C-80/77

Kutscher Sørensen Bosco Donner Mertens de Wilmars

Pescatore Mackenzie Stuart O'Keeffe Touffait

Delivered in open court in Luxembourg on 20 April 1978.

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE GENERAL WARNER DELIVERED ON 15 MARCH 1978

been high both in France and in Italy Member States shall be authorized in and secondly to successive devaluations order to avoid disturbances on their of the Italian lira. The French markets to take measures that may limit Government has alleged that it was due imports from another Member State. also to a failure on the part of the These measures shall be communicated Italian authorities to establish and to the Commission, which shall decide operate satisfactorily the administrative without delay whether to maintain, mechanisms necessary for the amend or abolish such measures." management of the market in wine as envisaged by Council Regulation (EEC) On the same day as it adopted the decree the French Government No 816/70 of 28 April 1970 (Official Journal L 99 of 5 March 1970) "laying informed the Commission of it by telex. down additional provisions for the On 15 September 1975, the Commission common organization of the market in wrote to the French Government wine". expressing the opinion that it was not With a view to limiting that influx, the entided to rely on Article 31 (2), French Government, on 11 September because that provision had, by then, 1975, instituted by decree (Decree No ceased to be operative, the 75/846) a charge on table wines and administrative mechanisms necessary for wines suitable for yielding table wines, the management of the market in wine coming from Italy, imported in being in application in all Member containers of more than two litres. The States. That being so, the Commission charge was calculated on the volume said, it would not be appropriate for it and the alcoholic strength of the wines. to take a decision of the kind envisaged Its amount was fixed at FF 1.13 per by the second subparagraph of Article degree/hectolitre. It is common ground 31 (2) and it asked the French Government to revoke its decree. that the charge was one having equivalent effect to a customs duty. The French Government having As the decree itself recited, the French declined so to do, the Commission Government relied, in introducing the initiated proceedings against the French charge, on Article 31 of Regulation No Republic under Article 169 of the 816/70. Paragraph 1 of that Article was, Treaty and eventually brought an action so far as relevant, expressed to prohibit in this Court against it under that Article, Case 117/75. Before that action the levying, in the internal trade of the Community, of any charge having came to a hearing, however, the French equivalent effect to a customs duty. In Government (by Decree No 76/287 of fact of course that provision was otiose. 31 March 1976) repealed the decree of The Regulation having been adopted 11 September 1975 as from 1 April after the end of the transitional period, 1976. Thereupon the action was discontinued. the prohibition already existed by the direct effect of Articles 9 and 12 of the By Council Regulation (EEC) No Treaty. Article 31 (2) was in these 1160/76 of 17 May 1976, a Regulation terms: which made numerous amendments of

The questions referred to the Court by common market" are to apply to agri­ the Tribunal d'Instance are these: cultural products "save as otherwise provided in Articles 39 to 46", and to "(1) Did Article 31 (2) of Council Regu­ lation No 816/70 accord with the Article 39 (2), which provides that "In working out the common agricultural EEC Treaty, having regard to the policy and the special methods for its fact that that provision authorized application, account shall be taken of measures contrary to the rules of among other things "the particular the Treaty on the free movement nature of agricultural activity, which of goods applicable after the end of results from the social structure of agri­ the transitional period? culture and from structural and natural (2) If the answer to the foregoing disparities between the various agri­ question is in the affirmative, were cultural regions". the provisions of Article 31 (2) of The Council and the Commission the said Regulation still applicable advance intermediate contentions, on 11 September 1975, having regard to the possibility that all the though not the same one. administrative mechanisms necess­ The Council contends that it has, when ary for the management of the instituting a common organization of market in wine had been set up?" the market in any agricultural product or group of agricultural products, a As regards the first question, there are limited power to derogate from the four rival contentions. general rules of the Treaty, limited in The Plaintiffs contend that, under the that the power does not permit the Treaty, the Council had no power, after Council to go beyond the adoption of the end of the transitional period, to measures that are both ancillary and legislate in such a way as to authorize temporary ("mesures temporaires d'ac- Member States to impose charges compagnement" was the expression having equivalent effect to customs used). duties in internal Community trade. The Commission's contention is more At the other extreme, the French restrictive. It is that the Council had Government contends that the way in power, when instituting the common which agriculture is dealt with in the organization of a market at or about Treaty, and in particular the unique the end of the transitional period, to provisions relating to it contained in prescribe transitional provisions Title II of Part Two of the Treaty, must applicable until the end of the then be taken to indicate (having regard to current marketing year. Thus, the those obvious characteristics of agri­ Commission contends, Article 31 (2) culture that distinguish it from other could only have been valid if it had economic activities, such as its vul­ been limited to operate until 1

in poultry meat) were lawful. It was To the three cases on monetary argued for an importer that they were compensatory amounts decided by the not because they were incompatible Court on 24 October 1973, namely with the Articles of the Treaty setting Case 5/73, the first Balkan case [1973] up the Common Customs Tariff. The 2 ECR 1091, Case 9/73 Schlüter v HZA Court rejected that argument. It held Lörrach, ibid. p. 1135 and Case 10/73 that such levies came within Article 40 Rewe-Zentral v HZA Kehl, ibid. p. (3) of the Treaty as being "measures 1175, I had occasion to refer recently in required to attain the ... regulation of Case 29/77, the third Roquette case prices ... and common machinery for [1977] ECR 1835. I there pointed out stabilising imports or exports". They that those cases, and others, were were therefore within the saving clause authority for saying that the of Article 38 (2). Thus, for the principle fundamental purpose of the system of of that decision to be held to apply m.c.a.'s was to prevent changes in here, it would be necessary to be able to exchange rates from immediately point to a. provision in Articles 39 to 46 affecting agricultural prices in terms of which, either expressly or by necessary national currencies in such a way as to implication, authorized the institution, disturb the functioning of the common as part of a common organization of a organizations of markets. Such distur­ market, of charges having an effect bances of trade could be of two kinds. equivalent to customs duties in trade The first kind was direct disturbance of between Member States. I can see none, intervention arrangements, such as had nor did either the French Government occurred in consequence of the deva­ or the Council attempt to point to any. luation of the French franc in 1969, Certainly Article 40 (3) cannot be held when German traders bought cereals in to constitute such a provision, since it France for re-sale to the German goes on to provide that a common intervention agency at a profit, and did organization "shall exclude any discri­ so in such quantities as to threaten to mination between producers or exhaust that agency's storage capacity. consumers within the Community". The second kind of disturbance

consisted in the diversion of trade the administrative mechanisms necessary between the Community and third for the management of the market in countries, in particular the diversion of wine existed in certain Member States, imports through Member Slates with notably in France (which had had until devalued currencies in search of lower then a national organization of that levies and the diversion of exports market) but they did not exist in other through Member States with revalued Member States, notably Italy. The currencies in search of higher refunds. Council was therefore faced with a

mechanisms were not operative in all Member States. It chose the latter Case 153/73 Holtz & Willemsen v course. That that was the genesis of Council and Commission [1974] 1 ECR Article 31 (2) may be inferred in pan 675 is in my opinion the most pertinent from paragraph 2 of the reasoned of the cases that were cited. It was an opinion of 29 October 1975 delivered action for damages under the second by the Commission to the French paragraph of Article 215 of the Treaty, Government in the Article 169 in which a German oil-miller, relying on proceedings and in pan from the obser Article 7 thereof and on the prohibition vations of the Council in the present of discrimination in Article 40 (3), case. (It appeared perhaps even more challenged the validity of a special clearly from the Commission's temporary subsidy instituted by the application in Case 117/75, but I would Council in favour of Italian oil-millers hesitate to refer Your Lordships to that as part of the common organization of document as it does not, strictly the market in oils and fats. The Court speaking, form pan of the papers in the upheld the validity of that subsidy on present case).

In my opinion the main

relevance of that case is that the Court of the market for a particular product there considered, not for the first time, precluded the application in that State the interpretation that ought to be given of Article 33 of the Treaty, which to Article 38 (2) of the Treaty. The provided for the progressive abolition Court held that it appeared from that during that period of import quotas as provision, "particularly if considered in between Member States. In dealing with conjunction with Article 42", that agri­ that question the Court adverted to cultural products were, in the absence what was to be the position after the of any contrary provision, "subject to end of the transitional period. But, as to the rules relating to the establishment of that, apart from making the general the common market". Article 42, Your observations on the interpretation of Lordships remember, is concerned with Article 38 (2) that I have mentioned, the the application "to production of and Coun said no more than that a Member trade in agricultural products" of the State would not then be entitled to rely provisions of the Treaty "relating to on the de facto absence of a common rules on competition". It provides that organization of the market in a those rules shall apply to such particular product as justifying it in production and trade "only to the maintaining restrictions on imports from extent determined by the Council". The other Member States under its own inference from that Judgment is, market organization. therefore, again, that, before the I now depart slightly from the chro­ Council can be held to have a discretion nological order of the authorities so as to exclude those rules in any particular to deal together with Case 46/76 respect, there has to be shown to be, Bauhuis v Netherlands [1977] ECR 5 somewhere in Articles 39 to 46 of the and Case 89/76 Commission v Treaty, a provision conferring that Netherlands [1977] ECR 1355. With all discretion on it. So the case is authority respect to those who cited them it seems against the French Government's to me manifest that those cases are not contention. in point. They were concerned with But it was relied upon by the Plaintiffs charges imposed to meet the cost of and by the Commission as authority for inspections provided for, in the first the view that, after the end of the case, by Council Directive No transitional period, there was no power 64/432/EEC (Official Journal L 121 of at all, even for a Community 29. July 1964) "on animal health Institution, to derogate in any way from problems affecting intra-Community the general rules of the Treaty except trade in bovine animals and swine" and, those relating to competition and except in the second case, by the International (per the Commission) to the extent of Plant Protection Convention. As I had

Here, on the other hand, it is, and should I think mention that the French always has been, common ground that Government referred to four instances the charge imposed by the French where, it said, the Council had enacted Government purportedly in pursuance provisions derogating from the general of Article 31 (2) of Regulation No rule of the free movement of goods 816/70 was one having an effect within the Community, the suggestion equivalent to a customs duty. Indeed being, so I understood, that, since the Article 31 (2) related only to such Council had enacted those provisions, it charges. must have had power to do so.

The Commission submitted in justification of a unilateral derogation that, in fact, in none of those three from the requirements of Article 34 of the Treaty, even in respect of an agri instances was there truly a derogation from the rule as to the free movement cultural product for which no common organization of the market has yet been of goods. I do not propose to enter into established." the question whether there was or was not. To my mind it cannot assist the It was submitted on behalf of the Court in determining what is, on the French Government and of the Council true interpretation of the Treaty, the that it could be inferred, from the use scope of the Council's powers, to know there of the word "unilateral", that the what in fact the Council regarded as Court would not have regarded as being within its powers in particular unlawful a similar derogation made in instances. pursuance of a measure adopted by the Community.

. . it is flies in the face of Article 38 (2) of the true that the common organizations of Treaty. The saving clause is for that the market give rise to intervention on which is "provided in Articles 39 to 46", the agricultural market by public auth not for whatever may be provided by orities to an extent which would not be the Council. I would therefore reject that contention. permissible in the industrial field, those organizations still have to abide by the There is authority inconsistent with the fundamental principle of the freedom of other extreme contention, that of the trade throughout the Community" (see Plaintiffs, notably in the m.c.a. cases [1977] ECR at p. 539). and in the Holz & Willemsen case.

COMMISSIONNAIRES RÉUNIS v RECEVEUR DES DOUANES

So I For the reasons I have already stated, I would reject it also. am of the opinion that, at the time There is authority to support the when Regulation No 816/70 was contention of the Council, but not in adopted, a situation existed which the wide terms in which it was warranted the inclusion in that Regu formulated. In order to justify the lation of Article 31 (2). Moreover the inclusion by the Council, in any second subparagraph of that provision legislation relating to the common was designed to ensure that its organization of agricultural markets, of operation remained under the control of a provision derogating from the general the Commission. I am accordingly of rules of the Treaty, in circumstances not the opinion that, at its inception, Article expressly provided for anywhere in 31 (2) was valid, and that Your Articles 39 to 46, it must be shown not Lordships should so rule in answer to only that that provision is auxiliary and the first question referred to the Court temporaly, but also that, in view of a by the Tribunal d'Instance of particular factual situation, the Bourg-en-Bresse. provision is necessary, and goes no further than is necessary, to afford a I turn to the second question. safeguard against the malfunctioning of As to that the French Government such organization.

In attainment of the objectives for which support of that view the French the express powers contained in that Government refers to the fact that the Article are conferred (consider para. I minutes of the Meeting of the Council (3) of the reasoning of the Court in its held on 27 and 28 April 1970, when Opinion given on 26 April 1977 under Regulation No 816/70 was adopted, Article 228 (1) of the Treaty in the contained a declaration to the effect matter of the draft 'Agreement that "the Commission would consider, establishing a European laying-up fund at the beginning of the next wine for inland waterway vessels' [1977] ECR, growing year, whether, in each Member at p. 755).

OPINION OF MR WARNER — JOINED CASES 80 AND 81/77

relies on the views expressed by certain lations — and, as Your Lordships members of the Council at subsequent know, I doubt if they can have any — meetings of it. they certainly cannot be invoked when In my opinion that submission should be unpublished. (I would refer in that connexion to what I said in Case 28/76 rejected. By its own terms Article 31 (2) was limited to operate only "so long as Milac v HZA Freiburg [1976] ECR at all the administrative mechanisms p. 1664 and in Case 109/76 Blottner v necessary for the management of the Nieuwe Algemene Bedrijfsvereniging market in wine are not in application". [1977] ECR, at p. 1154). It was also submitted on behalf of the French Indeed, had it not been for that limitation, Article 31 (2) would, I think, Government (at the hearing) that the having regard to the reasons that declaration might be held to have had warranted its inclusion in Regulation legal effect by virtue of the principle in Case 81/72 Commission v Council No 816/70, have been void as being in excess of what it lay within the power [1973] 1 ECR, 575. But that principle is of the Council to enact. The difficulty only that a declaration of the Council arises from the fact that the Regulation may, in certain circumstances, give rise did not specify by whom and in what to legitimate expectations which the law manner it should be ascertained when will protect. It is difficult to see that the the condition subsequent expressed in declaration here in question can have the limitation was satisfied. It cannot, given rise to any legitimate expectation however, be deduced from that that on anyone's part. At all event the such ascertainment should be a matter French Government did not mention

COMMISSIONNAIRES RÉUNIS v RECEVEUR DES DOUANES

sustainable. As I pointed out in Cases itself, without reference to this Court, a 51, 86 & 96/75 EMI v CBS [1976] ECR question concerning the validity of a at p. 854, it is open to this Court, on a provision of Community Regulation. reference under Article 177 as to the But, on any appeal against its decision validity of any act of a Community to a Court against whose decisions there Institution, to admit evidence on any is no judicial remedy under national issue of fact affecting such validity. law, a reference to this Court there

OPINION OF MR WARNER — JOINED CASES IS AND 81/77

membres qui, avant l'entrée en market in wine had still not been fully vigueur de ('organisation commune set up in Italy, or at all events were not du marché viti-vinicole possédaient functioning there properly. The Court asked the French Government whether déjà, dans le cadre national, les instruments correspondants." it proposed to put in any evidence to substantiate those allegations. In In other words the Commission could response to that invitation the French not find, at that date, that the Government put in a bundle of documents consisting in part of mechanisms in question had been fully established in all Member States, and in dispatches from the French Embassy in Rome, in part of cuttings from Italian particular could not find that they had newspapers and in part of extracts from been so established in Italy. the "Gazzetta Ufficiale della Republica The Commission's report was Italiana".

It did not for the management of the market in however rely on those documents in wine had been established in the argument. Having perused them, I have Member States by 31 December 1971. come to the conclusion that they are of It was argued on behalf of the French negligible evidentiary value. Government that those reports shoujd The rest of the evidence consists of be ignored because the Working Party documents put in by the Commission on Wine and the Special Committee on and by the Council Agriculture were simply non-statutory Of those the first that is relevant is the bodies set up by the Council to assist it report made by the Commission to the in its tasks, so that they had no power Council pursuant to the declaration to bind their master, the Council itself. contained in the minutes of the meeting If, however, I am right in thinking that of the Council of 27 and 28 April 1970. the competence of the Council did not That report was dated 27 July 1971. Its extend to adjudicating upon the conclusions were expressed in the question whether the condition sub following terms: sequent contained in Article 31 (2) of "— Les instruments nécessaires à la Regulation No 816/70 had been gestion du marché viti-vinicole satisfied at any particular time, that semblent, pour la plus grande argument is beside the point.

COMMISSIONNAIRES RÉUNIS v RECEVEUR DES DOUANES

The French Government held on 29 and 30 May 1972, when the relies strongly on the fact that, not only reports of the Commission and of the a number of other Members of the Special Committee on Agriculture were Council but also the responsible considered. The minutes of that meeting Member of the Commission (Mr are before the Court. Formally, the Lardinois), who was present, accepted Council confined itself to taking note of that such a solution might be possible. It the report of the Commission. During is fair to say however that they accepted the course of the discussion, however, it only reluctantly and as one element in the French Minister of Agriculture had a possible "political package", the said that he could not believe that all feasibility of which would need to be the mechanisms in question were in examined by the Commission, there application, because daily experience being doubts about its practicability and showed that difficulties were still being about its legality. In the events the encountered on the wine market. It was solution was rejected, because other "politically" impossible for him to Members of the Council were opposed accept that the Council should declare to it on both political and legal grounds. Article 31 (2) spent. In answer to a It is, incidentally, noteworthy that a question from the President, he number of them expressed, as I have confirmed that what he meant was that, done, the view that it was for the whilst those mechanisms had been Commission to say when the condition established, they were not functioning subsequent in Article 31 (2) had been adequately. The Member of the satisfied. Commission present stated that the In my opinion one cannot deduce from provisions of Regulation No 816/70 the proceedings at those two meetings had been applied. Whether those of the Council that, in September 1975, provisions needed modification or the condition subsequent in Article 31 improvement was another matter. (2) had still not been satisfied.

But culture drew attention to the Article 31 (2) cannot, in my opinion, be disturbance caused in the French wine interpreted as meaning that the right of market by the depreciation of the Italian a Member State to take measures there-

I am therefore of the opinion that Your Lordships should, in answer to the second question referred to the Court by the Tribunal d'Instance of Bourg- en-Bresse, rule that the provisions of Article 31 (2) of Regulation No 816/70 had ceased to be applicable before 11 September 1975.