T-267/94

OLEIFICI ITALIANI v COMMISSION

J U D G M E N T O F T H E C O U R T O F FIRST INSTANCE (Fifth Chamber) 11 July 1997 *

In Case T-267/94,

Oleifìci Italiani SpA, a company incorporated under the laws of Italy, established in Ostuni (Italy), represented by Piero A. M. Ferrari and Massimo Merola, of the Rome Bar, and by Antonio Tizzano, of the Naples Bar, with an address for service in Luxembourg at the Chambers of Alain Lorang, 51 Rue Albert I e r ,

applicant,

v

T H E C O U R T O F FIRST INSTANCE O F T H E E U R O P E A N C O M M U N I T I E S (Fifth Chamber),

composed of: R. Garcia-Valdecasas, President, J. Azizi and M. Jaeger, Judges,

Registrar: A. Mair, Administrator,

having regard to the written procedure and following the oral procedure on 4 Feb- ruary 1997,

gives the following

Judgment

3 The regulation at issue is Commission Regulation (EEC) N o 1429/92 of 26 May 1992 amending Regulation (EEC) N o 2568/91 on the characteristics of olive oil and olive-residue oil and on the relevant methods of analysis (OJ 1992 L 150, p. 17), which entered into force on 5 June 1992. The Commission thereby amended the annexes to Regulation N o 2568/91 defining the characteristics of the various types of olive oil, especially the maximum content of trans-isomers. With effect from the entry into force of Regulation N o 1429/92, oil whose trans-isomer con- tent exceeded that ceiling could no longer be marketed in the Community. Never- theless, 'in order not to harm trade', the Commission made provision for oil pack- aged prior to the entry into force of that regulation to be disposed of during a limited period (second recital in the preamble to Regulation N o 1429/92). It did so by making that regulation inapplicable to olive oil packaged before its entry into force, that is, 5 June 1992, and marketed up to 31 October 1992 (second paragraph of Article 2 of Regulation N o 1429/92).

Facts and procedure

4 In July 1991 the applicant imported 6 500 tonnes of lampante virgin olive oil from Tunisia. In order to qualify for the inward processing procedure, it had the oil in question temporarily imported, as from 29 October 1991, in several lots with a view to refining it. Since it found itself unable to sell the product quickly, it placed a certain tonnage of bulk refined oil in customs warehousing as from 1 April 1992. 920 tonnes were subsequently re-exported to non-member countries.

9 O n 29 April 1994 the draft regulation had still not been put on the agenda of the Management Committee. By letter of the same date the applicant formally requested the defendant, pursuant to Article 175 of the EC Treaty, to take mea- sures to compensate it for the loss which it claimed it had sustained as a result of the adoption of Regulation N o 1429/92.

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10 By letter dated 5 May 1994, the defendant informed the applicant that it did 'not accept any liability for the alleged losses' and that 'disposal of the oil in question had to be carried out in compliance with the existing rules.'

1 1 O n 18 July 1994 the applicant lodged the application originating these proceed- ings.

12 By letter dated 13 February 1995, the defendant informed the Italian Ministry of Finance that it was for the national authorities to decide whether or not to autho- rize the sale of the olive oil in question.

16 In its application, the applicant claims that the Court should:

— declare, pursuant to Article 175 of the Treaty, that the defendant has failed to act, inasmuch as it omitted to adopt specific measures to compensate the appli- cant for the loss it allegedly sustained as a result of Regulation N o 1429/92;

— order the defendant, under Articles 178 and 215 of the Treaty, to compensate the applicant for the loss suffered by it owing to the fact that Regulation N o 1429/92 does not provide for transitional arrangements for bulk olive oil placed in customs warehousing, such loss being estimated at LIT 18 473 million, equivalent to the purchase price of the olive oil in question, together with inter- est and storage, insurance and refinery costs (LIT 16 083 million), together also with loss of earnings resulting from the fact that it was impossible to sell on the oil (LIT 2 359 million);

— order the defendant to pay the costs.

17 By letter dated 16 September 1996, the applicant reduced its claim for compensa- tion to LIT 7 345, corresponding to storage costs, interest on those costs and costs incurred in respect of securities lodged.

18 At the hearing the applicant abandoned its claim for a declaration that the Com- mission had failed to act.

20 It should be recalled at the outset that, in accordance with settled case-law, for the Community to incur liability, the applicant must prove the unlawfulness of the conduct alleged against the institution concerned, the fact of damage and the exist- ence of a causal link between that conduct and the damaged complained of (Case 26/81 Oleifici Mediterranei v EEC [1982] ECR 3057, paragraph 16; Joined Cases T-481/93 and T-484/93 Exporteurs in Levende Varkens and Others v Commission [1995] ECR 11-2941, paragraph 80; T-175/94 International Procurement Services v Commission [1996] ECR II-729, paragraph 44, and Case T-336/94 Efisol v Com- mission [1996] ECR II-1343, paragraph 30).

21 Where the conduct alleged is an omission on the part of a Community institution, it may render the Community liable only if the institution concerned has infringed a legal obligation to act under a provision of Community law (see, for example, Case C-146/91 KYDEP v Council and Commission [1994] E C R I-4199, paragraph 58).

22 Where the alleged illegality concerns a legislative act, liability on the part of the Community is dependent upon a finding that there has been a breach of a superior rule of law for the protection of individuals. Finally, if the institution adopted the

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legislative act in the exercise of a wide discretion, the Community cannot be ren- dered liable unless the breach is explicit, that is to say, it is of a manifest and seri- ous nature (see Case 5/71 Schöppenstedt v Council [1971] ECR 975, paragraph 11; Joined Cases 83/76 and 94/76, 4/77, 15/77 and 40/77 HNL and Others v Council and Commission [1978] ECR 1209, paragraph 6; Joined Cases C-104/89 and C-37/90 Mulder and Others v Council and Commission [1992] ECR 1-3061, para- graph 12; Case T-572/93 Odigitria v Council and Commission [1995] E C R II-2025, paragraph 34, and Exporteurs in Levende Varkens, cited above, paragraph 81).

1. Infringement of the principle of the protection of legitimate expectations

Arguments of the parties

26 The applicant alleges that the defendant infringed the principle of protection of legitimate expectations on the following two grounds. First, Regulation N o 1429/92, which makes no provision for a transitional period, is based on Article 35a of Council Regulation N o 136/66, as inserted by Council Regulation N o 1915/87. However, Regulation N o 1915/87 entered into force four months after its adoption. Similarly, the other Commission regulations expressly referring to Article 35a also contained transitional provisions for the various types of olive oil, on the lines of Regulation N o 1915/87, with the exception of those dealing with measures concerning the retail trade, such as Commission Regulation (EEC) N o 1860/88 of 30 June 1988 establishing special marketing standards for olive oil and amending Regulation (EEC) N o 938/88 laying down special provisions on the marketing of olive oil containing undesirable substances (OJ 1988 L 166, p. 16). Inasmuch as it does not provide for any transitional arrangements for bulk oil, Regulation N o 1429/92 differs from the other regulations quoted and hence infringes the principle of protection of legitimate expectations.

29 Moreover, it contends that the applicant had known since July 1991 that the Com- mission was intending to adopt Regulation N o 1429/92, which did not enter into force until 5 June 1992.

30 Furthermore, the introduction of a transitional period for bulk oil would have jeopardized the principal objective of Regulation N o 1429/92, namely safeguarding the purity of the oil. Had it been possible to market bulk oil not complying with the purity requirements laid down in Regulation N o 1429/92 for a period after it had entered into force, this would have increased the risks of adulteration which the regulation was specifically intended to prevent.

31 Besides, since the tariff nomenclature adapted to suit Regulation N o 1429/92 did not enter into force until 19 February 1993 as regards oil in transit to non-Member States, Regulation N o 1429/92 was applicable only as from that date, thus allowing

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the applicant complete freedom to re-export the oil in question up to that date as refined oil.

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35 Within the framework of the wide discretion which it enjoys in the field of the common agricultural policy, the Community legislature is to give precedence to the objective of better ensuring the purity of a given product, together with, by implication, that of consumer protection, as opposed to the objective, which it may have pursued in a previous regulation, of facilitating the marketing of that product.

36 As regards a possible transitional period, the contested regulation must be assessed in relation to Regulation N o 2568/91, which it amends and is therefore of the same legal nature. Yet, the latter regulation, in common with Regulation N o 1429/92, provided for a transitional period only for packaged olive oil.

37 Moreover, as a trader in the sector, the applicant could not have been unaware, between the date when the oil in question was imported and the date when Regu- lation N o 1429/92 entered into force, that it was probable that that regulation would be adopted. Besides, it acknowledged at the hearing that it was aware that the technical standards contained in Regulation N o 1429/92 had previously been negotiated and adopted at international level by the International Olive Oil Coun- cil ( I O O C ) before they were adopted by the defendant.

38 Second, the case-law relied on by the applicant is irrelevant. It begins by citing Case C-152/88 Sofrimport v Commission [1990] ECR I-2477, in which the Court of Justice held that the institution concerned had infringed the principle of protec- tion of legitimate expectations on the ground that it had adopted a safeguard meas- ure whilst totally omitting, without having regard to any overriding public inter- est, to take into consideration the situation of traders, such as Sofrimport, which had goods in transit, even though a specific provision required it to do so. In con- trast, the relevant rules in this case include no specific provision requiring the defendant to take account of the specific situation of traders who had bulk olive oil in customs warehousing when Regulation N o 1429/92 was adopted.

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2. Infringement of the principle of non-discrimination

Arguments of the parties

42 According to the applicant, by providing for a transitional period for packaged olive oil but not for bulk olive oil the defendant treated holders of bulk oil less favourably than holders of packaged oil without any objective justification for so doing. It maintains, in any event, that the objective of fraud prevention does not justify that difference in treatment.

43 Furthermore, the applicant alleges, the defendant was guilty of unjustified dis- crimination in so far as it treated holders of bulk olive oil in free circulation identi- cally to holders of such oil in customs warehousing. In fact, according to the appli- cant, the latter oil could not be the subject of fraudulent operations owing to the supervision exercised by the customs authorities.

47 The contested regulation comes under the common agricultural policy. In order to establish discrimination, it must therefore be examined whether it treated compa- rable situations differently and, if so, whether the difference in treatment is objec- tively justified, regard being had, in that respect, to the wide discretion enjoyed by the defendant as regards the objective justification of any different treatment.

48 Article 2(2) of the regulation at issue treats bulk olive oil and packaged olive oil differently in so far as it provides for a transitional period only for the latter. The main aim of the contested regulation, as indicated in the preamble thereto, is to guarantee the purity of olive oil. However, it appears from the documents before the Court that if olive oil has been overheated it obtains a high percentage of trans- isomers, which enables it to be mixed with other oil of inferior quality. This risk of adulteration, which, in theory, does not exist in the case of packaged olive oil, by virtue of the fact that it is packaged, cannot be ruled out in the case of bulk olive oil, even if it is stored in customs warehousing.

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49 The defendant would have been obliged to provide for a derogation from the con- tested regulation only if storage in national customs warehousing afforded a guar- antee that it was impossible to adulterate bulk products so stored. In fact, in view of its wide discretion, the defendant would have been under a duty to provide for such a derogation only if it were proven that it was impossible to adulterate bulk olive oil stored in any Customs warehouse in the Community. However, in the light of their objectives, which are chiefly customs-related, the Community rules applicable to bonded warehouses are not such as to preclude all possibility of fraud or manipulation, except for customs purposes.

OLEIFICI ITALIANI v COMMISSION

that, by failing to provide for a transitional period for bulk olive oil, the defendant introduced a barrier to trade disproportionate to the objective of ensuring the purity of the oil whilst having as little effect as possible on trade. In any event, oil under customs supervision could not have been adulterated and the requirements of fraud prevention cannot therefore justify the absence of a transitional scheme as far as it is concerned.

53 The defendant maintains that the need to prevent fraud precluded any possibility of any transitional measure for bulk oil. Unlike the facts in the Schräder case, no financial charge was imposed on the applicant in this case.

Findings of the Court

54 According to the case-law of the Court of Justice, in order to establish whether a provision of Community law complies with the principle of proportionality, it must be ascertained whether the means which it employs are suitable for the pur- pose of achieving the desired objective and whether they do not go beyond what is necessary to achieve it (Joined Cases 279/84, 280/84, 285/84 and 286/84 Rau and Others v Commission [1987] ECR 1069, paragraph 34, and Case C-426/93 Ger- many v Council [1995] E C R I-3723, paragraph 42).

55 As stated above, in matters concerning the common agricultural policy, only the fact that a measure is manifestly inappropriate having regard to the objective assigned to it by the competent institution can affect its legality.

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60 It follows from the whole of the foregoing that the applicant has not proved that the defendant infringed the principle of proportionality in adopting Regulation N o 1429/92.

4. Infringement of acquired rights

Arguments of the parties

61 The applicant takes the view that, by placing the oil in question in customs ware- housing, it wished to switch from the temporary importation procedure to the procedure for goods intended for export. The goods ought then to have been regarded as having already formally left the territory of the Community. The applicant also says that it acquired the right to export the goods outside the Com- munity without authorization, in accordance with the rules in force at the time when it placed the oil in question in customs warehousing. The defendant infringed that right by adopting Regulation N o 1429/92 without at the same time providing for adequate transitional arrangements.

65 N o more may the applicant infer an acquired right from Article 121(1) of Regu- lation N o 2913/92. That article provides that '[s]ubject to Article 122, where a cus- toms debt is incurred, the amount of such debt shall be determined on the basis of the taxation elements appropriate to the import goods at the time of acceptance of the declaration of placing of these goods under the inward processing procedure.'

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66 In the first place, Regulation N o 1429/92 does not alter the amount of the customs debt, as determined in accordance with Article 121(1) of Regulation N o 2913/92. Secondly, no right to the maintenance in force of the rules determining the requi- site characteristics of olive oil marketed may be inferred from the applicant's right to have the amount of its customs debt determined in accordance with the said Article 121. Thirdly, Article 121 is totally irrelevant to this case inasmuch as the applicant had already processed the goods under the inward processing procedure prior to placing them in customs warehousing.

67 It follows from the foregoing that the complaint alleging infringement of acquired rights must be rejected.

5. Claim concerning the condition of unlawful conduct

70 The applicant maintains that it suffered a loss of LIT 7 345 million in respect of storage costs, interest on those costs, and costs of providing security. Initially, the loss allegedly amounted to LIT 18 473 million, but it was reduced as a result of the sale of the oil in question during these proceedings, after the defendant had aban- doned its objection to the issue by the Italian customs authorities of authorization to sell that oil.

71 In the defendant's view, since the applicant sold the oil in question in 1995 and 1996, taking advantage of the increase in olive oil prices on the world market, it suffered no loss by reason of the fact that it was blocked in customs warehousing but, on the contrary, made a profit of LIT 10 929 648 626. In any event, any loss which might have been caused by the regulation could not have exceeded the dif- ference between the price of the goods in question on non-Member State markets immediately before Regulation N o 1429/92 entered into force and the price of those goods immediately after it entered into force. The applicant has not, how- ever, proven that there was such a difference.

72 At the hearing the applicant responded by arguing that, if it had been in a position to reinvest the whole of the proceeds of sale of the 4 788 809 tonnes of oil at an earlier date, it would have made a much greater profit than the figure given by the defendant.

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Findings of the Court

77 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been asked for in the successful party's pleadings. Since the defendant has applied for costs and the applicant has been unsuccessful, the latter must be ordered to pay the costs.

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O n those grounds,

T H E C O U R T O F FIRST INSTANCE (Fifth Chamber)

hereby:

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