C-48/74

on the interpretation of Articles 33, 43, 45 and 46 of the EEC Treaty in the matter of national organizations of the market.

THE COURT

composed of: R. Lecourt, President, C. Ó Dálaigh and Lord Mackenzie Stuart, Presidents of Chambers, A. M. Donner, R. Monaco (Rapporteur), J. Mertens de Wilmars, P. Pescatore, H. Kutscher and M. Sørensen, Judges,

Advocate General: J. P. Warner, Registrar: A. Van Houtte,

gives the following

JUDGMENT

French Government to establish that Commission considered it necessary to there had been a violation of provisions examine whether in France there does of the Treaty of Rome and of the not exist a national organization of the Yaoundé Convention of 20 July 1963 banana market. There had in fact in (OJ 1964 No 93 p. 1431) insofar as the 1968 been a request to it by the French importation into France of bananas Government to recognize the existence originating in Zaire, Somalia and in France of such an organization. Surinam is concerned.

Treaty. By virtue of these French regulations, Mr Charmasson had 2. Meanwhile, by a notice to importers therefore only been able to effect published in the Journal Officiel of 28 imports from those countries within the October 1969, the French authorities framework of quotas opened by the opened a quota for the importation of French Government and to the extent fresh bananas originating in and coming that such quotas had been opened. from foreign countries other than those In support of his complaint Mr to, which the privileged treatment under Charmasson in essence argued that there Article 86 of the decree of 30 January had been a violation: 1967 of the 'directeur general des — of the Yaoundé Convention, which douanes et droits indirects' applied, and other than Spain and Rhodesia. by Article 5 provides inter alia that 'as regards the elimination of By summary application of 29 December quantitative restrictions, the Member 1964 and by supplementary pleading of States shall apply to goods 19 September 1970 Mr Charmasson originating in the Associated States asked the Conseil d'État of France to the corresponding provisions of the annul the aforementioned notice on the Treaty'; grounds of that it constituted an abuse — of the Decision of the Council of 25 of power (excès de pouvoir).

of Article 33. application of Article 33 of the Treaty, Hence, on the principle that products and, on the other hand, the banana falling within a national organization of market in France could at the time of the the market avoid having Article 33 of notice in question be regarded as the EEC Treaty applied to them, the governed by a national market

organization within the meaning of originating in Member States or in free Articles 43, 45 and 46 of the Treaty, circulation in those States. However, it decided on 28 June 1974 to stay the seems manifest that paragraph 2 of proceedings and to refer the following Article 38 of the Treaty authorizes the question for a preliminary ruling: existence of measures that derogate in '1. whether the existence in a Member favour of agricultural products, as State of a national market or­ defined in paragraph 1. These measures, which result from Articles 39 to 46 of ganization within the meaning of Articles 43, 45 and 46 of the Treaty the Treaty have a content different from of Rome is such as to preclude the that of the rules normally laid down for the establishment of the common application of Article 33 of the Treaty market. in the case of the product concerned and Having drawn attention to Article 45 of 2. if the answer is in the affirmative, the Treaty, the French Government what are the distinguishing charac­ believes itself entitled to conclude that teristics of a national market on the basis of this regulation, products organization of this kind.' which in a Member State are the subject 3. The decision making the reference of a national market organization are reached the Court on 5 July 1974. not subject to the general rules relating to the progressive elimination of The French Government, represented by quantitative restrictions on import. This the Minister for Economic Affairs and interpretation is confirmed by Article 60 Finance and the Commission of the (2) of the Act annexed to the Treaty of European Communities, represented by Brussels on the accession of new its legal adviser Bernard Paulin, Member States. Moreover, it is submitted observations under Article 20 of the EEC Statute of the Court of corroborated by the point of view expressed by the Commission of the Justice. European Communities on 29 November Upon hearing the report of the 1960 in reply to a written question asked Judge-Rapporteur, and the opinion of in the European Parliament (OJ of the Advocate-General, the Court decided 16. 12.1960), as well as by the case law to open the oral procedure without any of the Court of Justice, in particular the preparatory inquiry. Judgment of 14 December 1962 in Joined Cases 2 and 3/62.

— to stabilize markets, approved the proposal for a finding that — to assure the availability or supplies, at the time when the Treaty of Rome came into force there already existed a — to ensure that supplies reach national organization of the banana consumers at reasonable prices. market. Finally, when the meetings of The absence of a rigid legal definition of the AAMS group took place in 1970, the the concept 'market organization' is due representatives of the Commission to the variety of situations that are themselves based themselves upon the found in the agricultural field and the existence of such a national organization multiplicity of technical solutions for the purpose of refuting the Dutch capable of being set up for the purpose claims. of organizing the markets.

the market. Having referred to the February 1964, since the validity of these Court's Judgment of 13 November 1964 two acts did not extend beyond 31 May in Joined Cases 90 and 91/63 as well as 1969. By Decision of 28 May 1969, the aforementioned reply of the based upon Article 60, paragraph 2 of Commission, the French Government the said Convention, the Association concludes that an organization of the Council had decided to continue in market must comply with the general operation the provision of Title I objects of Article 39 of the Treaty and relating to trade until the coming into set up a coherent totality of measures force of the new Convention and until that would achieve these objects. 30 June 1970 at the latest.

the banana market. Having shown in the aforementioned Decisions of 28 May detail the elements going to make up this 1969 that the Community provisions regulation as well as its results, the relating to the elimination of French Government concludes that on quantitative restrictions were applicable the basis of the definition of the national to products originating in Associated organization of the market thus adopted, States, countries and territories. a national organization of the market The Commission considers that in order existed in France before 1958 which had to examine the first question it is consistently improved to this day. Mr necessary to bear in mind the definition Colonna di Palliano and Mr Mansholt of the concept of 'a national market arrived at the same conclusion in a organization' and the totality of the communication to the Members of the measures that govern the banana market Commission on 12 May 1969.

JUDGMENT OF 10. 12. 1974 — CASE 48/74

market. Whilst it might be a matter Now, what the Commission would of doubt whether an organization of like to see the Court do is to the market could consist of only one complete its definition by showing mechanism, it is on the other hand that the measures and legal certain that a system of quotas is not provisions that constitute the in principle sufficient by itself to national organization of the market establish that there is an agricultural provide guarantees for the employ policy in a particular sector and give ment and the living standard of the reasonable guarantees 'for the

1960. The definition of national State seeks to control and regulate the organization of the market as it market in a particular agricultural is contained in this reply is product, whilst giving guarantees for the nevertheless, in the opinion of a employment and standard of living of number of legal writers, imprecise in the producers concerned.' so far as it refers to provisions (b) Having thus defined the concept of relating to 'the sale of a particular 'national market organization', the agricultural product'. To set up a Commission on pages 14 to 16 of the market in fact amounts to acting not statement of its case analyses the only on sales but also on the various regulation of the banana market in component parts of this market: France with a view to explaining the supply, demand, price. On the other reasons which on the basis of an hand the organization of the market examination undertaken in 1969 led it to must not exclude actions having the the conclusion that this regulation, since purpose of correcting an existing before the coming into force of the EEC

Treaty, already amounted to market concluded, maintain the restrictions on organization within the meaning of the trade that are inherent in a national Treaty. organization. Whilst the possibility of concluding long-term agreements or 2. On the first question contracts is limited in time (first stage of The Commission observes, in the first the transitional period) the principle of keeping in existence national organiza­ place, that it is not possible to examine tions or certain of their elements this question in a global manner but that (quantitative restrictions) does on the one might in analysing the matter to other hand, in the absence of a common distinguish between the two provisions organization, have some permanent of Article 33 of the EEC Treaty, which value. are expressly set out by the Conseil d'État in the grounds of its decision, that This interpretation is confirmed by is to say: Article 43 (3) (a) of the Treaty, which — the rule of 'global quotas' laid down provides specifically that a common by Article 33 (1), first paragraph, organization may replace national and organizations provided the common organization offers 'equivalent safeguards — the rule of the 'progressive en­ for the employment and standard of largement of quotas' which arises living of the producers concerned ...'. in particular from Article 33 (3). Manifestly, these guarantees cannot be Since in its view this lastmentioned rule offered simply by the effect of the is the most important one, the provisions of the Treaty on the free Commission thought it preferable to movement of goods. A national take it first. organization of the market involves by definition guarantees that include, or (a) Whether the existence of a national may include, restrictions on trade. Since organization of the market impedes Member States cannot, except on the the application of Article 33 (3) of basis that equivalent guarantees are the Treaty provided, be forced to abolish such The Commission is convinced that this restrictions, Article 43 (3) therefore question ought to be answered in the appears to be a 'lex specialis', taking affirmative. The reasons justifying this precedence over the application of the conviction are based upon Articles 45 'lex generalis' of Article 33 (3). A and 43 as well as upon the general sense different interpretation, conferring of the agricultural provisions of the EEC supremacy upon Article 33 would Treaty, in particular Article 38 (4). deprive Article 43 (3) of any useful In the Commissions's view Article 45 of purpose.

Member State, instead of allowing provisions that the two rules are linked national market mechanisms to operate together. The globalization can only be or intervening only according to the explained by the procedure which must needs of the moment, had established then follow in order progressively to a real policy and set up a national enlarge, and finally abolish, the existing organization of the market. quotas. Moreover it has no sense and is Having said this, the Commission adds in any event of no interest from the that nevertheless the solution thus point of view of the creation of a common market intended to come into advocated ought to be toned down in order to make it clear that the exception existence normally in the twelve years of to the application of Article 33 (3), the transitional period.

globalization would have unacceptable Whilst the increase in quotas certainly consequences for the organization of the affects the national organization of the market in question without really market and consequently the legitimate helping the non-privileged Associated interests which it is its purpose to States. The situation to which it would protect, it does not at first sight appear lead would be all the more absurd on that the globalization of quotas the legal level in that in conformity with prejudices the French producers from the the principle expressed by the Court in French overseas départements (DOM). its aforementioned Judgment of 13 One can therefore conclude that the two November 1964, the totality of a rules contained in Article 33 of the national organization of the market, that Treaty are capable of being separated. is to say the mechanisms of which it is On reflection however such a conclusion made up, would, so to speak, be frozen does not appear to rest on good as it was at 1 January 1958.

established. . .'. It follows from the treatment and thus avoid this or logical connexion between the two ganization being overthrown.

III — Oral procedure reply to the second question having regard to factual and legal points other than such as existed on 1 Mr Charmasson, represented by Paul François Ryziger, and the Commission January 1958. Whilst it is true that of the European Communities submitted the Court's reply to the national court must furnish all the elements oral observations at the public hearing on 24 October 1974. necessary to allow it to deal with the case it is nonetheless true that in the On that occasion Mr Charmasson in present case the Conseil d'État itself particular argued as follows: has precisely defined the state of the banana market in France as at 1 On the first question January 1958. — The thesis put forward by the — It is true that in order to define a Commission according to which national market organization it is Article 45 of the Treaty has two necessary to transpose into the aspects, one positive and the other concept of national organization the negative, is not pertinent. Besides, it elements that constitute a common would have the paradoxical result organization of the market, such as that a Member State, having omitted result from the provisions of the to conclude long-term agreements or Treaty, in particular Articles 39, 40 contracts, might with impunity hide and 43. Bearing in mind these behind the negative aspect of this elements as well as the case law of

JUDGMENT OF 10. 12. 1974 — CASE 48/74

the Court in Joined Cases 90 and effect of expanding the market, of 93/63, decided by Judgment of 13 assuring the availability of November 1974, a national supplies and of ensuring that organization is considered to exist supplies reach consumers at within the meaning of the Treaty: reasonable prices (cf. Article 39 of the Treaty), — if it exists at the date of coming into force of the Treaty, — that in conformity with these objects they contain safeguards — if it involves recourse to several for the employment and the mechanisms, standard of living of the — if these mechanisms were 'et up' producers concerned (cf. Article by the public authorities and not 43 (3) (a)). only by the trades concerned, The Advocate-General delivered his — if these mechanisms have the opinion on 12 November 1974.

quantitative restrictions, the Member States shall apply to the importations in question the corresponding provisions of the Treaty.

5 The reply to the questions referred must therefore be made in the light of these provisions.

On the first question

6 The first question asks whether the existence in a Member State of a national market organization within the meaning of Articles 43, 45 and 46 of the Treaty is such as to preclude the application of Article 33 of the Treaty in the case of the products concerned, that is to say whether the national market organizations for the agricultural sector may obstruct the rules as to the progressive elimination of quotas.

7 (a) Article 38 (2) of Title II of the Treaty provides that 'save as otherwise provided in Articles 39 to 46, the rules laid down for the establishment of the common market shall apply to agricultural products'.

8 It appears from this provision, particularly if considered in conjunction with Article 42, that agricultural products are, in the absence of any contrary provision, subject to the rules relating to the establishment of the common market, which include Article 33.

14 (b) It follows from Article 40 (1) of the Treaty that the common organization of agricultural markets shall develop gradually during the transitional period and be accompanied, pursuant to Article 38 (4), by the development of the common agricultural market in conformity with the fundamental objectives of the Treaty, in particular that mentioned in Article 3 (d).

15 Accordingly, while the Treaty provides that the national organization may be kept in existence pending the establishment of a common organization, this was nevertheless only envisaged until the end of the transitional period, the date by which the common agricultural policy must be finally established.

16 Besides, these same provisions seem to show that during this period the national organization must adapt itself to the fullest possible extent to the requirements of the common market with a view to facilitating the establish­ ment of the common agricultural policy.

17 Accordingly, the derogations which a national organization may effect from the general rules of the Treaty are only permissible provisionally, to the extent necessary to ensure its functioning, without however impeding the adaptations which are involved in the establishment of the common agricultural policy.

18 The fact that this policy has not been finally established within the period fixed by Article 40 (1) of the Treaty demonstrates rather than justifies the anomalies that could resul t from keeping in existence a national organization conceived by the Treaty a measure having a transitional character.

19 In these circumstances, the adaptation of a national organization to the rules provided for the establishment of the common market is all the more

23 Under the provisions of Articles 43 (3) and 45 (1), the common organization in fact takes the place of the national organization if in respect of the product in question it provides equivalent safeguards for the employment and standard of living of the producers concerned, contains arrangements designed to guarantee national producers a market for their product and ensures conditions for trade within the Community similar to those existing in a national market.

24 The objectives of the national market organization are therefore on a national level analogous to those pursued at Community level by the common orga­ nization, as they are set out in Article 39 of the Treaty.

25 The pursuit of such objectives must be a matter not only for trade organizations, but for the public authority by appropriate measures and regulations, even where the administration thereof is delegated to organs under private law that are nevertheless placed under the control of the public authority.

JUDGMENT OF 10. 12. 1974 — CASE 48/74

26 The national organization therefore amounts to a totality of legal devices placing the regulation of the market in the products in question under the control of the public authority, with a view to ensuring, by means of an increase in productivity and of optimum utilization of the factors of produc­ tion, in particular of manpower, a fair standard of living for producers, the stabilization of markets, the assurance of supplies and reasonable prices to the consumers.

27 To continue permanently beyond the transitional period a simple quota system cannot respond to these conditions.

2. The national organization can be defined as a totality of legal devices placing the regulation of the market in the products in question under the control of the public authority, with a view to ensuring, by means of an increase in productivity and of optimum utilization of the factors of production, in particular of manpower, a fair standard of living for producers, the stabilization of markets, the assurance of supplies and

CHARMASSON v MINISTER FOR ECONOMIC AFFAIRS AND FINANCE

reasonable prices to consumers. To continue permanently and beyond the transitional period a simple quota system cannot respond to these conditions.

Lecourt Ó Dálaigh Mackenzie Stuart Donner Monaco

Mertens de Wilmars Pescatore Kutscher Sørensen

Delivered in open court in Luxembourg on 10 December 1974.