C-231/78

JUDGMENT OF 29. 3. 1979 — CASE 231/78

accession by a national organization provision" within the meaning of the of the market quantitative restrictions reservation set out in Article 9 (2) of and measures having equivalent effect the Act of Accession, such a reser­ until a common organization of the vation relating only to special market is implemented for these provisions which are clearly delimited products, constitutes a transitional and determined in time and not to a measure the application of which shall provision such as Article 60 (2) which terminate at the end of 1977. It refers to an uncertain future event. cannot be regarded as "special

In Case 231/78

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by Richard Wain­ wright, a member of its Legal Service, acting as Agent, with an address for service. in Luxembourg at the office of Mario Cervino, Jean Monnet Building, Kirchberg,

applicant,

v

COMMISSION v UNITED KINGDOM

THE COURT

composed of: H. Kutscher, President, J. Menens 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

JUDGMENT

JUDGMENT OF 29. 3. 1979 — CASE 231/78

Part Four of the Act of Accession, 5. On 7 June 1978 the Commission entitled "Transitional measures", con­ delivered its reasoned opinion to the tains, in Title I, entitled "Free movement effect that the United Kingdom, by its of goods", Article 42 which provides: prohibition on the importation of potatoes from other Member States after "Quantitative restrictions on imports and exports shall, from the date of accession, be abolished between the Community as orginally constituted and the new Member States and between the new Member States themselves.

COMMISSION v UNITED KINGDOM

(1) Declare that failing to repeal or amend the disputed provisions with regard to restrictions on the impor­ tation of main crop potatoes, the Government of the United Kingdom of Great Britain and Northern Ireland has failed to fulfil an obligation under the EEC Treaty;

JUDGMENT OF 29. 3. 1979 — CASE 231/78

for home demand with a slight sales normally to be made only to surplus. licensed merchants.

— Producers who grow more than one — Imports and exports of main-crop acre of potatoes for sale must be potatoes are controlled by the registered with the Potato Marketing Department of Trade under powers Board (hereinafter referred to as "the derived from the Import of Goods Board"). (Control) Order 1954. In order to keep the United Kingdom market in — The Board, which is a statutory body established under the Potato balance, exports are banned in times 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 plant (the "quota") in order that the Kingdom on 1 January 1973, it seems target acreage may be achieved. that there have been export bans on main-crop potatoes in 1973 (30 — Each registered producer must pay to March to 31 May), 1974 (20 the Board a contribution on each February to 31 May) and 1975 (16 acre planted. Producers who wish to October to 7 August 1977). At all plant more than their quota are other times, save from September to required to pay an additional contri­ October 1975, the "normal ban" on bution. imports applied. — In order to provide a minimum guaranteed price for the producer, Within the Community there are the Board may, with the approval of considerable differences between the

potatoes into the United Kingdom after barriers to free movement of goods the end of 1977 helped to maintain within the Community, a power which prices on the London market at the was an integral part of a national organi­ beginning of 1978 whilst it depressed zation. The system in the Act of prices on the Rotterdam and particularly Accession was therefore assimilated to the Arras markets. that thought to pertain under the Treaty, In summarizing the case-law of the on the understanding that if at 31 December 1977 there were still no Court in the matter the Commission common organization, the position states that the Charmasson judgment is regarding trade restrictions in the new confirmed by the judgments given in Case 68/76 Commission v French Member States would be exactly the same as in the original Member States. Republic [1977] ECR 515 and in Joined Cases 80 and 81/77 Commissionnaires In this sense Article 60 (2) was not to be Réunis and Les Fils de Henri Ramei v regarded as a "transitional measure" at all, any more than was Article 60 (1). Receveur des Douanes [1978] ECR 927. In its judgment in the Charmasson case Article 60 (2) of the Act of Accession must be read in the context of the whole the Court declared that as regards the original Member States the derogations act and in particular of Articles 2 and 9. which a national organization of the Article 2 enunciates the principle, which is fundamental to the Act of Accesion, of market could effect from the general rules of the Treaty were only permissible acceptance of the "acquis commu­ during the "transitional period". In the nautaire". An exception is made to this light of that judgment Article 60 (2) has principle by a system of transitional taken on the character of a transitional measures (Article 9). measure permitting, for trade involving The Commission does not accept that the new Member States, a system the phrase "until the common organi­ different from that applicable to trade zation of the market… is implemented" involving merely the original Member (Article 60 (2)) is a "special provision" to States. which the time-limit provided by Article A contrary interpretation of Article 60 9 is subject. The drafting of Article 60 (2) would mean an extension beyond the (2) does not permit such an interpre­ time-limit fixed by Article 9 of two tation since the placing of the phrase different sets of rules. This would indicates that it is intended to be a manifestly be contrary to the intent of limitation to an exception to the general that article as it was originally envisaged. rule, as is the other part of the sentence. On the other hand the provisions of the Act of Accession which might be interpreted as being "special provisions" in the sense of Article 9, entailing an extension of transitional measures beyond 31 December 1977 are quite explicit in this regard. In fact Article 60 (2) of the Act of Accession must be placed in its proper context. At the time of its drafting the prevailing interpretation of the Treaty was to the effect that, in the absence of a common organization of the market in a product, the original Member States still possessed the power to retain certain

Finally the Commission recalls that the inconceivable for the new Member States Council is at present considering to agree to abandon their own market proposals regarding other common organizations with nothing to put in organizations of the market for products their place. Accordingly Article 60 (2) of in which trade involving the new the Act of Accession enabled the new Member States is an important factor in Member States to retain in respect of the Community market. A decision by products which at the moment of the Court to the effect that restrictions accession were subject to a national on trade with the new Member States in organization of the market quantitative these products are still permissible might restrictions and measures having have the effect of postponing yet further equivalent effect until the common a decision by the Council to establish organization of the market for those common organizations. products was implemented. The Government of the United Kingdom Under the EEC Treaty there should have contends, as regards the facts, that the been by the end of the transitional period restrictions on the importation of in 1969 a common organization of the potatoes form part of the national organi­ market for every agricultural product. zation of the United Kingdom potato The Act of Accession did not alter the market and that they are necessary to obligations of the original Member ensure the maintenance of that organi­ States to establish a common organi­ zation. zation of the market for agricultural products or extend the transitional The Government of the United Kingdom period applicable. contends, as regards the law, that it is authorized to make use of the dero­ It is against this background that the gation provided for agricultural products Charmasson case must be interpreted. in 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 applicant 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 replying to some of the arguments put claims, its meaning cannot possibly have forward by the Commission the been changed ex post facto by the Government of the United Kingdom decision of the Court of Justice in the observes first of all that the "acquis Charmasson case. communautaire" is, under Article 2 of The French Government observes that the the Act of Accession expressly subject to Act of Accession, unlike the provisions the conditions laid down in that Act. of the Treaty of Rome, did not prescribe It emphasizes that Article 60 of the Act a "transitional period". Consequently the of Accession must be considered as a case-law of the Court of Justice as established in the Charmasson case whole and that the phrase "until the common organization of the market is cannot be applied to the very different situation which arises from the Act of implemented" constitutes a "special Accession. provision" within the meaning of Article 9 (2). In this connexion it refers to the Article 60 (2) of the Act of Accession wording of the German version of constitutes an instance of an application Article 60. of the notion of "special provision" The Government of the United Kingdom covered by the reservation in Article 9. considers that in the opinion of the In view of the fundamental structural Commission the prevailing interpretation differences between British agriculture of the EEC Treaty at the time when the and that in the original Member States Act of Accession was drafted was the the latter recognized in the negotiations exact opposite to what the Court of leading up to accession that it was Justice later held in the above-mentioned impossible to apply in their entirety the Charmasson case (48/74). rules on freedom of trade to agricultural The authors of the Act of Accession systems presenting such fundamental intended that the new Member States differences. It was accordingly logical that they should prescribe a specific were to be given the same rights after transitional arrangement whereby the 1977 as it was thought the original national organizations of the market Member States would have, namely the could continue in being until the right inherent in a national organization Community replaced them with common to retain quantitative restrictions for organizations. This was not to renounce products for which there was no the transitional nature of these provisions common organization. but to accept that it was necessary to The difference between the original provide special solutions for exceptional Member States and the new Member situations. States on the entry into force of the Treaty of Accession was this: The original Member States, according to the Commission, felt on a mistaken interpretation of the EEC Treaty, that they had this right. The new Member States acquired the right not on an erroneous interpretation of the EEC Treaty but on the clear wording of the Act of Accession.

Decision

1 By an application lodged on 19 October 1978, the Commission of the European Communities sought a declaration under Article 169 of the EEC Treaty that the United Kingdom of Great Britain and Northern Ireland had failed to fulfil an obligation under the Treaty by not repealing or amending the provisions of its national law which have the effect of restricting imports of main-crop potatoes before the end of 1977, the time-limit laid down in Article 9 of the Act concerning the Conditions of Accession and the Adjustments to the Treaties, annexed to the Treaty of 22 January 1972 concerning the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the European Economic Community and to the European Atomic Energy Community (hereinafter referred to as the Act of Accession).

COMMISSION v UNITED KINGDOM

2 The Commission states that, before its accession to the Community, there existed in the United Kingdom a national organization of the market in potatoes comprising inter alia a control on imports and exports of main-crop potatoes. In 1977, the Commission notified the Government of the United Kingdom that under Article 9 (2) of the Act of Accession the restrictions on the importation of the said product hat to be brought to an end. Nevertheless, on 28 December 1977, the British Ministry of Agriculture announced that the ban on imports of potatoes into the United Kingdom would continue until further notice.

3 According to the Commission, since the transitional measure for which provision is made in Article 60 (2) of the Act of Accession expired, by virtue of Article 9 (2) of that Act, at the end of 1977, the United Kingdom by continuing to prohibit imports of potatoes after that date has failed to fulfil its obligations under Article 30 of the Treaty.

3. …".

6 That Article unquestionably constitutes a derogation from Article 42, which is worded as follows :

"Quantitative restrictions on imports and exports shall, from the date of accession, be abolished between the Community as originally constituted and the new Member States and between the new Member States themselves.

Measures having equivalent effect to such restrictions shall be abolished by 1 January 1975 at the latest".

7 The provisions of Articles 42 and 60 cited above are applications of the general rule laid down in Article 9 of the Act, which provides:

"1. In order to facilitate the adjustment of the new Member States to the rules in force within the Communities, the application of the original Treaties and acts adopted by the institutions shall, as a transitional measure, be subject to the derogations provided for in this Act.

"From the date of accession, the provisions of the original Treaties and the acts adopted by the institutions of the Communities shall be binding on the new Member States and shall apply in those States under the conditions laid down in those Treaties and in this Act".

11 This provision makes it clear that the integration of the new Member States into the Community is the fundamental objective of that Act. With this in view, Article 9 (1) of the Act provides that it is only "in order to facilitate the adjustment of the new Member States to the rules in force within the Communities" that "the application of the original Treaties and acts adopted by the institutions shall, as a transitional measure, be subject to the dero­ gations provided for in this Act". The transitional period laid down in the Treaty had expired before accession and the Treaty had already become fully operative: for the new Member States the Act of Accession laid down only clearly specified time-limits and conditions in order to facilitate their adjustment to the rules in force within the Community.

judgment of 29. 3. 1979 — case 231/78

12 Therefore the provisions of the Act of Accession must be interpreted having regard to the foundations and the system of the Community, as established by the Treaty. In particular, the provisions of the Act of Accession relating to quantitative restrictions and measures having equivalent effect cannot be interpreted in isolation from the provisions of the Treaty relating to these matters. As Article 60 concerns agricultural products it must also be interpreted in the light of the provisions of the Treaty relating to the common agricultural policy, with the implementation of which that article is plainly concerned.

COMMISSION v UNITED KINGDOM

intention to give priority to the operation and development of the common market by obliging the institutions and the Member States to establish a common agricultural policy at a corresponding rate of progress. Since Articles 40 and 41 of the Treaty prescribe different forms for the establishment of a common organization of agricultural markets and do not preclude even fundamental alterations of that organization after the expiry of the transitional period, the continuance of alleged deficiencies in the establishment of the common agricultural policy cannot, therefore, after the end of that period, prevent the application of the rules laid down for the establishment of the common market, and in particular the application of the rule prohibiting quantitative restrictions.

17 This conclusion is confirmed by a consideration of the consequences which would ensue from the alternative interpretation advocated by the United Kingdom. In a matter as essential for the proper functioning of the common market as the elimination of quantitative restrictions, the Act of Accession cannot be interpreted as having established for an indefinite period in favour of the new Member States a legal position different from that laid down by the Treaty for the original Member States. If Article 60 (2) were regarded as a "special provision" within the meaning of Article 9 (2) of the Act of Accession, it would in effect establish a persisting inequality between the original Member States and the new Member States, the latter being in a position to prevent or restrict the importation of certain agricultural products coming from the Community, whereas the former would be obliged under the Treaty to refrain from any restriction on imports of the same products, even if they came from a new Member State which was making use of Article 60 (2). Although it was justified for the original Member States pro­ visionally to accept such inequalities, it would be contrary to the principle of the equality of the Member States before Community law to accept that such inequalities could continue indefinitely.

18 It follows that the United Kingdom of Great Britain and Northern Ireland has failed to fulfil an obligation under the Treaty, in particular Article 30 thereof, together with the Act of Accession, by not repealing or amending before the end of 1977 the provisions of its national law which have the effect of restricting imports of potatoes.

hereby:

1. Declares that the United Kingdom of Great Britain and Northern Ireland has failed to fulfil an obligation under the Treaty, in particular Article 30 thereof, together with the Act of Accession, by not repealing or amending before the end of 1977 the provisions of its national law which have the effect of restricting imports of potatoes;

2. Orders the defendant to pay the costs, except those arising from the intervention;

3. Orders the parties to bear their own costs arising from the intervention.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait