C-110/97

OPINION OF MR LÉGER — CASES C-110/97 AND C-451/98

OPINION OF ADVOCATE GENERAL LÉGER delivered on 13 March 2001 1

1. By these actions, brought under Arti- tories (hereinafter 'the OCTs') in order to cle 173 of the EC Treaty (now, after increase trade and promote jointly eco- amendment, Article 230 EC), the Kingdom nomic and social development. of the Netherlands and Antillean Rice Mills NV, 2a company registered under the law of the Netherlands Antilles, ask the Court to annul Council Regulation (EC) No 304/97 of 17 February 1997 introdu- cing safeguard measures in respect of imports of rice originating in the overseas 3. Article 227(3) of the EC Treaty (now, countries and territories 3 and to order the after amendment, Article 299(3) EC) pro- Council of the European Union to pay the vides that the association arrangements are costs. to apply to the OCTs listed in Annex IV to the Treaty, which includes the Netherlands Antilles.

I — Legal and procedural background to Cases C-110/97 and C-451/98 4. According to the second paragraph of Article 131 of the EC Treaty (now, after amendment, the second paragraph of Arti- cle 182 EC), the purpose of association is to promote the economic and social devel- opment of the OCTs and to establish close EC Treaty economic relations between them and the Community as a whole.

2. By Article 3(r) of the EC Treaty (now, after amendment, Article 3(s) EC), Com- munity activities are to include the associa- tion of the overseas countries and terri- 5. Article 132(1) of the EC Treaty (now Article 183(1) EC) states that the Member 1 — Original language: French. States are to apply to their trade with the 2 — Hereinafter 'ARM'. OCTs the same treatment as they accord 3 — OJ 1997 L 51, p. 1 (hereinafter referred to as the 'regulation at issue' or 'the contested regulation'). each other pursuant to the Treaty.

13. Article 3(3) of Annex II to the OCT 4 — OJ 1991 L 263. p. 1 (hereinafter the 'OCT decision'). decision lists working or processing con-

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sidered as insufficient to confer the status tioning of the association and the Commu- of originating products on OCT products. nity; those measures are not to exceed the limits of what is strictly necessary to remedy the difficulties that have arisen.

14. Article 6(2) of that annex provides: 17. Under Article 1(5) and (7) of Annex TV to the OCT decision, any Member State may refer the Commission's decision to implement safeguard measures to the Council within 10 working days of receiv- 'When products wholly obtained in the ing notification of the decision. In such a Community or in the ACP States undergo case the Council, acting by a qualified working or processing in the OCT, they majority, may adopt a different decision shall be considered as having been wholly within 20 working days. obtained in the OCT' (the 'cumulation of ACP/OCT origin' rule).

15. Article 109(1) of the OCT decision Regulation (EC) No 21/97 allows the Commission to take safeguard measures, or to authorise a Member State to take them, if, as a result of the applica- tion of the decision, serious disturbances occur in a sector of the economy of the 18. On 8 January 1997, at the request of Community or one or more of its Member the Italian and Spanish Governments, the States, or their external financial stability is Commission adopted Regulation (EC) jeopardised, or if difficulties arise which No 21/97 introducing safeguard measures may result in a deterioration in a sector of in respect of imports of rice originating in the Community's activity or in a region of the OCTs. 5 the Community. The Commission is then required to follow the procedure specified in Annex TV to the OCT decision.

Regulation No 304/97

20. The regulation at issue in this case — 4 594 tonnes originating in Mon- repeals and replaces Regulation No 21/97. tserrat; and

21. It was adopted by the Council follow- ing a reference by the United Kingdom, in accordance with Article 1(5) of Annex IV — 3 406 tonnes originating in Mon- to the OCT decision. In its reference the tserrat or the Turks and Caicos United Kingdom Government sought an Islands; and

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(b) 36 728 tonnes for rice originating in II — The factual background to Cases the other OCTs. C-110/97 and C-451/98

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29. There are generally four processing rice originating in the Netherlands Antilles stages: must undergo a final transformation before being consumed in the Community.

— paddy rice: this is the rice as harvested, as yet unfit for consumption;

ARM's activities in the Netherlands An- tilles — brown rice:6 this is the rice after the husk has been removed. It is fit for consumption but can also be processed further; 31. ARM is a company registered under the law of the Netherlands Antilles whose activities comprise the processing of rice in the Netherlands Antilles. 9 — semi-milled rice: 7this is the rice after part of the pericarp has been removed. It is a semi-finished product generally sold for processing rather than for consumption;

32. In the course of 1992, ARM concen- trated on the processing of brown rice originating from Surinam and Guyana into semi-milled rice with the intention of — milled rice: 8 this is fully processed rice exporting it to the Community. 10 after both the husk and the pericarp have been removed.

III — Admissibility of ARM's action in According to ARM and the Netherlands Case C-451/98 Government, the Council was aware of the particular situation of the applicant before the adoption of the regulation at issue since it intervened in the application brought by ARM against the safeguard measures 34. ARM's pleas and claims in Case adopted in 1993. 12 The Council could C-451/98 are more or less the same as not therefore be unaware that ARM was those of the Netherlands Government. one of the few undertakings specifically Since ARM has raised the question of the engaged in the processing of rice from admissibility of its action, I will deal with African, Caribbean and Pacific States (here- this question first. inafter 'ACP States') for export to the Community. ARM states that, in its letters of 3 and 24 December 1996, it had more- over informed the Commission and the Council of its specific situation, and had indicated that the safeguard measures would be of concern to it. It submits that its activity is entirely centred on the export Arguments of the parties of rice to the Community and that the safeguard measures inevitably mean that this will cease. Therefore ARM argues that the safeguard measures are of concern to it as a rice processing undertaking. It points 35. The Netherlands Government and out that, following the example of six other ARM submit that the latter should be undertakings established in the Nether- regarded as an 'undertaking concerned' lands Antilles, it entered into sizeable within the meaning of the judgment in investment so as to increase its production Piraiki-Patraiki and Others v Commis- capacity. That fact is such as to distinguish sion. 11 it from other rice producers established in the Netherlands Antilles.

Firstly, in respect of the contracts for the 38. In accordance with the fourth para- supply of semi-milled rice entered into with graph of Article 173 of the Treaty, any customers established in the Community, natural or legal person may institute pro- they note that the two contracts put in ceedings against a decision addressed to evidence by the applicant were concluded that person or against a decision which, after the Commission had let it be known although in the form of a regulation or a that it would be adopting safeguard mea- decision addressed to another person, is of sures. This shows that, at the time of direct and individual concern to the former. entering into those contracts, the applicant could not be unaware that safeguard mea- sures were likely to affect their perfor- mance.

39. Since the contested regulation is not a decision addressed to ARM, within the Secondly, they claim that it appears from meaning of the fourth paragraph of Arti- the documents submitted by ARM that the cle 173 of the Treaty, it is necessary to non-performance of the contracts with its consider whether it is an act of general customers established in the Community application or whether it should be regar- was not caused by the application of the ded as a decision in the form of a regula- regulation at issue. tion.

Thirdly, they dispute the assertion that the applicant's activities were entirely centred 40. In order to determine the general on the export of rice to the Community and applicability or otherwise of an act, it is

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46. Firstly, it states that its entire activity is centred on the export of rice to the 43. It cannot be ruled out, however, that an Community. It concludes for this reason act may, notwithstanding its general appli- alone that it is affected by the regulation at cation, be of direct and individual concern issue by reason of attributes peculiar to it. to certain natural and legal persons. 14 It is necessary to see whether ARM meets those two conditions. 15 — See Case 25/62 Plaumann v Commission [1963] ECR 95; Piraiki-Patraiki and Others v Commission, cited above, paragraph 11, and Codorniu v Council, cited above, paragraph 20. 13 — See, in particular, Case 307/81 Alusnisse Italia v Council 16 — See, in particular, Piraiki-Patraiki and Others v Commis- and Commission [1982] ECR 3463, paragraph 8. sion, cited above, paragraphs 17 and 28, and Case 14 — See, in particular, Case C-309/89 Codorniu v Council C-390/95 P Antillean Rice Mills and Others v Commission [1994] ECR I-1853, paragraph 19. [1999] ECR I-769, paragraph 28.

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47. Having regard to the evidence on the commercial activity which may at any time file, I doubt whether ARM operates exclu- be practised by any person and is not sively in trading in rice originating in the therefore such as to distinguish the appli- OCTs with the Community. 17 However, cant in relation to the contested decision as even if this were the case, the mere status of in the case of the addressee'. 19 exporter-trader of rice to the Community claimed by the applicant is not sufficient to bestow on it an attribute peculiar to it which sets it apart from any other under- taking operating in the same market. 18

17 — Contrary to ARM's assertions, it does not appear from the ARM-) judgment that its status as an exporter-trader of 50. The fact that the Commission is rice originating from the Netherlands Antilles to the required, by specific provisions, before Community was accepted. In the description of the rice market in the Netherlands Antilles, ARM is described as adopting a decision, to have regard to the an undertaking processing brown rice into semi-milled rice, whereas Trading & Shipping Co. Ter Beek NV is negative repercussions which its decision defined as an undertaking engaged in the rice trade which might have either on the economy of a State imports brown rice from Surinam and Guyana into the Netherlands Antilles where it processes it into semi-milled or for interested undertakings may be such rice prior to exporting it as such to the Community (paragraph 16 of the ARM-1 judgment). Furthermore, as to single out the latter 21 provided that having found that Trading & Shipping Co. Ter Beek N V they demonstrate proof that they are in a was individually concerned by the contested decisions (paragraph 78), the Court of First Instance stated that, since there was one application only, 'there is no need to consider whether the applicant ARM |is] entitled to bring proceedings' (paragraph 79 of the ARM-1 judgment and 19 — Page 107. the judgment cited therein). 20 — Paragraph 5 7 of ARM's application in the C-451/98 file. 18 — It has in fact been stated that six or seven undertakings 21 — Piraiki-Patraiki and Others v Commission, cited above, operate in the same market. paragraph 2 8 .

— the supply contracts entered into with customers established in the Commu- nity must have been concluded before the adoption of the act introducing the safeguard measures; 24 53. It also appears from the documents produced by ARM that, contrary to its assertions, the contracts entered into with customers in Surinam for the delivery to — the application of the act at issue must Bonaire of 8 400 tonnes of brown rice were be the cause, either solely or in part, of concluded on 16 August 1996, that is to the non-performance of those con- say, before those entered into with custo- tracts. mers established in the Community. ARM cannot, therefore, claim that the Surina-

22 — See ARM-1, paragraphs 72 to 74; Plaumann v Commis- sion and Pimiki-Patraiki and Others v Commission, cited 25 — ARM thus produced a letter dated 3 December 1996 in above, paragraph 28. which its board advised the Commission that the said 23 — Antillean Rice Mills and Others v Commission, cited measures not only risked having negative repercussions on above, paragraphs 25 to 30. the OCT's economy, but also that they were not justified 24 — That case concerned measures affecting products originat- having regard to the provisions of the Treaty and of the ing from Greece. OCT decision.

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mese contracts were intended to enable it to 56. Having failed to prove that it is indivi- meet its undertakings to its Netherlands dually concerned by the regulation at issue, customers. 26 it is therefore unnecessary to consider whether the applicant is directly affected by it.

55. Having regard to those various factors, it appears that ARM has not shown that it was affected by the regulation at issue by 59. The Netherlands Government advances reason of attributes peculiar to it or of a five pleas in law in support of its action. factual situation that distinguishes it from The first alleges breach of Article 109(1) of all other persons. the OCT decision. This plea is made up of two limbs. Under the first of these the Netherlands Government principally con- 26 — One of the reasons that lead me to doubt whether ARM's tends that Article 132 of the Treaty does activity is essentially centred on the export of semi-milled rice to the Community is to be found i n the documents that not permit the Council to adopt safeguard this company has adduced i n these proceedings. Of the measures for reasons connected to the contracts produced, it appears that, during the period in question, ARM purchased 14 000 tonnes of brown rice quantities or price-level of rice originating from Cereal Risi NV, a company established in Surinam, whilst the contracts for the sale of semi-milled rice to in the OCTs. Additionally, under the sec- customers established in the Community were for only ond limb, the Netherlands Government 4 800 tonnes. Those figures lead me to believe that, during the period i n question, contrary to its assertions, ARM's submits that the Council has not shown activity was essentially centred upon the processing of brown rice from Surinam rather than the export of semi- that the quantity or price-level of rice nulled rice to the Community. originating in the OCTs caused, or risked

Arguments By its third plea in law, the applicant submits that there has been a misuse of powers by the Council and the Commission in that they have used their competence under Article 109(1) of the OCT decision for a purpose other than that for which it 60. Under the first limb of its first plea, the was intended. Netherlands Government submits that it

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follows from the provisions of Article 132 only when the conditions laid down by of the Treaty that the advantages accorded Article 134 of the Treaty are satisfied.2"7 to the OCTs in the context of the progres- sive stages of the association cannot be called into question for reasons connected with the quantities or price-level of pro- ducts imported from the OCTs. Assessment

27 — Sec point 7 of this Opinion. 28 — Case C-17/98 Emesa Sugar [2000] ECR I-675, paragraph 63. The applicant accepts that the Com- 38. munity can adopt safeguard measures, but 29 — See point 8 3 e t seq., of this Opinion.

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Treaty, the Council may be prompted to of products imported from the OCTs. The curtail certain advantages previously first limb of the first plea in law is granted to the OCTs. 30 accordingly unfounded.

Second limb of the first plea in law 67. In order to reconcile the different objectives set by the Treaty, the Council is therefore authorised, exceptionally and temporarily, to remove or curtail the advantages previously granted to the OCTs where the application of the association Arguments arrangements causes, or risks causing, sig- nificant disturbance to the operation of a common market organisation. 31

70. By the second limb, the Netherlands Government submits essentially that the Council has failed to show that the impor- tation of rice from the OCTs risked causing 68. The Court has also rejected the argu- serious disturbances on the Community ment 'that safeguard measures may be market for rice by reason of the quantities taken only under the conditions set out in or price-level concerned. Article 134 of the Treaty [in so far as] Article 134 and the second paragraph of Article 136 pursue different aims...'. 32

measures, imports of rice from the OCTs The Netherlands Government points out for the 1995/1996 season amounted to that Community rice is sold in the form of 212 087 tonnes of milled rice. Comparison paddy rice, and that the buyers — usually of those two figures shows that the imports millers in the Member States where the rice of rice from the OCTs were not enough to is grown — process that Community satisfy the Community's needs for Indica paddy rice into milled rice. However the rice. The Netherlands Government deduces processing of husked rice from the OCTs from this that the Council wrongly stated into semi-milled rice and, then, the proces- that the quantity of imports of rice from the sing in the Community of that semi-milled OCTs threatened to disturb the market or rice into milled rice include an additional that these imports caused disturbance to element in the cost of processing and also the market. the mark-up of the intermediary miller. It claims that a summary of Italian and Spanish rice prices in 1997 compared to the intervention price for paddy rice shows that Community paddy rice remained below the intervention price, even during the period when the safeguard measures were in force.

74. The Council, the Commission and the It appears from the evidence produced by Spanish, French and Italian Governments the Council that imports of milled rice from dispute the allegations of the Netherlands the OCTs for the relevant period were as Government. They submit in substance follows: that, pursuant to Article 109 of the OCT decision, the Council has a wide margin of discretion and that, in this case, it could reasonably conclude that the imports con- cerned, having regard to the combined effect of their quantities and price-level, — 1992/1993 77 221 tonnes; cause disturbance to the Community rice market. They submit that the data relied upon by the applicant are questionable, since they are based on partial analysis which cannot be a proper substitution for the global analysis undertaken by the — 1993/1994 101 022 tonnes; Council. The Council has stated that its figures were supplied by Eurostat (Statisti- cal Office of the European Communi- ties). 35 — 1994/1995 108 394 tonnes;

75. In respect of the quantities of imports from the OCTs, the Spanish, French and — 1995/1996 212 087 tonnes. 36 Italian Governments submit that imports of rice from the OCTs tripled over the course of the last three years and that this

76. As for prices, the Commission and the 35 — Established in 1953, Eurostat is a Directorate-General of Spanish and French Governments submit the Commission of the European Communities. It is responsible, firstly, for providing the Community institu- that it is necessary to compare like with tions with the statistics necessary for the drafting, manage- ment and evaluation of Community policies, and, like, that is, at the milled rice stage or secondly, for the general publication of statistics on the Community for the benefit of public authorities, under- takings, the education sector, journalists and the general public. The Treaty of Amsterdam has given a constitu- tional basis to Community statistics (Article 285 EC). 36 — These figures are supplied by Eurostat.

78. The Commission states that the fact that the significantly lower price of rice from the OCTs compared with prices on the Community market disturbed the Com- munity market can be even more easily shown. The Commission bases its reason- ing on the findings of the Court of First Instance in the ARM-I judgment.

The Court concluded, at paragraph 131 of the same judgment, that: 'The Commission therefore rightly found that there was a At paragraph 130 of the ARM-I judgment, considerable difference between the price the Court of First Instance stated: The for Community rice and that for Antillean Court considers that the Commission did rice, which might have caused the collapse not commit any manifest error of assess- in the price of Community rice between ment by comparing the two raw materials September 1992 and January 1993'.

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82. The Spanish Government adds that, instead of treating the questions of price 81. Lastly, as regards the causal link, the and volume separately, the Council should Council, the Commission and the Spanish, have concentrated on the essential factor, French and Italian Governments argue that, namely that the ultimate basis for safeguard in the context of the application of Arti- measures lies in the combined effect of the quantities imported and the level of prices. 37 — By which is meant rice from the Netherlands Antilles and Aruba. 38 — Paragraph 130 of ARM-1. 39 — ARM-1, paragraph 128.

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Assessment measure result from the application of the OCT Decision'. 40

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circumstances: 'in a sphere such as this, in Community institutions, judicial review which the Community institutions have a must be limited to verifying that there has broad discretion, the lawfulness of a mea- been no manifest error of assessment of the sure can be affected only if the measure is facts or misuse of powers, that the proce- manifestly inappropriate having regard to dural rules have been complied with, that the objective pursued. The Court's review the reasons on which the act is based are must be limited in particular if the Council properly stated and that the facts on which has to reconcile divergent interests and thus the contested choice is based have been select options within the context of the accurately stated. 4 7 policy choices which are its own responsi- bility...'. 43

88. That case-law can be compared to that 90. In addition, the Court has also stated to which the Court systematically refers that the discretion which the Community when asked to rule on the legality of acts institutions have when assessing complex adopted by Community institutions which economic situations can be exercised not involve the assessment of complex eco- only in relation to the nature and scope of nomic situations. 44 In that type of situa- the provisions which are to be adopted but tion, the Court starts from the premiss that also, to a certain extent, to the findings as the Community institutions have a wide to the basic facts, especially in the sense discretion 4 5 and that only the manifestly that it is free to base its assessment, inappropriate nature of a measure in rela- if necessary, on findings of a general tion to the objective pursued can affect its nature. 48 legality. 46

92. It is clear from the documents before enabling it alone to define the common the Court, from the answers to the ques- agricultural policy on the market in Indica tions posed by the Court, from the hearing rice and to determine how and from where and from the preamble to the regulation at the Community's needs in that respect issue that the Council took into account would be met. It seems that, in the rice various factors before deciding on the need sector of the common agricultural policy, to adopt safeguard measures. the Community decided to encourage Com- munity producers to switch from the pro- duction of Japónica rice (where there was a surplus production) to the production of Indica rice. 50 I believe that the efforts to restructure this agricultural sector would be seriously compromised if the OCTs were 93. Thus, as regards the quantities of rice allowed to meet the whole of the Commu- imported from the OCTs, the Council nity's demand for Indica rice. considered on the basis of data supplied by Eurostat, which carries out global analysis, the reliability of which was not disputed by the Netherlands Government, that imports of rice from the OCTs were increasing rapidly and substantially.

compared and the methods of price calcu- 100. As regards the causal link, the fact lation, in particular as regards the conver- remains that the Netherlands Government sion rate to be used between the various does not dispute the fact of substantial processing stages. disturbances on the internal market for rice during the period in question. It acknowl- edges that the price of Community Indica rice did not stop falling during that period in spite of the deficit in that sector and improved harvests in Spain. It claims how- ever that those disturbances were caused by 98. In the ARM-1 judgment, as we have massive imports of rice from third coun- seen, the Court of First Instance precisely tries, in particular the United States and analysed those various methods of calcula- Egypt. On this point the Council states, tion. Its reasoning and the conclusions without having been contradicted by the which it reached seem to me to be applic- applicant, that no implementation agree- able in this case. The Netherlands Govern- ment pursuant to Council Regulation (EC) ment has not been able to show in this case, No 1522/96 of 24 July 1996 opening and any more than it did before the Court of providing for the administration of certain First Instance in ARM-1, that the Council's tariff 52quotas for imports of rice and broken method of calculating the level of rice rice, has yet been concluded with the prices from the OCTs and from the Com- United States, which has been accorded a munity was manifestly wrong. It is com- substantial share of the said quotas. Thus mon ground that the calculation methods for the most part, that quantity is still no put forward both by the Council and the more53 than potential as regards the mar- Netherlands Government are based on a ket. The Council lastly states that only theoretical price. 51 Japónica rice is grown in Egypt. That information has not been the subject of any debate.

102. It follows from the foregoing that the Second plea in law, alleging breach of Council, being required to implement com- Article 109(2) of the OCT decision peting policies, pursuant to the provisions of Article 131 et seq. of the Treaty, on the one hand, and of Article 40 of the EC Treaty (now, after amendment, Article 34 EC) et seq., on the other hand, could legitimately consider, having regard to the imbalance already existing on the internal 104. By the second plea in law, which is market, the continued increase in imports divided into four separate limbs, the Neth- of rice from the OCTs, and the reduction in erlands Government complains that the the price of OCT rice, that: Council breached the principle of propor- tionality as set out in Article 109(2) of the OCT decision. That provision states — it will be recalled — that 'priority shall be given to such measures as would least disturb the functioning of the association and the Community. These measures shall not exceed the limits of what is strictly necessary to remedy the difficulties that have arisen'. — disturbances on the Community mar- ket in rice were caused by the com- bined effect of the quantity and price- level of OCT rice;

105. In this respect the applicant submits that the safeguard measures adopted by the Council in this case:

— the situation would only deteriorate if safeguard measures were not adopted.

— breach the order of preference EC/ OCT/ACP/third countries (first limb);

103. In the absence of proof of a manifest error of assessment on the part of the Council, I propose that the Court hold the — have negative repercussions upon the second limb of the first plea to be unfoun- economy of the Netherlands Antilles ded. and Aruba (second limb);

109. The Netherlands Government points 107. These different arguments amount to out that, in the period from January to an allegation of breach of the principle of April 1997, the effect of the safeguard proportionality, which requires that acts measures introduced by Regulation adopted by the institutions do not exceed No 304/97 was to restrict imports of the limits of that which is necessary and husked rice from the OCTs exempt from appropriate in order to attain the objectives customs duties to 44 728 tonnes, whilst at legitimately pursued by the legislation in the same time the application of Regulation question; when there is a choice between No 1522/96 authorised the import into the several appropriate measures, recourse Community of the equivalent of 69 488 must be had to the least onerous, and the tonnes of husked rice exempt from customs disadvantages caused must not be dispro- duties from third countries. 56 portionate to the aim pursued. 54

55 — And referred to in ARM-1, paragraph 142. 54 — See, for example, Joined Cases C-296/93 and C-307/93 56 — Paragraph 89 of the Netherlands Government's applica- France and Ireland v Commission [1996] ECR I-795, paragraphs 22 and 30. tion.

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114. Furthermore, as the Commission points out, unlike imports from the OCTs, 113. It follows from the evidence in this imports from third countries and from the case that, when the Council adopted the ACP are in principle subject to customs safeguard measures in question, Regulation No 1522/96, authorising third countries to 58 — As far as I am aware this is still the case. 59 — The Netherlands Government lias not challenged this figure provided by the Commission in its statement in 57 — Points 86 to 91 and 107 o f this Opinion. intervention.

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duties. In addition, those countries, unlike measures. It says that the meeting organised the OCTs, never benefit from the cumula- by the Commission in December 1996 was tion of origin rule, which means they may purely formal since the Commission had not artificially increase their production already formed its opinion on the need to capacity. take safeguard measures.

115. It follows from the foregoing that 118. It submits that this method of pro- application of Regulation No 304/97 did ceeding was in breach of the principle of not place the ACP and third countries in a the protection of legitimate expectations. clearly more advantageous competitive Undertakings with consignments of rice position than that of the OCTs. from the OCTs en route for the Community at the time when the said measures were adopted are said to have been 'betrayed'.

Second limb of the second plea in law 119. The Council, the Commission and the Spanish Government dispute these argu- ments.

122. Similarly, the Netherlands Govern- 125. It follows from points 53 to 55 of this ment has not shown that the situation of Opinion that that is not the case here. the Netherlands Antilles was not examined in depth, particularly as regards the likely impact on their economy of the safeguard measures.

126. The second limb of the second plea in law is therefore unfounded.

123. As for breach of the principle of the protection of legitimate expectations, it Third limb of the second plea in law should be borne in mind that, according to the settled case-law of the Court, traders cannot claim to have a legitimate expecta- tion that an existing situation which is capable of being altered by decisions taken by the institutions within the exercise of their discretionary power will be main- Arguments tained. 60

Assessment 132. Contrary to the assertions of the Netherlands Government, the safeguard measures in question, consisting in the introduction of tariff quotas, are suited to the objective pursued by the Community legislature, as set out in Regulation 129. Having regard to the principles re- No 304/97 and the OCT decision. ferred to above, 63 this complaint can be upheld only if evidence is adduced that the measure in question is not capable of bringing about the intended objective, that it is unnecessary and that recourse to other, less onerous yet equally effective means would have been possible. 133. The measures authorise the Nether- lands Antilles to import into the Commu- nity, first, a certain quantity of Indica rice exempt from customs duty and, second, an 130. Regulation No 304/97 is intended to additional quantity subject to the payment restrict imports exempt from customs duty of the appropriate customs duties. of rice originating in the OCTs falling within CN code 1006. It is neither intended to, nor does it prohibit imports of those products, once the quota is filled, provided that the traders concerned pay the customs duties required. 64 It should also be pointed out that the regulation at issue was adopted pursuant to Article 109(1) of the OCT decision. It follows that the principles and 134. It has not been shown that the intro- objectives of that decision must be duction of a minimum price would have respected. entailed less disturbance for the OCT economies and would have been as effec- tive in the attainment of the Community legislature's objective. Moreover, in the ARM-1 judgment, the safeguard measure challenged consisted precisely in the intro- 131. The objectives of the OCT decision duction of a minimum price. Traders estab- are, in accordance with the provisions of lished in the Netherlands Antilles blamed the Treaty, to promote trade between the that type of measure for making Antillean OCTs and the Community, to enable rice more expensive on the Community customs duties between the OCTs and the market than rice from the ACP and third Community to be progressively abolished, countries. 65 Therefore, they were asking and to promote the economic and social the Court of First Instance to find that this development of the OCTs. measure exceeded that which was strictly necessary for remedying the difficulties

Arguments

139. The purpose of the measure at issue is to prevent speculative conduct. It is inten- ded to dissuade traders who have no real 136. By the fourth limb, the Netherlands intention of importing rice originating in Government submits that the amount of the OCTs into the Community from the security required from importers is such requesting import licences. If no security that the legislation laying down special were attached to the import licence, a very detailed rules for the application of the large number of operators would apply for system of import licences for rice is ren- such licences so as to keep open the option dered inapplicable. 67 to exploit that entitlement.

Argument

141. I therefore conclude that the measure in question is necessary and appropriate to the objective pursued. 144. The Netherlands Government criti- cises the Council and the Commission for having used their power under Arti- cle 109(1) of the OCT decision for a purpose other than that for which it was intended. 142. Lastly, it should be pointed out that the Netherlands Government has not sug- gested any other mechanism capable of attaining the objectives set out above. The inference can be drawn that the principle of the appropriate and necessary character of the arrangements complained of is not 145. It considers that Article 109(1) of the being disputed by the Netherlands Govern- OCT decision does not confer the right on ment. As for the complaint that the amount the Community legislature to stop or of the security is too high, it should be substantially reduce imports of rice from pointed out that the Netherlands Govern- the OCTs. Only amendment of the OCT ment has not shown that a lower figure decision, pursuant to the procedure laid would have been as effective. It has not, down — namely by unanimous vote of the therefore, shown that the Council has Council — would have allowed the Com- committed a manifest error of assessment. munity legislature to achieve this end.

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NETHERLANDS v COUNCIL

Assessment bances arising or which may arise on the internal market from imports of rice from the OCTs into the Community.

6 8 — Joined Cases 33/86, 44/86, 110/86, 226/86 .nul 285/86 Stahlwerke Vetne-Salzgitter and Hoogovens Groep v 150. I therefore propose that the Court Cimmussiwi [1988] ECR 4309; Case C 84/94 United Kingdom v Caunai [1996] ECR I-5755, paragraphs 57 to declare the third plea in law unfounded. 67, and Case C-285/94 ITALYV Commission [1997] ECR I-3519. paragraph 52. 69 — See, for example. Case T-489/93 Umfruit Hellas v Commission [I994| ECR II-1201. 70 — See points 83 to 103 of this Opinion.

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OPINION OF MR LÉGER — CASES C-110/97 AND C-451/98

Fourth plea in law, alleging infringement of 154. Secondly, it submits that the Commis- the revision procedure for safeguard mea- sion, in adopting the safeguard measures sures under Annex IV to the OCT decision provided for by Regulation No 21/97, breached the provisions of Annex IV to the OCT decision in that the said measures applied only with effect from 1 January 1997.

151. Firstly, by this plea in law, the Nether- lands Government complains that the Council did not examine the conditions on the rice market independently, when it 155. In its view, Article 1(4) of Annex IV repealed the measures laid down by the to the OCT decision provides that the Commission by Regulation No 21/97 and decision 'shall apply with immediate effect' replaced them with those of Regulation and is not retroactive. No 304/97.

156. The incompatibility thus identified between Regulation No 21/97 and Annex IV to the OCT decision on this point has not been remedied by the Council 152. In its view, the nature of the revision in Regulation No 304/97. procedure laid down by Annex IV implies that the Council, when it decides to adopt a decision different from that previously adopted by the Commission, is to proceed independently of the findings of the Com- mission; it may, in particular, not refer to 157. The Council, the Commission and the those findings. Spanish Government contest these argu- ments.

munity institutions enjoy a wide margin of presentation of the economic situation, I discretion. 71 The Court would deem it would only point out that the Netherlands necessary to censure the exercise of these Government has not put forward any powers only if it clearly appeared that the evidence in support of its assertions. acts adopted were inappropriate to the objective pursued by the Community legis- lature, or if it were shown that there had been a manifest error of assessment of the facts or an error as to the accuracy of the facts. 72 162. Lastly, it is not acceptable, in my view, to claim that the Council did not carry out a proper examination of the Commission decision when it proceeded to revise that 159. As far as the first limb of this plea in decision. law is concerned, I do not subscribe to the analysis of the Netherlands Government that the Council, when carrying out the review procedure provided for by Annex IV to the OCT decision, must carry out an 'independent assessment' in the sense that it may not refer to the file on 163. The argument that the Council did the basis of which the Commission decided not comply with Article 1(4) of Annex IV to adopt the safeguard measures. to the OCT decision, which requires the adoption of measures 'with immediate effect' and which are 'not retroactive', does not seem to me to be relevant. It expressly appears from the second paragraph of Article 8 of the regulation at issue 73 that 160. In the context of the revision proce- the Council ensured that the new measures dure, the task of the Council is to carry out adopted as a result of the revision proce- a reassessment, that is, as the word sug- dure should take effect immediately, with- gests, a check to see whether the measures out retroactive effect. previously adopted have not become inap- propriate. It seems to me therefore entirely logical, legitimate and useful that the Council should take into account the data upon which the Commission adopted the safeguard measures. 164. Furthermore, the assertion, which I have already examined, 74 that supply con- tracts were in the course of being per- formed when the Commission and the 161. Furthermore, as regards the argument Council decided to adopt the regulation at that the Council relied on the Commission's issue is unsupported by any evidence.

169. According to settled case-law, 75 the Fifth plea in law, alleging infringement of extent of the requirement to state reasons Article 190 of the Treaty depends on the nature of the measure in question and, in the case of measures intended to have general application, the statement of reasons may be limited to indicating the general situation which led 166. The Netherlands Government com- to its adoption and the general objectives plains that the Council confined itself to which it is intended to achieve. 76 reproducing, almost literally, the usual statement of reasons set out by the institu- tions when they decide to adopt safeguard measures on the basis of Article 109 of the OCT decision. 170. Likewise, the Court has repeatedly held that the statement of reasons must show clearly and unequivocally the reason- ing of the Community authority which adopted the measure so as to inform the persons concerned of the justification for the measure adopted, and to enable the 167. It submits that the regulation at issue Court to exercise its power of review. 77 contains no concrete information, nor any details of the criteria and facts that were taken into consideration by the Council to justify the validity of the measures adopted in this case. Thus, in the sixth recital to the 171. Furthermore, according to settled preamble of Regulation No 304/97, the case-law 78 'the statement of reasons for a Council confined itself to stating that rice from the OCTs can be sold on the Com- munity market at a substantially lower 75 — See, in particular, Case 5/67 Bens [1968] ECR 83, at page price than that at which Community rice 95. can be sold, given the level of processing 76 — See, in particular, Spain v Council, cited above, paragraph 28. involved, without indicating the processing 77 — See, in particular, Joined Cases C-63/90 and C-67/90 stage taken as the basis for the calculation Portugal and Spain v Council [1992] ECR I-5073, paragraph 16. of prices, or specifying the price-level 78 — Since Case 80/72 Koninklijke Lassiefabrieken [1973] ECR determined as a result of this calculation. 635, paragraph 25.

176. In this case it should be pointed out that the regulation at issue is an act of 174. Lastly the Court has stated that, in general application forming part of a series areas in which the Community legislature has a wide margin of discretion as to the choice of measures necessary for the 81 — See SPAIN V Council, cited above, paragraph 30. achievement of a complex policy, it suffices 82 — Ibidem. The Court was considering whether the Council in adopting Regulation (EC) No 1921/94 of 25 July 1994 amending Regulation (EC) No 519/94 on common rules for imports for c e r t a i nthird countries (OJ 1994 L 198, p. 1), had infringed the provisions of Article 190 of the' Treaty. 79 — See, in particular. Joined Cases C-9/95, C-23/95 and C-156/95 Belgium and Germany v Commission [1997] 83 — A policy also considered 'complex' within the meaning of LCR 1-645, paragraph 44. the Court's case-law. 80 — See, in particular, Case C-354/95 National Farmer' Union 84 — Spam v Council, cited above, paragraph 34. and Others [1997] ECR 1-4559, paragraph 58. 85 — Ibidem, paragraph 35.

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OPINION OF MR LÉGER — CASES C-110/97 AND C-451/98

of regulations laid down by the Community 178. The reasons given in the regulation in institutions in order to implement and issue also set out the general objectives that reconcile two complex policies, that pur- it is intended to achieve. sued by the common agricultural policy on the market in rice, and that sought by the economic policy drawn up in the context of the arrangements for association with the OCTs.

It is, in particular, explained that the disturbance on the Community market in Indica rice caused by imports of rice from the OCTs could wholly undermine the attempts of the Community legislature to 177. It further appears that the reasons encourage Community producers to pro- given in the regulation at issue set out the duce Indica rice 88 by means of temporary overall situation which led to its adoption. aid per hectare and that it was therefore appropriate to adopt safeguard measures intended to prevent these disturbances from getting worse and the efforts of the com- mon agricultural policy to diversify pro- duction in the rice sector from being compromised.

(I) In Case C-110/97

— dismiss the application;

— order the Kingdom of the Netherlands to bear its own costs and to pay those of the Council of the European Union;

— order the Kingdom of Spain, the French Republic, the Italian Republic and the Commission of the European Communities to bear their own costs.

(2) In Case C-451/98

— declare the application inadmissible;