Judgment — ECLI:EU:C:2005:450
Date: 2005-07-14
Language of the case: Dutch
Court formation: Second Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Agriculture and Fisheries;Overseas countries and territories;Sugar
Concepts: Association of Overseas Countries and Territories;Statement of reasons
Procedure: Action for annulment - unfounded
Origin: Netherlands

Summary of the Judgment 1. Association of the overseas countries and territories — Safeguard measures — Conditions for establishment — Discretion of the Community institutions — Judicial review — Limits (Council Decision 91/482, Art. 109) 2. Association of the overseas countries and territories — Safeguard measures concerning imports from the overseas countries and territories — Conditions for establishment — Difficulties resulting from the application of Decision 91/482 — Situations requiring the establishment of a causal link (Council Decision 91/482, Art. 109(1)) 3. Association of the overseas countries and territories — Safeguard measures concerning sugar and mixtures of sugar and cocoa originating in the overseas countries and territories (OCTs) — Conditions for establishment — Difficulties likely to disturb the common organisation of the sugar market — Commission’s obligation to establish that sugar imports originating in the OCTs actually occurred at a price below the intervention price — None (Commission Regulation No 2423/1999) 4. Association of the overseas countries and territories — Safeguard measures concerning sugar and mixtures of sugar and cocoa originating in the overseas countries and territories — Conditions for establishment — Danger of highly detrimental effects on Community sugar operators — Manifest error of assessment by the Commission — None (Commission Regulation No 2423/1999) 5. Acts of the institutions — Statement of reasons — Obligation — Scope — Regulation introducing safeguard measures in respect of sugar and mixtures of sugar and cocoa originating in the overseas countries and territories (Art. 253 EC; Commission Regulation No 2423/1999) 6. Association of the overseas countries and territories — Safeguard measures concerning imports of agricultural products originating in the overseas countries and territories (OCTs) — Products originating in the OCTs put in a competitive position less favourable than Community products — Principle of proportionality — Breach — Conditions (Council Decision No 91/482, Art. 109) 1. The Community institutions have a wide discretion in the application of Article 109 of Decision 91/482 on the association of the overseas countries and territories which empowers them to adopt or authorise safeguard measures where certain conditions are met. In those circumstances, the Community Court must restrict itself to considering whether the exercise of that discretion is vitiated by manifest error or misuse of powers and whether the Community institutions clearly exceeded the bounds of their discretion. The scope of the Community Court’s review must be limited in particular if the Community institutions have to reconcile divergent interests and thus to select options within the context of the policy choices which are their own responsibility. (see paras 58-60) 2. On the first hypothesis stated in Article 109(1) of Decision 91/482 on the association of the overseas countries and territories (OCTs), covering the taking of safeguard measures if, as a result of the application of that decision serious disturbances occur in a sector of the economy of the Community or one or more of its Member States, or their external financial stability is jeopardised, the existence of a causal link must be established because the purpose of the safeguard measures must be to iron out or reduce the difficulties which have arisen in the sector concerned. On the other hand, as regards the second hypothesis stated in that paragraph, under which the Commission may take safeguard measures if difficulties arise which may result in a deterioration in a sector of the Community’s activity or in a region of the Community, it is not a requirement that the difficulties which justify the imposition of a safeguard measure result from the application of the OCT Decision. (see para. 61) 3. Even if the Commission did not establish that sugar imports originating in the overseas countries and territories (OCTs) actually occurred at a price below the intervention price on the Community market, that fact, however, cannot invalidate Regulation No 2423/1999 introducing safeguard measures in respect of sugar falling within CN code 1701 and mixtures of sugar and cocoa falling within CN codes 1806 10 30 and 1806 10 90 originating in the OCTs, having regard to the reasons set out in the second, third and fifth recitals in the preamble to that regulation, which concerned the risk of deterioration in the functioning of the common organisation of the sugar market and the loss which the imports in question could have caused to Community operators in the sugar sector. Even if the imports in question were not at a price below the intervention price, the Commission sufficiently justified the safeguard measure at issue by pointing out that, in view of the stable consumption of sugar in the Community, the growing increase in sugar imports from the OCTs might cause growth in the volume of subsidised exports, itself resulting in an increase in the costs connected to those exports and hence in the contributions assumed by Community producers, or reductions in Community production quotas. Such difficulties are likely to disturb the common organisation of the sugar market. (see paras 71-73) 4. The Commission did not make a manifest error of assessment in putting forward as a ground to justify the adoption of Regulation No 2423/1999 introducing safeguard measures in respect of sugar falling within CN code 1701 and mixtures of sugar and cocoa falling within CN codes 1806 10 30 and 1806 10 90 originating in the overseas countries and territories (OCTs), that the imports in question may have highly detrimental effects on the sugar operators concerned. First of all, it is evident that the deterioration or threat of deterioration in the common organisation of the market may necessitate a reduction in the production quotas and thus directly affect the income of Community producers. Next, export refunds are financed in large measure by Community producers through production levies set each year by the Commission. The latter could legitimately find that the imports in question might have resulted in an increase in the volume of subsidised exports and, consequently, a rise in the production levy assumed by Community producers. Lastly, even if certain producers could have realised substantial profits on the sale of C Sugar to OCT operators by selling at prices much above the world market price, that assertion cannot bring into question the Commission’s assessment that the imports in question might have disturbed the sugar sector, and thus resulted in particular in an increase in the amount of export subsidies or a reduction in production quotas. (see paras 86-90) 5. The statement of reasons required by Article 253 EC must be appropriate to the nature of the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the Community Court to exercise its power of review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons for a measure 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. Those requirements are satisfied by Regulation No 2423/1999 introducing safeguard measures in respect of sugar falling within CN code 1701 and mixtures of sugar and cocoa falling within CN codes 1806 10 30 and 1806 10 90 originating in the overseas countries and territories. First, the adoption of that regulation was preceded by consultations between the Commission, the Kingdom of the Netherlands and the other Member States. Second, in the preamble to that regulation, the Commission set out the difficulties which had arisen on the Community sugar market, the reasons for which those difficulties could result in a deterioration of the functioning of the common organisation of the market and the damaging effects for Community operators, as well as the grounds which had led it to fix a minimum import price for sugar of EC/OCT origin and to make imports of mixtures subject to a Community surveillance procedure. (see paras 113-115) 6. As regards a safeguard measure taken under Article 109(1) of Decision 91/482 on the association of the overseas countries and territories (OCTs), it follows from the very essence of such a measure that certain imported products will be subject to a less favourable regime than Community products. It is not sufficient in those circumstances to argue, in order to establish an infringement of Article 109(2) of the OCT Decision, that that measure puts the imported products in question in a competitive position less favourable than that enjoyed by Community products. On the contrary, it must be shown that the measure in question is not suitable for the purpose of achieving the desired objective or that it goes beyond what is necessary to achieve it. (see para. 128)