C-159/98

APPEAL against the order of the President of the Court of First Instance of the European Communities of 2 March 1998 in Case T-310/97 R Government of the Netherlands Antilles v Council [1998] ECR II-455, seeking

— to have that order set aside, to have the application of Article 1(31) and (32) — concerning respectively rice and sugar which is worked or processed in the Netherlands Antilles — 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) suspended, subject to the condition that the Nether­ lands Antilles preserve or introduce minimum export prices for the products

* Language of the case: English.

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referred to in those paragraphs at a level equal to or higher than the interven­ tion prices within the Community, and to have the Council ordered to pay the costs,

Commission of the European Communities, represented by T. van Rijn, Legal Adviser, and X. Lewis, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of C. Gómez de la Cruz , of its Legal Service, Wagner Centre, Kirchbere,

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Italian Republic, represented by Professor U . Leanza, Head of the Legal Service in the Ministry 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-Adelaide,

interveners at first instance,

and

1 By application lodged at the Court Registry on 24 April 1998, the Government of the Netherlands Antilles brought an appeal under the second paragraph of Article 50 of the EC Statute of the Court of Justice against the order of the President of the Court of First Instance of 2 March 1998 in Case T-310/97 R Government of the Netherlands Antilles v Council [1998] ECR 11-455 ('the order under appeal' or 'the order'), rejecting its application for interim measures.

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2 The Government of the Netherlands Antilles seeks to have the order under appeal set aside and, principally, to have the application of Article 1(31) and (32) — con­ cerning respectively rice and sugar which is worked or processed in the Nether­ lands Antilles — 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; 'the contested decision') suspended, subject to the condition that the Netherlands Anti­ lles preserve or introduce minimum export prices for the products referred to in those paragraphs at a level equal to or higher than the intervention prices within the Community, or, in the alternative, to have the case referred back to the Court of First Instance to rule afresh.

3 By application lodged at the Court Registry on 30 April 1998, the Kingdom of Spain sought leave to intervene in the present interlocutory proceedings in support of the validity of the order under appeal.

7 Pursuant to the first paragraph of Article 37 of the EC Statute of the Court of Justice, the Kingdom of Spain must be granted leave to intervene.

8 By documents lodged at the Registry on 14 and 15 May 1998, the Council, the Commission, the Italian Republic and the Kingdom of Spain submitted their writ­ ten observations to the Court.

Legal background, facts and procedure

9 The legal and factual background to the dispute is set out in the order under appeal, in the following terms:

'1 The Netherlands Antilles form part of the overseas countries and territories ("OCTs") associated with the Community. Article 3(r) of the EC Treaty states the association of the OCTs in order to increase trade and promote jointly economic and social development to be one of the objectives of the Treaty.

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5 After harvesting, rice is husked and then polished in several stages. Brown rice, from which the husk has been removed, is processed into semi-milled rice by removal of some or all of the outer layers of the pericarp. Milled rice, which has been fully processed, is obtained by removal of the whole of the pericarp.

6 Article 6(2) of Annex II to the OCT Decision, which concerns, inter alia, the definition of the concept of "originating products", provides that when prod­ ucts wholly obtained in the ACP States undergo working or processing in the OCTs, they are to be considered as having been wholly obtained in the OCTs .

7 As a result, the processing of brown rice originating in ACP countries into semi-milled rice in the Netherlands Antilles is sufficient for it to be regarded as originating in the Netherlands Antilles under the rules laid down in Annex II to the OCT Decision. On the basis of that rule of cumulation of origins, rice processed in that way may therefore be imported into the Community free of customs duty.

8 Article 133(1) of the Treaty provides that customs duties on imports into the Member States of goods originating in the OCTs are to be completely abol­ ished in conformity with the abolition of customs duties between Member States in accordance with the Treaty. Article 101(1) of the OCT Decision pro­ vides that products originating in the OCTs are to be imported into the Com­ munity free of customs duties and charges having equivalent effect. Under Article 102 thereof, the Community is not to apply to imports of products originating in the OCTs any quantitative restrictions or measures having equivalent effect.

11 In addition, pursuant to Article 240(3) of the OCT Decision, the Commission sent the Council a communication on the mid-term review of the association of the OCTs with the Community (COM(94) 538 final of 21 December 1994), recommending various adjustments to that decision which took account, as far as was possible, of the desires expressed by the OCTs and of the experience gained by the Commission over the first five years of implementing the OCT Decision. To deal with the "clash between two Community policies — OCT development and maintenance of guarantees given to producers under the common market organisations —", the Commission proposed the creation of machinery enabling it to set reference prices for imports. It reserved the right, however, to supplement that machinery by amendments, where necessary, to the OCT rules of origin in respect of ACP / OCT cumulation and the minimal working required to obtain OCT origin.

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12 On 16 February 1996, the Commission submitted to the Council a proposal for a decision amending at mid-term the OCT Decision (OJ 1996 C 139, p. 1). In the sixth and seventh recitals in the preamble of that proposal, the Com­ mission stated that free access for all products originating in the OCTs and the maintenance of cumulation for ACP and OCT originating products had given rise to the risk of conflict between two Community policy objectives, namely the development of the OCTs and the common agricultural policy. It pro­ posed that fresh disruption on the Community markets for certain products subject to a common organisation of the market should be prevented by, in particular, the exclusion of cumulation for agricultural products, coupled with greater flexibility as regards derogations.

16 For sugar, Article 108b allows cumulation of ACP and OCT origins for an annual quantity of 3 000 tonnes.

17 For the purposes of implementing the cumulation rules set out above, milling or semi-milling operations for rice, and forming lumps or colouring for sugar, are to be considered as sufficient to confer the status of O CT-originating products, according to Articles 108a(4) and 108b respectively.'

10 By application lodged at the Registry of the Court of First Instance on 9 Decem­ ber 1997, the Government of the Netherlands Antilles sought annulment of the contested decision.

1 1 By separate document lodged at the Registry of the Court of First Instance on 10 December 1997, it further sought suspension, under Articles 185 and 186 of the Treaty, of the application of Article 1(31) and (32) of the contested decision, con­ cerning respectively rice and sugar which is worked or processed in the Nether­ lands Antilles, subject to the condition that the Netherlands Antilles preserve or introduce minimum export prices for the products referred to in those paragraphs at a level equal to or higher than the intervention prices within the Community.

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16 He further considered that, other than in a situation of obvious urgency, he could not, without running the risk of encroaching upon the Council's power of assess­ ment, override that institution's assessment as to the choice of the most appropri­ ate measure to prevent disruption on the Community markets for rice and sugar,

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whilst still taking account of the requirements imposed by the association of the OCTs with the Community, and thus held that the appellant's request could not be granted unless the urgency of the measures sought appeared undeniable (para­ graphs 64 and 65 of the order).

17 Starting from that premiss, he proceeded, in paragraphs 66 to 77 of his order, to examine the effects of the contested decision on the situation of the Netherlands Antilles, with a view to assessing the urgency of the suspension sought.

18 His examination dealt in turn with the rice sector, the sugar sector and the overall economic development of the Netherlands Antilles.

21 Finally, with regard to the economic development of the Netherlands Antilles, he found that the appellant's argument failed to take account of the fact that the con­ tested tariff quotas would entail only a small reduction in exports to the Commu­ nity, that it was based on mere forecasts as to the development of rice and sugar exports and, finally, that it was unsupported by any specific evidence from which it might be assumed that the alleged damage could be irreversible (paragraphs 73 to 75 of the order).

22 In conclusion, he held that the condition relating to urgency was not satisfied in the circumstances.

Prima fade case

23 With regard to the question whether there was a prima facie case for allowing the application for interim measures, it appears from the order under appeal that the Government of the Netherlands Antilles had put forward a single plea in law, alleging the Council's lack of competence ratione tempons to adopt the contested decision after the expiry of the time-limit laid down in Article 240(3) of the OCT Decision (paragraph 78 of the order). That plea in law did not appear to the Presi­ dent of the Court of First Instance prima facie to be well founded. Referring to Case 148/77 Hansen v Hauptzollamt Flensburg [1978] ECR 1787, paragraph 10, he considered that, prima facie, that provision of the OCT Decision was to be inter­ preted as constituting no more than a guideline. He further stated that the five- year period in question here did not, prima facie, have the same legal effect as the

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28 In the present instance, however, the appellant has failed to challenge the assess­ ment of the President of the Court of First Instance with regard to the fourth con­ dition — that the order must not neutralise in advance the effects of the judgment subsequently to be given — even though at paragraph 65 of the order under appeal he stressed the need to take account of 'the risk that the Community's interests may be irreversibly affected if the interim measure sought is granted'. The Council therefore submits that the appeal must be held to be inadmissible.

29 That argument cannot be upheld.

30 It is true that, at paragraph 61 of the order under appeal, the President of the Court of First Instance stated that there was no guarantee that 'a minimum price, if laid down to replace the contested tariff quotas, ... would not, during the course of the main proceedings, produce certain definitive effects likely to deprive the contested decision of its effectiveness'.

31 It is not, however, possible to deduce from that, as the Council does, that he decided that the suspension sought was not of a sufficiently provisional nature. It is clear merely that there did not appear to him to be any 'guarantee' in that regard.

36 Finally, the Italian Republic also submits that the appeal is inadmissible without, however, putting forward any specific arguments in support of that conclusion. It merely states that it supports the objection to the admissibility of the main action raised by the Council at first instance.

37 Here, it need merely be noted that the arguments put forward by the Council at first instance, which were dismissed in paragraphs 30 to 38 of the order under appeal, examining the admissibility of the application for interim measures, cannot provide any grounds for holding the appeal inadmissible.

38 The appeal must therefore be held to be admissible.

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The pleas put forward in appeal

NETHERLANDS ANTILLES v COUNCIL

42 The Council considers that to accept such reasoning based on an irreversible loss of time would lead to the absurd situation that damage which by its very nature is linked to the passage of time can never be the subject of financial compensation because time cannot be restored.

43 In addition, in the submission of the Council and the Commission, the appellant cannot criticise the President of the Court of First Instance for having given detailed consideration to volumes of trade and the situation of the rice and sugar industries, since it had itself insisted on that aspect. It is, moreover, in the Com­ mission's view, irrelevant whether the alleged harm is viewed in terms of trade flows in rice and sugar or of the overall development of the Netherlands Antilles economy.

44 In the second submission made under its second plea, the appellant argues that, even if it was not wrong to determine the alleged damage by reference to volumes of trade and the situation of the rice and sugar industries in the Netherlands Anti­ lles, the serious and irreparable nature of the harm was none the less incorrectly dealt with in the order under appeal, for three reasons.

45 First, as regards the sugar sector, it is clear from paragraphs 71 and 72 of the order that the expectations of infant industries in the OCTs were disregarded in the con­ tested decision. The appellant considers that, since one of the purposes of Article 133(3) of the EC Treaty is specifically to protect infant industries in the OCTs, failure to take those expectations into account is in itself sufficient automatically to establish the existence of serious and irreparable harm to the Netherlands Antilles.

48 In the first place, the order makes no mention of the existence of Commission Regulation (EC) No 2603/97 of 16 December 1997 laying down the detailed implementing rules for imports of rice originating in the ACP countries or the overseas countries and territories ( OCT ) (OJ 1997 L 351, p . 22), adopted in imple­ mentation of the contested decision. Under that new and restrictive system, opera­ tors may import a total of 35 000 tonnes of rice into the Community from the OCTs from January onwards, while the balance of 125 000 tonnes may be imported at the end of the year free of customs duty, provided that the ACP coun­ tries have not exported that amount directly into the Community. The appellant states that, in comparison with the advantage of a zero rate of customs duty, it is too expensive and commercially too risky to store rice until the end of the year, so that ACP rice producers are compelled to export directly to the Community rather than via the OCTs. The Commission admitted as much in its written obser­ vations to the Court of First Instance, from which it appears that 41 688 tonnes of rice had already been imported directly into the Community from the ACP coun­ tries in January 1998. The President of the Court of First Instance was therefore wrong to consider, in paragraph 68 of his order, that ACP rice producers preferred to export their products via the OCTs.

49 In the second place, in paragraph 69 of his order, the President of the Court of First Instance took no account of the findings set out in the report of the Nether­ lands Economic Institute, submitted by the appellant to the Court of First

52 With regard to the first submission made under the second plea in appeal, it must be noted that, contrary to the appellant's assertions, it is explicitly clear from para­ graphs 73 to 75 of the order under appeal that the President of the Court of First Instance did examine its arguments concerning the economic development of the Netherlands Antilles in the period leading up to the year 2000.

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53 More specifically, he considered that the figures which the appellant had put for­ ward with regard to that economic development did not take account of what he had found to be the true impact of the contested decision on exports of rice and sugar from the Netherlands Antilles to the Community. He further found that, in the absence of any evidence of a foreseeable structural effect on the rice and sugar industry, it had not been established that the damage was irreversible.

54 It is thus clear from the order under appeal that, with regard to the economic development of the Netherlands Antilles, the President of the Court of First Instance found that the damage was neither as serious as alleged nor apparently irreversible.

55 The appellant's challenge to those findings on the ground that he should have given greater weight to the fact that the time lost for the macroeconomic develop­ ment of the Netherlands Antilles could not be restored amounts to calling into question the assessments of fact on which the order under appeal is based.

60 It presupposes that the refusal to grant the suspension sought will lead to the clo­ sure of an infant industry in the Netherlands Antilles, which amounts to calling into question the assessments of fact in the order under appeal. To that extent, therefore, it must be rejected, for the reasons set out in paragraph 56 above.

61 Furthermore, even if, as the appellant alleges, the closure of an infant industry in the OCTs were to be deemed inevitably to constitute a breach of Article 133(3) of the Treaty, such a breach would not thereby constitute, per se and automatically, serious and irreparable harm.

62 A breach, if any, of a Treaty provision, whilst it may affect the validity of the con­ tested decision, cannot in principle be sufficient on its own to establish that any damage caused is serious and irreparable.

63 The second argument, that the President of the Court of First Instance did not apply the same standards when assessing the interests of the common agricultural policy as he did when assessing those of the association of the OCTs, seeks to challenge the assessment of the facts on which he based his refusal to grant interim measures. It must therefore be rejected, for the reasons set out in paragraph 56 above.

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69 To the extent that the claim is merely that the President of the Court of First Instance did not explicitly evaluate a specific item of evidence, therefore, the appel­ lant's allegation must be rejected.

70 Viewed as an allegation that the order is not properly reasoned on this point, the appellant's argument must also be rejected. A judge hearing an application for interim measures cannot be required to reply explicitly to all the points of fact and law raised in the course of the interlocutory proceedings. It is sufficient that the reasons given validly justify that order in the light of the circumstances of the case and enable the Court of Justice to exercise its powers of review (SCK and FNK v Commission, cited above, paragraph 52, and Case C-248/97 P(R) Chaves Fonseca Ferrão v OHI M [1997] ECR I-4729, paragraph 20).

71 In the present case, the President of the Court of First Instance clearly set out his assessment of that aspect of the situation at paragraph 69 of the order under appeal.

72 His reference to the experience of the safeguard measures introduced in 1997, which did not seem to have led to the closure of a large proportion of the rice mills established in the Netherlands Antilles, appears to be entirely relevant. In the con­ text of the interlocutory proceedings, he did not have to consider the permanent nature of the contested decision but merely to assess the effects it was likely to entail pending the conclusion of the proceedings on the main action. He was thus quite entitled to refer to the known effects of previous temporary measures.

75 The third plea put forward in support of the appeal relates principally to the rea­ soning which introduces paragraphs 55 to 65 of the order under appeal, as sum­ marised in paragraphs 14 to 16 above, on the basis of which the President of the Court of First Instance concluded that, in view not only of the risk that the Com­ munity's interests might be irreversibly affected if the interim measure sought were granted but also of the Council's power of assessment when reconciling the objec­ tives of the common agricultural policy and of the association of the OCTs with the Community, the appellant's application could not be granted unless the urgency of the measures sought appeared undeniable.

76 Four submissions are made under this third plea in appeal.

77 In its first submission, the appellant argues that, contrary to what is assumed in paragraphs 55 to 58 of the order under appeal, the Council is not authorised to avert a risk of conflict between two Treaty objectives — namely the development of the OCTs and the common agricultural policy — by introducing tariff quotas. Four arguments are put forward under this head.

78 First, the risk of conflict does not arise directly out of the Treaty but was created artificially by the Community, which failed to take account

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83 Fourth, the appellant denies the assertion made in paragraph 58 of the order under appeal, that it 'seems to be common ground that processing in the OCTs of rice or sugar from ACP countries, enabling those products to benefit from OCT origin, is a relatively simple industrial process not requiring costly plant' and that 'that cir­ cumstance thus favours the development of rice or sugar exports from the Neth­ erlands Antilles to the Community'. It cites the high investment costs of rice and sugar mills and the findings in the report of the Netherlands Economic Institute to the effect that the rice export potential of the OCTs to the Community could not exceed its 1996 level.

84 In the second submission under its third plea, the appellant claims that the Presi­ dent of the Court of First Instance wrongly assumed, in paragraph 55 et seq. of his order, that the Council was entitled to introduce tariff quotas on trade with the OCTs. It advances three arguments in support of that contention.

85 First, paragraph 55 runs counter to Article 133(1) of the Treaty, which prohibits tariff quotas on rice and sugar originating in the OCTs. Since the end of the tran­ sitional period, customs duties and charges having equivalent effect on imports into the Community of products originating in the OCTs have been prohibited.

86 Second, the measures contained in the contested decision, if they are to be regarded as quantitative restrictions or measures having equivalent effect, have been prohibited since the end of the transitional period in respect of imports from the OCTs into the Community. Paragraph 55 of the order thus wrongly presumes that the Council is empowered to introduce such measures.

89 In the fourth submission made under its third plea, the appellant argues that the President of the Court of First Instance could not consider, as he did at paragraph 61 of his order, that there was no guarantee that a minimum price, if laid down, would make it possible to avert further disruption. In the first place, he completely ignored both the existence and the comprehensive nature of the Netherlands Anti­ lles minimum price measure. Secondly, contrary to what is stated in paragraph 60 of the order, the appellant did challenge the Council's arguments relating to the difficulties involved in such a minimum price measure, referring in particular to certain correspondence between the Permanent Representation of the Netherlands and the Commission. Thirdly, the appellant points out that similar measures pro­ posed by non-member countries are accepted as alternatives to the imposition of anti-dumping duties. Finally, in the event of any difficulty with a minimum price system, recourse to safeguard measures would have remained available and the President of the Court of First Instance could also have varied or cancelled any interim measures ordered.

90 The Council contends that the first three submissions made under the third plea concern not the urgency of the measures sought and the balance of interests but

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the validity of the contested decision; they relate to pleas in law which the appel­ lant had raised in its main action for annulment before the Court of First Instance, but not when seeking to establish a prima facie case in its application for interim measures. They should therefore be dismissed as inadmissible.

95 With regard to the third submission made under the third plea, the Commission contends that the President of the Court of First Instance made no evaluation as to the validity of the approach taken by the Council in balancing the interests of the OCTs and those of the common agricultural policy — an evaluation which would have addressed the question of the prima facie case had the appellant sought it. It is clear from the order under appeal that the President of the Court of First Instance merely weighed up whether the balance of interests inclined in favour of granting the interim measures or not.

96 Finally, the Commission considers that the fourth submission made under the third plea seeks a review of the facts as found in the order under appeal and is thus inadmissible.

Findings

97 The first argument raised in the first submission and the second and third submis­ sions made under the third plea in appeal relate to arguments advanced in the main action to challenge the validity of the contested decision.

98 However, since it is clear from the order under appeal that the appellant did not rely on those submissions to establish a prima facie case for its application for interim measures, the President of the Court of First Instance cannot be criticised for not having taken them into account when weighing up the interests of the Community against those of the appellant.

99 As regards the third argument raised in the first submission made under the third plea, challenging the attribution of certain statements to the appellant by the Presi­ dent of the Court of First Instance, it need merely be pointed out that, in any event, that aspect did not play a decisive role in his reasoning.

102 As regards the finding that there was no prima facie case for the interim measures sought, the appellant submits that the order under appeal is vitiated by five errors.

103 First, since the issue raised in the single plea in law put forward in the interlocu­ tory proceedings was also at the same time the subject-matter of two requests for preliminary rulings, the President of the Court of First Instance should have taken into account the serious doubts expressed by the national courts in those cases.

104 Second, the interpretation given in the order under appeal to Article 240(3) of the OCT Decision is manifestly inconsistent with the ordinary meaning to be given to the terms of that provision, under which the five-year time-limit is binding.

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105 Third, that interpretation is also clearly wrong in view of the context of that provi­ sion within the OCT Decision.

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no However, the second and third pleas in appeal have not disclosed the existence of any error in law in the assessment of that latter condition.

111 The plea relating to the prima facie case, which does not call into question the lack of urgency of the measures sought, therefore cannot form grounds for setting aside, even partially, the order under appeal (SCK and FNK, cited above, para­ graph 31; Chaves Fonseca Ferrão, cited above, paragraph 18, and Case C-43/98 P(R) Camar v Commission and Council [1998] ECR I-1815, paragraph 40). It need thus not be examined.

112 In the light of all the foregoing considerations, the appeal must be dismissed.

Costs

113Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the appellant has been unsuccessful, it must be ordered to pay the costs of the present proceedings.

1. The appeal is dismissed.

2. The Government of the Netherlands Antilles shall pay the costs.

3. The Commission, the Italian Republic and the Kingdom of Spain shall bear their own costs.

Luxembourg, 25 June 1998.

R. Grass G. C. Rodriguez Iglesias

Registrar President