T-229/97

CEFS 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 8 October 1997*

In Case T-229/97 R,

Comité Européen des Fabricants de Sucre (CEFS), an association constituted under Belgian law, established in Brussels, represented by Bernard O'Connor, Solicitor, and Bonifacio Garcia Porras, of the Salamanca Bar, with an address for service in Luxembourg at the Chambers of Arsène Kronshagen, 12 Boulevard de la Foire,

applicant,

v

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ORDER OF 8. 10. 1997 — CASE T-229/97 R

A P P L I C A T I O N under Articles 185 and 186 of the EC Treaty for suspension of the operation of Article 1(f) of Council Regulation (EC) N o 1188/97 of 25 June 1997 fixing, for the 1997/98 marketing year, the derived intervention prices for white sugar, the intervention price for raw sugar, the minimum prices for A and B beet, and the amount of compensation for storage costs (OJ 1997 L 170, p. 3), in so far as it affects European sugar producers or otherwise erga omnes, and for all other such interim measures as the Court may judge necessary,

T H E PRESIDENT O F T H E C O U R T O F FIRST INSTANCE OF THE EUROPEAN COMMUNITIES

makes the following

Order

3 Sugar produced under the A quotas (A sugar) and under the B quotas (B sugar), when marketed within the Community, benefits from price and marketing guaran- tees thanks to an intervention system (see Article 9 of the basic regulation). The prices applied by the intervention agencies are fixed each year by the Council in accordance with Article 3 of the basic regulation.

4 As regards white sugar, those prices are not uniform across the whole Community. Article 3(1) provides for 'an intervention price' to be fixed for the non-deficit areas and 'a derived intervention price' for the deficit areas. According to the second subparagraph of Article 9(1) of the basic regulation, those different prices are valid for the area in which the sugar is situated at the time of purchase. Derived inter- vention prices are systematically fixed at a higher level than intervention prices. Thus, the intention is to help manufacturers in other areas to supply the deficit areas, the difference between the two intervention prices being deemed to cover, in whole or in part, the additional transport costs.

5 The basic regulation also provides for a price scheme for beet processed into A sugar and B sugar respectively (A beet and B beet; see Article 5(4) of the basic regulation). The minimum prices to be paid by sugar manufacturers to beet pro- ducers, under Article 6(1) and (2), vary according to the area in which the beet is produced. As provided for by Article 5(3) of the basic regulation, for areas for which a derived intervention price for white sugar is fixed, the minimum prices for A beet and B beet are to be increased by an amount equal to the difference between the derived intervention price for the area in question and the interven- tion price, such amount being adjusted by the coefficient 1: 30.

7 For the marketing year 1997/98, on 25 June 1997 the Council fixed both the inter- vention and derived intervention prices for white sugar. The intervention price is E C U 63.19 per 100 kilograms, in accordance with Article 1(2) of Regulation (EC) N o 1187/97 fixing, for the 1997/98 marketing year, certain sugar prices and the standard quality of beet (OJ 1997 L 170, p. 1). For Italy, Article 1(f) of Regulation (EC) N o 1188/97 of 25 June 1997 fixing, for the 1997/98 marketing year, the derived intervention prices for white sugar, the intervention price for raw sugar, the minimum prices for A and B beet, and the amount of compensation for storage costs (OJ 1997 L 170, p. 3, 'Regulation N o 1188/97'), fixed the derived interven- tion price for white sugar at E C U 65.53 per 100 kilograms. The third recital in the preamble to Regulation N o 1188/97 states that 'a supply deficit situation is to be foreseen in the areas of production in Italy ...'.

Procedure

s The applicant, CEFS (European Sugar Manufacturers Committee), is an associa- tion constituted under Belgian law and made up of national organizations of sugar manufacturers, and also of individual sugar businesses where their national repre- sentative organization is not a member of the CEFS or where there is no national representative organization. It represents the interests of the sugar industry in 14 Member States and Switzerland, together with the 'corresponding members' of five non-European countries.

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9 By application lodged at the Registry of the Court of First Instance on 5 August 1997, the applicant brought an action under Article 173 of the EC Treaty for annulment of Article 1(f) of Regulation N o 1188/97 in so far as it affects European sugar manufacturers, or otherwise erga omnes, and for an order that the Council produce all the documents, data and methods which it used in order to treat Italy as a deficit area in the contested regulation, and also for any other additional mea- sures which the Court might judge necessary.

Law

The application for leave to intervene

u Since the Commission's application for leave to intervene was made in accordance with Article 115 of the Rules of Procedure of the Court of First Instance and was submitted pursuant to the first paragraph of Article 37 of the EC Statute of the Court of Justice which, by virtue of the first paragraph of Article 46 thereof, applies to proceedings before the Court of First Instance, the Commission must be granted leave to intervene in these proceedings in support of the form of order sought by the defendant.

The application for interim measures

is Under the combined provisions of Articles 185 and 186 of the E C Treaty and Article 4 of Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988 establishing a the Court of First Instance of the European Communities (OJ 1988 L 319, p. 1), as amended by Council Decision 93/350/Euratom, ECSC, EEC of 8 June 1993 (OJ 1993 L 144, p . 21), by Council Decision 94/149/ECSC, E C of 7 March 1994 (OJ 1994 L 66, p . 29), and by Council Decision 95/1/EC, Euratom, ECSC of 1 January 1995 (OJ 1995 L 1, p. 1), the Court of First Instance may, if it considers the circumstances so require, order that application of the contested act be suspended or prescribe any other necessary measures.

i6 Article 104(1) of the Rules of Procedure provides that an application under Article 185 of the Treaty to suspend operation of any act of an institution is to be admis- sible only if the applicant is challenging the measure in question in proceedings before the Court of First Instance and also that any application for adoption of one of the other interim measures referred to in Article 186 of the Treaty is to be admissible only if it relates to the principal proceedings in a case before,the Court of First Instance.

i9 The applicant considers that adoption of the contested regulation entails two con- sequences which will cause it to suffer serious and irreparable damage: first, a loss of sugar market share; second, continued reduction in its guaranteed A and B quo- tas.

20 First, the applicant maintains that as a result of the decision to continue to treat Italy as a 'deficit area' and, in consequence, to fix a derived intervention price for white sugar produced in Italy of E C U 65.53 per 100 kilograms, E C U 2.34 higher than the ordinary intervention price of E C U 63.19, Italian manufacturers of sugar- based products are led to use non-Community sugar in preference to Community sugar for their exports to non-member countries. Non-Community sugar is imported at the free world market price (which is much lower than the interven- tion price charged in the Community) and without payment of customs duties, to

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2i Second, the applicant claims that the Council's decision to declare Italy a deficit area and to fix a derived intervention price risks giving rise to 'a substantial increase in the production of sugar' in the Community, leading to an increase in sugar exports to be subsidized through the refund machinery and to an increase in volume of Community sugar stocks. In the applicant's view, an increase in exports or stocks is contrary to the commitments entered into by the Community in the Agreement concluded as a result of the Uruguay Round of GATT (General Agree- ment on Tariffs and Trade) negotiations (signed in April 1994), which provide for a reduction in the level of Community sugar subsidies and, consequently, in the guaranteed A and B sugar quotas from the year 2001. In order to comply with those commitments, the Community is therefore obliged to reduce those quotas from one marketing year to the next or at the end of the transitional period

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expiring in 2001, as provided for in the basic regulation as amended by Council Regulation (EC) N o 1101/95 of 24 April 1995 (OJ 1995 L 110, p. 1). According to the applicant, that reduction in quotas would affect the whole European sugar industry, not only sugar manufacturers in the deficit area.

22 The applicant maintains that annulment of the contested regulation would not pre- vent the alleged damage from becoming irreparable, since the danger is that loss of market share and reduction in quotas would place European manufacturers in an extremely difficult position in which it was likely that they might have to 'cease trading' or lose for good 'a substantial part of their market share'.

its commitments for the marketing year 1995/96 and for 1996/97 the exportable balance is again expected to be less than the maximum provided for under W T O agreements. Since those agreements allow the Community to adjust any shortfall at the end of the transitional period, namely from the year 2001, any reduction of A and B quotas is for the time being purely hypothetical. Contrary to what the applicant maintains, the Council considers that it is not the application of the derived prices system in Italy which might threaten the interests of European sugar manufacturers, but instead the abolition of that system: if that were to happen, since sugar manufacturers in countries with a surplus have an interest in exporting the surplus sugar to non-member countries, taking advantage of the refund scheme, rather than in marketing it in deficit areas such as Italy, the sudden increase in the volume of exports could in actual fact undermine the Community's compliance with its commitments within the W T O , hence the necessity of a reduc- tion in A and B quotas even before the end of the transitional period.

25 With reference to the allegedly irreparable nature of the damage alleged to be suf- fered by the applicant, the Council considers that the CEFS has adduced no evi- dence to support the claim that the European sugar industry could be damaged by the fixing of derived intervention prices in Italy for the marketing year 1997/98. The risk of going out of business pleaded by the applicant is therefore hypotheti- cal, and is not supported by any evidence.

28 In this case, the damage which the applicant claims it will suffer if the contested provision is implemented consists of two parts. First, the loss of a considerable share of the European sugar market to the advantage of importers of non- Community sugar and, second, continuing reduction in the guaranteed A and B quotas.

29 So far as concerns the second aspect, even the applicant's own statements show that there is no real danger of a reduction in A and B quotas until the year 2001, which marks the end of the transitional period under the commitments concluded by the Community in the W T O , by which time it is probable that judgment will have been given in the main proceedings. There is no evidence to suggest such a risk might occur before the end of the transitional period: indeed, the Commission

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has pointed out — and has not been contradicted by the applicant — that up to the marketing year 1997/98 the sugar export ceiling in the context of the W T O of about 4 520 000 tonnes has not been reached, and the volume of Community exports of sugar to non-member countries, forecast to be 3 400 000 tonnes, leaves a sufficient operating margin for it to be concluded that no reduction in quotas is foreseeable in the near future. In those circumstances, the actual existence of the damage alleged by the applicant would not appear to have been established.

30 As regards proof of the first aspect of the damage alleged by the applicant, namely the loss of a significant share of the European sugar market to importers of non- Community sugar, the applicant has not shown the damage to be serious and irreparable.

33 In any event, the President of the Court of First Instance considers that the loss of market share claimed by the applicant is not evidently irreversible. N o evidence has been adduced to show that, if the contested provision were annulled, and not- withstanding the obligations resulting in this case from Article 176 of the EC Treaty, Italian manufacturers of sugar-based products for export would continue to import non-Community sugar under the IPRA in preference to using Italian sugar to which the derived intervention price would no longer apply. At first sight, therefore, that loss constitutes something which could be reversed following such annulment. As regards the period between the date on which the contested provi- sion was adopted and its possible annulment, there is prima facie nothing to pre- clude any interested person from being able to obtain compensation for unjustified loss by means of the remedies provided for by the Treaty, especially Articles 178 and 215 (see the order in Case T-6/97 R Comafrica and Dole Fresh Fruit Europe v Commission [1997] ECR 11-291, paragraph 49).

34 Since the applicant has not duly substantiated its application for interim measures so far as urgency is concerned, the application for interim relief must be rejected without there being any need to consider whether it is admissible or whether the pleas in law and arguments put forward in support of the action in the main proceedings seem at first sight to be well founded.

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O n those grounds,

T H E PRESIDENT O F T H E C O U R T O F FIRST INSTANCE

Registrar President

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