C-62/82

JUDGMENT OF 15. 3. 1983 — CASE 62/82

the products in question, at least in storage of cheese, they are based on part, even during the maturing period the assumption that every storage whereas the system of aids is intended operation must be preceded by the to enable the withdrawal from the conclusion of a written contract in market of products which fulfil all the order to be eligible for the conditions for them to be put on the Community aid provided for in market. Article 10 (2) of Regulation No 971/68.

3. Although the provisions of It follows that a contract of storage is Community law relating to aids in not concluded, for the purposes of respect of the private storage of Regulation No 971/68, until the certain cheeses do not expressly lay moment when the written instrument down the form of the contract for the is signed.

In Case 62/82

ITALIAN REPUBLIC, represented by Arnaldo Squillante, President of Section at the Consiglio di Stato [State Council], Head of the Department for Contentious Diplomatic Affairs, acting as Agent, assisted by Oscar Fiumara, Avvocato dello Stato, with an address for service in Luxembourg at the Italian Embassy, applicant,

v

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of According to Anicie 5 (2) (b) of the the procedure, and the conclusions, same regulation the Commission is to submissions and arguments of the parties clear the accounts relating to the may be summarized as follows : expenditure incurred by the national authorities and bodies on the basis of the annual accounts presented by the Member States. I — Facts and written p r o c e d u r e According to Article 8 of Regulation (EEC), No 1723/72 of the Commission of 26 July 1972 on making up accounts 1. Regulation (EEC) No 729/70 of the for the European Agricultural Guidance Council of 21 April 1970 on the and Guarantee Fund, Guarantee Section financing of the common agricultural (Official Journal, English Special policy (Official Journal, English Special Edition, Second Series, III, p. 109) the Edition 1970 (I), p. 218) lays down a decision as to clearance is to cover, inter system whereby refunds on exports to alia, the determination of the amount of non-member countries and intervention expenditure incurred in each Member intended to stabilize the agricultural State during the year in question, markets are directly financed by the recognized as chargeable to the Community through the Guarantee Guarantee Section of the Fund. Section of the European Agricultural Guidance and Guarantee Fund (herein- after referred to as "the Fund"). 2. By a decision dated 16 November 1981 ' and notified to the Government of the Italian Republic by letter dated By Article 4 of that regulation the 2 December 1981, the Commission Commission is to make available to the determined the amount of expenditure designated national authorities and for the financial year 1975 recognized as bodies the necessary funds. 1 — Published in the Official Journal 1981, L 375, p. 27.

Expenditure of LIT 3 727 568 990 in II — C o n c l u s i o n s of t h e p a r t i e s respect of aid for the private storage of cheeses; The Italian Republic claims that the Expenditure of LIT 78 596 145 in respect Court should: of aid for the private storage of dried pigmeat; 1. Declare the decision of the Com- mission of the European Communities Expenditure of LIT 3 610 555 765 in of 16 November 1981 void in so far respect of aid for the storage of wine; as the following sums are excluded from being financed by the Fund's Guarantee Section: Expenditure of LIT 98 951 625 in respect of aid for the re-storage of wine. LIT 880 058 997 LIT 3 727 568 990 The Commission regarded those items of LIT 78 596 145 expenditure as failing to comply with the provisions governing intervention LIT 3 610 555 765 measures. In the course of bilateral LIT 98 951 625 contacts preceding the decision as to the (Total LIT 8 395 731 522); clearance of the accounts the Italian authorities were informed of the specific 2. Order the defendant to pay the costs. reasons why each operation was regarded as failing to comply with those provisions. Those reasons were The Commission contends that the Court summarized in the "Summary report, should: conclusions from the preliminary work for the clearance of the accounts of the 1. Dismiss the application; and Guarantee Section of the Fund for the years 1974 and 1975", which was 2. Order the Italian Republic to pay the forwarded to the Italian Republic. The costs.

ITALY v COMMISSION

Having regard to the close relationship established by the The Commission of the European Com- Court between the principle of the equal munities, the defendant in this case, treatment of traders and the unity of the expresses first and foremost its concern market, the Commission interprets that at the tendency, which it has observed, case-law as meaning that national not to regard the national intervention measures which do not comply with authorities as strictly bound by all the provisions of Community law and are terms of the regulations governing the contrary to the objectives of the common different market organizations. Although agricultural policy are to be treated as the national administrations have a great incompatible with the principle of market influence, both at the level of the unity and consequently with the concept Council and under the management of a common agricultural policy.

It must be particularly demanding with remarks, on the other hand, that the regard to compliance with the provisions dispute which has arisen regarding the of the regulations by the national charging of certain expenditure to the administration because, on the one hand, Fund results merely from different

interpretations of the provisions of pursuit of those objectives by means of Community law by the Italian all the legal mechanisms and measures intervention agency on the one hand and which comprise the common organization the Commission on the other. Whilst of the markets causes the operations admitting that the meaning and scope of carried out by the Member States to fall a rule of Community law must be within the common agricultural policy uniform in all the States, the Italian and justifies the financing of those Government considers that it is possible operations. Moreover, the equality of for a rule to be open to different in- treatment of traders of the different terpretations prior to the existence of any Member States is guaranteed only if all measure designed to achieve uniform those legal mechanisms and measures are clarification and even for each interpret- applied in a uniform manner. ation to be advanced in the conviction that it is correct. In such a situation it The individual items in dispute seems to the Italian Government that the a posteriori finding that the relevant rule (a) The exclusion of the expenditure in has not been applied correctly is not a respect of losses of 2 % in the sufficient ground for regarding the processing of skimmed-milk powder operation which had been carried out as into animal feed not being a Community one, particularly if the common agricultural policy The Italian Government points out that objective laid down by that rule has by virtue of national practices applied nevertheless been attained. It adds that even before the entry into force of the the Italian intervention agencies have common agricultural policy the Italian acted for years on the basis that they intervention agency has paid aid in were correctly applying the Community respect of skimmed-milk powder for rules and that only when it came to the quantities including losses amounting to preparation of accounts, several years no more than 2 % of the· total.

ITALY v COMMISSION

that can only refer to milk used in the The Commission is of the opinion that process of the manufacture of the feed the exclusion of the aid paid by the including any loss due to that process. Italian intervention agency to processors Such losses are in fact a necessary and in respect of "losses" accords with both inevitable consequence of the process of the scheme and with the letter of the manufacture. The quantities lost thereby relevant rules of Community law. In that are therefore part of the product which connection it refers to the first recital in has "been used in the manufacture" even the preamble to Regulation (EEC) No if not processed themselves. Fur- 986/68 of the Council of 15 July 1968 thermore, the concept of "actual" use laying down general rules granting aid was included in the Community regu- for skimmed-milk and skimmed-milk lations to indicate that the products in powder for use as feed (Official Journal, question must be destined solely for English Special Edition 1968 (I), p. 260), animal feed. which states that "provision must be made for the granting of aid for skimmed-milk powder which is denatured or used as feed." From that point of view it is essential that the powder be actually used as feed. It is not therefore sufficient that the relevant The Italian Government goes on to quantities are intended for use as feed by observe that the Commission's view is virtue of their use in the process of that the farmer does not benefit fully manufacturing the feed. As is confirmed from Community aid inasmuch as he by the third recital in the preamble to must himself bear the costs of the losses Regulation No 990/72, which states that which inevitably occur in the processing provision should be made to ensure that of the milk for the manufacture of feed. "aid is granted only for . . . skimmed- To that extent the view of the Italian milk powder processed into feeding- Government corresponds more closely to stuffs", to be eligible for aid the product the objective of the Community rules, must be found in a processed form in the that is to say to make the use of compound feed. skimmed-milk powder competitive in comparison to the use of substitute products.

As regards the flat-rate reduction, with a granted was 1.745% for the financial maximum of 2 % , the Commission states year 1974 and 1.464% for the financial that the Italian Republic has not as yet year 1975. provided the documents required by Article 5 (1) of Regulation No 729/70 for the purpose of determining the precise sums paid out by the Italian On the basis of those data the applicant intervention agency in respect of reaffirms its points of view and contends, skimmed-milk powder which is not to be as an alternative argument, that the found in a processed form in compound reduction made by the Commission must feed. Consequently the Commission has correspond to the averages indicated, in to limit the amount which it charged to respect of which the aid was granted, the Fund to that part of the Italian that is to say at the fixed rate of 1.5%. expenditure which definitely complied with the requirements of the Community rules. The Commission, in its rejoinder, contends that the facts presented by the applicant in its reply show that the loss or waste during processing for which the Finally the Commission points out that it Italian Republic granted aids was not did not raise any objection with regard checked to ensure that they were to that question in the financial years genuine but simply for accounting prior to 1974 because in the case of Italy purposes. It was therefore possible to it had never checked that type of receive aid in respect of quantities of expenditure in respect of earlier years. skimmed-milk powder which were not in the hands of the undertaking, provided only that they had been recorded in the books of account as an actual daily loss In its reply the Italian Government refers not exceeding 2 % of the quantity to a circular of the Italian Ministry of contained in the final product. Agriculture dated 10 July 1974 which provided for a margin of actual losses up to a maximum of 2 % . That maximum percentage was fixed on the basis of The Commission considers itself unable technical surveys carried out at the to accept such administrative manage- processing plants. The processors were ment which would open the door to a required to state the actual daily loss in variety of abuses which could not be their processing records and, at the stage verified. when the aid was calculated, the prov- incial agricultural inspectorate informed the Italian intervention agency of the amount of the loss in the statement of Finally the Commission points out that quantities incorporated into animal feed. the clearance of the accounts was carried out on the basis of accounts presented in the form laid down by Regulations Nos 729/70 and 1723/72. It could not, at the An inquiry relating to the processing time of such clearance, accept as eligible records of 11 manufacturers of animal for financing any part of the expenditure feed who processed approximately 2 5 % other than that which, on the basis of the of all the milk powder in Italy during the accounts presented, corresponded to years 1974 and 1975 revealed that the operations which complied with the rules average actual loss for which aid was of Community law. It is not possible to

take into account the systematic error procedure the Italian agency, having revealed by the accounts other than at its verified that the request for the maximum extent of 2 % unless the figure conclusion of a contract submitted by could be proved precisely and not on the the person concerned fulfilled those basis of a presumption or of a flat rate. requirements, informed that person, the relevant provincial agricultural inspectorate and the Consorzio di Tutela [producers' association for quality protection] that the said request had (b) The exclusion of the expenditure in been granted subject to the inspectorte's respect of aid for the private storage supervising the product's entry into of cheese storage. Subsequently the Italian inter- vention agency regarded the contract as concluded once the inspectorate confirmed by report the storage of the As regards the Commission's refusal to quantities of cheese. The transmission to accept as chargeable to the Fund the person concerned of the general expenditure in respect of aid for the terms, in which all the operations carried private storage of Grana Padano and out were summarized, for his signature, Parmigiano-Reggiano cheese for the was purely for accounting purposes. financial years 1974 and 1975, the Italian Although the aid was paid only after Government considers that the Com- receipt of the signed general terms it was mission erroneously bases its decision on nevertheless in fact due once the the fact that the storage contracts were inspectorate's report had been drawn up. concluded several months after the cheese had gone into storage. According to Article 10 (2) of Regulation (EEC) No 971/68 of the Council of 15 July The Italian Government is therfore not 1968 (Official Journal, English Special able to agree with the Commission's view Edition 1968 (I), p. 251) private storage that the contract cannot be said to be paid for those cheeses is. to be concluded unless the general terms have conditional on the conclusion of a been signed by the person concerned. It contract of storage with the intervention states that under Article 1326 of the agency, and the requirements which Italian Civil Code a contract is complete must be fulfilled for the conclusion of at the moment when the offeror has such a contract are laid down in Article knowledge of the other party's 16 of Regulation (EEC) No 1107/68 of acceptance. In the present case the the Commission of 27 July 1968 (Official contract was concluded at the moment Journal, English Special Edition 1968 when the intentions of the person (II), p. 382). concerned expressed in his application concurred with the intentions of the Italian intervention agency expressed in its letter of acceptance and came into Aid was granted according to the effect as a result of the verification procedure laid down by the decision undertaken by the inspectorate and of the Italian intervention agency's recorded in the report. governing board dated 20 September 1973 (Gazetta Ufficiale della Repubblica Italiana No 225 of 2 October 1973), which contains the requirements to be The Italian Government opposes the fulfilled under the relevant rules of analogous application, proposed by the Community law. In conformity with that Commission, of the Court's judgment of

27 January 1981 in Case 1251/79 Italian however, storage contracts were Republic v Commission of the European concluded several months after the Communities [1981] ECR 205), storage had been effected, and even, in according to which the contract does not some cases, on the day before the expiry become perfect until the preparation of of the storage period. the written instrument, after verification of all the relevant information by the intervention agency. The system of aid As regards the concept of a contract the for the private storage of cheese is Commission is of the opinion that in the clearly different from that relating to aid absence of a Community concept it is for the storage of wine with which that necessary to refer to the national law of case was concerned. each Member State in relation to those matters which are not expressly regulated by Community law, such as the form of Thus Article 9 (1) of Regulation No the contract and the moment at which it 1437/70, which relates to wine, expressly may be regarded as concluded and provides for the drawing up of a contract binding upon the parties. in two copies, whereas Regulations Nos 971/68 and 1107/68, which relate to cheese, do not lay down any In that context it refers to the requirements as to the form of the aforementioned decision of the Italian contract itself. In the present case veri- intervention agency's governing board of fication both as to formal and as to 20 September 1973. According to Article substantive matters preceded the 2 of that decision the contract between "conclusion" of the contract. Moreover the Italian intervention agency and the the general terms drawn up by the Italian storer is concluded "at the moment when intervention agency for accounting the latter appends his signature to the purposes are superfluous so far as the instrument of acceptance whereby he Community rules are concerned. Finally, agrees to comply with the conditions set the conclusion of storage contracts in out in the general terms". Article 5 of respect of cheese is not subject to any that decision requires the signature of specific time-limit, such as that provided that instrument to be authenticated for the case of the storage of wine. within a period of five days failing which it will be void.

until the signature of the instrument of are not regulated by Community law are acceptance the Italian intervention governed by national law, that is to say agency did not have at its disposal any in the present case by the decision of the legal instrument which would enable it to governing board of the Italian enforce the trader's obligations. intervention agency dated 20 September 1973. It is of the opinion that it is not possible to assume that a trader has the The Commission therefore takes the intention to incur an obligation when he view that the storage operations were not makes his application since the aforesaid effected according to the Community decision explicitly defers the making of rules but according to a system which the contract to the later stage of the prevents a definitive verification by the signature of the general terms. The Italian intervention agency, sometimes reason why the contract does not come up to the last day of the storage period, into existence until such signature and which makes it impossible to enforce resides, even more than in any formal the obligations which it is the intention defect, in the absence of agreement of Community law to impose on the between the parties. trader by the system of contracts.

The Italian Government points out In that respect the Commission points finally that the procedure followed for out that in the present case the Italian the payment of aid demonstrates that in Government is reversing the terms of its substance, regardless of any procedural analysis by treating the trader's omissions, the aid was paid for actual application as a contractual offer. and genuine storage in respect of which Nevertheless, even from that point of all the required verifications had been view, the trader's application is made by carried out beforehand. reference to the entirety of the storage system established by Community and national provisions, including conditions The Commission in its rejoinder refers to as to form. the Court's judgment of 29 April 1982 in Jointed Cases 66 and 99/81 Pommerehnke and Others [1982] ECR Finally, the Commission maintains that 1363 in order to reaffirm its view that the verification to ensure that all the those aspects of a storage contract which requirements for the grant of the aid are

JUDGMENT OF 15. 3. 1983 — CASE 62/82

ITALY v COMMISSION

The Italian Government goes on to express the view that the minimum maturing period of five months laid Later the Commission stated, in a down in Anicie 1 of Regulation No working document dated 1 April 1982, 2600/74 is not to be regarded as a with regard to private storage under condition which causes the storage Regulation No 717/82, that: "The periods to begin to run but as a factor storage period shall start at the beginning for the purpose of classifying the of the first hour of the day following the products which are the subject of day on which entry into store is

product, is not taken into account except to verify that drying has taken place and it is therefore not necessary for it to be Finally the Italian Government states that indicated in the storage contract. the Commission shares the responsibility for a possibly erroneous interpretation of the Community provisions in question. In that connection it refers to an exchange In any event the rule gave rise to doubts of correspondence during the month of as to its interpretation. In that October 1975 between the Italian connection the Italian Government refers intervention agency and the relevant in the first place to the text of a "draft departments of the Commission with regulation of the Commission amending regard to the meaning of the expression Regulation (EEC) No 1092/80 laying "first day of the sixth month" contained down detailed rules for granting private in Article 2 of Regulation No 2600/74 storage aid for pigmeat" (Document V I / and to bilateral meetings held in

September and November 1975 to month after the last ham of that total consider the operation of the storage quantity has been submitted to the procedures in question. Any error of drying process. interpretation may also be imputed to the solution adopted by the Italian adminis- It is clear in the Commission's view that tration. Consequently the expenditure the system was designed in order to incurred by the Italian intervention withdraw from the market "finished" agency in that area should be charged to products, that is to say products which the Fund in accordance with a consistent have completed the minimum period of line of decisions of the Court on the maturing, for the whole storage period.

maturing. Such withdrawal is, however, already the subject of compensation by In Article 1 of that regulation dried or virtue of the increase in the value of the dried and smoked ham was defined in ham as a result of its maturing. such a way that only a product which had been matured for at least five months could be eligible for aid. Thus According to the Italian view the trader the obligation of the storer laid down in in effect receives aid for the whole of the Article 3 (2) of Regulation (EEC) No agreed storage period whereas only a 289/71 of the Commission of 10 part of the total quantity stored fulfils February 1971 (Official Journal, English the requirement as to maturing during Special Edition 1971 (I), p. 60) to take the whole of that period. the agreed quantity of the product in question into store within the time limits The Commission adds that it also follows laid down and to store it for the from the provisions of Article 2 of Regu- stipulated period can relate only to lation No 2600/74, with regard to the products which fulfil the minimum weight of the finished product in relation requirement as to maturing. to the weight of the fresh product, that the weight of the finished product must Article 2 of Regulation No 2600/74 then be known and that the product in defines the commencement of the agreed question must therefore be "finished", period of storage by reference to the within the meaning of the regulation, minimum maturing period. Far from before the actual commencement of amending the definition of the product storage. referred to in that regulation, that provision relates to the commencement Consequently the Commission considers of drying or drying and smoking with that in granting aid for the storage of regard to each ham to be stored under hams which were not "finished" the

ITALY v COMMISSION

(d) The exclusion of the expenditure in In its reply the Italian Government again respect of aids for the storage of points out that the sale of products wine placed in storage during the period of As regards the Commission's refusal to validity of the contract, referred to by provide Community finance in respect of the Commission in the summary report, aids granted in connection with contracts has never been established. As a for the private storage of wine made consequence of the results of the first with retroactive effect after the expiry of on-the-spot inspection the Italian the periods prescribed in the Community intervention agency had to correct only regulations, the Italian Government certain arithmetical errors on the part of requests the Court to reconsider the the producers. problem which was the subject of its judgment of 27 January 1981 in Case In the view of the Commission the 1251/79 Italian Republic v Commission problem was resolved by the afore- of the European Communities [1981] mentioned judgment in Case 1251/79 ECR 205. even, mutatis mutandis, in relation to short-term storage contracts concluded In states that with regard to the short- in respect of a period to the date on term and long-term contracts at issue in which they were made. Furthermore, it

JUDGMENT OF 15. 3. 1983 — CASE 62/82

refers to the arguments it submitted in in relation to table wines in respect of relation to aid for the private storage of which storage contracts were concluded cheeses. pursuant to Regulation No 1437/70 during the wine-growing year 1974 to (e) The exclusion of the expenditure in 1975. respect of aid for the re-storage of wine On this matter the parties refer to the IV — Oral procedure solution proposed by them in relation to contracts for the storage of wine, given The parties presented oral argument at that according to the terms of Regu- the sitting on 23 November 1982. lation (EEC) No 2117/75 of the Commission of 12 August 1975 (Official The Advocate General delivered her Journal 1975, L 215, p. 18) aid for the Opinion at the sitting on 18 January re-storage of wine may be granted only 1983.

4 According to the Commission only the milk product actually used for animal feed is eligible for Community aid. If the Italian Government's view were adopted aid would have to be granted for any quantity of the milk product used in the process of manufacturing animal feed.

5 The Commission's point of view must be regarded as correct. It accords with the actual wording of the provisions of Regulation No 990/72 and is based on the recitals in the preamble thereto which, after referring to the necessity of making certain changes to the existing regulations, state expressly that there is a need to ensure "that the skimmed milk and skimmed-milk powder for which aid is granted are in fact used as feed."

6 The Italian Government also claims that the Commission, even if its in- terpretation is correct, is not entitled to reduce the expenditure in question by 2 % since the rate of 2 % is the maximum laid down by the Italian rules. In reality the average percentage of waste for which the aid had been granted should be assessed at 1%.

7 As evidence the Italian Government submitted to the Court a table which, however, related to only 2 5 % of the total quantity of milk powder processed into animal feed in Italy during the years 1974 and 1975. In relation to that quantity the average loss amounted to 1.745% in 1974 and 1.464% in 1975.

s In those circumstances it has not been established that of the total quantity which had been processed the percentage of actual waste différend to any appreciable extent from the maximum rate of 2 % which was laid down by the Italian rules and which the Commission adopted as a basis at the time of clearance.

1 3 The view advanced by the Commission must be accepted. The interpretation given by the Italian Government would lead to the products in question being subsidized, at least in part, even during the maturing period, whereas the system of aids is intended to enable the withdrawal from the market of products which fulfil all the conditions for them to be put on the market.

ITALY v COMMISSION

14 This part of the application is therefore unfounded.

(c) Aids for t h e s t o r a g e of w i n e

15 The Italian Government admits that the Commission's refusal to charge to the Fund the amount in dispute in relation to the aid for the storage of wine for the year 1975 is based on the same reasons as the similar refusal in relation to 1973 and that the Italian Republic's action in respect of that refusal was dismissed by the Court in its judgment of 27 January 1981 in Case 1251/79 (Italian Republic v Commission of the European Communities. [1981] ECR 205). Nevertheless it requests the Court to re-examine the problem in question.

16 As the Italian Government rightly recalls, the judgment of 27 January 1981 decided that the Italian intervention agency had not paid aids for the storage of wine in the year 1973,- in accordance with the relevant Community rules, because the storage contracts had not been concluded before a specific date. The Court held that according to the relevant provisions of Community law a storage contract is not concluded until the written instrument has been prepared and it has been established that the conditions governing the Community aid have been fulfilled.

(e) Aids for t h e s t o r a g e of c h e e s e

2i Article 10 (2) of Regulation (EEC) No 971/68 of the Council of 15 July 1968 laying down general rules for the intervention on the market in Grana Padano and Parmigiano-Reggiano cheeses (Official Journal, English Special Edition 1968 (I), p. 251) provides that private storage aid in respect of those cheeses is to be conditional on the conclusion of a storage contract between the intervention agency and any person capable of fulfilling the requirements of such a contract.

22 The Italian Government maintains that, according to the practice of the Italian intervention agency, the drawing up by a State official of the record of entry into storage in which the date of commencement of the storage is stated, must be deemed to constitute the conclusion of a contract.

23 In the Commission's view a storage contract is not concluded for the purposes of Article 10 of Regulation N o 971/68, until the moment when the written instrument containing the terms of the contract is signed by the storer and the representative of the intervention agency. In that connection it recalls that according to Article 11 of Regulation N o 971/68 the storage contract must at least include provisions on the quantity of cheese stored, the amount of aid, the relevant dates relating to the execution of the contract, conditions to be laid down as to the minimum quantity of cheese per lot and the inspection measures.

24 In essence the Italian Government relies on the argument to the effect that the conclusion of a storage contract is governed by national law. Unlike the Community provisions relating to the storage of wine, which were the subject of the judgment of 27 January 1981, those relating to the storage of cheese do not lay down any particular requirement as to the form of the contract. Under Italian law the general rules of the Civil Code provide that a contract is concluded at the moment when the intentions of the two parties concur. By sending an application for the conclusion of a storage contract to the Italian intervention agency the storer makes an offer to that agency

28 It further follows from the relevant Community provisions and in particular from Article 11 of Regulation No 971/68, which lists certain provisions which must be included in the contract, that the storage contract may only be in the form of a written instrument. The same conclusion is to be derived from Article 17 (2) of Regulation (EEC) N o 1107/68 of the Commission of 27 July 1968 on detailed rules of application for intervention on the market

JUDGMENT OF 15. 3. 1983 — CASE 62/82

in Grana Padano and Parmigiano-Reggiano cheeses (Official Journal, English Special Edition 1968 (II), p. 382) according to which the storer is to cease to qualify for aid if the quantities of cheese specified in the contract are withdrawn from storage before the date of expiry of the contract.

29 Finally, the same interpretation is dictated by the objectives of the system of intervention in question. That system, which is part of the common organ- ization of the market in milk and milk products, is intended to contribute to the stabilization of those markets by means of, inter alia, the grant of Community aid for the private storage of certain cheeses. Such stabilization can be achieved only if the Community provisions ensure that the quantities of cheese which are the subject of storage contracts are actually withdrawn from the market.

30 It follows that a contract of storage is n o t concluded, for the purposes of Regulation N o 971/68, until the moment when the written instrument is signed. Moreover, it is in order to comply with.that requirement laid down by Community law that the 'provisions of Italian law governing the activities of the Italian intervention agency lay down the detailed rules in accordance with which the storage contracts are to be signed.

THE COURT

hereby: 1. Dismisses the application;

2. Orders the applicant to pay the costs.

Mertens de Wilmars Pescatore O'Keeffe Bosco Koopmans Due Bahlmann

Delivered in open court in Luxembourg on 15 March 1983.

P. Heim J. Mertens de Wilmars Registrar President