Judgment — ECLI:EU:C:2005:451
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 imports from the overseas countries and territories of sugar products with EC/OCT cumulation of origin – Conditions for establishment – Difficulties giving rise to a risk of a greater loss of guaranteed income for Community producers – Manifest error of assessment by the Commission – None (Commission Regulation No 465/2000) 4. Association of the overseas countries and territories – Safeguard measures concerning imports from the overseas countries and territories – Safeguard measures which do not put in question the preferential status of goods originating in those countries – Exceptional and temporary nature of those measures (Council Decision 91/482, Art. 109(1)) 5. Association of the overseas countries and territories – Safeguard measures concerning imports from the overseas countries and territories of sugar products with EC/OCT cumulation of origin – Principle of proportionality – Judicial review – Limits (Commission Regulation No 465/2000) 6. Association of the overseas countries and territories – Safeguard measures concerning imports from the overseas countries and territories of sugar products with EC/OCT cumulation of origin – Requirement of a large sum as security for importation into the Community of sugar of such origin – Security not depriving genuinely interested undertakings of the possibility of exporting sugar to the Community (Commission Regulation No 465/2000) 7. Acts of the institutions – Statement of reasons – Obligation – Scope – Regulation introducing safeguard measures for imports from the overseas countries and territories of sugar products with EC/OCT cumulation of origin (Art. 253 EC; Commission Regulation No 465/2000) 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 allows them to take or authorise safeguard measures when certain conditions are met. In those circumstances, the Community Courts must restrict themselves to considering whether the exercise of that discretion is vitiated by a manifest error or misuse of powers and whether the Community institutions clearly exceeded the bounds of their discretion. The scope of the Community Courts’ review must be limited in particular in cases where 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 53-55) 2. With regard to the first hypothesis outlined in Article 109(1) of Decision 91/482 on the association of the overseas countries and territories (OCTs), relating to the adoption 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 of one or more of its Member States, or if 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 resolve or reduce the difficulties which have arisen in the sector concerned. By contrast, as regards the second hypothesis outlined in that provision, to the effect that 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 must result from the application of the OCT Decision. (see para. 56) 3. The Commission did not commit any manifest error of assessment in submitting, as a ground for justifying the adoption of Regulation No 465/2000 introducing safeguard measures for imports from the overseas countries and territories of sugar sector products with EC/OCT cumulation of origin, that the imports in question might lead to a greater loss of guaranteed income for Community sugar producers. First of all, it is evident that the deterioration or threat of deterioration in the common organisation of a 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, in a rise in the production levy borne by Community producers. Lastly, even if certain producers could realise 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 issue might have disturbed the sugar sector, and might thereby have resulted in particular in an increase in the amount of export subsidies or in a reduction in production quotas. (see paras 77-81) 4. Article 109 of Decision 91/482 on the association of the overseas countries and territories (OCTs) provides precisely for the possibility of the Commission adopting safeguard measures in the circumstances which it covers. The fact that the Commission adopted such a measure in respect of certain products originating in the OCTs is not such as to place in question the preferential status, under Article 101(1) of that decision, of products originating in those countries, as a safeguard measure is, by nature, exceptional and temporary. (see para. 97) 5. As regards judicial review of compliance with the principle of proportionality, bearing in mind the wide discretionary power enjoyed, in particular, by the Commission in matters concerning safeguard measures, the legality of a measure adopted in this area can be affected only if the measure is manifestly inappropriate in terms of the objective which the competent institution is seeking to pursue. With regard to Regulation No 465/2000 introducing safeguard measures for imports from the overseas countries and territories of sugar sector products with EC/OCT cumulation of origin, it is not for the Court to establish whether the provision adopted by the Commission was the only or the best measure which could have been adopted, but to assess whether it was manifestly inappropriate. In that regard, the applicant has failed to adduce evidence that the restriction to 3 340 tonnes of the quantity of sugar with EC/OCT cumulation of origin which could be imported into the Community free of customs duties during the period covered by that regulation was manifestly inappropriate in order to attain the objective pursued. (see paras 103-106) 6. In the context of Regulation No 465/2000 introducing safeguard measures for imports from the overseas countries and territories of sugar sector products with EC/OCT cumulation of origin, the objective pursued by the Commission’s requiring a large sum as security for the import of such sugar was to avoid speculation. Such a security does not deprive genuinely interested undertakings of the possibility of exporting sugar to the Community. While the amount of the security must admittedly be paid in order to obtain import licences, that sum is reimbursed to the undertaking if the import operation is carried out. (see paras 108, 109) 7. The statement of reasons required by Article 253 EC must be appropriate to the nature of the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure in such a way as to enable the persons concerned to ascertain the reasons for the measure taken and to enable the Community Courts to exercise their 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 that article 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 conditions are met by Regulation No 465/2000 introducing safeguard measures for imports from the overseas countries and territories of sugar sector products with EC/OCT cumulation of origin. In the preamble to that regulation, the Commission explained the difficulties which had occurred on the Community sugar market, the reasons why those difficulties could give rise to deterioration in the functioning of the common organisation of the market and to detrimental effects for Community operators, in particular because of the serious risk of having to reduce Community production quotas, as well as the reasons which led it to fix the quota in issue. (see paras 124, 125)