T-310/97

ORDER OF 2. 3.1998 — CASE T-310/97 R

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 2 March 1998 *

In Case T-310/97 R,

Government of the Netherlands Antilles, represented by Pierre Vincent François Bos and Marco Marinus Slotboom, of the Rotterdam Bar, with an address for ser- vice in Luxembourg at the Chambers of Marc Loesch, 11 Rue Goethe,

applicant,

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GOVERNMENT OF THE NETHERLANDS ANTILLES ν COUNCIL

and

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

interveners,

A P P L I C A T I O N for interim measures in the form of an order of the President of the Court of First Instance suspending the operation, in part and subject to certain conditions, of Council Decision 97/803/EC of 24 November 1997 amending at mid-term Decision 91/482/EEC on the association of the overseas countries and territories with the European Economic Community (OJ 1997 L 329, p. 50),

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

and social development to be one of the objectives of the Treaty. 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 O C T Decision is applicable, by virtue of Article 240(1) thereof, for a period of 10 years from 1 March 1990. Under Article 240(3)(a) and (b), before the end of the first five years, the Council, acting unanimously on a proposal from the Com- mission, is to establish, where necessary, in addition to the Community's financial assistance for the second five years, any amendments to the O C T Decision desired by the relevant authorities of the OCTs or proposed by the Commission either in the light of its own experience or as a result of amendments under negotiation between the Community and the African, Caribbean and Pacific (ACP) States.

3 As stated in the order in Case T-179/97 R Netherlands Antilles v Council [1997] ECR 11-1297, at paragraph 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. In that context, the Council has adopted a number of measures to promote the cultivation of Indica rice by Community producers.

4 Undertakings established in the OCTs compete with undertakings established in non-member countries or A C P countries as regards imports of Indica rice into the Community. Imports of rice from A C P countries are subject to a tariff quota of 125 000 tonnes on which the customs duty is 50%. In excess of that quota, cus- toms duty is levied at 100%, as it is for imports from other non-member countries.

9 By way of derogation from the principles set out in those articles, Article 109(1) of the O C T Decision empowers the Commission to take the necessary safeguard measures 'if as a result of the application of [that] Decision serious disturbances

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occur in a sector of the economy of the Community or of one or more of its Member States, or their external financial stability is jeopardised, or if difficulties arise which may result in a deterioration in a sector of the Community's activity or in a region of the Community'.

10 The Commission and the Council have adopted a number of safeguard measures under Article 109 of the O C T Decision. In Decision 93/127/EEC of 25 February 1993 (OJ 1993 L 50, p. 27), amended by Decision 93/211/EEC of 13 April 1993 (OJ 1993 L 90, p. 36), the Commission introduced and then relaxed a minimum price for imports of rice originating in the Netherlands Antilles. The Council sub- sequently adopted Regulations (EC) N o 304/97 of 17 February 1997 and N o 1036/97 of 2 June 1997 introducing safeguard measures in respect of imports of rice originating in the OCTs (OJ 1997 L 51, p. 1, and L 151, p. 8, respectively). Those two regulations laid down a tariff quota limiting imports of rice originating in OCTs other than Montserrat and the Turks and Caicos Islands to 36 728 tonnes from 1 January to 30 April 1997 and to 56 180 tonnes from 1 May to 30 November 1997.

13 Transcending the differing considerations as to whether the rule on cumulation of origins should be abolished or alternative solutions, such as maintaining that rule but adding a minimum price system, should be adopted, the Council amended the O C T Decision on the basis of Article 240(3) by adopting, on 24 November 1997, Decision 97/803/EC amending at mid-term Decision 91/482 (OJ 1997 L 329, p. 50).

1 4 In that decision, the Council again points out the risk of conflict between the objectives of the development of the OCTs and of the common agricultural policy arising out of the maintenance of the cumulation of A C P and O C T origins referred to in Article 6 of Annex II to the O C T Decision (see paragraphs 6 and 7 above). In the seventh recital in the preamble, it stresses that 'fresh disruption should be avoided by taking measures to create a framework conducive to regular trade flows and at the same time compatible with the common agricultural policy'. To that end, it inserts the new Articles 108a and 108b into the O C T Decision, allowing cumulation of A C P and O C T origins for rice and sugar respectively, within a certain tariff quota.

15 For rice, in accordance with Article 108a(l), that quota is to be 160 000 tonnes, including the tariff quota for rice originating in the A C P States provided for in the fourth Lomé Convention. An initial issue of import licences for a quantity of 35 000 tonnes is to be made to the OCTs in January each year. Further imports

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may be made up to the total limit of 160 000 tonnes in so far as the A C P States do not actually use their direct export possibilities under the quota provided for in the Lomé Convention. Under Article 108a(2), the Commission is empowered to increase the total quota of 160 000 tonnes by 20 000 tonnes if it finds that such an increase will not disrupt the Community market.

20 By applications lodged at the Court Registry on 16 and 30 January 1998 respec­ tively, the Commission and the Italian Republic sought leave to intervene in these proceedings in support of the form of order sought by the Council. By orders of 27 January and 5 February 1998, the President of the Court of First Instance granted them leave to intervene in the interlocutory proceedings.

21 Oral argument was heard from the parties on 11 February 1998.

Law

22 Under Articles 185 and 186 of the Treaty, taken together with Article 4 of Council Decision 88/591/ECSC, EEC, Euratom of 24 October 1988 establishing a Court of First Instance of the European Communities (OJ 1988 L 319, p. 1), as amended by Council Decision 93/350/Euratom, ECSC, E E C of 8 June 1993 (OJ 1993 L 144, p. 21) and Council Decision 94/149/ECSC, E C of 7 March 1994 (OJ 1994 L 66, p. 29), the Court of First Instance may, if it considers that circumstances so require, prescribe any necessary interim measures in any cases before it.

23 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. Article 104(2) provides that applications for interim measures 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 measures sought must be provisional in that they must not prejudge the decision on the substance (see Case T-179/97 R Netherlands Antilles, cited above, paragraph 18).

26 N o r is the applicant individually concerned. It has not adduced any evidence that its situation is different from that of any other O C T in which rice mills have been or can be established. Rice processing is a relatively simple industrial process, and the construction of present or future rice mills is therefore not limited to specific OCTs.

27 The Commission, intervening in support of the Council's observations on this point, emphasises that rice mills also exist in OCTs other than the Netherlands Antilles, namely Aruba, Montserrat and the Turks and Caicos Islands. Processing

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of sugar sufficient to obtain cumulated origin is also, it adds, a simple industrial process. There are sugar-processing installations also in Aruba. Other rice mills or sugar installations could easily be set up in other OCTs.

28 Finally, on the basis of the indivisibility of Member State responsibility, the Coun­ cil submits that the Netherlands Antilles, as constituent parts of the Kingdom of the Netherlands, have no locus standi. For all those reasons, it claims, the present application for interim measures is inadmissible.

32 The argument that the Netherlands Antilles are manifestly not directly concerned by Articles 108a and 108b cannot, however, be accepted prima facie, since the application of the tariff quotas introduced by those articles does not obviously leave any margin of discretion to the Member States concerned.

33 In support of their claim that the applicant is not individually concerned by Articles 108a and 108b, the Council and the Commission submit, essentially, that those articles are provisions of a general and abstract nature affecting all the OCTs without distinction and that the responsibility of the Member States is indivisible.

34 Here, it must first be borne in mind that, in order to ascertain whether the appli­ cant is individually concerned by Articles 108ā and 108b introducing the contested tariff quotas, it must at first sight be determined whether, in the scheme of the Treaty and of the association of the OCTs with the Community, the Council was obliged when adopting those tariff quotas to take their effect on the economy of, inter alia, the Netherlands Antilles into consideration, inasmuch as they limit the application of the very favourable system operating under the rules governing cumulated A C P and O C T origin introduced by the O C T Decision (see, in par­ ticular, Joined Cases T-480/93 and T-483/93 Antillean Rice Mills and Others v Commission [1995] E C R 11-2305, paragraphs 70 to 77).

35 O n that aspect, it is sufficient to note at the present stage that Articles 108a and 108b modify the trading arrangements applicable to the OCTs in the context of their association with the European Community as laid down in the O C T Decision, which, pursuant to Article 240(3) thereof authorising the Council to review it at mid-term, is thus amended by the contested decision.

Substance

Urgency and balance of interests

— Arguments of the parties

39 The applicant submits that the contested decision deprives the Netherlands An­ tilles of the trade arrangements set out in Article 100 et seq. of the O C T Decision, which should apply, under Article 240, until 1 March 2000. That decision hinders the economic and social development of the Netherlands Antilles projected on the

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41 That report confirms, the applicant claims, that those arrangements, if maintained, can continue to make an increasing contribution to the economic development of the Netherlands Antilles. Since the adoption of the O C T Decision, 12 companies have been established there and were operational in 1996, particularly in the rice and sugar sectors. Two more companies have subsequently become operational. The impact of the trade arrangements introduced by the O C T Decision, expressed as a percentage of the G D P of the Netherlands Antilles, increased from 0.4% in 1992 to 1.2% in 1996. According to the estimate of the Netherlands Economic Institute, the arrangements, if maintained, should allow the contribution to the G D P of the sectors concerned to increase progressively from 2.2% in 1997 to 3.1% in the year 2000. At the hearing of the parties, the applicant stressed that those figures were considerable and showed that the rice and sugar sectors make a significant contribution to the economy of the Netherlands Antilles.

42 The contested decision also impairs social development in the Netherlands An- tilles. With a stagnating tourist sector, there are limited employment opportunities on the main island, Curaçao, particularly for young, low-skilled people. The unemployment rate in the 15 to 24 age range increased from 28% in 1994 to 3 1 % in 1995, leading to increased social problems linked in particular to drug abuse, crime and social decay. The abovementioned report also shows, however, that by 1996 the trade arrangement contained in the O C T Decision had contributed to the

44 As regards the balance of interests, the applicant submits that its interest in obtain­ ing the relief sought must prevail, since it would increase trade and promote econ­ omic and social development in the OCTs in accordance with Articles 3(r) and 131 of the Treaty whilst paying due respect to the objectives of the common agricul­ tural policy. The suspension in question is sought subject to the condition that the Netherlands Antilles preserve or introduce minimum export prices at a level equal to or higher than the intervention prices within the Community, thus preventing imports of rice and sugar from the Netherlands Antilles from disrupting the Com­ munity market in those products. The Netherlands Antilles have already estab­ lished a minimum export price for rice and are in the process of setting up an equivalent system for sugar.

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45 The applicant further notes that agriculture at present accounts for approximately 2.5% of the Community's GDP, whereas the contested decision deprives the Netherlands Antilles of a 3.1% increase in G D P by the year 2000.

46 The Council challenges all of those arguments. It points out that it is for the appli- cant to prove that serious and irreparable consequences would ensue if the interim measure sought were not granted.

47 In the present case, the effects of Community measures restricting cumulation of A C P and O C T origins have already been examined by the President of the Court of First Instance in Case T-179/97 R Netherlands Antilles, cited above, and by the President of the Court of Justice in Case C-110/97 R Netherlands v Council [1997] ECR I-1795, concerning safeguard measures in the form of tariff quotas laid down for imports of rice from the OCTs on the basis of average imports between 1992 and 1995. Article 108a of the O C T Decision, inserted by the contested decision, allows in reality the cumulation of origins up to a comparable annual limit, namely 160 000 tonnes. It empowers the Commission, moreover, to increase that quota.

52 As regards the balance of interests, the Council submits that, although the system of minimum prices for exports to the Community proposed by the applicant — a system limited, moreover, to a single O C T — might possibly help to avoid serious disturbances to the Community market, it would not be enough to arrive at the degree of control introduced by Article 108a. In addition, when weighing up the balance of interests, account should be taken not only of the irreversible nature of

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the suspension sought but also of the broad margin of discretion which the Coun- cil enjoys in applying Article 240(3) of the O C T Decision. In the present case, the need to prevent further disruption on the Community market for rice or sugar and the need not to prejudge the Court's decision on the main action should prevail over the risk of purely financial loss suffered by the Netherlands Antilles.

53 The Italian Republic, intervening in support of the form of order sought by the Council, submitted at the hearing of the parties that when weighing up the inter- ests involved account should also be taken of the interest of Indica rice producers in Italy, who lose LIT 46 000 per tonne of rice as a result of the fact that the mar- ket price is currently 9 3 % of the intervention price. The total loss suffered in that way over the first few months of the marketing year which began on 1 September 1997 amounts to LIT 2 700 million.

— Findings of the President

Decision in order to avert the risk of conflict between two Treaty objectives, namely the development of the OCTs and the common agricultural policy. The introduction pursuant to the O C T Decision of free access for all products origi­ nating in the OCTs and the cumulation of A C P and O C T origins had given rise to serious disruption on the Community market leading on a number of occasions to the adoption of safeguard measures for certain products. In that context, the pur­ pose of the contested tariff quotas is, in the words of that seventh recital, to avoid 'fresh disruption ... by taking measures to create a framework conducive to regular trade flows and at the same time compatible with the common agricultural policy'. At the hearing of the parties, the applicant emphasised that, at the end of the period of application of two successive safeguard measures over the first 11 months of 1997, the economic situation had not changed and the risk of conflict had become more serious, so that it was necessary to adopt a long-term solution.

56 Prima facie, it thus appears that the tariff quotas in issue were introduced in order to maintain Community imports of rice and sugar originating in the OCTs within limits compatible with the equilibrium of the Community market. More specifi­ cally, their apparent aim is to limit low-priced imports of those products into the Community, in order to allow the marketing of Community production and to avoid, in the case of rice, a situation in which Community rice producers, who have been encouraged to produce Indica rice by means of a temporary area sub­ sidy, sell large amounts into intervention or revert to producing Japónica rice, of which there is already a surplus in the Community, as was stated in the order in Case T-179/97 R Netherlands Antilles, cited above, paragraph 32.

60 The Council objects, however, in the first place, that the replacement of the tariff quotas introduced by the contested decision by a minimum export price would not make it possible to stem the massive flow into the Community of imports of Indica rice from the Netherlands Antilles. It refers, without being contradicted on this point by the applicant, to the difficulties involved in ensuring that minimum prices are applied and the danger that they will be circumvented.

61 Thus, contrary to what the applicant maintains, there is no guarantee that a mini- mum price, if laid down to replace the contested tariff quotas, would make it pos- sible to avert further disruption on the Community markets for sugar and rice and would not, during the course of the main proceedings, produce certain definitive effects likely to deprive the contested decision of its effectiveness.

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65 In the present case, 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 (see paragraphs 56 to 61 above) but also of the Council's power of assessment when reconciling different objec- tives, in this case those of the common agricultural policy and the association of the OCTs with the Community. The applicant's request cannot, therefore, be granted unless the urgency of the measures sought appears undeniable (see Case T-179/96 R Antonissen v Council and Commission [1997] E C R II-425, paragraph 22, and Case T-179/97 R Netherlands Antilles, cited above, paragraph 36).

66 The effects of the contested decision 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 made good. That may be so in particular if the damage, even when it occurs, cannot be quantified (see Cases C-51/90 R and C-59/90 R Comos-Tank and Others v Commission [1990] E C R I-2167, paragraph 24).

67 In the present case, more particularly with regard to the seriousness of the damage alleged in the rice sector, it must be noted that the applicant bases its argument in support of its allegations on the assumption that Article 108a in fact has the effect of limiting rice exports to the Community to 35 000 tonnes per year (see para- graph 41 above).

preference to exports via the OCTs up to the limit of the 160 000-tonne quota defined in Article 108a. That finding is corroborated by the answers given by the Council and the Commission, and not challenged by the applicant, to the ques­ tions concerning previous practice put by the President at the hearing of the par­ ties. It appears that in 1997 only 50 000 tonnes of A C P rice were exported directly to the Community, whilst exports via the OCTs were limited to 114 338 tonnes between 1 January and 30 November 1997 under the safeguard measures which applied during that period. Direct exports were much lower still in previous years, when no limit was placed on zero-rated exports via the OCTs. Those answers appear to confirm that, contrary to what the applicant alleged at the hearing, the A C P States are in practice able to favour exports via the OCTs in order to benefit from that exemption from duty. The applicant has not put forward any plausible argument capable of casting doubt on that possibility.

69 It must further be noted that, according to the information supplied by the appli­ cant, 217 000 tonnes of rice were exported to the Community in 1995-1996. The imposition of an annual tariff quota of 160 000 tonnes thus entails only a reduction of the order of 22% in comparison with rice exports during the years prior to the application of safeguard measures. Furthermore, the experience of the safeguard measures introduced in 1997 — which, between 1 January and 30 November 1997, imposed quantitative limits on exports at least as stringent as the tariff quotas introduced by the contested decision — does not appear, according to the docu­ ments before the Court and the information given by the applicant, to have led to the closure of a large proportion of the rice mills established in the Netherlands Antilles.

73 N o r is it possible to accept the applicant's argument that, in substance, the imme- diate application of Articles 108a and 108b would hinder the economic develop- ment of the Netherlands Antilles as sought by the Treaty and the O C T Decision.

74 The applicant claims in particular that the application of those articles prevents the contribution of trade with the Community to the G D P of the Netherlands An- tilles from increasing from 2.2% in 1997 to 2.9% in 1998 and 3.1% in the year 2000, as predicted in the Netherlands Economic Institute's report, and, according to the same report, prevents its unemployment rate from being brought down from 12.4% to 12%.

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75 That argument fails, however, to take account of the fact that the contested tariff quotas impose a reduction only in exports to the Community, of the order of 2 2 % for rice and 14% for sugar, in comparison with the quantities exported in 1995 and 1996, as has just been established. The figures advanced are, moreover, mere fore­ casts as to the development of rice and sugar exports to the Community in the coming years. In any event, the applicant has not adduced any specific evidence from which it might be assumed that the damage which it is likely to suffer during the course of the main proceedings could be irreversible and that, were the con­ tested decision to be annulled, the rice and sugar sectors would not prosper again.

76 The applicant has therefore not established the existence of a risk of serious and irreparable harm.

mid-term review of the O C T Decision. To carry out such a review after the expiry of the time-limit laid down in Article 240 thus runs counter to the principle of legal certainty. In support of its argument, the applicant refers to the judgment in Case C-430/92 Netherlands v Commission [1994] ECR 1-5197.

79 The Council considers that it had the power to adopt the contested decision. It challenges the interpretation of Article 240(3) put forward by the applicant. The purpose of the five-year period provided for therein is to allow the review of the O C T Decision to take account of the review of the Community's financial assis- tance, which had been set for five years, and to be aligned with that of the fourth Lomé Convention, in order for the OCTs to benefit from the improvements resulting from the latter.

— Findings of the President

80 Prima facie, Article 240(3) explicitly confers on the Council an optional power to review the O C T Decision at mid-term, as the applicant accepts.

81 Prima facie, within the scheme of the association of the OCTs to the Community introduced by the O C T Decision, Article 240(3) empowers the Council to review that decision 'before the end of the first five years', in order to take account of the experience acquired by the Commission and the relevant authorities of the OCTs, of the amendments to the Lomé Convention under negotiation between the Com- munity and the A C P States and of the review of the Community's financial assis- tance.

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84 More generally, that interpretation appears to be in agreement with well- established case-law (see, inter alia, Case 148/77 Hansen ν Hauptzollamt Flensburg [1978] E C R 1787, paragraph 10). In this case, contrary to what the applicant has asserted, the five-year period in question does not, prima facie, have the same legal effect as the time-limit of 60 working days within which, under Article 30(8) of Annex II to the O C T Decision, the Community authorities must take a decision on a request for a derogation from the rules on origin, which was the provision in issue in Case C-430/92 Netherlands ν Commission, cited above. Unlike Article 240(3) of the O C T Decision, Article 30(8) of Annex II thereto grants Member States or OCTs certain procedural rights by specifically laying down a time-limit within which their requests for derogations must be examined, on the expiry of which, if a decision is not taken, 'the request shall be considered as accepted'.

85 The single plea in law put forward by the applicant in the context of the interlocu­ tory proceedings does not, therefore, appear prima facie to be well founded.

86 Consequently, the application for interim measures must be dismissed.

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On those grounds,

Registrar President

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