C-355/00

FRESKOT

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 14 November 2002 1

I — Introduction Ellinikon Georgikon Asfaliseon (Greek Agricultural Insurance Organisation) and other provisions3 (hereinafter 'the 1988 Law') provides inter alia: 1. In the present case the national court essentially seeks to ascertain whether the imposition of a contribution provided for under Greek legislation on the purchase and sale of domestically-produced agricul- 'Article 1 tural products to finance an organisation insuring agricultural risks is compatible with Community law, in particular Articles 30, 38, 39, 40, 59, 60 and 92 of the EC Treaty (now, after amendment, 1. An organisation promoting the public Articles 28 EC, 32 EC, 33 EC, 34 EC, 49 interest called the Organismos Ellinikon EC, 50 EC and 87 EC) and with the First Georgikon Asfaliseon (ELGA), a private Council Directive 73/239/EEC of 24 July legal person wholly owned by the State, is 1973. 2 hereby established.

2. The ELGA shall have its headquarters in Athens and be supervised by the Minister of II — Legislation Agriculture, in accordance with the provi- sions of this Law.

A — National law Article 2

2. Law 1790/1988 concerning the organi- sation and operation of the Organismos 1. The ELGA has the object of organising and implementing programmes of proac- tive protection and insuring the production 1 — Original language: German. 2 — ... on the coordination of laws, regulations and adminis- and assets of agricultural enterprises. trative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance ( 7 3/239/EFC) (the 'First Non-Life Assurance Directive') OJ 1973 L 228, p. .1). 3 — FEK (Official Gazette) A' 134.

1. (a) income from a special insurance contribution;

(c) proactive protection of vegetable assets and vegetable production.

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2. Detailed rules for the application of this originating from fishing. Those percentages article shall be adopted by decision of the shall be calculated on the basis of the value Minister of Agriculture.' of the products.

3. Article 5a was inserted in the 1988 Law by Law 2040/1992 governing the compet- ence of the Ministry of Agriculture and of legal persons performing supervisory func- tions there and other provisions 4 (here- 7. Subject to the rules in paragraphs 12 and inafter 'the 1992 Law'). That provision 13 of this article, the special insurance states inter alia as follows: contribution shall be paid to the competent public finance service by persons statutorily liable thereto within the time-limits laid down in Article 30(2) of the Kodikas Forologikon Stikhion (Tax Code). ' 1 . The following domestically-produced agricultural products and by-products shall be subject to the special insurance con- tribution in favour of the ELGA:

B — Community law

4. In the field of insurance, freedom to (d) Insurance forming part of a statutory provide services and freedom of establish- system of social security; ment have been implemented by several directives.

…'.

5. Article 1(1) of First Council Directive 73/23 9/EEC, as amended by Council Direc- tive 84/641/EEC, 5states the following: III — Facts, main proceedings and ques- tion referred

7. The applicant in the main proceedings is 'This Directive concerns the taking-up and a public limited company incorporated pursuit of the self-employed activity of under Greek law and called 'Freskot'. The direct insurance, including the provision object of its business is the production and of assistance referred to in paragraph 2, purchase of poultry with a view to selling it carried on by undertakings which are wholesale in the domestic market and the established in the territory of a Member slaughter of poultry for third parties in State or which wish to become established return for payment. there'.

5 — ... of 10 December 1984 amending, particularly as regards tourist assistance, the First Directive (73/239/EEQ on the 8. Whilst carrying out a check, the tax coordination of laws, regulations and administrative provi- sions relating to the taking-up and pursuit of the business of administration ascertained that in the direct insurance other than life assurance (OJ 1984 L 339, p. 21). fourth quarter of 1993 Freskot did not

'Whether the imposition of the insurance contribution referred to in the grounds of the judgment, to which domestically-pro- 11. In particular, Freskot submitted to the duced agricultural products and by-prod- national court that, in so far as it concerns ucts of vegetable or animal origin or poultry production, the contribution at originating from fishing are subject and issue was contrary to the objectives of the which is levied and paid as income to the common agricultural policy within the competent public finance service, is, given meaning set out in Articles 38 and 39 of the objective it pursues, namely organising the EC Treaty (now Articles 32 EC and 33 and implementing programmes of proac- EC) and to the relevant market organi- tive protection and insuring the production sation. The system of compulsory insurance and assets of agricultural enterprises, at issue would deny poultry producers and contrary to the provisions of European traders in Greece the possibility of freely Union law concerning the free movement making the sales which they wish to make, of goods (Article 28), the common agricul- both in Greece, where their undertakings tural policy (Articles 38, 39 and 40), the are established, and in other Member States freedom to provide services (Articles 59 in the conditions laid down by the par- and 60), permitted State aid (Article 92) ticular Community provisions. In addition, and the provisions of the First Council it contends that the contribution at issue Directive 73/239/EEC of 24 July 1973?'

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6 — ... of 29 October 1975 on the common organisation of the 15. The Greek Government and the Com- market for poultrymeat (OJ 1975 L 282, p. 77). mission take as the starting point for their 7 — They refer to Case 51/74 Van der Hulst's Zonen [1975] ECR 79, and Case 83/78 Pigs Marketing Board [1978] considerations the objectives of the com- ECR 2347.

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18. The Greek Government submits that contrary neither to primary legislation nor the contribution at issue forms an integral to the COM in poultrymeat. part of a national social insurance system, that it serves the general interest in the proactive protection of agricultural prod- ucts — including poultry enterprises — against natural risks, and that the resultant burden on Greek poultry producers must be regarded as low. It adds that the 22. The Commission considers that the line contribution does not have a significant of reasoning pursued by the Court in Irish effect on pricing and on the mechanisms Creamery Milk Suppliers Association and provided for by the COM. Others9 is applicable to this case in so far as those cases concerned an indirect tax and this case concerns a parafiscal charge.

8 — ... of 20 July 1999, C (1999) 2536 final 9 — Joined Caies 56/80 and 71/80 [1981] ECR 735

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2. Legal assessment policy. Nor does it contain any rules on underwriting damage caused by natural disasters.

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30. In that connection, the Commission has price formation was addressed precisely pointed out that the imposition of a con- because the relevant COM contained such tribution on the value of domestically-pro- rules. Thus, in itself, the question whether duced agricultural products leads to an the rules at issue have any influence on increase in their price. Therefore, an effect price formation seems irrelevant in the on the flow of trade had to be expected present case. because foreign products would con- sequently become more attractive in comparison. Although that assertion must not be dismissed, it must also be noted that a system of insurance based on principles of national solidarity makes it possible to strike a balance between supply and demand in line with the objectives of the agricultural policy 12 by absorbing the 32. Moreover, the Commission considers effects of natural disasters and epidemics that the mechanisms of the relevant COM on the producers. Moreover, the Commis- could be adversely affected by producers sion clearly assumes there is a narrow switching to production of other products relationship between the amount of the because of loss of competitiveness caused contribution and price formation. How- by the contribution. 14 An objection must ever, it must be stated in that regard that be raised to that view to the effect that such the absence of a system of insurance of the a consequence is hardly likely since the type at issue would not necessarily have to insurance contribution at issue is imposed result in a fall in production prices because on all agricultural products. the producers would have to provide for risks by other means.

35. The Greek Government considers that the compensation at issue, which, in its view, concerns an area which is not har- monised at Community level, is not contrary to the Treaty provisions on free movement of goods because it does not give rise to any discrimination against similar products from other Member States, par- 34. I therefore suggest that, in line with its ticularly since it does not apply to such settled case-law, the Court rules that the products. In its opinion, at most discrimi- imposition of an insurance contribution on nation exists against domestic products, all domestically-produced agricultural which cannot be challenged under Com- products for the purpose of financing the munity law. insurance of the products and assets of agricultural enterprises is not in principle contrary to the Treaty provisions concern- ing the common agricultural policy within the context of Regulation (EEC) No 2777/75 of the Council on the common organisation of the market in poultrymeat, 36. The Commission essentially shares that unless the national court establishes that view. As grounds, it states that the con- the mechanisms of that market organi- tribution at issue is imposed on all domestic sation are adversely affected, in particular products. It does not affect the intra-Com- as a result of an increase from third coun- munity movement of goods because it is tries in imports of the products concerned, imposed neither on imported products nor which is detrimental to the market. How- exclusively on exported products. It could ever, such adverse effect does not auto- at most be assumed that discrimination matically follow from a possible price exists against domestic products as com- increase in domestic products. pared with foreign products.

39. It can be inferred from the national legislation that the contribution at issue is not imposed either on foreign products or 42. The Greek Government contends that exclusively on domestic products intended the services provided by the ELGA in the for export. Consequently, the contribution compulsory insurance of natural risks do at issue cannot be regarded as a charge not fall within the scope either of the having an effect equivalent to customs Treaty provisions on freedom to provide duties on imports and exports within the services or of the applicable secondary- meaning of Article 25 EC. Moreover, since legislation, because they are part of a the contribution is not imposed on goods national system of social insurance and from other Member States, it cannot be are financed primarily from public income. regarded as discriminatory internal tax- Thus, they would not meet the definition of ation under Article 90 EC either. 'services' because they are not generally

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44. The Commission points out that the services provided by the ELGA in the field of compulsory insurance do not conform to the technical characteristics of insurance as defined in the First Non-Life Assurance Directive in particular. In that connection, it argues that the contribution at issue does 46. According to the findings of the not constitute a premium in the technical national court, the national legislation at sense of the term because it is not calcu- issue could affect the freedom to provide lated on the basis of a specific risk; the services by keeping foreign insurers from compensatory nature of the contribution at the market, in so far as the income from the issue is limited; most of the risks covered contribution at issue is used to finance a cannot be insured because of their fre- system of insurance operated by an organi- quency and the extent of the damage sation in a monopoly position. associated with them; the financing of the ELGA precludes the establishment of tech- nical reserves in accordance with the insur- ance directives, and the ELGA cannot influence State decisions with regard to the amount of the contributions, capital funding or the amount of the benefits. 47. It must be determined whether the activities of the ELGA are services within the meaning of Article 50 EC. For that to be the case, they must in particular be services which 'are normally provided for 45. On the basis of those findings, the consideration'. This implies that the ser- Commission concludes that the activities of vices must be provided for profit.

49. Both the Commission and the Greek Government assume that the ELGA falls 52. From that point of view, the activity outside the scope of Directive 73/239. falls within the scope of Article 2(1 )(d) of Directive 73/239 and consequently that directive does not apply to the activities of the ELGA in the field of compulsory agricultural insurance. On the same grounds, it follows that the activities at issue of the ELGA do not fall within the 50. The fact that the ELGA is financed not scope of freedom to provide services. by contributions levied by that insurance organisation on the basis of the risk to be covered but by funds allocated by the State — and accordingly without the establishment of technical reserves — appears to be more of a consequence than a cause of the non-applicability of Directive 53. Of course, this interim conclusion does 73/239 and the subsequent insurance direc- not mean that the existence of a market for tives. the insurance of agricultural risks must be precluded in principle. The Commission was correct to point this out in its written observations. On the contrary, it is com- pletely feasible that certain economic oper- ators, namely private insurers — including insurers from other Member States — 51. However, the fact that the ELGA could be in a position to insure the risks pursues a social aim by providing full covered by the ELGA under economically insurance cover irrespective of the financial acceptable conditions. capacity of the agricultural enterprises lends support to the view taken by the Commission and the Greek Government. It

57. The question referred makes express reference to Article 92 of the EC Treaty (now Article 87 EC); however, the order for reference does not indicate how the national legislation at issue might conflict 55. However, it must be noted that the with that provision. In the written pro- national court has not sought an interpre- cedure, the parties examined to what extent tation of Article 86(2) EC, although the the income allocated to the ELGA from the Court of Justice has already relied on that contribution at issue could constitute State provision on several occasions when exam- aid. It was only in reply to a question from ining service monopolies. 16 Moreover, any the Court that the Commission explained further examination of that issue seems at the hearing that it regarded the benefits unnecessary, however, since the Court has paid to farmers by the ELGA as an issue always given Member States a broad dis- requiring consideration. cretion where organising their systems of social insurance is concerned.

59. The link between Article 87 EC and the The information provided and the ques- facts in the main proceedings is clearly in tions raised in orders for reference must not evidence in the present case. However, the only be such as to enable the Court usefully fact that the order for reference does not to reply but also to make it possible for the state the grounds on which it is based governments of the Member States and means that the parties have submitted other interested parties to submit observa- observations merely on part of the matter tions pursuant to Article 20 of the EC under consideration. Statute of the Court of Justice. 18 Since, pursuant to that provision, only the orders for reference are notified to the interested parties, the fact that the national court refers to the observations submitted by the parties to the main proceedings — which, moreover, are likely to contain different accounts of the dispute — is not sufficient 60. If, because of the evident, albeit unex- to safeguard that possibility for the inter- plained link, the Court gives an interpre- ested parties. 19 Furthermore, it is essential tation of Article 87 EC, the temptation to that the national court should give at the draw conclusions from the scant expla- very least some explanation of the reasons nations of the factual and legal framework for the choice of the Community provisions must be resisted. In my opinion, the Court of which it requests an interpretation and is, in particular, not in a position to make a on the link it establishes between those reliable assessment of the existence of a provisions and the national legislation relevant market, as indeed has already applicable to the dispute. 20 Consequently, become apparent in connection with the a question from a national court which question of compatibility with the freedom to provide services. 21 17 — Reference need only be made to Joined Cases C-51/96 and C-191/97 Deliene [2000] ECR I-2549 , paragraph 30. 18 — Order in Case C-116/00 Laguillaunne|2000| ECR I -4979, 21 — In this connection see also the careful choice of words in a paragraph 14. memorandum dated 15 February 2002 from the Spanish 19 — Order in Ciase C-422/98 Colonia Verstcherung and Others presidency to the Council, concerning agricultural insur- |1999| ECR I-1279, paragraph 5. ance for the prevention of risks in the areas of agriculture and cattle rearing: 'L'expérience montre que, laissée a 20 — Order in Ciase C-167/94 Grm Gomis and Others [1995] l'initiative privée,l'implantation des systèmes d'assurance I-1023, paragraph 9. agricole est très limitée'.

65. The Commission justifies its view by stating that the principle of national soli- darity is fundamental to the ELGA. It argues that this is clear from the fact that, 63. They submit that, because of both its on the one hand, when deciding on the level rules and regulations and its activities in the of contribution no differentiation is made field of compulsory social insurance, the amongst those liable and, on the other, any damage incurred is underwritten irrespec- tive of the risk. The Commission also 22 — They refer in particular to Case C-41/90 Höfner and Elser points out that there is no intention to [1991] ECR I-1979, paragraph 21, and Poucet and Pistre (cited in footnote 15), paragraph 17. make profit.

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68. The Court first of all emphasised the social aim of the system at issue. However, after holding that 'the social aim of any insurance scheme is not in itself sufficient to preclude the activity in question from being classified as an economic activity', 26

23 — Case C-218/00 Cisal [2002) ECR I-691. 24 — Sec inter alia Joined Cases C-l 80/98 to C-l 84/98 Pavlov and Others [2000] ECR I-6451, paragraph 22. See also Hoffner and Eher (cited in footnote 22, paragraph 21), Poucet and Pistre (cited in footnote 15, paragraph 17), Case C-244/94 Fédération française des sociétés d'assur- ance and Others [1995] ECR I-4013, paragraph 14, and Case C-67/96 Albany [1999] ECR I-5751, paragraph 77, 69. The above line of reasoning would Joined Cases C-115/97 to C-117/97 Brentjens' [1999] ECR I-6025, paragraph 77, and Case C-219/97 Drijvende seem to be directly applicable to this case. Bokken [1999] ECR I-6121, paragraph 67. 25 — Cisal (cited in footnote 23), paragraph 23, with further references. 26 — Cisal (cited in footnote 23), paragraph 37. 27 — Cisal (cited in footnote 23), paragraph 44.

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73. In response to a written question from the Court, the parties submitted observa- 71. Thus, the system of insurance operated by the ELGA permits comprehensive cover tions at the hearing on the extent to which against natural and epidemic risks. the benefits paid to the producers by the Undoubtedly, this fulfils a social aim, in ELGA are covered by aid within the so far as small businesses which may not be meaning of Article 92 of the EC Treaty able to finance such insurance cover are (now Article 87 EC). provided with cover against risks which could threaten their existence. Moreover, the system provides cover for risks which are uninsurable because of their frequency and the amount of damage associated with them. 74. At the hearing, the Commission expressed the view that the benefits paid to the producers by the ELGA are aids 28 — A distinction is made only between animal and vegetable products. To change the contribution rate for a particular granted by States because they constitute an sector or product, a joint decision by the ministers for finance and for agriculture is required. advantage for the beneficiaries. In contrast, 29 — In this regard, the Greek Government has also stated that the Greek Government pointed out that the rate of contribution is set by the competent ministers on the basis of a proposal from the ELGA to the there is no advantage for the producers in agriculture minister. Any other influence on the rate of so far as, in the final analysis, the benefits contribution or the amount of the compensation payments paid by the ELGA constitute consideration by the ELGA is clearly not possible.

77. A different conclusion could be justi- fied only if the benefits paid by the ELGA were not financed essentially from the income from the insurance contribution. 30 In that event, the benefits paid to the insured farmers could no longer be con- 76. Unlike the Commission, I think it very sidered to be financed by contributions. 31 doubtful that the benefits paid by the ELGA can be seen as an unfair cost 30 — According to information from the Greek Government, advantage. What must be stressed in this without exception, between 1996 and 2000 over 9 0 % of regard is that the benefits are, in the final the income of the ELGA came from the income from the insurance contribution. The ELGA's income from direct analysis, financed by the contribution at additional payments amounted only to between 2 . 1 % and 9.8%. issue. However, the group of persons who 31 — In the event of the alternative conclusion. Article 87(2)(b) have to pay the contribution is the same as EC makes it clear that benefits to make good the damage caused by natural disasters or exceptional occurrences that of the potential beneficiaries. The fact must in principle be considered as aid.

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V — Conclusion

78. I therefore propose that the Court:

Declare that Articles 28 EC, 29 EC, 49 EC, 50 EC and 87 EC, Regulation (EEC) No 2777/75 of the Council on the common organisation of the market in poultrymeat and the First Council Directive 73/23 9/EEC on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance do not in principle prohibit the imposition of an insurance contribution on domestically- produced agricultural products and by-products of vegetable or animal origin or originating from fishing by the competent public finance service or the paying of the corresponding income to a State organisation for the purpose of organising and implementing programmes of proactive protection and insuring the production and assets of agricultural enterprises.