C-161/90

— fine olive oil; 1. The questions which have been referred to the Court for a preliminary ruling by the Pretore di Lecce are essentially concerned with the procedures for the examination of — ordinary olive oil; olive oil within the framework of the common organization of the market in oils and fats, of which that product forms part. Let me begin with a few observations — lampante olive oil. regarding the rules applicable to that organ- ization. The characteristics to be taken into account relate to the acidity expressed as oleic acid and the flavour. The flavour must be abso- 2. The pricing system is based, first, on a lutely perfect for extra and fine olive oil and scheme of production and consumption aid good for ordinary olive oil. and, secondly, on an intervention mechanism according to which the inter- vention agencies are required to buy olive oil offered during the last four months of 4. According to the third and fourth each marketing year, that is from July subparagraphs of Article 3(2) of Regulation to October. Those purchases, financed by (EEC) No 3472/85, 2 which was applicable the EAGGF Guarantee Section, are carried at the material time: out at the intervention price, which varies, in particular, according to the various descriptions and qualities of the oil. 'With regard to edible virgin olive oil, the examination of the organoleptic charac- teristics [shall be] carried out according to a 3. In that respect, according to the Annex Community procedure. to the basic regulation, ' virgin olive oil is classified under four different descriptions and by reference to two characteristics. The descriptions are as follows: Until such a procedure is laid down, the Member States shall carry out the above * Original language: French. examination in accordance with national 1 — Regulation No 136/66/EEC of the Council of 22 procedures.' September 1966 on the common organization of the market in oils and fats (OJ, English Special Edition 1965-66, p. 231), last amended by Commission Regulation 2 — Commission Regulation (EEC) N o 3472/85 of 10· (EEC) N o 1858/88 of 30 June 1988 (OJ 1988 L 166, December 1985 on the buying-in and storage of olive oil p. 10). by intervention agencies (OJ 1985 L 333, p. 5).

5. Let me point out that the Community 7. The Italian intervention agency, AIMA, procedure for the examination of the orga- regulates intervention procedures and, for noleptic characteristics has not yet been laid the 1987/88 marketing year, it laid down down. Furthermore, according to Articles descriptions and characteristics for olive oil 5(3) and 9(2) of that regulation, the inter- with express reference to Regulation vention agencies may entrust other bodies, N o 136/66. 5 known as storage agencies, with the inter- vention transactions. At the material time AIPO (Associazione Italiana Produttori Olivicoli) was one of the storage agencies in Italy. 8. In Italy, according to the Commission's observations, the storage agencies are responsible for checking whether the oil offered for intervention exhibits the charac- teristics required by the various descriptions, and are free to choose the laboratories that are to be entrusted with the analyses (except 6. According to the Commission, before the as regards the classification of extra virgin entry into force of the Community oil, in respect of which it is compulsory for provisions, the classification of olive oil and the analyses to be carried out by the Istituto the methods of analysis in Italy were Sperimentale per l'Elaiotecnica (Exper- governed by Law No 1407 of imental Institute for Oil Technology) in 13 November I960 3 and a Ministerial Pescara. Decree of 26 November 1963. 4 That Law contained a classification other than that adopted by Regulation No 136/66, not giving the same descriptions as that regu- lation and defining the chemical and or- 9. During the 1987/88 marketing year, ganoleptic characteristics of the product AIMA informed the Commission of its according to criteria differing from those doubts regarding the figures for olive oil laid down by the Community rules. In that was the subject of intervention during particular, whereas the Community rules the current year, stating that it intended to require a 'perfect' flavour for (fine) virgin carry out inspections and checks at the intervention centres and seeking the olive oil, Article 1 of Law No 1407/60 Commission's participation. merely requires the oil 'not to have an unpleasant smell, such as would indicate rancidity, putrefaction, smoke, must, vermin, and the like'. Furthermore, the decree lays down rules for the carrying-out 10. The Commission stated that it intended of chemical analyses. As far as organoleptic to take part in the administrative inquiry examinations are concerned, the initiated by AIMA. Commission pointed out in its written observations that there was no provision for these in the Italian rules; it stated at the hearing, however, that 'something' existed in that connection, referring to a decree of 11. The suspicions of irregularity arose in 1959. particular from the fact that the greater part of the olive oil offered for intervention was 3 — GURI (Official Journal of the Italian Republic) No 295, 2.12.1960, p. 4411. 5 — Decision of 18 June 1988, GURI (Official Journal of the 4 — GURI (Official Journal of the Italian Republic) N o 320, Italian Republic) N o 146, 23.6.1988, General Series, 10.12.1963, p. 5850. p. 18.

of (fine) virgin quality and market prices 14. Furthermore, the inquiry revealed were between 7°/o and 2 2 % higher than the serious irregularities in the transactions intervention price, which, moreover, was carried out by the storage agencies and the payable only after four months. That warehouse proprietors. situation was even more remarkable because Italy had to import olive oil in order to cover its requirements for that product. 15. By letters of 20 February and 8 May 1989 signed by the Commission's Director General for Agriculture, AIMA was informed of the results of the analyses carried out by the Spanish laboratory. According to the second of those letters, the 12. As a result of tests carried out by two expenditure relating to the intervention bodies governed by public law, the Istituto transactions carried out in Italy in 1988 Sperimentale per l'Elaiotecnica, Pescara, could not be charged to the EAGGF. On and the laboratory of the Spanish Ministry 2 November 1989 AIMA informed the of Agriculture, it was found that almost all Commission that it agreed that the expen- the olive oil which had been offered for diture relating to olive oil for the 1987/88 intervention did not come within the year should not be charged to the EAGGF category in which it had originally been 'inasmuch as the results of the analyses classified. For the organoleptic examination, carried out by the Community laboratories those two laboratories apply the method had to be regarded as conclusive'. recommended by the International Olive Oil Council. I would point out that the analysis was carried out on samples from, in particular, the oil bought in by AIPO and stored in private warehouses used by that 16. By a decision of 30 April 1990 agency. Further samples were then taken concerning advance payments from the and subjected to two analyses, one carried EAGGF Guarantee Section for March out by the private laboratory of 1990, 6 the Commission disallowed the Dr Rampino, President of the chemists' expenditure incurred by Italy on inter- association of Lecce and Brindisi, and the vention for olive oil during the period from other by the Spanish laboratory. 1 October 1988 to 30 September 1989. The expenditure relating to the period from 1 July to 30 September 1988 was deducted within the framework of the decision of 30 November 1990 on the clearance of the accounts of the EAGGF for 1988. 7

18. The plaintiffs in the main proceedings, 22. Let me state, first of all, that it is Mrs Petruzzi and Mrs Longo, are producers apparent from the very wording of the regu- who had their oil collected by a producers' lation that until a Community procedure has association (ASO) in order to sell it to the been laid down, which is not yet the case, intervention agency. The association the examination is to be carried out in delivered the oil to the privately-owned accordance with national procedures. stores used by AIPO. Mrs Petruzzi and Mrs Longo are asking the national court to declare that any claim for recovery of the amounts paid by way of intervention is 'unfounded and unlawful'. 23. It is equally clear, however, that national procedures, whatever their methods may be, must have as their exclusive aim to verify that the criteria for classifying olive oil laid down by the Community rules have 19. Essentially, the argument developed been applied. In other words, the reference before the Pretore di Lecce is that in the to national procedures cannot mean that the absence of a Community procedure for the characteristics required by Community law examination of the organoleptic charac- are to be ignored and the oil classified in a teristics of virgin olive oil, only the manner contrary to Community law. procedures laid down by national law govern the methods of analysis of the oil offered for intervention. As a result, the analyses on which the Commission has relied are incompatible with Article 3(2) of 24. Let me point out in that respect that if Regulation No 3472/85 in that they employ national law uses criteria which are different methods which are not provided for in the from those of the Community rules, national rules. national examination procedures must be aimed exclusively at ensuring compliance with the characteristics and descriptions laid down by Regulation No 136/66, and that 20. The Pretore di Lecce accordingly conflicting national provisions must not be referred to the Court for a preliminary applied. ruling three questions which I shall now proceed to examine.

26. Finally, I would emphasize, although I shall return to this point in connection with the second question, that Article 3(2) of Regulation N o 3472/85 deals with the examination of the oil at the time when it is 'According to Article 8(1) of Regulation offered for intervention. (EEC) N o 729/70 of the Council of 21 April 1 9 7 0 . . . it is primarily for the Member States to satisfy themselves that transactions financed by the EAGGF are 27. The second question is essentially actually carried out and are executed concerned with whether the results of the correctly'. 8 tests and analyses carried out according to the national procedure at the time when the oil is offered for intervention and during its storage at the intervention centre may be refuted by the results of tests carried out in accordance with procedures and methods 30. In compliance with that obligation, which differ from national procedures. therefore, the Italian Republic was entitled to check the result of the organoleptic tests on which the classification of the olive oil was based. In participating in those checks, 28. In my view, that question has two the Commission was clearly entitled to aspects : make use of the power conferred on it by Article 9 of Regulation No 7 2 9 / 7 0 9 to verify that intervention measures are executed correctly. — first, is it possible subsequently to check the initial classification of the oil which was determined at the time when it was offered for intervention?

31. It thus appears to be indisputable that Italy and the Commission were entitled to — secondly, on the assumption that such a check is possible, can it be based on 8 — Case 214/86 Cretan Commiuion [1989] ECR 369. procedures which differ from national 9 — Council Regulation (EEC) No 729/70 of 21 April 1970 on ihe financing of the common agricultural policy (OJ, procedures? English Special Edition 1970 (I), p. 218).

34. Quite clearly, however, the existence or otherwise of a national procedure, and 39. It should be pointed out in the latter whether it is the same as the procedure case that if the organoleptic examination actually applied at the time when the check criteria laid down by the national rules is carried out, are issues of fact which it is differed from those laid down by the not in any way for the Court to determine. Community rules, it would follow that 'a single method of examination and analysis' — in the words used by the 35. Hence it is appropriate to give an plaintiffs in the main proceedings — would answer to the national court that accords mean that analyses which were faulty in any with the general terms used by it which case would have to be repeated, whereas a seem to presuppose that there is a difference check is in fact designed to ensure that between the national procedure for the intervention transactions are executed examination of olive oil and the verification correctly. procedure.

36. In that regard, Regulation N o 3472/85 40. T o take a specific example: if, admittedly provides that the examination of according to the national method of the organoleptic characteristics is to be analysis, oil considered 'good' is to be carried out in accordance with a national classified in the category of 'fine' virgin procedure until a Community procedure has olive oil, a criterion contrary to the been laid down. Community classification since, as I have already said, only olive oil of perfect flavour can come within that category, the mere 37. However, that regulation expressly repetition of analyses carried out according governs only the tests carried out at the time to such an inaccurate criterion is obviously when the oil is offered for intervention. It incapable of ensuring that intervention does not, on the other hand, contain any transactions are executed correctly.

46. After examining the documents 43. T h e third and final question referred produced by the Commission, which are for a preliminary ruling by the Pretore di annexed to its observations, and analysing Lecce remains to be examined, namely the legal situation to which they give rise, I whether 'the decision of the Commission of have come to the following categorical the European Communities and any other conclusion: there was no decision of the decision of that institution is valid if it is to Commission, that is to say no act giving rise the effect that the expenditure incurred in to permanent legal effects, in existence at the acquisition and management of the the time of the order for reference or, a batches of oil referred to in AIMA's letters fortiori, at the time when AIMA's letters of 29 March 1989 and 3 August 1989 seeking repayment of the sums at issue were (Nos 4387 and 1120, respectively, in the sent. plaintiff's bundle of documents) does not qualify for intervention, with an order, if necessary, for the production of the Commission's decision and any other 47. N o doubt the two letters mentioned decision of that institution'. above, which had been addressed to Italy by the Director General for Agriculture on 20 February 1989 and 8 May 1989, stated that the Commission's officers were unable to allow the expenditure on intervention 44. According to the grounds of the order and requested AIMA to rectify the net loss for reference, the national court considered accounts by excluding all the expenditure that 'for the purposes of any declaration incurred as from the date on which the olive that the claims for repayment are oil was bought in. The first question which unfounded and u n l a w f u l . . . it is not arises is whether any power had been sufficient to ascertain the precise interpret- delegated to the signatory of those letters, ation of the aforementioned provision of which expressly mention the position Regulation No 3472/85, but it is also adopted by the Commission's officers, so necessary to declare unlawful the order of that the Commission could be regarded as

52. That, I believe, is the inevitable conse- quence of the structural cohesion of the review of legality in Community disputes. It serves no purpose, in my view, to argue that 50. There is thus, to my mind, no doubt a refusal to examine the validity of that if the checks which revealed those preparatory acts would be tantamount to irregularities were to be regarded as disregarding the powers of a national court contrary to the Community rules, that inter- which is seeking a preliminary ruling. It is pretation would be sufficient to render by no means a matter of assessing the AIMA's claims for repayment unlawful. relevance of the question submitted by the national court, but of determining whether the act in question is one of those whose validity the Court may examine pursuant to Article 177. From that point of view, 'the concept of "act" in Article 177 must be the same as that provided for in Article 173'. 1 3

1) — Joli«: Le droit institutionnel des Communautés européennes. 51. Hence it is clear that the letters of 1989 Le contentieux, 1981, Faculté de Liège, p. 196; see also referred to above, on the assumption that Vandersanden, Barav: Contentieux communautaire, Bruylant, Brussels, 1977, p. 30«; Isaac: Droit commu- they are acts of the Commission, constitute nautaire général, Mason, Paris, Third Edition, p. 271; merely acts preparatory to decisions contra, Waelbroeck, Louis, Vignes, Dewost: 'Le droit de la Communauté économique européenne', vol. 10, La Cour de adopted at a later date. In my view, only Justice, part 1, p. 190. 12 — Vandersanden, Barav, ibid. 10 — CaseC-55/91. 13 — Vandersanden, Barav, ibid.

57. Accordingly, I suggest that the Court should rule as follows:

— under Community law in its present state, Article 3(2) of Commission Regu- lation (EEC) N o 3472/85 of 10 December 1985 must be interpreted as meaning that the organoleptic examination of virgin olive oil at the time when it is bought in by the intervention agency is to be carried out according to national procedures which must be intended solely to establish the charac- teristics laid down by the Community provisions for determining the purchase price in accordance with the designations provided for by those provisions;

— the Member States and the Commission are entitled to check the organoleptic characteristics of olive oil bought in by the intervention agency; that check may be carried out in accordance with examination procedures conducted under strict conditions of reliability which may, where necessary, involve the use of methods which differ from those laid down by the national procedure.

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