calculation of the loss incurred would in The applicant maintains the Community no way change matters, as it concerns authorities were culpable — this in the solely the amount of such loss, law of most Member States is a supposing that a real loss was actually prerequisite for claiming damages in incurred.

and particularly serious. discriminatory character of the subsidy From a procedural point of view, it can granted. be added that only the administrative The Commission says in answer that the authorities of Member States can decide Community institutions should then in regard to a person who may be have been made aware in good time of entitled thereto, the existence and the the particular commercial situation of amount of a given subsidy, in the applicant and of its supposedly accordance with Community law. The exceptional losses, so as to be able to applicant could have claimed that the ascertain whether or not limiting the amount of aid granted to it was not additional subsidy to Italy was an sufficiently high, and instituted arbitrary act. proceedings before the competent national courts. This Court would then The applicant had not so far shown the have been able to consider under Article existence of a right resulting from a breach of duty committed by the 177 of the EEC Treaty whether the European Economic Community.

JUDGMENT OF 2. 7. 1974 — CASE 153/73

In 1969, it Finally in view of the reaction which met bought 31 000 metric tons colza of the applicant's letter to the Council of 29 which 20 000 were from the Community, January 1973, it could be assumed that, mainly from Germany (5 700) and even if such action had been taken France (13 600). In 1970, it bought during the previous years, it would not 17 000 metric tons colza, of which have brought about any alteration 14 000 were within the Community and in the illegal practice. In any case, trade solely within Germany.

question. which 24 000 were from the Community After the closing of the written as follows: Germany (nearly 20 000), procedure, the Court in a letter of 24 Holland (3 000) and France (1 000). January 1974, put a number of questions to the parties, and the answers given are The applicant was not able to obtain briefly set out below. adequate supplies from France owing to The Commission supplies statistics particularly large purchases of French showing that exports of colza seed from colza made by Italian buyers, '.

HOLTZ & WILLEMSEN v COUNCIL

of the oil produced by a Venetian oil more, when the frontiers were opened in mill, and that the competitive advantage 1967, a quantity from Germany and the latter enjoys is between 7/8 and half France equal to one third of the annual the additional subsidy (0.8 u.a.). national production was put on the Oral arguments took place on 6 March Italian market over a period of a few 1974. The applicant was represented by weeks. Finally, the Council announced Dr Jürgen Gundisch, of the Hamburg that the rules in question would not be Bar, the Council of the European extended for the forthcoming marketing Communities by its Legal Adviser, year, and that it intended to study a new Daniel Vignes, acting as agent, assisted and completely different regulation to by Hans-Jürgen Rabe, of the Hamburg restructure all the provisions in respect of colza and colza oil. Bar, and the Commission of the European Communities by its Legal The applicant pointed out that, contrary Adviser, Peter Kalbe, acting as agent. to the information given in its During the oral argument, the parties application, the production area closest put forward the following new points: to the oil mills situated in the Venice

The Council claimed that the proportion region is not the Rhone, but the Garonne whence seeds are carried to it of Community colza in relation to the total quantity of colza crushed by the by sea. applicant is the same for all the Com­ The Advocate-General delivered his munity oil mills (about 70 %); further­ opinion on 8 May 1974.

Law

To accept the admissibility of the action would frustrate the contentious system provided for by the Treaty and in particular by paragraph 3 of Article 175 thereof which gives individuals no right to bring an action for failure to issue a Regulation.

3 However, the action for damages provided for in the second paragraph of Article 215 of the Treaty was included as an autonomous form of action, with a particular purpose to fulfil within the system of actions, and subject to conditions on its use by its specific nature.

4 It would be contrary to the autonomy of this action as well as to the efficacity of the general system of forms of action established by the Treaty to regard as a ground of inadmissibility the fact that in certain circum­ stances an action for damages could lead to a result similar to that of an action for failure to act under Article 175.

Such an action differs from an action for failure to act in that its end is not the adoption of a particular measure but compensation for damage caused by an institution in the performance of its duties.

5 This action aims only at the recognition of a right to compensation and as a result to a benefit intended to have effect solely with regard to the applicant.

The action is therefore admissible.

Since it relates to a legislative act which involves the choice of economic policy, the Community is not liable for any damage suffered by individuals as a consequence of this act under the provisions of Article 215, second paragraph, of the Treaty, unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred.

8 Regulation No 136/66/EEC of the Council of 22 September 1966, which entered into force on 1 October 1966, has applied since 1 July 1967 to colza and rape seed and to oil produced therefrom.

This Regulation aims, by means of a system of basic intervention prices and derived intervention prices, at alleviating the burden of transport costs to the oil mills for the seeds of colza products in the various areas.

JUDGMENT OF 2. 7.1974 — CASE 153/73

9 Since difficulties arose in Italy on the opening of the inter-Community frontiers on the coming into force of Regulation No 136/66, in particular from the fact the colza oil produced in France was available on the Italian market at prices considerably lower than those of oil produced in Italy, the Italian Government requested authority from the Commission to bring in protective measures under Article 226 of the Treaty.

10 On the Commission rejecting this request by Decision dated 11 October 1967, the Council, by Regulation No 876/67, issued under Article 36 of Regulation No 136/66, introduced an 'additional subsidy' amounting to 0.675 u.a. per 100 kg of seed for 'colza and rape seed harvested in the Community which is sent during the course of the 1967/68 marketing year to an oil mill in Italian territory' in order to be processed.

The additional subsidy in question is thus intended to compensate for the disadvantages in competition caused to the Italian mills far from the Commu­ nity production areas by the structure of the common organization of the market.

13 The objectives referred to in Article 40 of the Treaty, that is the establishment of a common agricultural policy and a common organization of agricultural markets, presupposes the adoption of common rules and criteria and the consequent exclusion of any discrimination based on the nationality or locality of the oil mills.

In this light the various factors in the common organization of the markets, protective measures, aids, subsidies, etc. may be distinguished according to the areas and other conditions of production or consumption only in terms of criteria of an objective nature which ensure a proportionate distribution of advantages and disadvantages for those concerned without distinguishing between the territory of Member States.

Additional subsidies limited to oil mills established in one of the Member States are therefore in general incompatible with the objectives of the common agricultural policy in so far as they are not justified by circumstances special to the whole of the national market in question.

14 At its initiation however the common organization of the market may not completely measure up to the objectives listed in Article 39 of the Treaty and may contain gaps capable of endangering the stability of the market in a part of the Community.

Although it is incumbent upon the institutions responsible to seek with all due diligence the causes of such difficulties and to adapt the regulations on the common organization of the markets as soon as possible to remedy the defects revealed, they are at liberty, in the meantime, to take provisional measures, which are limited to those Member States in which the market has been more particularly affected.

18 Having regard to the nature of the problems involved, by putting an end to the measures after the 1973/74 marketing year, the Council has respected their provisional nature.

The action is therefore not valid in law and must be rejected.

Costs

19 Under Article 69 (3) of the Rules of Procedure where the circumstances are exceptional, the Court may order that the parties bear their own costs.

HOLTZ & WILLEMSEN v COUNCIL

In the present case the applicant has had sufficient reason to refer the matter in question to the Court.

Lecourt Donner Sørensen Monaco Mertens de Wilmars

Pescatore Kutscher Ó Dálaigh Mackenzie Stuart

Delivered in open court in Luxembourg on 2 July 1974.

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL REISCHL