C-414/93

* Original language: English. 3 — Joined Cases C-13 to C-16/92 Driessen & Others [1993] 1 — O J 1989 L 116, p. 25. E C R 1-4751. 2 — O J 1989 L 116, p. 30 as amended by Commission Regulation 4 — Council Regulation, Article 3(1). (EEC) N o 3685/89, O J 1989 L 360, p. 20. 5 — Article 3(2).

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Article 3(3) states: 'Each Fund shall consist unís will be paid and the conditions of two separate accounts, one for dry-cargo under which the premiums may be carriers and pusher craft, the other for tanker obtained, vessels'. For each vessel covered by the Council Regulation the owner must pay a contribution into one of the Funds. As a general rule, the contribution must be paid to the Fund of the Member State where the vessel is registered. 6 — the adjustment coefficients for each type and category of inland waterway vessel.

reduced by 10% in respect of dry-cargo ves- the financial resources referred to in Arti- sels and pusher craft and by 15% in respect cle 1(2). of tanker vessels. 10 The Commission Regu- lation fixes the annual contributions, the scrapping premiums and the conditions under which they may be obtained accord- ingly. Article 1(2) states that a total budget of E C U 130.5 million is considered necessary. It divides that sum into three separate accounts as follows: E C U 81.2 million for dry-cargo vessels, E C U 44.3 million for 8. With a view to scrapping as much overca- tanker vessels, and E C U 5 million for pusher pacity as possible, a procedure is provided craft. whereby applications for a lower percentage of the applicable rate take precedence over applications for a higher percentage. Article 8(1) provides that, if the finances required to cover valid applications for scrapping premiums exceed the financial resources available in the various accounts provided for in Article 1(2), applications for lower percentages shall be given priority over those for higher percentages. In order 7. Article 3 lays down the rates of the annual to facilitate the operation of that procedure, contributions to be paid by owners for the Article 8(2) provides that the Commission, various types and categories of vessels. Arti- assisted by the authorities of the national cle 5 lays down the rates of the scrapping Funds, must draw up a joint list of valid premium for the various types and categories applications. Applications must be listed in of vessels. Article 6(2) provides that appli- order, starting with the application for the cants for scrapping premiums must indicate lowest premium rate-percentage. Separate in their applications the percentage of the lists must be drawn up for dry-cargo vessels, rate which they wish to receive as a scrap- tanker vessels and pusher craft. Under Arti- ping premium. That percentage may vary cle 8(3), the national Funds must continue to from 70% to 100% of the applicable rate. grant scrapping premiums in accordance Article 6(3) states that valid applications for with the lists, until the financial resources scrapping premiums amounting to 70% of available in the various accounts provided the applicable rate shall be deemed to be for in Article 1(2) are exhausted. If more accepted by the Fund within the limits of the than one application requesting the same financial resources available in the various premium-rate percentage is submitted, prior- accounts, as provided for in Article 1(2). The ity is to be given to the first one received. authorities of the national Funds must send to the Commission each month a list of the applications which they have received for scrapping premiums amounting to 70% of the applicable rate. The Commission must ensure that those applications do not exceed

10. The Council Regulation and the Com- mission Regulation are based on the premise that the cost of the coordinated scrapping scheme must be borne by the inland water- way transport undertakings which will in effect benefit from that scheme. In order to make possible the operation of the scheme 12. O n 27 April 1990 Mr F. D. Teirlinck without delay, Member States are required to submitted two applications for a scrapping give interest-free loans to the Fund situated premium to the Dutch Minister of Transport in their territory. n Repayment of the loans, and Water Resources ('the Minister'), who is which is financed by the annual contribu- the authority responsible for administering tions paid to the Funds by vessel owners, the coordinated scrapping scheme in the must be made within ten years. 1 2 The Coun- Netherlands. By one of the applications, cil Regulation provides that there must be Mr Teirlinck requested a premium amount- mutual financial support between the Funds ing to 97% of the rate provided for in Arti- with regard to the separate accounts pro- cle 5 of the Commission Regulation for the vided for in Article 3(3) in order to ensure scrapping of his pusher craft named 'Tonny'. that the time-limit for the repayment of the By the other application, he requested a pre- interest-free State loans to the Funds is the mium for the scrapping of his lighter (a dry- same for all Funds. I 3 The Commission cargo vessel) named 'Neptunus III'. By a Regulation contains specific rules for that decision of 2 July 1990, the Minister purpose. u accepted the application relating to 'Neptu- nus III' but, by a decision of 19 September 1990, he rejected the application relating to 'Tonny'. It is that decision which has given rise to the present proceedings.

13. The decision of 19 September pusher craft, the funds required to cover the 1990 stated that the application for a scrap- scrapping premiums applied for exceeded the ping premium in relation to the vessel 'Ton- financial resources available in the account n y ' fulfilled the conditions laid down in provided for that category of vessel. Accord- Article 5(1) of the Council Regulation. ingly, the priority procedure provided for in However, in accordance with Article 8 of the Article 8(1), (2) and (3) of the Commission Commission Regulation, an application for a Regulation was applied. The Commission, in scrapping premium could be accepted only if cooperation with the authorities of the there were sufficient financial resources in Funds, drew up a joint list of valid applica- the respective account referred to in Arti- tions, which is annexed to the letter. Given cle 1(2) of the Commission Regulation. The the limits of the financial resources available, decision stated that the resources available in only applications for a premium of 70% of the account for pusher craft were not suffi- the rate applicable were accepted. All appli- cient to cover the premium requested in rela- cations for higher premiums were rejected. tion to the vessel 'Tonny'. It referred in sup- Two applications for a 70% rate premium, port to a letter dated 29 June 1990 addressed one submitted to the French Fund and one by the Commission to the Dutch authorities. submitted to the Dutch Fund, were also rejected so as not to exceed the resources available. Rejection of those applications was based on the criteria provided for in Arti- cle 8(3) of the Commission Regulation.

lishment of a common account for dry-cargo of a scrapping premium. The referring court carriers and pusher craft. To the extent that also states that, according to a letter dated Articles 1(2) and 8 of the Commission Regu- 31 March 1992 addressed by the Commis- lation provide for the establishment of a sep- sion to the Minister, the financial resources arate account exclusively for pusher craft, available at the material time in the account they are invalid because they run counter to provided for dry-cargo vessels were suffi- the Council Regulation. Mr Teirlinck argued cient to pay scrapping premiums for all that the scrapping premium that he pusher craft for which applications were requested in relation to his pusher craft rejected on the ground that the resources 'Tonny' should have been charged to the available in the account provided for pusher common account provided for by Arti- craft had been exhausted. cle 3(3) of the Council Regulation for dry- cargo carriers and pusher craft, especially since that vessel was used, in combination •with his vessel 'Neptunus III', exclusively for the transport of dry cargo. Mr Teirlinck also argued that the Minister's decision rejecting his application was invalid on the 18. In the light of those considerations, the ground that it was issued on 19 September referring court has referred the following 1990 and therefore infringed Article 6(4) of questions: the Commission Regulation. According to that article, in the case of applications for scrapping premiums exceeding 70% of the applicable rates, the Fund authorities must notify the applicants in writing whether their applications have been accepted or rejected before 1 September 1990. '(1) Must the provisions of Article 5(1) of Regulation (EEC) N o 1101/89 be inter- preted as meaning that a valid applica- tion for a premium for the scrapping of an inland-waterway vessel to which that Regulation applies cannot be refused so long as the limit on the total available The questions referred funding for the coordinated scrapping schemes has not yet been reached?

(6) If the time-limit set out in Article 6(4) of the Commission Regulation is not complied with, must an application for (3) Must the provisions of Article 1(2) of a scrapping premium be deemed to have Regulation (EEC) N o 1102/89, in con- been accepted?' junction with the provisions of Arti- cle 8 of that Regulation, be interpreted as meaning that a valid application for a scrapping premium for a pusher craft must be refused if the financial resources needed to accept the applica- 19. Written observations have been submit- tion exceed the amount of E C U 5 rail- ted by the Government of the Netherlands lion referred to in Article 1(2) for and by the Commission. Mr Teirlinck pre- pusher craft from the Member States sented oral argument to the Court. concerned, notwithstanding the fact that the amount referred to therein for dry- cargo vessels and/or tanker vessels is not used up after approval of all appli- cations for scrapping premiums in those two categories? 20. I will examine the first and second ques- tions together. I will then examine the other questions referred.

The first and second questions

(4) If questions (2) and (3) are answered in the affirmative, are the abovementioned provisions of Regulation (EEC) N o 1102/89 compatible with Commu- 21. The first and second questions concern nity law, in particular the provision in the interpretation of Article 5(1) of the Article 3(3) of Regulation (EEC) Council Regulation, which states that any N o 1101/89 that each Fund is to consist owner scrapping a vessel 'shall receive a of two separate accounts? scrapping premium from the Fund to which

24. I do not find that reasoning persuasive. Article 3(3) of the Council Regulation pro- 22. Mr Teirlinck takes the view that the first vides for a common account for dry-cargo question must be given a negative reply and vessels and pusher craft but, as the Commis- that the second question must be given an sion points out, that does not mean that affirmative one. He argues that Article 5(1) scrapping premiums for dry-cargo vessels makes a clear distinction between 'the finan- and pusher craft must be financed by the cial means available', on the one hand, and same resources. The Council Regulation pro- 'the conditions set out in Article 6', on the vides only for the framework of the coordi- other hand. Article 6 leaves it to the Com- nated scrapping scheme, leaving a number of mission to determine the rate of the annual decisions which are essential in order for that contributions, the rate of the scrapping pre- scheme to come into operation to be taken miums and the conditions under which they by the Commission. In particular, it is clear may be obtained. However, it does not leave from the provisions of the Council Regu- it to the Commission to determine the limits lation that it is for the Commission to deter- of the available financial resources. Those mine the financial resources which must be limits are provided for by Article 3(3) of the made available for the payment of scrapping Council Regulation which states that each premiums in relation to each category of ves- Fund shall consist of two separate accounts, sel.

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26. It follows from Article 6 that the Com- mission is responsible for determining the financial resources which must be made available for the payment of scrapping pre- miums in relation to each category of vessel. 28. Mr Teirlinck argues that an owner who applies for a premium in relation to the scrapping of a pusher craft has the right to have his application accepted if there are suf- ficient financial resources in the common account for dry-cargo vessels and pusher craft provided for in Article 3(3) even if the resources available in the account 27. The Council Regulation refers to the need to bring about 'a substantial reduction 18 — Council Regulation, preamble, third recital, and Arti- cle 6(7). 19 — Commission Regulation, preamble, second recital, and 17 — See Article 6(4) of Council Regulation, above, paragraph 5. Article 1(1).

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30. The purpose of Article 3(3) of the Coun- cil Regulation is not to specify the limits of the available resources for financing scrap- ping premiums but rather, as the Commis- sion points out, to facilitate mutual financial support between the national Funds. The reason why Article 3(3) provides for separate accounts for dry-cargo vessel and for tankers is that in economic terms the market for the transpon of dry cargo is different from the 29. There is another reason why the Council market for the transport of liquid cargo. 21 Regulation does not give an owner who The establishment of separate accounts applies for a premium in relation to the implies that there is no financial solidarity scrapping of a pusher craft the right to have between them. Article 5(2) states that there his application accepted if there are sufficient will be mutual financial support between the financial resources in the common account Funds only with regard to the separate for dry-cargo vessels and pusher craft pro- accounts. A national Fund whose account vided for in Article 3(3). Article 6 of the for tankers does not have sufficient financial Council Regulation not only provides that resources to reimburse the State loans that it the Commission must lay down the rate of has received within the time-limit provided the annual contributions and the rate of the for in the Commission Regulation can only scrapping premiums separately for dry-cargo count on the support of the corresponding carriers, for tankers and for pusher craft. It also provides that, whereas contributions and premiums are to be calculated on the basis of 20 — Article 6(3). deadweight tonnage for cargo-carrying 21 — See Council Regulation, preamble, eighth recital.

accounts of the other Funds. It cannot have national Funds. The manner in which the recourse to any financial resources available common account of dry-cargo vessels and in the common account for dry-cargo vessels pusher craft is financed and is used in order and pusher craft and vice versa. to finance the scrapping premiums is a differ- ent question which is not governed by Arti- cle 3 but by Articles 5(1) and 6 of the Coun- cil Regulation. In accordance with those provisions, it is up to the Commission to fix the amount of financial resources available to finance scrapping premiums and the condi- tions for the allocation of those resources for 31. In its observations, the Commission each type of vessel. explains why Article 3(3) provides for a common account for pusher craft and dry- cargo \essels. Pusher craft do not transport cargo. Their function is to tow or to push barges used for the transport of dry cargo or liquid cargo. The Council considered the possibility of establishing a separate account exclusively for pusher craft but finally decided not to do so on the ground that the market for pusher craft was too small to jus- tify a distinct financial mechanism. The Council decided to include pusher craft in the account provided for dry-cargo vessels because pusher craft are generally used with 33. I conclude that the term 'the financial barges carrying dry cargo. Also, a consider- resources available' in Article 5(1) of the able number of pusher craft are owned by Council Regulation does not refer to the undertakings which own dry-cargo barges. accounts provided for in Article 3(3) but to By contrast, it is rare for undertakings which the financial resources to be specified by the own barges for the transport of liquid cargo Commission in accordance with the provi- to own pusher craft. sions of Article 6. The Council Regulation leaves it to the Commission to determine the maximum financial resources available for the payment of scrapping premiums in rela- tion to each category of vessel. It follows that the Council Regulation does not give an applicant for a premium for the scrapping of an inland waterway vessel a right to have his 32. According to the Commission, the com- application accepted provided that the total mon account established by Article 3(3) of financial resources in the Funds of the Mem- the Council Regulation for dry-cargo vessels ber States concerned are sufficient. N o r does and pusher craft serves only administrative the Council Regulation give an applicant for purposes. The revenue and expenses relating a premium for the scrapping of a pusher to dry-cargo vessels and to pusher craft must craft a right to have his application accepted be entered into the same account. That gives provided that the total financial resources rise to financial solidarity among the various available in the common account for dry-

cargo vessels and pusher craft referred to in fleet capacity by 10% in respect of dry-cargo Article 3(3) of that regulation are sufficient. vessels and pusher craft and by 15% in Consequently, the first and second questions respect of tankers. Anicie 1(2) provides for referred must both be given a negative reply. separate accounts in respect of tankers, dry- cargo vessels and pusher craft respectively and specifies the sums available in each account for paying scrapping premiums in relation to each category of vessel. Those sums are designed to finance the scrapping The third question premiums which need to be paid in order to achieve a reduction in overcapacity by the percentage sought. It follows that resources available in the account earmarked for a cer- tain type of vessel may not be used t o finance scrapping premiums for another type of vessel. 34. By the third question, the referring court seeks to ascertain whether Articles 1(2) and 8 of the Commission Regulation must be interpreted as meaning that a valid applica- tion for a scrapping premium in relation to a pusher craft must be rejected if the financial resources needed to accept it exceed the amount of E C U 5 million referred to in 37. Articles 6 and 8 of the Commission Article 1(2) for pusher craft notwithstanding Regulation make it clear that an application the fact that the amount referred to therein for a scrapping premium may be accepted for dry-cargo vessels and/or tanker vessels is only if there are sufficient resources in the not used up after approval of all applications account of the Fund which is earmarked for for scrapping premiums in those categories. the category of vessels to which the vessel in question belongs. Article 6(3) provides that valid applications for scrapping premiums amounting to 70% of the applicable rates shall be deemed to be accepted 'within the limits of the financial resources available in the various accounts, as provided for in 35. It is clear from the provisions of the Article 1(2)'. Article 8(3) provides that the Commission Regulation that the third ques- national Funds must continue to grant scrap- tion must be given an affirmative reply. ping premiums 'until the financial resources available in the various accounts referred to in Article 1(2) are used up'.

The fourth question Regulation. Article 3(3) does not give any indication as to the financial resources which must be made available for granting scrap- ping premiums with regard to each type of vessel. The accounts referred to in Arti- cle 1(2) of the Commission Regulation with regard to each separate category of vessel are 39. By the fourth question the referring the 'financial means available' within the court enquires as to the validity of the Com- meaning of Article 5(1) of the Council Regu- mission Regulation. It states that Articles lation. It follows that Articles 1(2) and 8 do 1(2) and 8 of the Commission Regulation not contradict Article 3(3) of the Council provide for the allocation of the financial Regulation. resources available in a way which is more specific and more restrictive than that pro- vided for in Article 3(3) of the Council Regulation. That article provides for a com- mon account for dry-cargo vessels and pusher craft. However, it follows from Arti- cles 1(2) and 8 of the Commission Regu- lation that an application for a scrapping pre- 41. In the order for reference, the referring mium in relation to a pusher craft must be court expresses doubt as to whether the sum rejected if the financial resources needed to of E C U 5 million provided for in Arti- accept it exceed the amount of E C U 5 mil- cle 1(2) of the Commission Regulation in lion referred to in Article 1(2) for pusher relation to pusher craft is sufficient to reduce craft, notwithstanding the fact that there are effectively the existing structural overcapac- sufficient financial resources in the account ity and thus to attain the objectives of the provided for dry-cargo vessels after all valid Council Regulation. According to the refer- applications for scrapping premiums in rela- ring court, there is no evidence to suggest tion to dry-cargo vessels have been satisfied. that the scrapping of the vessel 'Tonny' will The referring court asks whether the Com- not contribute to the attainment of the mission Regulation is invalid on the ground objectives of the Council Regulation. that it infringes Article 3(3) of the Council Regulation.

and the rate of premiums which need to be 45. In support of the view that the scrapping paid. of 'Tonny' would contribute to the attain- ment of the objectives of the scrapping scheme, Mr Teirlinck refers to Commission Regulation (EEC) N o 3690/92 23 which amended the Commission Regulation. Regu- lation N o 3690/92 refers to the need to reduce capacity further and states in its pre- amble that it is desirable to allow further 43. As the Commission points out, the scrapping premiums to be paid. objective of the Council Regulation is not to scrap as much capacity as possible but rather to establish a balance between supply and demand. It is not possible to determine in advance precisely how much capacity needs to be scrapped. The Commission sought to reduce fleet capacity by 10% in respect of 46. However, the fact that the Commission pusher craft after consulting the Member decided subsequently to reduce capacity fur- States and the professional organizations ther does not mean that the Commission concerned. Regulation which provided for the reduction of capacity by a certain percentage is invalid. Moreover, Regulation N o 3690/92 provides for additional financial resources to be made available for the payment of scrapping pre- miums from 1 January 1993. It applies with- out prejudice to the provisions of Arti- cle 1(1), (2) and (3) of the Commission 44. It appears from the list of valid applica- Regulation. 24 It does not allow the resources tions for a scrapping premium which was initially contained in one of the accounts drawn up by the Commission in cooperation established by Article 1(2) of the Commis- with the authorities of the Funds in the sion Regulation to be used to grant premi- meeting of 15 June 1990 22 that the vessel ums for the scrapping of vessels of a type 'Tonny' was number 47 in that list. The other than that to which that account refers. Commission states that if a scrapping pre- In other words, it does not provide for the mium were granted for the vessel 'Tonny', merging of the separate accounts established scrapping premiums should also be granted by Article 1(2) of the Commission Regu- for the eight vessels which preceded 'Tonny' lation. in the list and which were refused scrapping premiums. According to the Commission, the scrapping of nine additional pusher craft would exceed significantly the target of 10% provided for in Article 1(1) of the Commis- sion Regulation and would exceed by more than two million ecu the budget provided for 47. I conclude that the fourth question must pusher craft by Article 1(2) of that regu- be given an affirmative reply. lation.

The sixth question 49. The contents of the Commission's letter of 29 June 1990 have already been referred to. 25 The letter explains how the priority procedure provided for in Article 8 (1), (2) and (3) of the Commission Regulation was applied. Thus, it is not the validity of the let- ter itself which is in issue, but the validity of 50. The sixth question concerns the interpre- the measure or measures to which the letter tation of Article 6(4) of the Commission refers. 26 It appears from the letter that the Regulation, which states that the Fund procedure provided for in Article 8(1), (2) authorities must, before 1 September 1990, and (3) was applied correctly. In applying the notify in writing applicants for scrapping priority procedure, the Commission and the premiums exceeding 70% of the rates pro- authorities of the Funds do not enjoy any vided for in Article 5 as to whether their discretion in deciding which applications applications have been accepted or refused. should be accepted and which applications should be refused. Any change in the legal position of the applicants is the consequence of the rules laid down in Article 8 of the Commission Regulation. If, as I have sug-

51. The Minister did not comply with the 25 — See paragraph 14 above. 26 — See Case C-198/91 Cook v Commission [1993] ECR 1-2487, time-limit of 1 September 1990. The decision paragraphs 13 to 15 of the judgment. refusing Mr Teirlinck's application for a

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Conclusion

54. Accordingly, I am of the o p i n i o n that the questions referred should be answered as follows:

(1) Article 5(1) of C o u n c i l R e g u l a t i o n ( E E C ) N o 1101/89 of 27 April 1989 o n structural i m p r o v e m e n t s in inland w a t e r w a y transport does n o t give an a p p l i -

27 — See Article 6(1). 28 — See Article 7.

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(6) Article 6(4) of the abovementioned Commission Regulation must be inter- preted as meaning that the failure of the Fund authorities to notify an appli- cant for a scrapping premium whether his application has been accepted before 1 September 1990 does not have as a consequence that the application must be deemed to be accepted.

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