C-347/88

OPINION OF MR TESAURO — CASE C-347/88

OPINION OF MR ADVOCATE GENERAL TESAURO delivered on 23 May 1990 *

Mr President, reasoned opinion that it intended to waive Members of the Court, the infringement procedure in relation to some of the complaints set out in the letter of formal notice, including, in particular, the complaint relating to the government's power, provided for by Article 4(3) of Law 1. In these proceedings the Commission No 1571/85, to revoke in exceptional cases challenges the compatibility with the liberalization achieved in the sector by Community law of various provisions of the restoring the exclusive marketing rights Greek legislation on the importation, which had been abolished. exportation, and distribution of crude oil Instead — according to the Greek and its by-products. That system, as orig­ Government — the Commission seems in its inally established by Law No 1571/85 of 21 application to treat that possibility of revo­ October 1985 and as subsequently amended cation as an independent infringement of and implemented, is described in detail in Community law. the Report for the Hearing, to which reference is made also as regards the various questions of admissibility and substance raised by this application.

a given transport capability) were inad­ be regarded as being in conformity with missible, inasmuch as they had not been Community law only once it has been reor­ duly raised in the pre-litigation procedure. ganized 'in such a way that the costs borne by imported products are taken into account in the calculation of the maximum prices laid down'. For the rest, the reasoned opinion is silent. It must be pointed out, however, that contrary to the defendant's assertion those complaints are set out in detail both in the letter of formal notice — fourth indent, under (c) — and in the reasoned In the application the Commission sets out opinion — paragraph 9 — and are promptly the wording of Article 11(1) of Law No contested in the defence put forward by the 1571/85, as subsequently amended by Law Greek Government in the pre-litigation No 1769/88, confirms that together with procedure. In my view, therefore, the the administrative measures for its im­ objection is unfounded. plementation that provision is contrary to Article 30 and formulates the following three complaints:

5. On the other hand, the other issues of admissibility raised in these proceedings '(a) they [the prices laid down] do not take which relate to the Commission's complaints sufficient account of the specific costs concerning the Greek system of regulating associated with imported products (for the prices of petroleum products would instance, transport costs) ; appear to be more complex, as I said earlier.

The Commission's reply is that in the application it referred to the wording of the On the other hand, it should be said that in letter of formal notice and the reasoned the course of the procedure the Commission opinion, whose content should therefore be reworded its complaint specifically on that considered an integral part of the act insti­ point, stating that it did not intend to tuting the proceedings. challenge the fact that the Member States may empower the authorities to lay down rules for the application of a system of prices in general but rather the detailed rules according to which that system was established and organized. In other words 8. In my view, however, it is apparent from the point at issue is not so much the power Article 19 of the Protocol on the Statute of to regulate prices as the content of the rules the Court of Justice and from Article 38(1) adopted in the exercise of that power. If of the Court's Rules of Procedure that an that is true, it follows that the complaint application to the Court must contain under (c) is no longer to be regarded as a certain information, including in particular distinct and independent charge; instead, it the subject-matter of the dispute, the should be regarded as subsumed in the grounds on which the application is based other two complaints which are set out in and the form of order sought by the the application under (a) and (b) and which applicant. It follows that under the Article relate, albeit in extremely vague terms, to 169 procedure the Commission in any event the content of the rules in question. I am bears the onus of specifying in the act insti­ therefore inclined to conclude that the tuting the proceedings (as in the pre-liti- Court does not have to adjudicate speci­ gation procedure) both the substantive fically on that point. content of the complaints against the defendant State and, at least in summary form, the legal and factual grounds on which those complaints are based. Such requirements — which, moreover, are not particularly burdensome to draft — appear 7. Secondly, Greece maintains that the to be essential not only for the proper complaints set out in the reasoned opinion delimitation of the subject-matter of the but not in the application should no longer dispute before the court hearing the be regarded as forming part of the subject- proceedings, but also inasmuch as they matter of the dispute. In practice, the make it possible to ascertain, without doubt problem arises in relation to two complaints or ambiguity, that the Commission has not formulated in the reasoned opinion, as in waived any of the complaints referred to in the letter of formal notice which preceded the pre-litigation procedure.

In my view, therefore, as a matter of moreover, by the fact that in the written principle and in accordance with a criterion procedure and at the hearing the which strikes me as being far from alien to Commission raised no further objection to the procedural traditions of the Member the fact that the prices and conversion rates States, it is not permissible in the act insti relating thereto were fixed by the tuting the proceedings to deduce the government at excessively long intervals. In complaints and grounds by reference to my view, therefore, the complaints set out in other measures. It is possible, on the other the reasoned opinion in relation to those hand, although this is a different matter and two points must be regarded as being is clearly in line with the requirements set unconnected with the subject-matter of out above, to refer in proceedings under these proceedings. Article 169 to the arguments and circum stances set out in the letter of formal notice and in the reasoned opinion, if the intention is simply to clarify the scope of the complaints and the grounds which are in any event set forth in the application.

proceedings under Article 169 by referring they concern provisions (Article 2(5) of purely and simply to the acts of the Presidential Decree No 27 of 17 January pre-litigation procedure, nevertheless in this 1989) that were adopted long after the case the reference made by the Commission proceedings were instituted. in its application cannot in any event refer to the complaints set out in the reasoned opinion concerning the three-month time-limit laid down for the fixing of prices and the drachma/dollar conversion rate.

However, until fically challenging or commenting on that the Commission submitted its reply, that point in its application, the Commission provision did not attract the slightest hint of considered that the aforesaid amendment criticism or arouse any misgivings on its brought the Greek legislation back into line part. It is also true that Presidential Decree with the requirements of Community law No 27/89, adopted after the pre-litigation and that the infringement concerning those procedure and even after the com specific matters has consequently been mencement of the proceedings, which lays brought to an end. That is also borne out, down detailed rules for calculating the items

involved in fixing the basic price of 607), it is equally true that the Court has petroleum products together with a series of frequently reaffirmed that in order to other factors (international prices of prevent the essential purpose of the products, transport costs from ports situated pre-litigation procedure from being frus­ in Italy to Greek ports, losses incurred trated, the subject-matter of the dispute during such transportation, transport must be clearly defined in the letter giving insurance premiums), also provided for and formal notice (see, amongst the many regulated the determination of the 'market judgments on this point, that in Case trend' and 'storage cost' variables. 211/81 Commission v Denmark [1982] ECR 4547). It follows, therefore, that the scope of the complaints set out in the letter of formal notice cannot be amplified in the reasoned opinion (see the judgment in Case In its reply, as I have pointed out, the 51/83 Commission v Italy [1984] ECR Commission relied on the provisions of that 2793), in particular, the subject-matter of decree to challenge the introduction of or in the judicial proceedings must be firmly any event the detailed rules for calculating established in the pre-litigation procedure those two variables notwithstanding the fact and, consequently, 'the Commission's that in the preceding stages no reference reasoned opinion and its application must be had been made thereto and that conse­ founded on the same grounds and quently Greece did not have an opportunity, submissions' (see the judgment in Case before submitting its rejoinder, of expressing 166/82 Commission v Italy [1984] ECR its views on those matters. 459), and finally, in conformity with those principles, the acts in the pre-litigation procedure must satisfy, albeit in varying degrees, the essential requirements of precision. Those requirements are less strict 11. However, the Commission objects that in the case of the letter giving formal notice its intention in the pre-litigation procedure which contains only 'an initial brief and in the application was to challenge the summary of the complaints' which may be system of maximum prices in general on the set out in detail (but, as we have seen, may ground that it may adversely affect imports. not be amplified) in the reasoned opinion, The allegations put forward in the reply and much stricter in the case of the should therefore be viewed merely as a reasoned opinion which must, as the Court more detailed statement of that broader has frequently reaffirmed, 'contain a complaint and do not constitute new and coherent and detailed statement of the independent allegations. reasons' (see the judgment in Case 274/83 Commission v Italy [1985] ECR 1077).

proceedings already instituted before the conduct but the adoption by the defendant Court fresh complaints resulting from the State of measures substantively different enactment of new national provisions. from those for which it was reproached in the reasoned opinion and even in the application (see the judgment in Case 7/69 Commission v Italy [1970] ECR 111). Nor do I consider that those new complaints are concerned with facts of the same kind as those which are already chal lenged in the reasoned opinion and which

delays in the fulfilment of administrative reasoning, it would be easy to avoid obligations) also continues to be applied compliance with procedural principles, subsequently. Only in those circumstances is inasmuch as it would be sufficient for the it possible to take the view that the subject- Commission to formulate complaints in the matter of the dispute has remained substan pre-litigation procedure in extremely vague tially unchanged and that, in particular, the and general terms without specifying the rights of the defence have not been real subject-matter of its complaints until infringed.

was delivered. Thus, for instance, in a Finally, the conclusion must be drawn, it situation involving repeated delays in the seems to me, that the complaints in the payment of certain agricultural premiums reply concerning the 'storage cost' and the over successive wine-growing years, the 'market trend' were introduced in the Court held that the Member State's failure proceedings out of time and must therefore to fulfil its obligations did not relate 'to a be declared inadmissible. single act whose effects extend over a long period of time but to delays in the payment of the premiums due in each wine-growing year: those delays involve a separate breach of its obligations in each year' (see the 14. Secondly, that brings me to another Court's judgment in Case 309/84 consideration, namely whether or not the Commission v Italy [1986] ECR 599).

I - 4769

OPINION OF MR TESAURO —CASE C-347/88

I - 4770

COMMISSION v GREECE

the Treaty, inasmuch as they may constitute that the monopoly was to be adjusted as a barrier to trade and unlawful discrimi­ from 1 January 1986. nation between Community traders.

For the assessment of this complaint it is It is undisputed that when these proceedings necessary to distinguish between import were instituted, Greece had only partially rights for finished and semi-finished adjusted the exclusive import rights for products, on the one hand, and import petroleum products, inasmuch as 40 % of rights for crude oil, on the other. imports were still subject to the State monopoly.

I-4771

OPINION OF MR TESAURO —CASE C-347/88

I feel obliged to point out that, in my view, there should be no In my view, therefore, the complaint that procedural obstacles to an assessment of the rights in question constitute an that question by the Court. Although it is infringement of Article 37 is well founded, necessary to take into consideration legis and there is no need to consider whether lative amendments made after the expiry of those rights also constitute an infringement the time-limit set in the reasoned opinion, of Article 30. that is incapable of altering either the nature or the subject-matter of the Court's appraisal.

products. Greece points out, however, that by the reasoned opinion, it is undisputed in the light of Article 7(2) those imports that the Commission could ask the Court to must be effected 'in accordance with Article declare that those measures are not such as 1' of the same law. Since, as has been to terminate the infringement, in a more

In my view, therefore, the Commission's argument that, notwithstanding the amendment of Article 1 of Law No 1571/85, Greece has maintained the State monopoly over imports of crude oil is not well founded. 22. Having said that, and coming to the crux of the matter, I must point out first of all that Law No 1769/88 undoubtedly repealed the fundamental provision (Article 1 of Law No 1571/85) establishing a State monopoly over imports of crude oil. As for Article 7 of that law, paragraph 1 thereof lays down in general terms that imports of 23. However, even on the assumption that both crude oil and processed products 'are an exclusive import right for crude oil can in the general interest of the national be established, I do not believe in any event economy and are aimed in particular at that such a right can of itself, in the absence ensuring regular and stable supplies for the of other factors, be regarded as contrary to Greek market'. It is true, therefore, that Community law. Greece has emphasized, Article 7(1) also refers to crude oil, albeit in once again without being contradicted on the context of a provision whose signif­ this point by the Commission, that domestic icance lies in stating that, in general, oil production of crude oil is negligible and will transactions with foreign countries in any event cease by 1990. It follows that constitute an activity which is in the public Greece is totally dependent on imports for interest. Article 7(2), on the other hand, is its supply of oil. Those facts are essentially more specific in scope. It provides that the different from those which — as stated imports referred to in paragraph 1 are to be earlier — constituted the background to the effected exclusively by the State, but 'in judgment in Manghera since in this case conformity with Article 1' of the same law. there is in fact no domestic production of If the legislature amended Article 1 by abol­ crude oil which the holder of exclusive ishing the monopoly over imports of crude import rights would have an interest in oil which that article had provided for promoting inevitably to the detriment of the initially, it seems to me that the usual rules imported product. In those circumstances I

24. That is not all. In this case, whether or not there is a statutory monopoly over In the light of those considerations, I imports of crude oil would appear to have consider that the complaint concerning the no effect whatever on the flow of intra- exclusive import rights for crude oil must be Community trade since, in any event, the rejected. State has a legitimate monopoly over refining and therefore exercises full control over demand for imported crude oil. As was shown at the hearing, whether or not third parties enjoy in abstract terms the right to import crude oil is, in the specific circum­ stances of the case before the Court and in (b) The exclusive marketing rights for the absence of factual evidence to the petroleum products contrary, a matter devoid of any real economic consequences. In any event, public refineries (and private refineries operating under a licence granted by the State) will take steps themselves to secure their own supplies of raw materials, and 25. Pursuant to Article 4 of Law No consequently any other Greek importers 1571/88, Greece adjusted the monopoly seem destined not to find any genuine over the marketing of petroleum products to outlets amongst refiners on the domestic the extent that, at the time when the market. That de facto control over imports proceedings were instituted, private distri­ of crude oil, which exists independently of bution companies were under an obligation the legislative provision complained of to obtain 40% of their supplies from public inasmuch as it arises from the State refineries, whilst they were free to choose monopoly over refining, has not even been their own supplier as regards the touched upon by the Commission, nor remaining 60 %. would it appear to be open to question given that it constitutes in fact a direct consequence, almost a corollary, of the monopoly over refining whose legality has frequently been reaffirmed by the Commission. Therefore, even on the In that regard Greece contends that it had assumption that the State enjoys an to delay complete liberalization of trade in exclusive right to import crude oil, it seems petroleum products (which was only to me that in assessing the legality of that achieved as from 1 January 1990) so as to right the Commission overlooked the fact ensure that public refineries had a minimum

In the light of those considerations and in view of the need for a restrictive interpre­ 26. In its defence, however, Greece tation of the exceptions referred to in contended that the barrier to trade was Article 36 — a need promptly reaffirmed in justified by the same requirements of public the Campus Oil judgment as well — I do security as those recognized by the Court in not consider that in this case there were any its noted judgment in Case 72/83 Campus requirements of public security such as to Oil [1984] ECR 2727, a case which also justify, at the time when the proceedings involved an assessment of the compatibility were instituted, the obligation imposed on with the Treaty of legislation requiring distribution companies to obtain 40 % of companies engaged in the distribution of their supplies from public refineries. This petroleum products to obtain a given complaint is therefore well founded and it is percentage of their supplies from a public unnecessary to consider, in general terms, refinery. In particular, according to the whether the exceptions referred to in Article Greek Government, the special right 36 also apply to the national measures and enjoyed by public refineries was necessary practices covered by Article 37. even in this case in order to ensure their survival and therefore to guarantee that, in the event of an energy crisis, the country's national refining capacity would be sufficient to meet its essential oil requirements. (c) The import and export procedures

27. Notwithstanding the awkward nature, 28. The Commission has contested the made abundantly clear by the Court in compatibility with Articles 30, 34 and 37 of Campus Oil, of the issues inherent in secure the Treaty of certain procedures introduced

31. The Commission claims that the following requirements for marketing The wording of the relevant provisions petroleum products, imposed by the legis­ supports the Greek Government's argument lation in question on distribution companies, which, moreover, has not been contradicted are incompatible with Article 30: the by any other information furnished by the submission of annual procurement Commission. programmes for petroleum products, the establishment of a system of annual marketing quotas and the requirement of a minimum transport capability for the 29. That being so, however, it must be products in question. pointed out that in the light of the Court's case-law (see the judgment in Case 68/76 Commission v France [1977] ECR 515), even a mere formality not involving the grant of 32. Whilst denying that the measures in authorization at the discretion of the question constitute an infringement of competent authority constitutes a measure Article 30, Greece does not rely on having equivalent effect on account of the Article 36. delay it involves and the dissuasive effect it has upon trade. 33. With regard to the marketing quotas and the procurement programmes, it is undisputed that these were measures 30. Moreover, and even though in principle designed to share out amongst distribution it cannot be denied that specifically in the companies the percentage of supplies corre­ case of oil transactions certain kinds of sponding to the unadjusted part of the State control more thorough than those required marketing monopoly. Once the illegality of for other products may be essential and that that monopoly is established — it was it may therefore be necessary to seek from abolished, moreover, as from 1 January traders, without either Article 30 or Article 1990 — those requirements imposed on 34 coming into play, more detailed infor­ distribution companies for the exercise of mation than that resulting from normal the right to trade within the State would customs declarations, it must be pointed out seem to be largely divested of their

37. As I pointed out in connection with the question of admissibility, the complaints which the Commission raised only in its reply must, in my view, be regarded as 35. Conversely, the requirement of a given wholly unconnected with the subject-matter transport capability does not in my view of this application. I need not therefore constitute an infringement of that article. examine them in substance. With regard to That requirement applies to the distribution the complaint formulated in the application of domestic and imported products alike. under (c) concerning the system of prices, it Furthermore, no evidence has been adduced should not in any event be treated as a suggesting the existence of a foreseeable distinct allegation. Finally, as for the and plausible connection between that complaints under (a) and (b) in the measure and the trend with regard to intra- application, the only ones whose admissi­ Community trade. Finally, it constitutes a bility may to some extent be open to doubt, provision adopted as part of a set of rules they must be regarded as manifestly governing commercial distribution which unproven precisely on account of their meets a genuine need that is by no means utterly vague and general character.

I - 4777

OPINION OF MR TESAURO — CASE C-347/88

38. In the light of those considerations I suggest that the Court:

(1) declare inadmissible:

(i) the complaint relating to the possibility retained by the Greek Government of revoking the abolition of the exclusive marketing rights for petroleum products;

(4) order the parties, each of whom has been partially unsuccessful in its submissions, to bear their own costs.

I - 4778