C-118/78

JUDGMENT OF THE COURT OF 29 MARCH 1979 <apnote>1</apnote>

C. J. Meijer B.V. v Department of Trade, Ministry of Agriculture, Fisheries and Foods and Commissioners of Customs and Excise (preliminary ruling requested by the High Court of Justice, Queen's Bench Division, Commercial Court, London)

"Potato import restrictions"

Case 118/78

Accession of the new Member States to the European Communities — Act of Accession — Agriculture — Provisions relating to the elimination of quantitative restrictions — Derogation in Article 60 (2) — Legal nature — Special provisions within the meaning of Article 9 (2) — No

Article 60 (2) of the Act of Accession result that by virtue of the latter cannot be regarded as a special provision provision its application terminated at the end of 1977. within the meaning of the reservation set out in Article 9 (2) of that Act with the

THE MINISTRY OF AGRICULTURE, FISHERIES AND FOODS and THE COMMISSIONERS OF CUSTOMS AND EXCISE

on the interpretation of Article 60 (2) of the Act of Accession,

THE COURT

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

Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

main-crop potatoes into the United rules in force within the Kingdom would continue until further Communities, the application of the notice. original Treaties and acts adopted by the institutions -shall, as a On 5 January 1978, the plaintiff in the transitional measure, be subject to main action, which carries on business in the derogations provided for in that the Netherlands as a producer, dealer act. and exponer of potatoes, shipped a consignment of 20 tonnes of main-crop (2) Subject to the dates, time-limits and potatoes to the United Kingdom. The special provisions provided for in customs authorities refused entry of the this act, the application of the transitional measures shall goods at Great Yarmouth on the ground terminate at the end of 1977." that the ban on the importation of main- crop potatoes from any source was still in force. Following this refusal the Part Four of the Act of Accession, plaintiff issued an originating summons entitled "Transitional measures", in the High Court claiming declarations contains, in Title I, entitled: "Free to the effect that since 1 January 1978 movement of goods", Article 42 which the United Kingdom was no longer auth­ provides: orized to control the importation of "Quantitative restrictions on imports and potatoes from other Member States. exports shall, from the date of accession, The defendants in the main action be abolished between the Community as contended that, in the circumstances, the originally constituted and the new Member States and between the new control of imports of potatoes was Member States themselves. justified. The national court, after hearing argument by the plaintiff, stayed Measures having equivalent effect to the proceedings and ordered that the such restrictions shall be abolished by following question be referred to the 1 January 1975 at the latest." Court of Justice for a preliminary ruling: "Whether in the case of an agricultural product which was not covered at the date of accession by a common organiz­ ation of the market and is still not so covered on 1 January 1978 Article 60 (2) of the Act of Accession or any other provision of Community law permits the retention of quantitative restrictions on imports in respect of that product after 31 December 1977 (if they formed part of a national market organization on the date of accession) to the extent necessary to ensure the maintenance of the

(2) In respect of products not covered, C. Meijer S.V., the plaintiff, refers first on the date of accession, by a of all to the provisions of the EEC common organization of the Treaty, in particular Article 30 et seq. market, the provisions of Title I and Article 38 (2). As among the original concerning the progressive abolition Member States, all quantitative of charges having equivalent effect restrictions had to be abolished by the to customs duties and of end of the transitional period at the quantitative restrictions and latest. The prohibition of such measures having equivalent effect restrictions applied equally to trade in shall not apply to those charges, agricultural products, even where no restrictions and measures if they common organization of the market had form part of a national market yet been established (Case 48/74 Char­ organization on the date of masson v Minister for Economic Affairs accession. and Finance [1974] ECR 1383; Case 68/76 Commission of the European This provision shall apply only to Communities v French Republic [1977] the extent necessary to ensure the ECR 515). maintenance of the national organ­ ization and until the common organ­ According to Meijer, the principle ization of the market for these applied in the Charmasson case must products is implemented." apply equally or with even greater force in relation to the transitional provisions 4. The order for reference, dated 12 of the Act of Accession. Furthermore, April 1978, was lodged at the Court Meijer alleges that the measures at issue Registry on 19 May 1978. in the present case constitute the clearest and most blatant form of measures In pursuance of Article 20 of the prohibited by the Treaty. Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the Meijer under­ taking, represented by F. G. Jacobs and A. S. Grabiner of the London Bar, the Commission of the European Communities, represented by R. Wain­ wright and B. Hoff-Nielsen, acting as Agents, the British Government,

The scheme brought into force by the Article 9 (2) cannot be interpreted as Act of Accession was that quantitative permitting the continuance of restrictions generally should be abolished transitional measures beyond 31 as from the date of accession, namely 1 December 1977. It is true that the January 1973 (Article 42). Quantitative provision is "subject to the dates, time- restrictions in respect of agricultural limits and special provisions provided products had to be abolished from 1 for" in the act, but that reference must February 1973 (Article 60 (1)), subject to generally be understood as referring to the exception set out in the first sentence earlier dates and time-limits. In fact, of Article 60 (2), for products not yet there are almost no dates or time-limits subject to a common organization of the later than 31 December 1977 as the market. That exception is itself limited exceptions relate only to cases of a by the second sentence of Article 60 (2). special nature; they contain no dero­ Does Article 60 (2) of the Act of gation of indefinite duration (Articles Accession contain an open-ended dero­ 100 to 103, 131, 132 of the Act of gation from the Common Market, Accession and Article 5 (2) of Protocol limited in time only by the No 18). implementation of the common organ­ Equally the reference in Article 9 (2) to ization of the market for the product in "special provisions" cannot be question? understood as meaning that where no Meijer replies to that question in the date or time-limit is specified — as is the negative. It takes the view that such a case for Article 60 (2) — the derogation derogation could not go beyond the is not subject to the general time-limit general time-limit in Article 9 (2) of the laid down in Article 9 (2). On the Act of Accession. That interpretation is contrary, it is precisely the function of confirmed by the spirit, the structure and Article 9 (2) to set such a general time- the terms or the Treaty of Accession and limit. of the Act of Accession. The second sentence of Article 60 (2) The Act of Accession reflects the adds nothing to the derogation fundamental principle underlying the contained in the first sentence. By enlargement of the Communities, namely providing that if a national organization the acceptance by the new Member is replaced by a common organization States of the "acquis communautaire" in the derogation should lapse, the sentence its entirety. It may be seen from the Act must be interpreted as limiting, not of Accession itself that that "acquis extending, the derogation contained in communautaire" was in principle to the first sentence. apply from the date of accession (Article 2 of the Act of Accession; Case 185/73 Hauptzollamt Bielefeld v König [1974] ECR 607). Consequently the "derogations" pro­ vided for in Article 9 (1) must not be interpreted extensively, especially where they derogate from a fundamental principle of the Common Market, in particular the free movement of goods (Article 42 of the Act of Accession; Case 15/74 Centrafarm B.V, v Sterling Drug Inc. [1974] ECR 1147 at p. 1166 and Case 16/74 Centrafarm B.V. v Winthrop [1974] ECR 1183 at p. 1197).

According to Meijer the principle in the the market and was still not so covered Charmasson case is applicable with even on 1 January 1978 neither Article 60 (2) greater force in relation to the Act of of the Act of Accession nor any other Accession. provision of Community law permits the retention of quantitative restrictions on The provisions of the Act of Accession imports in respect of that product after provide both expressly and by 31 December 1977." implication — in contrast to the EEC Treaty — that for products not subject (b) Observations of the Netherlands to a common organization of the market Government derogations from the Common Market shall be eliminated by the end of the The Netherlands Government points out transitional period at the latest. that, in accordance with Article 9 (2) of If the Charmasson principle were not the Act of Accession, the application of the transitional measures was to applied in relation to the Act of Accession, whilst continuing to be terminate at the end of 1977, subject to applied to the original Member States, the dates, time-limits and special there would be a serious disparity provisions provided for in the act. Apart from the words "until the common between the systems in the original Member States and those in the new organization of the market for these Member States. As respects relationships products is implemented" which may between these States prohibitions on shorten the duration of the derogation, Article 60 (2) contains no such date, time- imports and exports and charges having an effect equivalent to customs duties limit or special provision. could continue to apply indefinitely. It follows that as from 1 January 1978 the general provisions of the EEC Treaty Finally, since the Charmasson judgment, Member States have had notice that are applicable to trade in the products in question. The lack of a common organ­ during the transitional period "the ization of the market for the products in national organization must adapt itself to question does not alter that fact. This' the fullest possible extent to the was the meaning of the Court's requirements of the Common market judgment in the Charmasson case. with a view to facilitating the establishment of the common agricultural (c) Observations of the French Gov­ policy" (paragraph 16). ernment

covered by a common organization of in their place. Accordingly Article 60 (2) the market for the existence in both the of the Act of Accession enabled the new old and the new Member States of Member States to retain in respect of national organizations of the market products which at the moment of based on fundamentally different accession were subject to a national principles. In view of this fact, the organization of the market quantitative authors of the Act of Accession expressly restrictions and measures having provided, in a specific provision by way equivalent effect until the common of derogation, that the abolition of organization of the market for those charges having an effect equivalent to products was implemented. customs duties and of quantitative Under the EEC Treaty there should have restrictions was not to apply to products been by the end of the transitional period coming under a national organization of in 1969 a common organization of the the market until the introduction of a market for every agricultural product. common organization. The Act of Accession did not alter the obligations of the original Member (d) Statement of case of the British States to establish a common organ­ Government ization of the market for agricultural The British Government, as defendant in products or extend the transitional the main action, claims that it is auth­ period applicable. orized to make use of the derogation It is against this background that the provided for agricultural products in Charmasson case must be interpreted. Article 60 (2) of the Act of Accession. In the present case on the other hand the The question how long the derogation is new Member States joined a Community to last must be answered by reference to in which the original Member States Article 9 (2) of the Act of Accession. The were already in default as regards their "special provision" of Article 60 (2) is obligations to establish the common agri­ that the derogation is to last "until the cultural policy within the period fixed by common organization of the market for Article 40 (1) of the EEC Treaty. The these products is implemented". situation which arose was accordingly expressly provided for in the Act of In order to give the article the meaning Accession. which the plaintiff desires to attribute to it it would be necessary to add at the end the words "or at the end of 1977 whichever is the earlier". No rule of interpretation can properly allow such words to be added.

In conclusion the British Government price difference being largely made asks the Court to answer in the affir­ up by the government. mative the question which has been — If at the end of the crop season the referred to it. average potato market price is shown to have fallen below the guaranteed (e) Observations of the Commission of the price despite buying-in by the Board, European Communities the government makes a deficiency First of all the Commission summarizes payment which is paid to the Board to be used for recouping the costs of the organization of the market in the present or future buying-in potatoes in the United Kingdom : programmes. — Each year the Ministry of Agriculture — The Board regulates the sales of calculates the probable consumption potatoes for human consumption by and yield of potatoes in the United prescribing the minimum size and Kingdom, b ed on recent trends, quality of potatoes which may be and fixes a arget acreage which is sold by producers and by requiring intended to provide enough potatoes sales normally to be made only to for home demand with a slight licensed merchants. surplus. — Imports and exports of main-crop — Producers who grow more than one potatoes are controlled by the acre of potatoes for sale must be Department of Trade under powers registered with the Potato Marketing derived from the Import of Goods Board (hereinafter referred to as "the (Control) Order 1954. In order to Board"). keep the United Kingdom market in — The Board, which is a statutory body balance, exports are banned in times established under the Potato of shortage and imports are banned Marketing Scheme (Approval) Order in times of surplus. 1955, notifies each registered — Since the accession of the United producer how many acres he should Kingdom on 1 January 1973, it seems plant (the "quota") in order that the target acreage may be achieved. — Each registered producer must pay to the Board a contribution on each re planted. Producers who wish to nt more than their quota are required to pay an additional contri­ bution.

that there have been export bans on of acceptance of the "acquis commu­ main-crop potatoes in 1973 nautaire". An exception is made to this (30 March to 31 May), 1974 principle by a system of transitional (20 February to 31 May) and 1975 measures (Article 9). (16 October to 7 August 1977). At all The Commission does not accept that other times, save from September to the phrase "until the common organ­ October 1975, the "normal ban" on ization of the markets… is imports applied. implemented" (Article 60 (2)) is a "special provision" to which the time- Within the Community there are limit provided by Article 9 is subject. The considerable differences between the drafting of Article 60 (2) does not permit prices quoted on the markets of the such an interpretation since the placing different Member States. The of the phrase indicates that it is intended Commission attaches as an appendix to to be a limitation to an exception to the its observations a paper giving the general rule, as is the other part of the wholesale prices of main-crop potatoes sentence.

JUDGMENT OF 29. 3. 1979 — CASE 118/78

Member States would be exactly the a decision by the Council to establish same as in the original Member States. common organizations. In this sense Article 60 (2) was not to be In conclusion the Commission suggests regarded as a "transitional measure" at that the Court should reply as follows to all, any more than was Article 60 (1). the question submitted to it: In its judgment in the Charmasson case "Article 30 of the EEC Treaty together the Court declared that as regard the with the Act of Accession, in particular original Member States the derogations Articles 9 and 60 (2) thereof, is to be which a national organization of the interpreted as not permitting the market could effect from the general retention of quantitative restrictions on rules of the Treaty were only permissible imports of agricultural products into a during the "transitional period". In the new Member State after 31 December light of that judgment Article 60 (2) has 1977 notwithstanding that the taken on the character of a transitional restrictions form part of a national measure permitting, for trade involving market organization and that the the new Member States, a system products are not covered by a common different from that applicable to trade organization of the market." involving merely the original Member States.

2 The question was raised in the context of a dispute between a Netherlands company which exported potatoes and the competent authorities in the United Kingdom and it relates to the refusal of the latter authorities to permit the entry of a consignment of potatoes which arrived at Great Yarmouth on 6 January 1978.

3 The plaintiff in the main action sought a declaration from the national court to the effect that the United Kingdom is not since 1 January 1978 entitled to prohibit the importation of potatoes from Member States of the European Economic Community whilst the defendants relied on Article 60 (2) of the Act of Accession; the national court therefore asked the Court of Justice to give a preliminary ruling on the following question:

"Whether in the case of an agricultural product which was not covered at the date of accession by a common organization of the market and is still not so covered on 1 January 1978 Article 60 (2) of the Act of Accession or any other provisions of Community law permits the retention of quantitative restrictions on imports in respect of that product after 31 December 1977 (if they formed part of a national market organization on the date of accession) to the extent necessary to ensure the maintenance of the national organ­ ization and until the common organization of the market for that product is implemented?"

JUDGMENT OF 29. 3. 1979 — CASE 118/78

4 The measures to which the national court refers have formed the subject of proceedings under Article 169 of the EEC Treaty brought by the Commission in Case 231/78 against the United Kingdom for failure to fulfil its obligations.

10 As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.

MEIJER v DEPARTMENT OF TRADE

On those grounds,

THE COURT,

in answer to the question referred to it by the High Court of Justice, Queen's Bench Division, Commercial Court, by order of 12 April 1978, hereby rules:

"Article 60 (2) of the Act of Accession cannot be regarded as a special provision within the meaning of the reservation set out in Article 9 (2) of that Act with the result that by virtue of the latter provision its application terminated at the end of 1977."

Mr President, Netherlands Potato Exporters] Members of the Court, (V.N.E.A.). On 5 January 1975 it shipped a consignment of 20 tonnes of I — The plaintiff in the main action is "ware" potatoes to London in order, as engaged in the Netherlands in the it openly declares, to test the British production, marketing and export of market. The consignment arrived in potatoes; it is a member of the Great Yarmouth that same day but Her Vereniging van Nederlandse exporteurs Majesty's Customs and Excise van aardappelen [Association of Department refused to allow the

1 — Translated from the French.