C-50/76

PRODUKTSCHAP VOOR SIERGEWASSEN (Ornamental Plant Authority)

on the interpretation of Regulation (EEC) No 1767/68 (OJ English Special Edition 1968 (II), p. 530) and Regulation (EEC) No 369/75 (OJ 1975 L 41, p. 1) on the system of minimum prices for exports to third countries of flowering corms, bulbs and tubers,

THE COURT

composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate-General: F. Capotorti Registrar: A. Van Houtte

gives the following

The order referring the matter and the considerable economic importance to the written observations submitted under Community and that the continuation Article 20 of the Protocol on the Statute and development of such exports may be of the Court of Justice of the EEC may ensured by stabilizing prices in that be summarized as follows: trade, Article 7 of Regulation (EEC) No 234/68 of the Council on the establishment of a common organization I — Facts and procedure of the market in live trees and other plants, bulbs, roots and the like, cut 1. The company Amsterdam Bulb BV flowers and ornamental foliage (OJ exports flower bulbs from the English Special Edition 1968 (I), p. 26) Netherlands solely to its parent company provided that: which is established in the United States of America. It considers that the 'For each of the products falling within minimum prices fixed by the heading No 06.01 A of the Common Customs Tariff, one or more minimum Netherlands Verordening Exportprijzen Bloembollen Oogst 1975 (Flower-bulb prices for exports to third countries may (1975 crop) Export Price Order) are so be fixed each year in good time before high as to render importation by the the marketing season ...' parent company unprofitable. The common organization of the market provides for a system of quality standards Under Article 9 of the Netherlands and minimum prices, compliance with Order the Chairman of the Produktschap which must be ensured by the Member voor Siergewassen is empowered to grant States. For flowering bulbs, corms and exemption from the minimum export tubers a corresponding system was prices. adopted by Regulation No 315/68 of the Council (OJ English Special Edition By letter of 5 August 1975 addressed to 1968 (I), p. 46), which provides in the said Chairman, Amsterdam Bulb BV particular for minimum sizes which are applied for exemption from the applicable both in intra-Community minimum export prices fixed for trade and in trade with third countries. America. By letter of 12 August 1975 the Chairman dismissed the application for In trade with third countries, however, exemption. Amsterdam Bulb BV the Member States may be authorized to appealed against this decision to the derogate from certain requirements of College van Beroep voor het the quality standards in order to allow Bedrijfsleven. That court considers that exporters to meet the trade requirements the dispute raises questions of of certain third countries (Article 2 (2)). Community law. Regulation No 537/70 of the Com­ mission (OJ English Special Edition 2. The Community regulations in 1970 (I), p. 157) authorized the Member question States to take measures derogating from quality standards in respect of sizing as Having regard to the fact that exports of regards a number of flowering bulbs, flowering bulbs to third countries are of corms and tubers.

That regulation provides, in particular, 'Do the provisions of Regulations (EEC) Nos 234/68, 1767/68 and 369/75 or any that where no minimum price has been fixed for a particular size of a given other provisions or principles of product the lowest minimum export European law forbid the Produktschap price fixed for that product shall apply to voor Siergewassen, as a Netherlands body the size in question (Article 2 (2)). invested with legislative authority, from adopting rules, such as those contained As regards the 1975/76 marketing year in the Verordening Exportprijzen minimum prices for exports, in particular Bloembollen Oogst 1975, which rules are for tulip bulbs, were fixed by Regulation in part essentially in conformity with No 369/75 of the Commission (OJ 1975, those contained in Regulation (EEC) Nos 1767/68 and 369/75, and in part contain L 41, p. 1). provisions which do not appear in the 3. The provisions of Netherlands law three abovementioned European regulations and have no legal foundation The Netherlands Order, the Verordening therein, such as those of Article 9 and of Exportprijzen Bloembollen Oogst 1975, Articles 2 (2) and (5) and 7 of the restates in guilders the minimum export Netherlands Order?' prices according to size fixed by Regulation No 369/75 of the 5. Procedure Commission. The order making the reference was Nevertheless, the Netherlands Order also received at the Court on 17 June 1976. includes a certain number of other Written observations were submitted provisions which are not contained in under Article 20 of the Protocol on the the Community regulations. Statute of the Court of Justice of the The provisions in question: EEC on behalf of Amsterdam Bulb BV, — Impose a minimum export price for the Produktschap voor Siergewassen and flower bulbs of a smaller size than the Commission of the European those for which Regulation No Communities.

are governed by various Commission Even if the power to grant exemptions regulations, no further national has never been used, which the plaintiff regulations can, as a matter of principle, in the main action does not know, that be adopted by the Netherlands on that does not render the provision in question matter (Neumann v Hauptzollamt any less incompatible with Community Hof/Saale ([1967] ECR 441); Costa v law: the problem is not to know whether ENEL ([1964] ECR 585)). a certain existing power is exercised but whether it may be exercised. Since the question of minimum export prices for flower bulbs is already dealt Assuming that the Order adopted by the with by Community rules, the spirit of Produktschap were therefore to be the Treaty and the existence of the EEC declared not to be binding on the sole regulations on the subject render it ground that detailed Community unnecessary for the Produktschap to regulations already exist in the area adopt separate rules of its own. The which it covers, it is a fortiori contrary Netherlands Order is contrary to to Community law since its intention is European law since, according to that to extend and amend the European rules. law, the Produktschap voor Siergewassen was not empowered to adopt it When Community regulations exist, a Hauptzollamt Bremen-Freihafen v Member State is only empowered to Krohn (Case 74/69 [1970] ECR 451); adopt decisions to implement them and Hauptzollamt Hamburg-Oberelbe v those decisions must further be necessary Bollmann (Case 40/69 [1970] ECR 69). in order for that implementation to take place.

JUDGMENT OF 2. 2. 1977 — CASE 50/76

Member State might thus circumvent the impose legal sanctions for failure to principle of Community law that the observe the terms of a regulation which Member States may not adopt measures brings Netherlands exporters into whose purpose is to modify the scope of conflict with the laws of third countries. a regulation or to add to its provisions. Amsterdam Bulb BV considers that the

If the Produktschap wishes to attain the reply to the preliminary question must objectives of the Treaty in the area of be in the affirmative.

minimum export prices, it must have recourse to the competent Community The Produktschap voor Siergewassen, the authority, which is, in this instance, the defendant in the main action, observes European Commission. By adopting the that although the terms of Article 2 (2) of rules in question the Produktschap did the Netherlands Order are not the same

not contribute to the uniform application as those of Article 2 (2) of Regulation of Community law. In fact, the adoption (EEC) No 1767/68, there is no difference of the rules in dispute and of the of substance between them. The coercive measures to ensure their Netherlands text is clearer and is observation constitutes one of the reasons intended to avoid any misunderstanding. why Netherlands exporters are in an unfavourable and detrimental com­ Article 2 (5), which concerns con­ petitive situation in relation to exporters signments of varieties not referred to in from other Member States. the EEC regulation, is only intended to avoid any circumvention of that Most of the other Member States merely regulation. published the regulations in question. Furthermore, they do not respect the rule The fact that the insertion of Article 2 (5) set out in Article 3 of Regulation (EEC) into the Netherlands Order restricts

AMSTERDAM BULB v PRODUKTSCHAP VOOR SIERGEWASSEN

used. The Produktschap considers, exemption from the obligation to apply however, that its Chairman must be the minimum export price or for the empowered to take action in special possibility of laying down exceptions to cases, in particular where a member of the provisions applicable in a particular the trade has such an overriding interest case?

in obtaining an exemption that the Chairman cannot reasonably refuse to Do any principles or provisions of grant it or where the refusal of an Community law prevent the application exemption would affect or even of a national provision which imposes contradict the purpose of the rules in penal sanctions in respect of failure to question. However, the Produktschap was apply the minimum export prices fixed aware that it could make no use of that by or by virtue of Community measures? provision so long as the EEC rules had not been amended. For that reason, no The scope of the Community rules exemption has ever been granted. On the other hand, it is possible that the In relation to sizes which are smaller Chairman of the Produktschap voor Siergewassen may make use of the than those for which Regulation No 369/75 of the Commission fixed exempting provision if the EEC authorities revoke the Community rules minimum export prices or add to them a similar exempting provision. The Commission maintains that a

minimum export price is also applicable The Produktschap considers that a to sizes other than those for which a

negative reply must be given to the minimum export price was expressly preliminary question referred. fixed by Regulation No 369/75 and that it is equal to the lowest minimum export Observations of the Commission price fixed by Regulation No 369/75 for the product in question. This does not The Commission considers that the apply to products which are smaller than question referred by the College van the minimum size laid down by the rules Beroep may be divided into three governing quality standards, since such sub-questions: products cannot be exported.

Under Community law it is impossible The Commission considers that in this for a Member State to fix autonomously instance the same solution must be

minimum export prices which derogate adopted as in the Granaria case. from or supplement those fixed by the Community rules. If the Community has 3. Penal sanctions

AMSTERDAM BULB v PRODUKTSCHAP VOOR SIERGEWASSEN

grant of an exemption from the would like to make use of the clause application of the minimum export enabling its Chairman to grant an prices fixed by the Community. exemption from the minimum prices in — There is no principle or rule of cases in which their application would Community law to" prevent the cause particular hardship, but considers adoption of a national provision that the Community regulations does not which imposes penal sanctions in the permit such action. As long as the case of infringement of the provisions Community regulation itself does not of Regulation No 234/68 or of provide for any possibility of exemption provisions adopted by virtue of that the Chairman will not make use of the regulation. provision in the national rules. The case-law of the Court shows that At the public hearing on 23 November Community regulations must be given a 1976 Mr Koning, for the plaintiff in the strict interpretation. main action, argued that Regulation (EEC) No 1767/68 is based upon the However, if the Court were to accept the concept of a transaction between an possibility of an exemption in specific individual exporter and an individual cases for reasons of natural justice, that purchaser. However, the plaintiff would, in the opinion of the company is a wholly-owned subsidiary of Produktschap, be a favourable develop­ an American undertaking. The products ment for Community law. are delivered in bulk and all the other

operations are carried out by the parent On behalf of the Commission, Mr company in the United States or on its Bourgeois stated that the arguments put behalf. The Community regulation forward by the plaintiff in the main obliges the plaintiff company to calculate action regarding the lack of any prices which are more than double those possibility of exemption are a challenge which are commercially justified. not to the national Order but rather to

— impose a minimum export price for flower bulbs of a smaller size than those for which Regulation No 369/75 fixes minimum export prices;

— impose a minimum export price in respect of flower bulbs other than those for which Regulation No 369/75 fixes minimum export prices;

— grant exemptions, in certain cases, to the provisions of the national rules;

— provide penal sanctions in respect of infringements of the rules.

4 As the Court has already stated in other contexts, in particular in its judgment of 10 October 1973 (Variola SpA v Amministrazione Italiana delle Finanze [1973] ECR 981), the direct application of a Community regulation means that its entry into force and its application in favour of or against those subject to it are independent of any measure of reception into national law.

5 By virtue of the obligations arising from the Treaty the Member States are under a duty not to obstruct the direct effect inherent in regulations and other rules of Community law.

11 The fifth recital of the preamble to that regulation states that exports of flowering bulbs to third countries are of considerable economic importance to the Community, that the continuation and development of such exports may be ensured by stabilizing prices in this trade and that provision should therefore be made for minimum export prices for the products in question.

12 Article 3 of that regulation provides that the Council may adopt rules governing standards of quality, sizing and packaging of the products covered by the common organization of the market and the scope of such standards.

13 According to the same article, when standards have been adopted, the products to which they apply may not be displayed for sale, offered for sale, sold, delivered or otherwise marketed except in accordance with the said standards.

14 Under Article 7 of the said regulation, minimum prices for exports to third countries of those products may be fixed by the Commission.

15 Regulation (EEC) No 315/68 of the Council of 12 March 1968 fixing quality standards for flowering bulbs, corms and tubers (OJ English Special Edition 1968 (I), p. 46), which was adopted in implementation of the basic regulation, No 234/68, provides in Article 2 that the standards shall apply both to intra-Community trade and to trade with third countries.

JUDGMENT OF 2. 2. 1977 — CASE 50/76

21 The annex in question shows that minimum export prices are fixed in express terms only for certain of the products listed in the annex to Regulation No 315/68 and for certain sizes larger than the minimum sizes indicated in Regulation No 315/68.

22 However, it is clear from Article 2 of Regulation No 1767/68 that a minimum export price is also applicable to sizes other than those for which Regulation No 369/75 expressly fixed such a price.

23 That minimum export price is equal to the lowest minimum price fixed by Regulation No 369/75 for the product in question.

AMSTERDAM BULB v PRODUKTSCHAP VOOR SIERGEWASSEN

24 Furthermore, it emerges from the Community rules as a whole that products which are smaller than the minimum sizes fixed in the annex to Regulation No 315/68 of the Council cannot be exported.

25 The answer must therefore be that the lowest minimum export price fixed for the product in question by Regulation No 369/75 is applicable to products which are larger than the minimum size but smaller than the sizes expressly listed in the annex to the said regulation.

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31 As regards a national provision which lays down sanctions in respect of an infringement of the Community rules, it must be stated that whilst those rules prohibit exports to third countries of those of the products in question which do not conform to the Community quality standards, they do not provide for sanctions in respect of infringements of those prohibitions by individuals.

32 Although Article 5 of the EEC Treaty places Member States under a duty to take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations resulting from action taken by the institutions of the Community, it allows the various Member States to choose the measures which they consider appropriate, including sanctions which may even be criminal in nature.

33 The answer to be given to the national court must therefore be that in the absence of any provision in the Community rules providing for specific sanctions to be imposed on individuals for a failure to observe those rules, the Member States are competent to adopt such sanctions as appear to them to be appropriate.

34 As regards the question of the authorization by a national authority of an exemption from the minimum prices fixed by the Community, it must be stated that neither Regulation No 234/68 nor its implementing regulations provide for any such possibility.

35 The Member States may not, therefore, either directly or through the intermediary of organizations set up or recognized by them, authorize or tolerate any exemption from Community law.

hereby rules:

1. The Member States may neither adopt nor allow national organizations having legislative power to adopt any measure which would conceal the Community nature and effects of any legal provision from the persons to whom it applies.

2. The lowest minimum export price fixed for the product in question by Regulation No 369/75 is also applicable to products which are larger than the minimum size but smaller than the sizes expressly listed in the annex to that regulation.

3. A national provision which fixes minimum prices for exports to third countries of certain varieties of bulbs other than those

for which the Commission has fixed minimum prices in Regulation No 369/75, which does not create exemptions from the Community system, does not limit its scope and seeks to achieve the same aim, that is, the stabilization of prices in trade with third countries, cannot be regarded as incompatible with Community law.

4. In the absence of any provision in the Community rules providing for specific sanctions to be imposed on individuals for a failure to observe those rules, the Member States are competent to adopt such sanctions as appear to them to be appropriate.