C-112/80

on the validity of Commission Regulation (EEC) No 687/79 of 5 April 1979 (Official Journal 1979, L 86, p. 18), in conjunction with amending Regu- lations (EEC) No 797/79 of 23 April 1979 (Official Journal 1979, L 101, p. 7) and N o 1152/79 of 12 June 1979 (Official Journal 1979, L 144, p. 13),

THE COURT

composed of: J. Mertens de Wilmars, President, Lord Mackenzie Stuart and T. Koopmans (Presidents of Chambers), A. O'Keeffe, G. Bosco, A. Touffait, O. Due, U. Everling and A. Chloros, Judges,

Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

The measures adopted consisted in Regulation No 687/79 and on the sub- suspending, during the period from 25 sequent Regulations N o 797/79 and N o April to 15 August 1979, the placing in 1152/79, since they considered that the free circulation of fresh apples, other importation in question was covered by than cider apples, imported from Chile. those provisions notwithstanding the fact that they dealt expressly with impor- tations effected by sea and not by air. In view of certain circumstances the That decision was contested by the Commission subsequently twice post- undertaking concerned before the poned the commencement of the afore- Hessisches Finanzgericht on the ground said period. that the legal provision on which it was based, namely Commission Regulation No 687/79, was contrary to Regulation By Regulation No 797/79 of 23 April N o 1035/72 and to Regulation N o 1979 it was postponed until 5 May 1979 2707/72 of the Council of 19 December in respect of the apples referred to in 1972 (Official Journal, English Special Regulation N o 687/79 which had left Edition 1972 (28-30 December), p. 3). Chile not later than 12 April 1979 in vessels bound for a Community port. In order to settle that issue the Hessisches Finanzgericht submitted the following preliminary question to the By Regulation N o 1152/79 of 12 June Court by order of 24 March 1980: 1979 release into free circulation was suspended only as from 17 June 1979 provided that the ships transporting the "Is Commission Regulation (EEC) N o apples from Chile had reached a 687/79 of 5 April 1979 (Official Journal Community port before 19 May 1979. L 86, p. 18), in conjunction with amending Regulations (EEC) N o 797/79 of 23 April 1979 (Official Journal L 101, On 13 July 1979 Chile requested that p. 7) and N o 1152/79 of 12 June 1979 consultations be held on the aforesaid (Official Jounal L 144, p. 13), valid?" protective measures pursuant to Article XIII (2) of the General Agreement on The order marking the reference was Tariffs and Trade (GATT). It considers received at the Court Registry on 18 that those measures are contrary to the April 1980. provisions of GATT. Written observations were submitted Firma Anton Dürbeck (hereinafter pursuant to Article 20 of the Protocol on referred to as "Dürbeck"), the plaintiff the Statute of the Court of Justice of the in the main action, which operates in the EEC by Dürbeck, represented by D. Federal Republic of Germany as a Ehle, U. C. Feldmann, V. Schiller and wholesaler and importer of fruit and E. Eyl, of the Cologne Bar, and by vegetables, applied to the German auth- the Commission of the European orities on 25 July 1979 for release into Communities, represented by Jörn Sack, free circulation of two boxes of dessert a member of its Legal Department, apples originating in Chile, with a weight acting as Agent. of 45 kg, which had been transported to the Federal Republic of Germany by air. On hearing the report of the Judge- The German customs authorities rejected Rapporteur and the views of the the application for customs clearance, Advocate General, the Court decided to basing their decision on Article 1 of open the oral procedure without any

Chile, for which the Commission had II — O b s e r v a t i o n s s u b m i t t e d p u r - fixed a quota of 42 000 tonnes, did not s u a n t t o A r t i c l e 20 of t h e accept that quantity in the context of P r o t o c o l o n t h e S t a t u t e of voluntary restraint, since firm contracts t h e C o u r t of J u s t i c e of t h e had already been concluded with EEC Community importers in respect of 55 000 tonnes (including 5 000 tonnes in transit to Austria). Diirbeck starts by analysing the situation which constitutes the background against which the facts of the case are set. The situation existing on the market for dessert apples in the Community at the time when the protective measure was adopted was largely known to the First, it explains that in November 1978 Commission and was transparent. it had concluded a contract with a Chilean exporter for a total quantity of approximately 300 000 boxes of apples originating in Chile during the import It was foreseeable that South Africa and period commencing at the end of March New Zealand would not totally exhaust 1979. the quantities which had been allocated to them in the context of the agreements on voluntary restraint, whilst they would Secondly, it recounts the history of the attempt to retain their reference quotas protective measures adopted by the in view of the possibility of future Commission in April 1979. agreements on voluntary restraint.

At the end of 1978 and the beginning of As for the Community harvest of dessert 1979 the Commission already knew both apples, it was approximately 6 · 5 million the quantities of dessert apples which the tonnes in 1978, but it should be noted five traditional supplier countries, of that that absolute figure, taken in which Chile is one, intended to export to isolation, does not mean a great deal. In the Community and the approximate fact, for an appraisal of the situation on figures for the 1978 harvest in the the apple market in April 1979 it is Member States. Although in possession necessary to know:

Dürbeck had protested without delay, on Moreover, at the time when the 10 and 12 April 1979, against the intro- protective measures were adopted only a duction of the protective measure and part of the produce qualifying for had requested a derogation for approxi- intervention buying remained in mately 2 000 tonnes of dessert apples, warehouses. In fact, the apples stored in but the Commission had refused to agree ordinary warehouses could not remain to transitional arrangements for the there, for purely technical reasons, quantity in question. beyond the middle or end of February. Later, however, by Regulations N o Finally, it may be supposed that if the 797/79 of 23 April 1979 and N o market had behaved normally until the 1152/79 of 12 June 1979, the beginning of 1979 a much larger Commission did adopt transitional quantity of apples would have been sold. provisions, observing in the one case that That was not the case by reason of the the capacity of the Community market fact that apples were deliberately would not be saturated by imports withheld from sale from October 1978 in carried out before 25 April 1979, and in order to obtain higher prices, to conceal the other case that it had not been the poor quality of the produce which saturated either by imports carried out would have been revealed by recourse to before 5 May 1979. premature intervention, and to support the demand for an extension of the Dürbeck did not benefit from those intervention period. transitional provisions because, after the Commission had left it with no hope of There was a constant trend towards the adoption of transitional measures, in higher selling prices at the wholesale spite or its repeated requests, it had

(3) the infringement of Article 37 of In order to determine whether the first Regulation (EEC) No 1035/72 and condition is fulfilled, three factors in of Articles 39 and 110 of the EEC particular must be taken into account, Treaty; namely: (4) the breach of the prohibition on — The actual or probable volume of discrimination laid down by Article 40 (3) of the EEC Treaty. imports;

— The availability of products on the (1) Infringement of Article 29 of Regu- Community market; and lation (EEC) No 1035/72 in conjunction with Articles 1, 2 and 3 of — The prices of domestic products Regulation (EEC) No 2707/72 recorcled on the Community market, or the probable trend of those prices. The above-mentioned infringement results from the fact that the conditions As regards the actual or probable volume required for the adoption of a protective of imports, the difference between the measure, with regard to dessert apples, import quota proposed by the were clearly not satisfied either as a Commission and that which Chile was matter of fact or as a matter of law. ready to accept was only 13 000 tonnes, of which 5 000 were merely to pass In the first place, it is necessary to bear through the Community on their way to in mind that Regulation No 687/79 is Austria. Thus the difference involved was

DÜRBECK v HAUPTZOLLAMT FRANKFURT AM MAIN-FLUGHAFEN

really 8 000 tonnes, which in relation to that they were "substantially higher than a Community production of 6 661 000 those at the same period in the two tonnes is such an insignificant quantity previous years", but it omitted to that in the light of the probable volume mention that in 1976/77 the apple crop of imports there would be no cause to was normal and that in 1977/78 it was apprehend disturbances, still less "serious exceptionally low, with the result that disturbances". Moreover, on 25 April State intervention did not take place in 1979 no more than approximately 36 000 those years. tonnes had been imported from Chile.

In order to demonstrate that price levels According to Dürbeck, no more than 25 were particularly low the Commission to 30% of the apples produced in 1978 made a comparison with prices in the and held in warehouses qualified for marketing year 1977/78. That compari- intervention buying. son is incomplete and misleading: in 1977/78 prices were abnormally high on account of the bad harvest. If prices in 1978/79 were also lower than in Further, as regards the stocks existing at 1976/77, that is an indication of the the time when the protective measures poor quality of the produce in 1978/79, were adopted, the Commission stated to which Dürbeck has already referred.

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Further, the Commission did not promoted, by the import of Chilean mention the foreseeable trend of prices apples. and the marketing effect, already referred to, which imports of fresh apples have on produce in storage. The protective measures adopted by the Commission are therefore unlawful in the light of the aforesaid Article 29. Therefore the first condition laid down They are also unlawful having regard to in Article 29 of Regulation N o 1035/72 the principle of proportionality, because for the adoption of protective measures they are neither appropriate nor is not satisfied. necessary.

DÜRBECK v HAUPTZOLLAMT FRANKFURT AM* MAIN-FLUGHAFEN

Subsequently the Commission did indeed (4) Breach of the prohibition on discrimi- grant two transitional periods (of which nation Dürbeck could no longer take advantage) and thus basically admitted It is argued that the prohibition on the principle of the protection of discrimination laid down by Article 40 of legitimate expectation in the particular the EEC Treaty extends to importers, case. who must in effect be regarded as Community "consumers" within the meaning or that provision. (3) Infringement of Article 37 of Regu- lation (EEC) No 1035/72 and of Regulations No 797/79 of 23 April 1979 Articles 39 and 110 of the EEC Treaty and N o 1152/79 of 12 June 1979 introduced transitional schemes for certain importations, but Dürbeck, which is also an importer, was excluded from Dürbeck points out that by virtue of them as it had cancelled its supply Article 37 of Regulation N o 1035/72 in contract and charter-party after the setting up the common organization of Commission had informed it in reply to the market in fruit and vegetables appro- two telex messages of 10 and 12 April priate account must be taken, at the that it did not intend to adopt same time, of the objectives set out in transitional measures. Articles 39 and 110 of the EEC Treaty. Assuming that the protective measure was valid, the Commission should at The Commission not only infringed Article 39, but was also in breach, even least have ensured that the Chilean more flagrantly, of the first paragraph of dessert apples imported after 25 April Article 110 whereby the Member States 1979 were shared out equitably between and the organs of the Community are the importers concerned in accordance required to contribute inter alia to the with standard procedure (Referenzver- progressive abolition of restrictions on fahren). international trade, and of the second paragraph of that article, which implies The Commission of the European in substance an undertaking to open Communities also considers it helpful to the common market to non-member describe the market conditions at the countries on conditions according with time when the protective measures were the laws of competition. adopted. It stresses the following factors in particular:

— The fall in apple prices on the market According to the Commission, the well below the basis prices; conditions defined in the first indent of Article 29 (1) of Regulation N o 1035/72 were satisfied in April and May 1979. — The considerable quantity of apples (380 000 tonnes) originating in non- In view of, on the one hand, the member countries which were abnormally high imports expected from expected to be imported into the countries in the southern hemisphere in Community between March and the marketing year 1978/79 and, on the August 1979. other hand, the large stocks resulting from Community production, the Community market for dessert apples was threatened with serious disturbances In order to restrain the dangerous trend in April and May 1979 which were of the apple market and to avoid, so far capable of endangering the attainment of as possible, costly withdrawals from the the objectives of Article 39 of the EEC market, the Commission invited the Treaty, in particular the stability of the traditional supplier countries to sign market and a fair income for producers. agreements on voluntary restraint in Indeed, there was reason to fear that if respect of their exports to the very large imports took place prices, Community. which were already low to begin with, might collapse completely and that it would be quite impossible to absorb, As Chile did not accept the quota of even partially, the enormous stocks. 42 000 tonnes proposed by the Those considerations, together with the Commission, the latter was obliged to description of market conditions at the adopt protective measures with regard to beginning of the observations, show that Chilean exports. in applying the first indent of Article 29 (1) the Commission had sufficient regard to the criteria mentioned in Article 1 of Regulation No 2707/72 (in particular When it subsequently ascertained that the probable volume of imports, the the total amount of apples imported availability of products on the market from Chile had not attained the quota of and the prices recorded). Therefore it 42 000 tonnes, the Commission, by made proper use of the power of Regulations No 797/79 and No appraisal which it possessed. 1152/79, authorized further imports (in respect of cargoes already in transit towards the Community) up to the limit By the terms of the second subparagraph fixed by that quota. of Article 29 (1) the protective measures taken thereunder may be applied only “ u n t i l . . the disturbance or threatened Having thus described the context in disturbance disappears”. which the present case is situated, the Commission examines the arguments recorded in the order making the The Commission believes that the figures reference in support of the invalidity of which it gave at the beginning of its the protective measures (arguments observations show very clearly that the which were repeated by Dürbeck in its threat of disturbance existed until the observations submitted subsequently to end of the marketing year 1978/79. those of the Commission). Large quantities continued to be with-

In fact, the attempted importation of two Moreover, before adopting the protective boxes of apples by air in July 1979 is measures the Commission studied the a transaction which is particularly facts in detail and made a correct unworthy of protection: it concerned appraisal thereof, weighing up all the minimal quantities, took place at a time economic and political interests involved. when the protective measures had already been in force for some time and it was carried out in an entirely unusual way. With regard to the alleged breach of the principle that legitimate expectation must be protected, the Commission does not deny that the protective measures The Commission considers that in the especially affected contracts of sale context of a reference for a preliminary already concluded. But any protective ruling under Article 177 of the Treaty measure is of necessity taken in the light the Court should have regard solely to of the available data on probable exports the circumstances of the specific dispute, to the Community, data which include even if one of the parties were to the quantities covered by contracts attempt, as Dürbeck might on this already concluded. If such contracts had occasion, to concern the Court with the to be excluded from the scope of such a effects of the protective measures in measure, the safeguard clauses provided completely different cases. for in the common organizations of the markets or in international agreements would be rendered entirely nugatory. However, purely as a precaution, the Therefore there cannot exist a principle Commission submits certain general regarding the protection of legitimate considerations with regard to the expectation which lays down a general protection of the legitimate expectation rule to the effect that contracts already of the importers of Chilean apples concluded may not be affected when concerned. In the Commission's opinion protective measures are ordered. an importer of agricultural products

Further, it is not true that the protective The only thing of which he may be measures adopted are contrary to the certain is that import restrictions are not aforesaid provisions. It is in fact a ordered unless all the legal and factual question of measures in regular use at conditions justifying their adoption are the international level, adopted for a satisfied. In this case the aforesaid limited period, and applied only to conditions were fully satisfied. certain agricultural products. In adopting those measures the Commission fully complied with its obligations under GATT. With regard to the breach of the prohibition on discrimination, the Commission submits in the first place On the basis of the foregoing that the conclusion of agreements on considerations, the Commission there- voluntary restraint with other countries fore proposes the following reply to the did not mean that Chilean products were question submitted to the Court of treated less favourably than products Justice by the court requesting a pre- originating in those countries since the liminary ruling: reductions applied were the same as in the case of the other exporting countries. Secondly, no discrimination lay in the "Consideration of the question raised fact that certain imports were still has disclosed no factor of such a kind as permitted, whilst others, which were to to affect the validity of Commission have taken place after the acceptable Regulations (EEC) No 687/79, N o volume of imports had been reached, 797/79 or N o 1153/79". were refused. In fact, that is a necessary consequence of observing the principle of proportionality.

2 That question was raised during an action between a German importer of fresh fruit originating in non-member countries and the German customs authorities regarding the refusal by those authorities to allow certain quantities of dessert apples originating in Chile to be released into free circu- lation in the Federal Republic of Germany on the ground that the entry into free circulation, of those quantities was prohibited by the regulations cited above.

I — Preliminary considerations

3 It is apparent from the information contained in the order making the reference for a preliminary ruling that the prohibition in question comes under the Community rules on the common organization of the market in fruit and vegetables provided for by Regulation No 1035/72 of the Council of 18 May 1972 (Official Journal, English Special Edition 1972 (II), p. 437).

4 The first subparagraph of Article 29 (1) of that regulation, as amended by Regulation No 2454/72 of the Council of 21 November 1972 (Official Journal, English Special Edition 1972 (November), p. 60), is worded as follows :

JUDGMENT OF 5. 5. 1981 — CASE 112/80

"(1) Appropriate measures may be applied in trade with third countries if: — By reason of imports or exports, the Community market in one or more of the products referred to in Article 1 experiences or is threatened with serious disturbances which may endanger the objectives set out in Article 39 of the Treaty; or — For the products listed in Annex III a, the withdrawal or buying-in operations effected pursuant to Articles 18 and 19 concern significant quantities".

(d) If the situation referred to in the first part exists by reason of imports : — The prices on the Community market of products exported from third countries and in particular their tendency to fall excessively,

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— Quantities for which withdrawals are or may be effected."

Article 3 of the same regulation provides inter alia as follows :

"(1) The measures which may be taken pursuant to Article 29 (2) and (3) of Regulation (EEC) N o 1035/72 are: — When the situation covered by the firt indent of paragraph (1) of that article exists, the suspension of imports or exports or the levying of export taxes;

(2) Such measures may only be taken in so far, and for as long, as they are strictly necessary.

8 It was possible for an agreement to be reached with South Africa, Argentina, Australia and New Zealand. Chile, however, which contended that export contracts had already been concluded for much larger quantities of apples, insisted on being able to export 55 000 tonnes instead of the 42 000 tonnes proposed.

9 When it saw that an agreement with Chile was not possible and in view of the information which it had about the goods in the course of transit from that country, the Commission adopted, by Regulation No 687/79 of 5 April 1979, "protective measures in respect of imports of dessert apples originat- ing in Chile" (Official Journal L 86, p. 18) so as to limit those imports to 42 000 tonnes.

10 Article 1 of that regulation provides that:

"The placing in free circulation in the Community of apples falling under subheading 08.06 A II of the Common Customs Tariff originating in Chile shall be suspended during the period 25 April to 15 August 1979".

On 6 April 1979 the Commission informed the Chilean Government that it was prepared to reconsider the measures in question in the event of its appearing that the quota of 42 000 tonnes allocated to Chile was not attained on 25 April.

1 1 The Chilean mission subsequently informed the Commission on 17 April 1979 that three ships having on that date a cargo of 6 400 tonnes on board which had been taken into account in the earlier estimates could not reach a Community port before 25 April 1979. In view of that information on 23 April 1979 the Commission adopted Regulation (EEC) No 797/79 amending the protective measures provided for by Regulation No 687/79 and adding a second paragraph to Article 1 thereof stating that in the case of

1 4 On 25 July 1979 it imported by air into the Federal Republic of Germany two boxes of Chilean dessert apples weighing 45 kilograms and applied to the German authorities for the release into free circulation of those goods. The competent customs office rejected that application on the ground of the protective measures adopted by the Community in Commission Regulations Nos 687/79, 797/79 and 1152/79 in regard to imports of dessert apples orig- inating in Chile.

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15 The plaintiff in the main action challenged that decision before the Hessisches Finanzgericht contending amongst other things that the legal basis for that decision, namely the regulations cited above, was void since those regulations had been adopted in breach of Regulations Nos 1035/72 and 2707/72 of the Council, Article 110 of the Treaty and the provisions of the General Agreement on Tariffs and Trade (GATT), and the principles of the protection of legitimate expectation and non-discrimination. With a view to settling the issue thereby raised the Finanzgericht referred the following question to the Court for a preliminary ruling:

"Is Commission Regulation (EEC) No 687/79 of 5 April 1979 (Official Journal L 86, p. 18), in conjunction with amending Regulations (EEC) No 797/79 of 23 April 1979 (Official Journal L 101, p. 7) and N o 1152/79 of 12 June 1979 (Official Journal L 144, p. 13), valid?"

16 On 13 July 1979 the Chilean Government sought, pursuant to the General Agreement, the opening of consultations with the EEC in application of Article XXIII of that Agreement on which the plaintiff in the main action and the Commission gave their views during the oral procedure before the Court.

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(a) The statement of the reasons on which Regulations Nos 687/79, 797/79 and 1152/79 are based

18 The question has been raised in relation to the reasons given as the basis for the regulations in question whether the fact that the preamble to Regulation No 687/79 mentions Regulation No 1035/72 only and makes no reference to Regulation N o 2707/72 constitutes a defect of form which by virtue of Article 190 of the Treaty affects the validity of that regulation and consequently that of the amending Regulations Nos 797/79 and 1152/79 also.

19 From the preamble to Regulation No 687/79 and in particular from the first recital therein it may be seen that that regulation defines its legal basis by reference to Article 29 of Regulation No 1035/72 paragraph (1) of which describes, in the first subparagraph, the type of situation requiring intervention by the Commission which may involve the adoption of pro- tective measures, whilst the second subparagraph states that the Council, acting ón a proposal from the Commission, "shall adopt rules for the application of this paragraph".

20 Since the very object of Regulation No 2707/72 is to determine the conditions for the application of Regulation No 1035/72, it follows in this case that the reference to Article 29 of Regulation No 1035/72 contained in Commission Regulation No 687/79 is a sufficient statement of the reasons on which Regulation N o 687/79 is based as it enables those concerned to identify the factors which the Commission took into account when adopting the protective measures in issue.

(c) the prices of domestic products and the probable trend of those prices, in particular their tendency to fall or rise excessively in relation to basic prices, and

(d) the prices on the Community market of products exported from third countries and in particular their tendency to fall excessively, and quantities for which withdrawals were or might be effected.

23 Regulations Nos 687/79, 797/79 and 1152/79 should therefore be examined in the light of those factors to determine whether they comply with the provisions of the first indent of Article 29 (1) of Regulation N o 1035/72 and Articles 1 and 3 of Regulation N o 2707/72.

24 With that in view consideration should be given first of all to whether the Commission exercised its discretion correctly at the time when the aforesaid measures were decided upon when assessing the situation on the market in question as regards the available quantities of the products involved.

25 The parties agree that in spring 1979 the quantities available were considerable. The amounts involved reflected both the quantities resulting from the 1978/79 harvest compared to those resulting from harvests in previous seasons and the quantities of products which had been the subject

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27 In order to determine the size of the quantities of dessert apples available on the Community market in spring 1979 the Commission had further to consider, in addition to quantities harvested in the year in question, quantities held in cold stores, both those which had been the subject of intervention measures and those held in private stocks. The relevant figures supplied during the proceedings reveal that the quantities of dessert apples held in storage had reached some 1 500 000 tonnes on 1 March 1979, which represents an increase in the region of 18 % and 40 % compared to the same periods in 1977 and 1978 respectively. Irrespective of whether such figures take account only of the products contained in cold stores and those meeting the quality standards, it is incontestable that when considered also in relation to the trend in domestic production, the figures relating to the stocks existing in spring 1979 disclosed increasingly serious difficulties for the disposal of domestic dessert apples on the Community market.

28 Those difficulties might moreover have been aggravated appreciably first by the trend of domestic prices at the time under consideration and secondly by

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the extent of the withdrawal measures taken in spring 1979 and probable thereafter.

29 As regards the first point, it appears from the information supplied to the Court during the course of the oral procedure that in February to April 1979 market prices on most of the national markets in the Community were under the basic price, fixed at 21.26 European units of account in accordance with Article 16 of Regulation N o 1035/72 on the basis of the average of the prices noted on the representative markets of the Community during the three previous years. Furthermore, a comparison between the prices in each of those three years shows that in March 1979 prices charged on most of the national markets in the Community had not reached the price level prevailing in the previous years but revealed a clear downward trend likely to aggravate conditions for the disposal of the products in question and to increase severely the already extremely heavy burden of storage arrangements.

34 Nor is the argument of the plaintiff in the main action that the supply of imported apples might have the effect of promoting the sale of domestic apples tenable. Such an effect, even if it exists, would only be temporary; in the long run imports from non-member countries would create a demand which, in the absence of imports, would be directed to domestic products.

35 In view, therefore, of the quantities of domestic dessert apples available on the Community market, both those from the 1978/79 harvest and those stored in Community and private cold stores, and the extent of probable intervention measures and price trends in the Community in particular, it does not appear that the Commission erred in assessing the true situation on the market in question by assuming that a volume of imports from countries in the southern hemisphere estimated to be 380 000 tonnes might sub- stantially aggravate the difficulties on that market and were likely to create a serious disturbance, within the meaning of Article 29 of Regulation No 1035/72, on that market which might jeopardize the objectives set out in Article 39 of the Treaty, particularly those in subparagraphs (a), (b) and (c) thereof.

36 The fact that the protective measures in dispute, enacted by Regulation N o 687/79, were amended twice by Regulations Nos 797/79 and 1152/79 may not be taken as signifying that the Commission's assessment of the

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situation on the market in the spring of 1979 was incomplete or mistaken. As the preamble to those regulations shows, the explanation for those amendments is simply that more detailed knowledge was acquired of the true quantities in the course of transit and actually intended to be released into free circulation in the Community, which formed part of the import quota for Chile.

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41 The fact that when adopting Regulations Nos 797/79 and 1152/79 amending Regulation No 687/79 the Commission took into consideration only goods which had left Chile to the exclusion of those in the course of being loaded does not amount to a failure to observe the principle of pro- portionality with regard to the last-mentioned products. The first sub- paragraph of Article 3 (3) of Regulation No 2707/72 states in fact that any protective measures adopted are to take account of the special position of products "in transit". The fact that in Regulations No 797/79 and No 1152/79 the Commission took account only of goods already being transported by sea at the time when the protective measures in issue were adopted constitutes a proper application of Regulation No 2707/72 which the Commission could not interpret widely without putting at risk the efficacy of the protective measures decided upon.

(c) Infringement of Article 110 of the Treaty and of the provisions of the General Agreement on Tariffs and Trade

42 A further charge levelled against the protective measures in issue is that since they comprise a suspension of imports from non-member countries they are in breach of the guiding principle of the common commercial policy laid down in Article 110 of the Treaty to which Article 37 of Regulation No 1035/72 makes express reference.

43 It should be remembered in this regard that according to Article 37 of Regu- lation No 1035/72 that regulation "shall be so applied that appropriate account is taken, at the same time, of the objectives set out in Articles 39 and 110 of the Treaty". That reference to the two articles shows that the regu- lation is intended to maintain a reasonable balance between the objectives of the common agricultural policy and the interests of world trade to which reference is made in Article 110.

(d) Breach of the principle of the protection of legitimate expectation

47 The Court's attention has been further drawn to the question whether the Commission was in breach of the principle of the protection of legitimate expectation on the ground, in particular, that it adopted the protective measure in issue at a late stage, after the importers concerned had entered into supply and affreightment contracts, and without making provision for transitional measures in favour of those importers.

48 A l t h o u g h , as the C o u r t has recently confirmed in its j u d g m e n t of 16 M a y 1979 in Case 8 4 / 7 8 Tomadini [1979] E C R . 1801, the principle of the protection of legitimate expectation is o n e of the fundamental principles of

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the Community, nevertheless "the field of application of this principle cannot be extended to the point of generally preventing new rules from applying to the future effects of situations which arose under the earlier rules in the absence of obligations entered into with the public authorities". In the same judgment the Court went on to say that "this is particularly true in a field such as the common organization of markets, the purpose of which necessarily involves constant adjustment to the variations of the economic situation in the various agricultural sectors".

49 The very circumstances which justify the adoption of protective measures within the meaning of Article 3 (1) of Regulation No 2707/72 underline the need for such adjustment enabling the common organization to avert the threat of a serious disturbance likely to endanger the objectives set out in Article 39 of the Treaty.

53 In those circumstances, the fact that the Commission took into consideration only the goods which were already in the course of being transported by sea on 12 April 1979 and excluded those which on that date had not yet left a Chilean port is in keeping with the provisions of Article 3 (2) of Regulation No 2707/72.

54 Since the situation of goods which had not yet left a Chilean port with respect to Article 3 (2) of Regulation No 2707/72 is not comparable to the situation of goods "in transit", within the meaning of Article 3 (3), the fact that the arrangements under the contested Regulations No 797/79 and No 1152/79 were not extended to such a situation cannot therefore be regarded as constituting discrimination contrary to the Treaty.

55 On the contrary the extension of those arrangements to imports, limited as they were, from a country which had not accepted the voluntary export restraint clause proposed bythe Commission would have been discriminatory in regard to the other countries in the southern hemisphere which had accepted such a clause and would have endangered the observance of the commitments assumed by those countries.

56 For all those reasons the answer to be given to the national court should be that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Commission Regulations Nos 687/79, 797/79 and 1152/79.

Costs

The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. 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 on costs is a matter for that court.

Touffait Due Everling Chloros

Delivered in open court in Luxembourg on 5 May 1981.

A. Van Houtte J. Mertens de Wilmars Registrar President

O P I N I O N OF MR ADVOCATE GENERAL REISCHL DELIVERED O N 24 FEBRUARY 1981 1

Mr President, "(1) Appropriate measures may be Members of the Court, applied in trade with third countries

Article 29 (1) of Regulation No 1035/72 of the Council on the common organiz- ation of the market in fruit and — By reason of imports or exports, vegetables (Official Journal, English the Community market in one Special Edition 1972 (II), p. 437) as or more of the products amended by Regulation No 2454/72 of referred to in Article 1" the Council (Official Journal, English (including dessert apples coming Special Edition 1972 (November), p. 60) under tariff subheading 08.06 A provides : II) "experiences or is threatened 1 — Translated from the German.