C-301/88
ECLI:EU:C:1990:92
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OPINION OF MR TESAURO —CASE C-301/88
OPINION OF MR ADVOCATE GENERAL TESAURO delivered on 6 March 1990 *
Mr President, the market in fishery products, and of the Members of the Court, objectives pursued thereby.
1. The Court of Appeal, London, has 3. The central concern of the legislation referred to the Court of Justice for a before the Court is reflected in the finding preliminary ruling five questions concerning that, in order to improve the profitability of the interpretation of certain provisions of production in the fishing industry, it is Council Regulation (EEC) No 3796/81 of necessary for there to be fair competition in 29 December 1981 on the common organ that market between products of good 1 ization of the market in fishery products quality and uniform standard (fourth recital (hereinafter referred to as 'the basic regu in the preamble to the basic regulation). lation'), Council Regulation (EEC) No 2202/82 of 28 July 1982 laying down general rules for the granting of financial compensation in respect of certain fishery 2 products, and Commission Regulation (EEC) No 3137/82 of 19 November 1982 To that end, the basic regulation provides laying down detailed rules for the granting for common marketing standards to be laid of financial compensation in respect of down (Title I) and imposes on the Member certain fishery products. 3 States the obligation to inspect the relevant products for conformity with those standards, and to take appropriate measures to penalize infringements (Article 4).
2. I do not intend to embark on a detailed description of the legislation in issue, a full account of which is given in the Report for the Hearing, to which I refer for further 4. Given the special features of the market details. in fishery products, it was considered that the formation of producers' organizations, whose members would be bound by certain rules in the matter of production and marketing, would contribute to the attainment of those objectives (sixth recital Nevertheless, to place in their precise in the preamble to the basic regulation). context the questions referred to the Court requires a summary account to be given of the general outline of the organization of
* Original language: Italian. 1 — OJ1981L 379, p. 1. In order to facilitate the formation and 2 — OJ 1982 L 235, p. 1. operation of those organizations, the basic 3 — OJ 1982 L 335, p. 1. regulation allows Member States to make
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aid available, which is partly financed by the At the end of 1985, the Intervention Board Community (seventh recital and Title II). for Agricultural Produce (hereinafter referred to as 'IBAP') decided to grant no financial compensation to two producers' organizations, the Fish Producers' Organ 5. The legislation in issue also provides for ization Ltd and the Grimsby Fish Producers' the determination of a withdrawal price Organization Ltd, for most species below which the producers' organizations withdrawn between September 1983 and may intervene, by withdrawing from the December 1985. That decision was based on market the products of their own members a finding that the fish put on the market by which have not reached the price indicated, those organizations during the period in and at the same time receive financial question, except in the case of the fish compensation (imputed finally to the withdrawn for which compensation was Community budget) in respect of quantities claimed, significantly failed to observe the withdrawn (Articles 9, 12 and 13 of the marketing standards laid down by the basic regulation). Community legislation.
As is apparent from the 15th recital in the preamble to the basic regulation, the The High Court found in favour of the two provision of financial compensation is producers' organizations but the IBAP intended to encourage fishermen to join the appealed against that judgment. producers' organizations.
6. Finally, Article 13(3) of the basic regu Considering that the essential issue in the lation provides for financial compensation proceedings related to the extent to which to be reduced in proportion to the volume the Community provisions on quality of withdrawals, thereby encouraging control and those on compensation were fishermen to adjust their deliveries to interlinked, the Court of Appeal, by market requirements (17th recital). judgment of 7 June 1988, stayed the proceedings and referred the questions to the Court which form the subject-matter of these proceedings. 7. The summary account given above, although necessarily brief and selective, seems to me to bring out with sufficient clarity the essence and purpose of the Community scheme, that is to say the 9. In its first question, the Court of Appeal achievement of market stability, brought asks whether the provisions of the EEC about principally by means of producers' Treaty, the basic regulation, Council Regu organizations. lation No 2202/82 and Commission Regu lation No 3137/82 are to be interpreted as requiring a Member State to pay to a producers' organization financial compen 8. I therefore now move on to summarize sation in respect of withdrawals of fish the facts underlying the dispute in the main which have been graded and marketed in proceedings. accordance with Council Regulation (EEC)
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No 103/76, 4if that producers' organization producers' organizations in support of a has failed to a significant extent to comply construction of the legislation in question with the Community marketing standards which would allow the financial compen laid down by the latter regulation in respect sation claimed to be granted to them, of other fish of the withdrawn species put appear to me not at all convincing. up for sale but not withdrawn during the same period.
The organizations in question are main taining in effect that the payment of financial compensation for fish withdrawn from the market is subject only to the 10. I would say straight away that, even on conditions expressly laid down in Article the level of strict logic, it seems at the very 13(1) of the basic regulation and least strange for someone, on the one hand, reproduced in Article 3 of Council Regu to alter the market mechanisms by lation No 2202/82, and those conditions are marketing a product which does not comply said to have been complied with in this case. with the quality standards, thereby increasing supplies and depressing prices, and, on the other hand, to claim compen sation for that portion of production They add that, were their right to compen complying with Community marketing sation in such circumstances to be denied, standards which it has not been possible to that would constitute the unlawful addition sell at the withdrawal price. of a supplementary condition for receipt of financial compensation, which is not provided for by Community legislation.
Were such a manner of proceeding to be In this respect attention is drawn to the duty tolerated, fishermen would be more and imposed by the basic regulation on the more induced to put up for sale fish of poor Member States to ensure compliance with quality and to withdraw fish complying with the marketing standards and to provide for the quality standards. It would in fact be a specific penalties for non-compliance with specific application of the well-known those standards (Article 4). 'Gresham's law', according to which 'bad money drives out good money', inasmuch as the poor quality fish would tend to push out from the market the better quality fish. It is argued that that provision, in conjunction with the obligation which Article 9 of Commission Regulation (EEC) No 2062/80 5lays upon Member States to withdraw recognition from producers' organizations which fail to observe 11. Coming now to the strictly legal aspects Community standards of marketing, shows of the interpretation of the provisions at that the legislature has laid down specific issue, I must straight away point out that penalties for such infringements, which is all the arguments put forward by the the more reason for precluding the
4 — OJ 1976 L 20, p. 29. 5 — OJ 1980 L 200, p. 82.
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application of a penalty which is not specifi However, an increase in supplies stemming cally provided for, such as the withholding from the placing on the market of poor of financial compensation. quality products has a negative effect on market prices and thus on the guide price.
12. Although such arguments are not at first sight entirely without foundation, they do not, in my view, do adequate justice to a systematic interpretation of the provisions Not only that, but the withdrawal price relied on. itself which, under the terms of Article 12 of the basic regulation, is determined on the basis of the guide price, will eventually be affected by the same negative consequences Whilst it is true that observance by the and will be fixed at a lower level. producers' organizations of the provisions relating to the marketing of products is not a specific condition, as laid down by Article 13 of the basic regulation, for receiving compensation, it is, however, the case that observance of those standards is a more It is true, as the producers' organizations assert, that the Community legislation general pre-condition which is essential for requires Member States themselves to ensuring the proper functioning of the ensure compliance with the marketing Community scheme as described above in standards for the products in question, but it the context of which the producers' organ is also true that, as explained earlier, the izations play a central role. producers' organizations bear equal respon sibilities in the task of ensuring the observance of such standards, which is in fact their principal raison d'être. 13. A closer analysis of the provisions relating to the common organization of the market in fishery products enables the correctness of this proposition to be demon strated. 14. Secondly, the system of calculating and paying financial compensation presupposes that all the fish placed on the market and In the first place, the marketing of products not withdrawn have been correctly graded. which do not comply with the quality standards alters the whole system of Community prices.
Article 13(3) of the basic regulation in fact As provided for in Article 10(2) of the basic determines the amount of compensation by regulation, the guide price is in fact based referring to the fish withdrawn as a on the average of prices recorded on percentage of the annual quantities of the representative wholesale markets or in product concerned which are put up for sale representative ports during the last three in accordance with Community marketing fishing years. standards.
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Nor does it seem to me to be possible to the quantities withdrawn from the market, accept the argument, put forward by the the monthly quantities put up for sale producers' organizations, to the effect that, during the fishing year, clearly proceed on in order to ensure compliance with the the assumption that the quantities marketed operative part of the provision in question, are in compliance with the rules laying it is sufficient to calculate financial compen down the quality requirements for the sation by reference to the total quantities of products in question. fish of a given species put up for sale, but reduced in such a way as to reflect the quantity of fish of that species put up for sale in breach of the Community marketing standards. 16. As regards finally the existence of specific penalties for breach of the obli gation to observe the marketing standards and, in particular, the provision for with Leaving aside the problem relating to the drawal of recognition from the association burden of proof, I consider that the solution which is liable for that offence, it does not proposed, although it may appear attractive seem to me, in the light of the consider at first sight, is not such as to assure the ations set out above, that that can entail an proper functioning of the system and, obligation on the national authorities to therefore, does not guarantee that the grant financial compensation even where amount of the compensation is that which there has been a significant failure to would in fact have been payable if the comply with the standards in question. Community system had been fully complied with.
It should, however, be observed that with Suffice it to observe in this connection that drawal of recognition represents an extreme the placing of a greater quantity of fish on penalty which testifies once again to the the market depresses the level of prices and importance attached by the legislature to consequently causes an increase in the observance of those standards and to the volume of fish withdrawn. role which producers' organizations are called upon to play in this context. With drawal of recognition is intended in practice to exclude a body which has proved to be In other words, the failure to comply with without utility, if not harmful, since it has the marketing standards, thereby altering failed in the performance of those duties of the balance of the market, makes it supervision for which it was specifically set impossible to calculate correctly the amount up. of financial compensation to be paid to the producers' organizations.
17. To that it may be added that, to allow 15. It should also be borne in mind that financial compensation to be paid to a other provisions contained in the legislation producers' organization which, having in issue, such as for example Article 6 of failed significantly to observe Community Commission Regulation No 3137/82, which marketing standards, has conducted itself in provides that producers' organizations are a manner which is incompatible with the to keep a register showing, in addition to objectives pursued by the Community
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scheme would be to introduce a further not withdrawn which has not been properly element disruptive of the market in fishery graded. products, inasmuch as it would penalize other organizations which have borne the costs necessary for ensuring compliance with the marketing standards on the part of 19. Under the provision to which the their own members. national court makes reference, where a producers' organization or one of its members has committed an infringement of limited importance of the rules for financial compensation, and that organization can prove to the satisfaction of the Member State concerned that the infringement was
18. The considerations set out in relation to committed without intent to defraud or in the first question make it unnecessary for the absence of gross negligence, the me to examine the second and third Member State is to withhold an amount questions raised by the national court. I 6 equal to 10% of the Community withdrawal turn therefore to a consideration of the price applicable to the quantities in question fourth and fifth questions in which the which have been withdrawn and which did Court is asked whether, and to what extent, not receive a carry-over premium. the failure by a producers' organization properly to grade fish put up for sale, but not withdrawn, in breach of Community marketing standards can be said to be 'an The literal wording of the provision and the infringement of limited importance of the wording of the penultimate recital in the rules for financial compensation', within the preamble to the instrument in question, meaning of Article 13 of Commission Regu according to which in the case of an lation No 3137/82; and, if that article may infraction of limited importance of the be applied to a failure properly to grade fish financial rules of compensation, taking into put up for sale, whether the Member State, account the innovative nature of the said before refusing to pay any compensation, rules, the minimal financial advantage must: (a) first consider whether the resulting from this infraction should not be infringement is of limited importance, and sanctioned by the total suppression of the in so doing, (b) consider the quantity of fish right to financial compensation but only by of the relevant species put up for sale but a standard reduction thereof, lead me to conclude, like the Commission, that a 6 -— The questions raised were the following: failure to comply with the marketing '(2) If the answer to Question I is that financial compen- sation must be paid to a producers' organization, is standards, because it entails consequences that compensation to be calculated: for financial compensation, is covered by (a) by reference to the toul quantity of fish of the relevant species put up for sale even if some of the expression 'an infringement.
. . of the that quantity of fish of the relevant species was rules for financial compensation', to which put up for sale in breach of Community marketing standards, or the provision refers. (b) by reference to the total quantity of fish of the relevant species put up for sale reduced pro tanto to reflect the quantity of fish of that species put up for sale in breach of Community marketing standards (3) If the answer to Question 2 is that compensation is to be calculated by reference to the quantity of fish as
20. Having said that, I would add reduced to reflect the quantity put up for sale in straightaway that the very formulation of breach of Community marketing standards, is the burden upon the Member State to establish the extent that question puzzles me somewhat, as the of the producers' organization's failure or upon the Court of Appeal itself stated that the organ producers' organization to show the extent of ITS compliance?' izations in question had failed to a
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significant extent to comply with the not seem to me that it falls to the national Community marketing standards, and I find authorities to carry out that task. it hard to understand how an infringement may at the same time be significant and of limited importance. Article 13 of Commission Regulation No 3137/82 is in fact a derogation from the more general principle according to which an infringement of the rules on financial In any event I consider that, in the case of a compensation entails the loss of the benefit failure to comply with quality standards, an in question. infringement of limited importance must be understood as a failure in respect of an extremely limited quantity of products, which is therefore not such as to constitute Whenever the competent authorities have, a disruptive factor for the market. accordingly, ascertained that a producers' organization has failed to apply the Community marketing standards, it is for the organization itself to raise an objection 21. As regards finally the determination of and to demonstrate the limited importance the importance of the infringement, it does of the infringement committed.
22. In the light of the considerations developed above, I accordingly propose that the Court should give the following replies to the questions raised by the Court of Appeal:
'(1) The provisions of Council Regulation (EEC) No 3796/81, Council Regu lation (EEC) No 2202/82 and Commission Regulation (EEC) No 3137/82 must be interpreted as meaning that they preclude a Member State from paying to a producers' organization financial compensation in respect of fish withdrawn at the Community withdrawal price, such fish having been properly graded and marketed in accordance with Council Regulation (EEC) No 103/76, where that producers' organization has failed to a significant extent to comply with the Community marketing standards laid down by that regulation in respect of other fish of the withdrawn species put up for sale but not withdrawn during the same period.
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(2) The failure by a producers' organization properly to grade fish put up for sale but not withdrawn in breach of Community marketing standards may be regarded as "an infringement of limited importance of the rules for financial compensation", within the meaning of Article 13 of Commission Regulation No 3137/82, only when that infringement relates to an extremely limited quantity of products which is not such as to constitute a disruptive factor for the market. The failure, to a significant extent, to comply with the Community marketing standards may in no event constitute a limited infringement within the meaning of the abovementioned provision.
(3) The burden of proof that the infringement committed is "of limited importance", within the meaning of Article 13 of Commission Regulation No 3137/82, must be borne by the producers' organizations.'
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