C-11/82

Commission of the European Communities, represented by its Legal Adviser, Michel van Ackere, and by Xenophon Yataganas, a member of its Legal Department, acting as Agents, with an address for service in Luxembourg at the office of Oreste Montako, Jean Monnet Building, Kirchberg,

defendant, supported by

The Government of the French Republic, represented by Noël Museux, acting as Agent, and by Alexandre Carnelutti, acting as Deputy Agent,

intervener, * Language of the Case: French.

JUDGMENT OF 17. 1. 1985 — CASE 11/82

APPLICATION for a declaration that Commission Decision No 81/988/EEC of 30 October 1981 (Official Journal L 362, p. 33) authorizing the French Republic to take protective measures with regard to imports of cotton yarn from Greece, as provided for in Article 130 of the Act of Accession of Greece to the European Communities, is void,

The facts of the case, the course of the could bring about serious deterioration in procedure and the conclusions, submissions the economic situation of a given area, the and arguments of the parties may be Hellenic Republic may apply for author­ summarized as follows: ization to take protective measures in order to rectify the situation and adjust the sector concerned to the economy of the common 1. Facts and procedure market.

In the same circumstances, any present Article 130 (1) of the Act concerning the Member State may apply for authorization conditions of accession of the Hellenic to take protective measures with regard to Republic and the adjustments to the the Hellenic Republic. Treaties (Official. Journal 1979, L 291, p. 17) provides as follows: …'

'If, before 31 December 1985, difficulties arise which are serious and liable to persist The third paragraph of that article reads as in any sector of the economy or which follows:

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By letter of 21 September 1981 from its Rules of Procedure, leave to intervene in Permanent Representative to the European the proceedings in support of the Communities, alleging serious difficulties in Commission's conclusions. its domestic combed cotton yarn industry, the Government of the French Republic asked the Commission for authorization Upon hearing the report of the Judge-Rap under Article 130 to take protective porteur and the views of the Advocate measures with regard to the importation General, the Court decided to open the oral into France of cotton yarn from Greece. procedure on the objection of inad The French Government expressed the wish missibility without any preparatory inquiry. that imports of cotton yarn be limited to By order of 19 May 1982 the Court also 200 tonnes for each of the last three months decided to permit the Government of the of 1981 and 600 tonnes for each month of French Republic to intervene and auth 1982. orized that Government to make submissions on the question of admissibility By Decision No 81/988/EEC of 30 during the oral procedure. October 1981 (Official Journal L 362, p. 33), the Commission authorized the French Republic to limit imports into France of By order of the same date made pursuant to cotton yarn (Common Customs Tariff Article 95 (1) and (2) of the Rules of Heading No 55.05) from Greece. Article 2 Procedure the Court assigned the case to sets that limitation at 300 tonnes for the the First Chamber. period until 30 November 1981, 300 tonnes for the period 1 to 31 December 1981 and The hearing on the objection of 650 tonnes for the period 1 to 31 January inadmissibility was held on 21 September

The Advocate General presented his opinion By a notice of objection dated 12 February on the objection of inadmissibility at the 1982 the Commission raised an objection of sitting on 14 October 1982.

The written procedure was resumed. It Dismiss the application followed the normal course. (a) as inadmissible, or Having heard the report of the Judge-Rap­ (b) in the alternative, as unfounded, and porteur and the opinion of the Advocate order the applicants to pay the costs, General, the Court (First Chamber) decided including those of the intervener. to open the oral procedure with regard to the substance of the case without any preparatory inquiry. It asked the Com­ 3. Submissions and arguments of the mission, however, to reply to a number of parties questions. The replies of the Commission were received at the Court Registry on 9 3.1. The objection of inadmissibility March 1984. In its notice of objection the Commission alleges that the application is inadmissible. 2. Conclusions of the parties Article 173 of the EEC Treaty permits the In their application the applicants claim that Council, the Commission and the Member the Court should: States to challenge the validity of acts of the Council and of the Commission before the Declare that the application is admissible Court, but it only allows private persons to and well founded; challenge decisions addressed to them. A Declare void the Commission decision of 30 private person may however institute October 1981 authorizing the French proceedings against a decision which, Republic to take protective measures with although in the form of a regulation or a regard to imports of cotton yarn from decision addressed to another person, is of Greece; direct and individual concern to him. The applicants must therefore prove on the one Order the defendant to pay the costs. hand that the decision in question, which is addressed to two Member States, concerns Furthermore, in their written observations in them directly, and on the other hand that it reply to the Commission's notice of concerns them individually; those two objection, the applicants claim that the conditions must be considered cumulative, Court should: and must both be fulfilled before the application can be considered admissible. Consider the admissibility of the application Here, on the contrary, the Commission at the same time as its substance; argues that the decision in question is of a In the alternative, dismiss the objection of general economic nature and does not inadmissibility; concern the applicants directly or individually. In any event, order that the proceedings continue. Article 130 of the Act of Accession of Greece provides that during the transitional The Commission contends that the Court period 'if difficulties arise which are serious should: and liable to persist in any sector of the

economy or which could bring about serious considers that such an interest exists in cases deterioration in the economic situation of a where a private person is concerned by a given area' either Greece or another Community decision and no national Member State may apply for authorization measure is interposed between him and that to take protective measures 'in order to act. In this case, however, the contested rectify the situation and adjust the sector decision necessitated national implementing concerned to the economy of the common measures from which in turn flowed direct market'. That provision repeats in their consequences for private persons. All the entirety Article 226 of the EEC Treaty and Commission did was authorize a Member Article 135 of the 1972 act concerning the State to take measures limiting imports of accession of the United Kingdom of Great certain products in a defined sector of the Britain and Northern Ireland. According to economy; the decision itself merely the Commission those protective measures, establishes a scheme which France is auth­ essentially protectionist tariff and quota orized to put into force, remaining free to measures, are by their nature and their do so or not, to apply higher import quotas, method of adoption general measures, taken or to apply quotas for a shorter period. Nor in objective and strictly defined circum­ was it a decision taken in order to ratify stances, which are intended to rectify measures already adopted or provide a legal situations endangering general interests of a basis for choices already implemented at the regional, national or Community nature. national level, as in the cases provided for in They thus go beyond the interests of the the second paragraph of Article 115 of the undertakings considered individually, since EEC Treaty. Finally, the fact that the they cover whole sectors of the economy, decision in question was notified to the whatever the nature or the number of Greek Government and not to undertakings natural or legal persons involved in the in the Greek cotton industry is further proof manufacture and marketing of the products that the matter involves relationships and of the sector in question. In these interests which concern solely the proceedings the decision in question Community and certain Member States. concerns not only Greek cotton manufac­ turers such as the applicants but also Greek exporters who are not themselves manufac­ turers, and French importers and retailers. The fact that it is theoretically possible to identify the persons concerned by the decision does not in itself affect the general nature of the measure, especially since the Commission neither had nor needed to obtain information in that regard.

Those conditions are not met. For that and of the substance of the case. They argue purpose, it is not possible to rely, as the that the protective measures in question are applicants do, on the existence of contracts not directed towards a true 'sector of the for exports to France concluded before the economy'; their main object is only the date of adoption of the decision for regulation of the activity of Greek quantities in excess of those permitted by producers and exporters to France of cotton the decision, since the existence of such yarn, and their effects are not only limited contracts is not established by the as to the number of traders concerned but documents in the case. If such contracts also restricted in terms of the product, in existed they would have been subject to a time and in space. In that sense these are force majeure clause, triggered in this case by not measures with a general and objective the adoption of the protective measures; economic scope but specific and subjective they would in any event be contracts measures. In those circumstances the governed by private law of whose existence Commission can not be heard to assert that the Commission could not be aware. In it did not know which individual under reality, the protective measures authorized takings were affected by its decision and by the decision in question are not that it should not be obliged to obtain infor addressed to the applicants individually, but mation in that regard, since a measure such affect the interests of categories of traders as that in question cannot be adopted considered abstractly and distinguished from without consideration of the interests of the others only by their activity in the market Greek traders concerned.

act. With regard to the issue of direct concern, the Greek undertakings challenge the assertion that the decision in question granted a discretionary power to the French Government and that its implementation With regard to the nature and scope of the required national measures. In this case the decision in question, the applicants, while national measure putting into effect the they accept that protective measures should decision of the Commission was nothing be general in their scope and concern whole more than a measure of formal sectors of the economy, challenge the implementation, whereas the decision in assertion that that is the case here; that issue question was adopted in reply to persistent can only be resolved by consideration in representations on the part of the French their context of the issue of admissibility Government, following the failure of

According to the applicants, the fact, on which the Commission seeks to rely, that they are not the only persons concerned by the decision in question has no relevance to The applicants consider that in taking such the admissibility of the action. The Court an approach to the notion of 'direct has held that in authorizing a person to concern', which places the measure in challenge a measure which is not formally question in its true political, economic and addressed to him, the second paragraph of legal context, it cannot be denied that the Article 173 of the EEC Treaty does not contested decision directly affected their require that that person or the limited group legal position. That is shown by the fact that of which he is a member should be the sole the decision was raised against them as a trader affected by the measure; it is legal justification for the refusal of their sufficient that he should be one of the French contracting partners to perform the persons principally and primarily affected by sales contracts concluded before the entry the measure in question, which is precisely into force of the contested measure. the case here.

it is not possible to identify them Greece amount to 60% of all imports in individually to a sufficient degree, and France, as is stated in the preamble to the finally the fact that the circumstances in this contested decision, those imports represent case are in no way comparable with those a much smaller proportion of French which gave rise to the judgments of the consumption (24.6%). In relation to total Court relied on as precedents by the French consumption, between 1980 and applicants. In other respects it endorsed the 1981 Greek imports increased by only about arguments presented by the representatives 7 . 1 %. of the Commission, stating that in French law a 'notice to importers' such as that issued in this case does not merely provide information but also has a normative In order better to understand that infor character. There can therefore be no mation, it must be borne in mind, say the question of the decision at issue having any applicants, that until 1980 Greek imports direct effect with effect to the applicants, were subject to association arrangements, since a national implementing measure was based on voluntary limitation of Greek necessary. exports towards the Community.

market. That had very serious consequences for the Greek textile industry, whose situation had already deteriorated to a sub The applicants challenge the assertion that stantial extent. During the last 10 months the main cause of the difficulties referred to the Greek cotton spinning industry has lost by France was the increase in 1981 of 300 000 spindles on a total of 1 200 000. imports of cotton yarn from Greece. They The partial or total suspension of argue in that regard that imports to France production in certain plants is also under of cotton yarn represent a very small consideration. percentage of French production or

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1981 imports and exports were maintained In their reply, the applicants state that it is at the level of 1980. illusory to think that an industrial sector in a state of crisis can be re-established by limiting imports of cotton yarn from Greece for a period of three months, when those According to the information at the imports are minimal in relation to the Commission's disposal eight of the 16 production and consumption of cotton yarn French producers of combed cotton yarn in France. are situated in the region Nord-Pas-de- Calais. Those undertakings account by themselves for 40 % of total production. A According to the applicants, the data plan for the restructuring of those under­ contained in the annexes to the takings had been drawn up with a view to Commission's defence show that: concentrating the production of four under­ takings in two factories and eliminating obsolete equipment. The carrying out of that plan would result in the loss of 10% of French combed cotton production would the 1 980 jobs in the industry. decline in 1981 by only 11.2%;

imports into France from all sources would increase in 1980 and 1981 by 28.7%, Imports into France of combed cotton yarn amounting to 31.6% of French consumption from Greece, which amount to about 75 % in 1980 and 41 % in 1981 that is, an of all imports, have consistently increased. increase of 9.4%; They increased by 47 % in 1979, by 21 % in 1980 and, if the trend in the first six months of the year was maintained, by 40 % in 1981. That increase took place only in imports into France from Greece would France and not in the other Member States. increase between 1980 and 1981 by 39%, going from 17.5% to 24.5% of French consumption, that is, an increase of 7 %;

The applicants also emphasize that the follows, says the Commission, that imports Commission relied on much more detailed from Greece are in fact the most important and significant elements in authorizing the factor disturbing the French market. French Republic to adopt protective measures under Article 226 of the EEC Furthermore, the Commission argues that Treaty against the importation of Italian the comparison made by the applicants refrigerators (see the judgment of the Court between this case and that of the Italian of 17 July 1963 in Case 13/63, Italian refrigerators is of little value, since the cases Republics Commission, [1963] ECR 165). concern different sectors subject to different economic conditions. In its rejoinder, the Commission argues first that the harm caused to the Greek textile 3.2.2. The grounds raised in the application industry by the contested decision was not in support of the assertion that the decision as serious as the applicants allege. Infor­ was illegal mation provided by the Permanent Rep­ resentative of Greece to the European (a) Infringement of Article 130 of the Act Communities shows that 200 000 spindles of Accession were withdrawn, and a large number of them have been replaced. The Commission The applicants argue that the conditions of notes that Greek exports went from 49 424 application of Article 130 were not met in tonnes in 1980 to 51 080 tonnes in 1981. this case since:

With regard to the effects of imports into the product in question does not constitute France of combed cotton yarn from Greece, a 'sector of the economy' as referred to in the Commission rejects the criticism put Article 130; forward by the applicants and challenges the data on which they rely. the sectoral or regional difficulties envisaged by that article do not exist in this case;

In their reply the applicants challenge the according to whether it is combed or carded assertion that combed and carded cotton but according to its thickness. yarn can be distinguished, since the two products are largely interchangeable and require the same production structure. With regard to the absence of sectoral or regional difficulties, the applicants argue that the contested decision refers to the According to the applicants, if the sector of existence of both 'difficulties which are the economy to which the Commission's serious and liable to persist in a sector of decision applies is that of combed cotton the economy" and 'difficulties which could yarn, its application to carded cotton yarn is bring about serious deterioration in the illegal. If on the other hand the sector of the economic situation of a given area', without economy in question is that of cotton yarn either of these alternative conditions being in general, the decision is also illegal, since met individually. The factors relied on with the Commission has not established the regard to one or the other of those existence of serious difficulties concerning conditions are not sufficient to satisfy one the whole of that sector. of them taken by itself.

JUDGMENT OF 17. 1. 1985 — CASE 11/82

it chosen with a view to disturbing as little of adopting protective measures and the as possible the functioning of the common content of those measures. market. The decision in issue seriously harms traders affected by the measures They point out that the Commission: ordered. does not explain in what way the The Commission points out that the very production and marketing of combed cotton nature of protective measures implies yarn constitutes a 'sector' within the temporary derogations from the rules of meaning of Article 130; Community law, which is inevitably accompanied by a degree of harm to the combines the conditions of application of interests of the business groups concerned. that article (sectoral difficulties and regional Having regard to the quantity and duration difficulties) without showing in what way of the quotas authorized and to their each condition is properly met; restriction in relation to the request made by the French Government, however, the contested decision gave authorization for does not take into account the situation of the minimum measure necessary in order to the Greek producers of cotton yarn or the give the struggling French cotton firms the harmful effects which the measures adopted breathing space which they sought. would have for those undertakings;

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As for the data whose absence is referred to nation since Greek undertakings are treated by the applicants, some of them appear in unfavourably to the benefit of undertakings the preamble to the contested decision; the established in other Member States. remainder are superfluous. Referring to the

The contested decision also constitutes a As for the principles of non-discrimination, breach of the principle of non-discrimi­ Community preference and free compe-

JUDGMENT OF 17. 1. 1985 — CASE 11/82

tition, the Commission points out that the aiding the French undertakings which are in measures authorized cover all imports from difficulties without penalizing Greek under­ Greece, whatever the place of manufacture. takings. The applicants seem moreover to forget that Article 130 does not allow the Commission to authorize protective measures with 4. Oral procedure regard to other countries of origin. Nor has the Commission the power under Article The applicants, represented jointly by 130 to authorize measures with regard to D. Evrigenis, of the Thessaloniki Bar, and other Member States and non-member G. Vandersanden, of the Brussels Bar, the countries. Commission of the European Communities, represented by M. van Ackere and X. Yataganas, acting as Agents, assisted by M. In their reply the applicants state that their Hall, principal administrator, in the capacity complaint with regard to the alleged breach of expert, and the Government of the of the principle of non-discrimination is that French Republic, represented by B. Botte, the Commission chose measures which have acting as Agent, presented oral argument at too great an effect on Greek undertakings, the sitting on 3 July 1984. which are in no way responsible for the situation which the decision in issue is The Advocate General delivered his opinion intended to rectify, instead of measures at the sitting on 11 October 1984.

5 It is common ground that in this case the contested decision is not addressed to the applicants. It is therefore necessary, without going into the legal nature of the decision, to consider whether the decision is nevertheless of direct and individual concern to the applicants.

6 With regard to the question of direct concern, the Commission and the Government of the French Republic argue that the applicants are not directly affected by the decision at issue since that decision merely authorizes the French Republic to institute a quota sytem on imports of cotton yarn from Greece, and thus leaves the Member State which requested the authorization free to make use of it or not. The decision therefore does not itself establish a system limiting imports but, in order for it to have practical effect, requires implementing measures on the part of the French authorities.

7 It is true that without implementing measures adopted at the national level the Commission decision could not have affected the applicants. In this case, however, that fact does not in itself prevent the decision from being of direct concern to the applicants if other factors justify the conclusion that they have a direct interest in bringing the action.

JUDGMENT OF 17. 1. 1985 — CASE 11/82

8 In that respect it should be pointed out that, as the Commission itself admitted during the written procedure, even before being authorized to do so by the Commission the French Republic applied a very restrictive system of licences for imports of cotton yarn of Greek origin. It should moreover be observed that the request for protective measures not only came from the French authorities but sought to obtain the Commission's authorization for a system of import quotas more strict than that which was finally granted.

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13 That proposition cannot be accepted. It must first be pointed out that the applicants are affected by the decision at issue only in their capacity as exporters to France of cotton yarn of Greek origin. The decision is not intended to limit the production of those products in any way, nor does it have such a result.

14 As for the exportation of those products to France, that is clearly a commercial activity which can be carried on at any time by any undertaking whatever. It follows that the decision at issue concerns the applicants in the same way as any other trader actually or potentially finding himself in the same position. The mere fact that the applicants export goods to France is not therefore sufficient to establish that they are individually concerned by the contested decision.

15 The applicants argue however that their situation may be distinguished from that of any other exporter to France of cotton yarn of Greek origin inasmuch as they had entered into a series of contracts of sale with French customers, to be performed during the period of application of the decision and covering quantities of cotton yarn in excess of the quotas authorized by the Commission. The applicants state that those contracts could not be carried out because of the quota system applied by the French authorities. They take the view that in those circum­ stances their individual interests were affected by the decision in question.

16 According to the applicants the Commission was in a position, and even under an obligation, to identify the traders who, like the applicants, were individually concerned by its decision. In failing to obtain information in that regard it did not comply with the conditions of application of Article 130 of the Act of Accession, since in the applicants' view that provision obliges the Commission, before making a decision, to ascertain which traders, in this case Greek traders, would be individually concerned by the protective measures authorized.

21 In that respect it must be observed that the reply to be given to the question whether and to what extent the Commission was aware, or could have made itself aware, which Greek exporters had entered into contracts covering the period of application of the contested decision depends on the interpretation given to Article 130 of the Act of Accession, and in particular on the question whether the Commission, before authorizing a protective measure under that provision, is obliged to make appropriate enquiries as to the economic effects of the decision to be taken and the undertakings which would be affected by it. Since arguments related to that problem were raised in support of the assertion that the decision at issue is unlawful, the admissibility of the application from that point of view must be considered in conjunction with the substance of the case.

22 The applicants argue first that in the adoption of the contested decision the conditions laid down in Article 130 of the Act of Accession were not met. In that regard the applicants make three distinct submissions. In the first place they maintain that the product covered by the decision at issue does not constitute a ' 'sector of the economy as envisaged by Article 130. In their second submission they argue that the sectoral or regional difficulties referred to in that article did

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not exist in this case. In their third submission they assert that the content of the decision in question was not restricted to the measures strictly necessary, contrary to Article 130 (3).

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28 It must be observed that in order to ascertain whether the measure whose authori­ zation is being considered meets the conditions laid down in Article 130 (3) the Commission must also take into account the situation in the Member State with regard to which the protective measure is requested. In particular, in so far as the circumstances of the case permit, the Commission must inquire into the negative effects which its decision might have on the economy of that Member State as well as on the undertakings concerned. In that connection it must also consider, in so far as is possible, the contracts which those undertakings, relying on the continuation of free trade within the Community, have already entered into and whose execution will be wholly or partially prevented by the decision authorizing the protective measure.

29 In that regard the Commission objects that it would be impossible for it, during the brief period within which it must act, to make itself aware of the exact number of contracts meeting that description.

30 That argument cannot be accepted in the light of the circumstances of this case. Before adopting the contested decision the Commission had sufficient time to obtain the necessary information. As the Commission admitted at the hearing, moreover, it had arranged a meeting with representatives of the Greek Government and of the trade interests concerned, which even included certain of the applicants.

31 In those circumstances it must be concluded that the Commission was in a position to obtain sufficiently exact information on the contracts already entered into which were to be performed during the period of application of the decision at issue. It follows that the undertakings which were party to contracts meeting that description must be considered as individually concerned for the purpose of the admissibility of this action, as members of a limited class of traders identified or identifiable by the Commission and by reason of those contracts particularly affected by the decision at issue.

36 The applicants also argue that the product to which the decision at issue applies does not constitute a 'sector of the economy' as referred to in Article 130 of the Act of Accession. In that regard they maintain that combed cotton yarn, to which the request for protective measures made by the Government of the French Republic referred, can only with difficulty be distinguished from carded cotton yarn, since the two products are largely interchangeable and require the same production structure.

37 It appears, however, that although the request of the Government of the French Republic referred to difficulties in the combed cotton yarn sector alone the Commission decision applied to both combed and carded yarns. The Commission thus made no distinction between those two products. The argument set out above is therefore irrelevant and must be rejected.

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38 The applicants go on to state that the decision at issue refers to the existence of both 'difficulties ... which are serious and liable to persist' in a sector of the economy and 'difficulties ... which could bring about serious deterioration in the economic situation of a given area', as referred to in Article 130, but that neither of those alternative conditions is in itself met.

39 In that regard it must first be pointed out that although Article 130 lays down two distinct conditions under which the Commission may authorize a protective measure, that does not mean that factors relating to one or the other of those conditions may not be taken into account generally in order to arrive at the conclusion that the request for a protective measure made by a Member State is justified.

44 In this case the contested decision has been declared void in part only. The Commission should therefore be ordered to pay half of the costs incurred by the applicants, as well as its own costs.

45 Since the action has been declared inadmissible in so far as Vomvyx P.V. Svolopoulos and Koutroubis A.E. and Unicot Hellas A.E. are concerned, however, those undertakings must bear all their own costs.

46 The Government of the French Republic, intervening, must pay the costs arising from its intervention.

On those grounds,

The Court (First Chamber)

hereby:

Bosco Koopmans Joliet

Delivered in open court in Luxembourg on 17 January 1985.

P. Heim G. Bosco Registrar President of the First Chamber