**Joined Cases T-366/03 and T-235/04**

**Land Oberösterreich and Republic of Austria**

**v**

**Commission of the European Communities**

(Approximation of laws – National provisions derogating from a harmonisation measure – Ban on the use of genetically modified organisms in Upper Austria – Conditions for application of Article 95(5) EC)

Judgment of the Court of First Instance (Fourth Chamber), 5 October 2005

Summary of the Judgment

1.     *Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision
addressed to a Member State relating to national provisions on banning the use of genetically modified organisms in a region
of that State – Action by the region which is the author of those provisions which were the subject of an application for
derogation by that State from a Community harmonisation measure – Admissibility*

*(Arts 95(5) EC and 230, fourth para., EC; Commission Decision 2003/653)*

2.     *Approximation of laws – Measures for establishing the single market – Introduction of new derogating national provisions –
Supervision by the Commission – Procedure – Application of the principle of the right to be heard – None*

*(Art. 95(4), (5) and (6) EC)*

3.     *Approximation of laws – Measures for establishing the single market – Introduction of new derogating national provisions –
Supervision by the Commission – Decision – Duty to state reasons – Scope*

*(Arts 95(5) EC and 253 EC)*

1.     Persons other than those to whom a decision is addressed may claim to be individually concerned within the meaning of the
fourth paragraph of Article 230 EC only if that decision affects them by reason of certain attributes which are peculiar to
them, or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors
distinguishes them individually just as the addressee of that decision may be so distinguished. The purpose of that provision
is to ensure that legal protection is also available to a person who, whilst not the person to whom the contested measure
is addressed, is in fact affected by it as if he were the addressee.

In this respect, a region of a Member State which is the author of a draft law falling within its own competence and in respect
of which the Member State concerned sought a derogation under Article 95(5) EC is individually concerned by a Commission decision
relating to national provisions on banning the use of genetically modified organisms in a region of a Member State notified
by that Member State pursuant to Article 95(5) EC. That decision therefore not only affects a measure of which the region
is the author, but also prevents it from exercising, as it sees fit, its own powers conferred on it under the national constitutional
system.

Furthermore, although that decision was addressed to the Member State concerned, the latter did not exercise any discretion
when communicating it to that region, which therefore is also directly concerned by that decision for the purposes of the
fourth paragraph of Article 230 EC.

(see paras 27-29)

2.     The right to be heard does not apply to the procedure laid down in Article 95(5) EC. Like the procedure referred to in Article
95(4) EC, the procedure in Article 95(5) EC is commenced at the request of a Member State seeking the approval of national
provisions derogating from a harmonisation measure adopted at Community level. In both cases, the procedure is initiated by
the notifying Member State, which is at liberty to comment on the decision it asks to have adopted. Likewise, both procedures
must, in the interest of the applicant Member State and the proper functioning of the internal market, be concluded rapidly.
In this respect, the fact that, unlike the procedure in Article 95(4) EC, the procedure laid down in Article 95(5) EC concerns
national measures which are still in draft form does not enable the Commission to extend the six-month deadline laid down
in Article 95(6) EC in order to have an exchange of arguments.

First, as regards the wording of that provision, it applies without distinction to requests for derogation concerning national
measures in force, referred to in Article 95(4) EC, and to requests concerning measures in draft form, to which Article 95(5)
EC is applicable. Also, given that the option, provided for in the third subparagraph of Article 95(6) EC, of extending the
six‐month deadline for making a decision may be exercised by the Commission only if the complexity of the matter makes it
necessary and in the absence of danger for human health, that provision does not allow the Commission to defer the end of
the six‐month period for making a decision only so that the Member State which has submitted a request for derogation under
Article 95(5) EC to it can be given the opportunity to state its views.

Second, as regards the scheme of Article 95(5) EC, the fact that that provision relates to a national measure which is not
yet in force does not diminish the interest in having the Commission rule quickly on the request for derogation which has
been submitted to it. The authors of the Treaty intended that that procedure should be speedily concluded in order to safeguard
the applicant State’s interest in being certain of the applicable rules, and in the interest of the proper functioning of
the internal market.

(see paras 41-44)

3.     In order to comply with the obligation to state reasons laid down in Article 253 EC, a decision adopted by the Commission
on the basis of Article 95(5) EC must contain a sufficient and relevant indication of the factors taken into consideration
in determining whether the conditions laid down by that article for the grant to a Member State of a derogation from a Community
harmonisation measure are met.

(see para. 53)


JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)

5 October 2005 ([\*](#Footnote*))

(Approximation of laws – National provisions derogating from a harmonisation measure – Ban on the use of genetically modified organisms in Upper Austria – Conditions for application of Article 95(5) EC)

In Joined Cases T‐366/03 and T‐235/04,

**Land Oberösterreich,** represented by F. Mittendorfer, lawyer,

**Republic of Austria,** represented by H. Hauer and H. Dossi, acting as Agents, with an address for service in Luxembourg,

applicants,

v

**Commission of the European Communities,** represented by M. Patakia and U. Wölker, acting as Agents, with an address for service in Luxembourg,

defendant,

APPLICATIONS for annulment of Commission Decision 2003/653/EC of 2 September 2003 relating to national provisions on banning
the use of genetically modified organisms in the region of Upper Austria notified by the Republic of Austria pursuant to Article
95(5) of the EC Treaty (OJ 2003 L 230, p. 34),

THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (Fourth Chamber),

composed of H. Legal, President, P. Lindh and V. Vadapalas, Judges,

Registrar: C. Kristensen, Administrator,

having regard to the written procedure and further to the hearing on 17 March 2005,

gives the following

**Judgment**

**Legal context**

*Article 95 EC*

1       Article 95(4) to (7) EC provides:

‘4.      If, after the adoption by the Council or by the Commission of a harmonisation measure, a Member State deems it necessary to
maintain national provisions on grounds of major needs referred to in Article 30, or relating to the protection of the environment
or the working environment, it shall notify the Commission of these provisions as well as the grounds for maintaining them.

5.      Moreover, without prejudice to paragraph 4, if, after the adoption by the Council or by the Commission of a harmonisation
measure, a Member State deems it necessary to introduce national provisions based on new scientific evidence relating to the
protection of the environment or the working environment on grounds of a problem specific to that Member State arising after
the adoption of the harmonisation measure, it shall notify the Commission of the envisaged provisions as well as the grounds
for introducing them.

6.      The Commission shall, within six months of the notifications as referred to in paragraphs 4 and 5, approve or reject the national
provisions involved after having verified whether or not they are a means of arbitrary discrimination or a disguised restriction
on trade between Member States and whether or not they shall constitute an obstacle to the functioning of the internal market.

In the absence of a decision by the Commission within this period the national provisions referred to in paragraphs 4 and
5 shall be deemed to have been approved.

When justified by the complexity of the matter and in the absence of danger for human health, the Commission may notify the
Member State concerned that the period referred to in this paragraph may be extended for a further period of up to six months.

7.      When, pursuant to paragraph 6, a Member State is authorised to maintain or introduce national provisions derogating from a
harmonisation measure, the Commission shall immediately examine whether to propose an adaptation to that measure.’

*Directive 90/220*

2       According to Article 1(1) of Council Directive 90/220/EEC of 23 April 1990 on the deliberate release into the environment
of genetically modified organisms (OJ 1990 L 117, p. 15), the objective of that directive was to approximate the laws, regulations
and administrative provisions of the Member States and to protect human health and the environment as regards the deliberate
release of genetically modified organisms (‘GMOs’) into the environment and the placing on the market of products containing,
or consisting of, GMOs intended for subsequent deliberate release into the environment.

3       Article 4 of Directive 90/220 required the Member States to take all appropriate measures to avoid adverse effects on human
health and the environment which might arise from the deliberate release or placing on the market of GMOs.

4       Part C of Directive 90/220 (Articles 10 to 18) contained specific provisions concerning the placing on the market of products
containing GMOs. Under Article 11(5) of the directive, read in conjunction with Article 11(1), no product containing GMOs
could be released into the environment before the competent authority of the Member State in which the product was to be placed
on the market for the first time had given its written consent following a notification to that authority by the manufacturer
or the importer into the Community. Article 11(1) to (3) of the directive specified the information to be contained in that
notification, which had, in particular, to enable the national authority to carry out the risk assessment required by Article
10(1). The risk assessment had to precede any consent.

5       Article 16 of Directive 90/220 stated:

‘1.      Where a Member State has justifiable reasons to consider that a product which has been properly notified and has received
written consent under this Directive constitutes a risk to human health or the environment, it may provisionally restrict
or prohibit the use and/or sale of that product on its territory. It shall immediately inform the Commission and the other
Member States of such action and give reasons for its decision.

2.      A decision shall be taken on the matter within three months in accordance with the procedure laid down in Article 21.’

*Directive 2001/18*

6       Following several amendments, Directive 90/220 was repealed and replaced by Directive 2001/18/EC of the European Parliament
and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms and repealing
Directive 90/220 (OJ 2001 L 106, p. 1). It pursues the same objectives.

7       The deliberate release or placing on the market of a GMO is subject to an authorisation regime. Any person wishing to obtain
a consent must first carry out a health and environmental risk assessment. Article 4(3) of Directive 2001/18 provides:

‘Member States and where appropriate the Commission shall ensure that potential adverse effects on human health and the environment,
which may occur directly or indirectly through gene transfer from GMOs to other organisms, are accurately assessed on a case-by-case
basis. This assessment shall be conducted in accordance with Annex II taking into account the environmental impact according
to the nature of the organism introduced and the receiving environment.’

8       Directive 2001/18 establishes two separate sets of rules for the placing on the market of a GMO as or in a product and for
its deliberate release for any purpose other than being placed on the market.

9       Consents granted before 17 October 2002 under Directive 90/220 for the placing on the market of a GMO as or in a product may
be renewed before 17 October 2006, in accordance with the simplified procedure set out in Article 17(2) to (9) of Directive
2001/18.

10     Article 23 of Directive 2001/18, headed ‘Safeguard clause’, reads as follows:

‘1.      Where a Member State, as a result of new or additional information made available since the date of the consent and affecting
the environmental risk assessment or reassessment of existing information on the basis of new or additional scientific knowledge,
has detailed grounds for considering that a GMO as or in a product which has been properly notified and has received written
consent under this Directive constitutes a risk to human health or the environment, that Member State may provisionally restrict
or prohibit the use and/or sale of that GMO as or in a product on its territory.

The Member State shall ensure that in the event of a severe risk, emergency measures, such as suspension or termination of
the placing on the market, shall be applied, including information to the public.

The Member State shall immediately inform the Commission and the other Member States of actions taken under this Article and
give reasons for its decision, supplying its review of the environmental risk assessment, indicating whether and how the conditions
of the consent should be amended or the consent should be terminated, and, where appropriate, the new or additional information
on which its decision is based.

2.      A decision shall be taken on the matter within 60 days in accordance with the procedure laid down in Article 30(2) ...’

**Background to the dispute**

11     On 13 March 2003, the Republic of Austria notified the Commission of the Oberösterreichisches Gentechnik-Verbotsgesetz 2002,
a draft law of the Land Oberösterreich (Province of Upper Austria) banning genetic engineering (‘the notified measure’). The
notified measure was intended to prohibit the cultivation of seed and planting material composed of or containing GMOs and
the breeding and release, for the purposes of hunting and fishing, of transgenic animals. The notification was intended to
secure, on the basis of Article 95(5) EC, a derogation from Directive 2001/18. The notification relied on a report entitled
‘GVO‐freie Bewirtschaftungsgebiete: Konzeption und Analyse von Szenarien und Umsetzungsschritten’ (GMO‐free areas of farming:
conception and analysis of scenarios and steps for realisation).

12     The Commission requested the European Food Safety Authority (EFSA) to issue an opinion, in accordance with Article 29(1) and
Article 22(5)(c) of Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down
the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures
in matters of food safety (OJ 2002 L 31, p. 1), on the probative value of the scientific information relied on by the Republic
of Austria.

13     In its opinion of 4 July 2003 (‘the EFSA opinion’), EFSA essentially reached the conclusion that that information did not
contain any new scientific evidence which could justify banning GMOs in the Land Oberösterreich.

14     Those were the circumstances in which the Commission adopted Decision 2003/653/EC of 2 September 2003 relating to national
provisions on banning the use of genetically modified organisms in the region of Upper Austria notified by the Republic of
Austria pursuant to Article 95(5) of the EC Treaty (OJ 2003 L 230, p. 34, ‘the contested decision’).

15     According to the contested decision, the Republic of Austria failed to provide new scientific evidence or demonstrate that
a specific problem in the Land Oberösterreich arose following the adoption of Directive 2001/18 which made it necessary to
introduce the notified measure. Since the conditions set out in Article 95(5) EC were not satisfied, the Commission rejected
the Republic of Austria’s request for derogation.

**Procedure and forms of order sought**

16     By application lodged at the Registry of the Court of First Instance on 3 November 2003, the Land Oberösterreich brought the
action registered under case number T-366/03.

17     By application lodged at the Registry of the Court of Justice on 13 November 2003, the Republic of Austria brought an action
allocated case number C-492/03.

18     By order of the Court of Justice of 8 June 2004, that case was referred to the Court of First Instance, pursuant to Article
2 of Council Decision 2004/407/EC, Euratom of 26 April 2004 amending Articles 51 and 54 of the Protocol on the Statute of
the Court of Justice (OJ 2004 L 132, p. 5). It was registered under case number T‐235/04.

19     By decision of the President of the Fourth Chamber of the Court of First Instance of 22 February 2005, after the parties had
been heard, Cases T-366/03 and T‐235/04 were joined for the purposes of the oral procedure and the judgment, in accordance
with Article 50 of the Rules of Procedure of the Court of First Instance.

20     Upon hearing the report of the Judge-Rapporteur, the Court (Fourth Chamber) decided to open the oral procedure and, as measures
of organisation of procedure provided for in Article 64 of the Rules of Procedure, put questions in writing to the Republic
of Austria and the Commission.

21     The parties presented oral argument and answered the questions put by the Court at the hearing on 17 March 2005.

22     In Case T-366/03, the Land Oberösterreich claims that the Court should:

–       annul the contested decision;

–       order the Commission to pay the costs.

23     In Case T-235/04, the Republic of Austria claims that the Court should:

–       annul the contested decision;

–       order the Commission to pay the costs.

24     In Cases T-366/03 and T-235/04, the Commission claims that the Court should:

–       dismiss the actions;

–       order the applicants to pay the costs.

**The admissibility of the action brought by the Land Oberösterreich**

25     Although the Commission has not contested the admissibility of the action brought by the Land Oberösterreich, it should be
noted that the contested decision was addressed to the Republic of Austria. In order to assess whether the action in Case
T-366/03 is admissible, the Court considers it appropriate to verify of its own motion whether the contested decision is of
direct and individual concern to the Land Oberösterreich, within the meaning of the fourth paragraph of Article 230 EC.

26     The Land Oberösterreich submits that it has a specific legal interest in bringing proceedings, separate from that of the Republic
of Austria. It contends in that regard that, constitutionally, the notified measure falls within its exclusive competence.
In addition, it asserts that it is directly and individually concerned by the contested decision, and therefore the action
in Case T-366/03 is admissible. As regards more specifically its individual interest, the Land Oberösterreich claims that
the contested decision prejudices its autonomous legislative powers, notwithstanding the fact that the notified measure was
in draft form.

27     In accordance with settled case-law, persons other than those to whom a decision is addressed may claim to be individually
concerned within the meaning of the fourth paragraph of Article 230 EC only if that decision affects them by reason of certain
attributes which are peculiar to them, or by reason of circumstances in which they are differentiated from all other persons,
and by virtue of these factors distinguishes them individually just as the addressee of that decision may be so distinguished
(Case 25/62 *Plaumann* v *Commission* [1963] ECR 95 at 107, and Case 169/84 *COFAZ and Others* v *Commission* [1986] ECR 391, paragraph 22). The purpose of that provision is to ensure that legal protection is also available to a person
who, whilst not the person to whom the contested measure is addressed, is in fact affected by it as if he were the addressee
(Case 222/83 *Municipality of Differdange and Others* v *Commission* [1984] ECR 2889, paragraph 9).

28     In the present case, the Land Oberösterreich is the author of a draft law falling within its own competence and in respect
of which the Republic of Austria sought a derogation under Article 95(5) EC. The contested decision therefore not only affects
a measure of which the Land Oberösterreich is the author, but also prevents it from exercising, as it sees fit, its own powers
conferred on it under the Austrian constitutional system. It follows that the Land Oberösterreich is individually concerned
by the contested decision for the purposes of the fourth paragraph of Article 230 EC (see, to that effect, Case T-214/95 *Vlaamse Gewest* v *Commission* [1998] ECR II-717, paragraph 29 et seq., and Joined Cases T-346/99, T-347/99 and T-348/99 *Diputación Foral de Álava and Others* v *Commission* [2002] ECR II-4259, paragraph 37).

29     Furthermore, although the contested decision was addressed to the Republic of Austria, the latter did not exercise any discretion
when communicating it to the Land Oberösterreich, which therefore is also directly concerned by the contested decision for
the purposes of the fourth paragraph of Article 230 EC (see, to that effect, Joined Cases 41/70 to 44/70 *International Fruit Company and Others* v *Commission* [1971] ECR 411, paragraphs 25 to 28).

30     It follows that the Land Oberösterreich has standing to seek the annulment of the contested decision.

**The substance**

31     The applicants raise four pleas in law alleging (i) infringement of the right to be heard, (ii) breach of the obligation to
state reasons, (iii) infringement of Article 95(5) EC and (iv) breach of the precautionary principle.

*The first plea: infringement of the right to be heard*

 Arguments of the parties

32     The applicants complain that the Commission did not give them the opportunity to state their views before adopting the contested
decision.

33     Although the Court of Justice has ruled that the right to be heard does not apply to the procedure laid down in Article 95
EC (Case C-3/00 *Denmark* v *Commission* [2003] ECR I-2643), the applicants assert that the circumstances of this case call for a different answer.

34     First, *Denmark* v *Commission* concerned a request for derogation under Article 95(4) EC relating to a national measure in force at that time. In the present
case, since the notified measure was still in draft form, the Commission could, without prejudicing the functioning of the
internal market or the interests of the applicant Member State, have continued the procedure in accordance with the third
subparagraph of Article 95(6) EC, in order to give the applicants the opportunity to state their views.

35     Second, contrary to its approach in the case which gave rise to the judgment in *Denmark* v *Commission*, the Commission did not confine itself, in the present case, to ruling on the notification, but sought an expert report from
EFSA, on which the contested decision is based. The Commission should therefore have given the applicants the opportunity
to state their views on the EFSA opinion before adopting the contested decision. Had they been given that opportunity, they
could have rebutted that opinion and enabled the Commission to take a different decision.

36     The Commission disputes those arguments. It states that the Land Oberösterreich cannot rely on the right to be given the opportunity
to state its views because it was not a party to the procedure in question, which concerned solely the Republic of Austria.
It submits, moreover, that the right to be heard does not apply to the procedure in Article 95(5) EC (*Denmark* v *Commission*, paragraph 50).

 Findings of the Court

37     The Court of Justice has ruled that the right to be heard does not apply to the procedure laid down in Article 95(4) EC (*Denmark* v *Commission*, paragraph 50). It should be examined whether, as the applicants claim, the procedure laid down in Article 95(5) EC is subject
to a different rule.

38     In *Denmark* v *Commission*, the Court of Justice relied on the fact that the procedure laid down in Article 95(4) EC was initiated not by a Community
institution but by a Member State, the decision of the Community institution being adopted merely in response to that initiative.
Under that procedure, approval is sought for national provisions derogating from a harmonisation measure adopted at Community
level. In its request, the Member State is at liberty to comment on the decision it asks to have adopted, as is quite clear
from Article 95(4) EC, which requires that State to indicate the grounds for maintaining the national provisions in question.
The Commission in turn must be able, within the prescribed period, to obtain the information which proves to be necessary
without being required once more to hear the applicant Member State (*Denmark* v *Commission*, paragraphs 47 and 48).

39     According to *Denmark* v *Commission* (paragraph 49), those factors are reinforced, first, by the second subparagraph of Article 95(6) EC, according to which the
derogating national provisions are deemed to have been approved if the Commission does not take a decision within a certain
period. In addition, under the third subparagraph of Article 95(6) EC, no extension of that period is allowed where there
is a danger for human health. The Court concluded therefrom that the authors of the Treaty intended, in the interest of both
the applicant Member State and the proper functioning of the internal market, that the procedure laid down in Article 95(4)
EC should be speedily concluded. The Court ruled that that objective would be difficult to reconcile with a requirement for
prolonged exchanges of information and observations (*Denmark* v *Commission*, paragraph 49).

40     This Court considers that that reasoning may be applied to the procedure laid down in Article 95(5) EC. Like the procedure
referred to in Article 95(4) EC, the procedure in Article 95(5) EC is commenced at the request of a Member State seeking the
approval of national provisions derogating from a harmonisation measure adopted at Community level. In both cases, the procedure
is initiated by the notifying Member State, which is at liberty to comment on the decision it asks to have adopted. Likewise,
both procedures must, in the interest of the applicant Member State and the proper functioning of the internal market, be
concluded rapidly.

41     Contrary to what the applicants claim, the fact that the procedure in Article 95(5) EC relates to national measures which
are still in draft form does not mean that it can be distinguished from the procedure laid down in Article 95(4) EC to an
extent that the right to be heard can be held to apply to it. The applicants cannot properly argue that the requirement for
speed is less great when examining a national measure which has not yet entered into force, so that the Commission could easily
extend the six-month deadline laid down in Article 95(6) EC in order to have an exchange of arguments.

42     First, the applicants’ argument is contrary to the letter of Article 95(6) EC. That provision applies without distinction
to requests for derogation concerning national measures in force, referred to in Article 95(4) EC, and to requests concerning
measures in draft form, to which Article 95(5) EC is applicable. Also, the Commission may exercise the option, provided for
in the third subparagraph of Article 95(6) EC, of extending the six-month deadline for making a decision only if the complexity
of the matter makes it necessary and in the absence of danger for human health. It is apparent therefore that the third subparagraph
of Article 95(6) EC does not allow the Commission to defer the end of the six-month period for making a decision only so that
the Member State which has submitted a request for derogation under Article 95(5) EC to it can be given the opportunity to
state its views.

43     Second, the applicants’ argument runs counter to the scheme of Article 95(5) EC. The fact that that provision relates to a
national measure which is not yet in force does not diminish the interest in having the Commission rule quickly on the request
for derogation which has been submitted to it. The authors of the Treaty intended that that procedure should be speedily concluded
in order to safeguard the applicant Member State’s interest in being certain of the applicable rules, and in the interest
of the proper functioning of the internal market.

44     On that latter point, it should be pointed out that, in order to avoid prejudicing the binding nature and uniform application
of Community law, the procedures laid down in Article 95(4) and (5) EC are both intended to ensure that no Member State applies
national rules derogating from the harmonised legislation without obtaining prior approval from the Commission. In that respect,
the rules applicable to national measures notified under Article 95(4) EC do not differ significantly from those which apply
to national measures still in draft form notified under Article 95(5) EC. Under both procedures, the measures in question
are inapplicable as long as the Commission has not adopted its decision on whether to grant a derogation. Under Article 95(5)
EC, that situation arises from the very nature of the measures in question, which are still in draft form. As regards Article
95(4) EC, that situation arises from the subject-matter of the procedure which it lays down. The Court of Justice has pointed
out that measures for the approximation of the laws, regulations and administrative provisions of the Member States which
concern the establishment and functioning of the internal market would be rendered ineffective if Member States retained the
right unilaterally to apply national rules derogating from those measures. A Member State is not, therefore, authorised to
apply the national provisions notified by it under Article 95(4) EC until after it has obtained a decision from the Commission
approving them (see, by analogy with the procedure under Article 100a(4) of the EC Treaty, Case C-41/93 *France* v *Commission* [1994] ECR I-1829, paragraphs 29 and 30, and Case C-319/97 *Kortas* [1999] ECR I-3143, paragraph 28).

45     Finally, it is necessary to reject the applicants’ argument that the circumstances of this case differ from those which gave
rise to the judgment in *Commission* v *Denmark*, in that the Commission did not confine itself to ruling on the basis of information submitted by the Republic of Austria,
but asked EFSA to produce an expert report, on which the contested decision is based. Since the right to be heard does not
apply to the procedure in question, that argument is irrelevant.

46     Moreover, it should be observed that the fact that the right to be heard is not applicable does not mean that the Commission
is obliged to come to a decision solely on the basis of the information provided in support of the request for derogation.
On the contrary, it is clear from *Denmark* v *Commission* (paragraph 48) that the Commission must be able, within the prescribed period, to obtain the information which proves to
be necessary without being required once more to hear the applicant Member State.

47     It follows that the first plea must be dismissed as misplaced, without it being necessary to rule on the specific point of
whether the Land Oberösterreich, although not a party to the administrative procedure, was able to rely on infringement of
the right to be heard.

*The second plea: breach of the obligation to state reasons*

 Arguments of the parties

48     According to the applicants, the contested decision fails to satisfy the requirements of Article 253 EC. It does not contain
a view on the duration of the notified measure, which is limited to three years. That question is, however, crucial for assessing
whether the measure is proportionate. Consents granted on the basis of Directive 90/220 must be renewed in the light of the
stricter criteria of Directive 2001/18, before 17 October 2006. The applicants argue that the period of validity of the notified
measure was only three years so as to coincide with that expiry date and to prevent GMOs which fail to satisfy the environmental
protection requirements of Directive 2001/18 from being used in the Land Oberösterreich before the expiry of the moratorium
agreed on by the Council in 1999. The Commission should have responded to the arguments in the notification that the level
of environmental protection resulting from Directive 2001/18 was insufficient.

49     The Commission disputes that it infringed Article 253 EC. It takes the view that it was not necessary to comment in detail
on the limited duration of the notified measure, since that factor was irrelevant in the light of the conditions under Article
95(5) EC.

 Findings of the Court

50     According to settled case-law, the statement of reasons required by Article 253 EC must be appropriate to the measure at issue
and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in
such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the Community judicature
to exercise its power of review (Case C-367/95 P *Commission* v *Sytraval and Brink’s France* [1998] ECR I-1719, paragraph 63, and Case C-159/01 *Netherlands* v *Commission* [2004] ECR I‐4461, paragraph 65).

51     The question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only
to its wording but also to its context and to all the legal rules governing the matter in question (Case C-350/88 *Delacre and Others* v *Commission* [1990] ECR I-395, paragraphs 15 and 16, and Case C‐114/00 *Spain* v *Commission* [2002] ECR I-7657, paragraphs 62 and 63).

52     Although the Commission is obliged to state the reasons on which its decisions are based, mentioning the matters of fact and
law which provide the legal basis for the measure in question and the considerations which have led it to adopt its decision,
it is not required to discuss all the issues of fact and of law raised during the administrative procedure (Case T-290/94
*Kaysersberg* v *Commission* [1997] ECR II-2137, paragraph 150).

53     In order to comply with the obligation to state reasons laid down in Article 253 EC, a decision adopted by the Commission
on the basis of Article 95(5) EC must contain a sufficient and relevant indication of the factors taken into consideration
in determining whether the conditions laid down by that article for the grant of a derogation are met.

54     Article 95(5) EC requires that the introduction of national provisions derogating from a harmonisation measure be based on
new scientific evidence relating to the protection of the environment or the working environment on grounds of a problem specific
to the Member State concerned arising after the adoption of the harmonisation measure, and that the proposed provisions as
well as the grounds for introducing them be notified to the Commission. Since the conditions are clearly cumulative, they
must all be satisfied if the request for derogation is not to be rejected by the Commission (Case C-512/99 *Germany* v *Commission* [2003] ECR I-845, paragraphs 80 and 81).

55     In the present case, the Commission has set out its arguments in a detailed and comprehensive manner, enabling the addressee
of the contested decision to be aware of its factual and legal grounds and the Court to review the lawfulness of the decision.

56     The Commission relied on three main factors in order to reject the Republic of Austria’s request. First of all, it found that
that Member State had failed to demonstrate that the notified measure was justified in the light of new scientific evidence
concerning protection of the environment (recitals 63 to 68 of the contested decision). Moreover, the Commission considered
that the notified measure was not justified by a problem specific to the Republic of Austria (recitals 70 and 71 of the contested
decision). Finally, the Commission rejected the arguments of the Austrian authorities seeking to justify the national measures
by recourse to the precautionary principle, taking the view that those arguments were too general and lacked substance (recitals
72 and 73 of the contested decision).

57     As regards the question whether the Commission infringed Article 253 EC by failing to express a view on the arguments put
forward by the Republic of Austria in which it claimed, in essence, that the notified measure was justified by an insufficient
level of environmental protection until the expiry of the period laid down by Article 17(1)(b) of Directive 2001/18 for the
renewal of consents granted before 17 October 2002 under Directive 90/220 for the placing on the market of a GMO as or in
a product, it should be noted that the contested decision does not expressly deal with that point. However, that lacuna is
attributable not to a lack of reasoning, but to the nature of the reasoning followed by the Commission in setting out the
factual and legal grounds which justify the contested decision. Since the Commission set out why it considered that the notification
failed to meet the requirements of Article 95(5) EC concerning the existence of new scientific evidence relating to protection
of the environment and of a problem specific to the Member State concerned, it was not required to respond to the arguments
of the Republic of Austria as regards the level of environmental protection achieved by Directive 2001/18 until 17 October
2006.

58     Consequently, this plea must be dismissed as unfounded.

*The third plea: infringement of Article 95(5) EC*

 Arguments of the parties

59     The applicants submit that the Commission should have granted the Republic of Austria’s request, since the requirements of
Article 95(5) EC were satisfied. They claim that the notified measure was intended to protect the environment, that it was
based on new scientific evidence, that it was justified by a problem specific to Austria and that it complied with the principle
of proportionality.

60     The Commission criticises those arguments.

 Findings of the Court

61     Article 95 EC, which by virtue of the Treaty of Amsterdam replaces and amends Article 100a of the EC Treaty, distinguishes
between notified provisions according to whether they are national provisions which existed prior to harmonisation or national
provisions which the Member State concerned wishes to introduce. In the first case, provided for in Article 95(4) EC, the
maintenance of existing national provisions must be justified on grounds of major needs referred to in Article 30 EC or relating
to the protection of the environment or the working environment. In the second case, provided for in Article 95(5) EC, the
introduction of new national provisions must be based on new scientific evidence relating to the protection of the environment
or the working environment on grounds of a problem specific to that Member State arising after the adoption of the harmonisation
measure.

62     The difference between the two situations envisaged in Article 95 EC is due to the existence, in the first, of national provisions
predating the harmonisation measure. They are thus known to the Community legislature, which cannot or does not seek to be
guided by them for the purpose of harmonisation. It is therefore considered acceptable for the Member State to request that
its own rules remain in force. To that end, the EC Treaty requires that such national provisions must be justified on grounds
of major needs referred to in Article 30 EC or relating to the protection of the environment or the working environment. By
contrast, in the second situation, the adoption of new national legislation is more likely to jeopardise harmonisation. The
Community institutions could not, by definition, have taken account of the national provisions when drawing up the harmonisation
measure. In that case, the needs referred to in Article 30 EC are not taken into account, and only grounds relating to protection
of the environment or the working environment are accepted, on condition that the Member State provides new scientific evidence
and that the need to introduce new national provisions results from a problem which is specific to the Member State concerned
and subsequent to the adoption of the harmonisation measure (*Germany* v *Commission*, paragraphs 40 and 41, and *Denmark* v *Commission*, paragraphs 56 to 58).

63     It is for the Member State which invokes Article 95(5) EC to prove that the conditions for application of that provision have
been met (Opinion of Advocate General Tizzano in *Germany* v *Commission*, point 71; see also, by analogy with Article 95(4) EC, *Denmark* v *Commission*, paragraph 84).

64     Under Article 95(5) EC, in the present case it was for the Republic of Austria to demonstrate, on the basis of new scientific
evidence, that the level of environmental protection afforded by Directive 2001/18 was not acceptable having regard to a problem
specific to that Member State which arose after the adoption of Directive 2001/18. It is therefore necessary to examine at
the outset whether the Commission erred in finding that the Republic of Austria had failed to demonstrate the existence of
a specific problem which arose after the adoption of Directive 2001/18.

65     In the contested decision, the Commission rejected the arguments of the Republic of Austria by which it sought to demonstrate
that there was a specific problem within the meaning of Article 95(5) EC, on the ground that it was clear from the notification
that the small size of farms, far from being specific to the Land Oberösterreich, was a common characteristic, to be found
in all the Member States. The Commission also adopted the conclusions of EFSA, in particular those according to which, first,
‘the scientific evidence presented contained no new or uniquely local scientific information on the environmental or human
health impacts of existing or future GM crops or animals’ and, second, ‘no scientific evidence was presented which showed
that this area of Austria had unusual or unique ecosystems that required separate risk assessments from those conducted for
Austria as a whole or for other similar areas of Europe’ (recitals 70 and 71 of the contested decision).

66     It must be stated that the applicants have failed to provide convincing evidence such as to cast doubt on the merits of those
assessments as to the existence of a specific problem, but have confined themselves to drawing attention to the small size
of farms and the importance of organic production in the Land Oberösterreich.

67     In particular, the applicants have not put forward evidence to rebut EFSA’s conclusions that the Republic of Austria failed
to establish that the territory of the Land Oberösterreich contained unusual or unique ecosystems that required separate risk
assessments from those conducted for Austria as a whole or in other similar areas of Europe. When requested at the hearing
to comment on the scale of the problem posed by GMOs in the Land Oberösterreich, the applicants were not able to state whether
the presence of such organisms had even been recorded. The Land Oberösterreich stated that the adoption of the notified measure
was prompted by the fear of having to face the presence of GMOs because of the announced expiry of an agreement pursuant to
which the Member States had temporarily committed themselves no longer to issue consents for those organisms. Such considerations,
by their general nature, are not capable of invalidating the concrete findings set out in the contested decision.

68     Consequently, the arguments by which the applicants have disputed the findings made by the Commission on the condition relating
to the existence of a problem specific to the notifying Member State must be rejected.

69     Since the conditions required by Article 95(5) EC are cumulative, it is sufficient that only one of those conditions is not
satisfied for the request for derogation to be rejected (*Germany* v *Commission*, paragraph 81). Since the applicants have failed to demonstrate that one of the conditions required by Article 95(5) EC was
satisfied, the third plea must be dismissed as unfounded, without it being necessary to rule on the other complaints and arguments.

*The fourth plea: breach of the precautionary principle*

70     The applicants criticise the Commission for ignoring the fact that the notified measure was a measure of preventive action
within the meaning of Article 174(2) EC, justified by the precautionary principle; the Commission disputes that.

71     This Court finds that this plea is irrelevant. A request had been submitted to the Commission under Article 95(5) EC. It decided
that the conditions for application of that article were not met. This Court has found, following examination of the third
plea, that the contested decision was not incorrect. The Commission therefore had no option in any event but to reject the
application which was submitted to it.

72     The fourth plea must therefore be dismissed.

73     In the light of all the foregoing, the actions must be dismissed in their entirety.

**Costs**

74     Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
applied for in the successful party’s pleadings.

75     In the present case, since the applicants have been unsuccessful, they must be ordered to pay the costs of the action incurred
by the Commission, in accordance with the form of order sought by the Commission.

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber)

hereby:

1.      **Dismisses the actions;**

2.      **Orders the applicants to pay the costs.**

| | | |
| --- | --- | --- |
| Legal | Lindh | Vadapalas |

Delivered in open court in Luxembourg on 5 October 2005.

| | | |
| --- | --- | --- |
| H. Jung | | H. Legal |

| | | |
| --- | --- | --- |
| Registrar | | President |

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[\*](#Footref*) Language of the case: German.