C-17/98

OPINION O F M R RUIZ-JARABO — CASE C-17/98

OPINION OF ADVOCATE GENERAL RUIZ-JARABO C O L O M E R delivered on 1 June 1999 *

I — Introduction 2. The various questions on which a pre- liminary ruling is sought were raised in the context of interlocutory proceedings brought by the Dutch company Emesa Sugar (Free Zone) NV ('Emesa') against the authorities of the Netherlands State and of the Caribbean island of Aruba, which is one of the OCTs. In essence, Emesa sought the non-application of the provisions of the reviewing Decision, so that sugar imports from Aruba could continue to be governed by the OCT Decision. 1. This reference for a preliminary ruling from the President of the Arrondissements- rechtbank te 's-Gravenhage (District Court, The Hague) concerns the validity of the amendment made by the Council to the scheme of association between the Eur- opean Community and the overseas coun- tries and territories ('the OCTs'). This scheme, which was established for a period of ten years by Decision 91/482/EEC of 25 July 1991 1('Decision 91/482' or 'the OCT Decision'), was greatly amended, during the period of its application, by the adoption of Decision 97/803/EC of 24 November 1997 2 ('Decision 97/803' or 'the reviewing Decision'), which affected, among other things, the possibility of exporting sugar to the Community from the OCTs. 3. The main proceedings form part of a whole 'battery' 3 of actions brought by Emesa and other economic operators and * Original language: Spanish. 1 — Council Decision 91/482 of 25 July 1991 on the association by the authorities of Aruba and the Nether- of the overseas countries and territories with the European lands Antilles both before the national Economic Community (OJ 1991 L 2 6 3 , p. 1: corrigendum published in OJ 1993 L 15, p. 33). courts and the Court of First Instance of 2 — Council Decision 97/803 of 24 November 1997 amending at mid-term Decision 91/482 on the association of the overseas countries and territories with the European Eco- nomic Community (OJ 1997 L 329, p. 50). 3 — The French Government speaks of 'legal warfare'.

4 — T h e proceedings in Case T-310/97 Netherlands Antilles v Council, concerning an application for the annulment of Decision 97/803, were suspended by order of 16 November 1998 pending judgment in the present case. The application for interim measures in that case for (he suspension of the 5. The company Emesa Sugar (Free Zone) operation of various provisions of the said decision was dismissed by order of the President of the Court of First NV was formed on 6 February 1997 with Instance of 2 March 1998 (T-310/97 R 11998] ECK II-455), capital originating from the United States- upheld on appeal by order of the President of the Court of Justice of 25 June 1998 (Case C-158/98 P'(R) | 1 9 9 8 | ECR Brazilian Emesa Group. As early as April of 1-4147). Similar applications for annulment were lodged by Aruba against the Council (Case T-36/98) and by Enicsa the same year Emesa began its sugar- against the Council and the Commission (Cases T-43/98 and T-44/98). In all three cases orders were also made for a stay processing activity on the island of Aruba. of the proceedings pending the outcome of the present case. This self-governing dependency of the The application for interim measures in Case T-43/98 was dismissed by order of the President of the Court of First Kingdom of the Netherlands is, as I have Instance of 14 August 1998 (Case T-43/98 R [1998] ECR already said, one of the OCTs listed in II-3055), although that order was then set aside on appeal by order of the President of the Court of Justice of Annex IV to the EC Treaty. 17 December 1998 (Case C-363/98 P'(R) Kmesa Sugar v Council [1998] ECR I-8787). In Case T-44/98 Emcsa also challenged, on an interim basis, the Commission's refusal to issue a sugar import licence under the conditions in force prior to the reviewing Decision. That application was also dismissed by the President of the Court of First Instance by order of 14 August 1998 (Case T-44/98 R), which was set aside on appeal by order of the President of the Court of Justice of 17 December 1998 (Case C-364/98 P(R) Emesa Sugar v Commission [998] E.CR I-8815). On 30 April 1999 the President of the Court of First Instance made a new order granting the interim suspension, subject to certain conditions, of the operation of Article 108b of the 6. Since sugar is not produced on Aruba, decision, authorising Emesa to export 7 500 tonnes of sugar to the Community over a period of six months. Finally, the plaintiff company in the main proceed- proceedings in Joined Cases T-52/98 and T-53/98 Nether- lands Antilles v Commission and Case T-54/98 Aruba v ings obtains the necessary raw material for Commission were also stayed, by order of 11 February 1999. its business from cane sugar refineries in 5 — Case C-380/97 Emesa Sugar v Kingdom of the Netherlands, Trinidad and Tobago, which is one of the Staal der Nederlanden, Netherlands Antilles and Aruba, in which proceedings were staved by order of 5 December African, Caribbean and Pacific States ('the 1997. ACP States'). The sugar obtained in this

7. Under Article 6(2) and (3) of Annex II to the O C T Decision, concerning what has become known as the 'ACP/OCT cumula- tion of origin' (see point 24 below), the operations mentioned in the previous para- 10. Decision 97/803, which was adopted graph are sufficient for the sugar to be by the Council on 24 November 1997 and considered as originating in an O C T and which came into force on 1 December thereby to gain free access to the Commu- 1997, limits to 3 000 tonnes per year the nity market. Since the price of sugar in the quantity of sugar which may be imported European Union is three times the world into the Community duty-free under the market price, 7 it is easy to see the com- 'ACP/OCT cumulation of origin' regime. mercial attraction of the operation outlined The decision thus put an end to the above. situation described in the previous para- graph, with serious consequences for Eme- sa's economic objectives because, according to Emesa itself, the quota of 3 000 tonnes of sugar per year hardly represents one month's production.

' 1 . Is the mid-term amendment of the OCT Decision on 1 December 1997 by Council Decision 97/803/EC of Nevertheless, in the order for reference 24 November 1997 (OJ 1997 L 329, itself, the Netherlands court declared the p. 50) proportionate, more specifically application inadmissible for want of the the insertion of Article 108b(1) and court's substantive jurisdiction, since it was deletion of "milling" as a relevant directed against the Netherlands State method of processing for the purposes (Staat der Nederlanden) and the HPA, and of origin? regarded it as admissible only in relation to Aruba. As a result, the subject-matter of the main proceedings is limited to Emesa's application, which was granted in the same order, for an order prohibiting the compe- tent authorities of the island of Aruba from 2. Is it acceptable for the restrictive con- refusing to issue the EUR. 1 certificate for sequences of that Council decision — sugar produced by the applicant on the more specifically the insertion of Arti- ground that such refusal would not have cle 108b(1) and deletion of "milling" been possible under Decision 91/482. as a relevant method of processing for the purposes of origin — to be (far) more serious than would have been the 9 — Article 12 of Annex II to the O C T decision provides .is case had recourse been had to safe- follows: ' 1 . Evidence of originating statns of products, within the guard measures pursuant to Arti- meaning of this annex, shall he given by a movement certificate KUR.1, a specimen of which appears in cle 109 of the OCT Decision? Annex 4 to this annex. 2. A movement certificate EUR.l may he issued only where it can serve as the documentary evidence required for the purpose of implementing the Decision. 3. A movement certificate EUR.1 s h a l l be issued only on application having been made in writing by the exporter or, on his responsibility, by his authorised representative. Such application shall be made on a form, a specimen of which appears in Annex 4 to this annex, which shall be 3. Is it compatible with the EC Treaty, in completed in accordance with this annex. particular Part IV thereof, for a Coun- 6. The movement certificate EUR.1 shall be issued by the customs authorities of the exporting country or territory, cil decision of the kind referred to in if the goods can be considered "originating products" within the meaning of this annex. the second paragraph of Article 136 of the Treaty (in the present case, Deci-

9. Is Council Decision 97/803 valid, hav- ing regard to the expectations aroused 5. Does it follow from the EC Treaty, in by the information brochure (DE 76) particular Part IV thereof, that for the distributed by the Commission in purposes of the second paragraph of October 1993, given that, at page 16, Article 136, the experience acquired — the brochure states that the period of in the form of measures favourable to validity of the Sixth OCT Decision is the OCTs — may not subsequently be now ten (previously five) years? reviewed or annulled to the detriment of the OCTs?

10. Is Article 108b, which was inserted on 6. If that is indeed the case, are the 1 December 1997, so unworkable that Council decisions at issue therefore it must be deemed to be invalid? I-684

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11. Does the national court have jurisdic- the EC Treaty (now, after amendment, tion, in circumstances such as those Article 299 EC) includes in that scope the described in Joined Cases C-143/88 OCTs listed in Annex IV which are the and C-92/89 Zuckerfabrik Siiderdith- subject of 'the special arrangements for marschen and Others and subsequent association set out in Part Four of this cases, to adopt an interim measure in Treaty'. Since 1964 those OCTs 10 have advance, in the event of an imminent included the Netherlands Antilles. breach of Community law by a non- Community enforcement body desig- nated by Community law, in order to prevent that breach?

'Association shall have the following objec- » tives:

18. Finally, Article 136 of the EC Treaty 1. Member States shall apply to their trade (now, after amendment Article 187 EC) with the countries and territories the same states: treatment as they accord each other pur- suant to this Treaty.

'For an initial period of five years after the ...' entry into force of this Treaty, the details of and procedure for the association of the countries and territories with the Commu- nity shall be determined by an Implement- ing Convention annexed to this Treaty. 17. Article 133 of the EC Treaty (now, after amendment, Article 184 EC) provides as follows: Before the Convention referred to in the preceding paragraph expires, the Council shall, acting unanimously, lay down provi- sions for a further period, on the basis of ' 1 . Customs duties on imports into the the experience acquired and of the princi- Member States of goods originating in the ples set out in this Treaty.' countries and territories shall be completely abolished in conformity with the progres- sive abolition of customs duties between Member States in accordance with the provisions of this Treaty.

Decision 91/482

2. Customs duties on imports into each country or territory from Member States or 19. For the 10-year period 1990-99 the from the other countries or territories shall Council adopted Decision 91/482 which, in be progressively abolished in accordance accordance with Article 241 thereof, came I-686

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— have not been the subject of an exemp- 'For the purpose of implementing the trade tion from, or a refund of, in whole or in cooperation provisions of the Decision, a part, customs duties or charges having product shall be considered to be originat- equivalent effect, ing in the OCT, the Community or the ACP States if it has been either wholly obtained or sufficiently worked or processed there.'

— are accompanied by an export certifi- cate. 23. Article 3(3) of that annex contains a list of working and processing operations which are deemed insufficient for the product to be considered as originating in an OCT. 5

24. Article 6(2) and (3) of Annex II lays down the 'cumulation of origin' system 21. Article 108(1), first indent, of Decision under which: 91/482 states:

'— the concept of originating products and '2. When products wholly obtained in the the methods of administrative coopera- Community or in the ACP States undergo tion relating thereto are laid down in working or processing in the OCT, they Annex II'. shall be considered as having been wholly obtained in the OCT.

27. Finally, Article 102 was replaced by the following:

'1. The ACP/OCT cumulation of origin referred to in Article 6 of Annex II shall be allowed for an annual quantity of 3 000 tonnes of sugar...

2. For the purposes of implementing the ACP/OCT cumulation rules referred to in 'Without prejudice to Articles ... and 108b, paragraph 1, forming sugar lumps or the Community shall not apply to imports colouring shall be considered as sufficient of products originating in the OCTs any to confer the status of OCT-originating quantitative restrictions or measures having products'. equivalent effect.'

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V — The arrangements for trade between mary and secondary, applies to them the OCTs and the Community directly and automatically. On the con- trary, it is necessary in each case to establish, in the light of Part Four of the EC Treaty, which Community provisions are applicable to them and to what extent. 28. In the Opinion which I delivered in Road Air12 I had occasion to point out that, in order to determine the legal condi- tions governing relations between the OCTs and the Community, it was impor- tant above all to ascertain the extent to which each of the provisions of the Treaty could be applied to them, having regard to the provisions of Part Four of the Treaty. 1 3

30. Consequently the association of the OCTs with the Community does not mean that the whole of Community law, 1 5 pri- 32. Similarly, in Antillean Rice Mills, 16 the Court stated that, although the OCTs have 12 — Cited in footnote 11. special links with the Community, they do 13 — The Road Air case concerned the question whether the provisions of Part Four of the EEC Treaty prevented, at the not form part of it and free movement of material date (June 1991), the levying of customs duties on the importation into the Community of goods originating goods between the OCTs and the Commu- from a non-member State which were in free circulation in nity does not exist unrestrictedly at this the Netherlands Antilles. 14 — Case C-260/90 Leplat [1992] ECR 1-643, paragraph 10. stage. 15 — In paragraph 62 of Opinion 1/78 [1979] ECR 2 8 7 1 , and paragraph 17 of Opinion 1/94 [1994] ECR I-5267, the Court of Justice, referring to the OCTs, confirmed that they are dependent territories of Member States but are 16 — Case C-390/95 P Antillean Rice Mills and Others v outside the scope of Community law. Commission [1999] ECR I-769, paragraph 36.

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33. The legal principles on the basis of (d) In any case it is necessary to abide by which that reply was given are, in brief, as the provisions of the decisions adopted follows: by the Council for the period in question on the basis of Article 136 of the Treaty.

(a) The OCTs do not form part of the customs territory of the Community, and their trade with the Community is VI — Re-ordering of the questions not treated in the same way as trade between Member States. In the latter case transactions are intra-Community transactions, whereas those between the OCTs and the Community are true 34. To facilitate discussion of the questions imports. from the national court, I shall group them together in the following logical order:

Treaty (now, after amendment, Arti- point 110 et seq. below). Since the applica- cle 184(1) EC) and Article 136 of the tion for suspension directed against the Treaty (Questions 3, 4 and 8). Netherlands authorities has been ruled inadmissible, the subject-matter of the main proceedings has been reduced to the interim order requiring Aruba to continue to issue EUR.1 certificates of origin with- out taking account of the provisions of the (e) Proportionality of the introduction of reviewing Decision. Since that decision the quota and the alleged deletion of makes no changes whatever with regard milling as a sufficient method of pro- to those certificates, the question whether it cessing (Questions 1, 2 and 10). is valid or not in the light of Community law (which is the subject of the question referred) can have no effect at all on the order for suspension in the main proceed- ings. (f) [Unworkable nature of Article 108b (Question 10)

(g)] Adoption of interim measures (Ques- However, the Council and the Commission tions 11 and 12). agree that, quite apart from the subject- matter of the present case, the Community public interest and, in particular, the need for legal certainty require a rapid decision by the Court of Justice on whether Decision 97/803 is valid.

VH — Replies to the questions

A — Preliminary question: inadmissibility Bearing in mind these considerations, and of the questions referred the fact that the proceedings in the other cases in which the validity of that decision has been questioned have been suspended pending the outcome of the present case (see footnotes 4 and 5), I also am of the 35. The Council and the Commission have opinion that it would be in the interest of raised the possible inadmissibility of the the proper administration of justice to give questions referred on account of their lack rapid replies to the questions which have of relevance to the main proceedings (see now been referred. I-692

38. The observations of the various Mem- ber States and institutions which have 41. According to the Italian Government, intervened in the proceedings are in almost the words 'before the end of the first five perfect agreement on both the effect and years' in Article 240(3) cannot be taken to the actual terms of the reply which should mean an unalterable period after which no be given to this question. amendments whatever could be made. If

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that were so, it would mean that the O C T 44. In short, therefore, the Council's legis- Decision had to be regarded as an inflexible lative power in this matter is limited, not by instrument, disregarding its true ratio. On the provisions of the O C T Decision, but, the contrary, that period should be under- more specifically, by the ultimate attain- stood as an 'encouragement' to act in the ment of the political objectives set out in light of all the measures already applied. Article 132 of the Treaty and, in general, by the fact that the Council's acts are subject to the requirement of legality, in which the general principles of law play a predominant part.

19 — Road Air, cited in footnote 11, paragraph 39. 18 — Case 148/77 Hansen [1978] ECR 1787. 20 — Ibid., paragraph 40.

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47. Therefore I consider that the Council those which may be based on the legislative was fully entitled to review the OCT measure on which it purports to give Decision when it did. information. Therefore the question from the national court is reduced to the expec- tations, meriting legal protection, which Emesa was entitled to have with regard to the maintenance in force of the cumulation of origin rules laid down in the OCT 48. By its ninth question, the Netherlands Decision. court raises the issue of the validity of Decision 97/803 having regard to the hopes raised by brochure No DE 76 21 distributed by the Commission in October 1993, which stated that the period of applicability of the OCT Decision was 10 years. 51. As the Court has repeatedly observed, 'whilst the protection of legitimate expec- tations is one of the fundamental principles of the Community, traders cannot have a legitimate expectation that an existing 49. In reply to this question, it could be situation which is capable of being altered argued, firstly, that a brochure can under by the Community institutions in the no circumstances serve as a basis for exercise of their discretion will be main- legitimate hopes on the part of a business- tained; this is particularly true in an area man preparing to make a large economic such as the common organisation of the investment. It is inconceivable that even the markets whose purpose involves constant least diligent administrator, when carrying adjustments to meet changes in the eco- out an investment project, should take into nomic situation.' 22 If this applies generally, account only the information contained in it applies with greater force where the a publicly distributed document which has trader concerned takes financial risks when no legal status whatever. he is well aware of the possibility of a change in the legal rules in question.

vations, that is clear from the statements of 55. The parties to the main proceedings Emesa's own legal representatives in Case agree that what they refer to as a 'locking' T-43/98. 23 According to them, it had been or 'blocking' mechanism exists under Part known at least since November 1996 that Four of the Treaty. This mechanism is said the Council was studying an Irish compro- to prevent the Community institutions mise proposal consisting precisely in limit- from adopting measures which would ing to 3 000 tonnes per year the quantity of entail a permanent curtailment of the rights sugar which could be imported into the or privileges granted to the OCTs in each of Community under the ACP/OCT cumula- the preceding decisions. The provisions of tion of origin rules. those decisions are said to mark a point of inflexibility or of no-return, so that any subsequent decision curtailing such rights or privileges must be deemed to be contrary to the Treaty and individuals could plead directly that it is invalid. 53. Under those circumstances, I do not think the applicant company can avail itself of the protection which would be merited by legitimate expectations that the prefer- ential arrangements for sugar imports were to continue.

57. Nevertheless, according to the opinion However, the Court added that the Proto- which I share with all the representatives of col was adopted as a transitional measure the Member States and the Community pending standardisation of the conditions institutions which have intervened in the for importing bananas into the common proceedings, there is no foundation for the market. locking theory in the general terms in which it is formulated. The fact that the dynamic process of association of the OCTs with the Community requires ever-greater global integration does not mean that the Council cannot, in certain matters, reinter- pret downwards a particular facility pre- 59. The provisional or, if preferred, transi- viously granted to the OCTs. This applies tional nature of the measures which the particularly where the advantage in ques- Council may adopt in such circumstances is tion has been established only on a provi- not disrespectful of the rights and expecta- sional basis, because of its exceptional tions of the OCTs or of individuals, parti- nature and the characteristics of the Com- cularly where the stability of a system of munity market. That is the case here with trade privileges depends on whether it is regard to the rule which allows certain compatible with other Community objec- products from the ACP States, after certain tives which are also enshrined in the Treaty, operations have been carried out, to be such as the proper functioning of a com- classified as being of OCT origin. mon market organisation in accordance with Article 33 EC Treaty (formerly Arti- cle 39 of the EC Treaty). Therefore when it was found that the cumulation of origin in the sugar sector could cause significant 58. The fiction upon which the cumulation disturbances to the already delicate balance of origin rules are based was adopted at the of the common market organisation in time by the Council without its being question, the Council was not only for- entirely aware — and it probably could mally entitled, but also obliged by the not have been aware — of the conse- Treaty itself to take action against those quences which it could entail. There are intolerable effects of the OCT Decision. precedents for comparable provisional situations. In Germany v Council, 24 the Federal Government argued that the Pro- tocol on the customs quota for imports of bananas formed an integral part of the Treaty and therefore any amendment to the Protocol must be made in accordance with 60. Consequently the Council fulfilled its the conditions laid down by the then duty in analysing the 'experience acquired' Article 236. The Court found that it was from the O C T Decision in the light of 'the correct that the Protocol formed an integral principles set out in this Treaty' (Arti- part of the Treaty since it was annexed to cle 136). The results of that analysis could the implementing Convention on the Asso- have led to the maintenance or the with- ciation of the OCTs with the Community. drawal of the measure, or to the restriction of its effects. Likewise, the Council could have considered altering the common mar- 24 — Case C-280/93 Germany v Council [1994] ECR I-4973 ket organisation for sugar. The important

62. However, the reviewing Decision does not contain only restrictions or limitations. 64. Therefore I cannot find any cogent It also established various advantages in arguments for concluding that, where a different fields of the association: better preferential rule of origin in the framework opportunities for the establishment of of the association of the OCTs has shown inhabitants of the OCTs in the Community itself capable, at least potentially, of caus- (Articles 232 and 233a), advances in the ing significant disturbances in the function- mutual recognition of qualifications (Arti- ing of a common market organisation, the cle 233b) and an opportunity for access to Council is obliged by the Treaty to uphold various Community programmes (Arti- that rule for ever. cle 233c). In addition, Community finan- cial aid to the OCTs was increased by 2 1 % . 25 — Particularly when account is taken of the probably modest In brief, I do not think, considering the contribution to the economic development of the OCTs reviewing Decision as a whole, that it must which may arise from the low added value represented by the industrial operations in this case (see footnote 38). necessarily be concluded that the OCT 26 — [1997] ECR 1-2250, point 95.

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D — The validity of quantitative restric- and Article 108b of the reviewing Decision. tions in the light of Articles 133(1) and 136 However, as I shall show below, the answer of the Treaty (Questions 3, 4 and 8) will probably be the same whether the problem is approached from the technical viewpoint of customs or from the view- point of trade policy.

68. The concept of 'origin of a product', which is not defined in the Treaties, never- theless has a minimum content given to it by the meaning of the words themselves. Wine made from Rioja grapes which has 66. Firstly, unlike the Council, I consider been made, matured and bottled in Spain is that Article 108b of the reviewing Decision unquestionably a product of Spanish ori- imposed an actual quantitative restriction gin. This core meaning of the concept 27 — on trade with the OCTs. As the Commis- which applies also where the goods have sion observes, although the importation of undergone a manifestly minor processing a particular product is legally possible over operation elsewhere — must be sheltered and above the fixed quota, the duties from any intervention by the legislature payable usually make it economically because it constitutes one of the creations impractical. This applies to products sub- of the law of property. Then, the discretion ject to a common market organisation and which the legislature still has regarding the for which there are surpluses in the Com- definition of the term inevitably changes munity. the rules of origin into technical legal instruments serving political aims. There is nothing unlawful in using what are really customs parameters for the orientation of the Community's trade policy, for example. Accordingly, in the context of the common agricultural policy, fiscal measures are frequently used for the purpose of market 67. On the other hand, what I am uncer- regulation. 28 tain of is whether the quantitative restric- tion in this case was applied to 'goods originating in the countries and territories' 27 — Which is defined, in relation to intra-Community trade, in Article 4 of Council Regulation (EEC) No 802/68 of within the meaning of Article 133. This 27 June 1968 on the common definition of the concept may hold the key to all the questions of origin of goods (OJ English Special Edition 1968 (I), p. 165) and, in relation to the OCTs, in Article 2 of referred to the Court in this case: the legal Annex II to the OCT decision. assessment of the provisions in Article 6(2) 28 — For the legal nature of the additional levy on milk and milk products, see the Opinion I delivered in Case C-186/96 and (3) of Annex II to the OCT Decision Demand [1998] ECR I-8529, points 36 to 44.

69. This means that, for purposes of cus- 71. To sum up, I consider that the ACP/ tom control, of course, there is nothing to OCT cumulation of origin rules are a prevent the legislature from allowing as the means of preferential trade treatment and, place of origin of certain goods a place as such, are completely outside the provi- where they could not have originated from sions of Article 133(1) of the Treaty and an economic point of view, because of the are subject only to the attainment of the small amount of added value. By acting in aims set out in Articles 131 and 132 of the this way, the legislature is not claiming to Treaty. designate the origin of the goods in ques- tion, but is using a legal fiction which permits certain kinds of goods to receive — usually preferential — treatment such as that which is given to goods of a particular origin. 72. If, notwithstanding the reasoning above, the Court took the view that the addition of Article 108b is equivalent to the imposition of a customs duty on goods originating from the OCTs, the validity of that provision should not necessarily be questioned for that reason either. The favourable treatment laid down by the Treaty for the importation of goods of OCT origin must be put in place in the same way as that in which it was gradually introduced between the Member States. This is the meaning to be given to Arti- cle 133(1) when it provides that 'customs 70. The ACP/OCT cumulation rules must duties shall be completely abolished in be seen in this way, since they confer a conformity with the progressive abolition certificate of OCT origin on goods from the of customs duties between Member States ACPs after minimum working in one of the in accordance with the provisions of this OCTs, so that they can be given favourable Treaty'.30 Similarly, Article 132(1) of the treatment as if they were OCT goods. It is Treaty states that one of the objectives of not for nothing that Article 6(2) and (3) of association is that Member States are to Annex II to the OCT Decision state that apply to their trade with the OCTs the '[w]hen products wholly obtained in the same treatment as they accord each other Community or in the ACP States undergo pursuant to the Treaty. working or processing in the OCT, they shall be considered as having been wholly obtained in the OCT', or '[w]orking and processing carried out in the Community or in the ACP States shall be considered as having been carried out in the OCT when the materials undergo working or proces- 73. Therefore it must be concluded that, in sing in the OCT'. 29 the field in question in this case, that is the

77. That is precisely what the Council did when, in view of the risk of disruption of the Community market created by poten- tially unlimited imports of sugar under the cumulation rules, it imposed a tariff quota on that product in order to preserve part of the common agricultural policy which is undoubtedly one of the elements of the 74. I therefore conclude that Article 133(1) Treaty (Article 3(e)). The seventh recital in of the Treaty provides no basis for challen- the preamble to Decision 97/803 sets out ging the validity of the quantitative restric- with a rare degree of clarity the reasons

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which led the Council to proceed as it 79. With regard to the means chosen for did. 31 implementing its objectives, it must be remembered that, in so far as this question will not be considered in connection with observance of the principle of proportion- ality, the Community legislature has, in matters concerning the common agricul- tural policy, a broad discretion which corresponds to the political responsibilities given to it by Articles 40 to 43 of the EC Treaty (now, after amendment, Articles 34 EC to 37 EC) 34

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(i) The principle of proportionality in gen- vidually and, where necessary, give any one eral of them temporary priority in order to satisfy the demands of the economic factors or conditions in view of which their decisions are made'. 36

8 2 . T h e principle of p r o p o r t i o n a l i t y requires that, where a measure is taken to prohibit or restrict economic activity, it must be appropriate and necessary in order 84. In exercising its power of assessment, to attain the objectives pursued; that, the institution in question must subject the where a choice must be made between means which it proposes to adopt to a several measures, recourse must be had to 'reasonableness' test, in the double sense the least onerous and, finally, that the that the means must he 'reasonably' likely disadvantages caused should not be dispro- to bring about the objectives and that the portionate to the aims pursued. In the case detriment or harm caused by the measure of the exercise of a discretionary power by must be 'reasonably' tolerable, that is to legislative means, the measure adopted say, it must not be disproportionate to the should not be manifestly inappropriate, benefit to the public in general. 37 having regard to the objectives pursued. 35

86. It is easy to see the potential extent of 87. Finally, it is a fact that the OCTs do not this risk of conflict. Figures produced by produce sugar themselves. They merely the Commission, which have not been process sugar originating from the ACPs, challenged, show that the European market and do so with little added value. 38 for sugar is now precariously balanced. As a result of the imposition of quotas, Community production of beet sugar is 13.4 million tonnes, which is more than the quantity of sugar consumed in the Com- munity, that is to say, approximately 12.7 million tonnes. Furthermore, the Commu- 88. In the present case the Council has nity imports 1.3 million tonnes of cane done no more than weigh up the different sugar from the ACPs in order to meet the factors in play and has then immediately specific demand for that variety. In addi- adopted a decision to resolve a conflict tion, by reason of agreements concluded between two important objectives of Com- within the World Trade Organisation munity policy. In view of the situation on (WTO), the Community has an obligation the Community market for sugar, I do not to authorise the importation of 400 000 think it can be said that the Council's tonnes of sugar from non-member coun- solution was disproportionate. The above- tries. mentioned figures show that in reality there is a surplus on the Community market and that a balance is achieved only by means of subsidised exports. Any additional quantity of sugar which entered the market would have compelled the Community institutions either to increase the amount of export subsidies (within the abovementioned lim- its) or to reduce the quotas of European As the total demand for sugar in the producers. In either case, the result would Community is less than the supply, some be serious disruption of the common orga- of the sugar available is set aside for export. nisation of the sugar market, contrary to However, as there is a considerable differ- the objectives of the common agricultural ence between prices on the world market policy. and that in the Community (the Commu- nity price is almost three times the world market price), export sales must be sub- 38 — As the Commission representative pointed out at the sidised by means of export refunds, which hearing, the most important processes which are necessary before sugar can be supplied to the public are carried out in are at present at the rate of 470 euros per Trinidad and Tobago, and not on the island of Aruba.

91. With regard to the alleged deletion of 'milling' as a processing operation relevant 93. In these circumstances it cannot be said 39 — In 1996 these imports totalled 2 310 tonnes, according to that Article 108b(2) deleted 'milling' as a the Eurostat figures cited by the Council. relevant operation for the purpose of the

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OPINION OF MR RUIZ-JARABO — CASE C-17/98

attribution of origin. On the other hand, it ded as a structural measure and not merely is possible to deplore the poor quality of a short-term one. Therefore its function the legislative technique used in drafting it. and the justification for it are quite differ- If the Council intended only to describe the ent from those of safeguard measures under operations of forming sugar lumps and of Article 109. Therefore its effects may be colouring as 'insufficient' for the above- greater than those of safeguard measures, mentioned purpose, it should have done so since they relate to different situations expressly or at least have offered an provided for by the legislature. explanation in the preamble.

(iv) The extent of the restrictive effect of Article 108b in relation to safeguard mea- sures 97. Safeguard measures are by nature lim- ited in time and constitute exceptions to the normal trade rules. Article 108b of the Decision, by contrast, forms part of the said ordinary rules and it must be assessed 94. In the second question the Netherlands in that context. The preamble to the court seeks to ascertain whether it is Decision explains the reasons justifying it acceptable for measures such as the impo- in clear terms which show that it would not sition of a quota or the deletion of 'milling' have been sufficient to resort exclusively to to have far more restrictive consequences provisional solutions in order to resolve than would have been the case if safeguard permanent problems: measures authorised by Article 109 of the O C T Decision had been taken.

98. Moreover, the safeguard measures appears from Aruba's submissions in the under Article 109 and the imposition under main proceedings that the 'unworkability' Article 108b of a quota for ACP/OCT of the article stems from the fact that the cumulation of origin sugar, are based on, authorities of each OCT have no means of and governed by, different criteria. their own of knowing when the limit of 3 Whereas Article 109 lays down objective 000 tonnes of sugar, which applies to criteria for the adoption of safeguard imports from all the OCTs (in relation to measures (serious disturbances in a sector which the ACP/OCT cumulation of origin of the economy of the Community or is laid down), is exceeded and therefore Member States, a risk to external financial they cannot issue or refuse the correspond- stability, difficulties which may result in a ing certificates of origin in each particular deterioration of the Community's activity), case. Article 108b fits into a scheme of freedom of political action.

101. In any case it cannot be said that the provision is invalid. Firstly, on grounds of principle: the validity of legislation is never 99. Consequently there is no reason to subject to the greater or lesser difficulty of think that the principles applicable to safe- applying it, Article 108 b merely sets the guard measures should also apply to the substantive limits for the ACP/OCT cumu- normal regulatory framework in which lation of origin, without reference to the they have been incorporated. Therefore procedural problems which may arise in there is no reason to limit the effects of applying them. Article 108b of the Decision in the same way as those of the exceptional safeguard measures.

G — The adoption of interim measures 105. The national court in the present case (Questions 11 and 12) is hearing a case concerning an OCT and is required to give a ruling on the legality of a Community act. I presume that the said court has jurisdiction and is entitled to determine the matter, just as it has given decisions in relation to the various actions and claims which have so far been brought 102. In the eleventh question the Nether- in connection with Emesa. Under these lands court seeks to ascertain whether a circumstances — and unless the legal rules national court has jurisdiction to adopt linking the island of Aruba with the King- interim measures vis-à-vis a non-Commu- dom of the Netherlands provide other- nity body in order to prevent a breach of wise — it seems clear to me that the court Community law. in question must apply the same criteria as it would apply if the same question arose in relation to a Member State. Consequently the reply to the eleventh question, in the abstract terms in which it is worded, is in the affirmative.

KMKSA SUGAR

of Justice stated that a national court can OCTs and the maintenance of the common order the suspension of a Community act agricultural policy (which, contrary to or a national administrative measure based what the national court appears to believe, on a Community act only if all the follow- goes further than purely economic aspects) ing conditions are fulfilled: have already been discussed in connection with the validity of fixing a quota in the light of Articles 133(1) and 136 of the Treaty (Questions 3, 4 and 8). For its part, the importance which should be attached to the reduced impact of sugar imports from •— if that court entertains serious doubts the OCTs, having regard to the volume of as to the validity of the Community sugar production in the European Union, measure and, should the question of was studied in connection with the propor- the validity of the contested measure tionality of introducing the quota (Ques- not already have been brought before tions 1 and 2). the Court of Justice, itself refers that question to the Court of Justice;

109. For the reasons which I shall go on to — if there is urgency and a threat of give, I do not think it necessary to establish serious and irreparable damage to the whether the second of the requirements set applicant; out by the case-law is fulfilled, that is to say, that the application for suspension of the Community act be urgent and that, if the plant is closed, Fmesa may suffer serious, irreparable damage. — and if the national court takes due account of the Community's inter- ests. 4 2

Consequently, I do not think that, in the circumstances of the present case, the first and third requirements set out above, which are necessary for the national court 112. The suspension in question is not to be able to contemplate the suspension of connected with the validity or otherwise a Community act are fulfilled. of Decision 97/803, but with the issue of EUR.1 certificates by the customs autho- rities of the OCTs, which is governed by Title II of Annex II to the O C T Decision, the validity of which has not been ques- 110. Nevertheless, so far as the interim tioned in these proceedings. Even were it measures actually adopted by the national possible to argue that, if the reviewing court are concerned, my objection is of a Decision were invalid, that could affect the very different nature. The injunction direc- legality of acts such as the O C T Decision ted at Aruba is neither relevant in the itself, which are closely linked to the act context of the present proceedings nor challenged in the main proceedings, it must appropriate for affecting the suspension at be recognised that the reviewing Decision issue. has in no way affected the obligation of the O C T authorities to issue EUR.1 certificates in the prescribed circumstances. The task of checking compliance with the quota of 3 000 tonnes per annum, in accordance with 111. The reason is that, in the absence of Regulation N o 2553/97, falls to the autho- substantive jurisdiction, the national court rities of the importing States, not those of had to rule that the application for interim the OCTs. Consequently the interim mea- measures was inadmissible in so far as it sure of suspension, the necessity for which was directed against the Netherlands State in law is the subject of the question from and the HPA, and admissible only in the national court, is of no assistance at all.

(3) In the present case, the interim measure adopted by the national court is not justified by the circumstances described.

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