C-269/97

2 — Proposal for a Council Regulation (EC) establishing a system for the identification and registration of bovine * Original language: Italian. animals and Proposal for a Council Regulation (FC) 1 — OJ 1996 L 177, p. 1. regarding the labelling of beef and beef products (OJ C 349 of 20 November 1996, pp. 10 and 14)

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ment, suggested to the Commission that tion with the Parliament — that procedure Article 100a of the Treaty should also be should have been used to adopt the con- chosen as the legal basis for that measure. tested measure.

8. The Commission then examines the content and aims of the contested regula- 6. The Commission maintains that the tion in order to determine the correct legal Council has infringed essential procedural basis for the measure in the light thereof. requirements by taking Article 43 of the Treaty as the legal basis for the Regulation. Since Article 100a of the Treaty, which 3 — I n that respect the Commission refers, first, to Council Directive of 27 November 1992 on the identification and should have formed the legal basis for the registration of animals (92/102/EEC) (OJ L 355, p. 32) and Council Regulation (EEC) No 1208/81 of 28 April 1981 measure, provides for the application of the determining the Community scale for the classification of codecision procedure referred to in Arti- carcases of adult bovine animals (OJ 1992 L 123, p. 3), and second, to a Council Directive of 18 December 1978 on the cle 189b of the EC Treaty (now Article 251 approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for EC) — in contrast to Article 43(2) of the sale to the ultimate consumer (79/112/EEC) (OJ 1979 L 33, Treaty which merely provides for consulta- p. D·

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12. However, the parties' opinions differ greatly as to the purposes of the Regula- tion. 10. As regards the system for the labelling of beef and beef products, the Commission refers to Title II of the Regulation. Firstly, Article 12 of that Title sets out the infor- mation which a label must contain at the point of sale. For example, Article 12(1) 13. The Commission acknowledges that the Regulation relates to products listed in refers to information concerning the origin Annex II to the Treaty and forming part of or decisive characteristics or production a common organisation of the market. 5 conditions of the labelled meat or of the However, in its view that does not necessa- animal from which it derives. Under Arti- rily mean that the Regulation pursues, in cle 19 of the Regulation, that beef-labelling the main, an objective of agricultural system will be obligatory in all Member policy. States from 1 January 2000 onwards. To market beef, operators require a specifica- tion approved by the competent authority of the Member State concerned. In accor- dance with Article 14 of the Regulation, the specifications must indicate the infor- mation to be included on the label, the 14. In particular, it maintains that the first measures to be taken to ensure the accuracy and third recitals in the preamble to the of information, and the control system Regulation reveal the actual purpose of the

5 — Regulation (EEC) No 805/68 of the Council of June 4 — Sec the first recital in the preamble to Regulation 1968 on the common organisation of the market in beef and No 820/97. veal (OJ, English Special Edition: 1968(1), p. 187).

18. Therefore, the Commission concludes that the correct legal basis for the Regula- 15. The actual and fundamental reason for tion should have been Article 100a of the the adoption of the contested regulation, Treaty. namely the protection of human health, is evident only against the background of the crisis caused by BSE. Although the labelling of beef could admittedly also be regarded in general terms without any link to health protection, in the present case the measures taken were intended solely to provide consumers with information on the origin 19. The Commission was guided by the of the product and certain characteristics case-law of the Court of Justice when it thereof or production conditions. More- drew up the original two proposals for a over, it is precisely that information which directive. Initially it envisaged a regulation is intended to assure the consumer that the concerning products listed in Annex II to product he intends to purchase poses no the Treaty and considered that public- risk to his health. interest requirements, in particular the protection of health, could not be disregar- ded when pursing the objectives of the common agricultural policy. For that rea- son, it initially chose Article 43 as the legal basis for its proposals. However, after closer consideration it concluded that the BSE crisis called for special measures directed particularly and primarily at pro- 16. The measures relating to traceability tecting the health of consumers. For that provided for in the Regulation were reason it finally gave Article 100a of the adopted specifically to combat BSE. That Treaty as the legal basis for its proposals. explains why those measures apply solely to bovine animals. Those measures make it possible not only to identify individual animals but also to trace the herds and holdings from which they derive. That provides not only a greater insight into the disease, but also offers the best system 20. Furthermore, in the context of Arti- for combating it. cle 100a the Commission refers to the idea

22. Moreover, the Commission considers (3) order the Council to pay the costs. that if Regulation No 820/97 is annulled, the Court of Justice should rule that the effects thereof are definitive in accordance with the second paragraph of Article 174 of the EC Treaty (now the second para- 24. The Parliament, which intervened in graph of Article 231 EC). It claims that the the proceedings in support of the form of normative mechanism laid down by the order sought by the Commission, also Regulation constitutes an important step in considers that the principal aim of the the fight against BSE. In particular, the Regulation is to protect human health. It- Commission has already adopted, on the submits that in order to gain a better basis of the Regulation, implementation understanding of a measure account must

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28. Finally, the Parliament also considers that if the Regulation is annulled its effects should be preserved. 25. As far as the Parliament is concerned, in the present case there is no difference between this and other provisions concern- ing the labelling of foodstuffs in general which must be based on Article 100a and not Article 43 of the Treaty. Thus far case- 29. The Council contends that the Court of law has dealt only with measures whose Justice should dismiss the action and order principal aim was the marketing of agri- the Commission to pay the costs. cultural products on the internal market and which sought to protect human health only as a secondary aim. However, that is not the case here where the principal aim of the Regulation is to protect human health. 30. The Council considers that although the context in which a measure is adopted may also be taken into account in order better to understand the scope thereof, it is not the decisive factor in the choice of a legal basis. That is because such choice 26. It also is evident from the Treaty itself must be based on objective factors which that, in matters relating to health protec- are amenable to judicial review. According tion, the Parliament must be involved in the to the case-law of the Court of Justice, the

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content and aim of the measure constitute 34. To that end it was essential to establish those factors. an efficient identification and registration system at the production stage and a Community labelling system based on objective criteria at the marketing stage. 6

'... the market in beef and beef products has been destabilised by the bovine spongiform encephalopathy crisis;... it is necessary to re-establish stability in this market;... such 36. However, it claims that the protection re-establishment of stability can most effec- of human and animal health is merely a tively be achieved by improving the trans- secondary aim of the Regulation which also parency of the conditions for the produc- lays clown rules for the intra-Community tion and marketing of the products con- trade in live animals, since animals for that- cerned particularly as regards traceability.' trade have to be identified and registered in accordance with Community rules. Such identification and registration must make it- possible to trace the original or transit holding, centre or organisation. 8 The indi- vidual identification of certain types of livestock, in this case bovine animals, also 33. The Council considers that such trans- parency is capable of restoring consumer confidence both in the market and the 6 — See the second recital in the preamble to Regulation No «20/97. ' products and will thus enable the stability 7 — See the third recital in the preamble to Regulation of the market, which has been thrown into No 820/97. 8 — See the fifth recital in the preamble to Regulation crisis by BSE, to be re-established. No 820/97.

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enables certain Community aid schemes for directive was also adopted on the basis of agriculture to be properly managed. 9 Article 37 of the Treaty without that choice of legal basis subsequently being contested.

38. As regards the provisions concerning 41. Moreover, the protection of animal the tracing of animals, they were not health is linked quite closely to the market- adopted solely to combat BSE. Although ing of the product concerned. If the animals the progress of an animal can now be satisfy the requirements imposed on them traced from rearing to the abattoir, that to protect health, it will be possible, cannot, in terms of protecting human eventually, to win back and maintain health, be regarded as constituting a mea- customer confidence more easily and con- sure capable of eradicating BSE. sequently to establish stability in the mar- ket. The fact that the Regulation applies only to bovine animals and beef and not pigs, sheep and goats and meat derived therefrom is not due to the fact that greater account is taken of the health-protection 39. Furthermore, the Council observes that requirements in that case, but simply Directive 92/102, which applied previously because the market in beef was thrown to the identification and registration of into such serious crisis by mad cow disease bovine animals, proved to be not entirely that immediate action in the form of satisfactory for those animals and had to be stabilising measures was necessary. amended. The contested regulation, which applies specifically to bovine animals, was adopted in order to extend the provisions of the abovementioned directive. 10 That

9 — See the seventh and eleventh recitals in the preamble to 42. As regards the choice of legal basis, the Regulation No 820/97. Council argues that it must, in the final 10 — See the ninth recital in the preamble to Regulation No 820/97. analysis, be made solely in the light of the

content and aim of the measures envisaged. within the context of the common organi- Since this case concerns the production and sation of the market in beef to promote marketing of products listed in Annex II to better organisation of production, proces- the Treaty and also the pursuit of essential sing and marketing and to improve quality. aims of common agricultural policy, the That is precisely the objective the Council contested regulation was rightly based on was pursuing when it adopted the Regula- Article 43 of the Treaty. tion with a view to producing a positive effect on the market. Since public interests are also part of agricultural policy, which in turn must form part of the general eco- nomic context, the arguments put forward by the Commission and the Parliament 43. The arguments put forward by the would result in Article 43, which constitu- Commission and Parliament could ulti- tes a lex specialis, being rejected in favour mately reduce to nothing the field of of Article 100a when choosing the legal application of Article 43 of the Treaty since basis for a measure every time the adoption any measure which also seeks to protect of a measure was connected directly or human health would also have to be based indirectly with the BSE crisis since the on Article 100 of the EC Treaty (now objective would always be to protect public Article 94 EC) or Article 95 thereof. How- health. That would reduce considerably the ever, the Council contends that public- scope of the objectives of the common interest requirements, in particular the agriculture policy set out in Article 39 of protection of consumers or human and the Treaty. animal health, are also taken into account where Article 43 is chosen as the legal basis for a measure since such public interests cannot be disregarded where objectives of the common agricultural policy are being pursued, as is clear from the first subpar- agraph of Article 129(1) of the Treaty and the case-law of the Court of Justice. 45. The Council concludes that if the criteria which are decisive for the choice of legal basis for the provisions envi- saged — content and aim — are examined, the action which it took in the present case 44. Moreover, the Regulation seeks, inter must be regarded as right and proper. alia, to achieve the aim referred to Arti- cle 39 of the EC Treaty (now Article 33 EC), that is to say to stabilise markets. Furthermore, the measures provided for in the Regulation are referred to in Article 2 of Regulation No 805/68. 1 1On account of that provision, measures may be adopted 46. As for the argument by which the 11 — Regulation on the common organisation of the market m Commission and the Parliament proposed, beef and veal (cited above in footnote 5). in the alternative, that Article 43 and

— individual registers kept on each hold- ing. Content of the Regulation

The Commission, the competent authority 48. The Regulation is divided into two of the Member State concerned and all parts. Title I provides that the Member interested parties, including the relevant consumer associations, must have access to all such information. Article 4 then speci- 12 —Judgments in Case C-45/96 Commission v Council [1987] fies the animals which must be identified by ECR 1493, at paragraph 11, Case C-131/96 United Kingdom v Council [1988] ECR 905, at paragraph 29, eartags and the characteristics which those and Case C-271/94 Parliament v Council [1996] ECR 1-1689, at paragraph 14. tags must have. Article 5 sets out the

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51. The second part of the Regulation governs the labelling of beef and beef products. Article 19 introduces a compul- sory beef-labelling system which will be obligatory in all Member States from 54. Furthermore, this part of the Regula- 1 January 2000 onwards. Moreover, the tion lays clown possible penalties if the provisions contained in Title II apply to each operator who wishes to label beef at the point of sale in such a way as to provide 13 — Article- 12(1) of Regulation No 820/97.

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provisions contained in the individual arti- 58. The aims of the Regulation can be cles are infringed. determined essentially from the individual provisions thereof and the recitals in the preamble thereto.

55. The abovementioned provisions also relate essentially to the factual and techni- cal requirements concerning the labelling of beef and beef products. Although they are also directed at the producer, they relate primarily to the marketing stage of the 59. From these it may be seen that the product. The connecting factor for the Regulation is aimed at improving the labelling of beef is the point of sale transparency of the conditions for the (Article 12(1) of the Regulation). production and marketing of beef, particu- larly as regards traceability. That is inten- ded to enable stability in the market, which has been destabilised by the BSE crisis, to be re-established. 14

56. Moreover, since the parties agree on the content of the Regulation, it appears unne- cessary to dwell on this matter any further.

61. However, the Regulation also seeks to 65. In view of the foregoing, Council's manage properly certain Community aid argument must be accepted in so far as it- schemes in the field of agriculture for which claims that the Regulation relates to the it is necessary to identify certain types of production and marketing of products livestock individually.18 listed in Annex II to the Treaty. It must also be acknowledged that the Regulation seeks to implement the objectives of the common agricultural policy as set out in Article 39( I ) of the Treaty and in particular to increase agricultural productivity and stabilise markets. 62. Moreover, the establishment of the system for the identification and registra- tion of bovine animals is intended to enable them to be traced easily and accurately. The rules previously in force proved to be not entirely satisfactory, in particular during the BSE crisis, and needed improvement 19 (which was brought about by adopting the contested regulation). 66. However, it is uncertain whether that is the sole and decisive aim of the Regulation.

63. Moreover, an efficient labelling system must be established to make it possible to trace back any labelled beef to the animal 67. In the submission of the Commission or animals of origin. 20 and the Parliament, in order to determine the principal aim of a measure, account must also be taken of the factual and political circumstances which led to its adoption.

69. However, in principle that does not preclude other criteria from also being 72. In this case the Council does not taken into account to determine the legal dispute the factual context, namely the basis, provided that they are objective and BSE crisis. On the contrary, it states that it amenable to judicial review. was the crisis which necessitated the adop- tion of the contested regulation. However, it adds that the measure was not specifi- cally taken primarily to guarantee a high level of human-health protection, but rather because it was necessary to strengthen, by means of stabilisation mea- sures, the market in beef and beef products 70. However, it is more than doubtful which was in serious difficulty. One of the whether the factual circumstances and means of attaining that aim was to restore political consideration which are taken into and encourage consumer confidence in the account when a measure is adopted may be products in question by means of identifi- assessed, for the purpose of determining the cation and labelling. aim of that measure, in the same way as the content and aim thereof. The political circumstances in particular are open to rather subjective assessments and may vary to such a considerable extent, depending on the various views and political necessities, that for reasons of coherence and legal certainty they cannot be regarded as a 73. However, the Commission and the decisive criterion for the determination of Parliament contend, having regard to the the legal basis of a measure. BSE crisis, that the principal aim of the Regulation was to protect human and animal health.

81. If we begin by looking at the history of the Regulation and its content, wc cannot 77. However, the mere fact that public- fail to observe that a single measure interest r e q u i r e m e n t s are taken into governs two separate and distinct subject- account does not automatically mean that matters together. On the one hand, the they constitute the principal aim of the system for identifying and registering measure taken. bovine animals is set out in detail, and on the other, a system is established for the labelling of beef and beef products. Those two subject-matters operate on different levels from the outset (production and sale respectively). They have equal status and therefore may also differ in terms of their respective purposes. 78. The fact that in any event rules are laid down for the production and marketing of agricultural products in order to stabilise the market means that Article 100a cannot

82. As regards the rules on the identifica- 23 — Order in Case C- 180/96 R Umlnl Kingdom v Cominissiun tion and registration of bovine animals [1996] ECR I-3903, at paragraph 63, and judgment in Case C-180/96 United Kingdom v Commission [1998] which apply at the production stage, it can ECR I-2265, at paragraph 120. be stated, in the light of the foregoing, that

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86. However, where a regulation governs two separate subject-matters, to be consid- ered separately, which co-exist side by side, it would appear logical to examine whether 83. As regards that part of the Regulation it the two parts of the regulation pursue the must therefore be found that it is not same aims or whether different aims are in necessary to take account of Article 100a point. If the latter is the case, it is not of the Treaty in addition to Article 43 with possible to apply the conventional hierar- regard to the choice of legal basis. chy of aims (principal and secondary aim) when examining the regulation as a whole since such a distinction makes sense only where rules are laid down for a single subject-matter. A second, independent, sub- ject-matter cannot be subordinated to another subject-matter simply because it is governed by the same rules. In particular, 84. However, matters are slightly different the linking of two independent subject- with regard to the second part of the matters must not (be able to) result in an Regulation, namely the labelling of beef. independent (and separate) aim being reduced to a secondary aim merely because it is linked to another important objective. The division into principal and secondary aim is of no significance where there is a risk — albeit unintentional — of one aim being subordinated to another simply on account of the link made between two 85. It should be noted at the outset that it different subject-matters. It would then be forms an entirely independent part of the possible to imagine a case — of course only Regulation. The provisions of Title II theoretically from the point of view of the (Labelling) could exist even without Title Court — where through a 'shrewdly calcu-

92. Since the aim and effect of this is to provide the consumer with better informa- tion on the product he intends to buy, the decisive aim of Title II of the Regulation 90. However, the information is essentially appears to be, in respect of this part of the for the benefit of consumers. On account of Regulation, to inform the consumer.

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93. However, the second aim, that is to say 97. The parties have proposed that, in the to stabilise the markets, takes second place event that the measure is annulled, the as regards this part of the Regulation. effects of the Regulation should be consid- ered as definitive pursuant to the second paragraph of Article 174 of the Treaty since they appear to be necessary in their entirety. That proposal should be accepted 94. However, it follows that the (separate) since the contested regulation constitutes principal aim of that part of the Regulation an effective means of dealing with the crisis is not the same as that pursued by Title caused by BSE and provides the consumer I. Having regard to the foregoing (see with the greatest possible amount of infor- paragraph 86), there are, therefore, two mation. In particular, it should be accepted different aims for two separate subject- for reasons of legal certainty as the Com- matters which are nevertheless incorpo- mission has already adopted several imple- rated into a single regulation. None the menting provisions for that Regulation. less, as regards the problem of choosing a correct legal basis it must be concluded that when the Regulation was adopted account should have been taken of the (equal) importance of those aims without subordi- nating one of them to the other. Costs

(2) preserve the effects of the annulled regulation until new rules on the subject, adopted by the Community legislature on the proper legal basis, enter into force;

(3) order the Council to pay the costs;

(4) order the Parliament to bear its own costs.

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