T-179/97

GOVERNMENT OF THE NETHERLANDS ANTILLES v COUNCIL

O R D E R O F T H E PRESIDENT O F T H E C O U R T O F FIRST INSTANCE 15 July 1997*

In Case T-179/97 R,

Government of the Netherlands Antilles, represented by P. V. F. Bos and M. M. Slotboom, of the Rotterdam Bar, with an address for service in Luxembourg at the Chambers of M. Loesch, 11 Rue Goethe,

applicant,

v

ORDER OF 15. 7.1997 — CASE T-179/97 R

Kingdom of Spain, represented by R. Silva de Lapuerta, Abogado del Estado, act- ing as Agent, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard Emmanuel Servais,

French Republic, represented by K. Rispal-Bellanger, Head of Subdirectorate in the Legal Directorate of the Ministry of Foreign Affairs and, at the hearing of the parties, by C. Chavance, Foreign Affairs Secretary in the same directorate, acting as Agents, with an address for service in Luxembourg at the French Embassy, 8B Boulevard Joseph II,

and

Italian Republic, represented by U. Leanza, Head of the Legal Service in the Min- istry of Foreign Affairs, acting as Agent, assisted by F. Quadri, Avvocato dello Stato, with an address for service in Luxembourg at the Italian Embassy, 5 Rue Marie-Adélaïde,

interveners,

Facts and procedure

1 The Netherlands Antilles form part of the overseas countries and territories ( O C T s ' ) associated with the Community. The association of the OCTs with the Community is governed by Part Four of the EC Treaty and by Council Decision 91/482/EEC of 25 July 1991 (OJ 1991 L 263, p. 1, 'the O C T Decision'), which was adopted pursuant to the second paragraph of Article 136 of the Treaty.

2 The processing of brown rice — rice from which the husk has been removed — from Surinam and Guyana into semi-milled rice in the Netherlands Antilles is suf- ficient for it to be regarded as originating in the Netherlands Antilles under the rules laid down in Annex II to the O C T Decision.

3 The Community produces a surplus of semi-long grain, or Japónica, rice. There is a deficit, however, in Indica rice, which accounts for only 20% of Community production. According to the information provided by the Commission in response to a question put by the President at the hearing of the parties, consump- tion of Indica rice in the Community is estimated to be approximately 628 000 tonnes in current years. As Community production of this type of rice amounts to

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7 Pursuant to Article 109 of the O C T Decision, together with Article 1(7) of Annex IV thereto, which is entitled 'Safeguard measures' and lays down the detailed rules for the implementation of Article 109, the Council adopted Regulation (EC) N o 304/97 of 17 February 1997 introducing safeguard measures in respect of imports of rice originating in the OCTs (OJ 1997 L 51, p. 1). That regulation intro- duced a tariff quota allowing imports of rice originating in the OCTs free of cus- toms duties up to a ceiling of 8 000 tonnes for rice originating in Montserrat and the Turks and Caicos Islands and 36 728 tonnes for rice originating in the other OCTs, between 1 January and 30 April 1997. An interlocutory application by Antillean Rice Mills NV, seeking suspension of operation of that regulation and lodged at the same time as an action, currently pending before the Court of First Instance, in which that company seeks the annulment of the same regulation, was dismissed by order of the President of the Court of 21 March 1997 (Case T-41/97 R Antillean Rice Mills v Council [1997] ECR 11-447).

8 Subsequently, pursuant to Article 109 of the O C T Decision and at the request of the Italian Government, which wished the above safeguard measures to be extended, the Commission adopted Regulation (EC) N o 764/97 of 23 April 1997 introducing safeguard measures in respect of imports of rice originating in the overseas countries and territories (OJ 1997 L 112, p. 3). That regulation introduced a tariff quota for the period from 1 May to 30 September 1997, limiting imports of rice originating in the OCTs and benefiting from exemption from customs duties to 10 000 tonnes for rice originating in Montserrat and the Turks and Caicos Islands and 59 610 tonnes for rice originating in the other OCTs.

12 By separate application under Article 186 of the Treaty and Articles 104 and 105(1) of the Rules of Procedure of the Court of First Instance, lodged at the Court Reg- istry on the same day, it also sought the adoption of interim measures relating to the safeguard measures introduced by Regulation N o 1036/97. In that interlocu- tory application, it seeks an order enjoining the applicant and defendant to negoti- ate a minimum price — to replace the tariff quota introduced by Regulation N o 1036/97 — for imports into the Community of equivalent husked rice origi- nating in the Netherlands Antilles and to submit their conclusions to the President of the Court, for his decision, within seven days from the date of the interlocutory order. According to the applicant's written observations, that minimum price should be the same as the intervention price in order to guarantee Community preference whilst at the same time ensuring that rice originating in the Netherlands Antilles will not be imported on less favourable terms than that originating in A C P States or other non-member countries. In the alternative, the Government of the Netherlands Antilles seeks the adoption of any interim measure which appears necessary and appropriate. In addition, it requested that the Council be asked to submit only oral observations, pursuant to Article 105(1) of the Rules of Pro- cedure, at the hearing of the parties.

1 3 The President, considering that it was not necessary in the circumstances of the case to accede to the request that only oral argument be heard from the Council, prescribed a period for that institution to submit written observations. It did so within that period, by document registered at the Court on 25 June 1997.

17 Article 104(1) of the Rules of Procedure provides that an application to suspend the operation of a measure is admissible only if the applicant is challenging that measure in proceedings before the Court of First Instance. According to settled case-law, the issue of the admissibility of the main action should not, in principle, be examined in proceedings relating to an application for interim measures. It should be reserved for the examination of the main application, unless it is appar- ent at first sight that the latter is manifestly inadmissible, so as not to prejudge the Court's decision on the substance of the case (see, most recently, the order in Case T-155/96 R City of Mainz v Commission [1996] ECR II-1655, paragraph 8).

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18 As regards substance, Article 104(2) provides that applications for interim mea- sures must state the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measures applied for. The mea- sures sought must be provisional in that they must not prejudge the decision on the substance (see the order in Case T-41/97 R Antillean Rice Mills, cited above).

19 In the present case, the President considers it appropriate to examine first the con- dition relating to urgency.

Urgency

22 Fourthly, the Netherlands Antilles suffer serious and irreparable harm as a result of the preferential treatment accorded by the Council to Community rice producers, without taking into account the interests of the Antillean undertakings affected by the safeguard measures in issue. The Council is thus in infringement of Article 3 of the Treaty, which lists the common agricultural policy and the association of the OCTs as amongst its objectives, without giving precedence to either. N o financial compensation could be awarded, in the event of the annulment of the contested regulation, for the damage thus caused to the security conferred on the Nether- lands Antilles by the Treaty and the O C T Decision.

23 In all those regards, taken as a whole, the Netherlands Antilles suffer considerable and unquantifiable material and non-material damage as a result of investors' los- ing confidence in the arrangements set up by the O C T Decision. The applicant notes in particular that 'necessary projects are provisionally in abeyance as a result of the threat that the arrangements under the Sixth O C T Decision will become less favourable because the Commission has proposed an interim revision and of the fact that they have already become so because there have been two successive safe- guard measures'. Investments have come to a complete halt as a result of the uncer- tainty thus hanging over the undisturbed continuation of the preferential trade arrangements set up by the Sixth O C T Decision.

24 In that context, the structural adaptation programme concluded by the Nether- lands Antilles with the International Monetary Fund is in jeopardy. That

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27 There is no sufficient causal link between the damage allegedly due to a loss of confidence on the part of investors and the safeguard measure introduced by the contested regulation. In particular, the applicant has failed to indicate what specific effects the alleged wiping-out of the rice sector's contribution might have on the success of the structural adaptation programme in the Netherlands Antilles.

28 The Council also specified in its written pleadings, and confirmed at the hearing, that the tariff quota introduced by the contested regulation had not been exhausted. O n 16 June 1997, approximately 7 600 tonnes of the quota for Montser- rat and the Turks and Caicos Islands and 20 000 tonnes, or 3 5 % , of the quota for the other OCTs were still available, so that exports to the Community could con- tinue at least until the end of September 1997, since, under Article 6(2) of the con- tested regulation, import licences are valid from the date of their issue to the end of the third month following that date.

31 In the present case, the act in issue is a safeguard measure in the form of a tariff quota laid down for a period of seven months, from 1 May to 30 November 1997, the aim of which is to maintain Community imports of rice originating in the OCTs within limits compatible with the stability of the Community market dur- ing that period. More specifically, it is made clear in the ninth to twelfth recitals in the preamble to the contested regulation that, although the first safeguard mea- sures, introduced in the form of a tariff quota by Regulation N o 304/97, have had a favourable effect on the situation as regards Indica rice in the Community, the market price in the Community remains considerably lower than the intervention price fixed for rice in the Community. The Council concluded that, in such a con- text and having regard in particular to the possibility of a considerable increase in exports from the OCTs, the risk of a degradation in the rice sector was still present in the Community. It therefore considered it necessary to extend the application of the abovementioned safeguard measures for seven months.

32 Without there being any need at this stage to consider whether the safeguard meas- ure in issue is justified and prima facie effective, it is sufficiënt to note that, accord- ing to the explanations provided at the hearing by the Council and the interveners, that measure seeks to limit low-priced imports of rice originating in the OCTs in order to allow the marketing of the Community harvest of Indica rice, which is expected to be good in 1997, after several years of drought, particularly in Spain. The period during which that rice, sown from April onwards, will be sold begins in September. The contested regulation is thus intended to avoid a situation in which Community rice producers, who had been encouraged to change to Indica

36 In accordance with the case-law, therefore, when assessing the balance of interests, account must be taken not only of the risk that the Community's interests may be irreversibly affected if the interim measure sought is granted but also of the Coun- cil's power of assessment in the application of Article 109 of the O C T Decision. The applicant's request cannot, therefore, be granted unless the urgency of the

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measures sought appears undeniable (see the order in Case T-179/96 R Antonissen v Council and Commission [1997] E C R II-425, paragraph 22).

37 The effects of the contested regulation on the applicant's position must therefore be examined, bearing in mind that it has consistently been held that damage of a financial nature is not in principle considered to be serious and irreparable unless, in the event of the applicant's being successful in the main action, it could not be wholly recouped. That may be so in particular if the damage, even when it occurs, cannot be quantified (see the order in Cases C-51/90 R and C-59/90 R Comos- Tank and Others v Commission [1990] ECR I-2167, paragraph 24).

38 In the present case, the applicant maintains that the irreversible harm it would suf- fer if the safeguard measure in issue were to continue to be applied comprises, essentially, the degradation of the investment climate as a result of loss of confi- dence on the part of investors in the association arrangements between the OCTs and the Community. It is thus not the mere financial damage which might arise from the limitation of rice exports to the Community, as it confirmed at the hear- ing of the parties. The rice industry, it states, is only one of the sectors affected by that crisis in confidence, extending to the whole Antillean economy, one example being the fruit juice sector.

40 In those circumstances, the contested regulation does not create any barrier to the continued exportation of rice to the Community on a scale allowing the Nether- lands Antilles rice industry to maintain, possibly at a reduced level, the rice pro- cessing activity which it developed following the entry into force of the association arrangements introduced by the Sixth O C T Decision of 25 July 1991, Article 6 of Annex II to which enshrines the principle of cumulative origin, by which products wholly obtained in the A C P States and processed in the OCTs are considered to have been wholly obtained in the OCTs. Thus, the contested regulation, without jeopardizing the survival of that industry, temporarily limits imports into the Community free of customs duty of rice produced in ACP countries and then husked in the Netherlands Antilles, thereby acquiring Netherlands Antilles origin, the factor which qualifies it for importation into the Community free of customs duty pursuant to Article 101 of the O C T Decision.

41 In particular, it must be stressed that the contested tariff quota has not, in the present case, been exhausted. According to the information provided by the Coun- cil and the Commission, approximately 20 000 tonnes of that quota were still avail- able on 16 June 1997 for OCTs other than Montserrat and the Turks and Caicos Islands, so that exports can continue, as the Council points out, at least until the end of September, given the fact that import licences remain valid three months from their date of issue.

42 The applicant stated at the hearing of the parties, however, that no rice had been exported from the Netherlands Antilles to the Community between 12 March and 1 July 1997. In response to a question put by the President, it specified that the suspension of exports was due to the excessively high guarantee required for import certificates by the contested regulation.

46 Finally, the applicant has adduced no specific evidence from which it might be pre- sumed that the alleged degradation in the investment climate can be ascribed espe- cially to the adoption of the contested safeguard measure, which concerns only the rice sector. It expressly acknowledges, moreover, that the alleged uncertainty on

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the part of investors regarding future developments in the trade arrangements set up by the O C T Decision is explicable in particular by the proposed revision of that decision submitted by the Commission.

47 It follows from all of the foregoing that the applicant has not shown that it is in danger of suffering serious and irreparable harm, in particular as regards continued investment in its territory and the implementation of its structural adjustment pro- gramme, as a result of the application of the contested regulation. It is true that the safeguard measure in issue has the effect, for the applicant, of limiting exports of rice to the Community for a further period of seven months. Such damage, how- ever, the foreseeable order of magnitude of which has not been specified by the applicant, can be made good by an award of pecuniary damages and therefore can- not, even if it is assumed to be considerable, be of an irreversible nature.

48 It is thus clear that appropriate damages could be awarded if the contested regu- lation were to be annulled. In any event, the fact that the regulation may have already been implemented and its specified period of application may have expired would not deprive the applicant of adequate protection of its rights, since the insti- tution concerned would be obliged to take the necessary measures to comply with the judgment and might thus be required to restore the applicant to its original situation or to avoid the adoption of an identical measure (see Joined Cases T-480/93 and T-483/93 Antillean Rice Mills, cited above, paragraph 60).

hereby orders:

1. The Kingdom of Spain, the French Republic, the Italian Republic and the Commission are granted leave to intervene in support of the defendant in the interlocutory proceedings.

2. The application for interim measures is dismissed.

3. Costs are reserved.

Luxembourg, 15 July 1997.

H. Jung A. Saggio