C-354/87

2. The basic regulation in the beef and veal sector is Regulation (EEC) No 805/68 of the Council. 2 The detailed implementing rules were first adopted in Commission Regulation No 2972/79 5 and again every year after the tariff quota was opened. For 1987, the year Each year since 1 January 1980, as part of at issue in this case, the implementing rules its obligations under the General Agreement are laid down in Commission Regulation on Tariffs and Trade (GATT), the (EEC) No 3985/86, which will be Community opens a tariff quota for high- quality fresh, chilled or frozen beef and veal 3 — Regulation of 20 December 1979 opening a Community falling under subheadings 02.01 A II (a) tariff quota for high-quality fresh, chilled or frozen beef and veal falling within subheadings 02.01 A II (a) and and 02.01 A II (b) of the Common 02.01 A II (b) of the Common Customs Tariff (OJ 1979 L 336, p. 5). Customs Tariff. For that quota, the 4 — Regulation of 16 December 1986 opening a Community tariff quota for high-quality, fresh, chilledor frozen beef * Original language: Dutch. and veal falling within subheadings 02.01 A II (a) and 02.01 A II (b) of the Common Customs Tariff (1987) 1 — Regulation of 18 September 1987 on the issue of import (OJ 1986 L 365, p. 2). licences for high-quality fresh, chilled or frozen beef and veal (OJ 1987 L 268, p. 59). 5 — Regulation of 21 December 1979 laying down detailed rules for the application of the import arrangements 2 — Regulation of 27 June 1968 on the common organization provided for by Regulations (EEC) Nos 2957/79 and of the market in beef and veal (OJ, English Special Edition 2958/79 in the beef and veal sector (OJ 1979 L 336, 1968 (I), p. 187). p. 37).

3. Other detailed implementing rules were 4. The original text of Article 12(l)(a), with also adopted, however, under the applied from 1 October 1980 until the end management committee procedure. Some of 1982, provided as follows: are contained in Commission Regulation (EEC) No 2377/80, 6 the legal basis for which is both the basic Council regulation (in particular, Articles 13 and 14 thereof 7) 'In order to qualify for the special import and Council Regulation No 2957/79 arrangements referred to in Article l(l)(d) opening a Community tariff quota. 8Regu- of Regulation (EEC) No 2972/79: lation No 2377/80 contains general arrangements, for a series of different schemes in the beef and veal sector, including the scheme at issue here, (a) the licence application or applications governing applications for, and the issue of, lodged by any one applicant shall relate import and export licences. Articles 12 and to a total quantity corresponding to not 15 are of paramount importance in this case. less than five tonnes of meat by product The applicant claims that the provision cited weight and not more than 10% of the above (in point 1) of the regulation at issue quantity fixed pursuant to Article 7 of is contrary to Regulation No 2377/80. Regulation (EEC) No 2972/79 in respect of the arrangements in question for the quarter during which the application or applications are lodged.'

It is clear from the documents before the Court that Articles 12 and 15 were amended The text which applied from 1 January 1983 twice in a manner which affects the inter- until the end of 1987, that is to say during pretation of the legislation concerned, first the period covered by the facts at issue in in 1 9 8 3 , b y C o m m i s s i o n R e g u l a t i o n (EEC) this case, provided as follows: No 3578/82, 9and again with effect from

Lastly, the text which has applied since 1 'The Commission shall decide to what January 1988 reads as follows: 13 extent applications under Article 12 can be accepted. If the quantities for which licences have been requested exceed the quantities available, the Commission shall reduce the amounts requested by a fixed percentage. If '. . . the licence application or applications the total quantity requested is lower than lodged by any one applicant shall relate to a that available the Commission shall total quantity corresponding to not less than determine the amount of the balance five tonnes of meat by product weight and remaining.' shall not exceed the quantity available in respect of the arrangements in question for the quarter 14 in which the application(s) is(are) lodged'. For the discussion before the Court, what is crucial is the power which the Commission, 11 — Anide 7 of this regulation referred to Article l(l)(d) of as the general legislature, has granted itself the same regulation, in which the quota for 'Hilton beef' is allocated within the total quota for 1980. In 1987, the year in Article 15(6), cited above, as the at issue here. Article 7 of Commission Regulation (EEC) No 3985/86 also referred to Article l(l)id) of the same day-to-day manager to decide the (appro- regulation. priate) fixed percentage by which the quan- 12 — It is not disputed between the parties that at the beginning tities applied for may be reduced. As can be of the 1980s the quantities applied for were insufficient, so that the quotas were not fully used. 13 — Since Regulation No 3434/87, cited in footnote 10 above. 15 — Article 12 concerns the special import arrangements 14 — There is therefore a return to quarterly management. referred to in Regulation No 2972/79.

A week later, 18 in Regulation No 3985/86, the Commission laid down the detailed rules It is not disputed between the parties that for the application of the previous regu- ultimately the number of import licences lation, which entered into force on 1 thus issued was not, however, completely January 1987. In particular, it states therein used, so that there was a 'surplus' of import that, within the general beef import quota possibilities. In order to remedy this of 29 800 tonnes, 10 000 was allocated for situation the Commission invited fresh 'Hilton beef'. 19 In addition, Article 7 of the licence applications for Hilton beef in regulation provides that, as regards the Commission Regulation No 2539/87 of 24 lodging of licence applications and the August 1987. 22 This regulation provided for issuing of import licences, the provisions of licence applications to be submitted during Articles 12 and 15 of Regulation N o the first 10 days of September 1987 for the 2377/80 apply; Articles 12 and 15 are set total quantity of 4 617 tonnes of beef and out in part above (in points 4 and 5). veal originating in and imported from the United States of America or from Canada. 16 — With effect from 1 January 1988 only the last sentence of Article 15(6)(d) was amended; it concerns the situation in which not enough licences are requested; our problem 20 — Regulation of 20 February 1987 on the issue of import concerns too many applications. licences for high-quality fresh, chilled or frozen beef and 17 — See footnote 4 above. veal (OJ 1987 L 52, p. 12). 18 — Regulation of 23 December 1986 laying down detailed 21 — In the Dutch version, the word 'procentueel' (up to a rules for the application of the import arrangements certain percentage) appears; in the eight other language provided for by Council Regulations Nos 3927/86 and versions, the word used is 'proportionally'. 3928/86 in the beef and veal sectors (OJ 1986 L 370, 22 -— Regulation concerning the quantity of high-quality beef p. 37). and veal that may be imported from the United States of 19 — For the official description, see Article l(l)(d); both America and from Canada under the arrangements laid Weddel and the Netherlands Government use the term down in Council Regulation N o 3928/86 (OJ 1987 L 241, 'Hilton beef'. p. 6).

The contested regulation The Commission contends that the contested second paragraph of Article 1 of the regulation at issue is no more than the logical conclusion of the principles already contained in the more general rules. 7. The crux of the dispute is therefore the way in which the Commission organized the additional application period of 10 days in Uncontested facts September 1987: in the first paragraph of Article 1, the Commission fixed the percentage for 'meeting' the applications as follows: 0.2425% of the quantity requested. 9. On 11 September 1987, the day after the (second) period fixed for applications to be submitted ended, the Produktschap voor Vee en Vlees (Cattle and Meat Board, here- inafter referred to as 'the Produktschap') informed the Commission by telex message The point at issue is the second paragraph of the total applications submitted in the of Article 1, already cited above (in Netherlands; these applications amounted to point 1), which states that applications for a 1 033 970 tonnes, which was clearly far in quantity in excess of 4 617 tonnes, the total excess of the total quantity available available quantity, are deemed to have been throughout the Community, 4 617 tonnes. made for that quantity. This means in As has already been stated, Weddel had practice that the applications submitted by applied for 80 000 plus 240 000, that is to the applicant, which were for 80 000 plus say 320 000 tonnes, being approximately 240 000, that is to say 320 000 tonnes, were one-third of the Netherlands total. deemed to have been made for only 4 617 tonnes, so that the applicant was granted a quantity of only 0.2425% of 4 617 tonnes, By a telex message of 15 September 1987 that is to say just over 11 tonnes. the Commission replied, stating that 'although there has been no specific ceiling 23 — See footnote 20 above. under these arrangements since 1982, it is

clear from the circumstances and from the question of the admissibility of applications terms of Regulation No 2539/87 2 4that a for a quantity in excess of the notified licence application may not in any event quantity to be allocated (hereinafter referred exceed the quantity of 4 617 tonnes to as 'excessive applications'). available at the beginning of the current month'. The Produktschap then expressed surprise at the telex message of 15 September, which in its view was incon- sistent with certain decisions taken earlier, According to the applicant, the in particular at the meeting of the Produktschap based its view on the fact that management committee for Beef and Veal after the deletion of a phrase from Article

At that meeting, a applications had been lodged and securities representative of the United Kingdom asked deposited on 10 September, according to whether excessive applications could be your present interpretation'. submitted, to which the Commission did not reply and stated that it would have to consider the question (according to the Minutes of the committee meeting). The Commission did not accede to the Produktschap's request and on 18 September adopted Regulation No 2806/87, which is contested in these proceedings and which provided that applications should be The Commission states that, in any event, deemed to be for 4 617 tonnes. the meeting of 11 September took place after the end of the period prescribed for applications to be lodged, that it did not state at the meeting that an application for a Contested facts quantity in excess of the quantity available was admissible and that in any case there could be no question of an 'opinionof the committee' but only of an inquiry made by

I-3870

WEDDEL v COMMISSION

committee drawn up by the Commission are 12. It follows from the judgments of the inaccurate; according to the Produktschap, Court that this application is admissible if the Commission replied unreservedly that the contested provision 'is not a provision of applications could be made for more than general application within the meaning of the maximum amount. The applicant also the second paragraph of Article 189 of the states in the reply that the Netherlands Treaty but must be regarded as a Government subsequently submitted a conglomeration of individual decisions strong protest against what it regarded as a taken by the Commission under the guise of change in the Commission's position. 26 a regulation . . . , each of which decisions affects the legal position of each author of an application for a licence'. 32 In its rejoinder, the Commission states that the Netherlands representative on the management committee did not challenge When is a regulation in reality a the accuracy of the Minutes and that any conglomeration, or bundle, of individual declarations made by the Commission to the decisions which may therefore be contested Produktschap after the end of the 10-day by individuals? period in question could not in any event be relied upon against the Commission by an individual undertaking. In International Fruit Company, the action was brought against a regulation which provided that applications for import Admissibility licences lodged by a certain date in the recent past would be met only up to 80% of a reference quantity. The applicant had 11. The defendant contends that the lodged applications during the period in application is inadmissible. In its view, the question. Its application was admissible contested regulation is not of direct and because 'when the said regulation was individual concern to the applicant. In this adopted, the number of applications which regard it relies upon three judgments of the could be affected by it was fixed' and 'no Court: Moksel, 27 Binderer 28and Deutz. 29 new application could be added'. 33

few or the fact that 'it is possible to In this case, the contested decision was determine the number or even the identity adopted on 18 September 1987 and of the persons to whom it applies at any published in the Official Journal on 19 given time'. 34 It is the fact that, at the time September 1987. It determined the way in at which the contested regulation was which applications lodged between 1 and adopted, it affected the legal situation of a 10 September 1987 were to be treated. The closed category of persons. 35 category of applicants affected by the regu- lation was therefore clearly closed: no more persons could be added at the time at which the regulation was adopted. The applicants were therefore directly and individually concerned by the contested regulation, In the circumstances of the judgments in which may equally be regarded as a bundle Moksel and Usines coopératives, the or a series of individual decisions. In other contested regulation produced legal effects words, the application is admissible. which applied to an open category of persons: both cases concerned the intro- duction of a suspension period which ended after the date on which the regulation itself was adopted. 36 The regulation therefore produced legal effects on the treatment of Arguments as to the substance: powers, an unknown and unknowable number of statement of reasons and procedure applications, which would still have been lodged without the contested regulation.

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WEDDEL v COMMISSION

restricts individual applications to the total management committee and with an express available quantity. The applicant claims that statement of reasons. That again, in its view, the fact that inadequate reasons are given shows that the contested second paragraph for this addition constitutes an infringement of Article 1 requires a further formal basis, of Article 190 of the Treaty. which it lacked. Moreover, it is clear from the subsequent amendment which did not enter into force until 1 January 1988 that there were no exceptionally urgent circum- stances which could have justified unauth- The applicant also claims that the second orized assumption of the power to take paragraph is ultra vires, since it does more 'exceptional legislative measures'. than take a decision which the Commission was authorized to make under Article 15(6)(d) of Regulation No 2377/80: 39 in the contested second paragraph the 14. The Commission's reply to these three Commission in fact lays down a rule submissions is essentially contained in the concerning the conditions governing account of what is called in the Defence the applications which goes beyond the rules 'origin of the ceiling'. According to the contained in Article 12 of Regulation No 2377/80. The contested regulation does not defendant, the contested second paragraph therefore confine itself to deciding the of Article 1 merely clarifies and does not procedure for lodging licence applications amend the arrangements laid down in (as provided for in Article 2 of Regulation Articles 12 and 15 of Commission Regu- No 3928/86, 40 cited above (in point 6)) lation No 2377/80. 44 In its view, this is but, on the contrary, usurps a power by clear from two factors, the text of Regu- laying down, in rules of procedure or lation No 2539/87, by which the second implementation, additional conditions. period for licence applications was opened, 45 and the general scheme in its entirety.

Community is not only fanciful but also more flexible by Regulation No speculative. In particular, it would lead to 3578/82 (see point 4 above) and the unacceptable results, incompatible with the requirement of a maximum per functioning of market organizations: first, it application had been removed; in this would discriminate against smaller traders, context the Commission had the power who could not lodge the (high) security only to make a proportional reduction; which must accompany an excessive application and, secondly, it would lead to deflections of trade and therefore an unfair distribution of the quota between Member States if excessive applications were permitted in some Member States and not in (iii) a proportional reduction means a others. The defendant concludes that when general reduction and must be it was confronted with the existence of the contrasted with the reduction of indi- practice whereby excessively large vidual applications, such as those which applications were made in some Member exceed the total quantity available; the States, it had no alternative but to insert the applicant stresses the difference second paragraph in question into Regu- between proportional general re- lation No 2806/87 as the logical conse- ductions, which the Commission is quence of Article 15(6)(d) and of the empowered to make, and individual general scheme in its entirety. reductions, which it is not empowered to make; this view is supported by the Netherlands Government in its inter- vention.

15. The applicant states that the Commission's contention as set out above is untenable, for the following reasons:

At the hearing the defendant stated that it the scheme of the whole application system, was easier to identify and combat abuse of then the applicant could not legitimately the application procedure consisting of the expect that his application would be taken lodging of manifestly excessive applications into account for more than the total than abuse entailing the lodging a large quantity available. The Community legal number of applications under pseudonyms. principle of legitimate expectation affords It is the Commission's duty to combat abuse protection against unforeseeable changes in of the procedures in so far as it can. It is a a legal situation, not against an erroneous fact that some forms of abuse can be dealt assessment of a stable legal situation. with more quickly or effectively. This point Furthermore, the assessment of a specific will be considered once again in connection legal situation is not merely subjective: with the applicant's argument on equal protection is afforded only to an expec- treatment. tation which a person could reasonably have. What is more, even if the expectation was justified, it was created in this case by a statement the content of which was disputed and contradicted by properly constituted Minutes of the meeting of the management 16. My assessment of the question whether committee, and which was made on the the Commission had the power to adopt the telephone by an individual Commission contested provision overlaps with my official 4 7 to persons other than the assessment of the question whether the applicant: this is all the more reason not to contested provision required an express consider the expectation it allegedly created statement of reasons and whether the capable of being relied upon as against the applicant's legitimate expectations were Commission. thereby infringed. The reply to these three questions in my view depends upon the reply to the following question: was the Commission entitled, in the contested second paragraph, to make it clear, at a 17. I come now to the reply to the question time when all the applications had already which I have framed. It must be based first been lodged, that each application would be of all on the aim of the system of deemed to be only for 4 617 tonnes, the applications and the aim of reducing the total quantity available? applications in question, that is to say the distribution of the quantity available ammong the persons concerned in the event that the quota is exceeded. It is clear that this is the purpose from the second recital in the preamble to Council Regulation No I have used the words 'make it clear' in 2957/79, cited in point 2 above ('there order to show that it must in fact be a should be a guarantee of equal and confirmation of a self-evident fact. If the Commission did more than clarify, the continuing access by all interested operators problem appears in a totally different light. within the Community to the said quota').

In that context it seems to me that an normal and accepted in other regulations undertaking which lodges an application for and rules on the common agricultural policy a quantity which is several times higher than to 'over-apply' or lodge 'excessive the total quantity available throughout the applications'. In its reply to a written Community is not acting in good faith, or at question put by the Court, however, the least performs an act on which it cannot applicant was unable to support this alle- base a legitimate claim. 48 The excessive gation with any concrete example from application can only have been made in other sectors. I therefore conclude that it order to distort to the applicant's own has not been established that in the advantage the proportional reduction of the contested second paragraph the Commission various applications carried out was doing more than explain something that subsequently by the Commission. If this was self-evident. There is no doubt that it were allowed, an excessive application for was empowered to do so without giving any one thousand times the quantity available, reasons other than those which were clear for example, would be enough, if the other from the nature of things and without applicants behaved 'normally', for the consulting the management committee. applicant to obtain virtually the entire quantity available. As the applicant has itself pointed out (point 14 above), the cost of the bank guarantee or security would be no obstacle to such a practice. All the other I would make one further remark in this 'normal' applications would therefore yield connection. I do not consider that it is virtually nothing. The logical reaction to be possible to conclude from the fact that the expected on the part of disappointed ceiling of 10% of the quantity available was 'normal' applicants on the following abolished in 1982 (see point 4 above) that occasion would be to emulate the the obvious limit of 100% was also applicant's behaviour. The whole system abolished. The abolition of this low ceiling would then become a kind of poker game of 10% was intended to combat the estab- and would completely collapse. It is in my lished shortage of applications. The view clear from those considerations that Commission could not thereby have the taking into account of individual intended to dismantle the entire application applications up to the total quantity procedure. I therefore consider that the available, with a view to reducing them arguments alleging ultra vires, inadequate later, is dictated by the nature of things and statement of reasons, breach of the principle the applicant could not reasonably have of legitimate expectations and failure to expected the Community authorities to act consult the management committee must be otherwise. rejected.

19. In its reply the applicant demon- strates — in my view convincingly — that The defendant's reply to this submission is the judgments on equal treatment used as as follows: it recognizes that since the the second ground for refuting its amendment to Article 15(2)(b) of Regu- submission are not relevant: those cases lation No 2377/80 49 by Regulation No concerned an inequality between two possi- 3578/82, 50 different applications submitted bilities which were still open to the by the same applicant in different Member applicants at the date at which they were States are no longer lumped together; it deciding what to do; in the present case, admits that this, combined with the ceiling however, at the time when the Commission provided for in the contested regulation, informed the Produktschap of its interpre- might lead to a difference in treatment. tation and at the time when it adopted the However, the defendant states that in contested regulation, there was no longer practice there were no signs — in the form any possibility for the applicant, or its of deflections of trade, of which the competitors, to lodge applications in other management committee was aware — that Member States; in the applicant's words, any serious problem existed; otherwise, there was therefore a new 'discrimination', measures would undoubtedly have been or at least a difference created by the taken, at the request of the management contested legislation itself. committee; it makes the following general remark: 'There is no absolute requirement that the Commission should legislate directly to combat the least little imper- fection in a common organization of the market'. 20. The reply to the question whether the contested part of the regulation constitutes discrimination which is contrary to Community law depends upon whether the applicant pursued a course of action which Secondly, the defendant states that the put it in a position to require equal applicant was not affected by the potential treatment. In this regard, its application difference in treatment, since it did not cannot in my view be upheld. The submit applications in other Member States comparison between the open manner in and therefore did not take advantage of a which the applicant misuses the system of possibility which existed; in that regard it applications and the granting of licences relies upon the judgments of the Court in with the rather covert manner of operation Cargill v ONIC 5 1 and Welding, 52 which it it ascribes to undertakings in other Member States is in itself problematic. There is no 49 — See footnote 6 above. 50 — See footnote 9 above. right to equal treatment between those who 51 — Case 27/77 Cargill v Office national interprofessionel del openly abuse regulations introduced by cerealei [1977] ECR 1535, paragraph 19. Community law and those who do the same 52 — Case 87/78 Welding v Hauplzollamt Hamburg-Waltershof [1978] ECR 2457, paragraph 8. thing but in a disguised manner, which may

Conclusion

22. O n the basis of the considerations set out above, I propose that the C o u r t should declare that the applicant has not adduced any evidence of such a kind as to cast doubt o n the validity of Article 1 of Commission Regulation (EEC) N o 2 8 0 6 / 8 7 , and should therefore dismiss the application for annulment and order the applicant to pay the costs.

53 — See footnote 22 above.

I-3878