C-291/86
ECLI:EU:C:1988:124
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OPINION OF SIR GORDON SLYNN — CASE 291/86
OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN delivered on 8 March 1988
My Lords, Article 14 (1) provided that: 'if, by reason of imports or exports, the Community market in one or more of the products specified in Article 1 is or is likely to be exposed to serious disturbances which might endanger the objectives set out in Article 39 of the Treaty, appropriate measures may be applied in trade with non-Member countries until such disturbances or threat thereof have ceased.' As in Case 77/86 R. v HM Customs & Excise ex parte National Dried Fruit Trade Association ('NDFTA' [1988] ECR 757, these proceedings concern Community legislation imposing a minimum import price (MIP) system in respect of dried grapes imported from third countries. The questions referred by the Finanzgericht, Düsseldorf concern what in my opinion in NDFTA I call the 'first MIP system'. A description of the first MIP system, is given in the report for the hearing in the present case and in that opinion. Its legislative history can be briefly summarized as follows. Detailed rules for the application of these provisions are contained in Council Regu lation No 521/77 (Official Journal 1977, L 73, p. 28). The Regulation recites that the measures taken pursuant to Article 14 are to cease to apply once the disturbance or threat of disturbance has ceased; they must be suited to the circumstances if they are not to have other than the desired effects. Article 1 provides that, in deciding whether At the relevant time, the basic regulation on an actual disturbance or a threat of the common organization of the market in disturbance exists, account is to be taken products processed from fruit and inter alia of the volume of imports effected vegetables (including dried grapes) was or foreseen, the quantities of products Council Regulation No 516/77 (Official available on the Community market, prices Journal 1977, L 73, p. 1), as amended from and the trends of prices for Community time to time, which provided inter alia for products on the Community market and, common price and levy machinery. Recital under subparagraph (d), 'where the 12 recognized that that machinery might abovementioned situation arises as a result prove inadequate in exceptional circum of imports', account must be taken of 'the stances. prices obtaining on the Community market,
CENTRAL-IMPORT MÜNSTER v HAUPTZOLLAMT MÜNSTER
at a comparable stage for products from 2 (2) imposed a countervailing charge of third countries, and in particular any ECU 16 per 100 kilograms net if the excessive downward trend in these prices'. minimum price was not respected.
In the event that serious disturbances exist or are threatened, Article 2 provides that, where required, import certificates may be The MIP and the countervailing charge, discontinued or refused, and where not expressed in ECU , had to be converted into required, imports may be suspended in national currency for comparison with the whole or in part. It also provides for 'the contract price on the day of completion of introduction of arrangements under which, customs import formalities (Articles 2 and 3 if the price for an imported product falls of Regulation No 2742/82). Coefficients below a certain minimum, a condition may were set for such conversion and adjusted be imposed whereby that product may be periodically. At the time relevant to these imported only at a price which is at least proceedings, they were contained in equal to such minimum' (Article 2 (1) (c)). Commission Regulation No 2186/83 (Official Journal 1983, L 210, p. 11).
By Article 2 (2), 'The measures referred to in paragraph 1 may be taken only to such extent and for such length of time as is strictly necessary. . . . They may be restricted The facts leading to the present reference to . . . particular qualities or types of presen for a preliminary ruling can be shortly tation … '. stated. In February and April 1984, the plaintiff in the national proceedings imported three lots of Turkish sultanas, in each case declaring a price which exceeded the MIP. Later enquiries by the customs Commission Regulation No 2742/82 authorities established that the real contract (Official Journal 1982, L 290, p. 28) recited price was lower than the MIP. Counter that protective measures were needed for vailing charges were therefore levied, dried grapes other than currants because the totalling DM 20 174.70. The plaintiff now prices of imports in the marketing year seeks to recover that amount on the basis 1981/82 had significantly undercut that the regulations applicable at the time Community prices leaving, in October 1982, were invalid. The matter has come before stocks of sultanas equal to 60 % of the the Finanzgericht at Düsseldorf which has harvest for that year and exposing the referred the following questions: Community market to serious disturbances which might endanger the objectives set out in Article 39 of the Treaty.
'1 . Does Article 14 of Regulation (EEC) A minimum price for imports of dried No 516/77, in conjunction with Articles grapes other than currants was fixed initially 1 and 2 of Regulation (EEC) No at ECU 106.7 per 100 kilograms net. Article 521/77, contain a sufficiently specific
OPINION OF SIR GORDON SLYNN — CASE 291/86
enabling provision establishing the 5. Alternatively: is the minimum price laid essential criteria for protective measures down in Article 2 (2) of Regulation No such as those adopted by the 2742/82 unlawful since it has not been Commission in Regulation No 2742/82? calculated according to objective criteria and no reasons are given for it? '
2. Alternatively: is the term 'by reason of imports' in Article 14 of Regulation No 516/77 and Article 1 of Regulation No 521/77 to be interpreted as meaning that imports from non-member countries The third, fourth and fifth questions raise must have been the main cause of the issues which also arose in NDFTA. The disturbances at the date on which Regu submissions made in the present proceedings lation No 2186/83 was adopted and at do not lead me to modify the views I the date on which the plaintiff carried expressed in my opinion in that case, to out the imports in question? which I refer.
3. Alternatively: must Article 2 (2) of Regulation No 521/77, in conjunction with Articles 13 and 14 of Regulation No 516/77 and Article 155 of the EEC In its judgment in NDFTA the Court, whilst Treaty, be interpreted as meaning that accepting that a countervailing charge, even the Commmission was not entitled to if not expressly authorized by Article 2 of impose a countervailing charge in the Regulation No 521/77 was an appropriate event of import prices falling below the way of enforcing an MIP system, that a minimum import prices laid down? fixed rate could be adopted and that sufficient reasons were given for what was done, yet held that 'a single, fixed-rate countervailing charge, imposed even where the difference between the import price and the minimum price is very small, amounts to an economic penalty' not shown by the 4. Alternatively: must Article 2 (2) of Commission to be necessary for the MIP Regulation No 521/77, in conjunction system to achieve its aim. The Court with Articles 13 and 14 of Regulation therefore declared Regulation No 2742/82 No 516/77, be interpreted as meaning (and, it follows in my view the series of that the Commission is not entitled to Regulations amending it) 'invalid in so far establish a flat rate for countervailing as it introduced a countervailing charge at a charges so that they exceed the fixed rate equal to the difference between difference between the minimum price the lowest world market price and the laid down and the import price? minimum price' (paragraphs 32 and 33).
CENTRAL-IMPORT MÜNSTER v HAUPTZOLLAMT MÜNSTER
The first and second questions raise new Article 155 provides that the Commission issues and require more detailed shall, inter alia, 'exercise the powers consideration, although the Court's ruling conferred on it by the Council for the in NDFTA may afford the plaintiff the implementation of the rules laid down by necessary relief. the latter'.
The Council, which confines its obser vations in this case to the first question, takes the view that the scope of the The first question contains the most discretion conferred upon the Commission significant difference between this case and by Regulation No 521/77 is within the NDFTA: the plaintiff is attacking the bounds previously judged acceptable by the Council Regulations underlying the MIP Court and is a normal exercise of the power system as well as the implementing set out in Article 155 of the Treaty. It is Commission Regulations. It contends that sufficiently defined to enable full judicial very specific enabling provisions are review to be effected. required in this field, in particular since interested parties are not consulted in contrast with anti-dumping proceedings and that the lack of a role for interested parties in the scheme of the Community organ Both the Council and the Commission refer ization of the processed fruit and vegetables to the Court's ruling in Case 25/70 Einfuhr- market requires the Court of Justice to und Vorratsstelle vKöster [1970] ECR 1161 compensate by conducting a full exam that the Council is not itself required to take ination of the facts relied on by the all measures relating to the common agri Community institutions when setting up the cultural policy according to the procedure MIP system. Failure by the Court to contained in Article 43 provided that the conduct such a review would be contrary to 'basic elements of the matter to be dealt rights guaranteed to the plaintiff by the with' have been so adopted, as was done German constitution. in Regulation No 516/77. Provisions implementing basic regulations may be otherwise adopted, either by the Council itself or by the Commission pursuant to an authorization complying with Article 155, which is a facultative provision enabling the Council to 'determine any detailed rules to From those propositions, the plaintiff which the Commission is subject in exer deduces that Council Regulation No 521/77 cising the power conferred on it'. is void. Supposedly laying down detailed rules for the implementation of the general provisions of Article 14 of Council Regu lation No 516/77, it is in fact scarcely less general than Article 14 and essentially turns Both institutions also emphasize that the over the Council's entire competence to the Court has consistently recognized that the Commission. The plaintiff claims that this is Commission must enjoy, and the Council excessive delegation contrary to Articles 4, may therefore confer upon it under Article 43, 145 and 155 of the EEC Treaty, the 155, a wide discretion in deciding how to hierarchy of norms and the rule of law. act, sometimes with urgency, in the daily
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management of agricultural markets (see, and Article 1 of Regulation No 521/77 for example, Case 23/75 Rey Soda v Cassa must be interpreted to mean that imports Conguaglio Zucchero [1975] ECR 1279, at must be, if not the only, at least the essential p. 1300). They contend that the constraints cause of the market disturbance. In this to be found both in Article 14 of Regulation case, it argues, the preconditions for No 516/77 (the disturbance must be serious applying protective measures were not and the measures taken in response must satisfied: such market disturbance as there cease as soon as the disturbance does) and may have been was not caused, or not Articles 1 and 2 of Regulation No 521/77 essentially caused, by imports. Two (laying down the matters to be taken into principal arguments are adduced. account when deciding whether serious disturbance exists or is threatened, the type of protective measures which could be taken and the circumstances in which they could be taken) show that the Commission's freedom to act was appropriately circum scribed. It was in any case subject to review by the Council on application by any Member State by virtue of Article 14 (3) of First, during the relevant period, the combi Regulation No 516/77 which gives the nation of high levels of Community aid and Council the power in such circumstances to national aid led to artificially raised amend or annul the Commission's Regu production and prices, as well as to lower lation. quality since aid was received irrespective of quality. Resort to safeguard measures in those circumstances is unjustified. On this point, the Commission agrees that Greece was granting unauthorized aid, some of which the Commission found to be incom patible with the common market, but alleges that such aid had a partially beneficial, I accept these arguments of the institutions. partially neutral effect on the Community There is nothing abnormal or excessive in market: beneficial in increasing Greek sales the discretion conferred on the Commission within the Community, neutral in increasing by Regulation No 521/77. It is necessary Greek exports from the Community. The that the Commission be able to act quickly Commission's investigation of the alleged and effectively within appropriate and aid is continuing. Greece, on the other reviewable limits. The Commission's powers hand, categorically denied at the hearing here were clearly defined and exercisable in that any illegal aid had been granted. a manner subject to judicial review (which is complemented by the power retained by the Council in Article 14 (3) of Regulation No 516/77). I would therefore answer the first question in the affirmative.
No party was able to present to the Court any figures indicating the amount or purpose of the alleged national aid. The plaintiff's observations contain some detail On the second question, the plaintiff argues of Community aid paid out under the that Article 14 of Regulation No 516/77 relevant common organization of the
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market, but I do not understand the plaintiff All Greek produce is treated with sulphite; to be attempting to challenge that system it is the only way Greek produce can (except perhaps by reference to GATT , a acquire the colour which the trade asso point I deal with below). He is referring to ciates with sultanas. Therefore Greek unauthorized national aid paid in addition produce is not suitable either for the to Community aid. I do not think it right German market or for some other that the existence of national aid prevents Community markets. The plaintiff was the taking of protective measures by the importing non-sulphited sultanas. Community of the kind in issue here. Nor is it shown, in my view, in these proceedings that the aid was the cause of the disturbance of the market. That, however, is ultimately a matter to be investigated by the national court.
This account of the categories of dried grapes is not essentially at variance with that put forward by the NDFTA. In particular, it seems to be agreed that what in Britain are known as raisins are produced from the Secondly, the goods imported were not same grape as Greek sultanas but by similar to the Community produce and different methods. The arguments to the therefore could not cause disturbance. This contrary of the Commission and the Greek raises the question whether a distinction is Government are essentially the same as put to be drawn between raisins and sultanas, a forward in NDFTA. matter debated at length in NDFTA.
The plaintiff's position is that, other than In that case it seemed to me that, whilst my currants, dried grapes divide into two: prima facie conclusion would be to accept 'rosinen' which are dried grapes with seeds that there is a distinction between raisins and are no longer sold, at least in Germany, and sultanas, it was really a question of fact and sultanas which are derived from for the national court and that for the seedless green grapes. Sultanas further purposes of the reference, this Court could divide into two categories, light and dark. accept that the distinction existed, since it Light sultanas are dipped in water does not, in my view, follow that it was containing small quantities of potassium necessarily ultra vires the Commission to carbonate and a drying agent before being impose an MIP and countervailing charge dried in the sun; dark sultanas are not on all dried grapes other than currants. This dipped and are dried in the full sun. Dark is because, as I said in my opinion in sultanas are known as 'raisins' in England NDFTA, 'importation of one product not and the United States. Light sultanas further produced in the Community may be capable divide according to whether they are treated of threatening a serious disturbance of the with sulphite. The German market requires Community market in a product produced non-sulphited sultanas on health grounds. in the Community". In particular, Article 14
OPINION OF SIR GORDON SLYNN — CASE 291/86
of Council Regulation No 516/77 does not In the present proceedings, which were limit the measures which may be taken to pending when NDFTA was heard, the imports of the same product. Court has further evidence that, in a third Member State, for some uses at least the two kinds are not regarded as inter changeable. At the hearing in these proceedings the Court was also told that a similar position obtained in the Netherlands and that similar proceedings there had been suspended pending the outcome of these two references to this Court. The problem is, as I see it, not confined to a given region or a single Member State.
In its judgment, the Court, while holding that it was not necessary to decide whether 'other dried grapes' might comprise two categories, raisins and sultanas (paragraph 12), held that the NDFTA had not demon strated that 'those two kinds of product cannot satisfy the same needs, so that they However, if the question to be decided is cannot be substituted one for the other to whether there was evidence, on which the any extent' (paragraph 13). The Court thus Commission could proceed, that the treated the question as one of products were interchangeable, I do not evidence — 'the Commission's view that consider that it has been shown in this case those last two kinds of grapes are to be that a different result should be reached considered interchangeable must be from that reached in NDFTA. accepted unless it is demonstrated that those two kinds of product cannot satisfy the same need, so that they cannot be substituted one for the other to any extent'. In that case, the Court expressly considered that the issue was not to be determined 'solely on the culinary traditions of certain regions of Great Britain and of Ireland'. It appears, in addition, either to have rejected or to have left aside the detail contained in the Association's written pleadings as to the If, however, the matter is one of evidence to respective suitability of raisins and sultanas be decided in judicial proceedings rather to commercial food processing applications than by the Commission, it still seems to me (rather than culinary matters) such as dessi- that the question of interchangeability is one cation, heating to high temperatures, incor of fact to be decided, on the evidence poration in pastes, confectionery and available to it, by the national court. If the breakfast cereals, and the uncontradicted national court finds that the products are assertion of the Association that in certain interchangeable, it will no doubt follow the Member States there was no tradition of decision in NDFTA which proceeds on that using raisins. basis and finds that the Commission was not
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incorrect in its view that increasing imports imports. That must to my mind mean that from third countries, particularly Turkey, at the imports are a 'substantial' or 'significant' a time when world market prices were factor in the cause of disturbance or threat declining represented a threat of disturbance to the market which is capable of correction to the Community market. If there is found by the taking of protective measures. If the by the national court to be a distinction effective cause of the disturbance (or threat between the Community produce and the of it) lies elsewhere so that protective goods imported by the plaintiff, that court measures in regard to imports will have no must decide whether such imports at the material effect on the disturbance, then the relevant time caused, or threatened to cause, disturbance is not caused or threatened by a serious disturbance on the Community reason of the imports. On the other hand, I market for the Community produce. do not consider that the imports have to be the sole cause or even the 'primary' cause of the disturbance of the market, or the sole or primary threat to it. That would in many cases rule out the use of protective measures where imports are having or threaten to have a substantial or significant effect on the stability of the market, but where other Both these arguments concern the extent to factors have an influence. In the present which the imports actually caused, or case, it seems to me, that there was clearly threatened to cause, a serious disturbance. material on which the Commission could The Commission argues that it does not conclude that imports were a substantial or have to be shown that the imports were the a significant factor if sultanas and raisins are primary cause of disturbance. That would to be regarded as interchangeable. If they be an unworkable test. Interrelated factors are not strictly interchangeable, then it is create and disturb market conditions: the for the national court to consider whether general economic situation, production costs the import of one had a substantial or (some of which are affected by political significant effect on the market of the other. considerations, such as the guaranteed incomes fixed within the common organiz ations of the market), the weather which determines whether the harvest is good, consumer demand. Certain combinations of such factors will make imports attractive or otherwise. If Community prices are high and there is sufficient demand, lower cost imports will be attracted. If that causes problems for the Community producers, can it be said that their problems are caused, even essentially, by the imports? The plaintiff has referred to Article 3 of Regulation No 521/77 which provides that 'the application of this Regulation shall respect the Community's obligations under international agreements'. It is contended that the Community must therefore observe GATT and, in particular, Articles XIX , II and XXIII. Reliance is placed on GATT The regulations empower the Commission Panel Report L/5778 of 20 February 1985 to act when disturbance to the market is entitled 'The European Economic caused, or threatened, 'by reason of' Community — production aids granted on
OPINION OF SIR GORDON SLYNN — CASE 291/86
canned peaches, canned pears, canned fruit event, in my view, substantiate his cocktail and dried grapes'. arguments, nor do the findings of the GATT Panel seem to me to help him. I do These questions are not raised in the order not consider that these questions fall for for reference. The plaintiff does not in any decision.
Accordingly, the questions put by the Dusseldorf court should, in my view, be answered to the effect that nothing has emerged in the proceedings which leads to Council Regulations Nos 516/77 and 521/77 being declared invalid but that the regulations constituting the first MIP system (that is, Commission Regulation No 2742/82 and the regulations amending it) are invalid in so far as they provide for a flat rate countervailing charge, whatever the difference between the actual import price and the MIP. Imports must have been a substantial cause of the alleged disturbance of the Community market for protective measures to be applied.
The plaintiff's costs are a matter for the referring court. The costs of the Greek Government and of the Council and Commission of the European Communities are not recoverable.