C-316/91

PARLIAMENT v COUNCIL

JUDGMENT OF THE COURT 2 March 1994*

In Case C-316/91,

European Parliament, represented initially by Jorge Campinos, jurisconsult, then by José Luis Rufas Quintana, a member of its Legal Service, acting as Agents, assisted by Roland Bieber, Professor of European Law at the University of Lau­ sanne, with an address for service at the Secretariat of the European Parliament, Kirchberg,

applicant,

v

Kingdom of Spain, represented by Alberto Navarro González, Director General for Community Legal and Institutional Coordination, and Rosario Silva de Lapu- erta, State Attorney in the Legal Department for Matters before the Court of Jus­ tice, acting as Agents, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard E. Servais,

intervener,

APPLICATION for the annulment of Financial Regulation 91/491/EEC of 29 July 1991 applicable to development finance cooperation under the Fourth ACP- EEC Convention (Official Journal 1991 L 266, p . 1),

THE COURT,

composed of: O . Due, President, G. F. Mancini and J. C. Moitinho de Almeida (Presidents of Chambers), C. N . Kakouris, R. Joliet, F. A. Schockweiler, G. C. Rodríguez Iglesias, F. Grévisse, M. Zuleeg, P. J. G. Kapteyn (Rapporteur) and J. L. Murray, Judges,

Advocate General: F. G. Jacobs, Registrar: R. Grass,

Judgment

1 By application lodged at the Court Registry on 6 December 1991 the European Parliament brought an action under Article 173 of the EEC Treaty for the annul­ ment of Financial Regulation 91/491/EEC of 29 July 1991 applicable to develop­ ment finance cooperation under the Fourth ACP-EEC Convention (Official Jour­ nal 1991 L 266, p. 1).

2 The Fourth ACP-EEC Convention was signed at Lomé on 15 December 1989 (Official Journal 1991 L 229, p. 3). Financial cooperation is governed by Part Three of the Convention, Title III, Chapter 2. Article 231 refers to the Financial Protocol to the Convention for the overall amount of the financial assistance. That amount was set at ECU 12 000 million. The representatives of the Governments of the Member States of the European Economic Community, meeting within the Coun­ cil, adopted on 16 July 1990 Internal Agreement 91/401/EEC on the financ-

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JUDGMENT OF 2.3.1994 — CASE C-316/91

ing and administration of Community aid under the Fourth ACP-EEC Conven­ tion (Official Journal 1991 L 229, p. 288). By that agreement the Member States established a seventh European Development Fund (1990, hereinafter the 'EDF').

PARLIAMENT v COUNCIL

7 First, the Council submits that the financial regulation is not an act which may be contested under Article 173 of the Treaty. Although the act is an act of the Coun­ cil, it is an act adopted not pursuant to the Treaty provisions but pursuant to a power conferred on the Council by a provision of an internal agreement to which all the Member States are parties.

8 It should be noted that it is settled law that an action for annulment must be avail­ able in the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects (see the judgment in Case 22/70 Commission v Council [1971] ECR 263, at paragraph 42).

9 It follows that an action by the Parliament against an act of an institution intended to have legal effects is admissible irrespective of whether the act was adopted by the institution pursuant to Treaty provisions.

10 Secondly, the Council submits that the Parliament may not plead that its prerog­ atives were infringed since it was in fact consulted, albeit as an optional step.

11 It should be noted at the outset that it is settled law (see, in particular, the judg­ ment in Case C-70/88 Parliament v Council [1990] ECR I-2041, at paragraph 21) that the Treaties set up a system for distributing powers among the different Com-

15 The argument of the Council that there was no breach of the Parliament's prerog­ atives on the ground that it was in fact consulted cannot be accepted.

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PARLIAMENT v COUNCIL

16 The right to be consulted in accordance with a provision of the Treaty is a prerog­ ative of the Parliament. Adopting an act on a legal basis which does not provide for such consultation is hable to infringe that prerogative, even if there has been optional consultation.

17 Proper consultation of the Parliament where required by the Treaty is one of the means allowing it to play an actual part in the legislative process of the Commun­ ity (see the judgments in the Isoglucose cases, Case 138/79 Roquette Frères v Coun- cil [1980] ECR3333 , at paragraph 33, and Case 139/79 Maizena v Council [1980] ECR 3393, at paragraph 34).

18 Moreover, a particular provision applies where the Parliament is consulted pursu­ ant to Article 209 of the Treaty. Article 127 of the Financial Regulation of the Council of 21 December 1977 applicable to the general budget of the European Communities (Official Journal 1977 L 356, p. 1; updated text published in Official Journal 1991 C 80, p. 1) provides that any financial regulations amending that financial regulation are to be adopted by the Council only after recourse to the conciliation procedure if the European Parliament so requests.

21 The Parliament argues that it follows from the very words of Article 231 of the Convention, repeated in Article 1 of the Financial Protocol, that the Community as such has undertaken vis-à-vis the ACP States, in the framework of development finance cooperation, an obligation of international law distinct from those under­ taken by the Member States.

22 In its view, the financial resources to be granted thus constitute Community expenditure which must be shown in the Community budget and which is subject to the provisions of the Treaty concerning its implementation, in particular Article 209.

23 That argument must be rejected.

24 The question as to who has entered into a commitment vis-à-vis the ACP States must be dissociated from the question whether it is for the Community or its Member States to perform the commitment entered into. The answer to the first question depends on an interpretation of the Convention and on how in Community law powers are distributed between the Community and its Member States in the relevant field, while the answer to the second question depends only on how those powers are distributed.

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PARLIAMENT v COUNCIL

JUDGMENT OF 2.3.1994 — CASE C-316/91

Community and its Member States as partners of the ACP States are jointly liable to those latter States for the fulfilment of every obligation arising from the com­ mitments undertaken, including those relating to financial assistance.

30 Although Article 231 of the Convention, like Article 1 of the Financial Protocol, uses the phrase 'the Community's financial assistance', it is nonetheless the case that several other provisions use the term 'Community' in order to denote the Community and its Member States considered together.

31 Thus, Article 338 of the Convention provides, without distinction depending on the subject-matter of the proceedings, that the Council of Ministers of the Asso­ ciation is to act by agreement between the Community, on the one hand, and the ACP States, on the other. Furthermore, Article 367 of the Convention provides that it may be denounced by the Community, without being more specific.

32 Finally, Article 223 of the Convention provides, in the very field of development finance cooperation, that, unless otherwise provided in the Convention, all deci­ sions requiring the approval of either contracting party are to be approved, or be deemed approved, within 60 days of notification by the other party.

33 It follows from the above that, in accordance with the essentially bilateral charac­ ter of the cooperation, the obligation to grant 'the Community's financial assist­ ance' falls on the Community and on its Member States, considered together.

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38 It follows that the expenditure necessary for the Community's financial assistance provided for in Article 231 of the Convention and Article 1 of the Financial Pro­ tocol is assumed directly by the Member States and distributed by a Fund which they have set up by mutual agreement, with the administration of which the Com­ munity institutions are associated by virtue of that agreement.

39 Consequently, that expenditure is not Community expenditure which must be entered in the Community budget and to which Article 209 of the Treaty must apply.

40 The Parliament has also argued before the Court that the fact that the expenditure is Community expenditure is apparent from all aspects of the procedure laid down for its administration and allocation. Thus, it appears from the origin, the external appearance, the decision-making procedure and the content of the financial regu­ lation that it is very closely related to Community acts.

41 That argument cannot be accepted. No provision of the Treaty prevents Member States from using, outside its framework, procedural steps drawing on the rules applicable to Community expenditure and from associating the Community insti­ tutions with the procedure thus set up (see the judgment in Joined Cases C-181/91 and C-248/91 Parliament v Council and Commission [1993] ECR1-3685).

THE COURT

hereby:

1. Dismisses the application;

2. Orders the European Parliament to pay the costs. The Kingdom of Spain, intervener, is to bear its own costs.

Due Mancini Moitinho de Almeida Kakouris

Joliét Schockweiler Rodríguez Iglesias