C-345/82

J U D G M E N T OF T H E COURT (FIRST CHAMBER) 12 APRIL 1984 1

Wünsche Handelsgesellschaft GmbH & Co. ν Federal Republic of Germany (reference for a preliminary ruling from the Verwaltungsgericht Frankfurt am Main)

(Preserved mushrooms — Protective measures)

Case 345/82

Agriculture — Common organization of the markets — Products processed from fruit and vegetables — Protective measures on the importation of preserved mushrooms Measures which may be adopted by the Commission — Levying of an additional amount (Council Regulations No 516/77, Art. 13 (2), and No 521/77, Art. 2; Commission Regulation No 3429/80, Arts 1 and 2)

The Commission was empowered to provision that import licences should be incorporate in Regulation No 3429/80, issued on payment of an additional as a protective measure within the amount. meaning of Regulation No 521/77, a

FEDERAL REPUBLIC O F GERMANY, r e p r e s e n t e d by t h e B u n d e s a m t für E r n ä h r u n g u n d Forstwirtschaft [Federal Office for N u t r i t i o n a n d Forestry M a n a g e - m e n t ] , Frankfurt am M a i n ,

o n the validity of Article 1 of Commission Regulation ( E E C ) N o 3 4 2 9 / 8 0 of 29 D e c e m b e r 1980 a d o p t i n g protective measures applicable t o imports of preserved m u s h r o o m s (Official J o u r n a l , L 358, p . 6 6 ) ,

T H E C O U R T (First C h a m b e r )

c o m p o s e d of: Lord M a c k e n z i e Stuart, President, T . K o o p m a n s , President of C h a m b e r , a n d G. Bosco, J u d g e ,

Advocate G e n e r a l : M r s S. R o z è s Registrar: P . H e i m

gives t h e following

(b) the quantities of products available Article 14, however, provides as follows: on the Community market;

" 1 . If, by reason of imports or exports, (c) the prices for Community products the Community market in one or on the Community market or the more of the products specified in foreseeable trend of these prices and Article 1 is or is likely to be exposed in particular any excessive upward or to serious disturbances which might downward trend thereof in relation endanger the objectives set out in to prices in the years immediately Article 39 of the Treaty, appropriate preceding; measures may be applied in trade with non-member countries until such disturbances or the threat (d) where the abovementioned situation thereof has [sic] ceased. arises as a result of imports, the The Council, acting by a qualified prices obtaining on the Community majority on a proposal from the market, at a comparable stage, for Commission, shall adopt rules for products from third countries, and in the application of this paragraph and particular any excessive downward shall define the cases and the limits trend in these prices." within which Member States may take protective measures. Article 2 contains a list of the protective measures "which may be taken under 2. Should the situation envisaged in paragraphs (2) and (3) of" Article 14 of paragraph (1) arise, the Commission, Regulation No 516/77. As far as the acting either at the request of a products at issue here are concerned, the Member State or on its own measures are the following: initiative, shall decide what measures are necessary and communicate them to the Member States; such measures the total or partial discontinuation of the shall be immediately applicable. issue of certificates, as a result of which ..." new applications will not be accepted ;

The measures may be taken “only to lawful (see the judgments of 6. 5. 1982, such extent and for such length of time Case 126/81 Wünsche [1982] ECR 1479, as is strictly necessary”; they must take of 15. 7. 1982, Case 254/81 Edeka account of the special situation of [1982] ECR 2745, and of 28. 10. 1982, products which are already on their way Case 52/81 Faust [1982] ECR 3745). to the Community and may be restricted to products imported from or originating in particular countries, to exports to Commission Regulation (EEC) No particular countries or to particular 3429/80 of 29 December 1980, which qualities or types of presentation, or to is at issue in this case, introduced for imports intended for particular regions the first time the following protective of the Community. In any event (Article measures : 3), the application of the regulation in question “shall respect the Community's obligations under international agree- (i) Article 2 (1) provides that appli- ments”. cations for import licences are to be accepted for preserved mushrooms for up to 26% of the quantities for Similar provisions had appeared in which import licences were issued previous regulations, namely Regulations during the first 11 months of 1980 Nos 865/68 (Official Journal, English for products from each supplier Special Edition 1968 (I), p. 225), country in the Member State in 1927/75 (Official Journal, L 196 of which the licence application is 29. 7. 1975, p. 7) and 1928/75 (L 198 made; of 29. 7. 1975, p. 11). From 1975, the Commission resorted to the protective clause on several occasions and, since (ii) Article 2 (2) allocates the total May 1978, has made constant use of it, quantity resulting from the appli- adopting, over a period of two and a cation of Article 2 (1) between the half years, 18 regulations which set limits main supplier countries outside the on the importation of preserved Community; mushrooms from non-member countries. The measures taken until 28 December 1980 always dealt with the restriction or (iii) Article 1 provides that the release suspension of the issue of import certi- into free circulation in the Com- ficates and varied according to the munity of goods exceeding the country exporting the goods to which stated quantities is to be subject, the measures applied, account being during the first quarter of 1981, to taken of the fact that some producer the levy of an “additional amount” countries had signed undertakings of of 175 European currency units per voluntary restraint with regard to their 100 kg net. For that purpose, exports to the Community. Furthermore, licences issued for quantities in the protective measures applied in some excess of the limit are required to cases to preserved cultivated mushrooms bear the wording “additional generally and in others to preserved cul- amount to be levied” (Article 3). tivated button mushrooms. The legality of those measures, in particular as regards the difference in the treatment of The new legislation on protective supplier countries outside the Com- measures was kept in force by the munity, was the subject of three cases Commission for the second and third brought before this Court, in which the quarters of 1981 (see Regulations Nos Commission's actions were held to be 796/81 of 27. 3. 1981, Official Journal,

L 82, p. 8, and 1756/81 of 30. 6. 1981, "Is Article 1 of Commission Regulation Official Journal, L 175, p. 23). The (EEC) No 3429/80 of 29 December Council then adopted definitive rules on 1980 adopting protective measures the matter in the form of Regulation No applicable to imports of preserved 1796/81 of 30 June 1981 (Official mushrooms (Official Journal, L 358 of Journal, L 183, p. 1), whereby the 31. 12. 1980, p. 66) valid?" additional amount, reduced to 160 ECU per 100 kg net, was adopted not as a protective measure under Article 14 of Regulation No 516/77 but as a market- In the grounds of its decision, the management measure under Article 13 national court observes that the legality (2) thereof. of the provision at issue is doubtful, first because Wünsche, during the main proceedings, demonstrated by means of official statistics that the requirements laid down by Article 1 of Council Regu- I I — Facts and written p r o c e d u r e lation No 521/77 and by Article 14 of Council Regulation No 516/77 for the adoption of protective measures had not been fulfilled in this instance, there being On 23 February 1981, Wünsche Han- no disturbance or threat thereof to the delsgesellschaft GmbH & Co., a German Community market. In that regard the import firm based in Hamburg (herein- national court takes the view that it is a after referred to as "Wünsche"), matter for the Court of Justice to requested the Bundesamt für Ernährung determine whether those requirements und Forstwirtschaft [Federal Office for were fulfilled, or at least to provide the Nutrition and Forestry Management, national court with guidance on that hereinafter referred to as the "Bundes- question. Secondly, the national court is amt"] to grant it an import certificate in of the opinion that the Commission was respect of 3 500 tonnes of preserved cul- not empowered to adopt any protective tivated mushrooms from the People's measures other than those envisaged by Republic of China, but "containing no Regulation No 521/77, which listed reference to an additional amount of them exhaustively. 175 ECU". On 26 February 1981 the Bundesamt rejected that application and on 13 May 1981 also dismissed The order for reference was lodged at Wünsche's appeal, citing in support of its the Court Registry on 29 December decisions the provisions of Regulation 1982. No 3429/80, mentioned above.

Upon hearing the report of the Judge- determine the nature and content of such Rapporteur and the views of the measures, since only the Council is Advocate General the Court decided to competent to do so. The Council had open the oral procedure without any exercised its powers in the sphere by preparatory inquiry. However, the drawing up an exhaustive list of parties were requested to reply to several applicable measures in Regulation N o questions prior to the hearing and to 521/77. The Commission therefore had supply further details of the statistical the power to select the most appropriate data on which they based their of those measures, but not to create new arguments. ones. The Court had indeed already given judgment to that effect, by stating, in its judgments of 5 May 1981 (Case 112/80 Dürbeck [1981] ECR 1095) and The Court further decided, pursuant to 15 July 1982 (Case 254/81 Edeka cited Article 95 (1) and (2) of the Rules of above), that in Article 2 (1) of Regu- Procedure, to assign the case to the First lation No 521/77 the Council had laid Chamber. down the list of possible protective measures. By adopting Regulation No 1796/81, the Council further established, clearly and directly, that the Commission had no power whatever to introduce, on III — Written observations sub- its own initiative, an additional amount m i t t e d u n d e r A r t i c l e 20 of by way of a protective measure. the P r o t o c o l on the Statute of t h e C o u r t of J u s t i c e of the E E C Moreover, the measure adopted in this particular instance was no less restrictive than a suspension of imports; the Commission could not therefore rely upon the decisions in which the Court In a very long and detailed set of obser- held that, whenever the Commission was vations, Wünsche contests the legality of entitled to take protective measures the provision which introduced the leading to a complete suspension of disputed additional amount and ac- imports from non-member countries, it cordingly proposes that a negative reply was a fortiori entitled to adopt less be given to the question submitted by the restrictive measures (judgment of 13. 5. national court. In its opinion, the 1971, Joined Cases 41 to 44/70 Inter- Commission was not, in the first place, national Fruit Company [1971] ECR 411, empowered to introduce a new protec- at p. 427). Indeed, the contested amount tive measure which was not envisaged by was fixed at so high a level that, even on Regulation No 521/77 and, in the its own, it far exceeded both the value of second place, the state of the market at the goods and the selling price of the the time when Regulation N o 3429/80 home-grown product. Furthermore, the was adopted in no way warranted the quantity of goods which might be imposition of protective measures in imported free of the additional amount relation to preserved mushrooms. scarcely corresponded to the traditional volume of imports from non-member countries, but was much lower. In fact, it Wünsche claims that, whilst the was only ostensibly that the Commission Commission is authorized to adopt allowed additional quantities to be im- protective measures, even on its own ported; the disputed amount concealed a initiative, it is not empowered to total ban on imports in excess of the

permitted quota inasmuch as it made the Community market against serious sale of such products on the Community disturbances or the threat thereof. An market completely impossible. The additional amount cannot be regarded as consequences of introducing the proportionate to such an aim unless it additional amount were even more represents, at most, the difference serious than those of restricting or between the final price of the foreign suspending the issue of import certi- product and the cost price to Com- ficates. The reason for this is that an munity industry of the same product. importer who has imported goods which However, the Commission adopted the are not covered by a valid certificate may contested measure without taking the not be fined unless it is proved that he trouble to acquaint itself with the cost acted wilfully or negligently, and the prices to Community industries, and that amount of the fine is proportionate to explained its total failure to refer to that the nature of the fault; the additional essential point in the preamble to the amount, on the other hand, has to be contested regulation. That failure also levied even if the importer is guilty of no entailed an infringement of Article 190 fault, and irrespective of whether or not of the EEC Treaty and thus afforded a he has derived any economic benefit further reason for the illegality of the from the transaction. provision at issue. It was only sub- sequently that the Commission carried out a calculation of the cost price, probably at the time of the preparation of Council Regulation No 1796/81, but the calculation was incorrect and con- Since, moreover, the disputed amount is tradictory, and therefore unreliable; in in the nature of a charge having any event, Wünsche rejects it completely. equivalent effect to a customs duty, the Commission further infringed the pro- hibition on the levying of such charges contained in Article 13 of Regulation No 516/77 — a prohibition which must apply not only to the Member States but That belated calculation did not, in any also to the Commission —, because the case, take account of the differences in conditions laid down therein permitting cost price and selling price between derogation from the general rule were goods of different quality; hence it not satisfied. Moreover, the same overlooked the fact that second- and prohibition arises from the Common third-grade preserves were inevitably and Customs Tariff, which was illegally unfairly penalized by the fact that the amended. additional amount was fixed at a flat rate, with the result that its effect was greater in the case of lower-priced goods.

As regards the more general problem of (ii) The prices of Community products whether the conditions for the adoption had also increased, although re- of protective measures were fulfilled, maining below the prices of pre- Wünsche observes first of all that, since serves originating in non-member the procedure laid down for preliminary countries; rulings makes no allowance for a statement in reply, the parties are not in a position to give full and proper (iii) No problem had arisen in the consideration to this question. In any disposal of Community products; event, Wünsche stresses that, according stock levels were below average and to existing case-law, it is a matter for the difficulties in obtaining supplies had national court to establish the facts, even been experienced during whereas the Court's sole task is to settle certain periods; problems of law. It therefore claims that any ruling on the preliminary question must be deferred until the national court has established the facts, that is to say (iv) Imports from non-member countries whether or not a disturbance, or the risk over the same period had declined thereof, was in evidence on the steadily, owing not only to the Community market at the time when the protective measures adopted by the contested measure was adopted. In the Commission but also to an increase alternative, Wünsche requests the Court in the prices of such products to order a preliminary inquiry and to (taking account of the costs of give the parties concerned the oppor- transportation, financing, storage tunity to submit written comments on the and customs dues). findings. It further takes the view that, whilst in principle it is required to prove the alleged illegality of the contested regulation, the Commission must none It follows that the constant adoption of the less bear the burden of proving that protective measures since 1978, in the the conditions for the application of the face of the perfectly normal development protective measure which it adopted of the market, was in no way designed to were satisfied. forestall disturbances, which were not in prospect, but rather to achieve a massive protection of Community producers — especially French and Netherlands Furthermore, Wünsche relies on nu- producers — who were therefore able to merous statistics in an effort to gain a firm hold on virtually the whole demonstrate that, at the time when the of the largest consumer market, namely "additional amount" was introduced, the the German market. In those circum- Community market showed no sign stances, the action taken by the either of actual or of threatened disturb- Commission constituted a misuse of its ances. To that end, Wünsche argues powers. Those considerations apply that: particularly to goods which, like preserved mushrooms, are subject to the system of import certificates, since the (i) The production and sale of Com- Commission is always able to forecast munity products had greatly the volume of imports by examining the

The above situation is demonstrated by On that basis, any claim that Regulation statistical tables which the Commission No 3429/80 is invalid is, in the annexes to its observations. It follows Commission's view, quite unfounded. that the conditions governing the Apart from the fact that the order for adoption of protective measures were reference failed to specify the official fulfilled. statistics to which Wünsche was referring, the national court seems to have considered the situation as it was Turning the doubts expressed by the during the first quarter of 1981, and not national court as to the legality, in this the situation obtaining at the time when particular case, of adopting a protective the disputed protective measures were measure for which the Council regu- adopted, together with developments lation made no express provision, the foreseeable at that stage. At the time the Commission observes that it was obliged, regulation at issue was adopted, the both under Article 14 of Regulation No situation on the Community market for 516/77 and under Article 2 (2) of Regu- preserved mushrooms was as follows: lation No 521/77, to limit the protective measures to a strict minimum. That was precisely the case with the measure (i) Despite the conclusion of voluntary- adopted, which made it possible to restraint agreements with the remedy the disruption of the market

JUDGMENT OF 12. 4. 1984 — CASE 345/82

By letter of 3 August 1983 the Court In response to the request to give its put a number of questions to the views on some of Wünsche's arguments, Commission and to Wünsche and also the Commission: requested the French Government and the Council to furnish documents and the Bundesamt to supply certain infor- (i) Admitted that it was correct to say mation. The parties concerned complied that the system of import certificates

WÜNSCHE / GERMANY

in itself enabled imports to be and carrots, with regard to the pro- monitored, but contended that the portion of the French cost price system established by the disputed accounted for by labour costs, was regulation none the less conferred not correct since the processing of advantages on importers by enabling mushrooms was not automated; them to plan more effectively;

(iii) Specified which information sup- (b) that the comparison drawn by plied by the Commission it Wünsche with the processing of peas challenged, namely:

JUDGMENT OF 12. 4. 1984 — CASE 345/82

(a) The statement concerning the connection, Wünsche refers to increase in imports into the the arguments set forth in its Community in 1980, which written observations and main- overlooked both the fact that tains that it is inconceivable that such imports were subject to the industries forced to sell at a loss procurement of import certi- should continue year after year ficates and were thus authorized to increase those sales and those by the Commission and the fact supposed losses; that the increase was quite unrelated to imports from China. Furthermore, the Com- (f) The figures relating to stock mission had omitted to add that levels, which were again inac- preserves imported from France curate and approximate. More- and the Netherlands into the over, no mention was made of Federal Republic of Germany the true cause of the increases in over the same period had stock levels, namely the increase increased more steeply than in French and Netherlands those from non-member output; nor did the figures take countries. The information account of the fact that normal supplied by the Commission was stock levels necessarily rep- therefore incomplete and resented a given percentage of misleading; output, with the result that, if production increased, stocks were bound to increase as well. (b) The alleged deflection of trade by the importation via Scand- inavia of goods originating in Turning tö the term "net weight", China, which supposedly Wünsche agreed with the opinion occurred in 1980; expressed by the Commission.

3 The additional amount referred to in Wünsche's application was provided for by Article 1 of Regulation No 3429/80, under which:

"Release into free circulation in the Community of preserved mushrooms within subheading 20.02 A of the Common Customs Tariff, other than those referred to in Article 4 and exceeding the quantities laid down pursuant to Article 2 (1) and (3), shall be subject, during the period 1 January to 31 March 1981, to levy of an additional amount of 175 ECU per 100 kilograms net."

4 The plaintiff in the main proceedings argued in its observations that the above provision should be considered invalid on two grounds, namely:

First, because at the time when the Commission adopted Regulation No 3429/80 the conditions to which Community legislation subjects the adoption of protective measures were not satisfied;

JUDGMENT OF 12. 4. 1984 — CASE 345/82

Secondly, because the Commission was not empowered to adopt a protective measure, such as the levying of an additional amount, which did not appear in the exhaustive list of protective measures drawn up by the Council in Article 2 (1) of its regulation, Regulation N o 521/77 of 14 March 1977 laying down detailed rules for applying protective measures in the market in products processed from fruit and vegetables (Official Journal 1977, L 73, p. 28).

7 The first factor to be taken into consideration under Article 1 of Regulation N o 521/77 is therefore the volume of imports, effected or foreseen, into the Community.

8 In that regard the plaintiff in the main proceedings argued that, when Regu- lation N o 3429/80 was adopted, the imports for 1981 had not yet been effected and the import forecasts for the first quarter of 1981 were still

WÜNSCHE / GERMANY

unknown. The plaintiff added that applications for import certificates lodged prior to 29 December 1980, the date on which the regulation was adopted, gave no cause to fear any disturbances on the market for preserved mushrooms.

9 In reply, the Commission stated that the volume of imports from non- member countries was higher in 1980 (35 700 tonnes) than in 1979 (29 741 tonnes) and that the difficulties encountered by the Commission in renewing voluntary-restraint agreements with certain non-member countries, par- ticularly the People's Republic of China, which was by far the leading supplier to the Community, offered the prospect that the growth of imports would continue in 1981.

10 Having regard to the fact that, by the end of 1980, no voluntary-restraint agreement had yet been signed in respect of 1981 with the non-member countries which supplied preserved mushrooms and that those countries included the People's Republic of China, which accounted for more than 70% of imports, the conclusion must be drawn that the Commission had good reason to take the view that, unless protective measures were taken, imports would increase to an extent liable seriously to disturb the Community market.

15 That fact becomes particularly evident if regard is had to the movement in stock levels in the Netherlands, where total stocks stood at about 3 000 tonnes throughout 1979 and at about 5 000 tonnes during the greater part of 1980, but soared to 12 000 tonnes during the last quarter of 1980 and only gradually returned to the level of 5 000 tonnes in the course of 1981.

16 Although Wünsche disputed those figures, it must nevertheless be said that the Commission was justified in basing itself on statistics which, as it stated, came directly from the Netherlands Ministry of Agriculture and which, moreover, were confirmed by that Ministry in reply to telex messages in which the Commission had expressly requested such confirmation.

17 The third factor to be taken into consideration in judging whether conditions existed which warranted the adoption of a protective measure is the trend in the prices of Community products.

18 Whereas, according to Wünsche, the prices of Community products actually increased during 1980, the Commission for its part maintains that the prices fell.

19 In that regard it should be observed that the documents laid before the Court disclose that Community prices during 1980 displayed a definite downward trend and did so in spite of inflation.

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22 The second argument put forward by Wünsche is based on the claim that the list of potential protective measures set forth in Article 2 (1) of Council Regulation no 521/77 is exhaustive and that the Commission is empowered, in the circumstances envisaged by Article 14 (1) of Council Regulation No 516/77 of 14 March 1977 on the common organization of the market in products processed from fruit and vegetables (Official Journal 1977, L 73, p. 1), to do no more that adopt one of the protective measures appearing in that list. By introducing an additional amount of 175 ECU per 100 kg net as a protective measure, when the only measures contained in the above- mentioned list are, on the one hand, the total or partial discontinuation of the issue of certificates or the rejection of all or some of the applications for certificates and, on the other, a system of minimum prices, the Commission is said to have exceeded its powers.

23 It should be recalled in that regard that, as the Commission has pointed out, the Court, in its judgment of 13 May 1971 in a case concerning protective measures on the importation of dessert apples (Joined Cases 41 to 44/70 International Fruit Company NV and Others v Commission [1971] ECR 411, at p. 427), held as follows: "Since the Commission was entitled to take protective measures leading to a complete suspension of imports from third countries, it was, a fortiori, entitled to adopt less restrictive measures".

24 Article 2 (1) of Regulation No 3429/80 provides: "Applications for import licences shall be accepted for preserved mushrooms for up to 26% of the quantities for which import licences were issued during the first 11 months of 1980 for products from each supplier countiy in the Member State in which

the application of a n y quantitative restriction or measure having equivalent effect,

shall be prohibited in t r a d e with n o n - m e m b e r countries".

In its opinion, Article 14 (1) of t h e same regulation does n o t provide " o t h e r w i s e " , since it merely refers t o t h e possibility of applying " a p p r o p r i a t e m e a s u r e s " should t h e m a r k e t become disturbed.

27 Article 2 of Regulation N o 5 2 1 / 7 7 makes provision for t h e total or partial suspension of imports, which is t a n t a m o u n t t o a quantitative restriction. It must therefore be concluded that Article 14 of Regulation N o 5 1 6 / 7 7 does provide " o t h e r w i s e " as regards measures which m a y consist of quantitative restrictions. Consequently, t h e same must hold g o o d for t h e levying of a charge having equivalent effect t o a customs duty, w h e n e v e r such a charge m a y validly be a d o p t e d by t h e Commission as part of a protective measure.

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28 It follows from the foregoing considerations, taken as a whole, that the Commission was empowered to provide for an additional amount as a protective measure within the meaning of Regulation No 521/77.

Consideration of the question referred to the Court has disclosed no factor of such a kind as to affect the validity of Commission Regulation No 3429/80.

Mackenzie Stuart Koopmans Bosco

Delivered in open court in Luxembourg on 12 April 1984.

P. Heim T. Koopmans Registrar President of the First Chamber