61972C0057
OPINION OF MR ADVOCATE-GENERAL MAYRAS
DELIVERED ON 20 FEBRUARY 1973 (
1
)
Mr President
,
Members of the Court
,
I — Introduction
An examination of the preliminary questions submitted to you by the Administrative Court of Hesse (Hessischer Verwaltungsgerichtshof) will lead you to a study of the Community system for denaturing sugar intended for animal feeding-stuffs.
You have already had occasion to consider certain details of this system in the joined cases 38 and 39/72 which involved, in the main action, the same applicant Westzucker (judgment of 26 January 1972, Rec. p. 1).
In the present matter it is the very principle of the grant of denaturing premiums which is at the centre of the discussion. Therefore it seems to us appropriate to give a brief statement of the general organization of this system.
The common organization of the market in sugar, the fundamentals of which are found in Regulation No 1009/67 of the Council, is dominated by the fact that, in the years preceding its establishment, the world market situation was characterized by the existence of substantial surpluses; and that, in the Community itself, the production of sugar has on several occasions exceeded consumption requirements.
With a view to achieving a satisfactory equilibrium between supply and demand, the Community legislature therefore endeavoured, on a temporary basis and for a period intended to terminate in 1975, to limit production by determining the basic quantities of sugar capable of being produced in each of the Member States and by granting the national authorities the power to fix a basic quota for each sugar works.
The basic quantities were fixed in such a way that, in any event, the needs of the Community were amply covered. Futhermore, the intervention agencies designated by the Member States are required to buy in at the Community intervention price, sugar offered to them. In order to absorb the surpluses which this obligation may create, the Community authorities provided in principle two systems:
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on the one hand, an aid to exports to third countries, by means of the grant of refunds;
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on the other hand, an arrangement intended to encourage the denaturing of sugar, particularly by converting white sugar or raw sugar suitable for human consumption in order to obtain products intended for animal feeding-stuffs. This system has several aspects: the one with which we are concerned in the case in point is laid down in Article 9 (2), of Regulation No 1009/67, in accordance with which the intervention agencies may grant denaturing premiums for sugar rendered unfit for human consumption.
In accordance with the provisions of Article 9 (7), the Council determined the general rules for the grant of denaturing premiums by its Regulation No 768/68. The Commission was instructed, on the one hand, to lay down the manner in which such rules were to be put into effect; and on the other hand to fix the amount of the premium according to the so-called Management Committee procedure provided for in Article 40 of the basic Regulation.
In order to fix the premium, the Council adopted objective criteria taking into account in particular the most rational use of sugar given the market situation and foreseeable market prices for animal feeding-stuffs with which sugar for denaturing would have to compete.
The grant of the premiums is subject to the issue, by national authorities and on written application by processers, of denaturing certificates. These certificates carry both the obligation, guaranteed by a deposit, to denature the quantities of sugar mentioned, in the conditions specified therein, and also the right of the holder to receive the amount of the premium. The certificate is valid until the expiry of the eleventh month following that during which it has been issued.
The amount of the denaturing premium for sugar, which had been fixed at 14·03 units of account per 100 kg as from 1 July 1968 by the Commission, with the approval of the Management Committee (Regulation No 840/68), was reduced to zero units of account by Regulation No 354/69 issued in accordance with the same procedure. This Regulation, published on 27 February 1969, entered into force on the same day in accordance with the provisions of Article 2 thereof.
It is this decision whose validity the Administrative Court of Hesse asks you to determine with a view to settling the dispute put to it by way of appeal by Westzucker.
In fact, this company purchased in France, between November 1968 and mid-February 1969, 14075 metric tons of sugar for denaturing, but requested the issue of the denaturing certificates from the sugar import and storage office (Einfuhr- und Vorratsstelle für Zucker) only on 28 February 1969. Relying on Regulation No 354/69, this office rejected the application. The Administrative Court (Verwaltungsgericht) of Frankfurt, before which the matter was laid in first instance, rejected Westzucker's action as ill-founded and the latter appealed to the Administrative Court of Hesse which, by order of 21 July 1972, suspended its decision and, in accordance with Article 177 of the Treaty establishing the European Economic Community, has put to you the following preliminary questions:
1.
Is Article 1 (1) of Regulation No 354/69 of the Commission, modifying the sugar denaturing premium, valid?
2.
Is Article 2 of this same Regulation valid?
3.
Is Article 2 (2), sentence 2, of Regulation No 833/68 of the Commission, establishing detailed rules relating to denaturing of sugar for animal feed, valid?
II — Power of the Commission to suspend the application of the arrangements for denaturing sugar
The first of these questions implies that you should first of all decide whether the Commission has the power to suspend the grant of sugar denaturing premiums. To fix the amount at zero units of account is in fact equivalent to a temporary termination of the application of this system until the time when, by a further decision, a positive amount of premium is again fixed.
The applicant in the main action denies that the Commission has such powers, which the Council, by virtue of Article 155 of the Treaty, would have been able to grant to it only express provision.
In this connexion it establishes a comparison between Regulation No 768/68 of the Council governing the general conditions relating to the grant of denaturing premiums and Regulation No 766/68 relating to the conditions for granting export refunds on sugar.
This latter text includes, in Article 2 (2), a precise provision by virtue of which the periodic fixing of the amount of the refund ‘may be discontinued in accordance with the procedure laid down in Article 40 of Regulation No 1009/67’, that is to say by the Commission in accordance with the Opinion of the Management Committee, ‘if it is found that no surplus sugar is available within the Community for export on the basis of world market prices. In this event, no refund shall be granted’.
However, the text applicable to denaturing premiums contains no provision of this nature.
Westzucker deduces from this that the Commission is not authorized to suspend the grant of such premiums.
This argument meets with several objections:
1.
As the Commission points out, the common organization of the market in sugar, as is the case with the organization of the markets in other agricultural products, makes provision for two types of measure for control and stabilization of the market:
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The first are obligatory; they are required throughout each marketing year and the intervention agencies have the duty to implement them. This, in particular, is the case with the obligation to buy in sugar offered to them (Article 9 (1) of Regulation No 1009/67); it is also the case with the charging of a levy on importation which the Commission is required by virtue of Article 14 of the same Regulation to fix.
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The other measures have an optional nature; they are to be taken only if the market situation so requires; thus, to the extent necessary, the difference between prices of sugar on the world market and prices in the Community may be covered by an export refund, provided that there are exportable surpluses; furthermore, the intervention agencies may grant denaturing premiums; this is not an obligation unless the market situation makes it necessary to resort to this method of absorbing certain surpluses.
2.
Export refunds and denaturing of sugar have, in some respects, an identical function within the common organization of the market. Both are, bearing in mind the situation, which at the time was considered as involving built-in Community surpluses, means suitable for ensuring the flow of sugar and the absorption of surpluses.
But there is a difference between these two devices for stabilization of the market. Exportation also meets the need to maintain external commercial contacts. Denaturing tends to give sugar a use — animal feeding-stuffs — for which it is not normally intended and which its price would furthermore make impossible if such use were not subsidized; moreover, denatured sugar competes with fodder cereals.
White sugar is not, in principle, intended for denaturing whilst raw sugar may be intended for denaturing, as sugar used for animal feeding-stuffs must in particular be a substitute for maize. Since maize is a commodity which, traditionally, constitutes the basis of cattle feed, it is not in principle possible to charge for denatured sugar — a competing product — a price in excess of that for maize. However, in general, sugar which is subsequently denatured is initially manufactured for normal use.
Nevertheless, if surpluses of white sugar exist, denaturing ‘could represent an outlet for… sugar surpluses’ (Regulation No 2049/69), but in that case it is necessary ‘to prevent a premium being paid in respect of sugar not used for feed’ and ‘objective criteria must be laid down which would take the most rational use, given the situation on the sugar market… into account’ (preamble to Regulation No 769/68).
That is to say, the denaturing of white sugar must be subject to particularly strict conditions.
Recourse to denaturing is therefore justified only as ‘ultima ratio’, as an expedient calculated to reduce surpluses which could not otherwise be used. It becomes pointless when the market is stable; it would be economic nonsense in the event of a shortage of sugar intended for human consumption.
The use of this procedure must necessarily be closely bound up with the market situation. It does not have a permanent, obligatory or, so to speak, institutional nature.
It is therefore impossible to share the opinion of the applicant in the main action when it maintains that, amongst the means for eliminating surpluses, the Council intended to give denaturing priority over exportation to third countries.
In our view, there is no defined order of merit as between refund and denaturing. It is for the Commission to modulate their use having regard to the circumstances, namely the market situation, and, in any event, to give preference to the needs of human consumption.
3.
Finally, Regulation No 768/68, whereby the Council laid down general conditions for the grant of the denaturing premium, commences by strictly defining the circumstances in which sugar rendered unfit for human consumption may benefit from a denaturing premium. It then lays down criteria on the basis of which such premium may be fixed. Among these criteria may be distinguished, in particular insofar as concerns white sugar, those which operate only to determine the amount of the premium and those which are conclusive in deciding whether this premium is to be granted, or wether on the contrary, the application thereof is to be suspended.
From Article 2 of this Regulation, applicable to white sugar, it follows in fact that the premium is fixed taking account of:
sub-paragraph (a)
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the intervention price for white sugar, in the Community area with the largest surplus;
sub-paragraph (b)
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standard amounts for technical costs of denaturing and charges.
These are criteria for fixing the amount of the premium at a higher or lower level.
On the other hand, the criteria set out in sub-paragraphs (c) and (e) are derived:
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on the one hand, from the situation with regard to the foreseeable competition, at a given moment, between denatured sugar and other animal feeding-stuffs; and
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on the other hand, from the total sugar surpluses available for denaturing in the Community.
Article 3 of the Regulation sets out similar criteria with regard to sugar.
By these criteria and in particular the last, the Council has granted the Commission a particularly wide power of assessment which, in our view, enables it to fix the amount of the premium at zero units of account it the market situation is such that recourse to denaturing becomes pointless or even inappropriate.
Such would be the case in the event of an excess production of fodder normally intended for animal feed and offered at prices such that denatured sugar could not compete with such products or, even more, if the production of sugar were to fall to a level such that it was not even sufficient to meet the needs of human consumption.
It seems to us to be reasonable, therefore, to interpret the provisions appearing in the final sub-paragraph of Article 2 of Regulation No 768/68 as making the grant of premiums for denaturing subject to the existence of surpluses of sugar capable of being used for denaturing on the Community market.
In these circumstances to maintain — as the applicant did in the main action — that all the criteria laid down by Article 2 have a cumulative application, would be tantamount to denying the difference in nature and purpose of these various heads of assessment.
It should be added that Regulation No 768/68 is, in relation to the basic text governing the common organization of the market in sugar — Regulation No 1009/67 — a subordinate instrument, and that it would be illogical to infer therefrom that the grant of denaturing premiums, which is optional in accordance with the provisions of Article 9 (2) of the basic Regulation, has become obligatory by virtue of the implementing Regulation.
Accordingly, the fact that the latter Regulation contains no express provision relating to the suspension of the denaturing premium in contrast to what is provided with regard to export refunds by Regulation No 766/68 is, in our view, devoid of significance insofar as concerns the power of the Commission. The difference noticed in the wording of the two texts is explained simply by the consideration that the obligation to fix export refunds at regular intervals (every two weeks) does not exist insofar as the denaturing premium is concerned. It in no way follows that such premium must be granted in all circumstances.
III — Did the Commission, by fixing the sugar denaturing premiums at zero units of account under Regulation No 354/69, rely on materially incorrect facts? Did it make an erroneous assessment of the market situation?
If it is admitted that the Commission had the power to fix the amount of the sugar denaturing premiums at zero units of account, we must now ascertain whether it has acted legally and, in particular, whether it has complied with the criteria laid down in Article 2 of Regulation No 768/68 of the Council.
In stating reasons for its decision, the Commission recalled that at the time of the previous fixing of the amount of the denaturing premiums on 28 June 1968 (Regulation No 840/68), it had taken account, among the criteria defined by the Council, of the surpluses of sugar then available for denaturing in the Community; it then found that the situation in the sugar sector is ‘currently undergoing reorganization; that export licences or denaturing premium certificates have been issued for the surpluses; that it is therefore necessary to take account of this situation by reducing denaturing premiums to zero’.
According to the statement of the applicant in the main action, these reasons were erroneous in fact; they were not in accordance with the true market situation on 26 February 1969; the supply statement showing the provisional stock of sugar drawn up on 18 February, that is, several days earlier, and on the basis of which the Commission made its decision, contained incorrect figures. According to the applicant, it was by submitting information not in accordance with the facts and, moreover, by making a tendentious interpretation of these factors that the Commission obtained the approval of the Mangement Committee for the suspension, in actual fact, of the grant of denaturing premiums.
According to Westzucker, the state or the stock of sugar within the Community, at the date of adoption of the Regulation in dispute, by no means made it possible to assert that the situation was remedied and that the reabsorption of the surpluses could be ensured without resorting to the grant of new denaturing premiums.
In this connection Westzucker mentions the statements prepared by the Commission's departments not only in February 1969 but on the previous 30 January and the following 18 March, inferring therefrom that the Commission artificially, and for reasons of policy, increased the estimated data relating to bridging stocks for the period to the detriment of estimates concerning denaturing.
It should be recalled, in order to understand this contention, that, during each marketing year, in the case in point from 1 July 1968 to 30 June 1969, the initial market situation and its trend are shown in monthly statements which, based on stocks recorded at the beginning of the marketing year, show the estimates of Community production on the one hand and domestic consumption on the other hand, and which also provide estimates of exports to third countries and of sugar for denaturing in such a way that, at the end of the marketing year, a stock equal in principle to four thirteenths of the guaranteed quantity established by the Council for the marketing year in question should normally subsist, that is to say three months' reserve. This stock is intended in particular to ensure bridging with the following marketing year. In 1968 the Council had, by Regulation No 432/68, fixed the guaranteed basic quantity at 6594000 metric tons. The final stock available at 30 June 1969 must have been, according to Westzucker, 2029000 metric tons.
The aggregate quantities of sugar available (that is essentially the stock existing prior to 1 July 1968, plus the Community production, plus importations originating from third countries) having remained stable at the level of approximately 9150000 metric tons, and the sugar used for human consumption having likewise formed the subject of a forecast which did not vary during the course of the marketing year, that is 5935000 metric tons, the difference between these two figures — that is, 3215000 metric tons — represents, on the one hand, the bridging stock which must have existed at 30 June 1969 and, on the other hand, the surpluses capable either of being exported outside the Community, or of being denatured.
Although, in the supply statements for 30 January 1969, exports were entered at an estimated 754000 metric tons and the total quantity of sugar to be denatured at 416000 metric tons, it appears from the statement drawn up on 18 March, that is, three weeks after the Commission had taken the decision to suspend the grant of denaturing premiums, that the estimated figure relating to the tonnage of sugar to be denatured had been reduced to 314000 metric tons, showing therefore a fall of the order of 100000 metric tons, whilst on the contrary the bridging stock, shown at the end of January at 2051000 metric tons, was increased to 2172000 metric tons.
The figures appearing under the same heading in the supply statement for 18 February 1969 were 426000 metric tons for denaturing and 2029000 metric tons for stock available at the end of the marketing year.
Westzucker infers from this that the Commission has arbitrarily reduced the tonnage initially provided for denaturing and transferred the quantity thus removed from this use to the item ‘final stock’.
It is claimed that the Commission has thus increased the final stock, disregarding the provisions of Regulation No 432/68 of the Council which stipulated that it should be limited to four thirteenths of the guaranteed basic quantity fixed for the current marketing year.
These statements may be deduced from a reading of the supply statements but we do not feel that it is possible to draw from them, on the legal level, the conclusions which the applicant in the main action claims to draw.
In fact, the documents on the basis of which the Commission can regularly assess the market situation and, in brief, base its short-term policy comprise;
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in the first place, figures having an ascertainable value (that is, stocks existing on the first day of the marketing year) and basic quantities fixed by the council;
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in the second place, estimated figures which are nevertheless fairly reliable because they are taken from relatively stable data, not likely to undergo sizable modifications during the course of the marketing year: such are the production and consumption estimates;
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finally, figures which are likewise estimates but substantially less reliable to the extent to which they are linked, on the one hand, to circumstances and on the other hand to the effective realization of operations which depend in the last resort on economic factors, namely exports and denaturing.
If the Commission had based its decision on incorrect ascertainable factors, this decision would certainly have been vitiated by a flagrant material error and would therefore be illegal. But in our view such a complaint cannot be maintained if the Commission relied on simple forecasts which, at the moment when it adopted its decision, were plausible and only proved subsequently to be incorrect.
This did in fact occur. In the statements of 30 January and 18 February 1969, the quantities of sugar to be denatured had been evaluated at 416000 and 426000 metric tons respectively; but the Commission found, on 26 February, when it decided on a provisional suspension of the grant of denaturing premiums, that the premium certificates already issued represented a quantity of 407000 metric tons which in practice exhausted the forecasts of the statements under this heading.
As the Commission points out, the supply situation at that time made it possible to conclude that the various requirements foreseeable until the end of the marketing year, including denaturing, would be just covered, assuming that a bridging stock of the order of 2000000 metric tons was, in any event to be maintained.
Furthermore, the true prices of sugar on the Community market, without reaching the target price, had then reverted to the level of the intervention price, and this has not been disputed; prices were tending to rise and certain difficulties which had already appeared in the purchase of sugar intended for human consumption showed that the market no longer had surpluses which would have justified encouraging the use of supplementary quantities of sugar for the purpose of cattle feed. The Commission therefore relied on the fact that by extending the grant of denaturing certificates it would have run the risk of diverting from human consumption certain quantities of sugar in favour of a less rational use and one which, furthermore, would have been much more costly for the Community.
We do not think that, in doing this, it relied on materially incorrect facts: it drew from a correct finding — namely the fact that denaturing certificates amounting to 407000 metric tons had already been issued — the deduction that in the condition of the market it was advisable to suspend, at least provisionally, the grant of denaturing premiums.
It seems to us difficult to take the Commission to task for not having taken into account at that time the fact that all the quantities for which these certificates had been issued had not in fact been denatured. It was only in the statement drawn up several weeks later that the assessment of the foreseeable tonnages for actual denaturing had to be reduced, in the light of information received, to 314000 metric tons. It was in fact 352000 metric tons of sugar which were subjected to denaturing, as was ascertained at the end of the season.
Bearing in mind the period of validity of the denaturing certificates, that is, more than 11 months, it was not possible for the Commission in February to estimate precisely the quantitites which would finally and in fact be denatured; it therefore based its decision on the sole datum of which it had certain knowledge, that is to say on the tonnage represented by the denaturing certificates previously issued.
At this point it is appropriate to examine another argument based, by the applicant in the main action, on the fact that by fixing the amount of the denaturing premiums at zero units of account, and not at the same time suspending the grant of refunds on exports of sugar, the Commission did not respect the order of precedence required between these two procedures for the absorption of surpluses, according to which priority had to be given to denaturing.
As we have seen, such an order of precedence does not emerge from any provision of the basic Regulation; nor does it have any foundation in Regulations Nos 766/68 and 768/68 of the Council relating to the conditions for the grant of export refunds on the one hand and denaturing premiums on the other hand.
Although both of these techniques contribute to eliminating the surpluses of Community production it is for the Commission, having regard to the market situation, to choose between the two methods. We are no longer at this point in the field of legality, but, in our view, in that of expediency which it is for the Commission alone to assess.
However, the latter had two equally valid reasons for suspending the grant of denaturing premiums rather than acting against export refunds:
—
the first lies in the fact that refunds are intended to permit export to third countries, and thereby to maintain traditional trade relations;
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the second lies in a comparison of the cost of each of the measures concerned.
As compared with export, the use of sugar surpluses for animal feed involves higher charges for the Community. As we know, the rate of refund was, in February 1969, 12·7 units of account per 100 kg; it was furthermore reduced several weeks later to 10·9 units of account whilst the denaturing premium was fixed, until the appearance of Regulation No 354/69, at 14·03 units of account.
In an economic and technical study carried out in 1968 by the Institute of Agricultural Economy of the University of Stuttgart-Hohenheim at the request of the Commission, it was moreover indicated that, assuming export to the world market of a surplus quantity of 1 million metric tons of sugar, the cost of returns would amount to between 600 and 650 million DM.
The use of the same surplus for animal feed would have cost 730 to 790 million DM. There must be included in this charge not only the high rate of the denaturing premium as fixed at that time but also the loss of income which would result from the reduction in Community levies on cereals intended for animals. In fact, the use of sugar in feeding them results in a reduction in the Community's cereal deficit and, accordingly, in imports, which are sources of levy.
IV — Misuse of Power
It now remains to consider whether the Commission was inspired by motives not germane to the purpose of the authority vested in it — that is, whether it committed a misuse of power.
The applicant in the main action complains that in fact it allowed itself to be guided by two orders of considerations:
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it aimed at facilitating the acquisition by Italy of certain quantities of Community white sugar;
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it also made it possible to increase exports of sugar from the French Antilles over and above the amounts forecast.
It is correct that the Italian Republic, during the 1968-1969 marketing year, carried out substantial purchases of sugar from other Member States with a view to satisfying the requirements of domestic consumption and the obligation laid on it to export, prior to 1 July 1969, the quantity of white sugar in excess of its basic quota.
On the second point, the Commission acknowledges that, during the period concerned, there was an increase in exports of sugar from the Antilles, but it explains this increase by the particularly favourable conditions of the operation.
In our view, these considerations dit not play a crucial role in the decision of the Commission which relied, as it was bound to do, on the overall situation of the Community sugar market, taking the view that it should temporarily suspend aid for denaturing rather than affect exports.
However, even assuming that these considerations did affect its decision, it does not seem to us that one could regard them as unrelated to the purposes of the common organization of this market. Let us recall that this organization must, in the first instance, aim at maintaining and improving the standard of living of the farmers concerned and not at providing guarantees for undertakings which denature sugar.
Regulation No 1009/67 sets up a transitional system for the period from the 1968/1969 marketing year to that of 1974/1975. This system, which was characterized by the institution of devices for the distribution of production and quotas, was established with a view to limiting Community production and promoting regional specialization, whilst at the same time guaranteeing a minimum level of production, even for regions less suitable for sugar production, of which Italy was considered to be one.
Although Article 22 of Regulation No 1009/67 provides that the definitive arrangements are still to be adopted, but that they shall not involve any discrimination between Community producers, this amounts, it seems, to admitting and authorizing the existence of substantial departures from this principle during the transitional period.
The position of the Antilles, like that of the British Commonwealth at the present time, was a factor which the authors of the basic Regulation had to take into account. The procution of cane sugar is of particular importance for the economy of the French departments of Guadeloupe and Martinique and the intervention of the European Agricultural Guidance and Guarantee Fund was, furthermore, expressly extended to these departments which are considered, in this connexion, as forming an integral part of the Community. Thus, according to Article 9 (5) of Regulation No 1009/67, certain measures are to be taken should difficulties arise in marketing sugar produced in the French overseas departments.
Likewise, although the purpose of the authors of these Regulations was to permit a better adaptation of production and the commencement of regional specialization between Member States, they wished to avoid the too sudden disappearance of unprofitable industries from certain of these States. Thus Article 34 of Regulation No 1009/67 provides that until 1975 Italy may grant ‘adaptation subsidies’ to Italian beet growers and sugar producers.
The sole question which might arise would then be to ascertain whether the Commission did not unlawfully sacrifice the interests of denaturing to the export of sugar from the Antilles and to the particular situation of Italy. This would be the case only if the Regulation in dispute had had this as its sole and specific objective. But this is not the fact. This Regulation was based on a plausible economic assessment and on the very technique of forecast statements. If it also and as an incidental matter had the result of assisting the Antilles production and the Italien sugar economy, we can see no grounds for invalidity in this.
V — Immediate entry into force of Regulation No 354/69
We can now tackle the second question put forward by the Administrative Court of Hesse relating to the validity of Article 2 of the Regulation in dispute, which fixed 27 February 1969 as the date of entry into force of the Regulation, that is, the same day as its publication in the Official Journal of the European Communities.
According to the applicant in the main action, such a provision would have required a special statement of the reasons on which it was based, which the Commission refrained from giving. The lack of such a statement would entail invalidity of the Regulation itself.
This argument is without value.
In accordance with the terms of Article 191 of the Treaty of Rome, Regulations shall enter into force on the date specified in them. The Treaty grants the institution making a Regulation the power to specify therein the date of entry into force and it is only in the absence of a date so specified that such Regulation enters into force, by virtue of Article 191, only on the twentieth day following its publication in the Official Journal.
In your Judgment of the 13 December 1967 (Case 17/67, Neumann, Rec. 1967, p. 592), you conceded that an institution is not required to indicate explicitly the reasons for which it has fixed the date of publication of a Regulation as that of its entry into force. But you stated that ‘this wide liberty granted into the authors of a Regulation cannot however be considered as excluding any jurisdictional control, particularly with regard to any retroactive effect’ and you added that an institution ‘could not, without having an adverse effect on a legitimate regard for legal certainty, resort without reason to the procedure of immediate entry into force’.
In other words there is no obligation to provide a formal statement of reasons, but you reserve to yourselves the power to ascertain whether by reason of the provisions laid down, there are ‘serious reasons for holding that any interval between the publication and entry into force of the Regulation might have been prejudicial to the Community’.
Applying this criterion of jurisprudence, we feel that a delay, even limited to several days after publication, of Regulation No 354/69 would have entailed the risk that this text would have been completely devoid of effect.
What in fact would have happened in such an instance?
It cannot be disputed that as soon as the Regulation had been published, the undertakings concerned would have taken advantage of this interval, brief though it might have been, to lodge in haste applications for denaturing certificates so as to benefit from the favourable rate previously fixed. They would have had an even greater incentive to do so since, being unaware as they were, both of the time at which the Commission would think it possible to terminate the temporary suspension of the denaturing premium and of the amount of the premium which would then be fixed, there would have been a very great inducement for them to obtain the issue, by way of precaution and in a sense as a ‘reserve’, of denaturing premium cretificates.
Thus, in every probability, a flood of applications to which the intervention agencies could not but have acceded on the basis of the previous legislation, would have caused the decision of the Commission to be without effect.
Accordingly, sugar — no doubt in considerable quantities — would have been diverted from human consumption towards an exceptional use which the Commission had estimated that the market situation no longer justified. The immediate entry into force of Regulation No 354/69 was therefore necessary, bearing in mind its very purpose.
Would it not have been possible in these circumstances, and so as to have regard to the interests of denaturing undertakings, to take account of the commitments which they had already entered into with producers of animal feeding-stuffs on financial conditions determined on the basis of the amount of the denaturing premium then applicable?
This is the question which the applicant in the main action puts forward, considering that there was nothing to prevent the Commission from authorizing the grant of denaturing certificates on the basis of the previous legislation, at least when evidence was forthcoming that the claims related to the performance of contracts concluded prior to 27 February 1969.
This line of argument makes it necessary to enquire whether the Regulation had a retroactive and, accordingly, unlawful effect. This is not our view. This Regulation does not adversely affect the rights which the holders of denaturing certificates had acquired prior to its entry into force. It limited itself to preventing for the future the issue of new certificates. The Commission was in no way under an obligation to adopt transitional measures in favour of those of the manufacturers who had entered into commitments by speculating on the permanent nature of the system of denaturing premiums; it was not bound by the commercial contracts which they had concluded under previous legislation, one of the characteristics of which is that it may be amended at any time.
Nor would a complaint of unlawful interference with rights acquired have any more substantial basis in an instance where, without suspending the grant of denaturing premiums, the Commission had limited itself to reducing the amount thereof.
We may add that, in fact, the long period of validity of these certificates guaranteed to sugar works and denaturing undertakings as well as to manufacturers of animal fodder, the opportunity to conclude transactions on a sufficiently sure and stable basis, provided of course that these contracts were negotiated only after the issue of the certificates giving right to the premium.
VI — Validity of Regulation No 833/68 of the Commission
The third and last question submitted by the German Judge relates to Regulation No 833/68 whereby the Commission adopted various detailed rules relating to the denaturing of sugar for animal feed and, in particular in Article 2 thereof, standard conditions with which applications for the grant of denaturing premiums submitted to the national intervention agencies must comply.
After specifying the information which applications must necessarily contain, that is:
—
the name and address of the applicant
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the nature and quantity of sugar to be denatured
—
the Member State where the denaturing is to take place,
this text adds:
‘Member States may require applicants to furnish additional information’.
It is on the validity of this provision that the judge in the main action asks you to decide.
As you have seen on many occasions, such an authorization is customary in Regulations relating to the common organization of agricultural markets. It is inherent in the very conditions in which the concrete application of Community Regulations is carried out by the competent bodies of Member States, in the absence of a special administrative infrastructure for the Commission itself.
This situation implies that the States are authorized to adopt additional measures in accordance with their domestic law and their own administrative procedures.
To deny the Commission, as the applicant in the main action does, the authority to endow Member States with such a power of execution, amounts to disregarding this unavoidable necessity.
By delegating to the Commission the right to draw up the conditions for the grant of premiums, by Article 9 (8) of Regulation No 1009/67, the Council in no way intended to prevent measures of pure implementation being decided by Member States themselves, provided — as you recalled recently in a judgment of 30 November 1972 (Case 32/72Wasaknäcke) — that the power granted to national authorities is limited to supplementary measures, not capable of derogating from essential Community Regulations for the functioning of the organizational machinery of an agricultural market.
In the case in point, the Commission wished to grant to States the right to take measures of pure form within the framework of the procedure for the issue of denaturing certificates.
It in no way exceeded its authority and the validity of the provision in question seeems to us to be indisputable.
It would be otherwise only if the Commission had intended to make the existence of the right to the denaturing premium subject to compliance with additional procedural requirements laid down by national authorities; but this is not the case.
With regard to the regulation issued on 8 August 1968 by the German Minister of Food, Agriculture and Forestry, as empowered by Community legislation, it has the purpose of requiring applicants for denaturing certificates to submit their applications in accordance with a standard form and adds to the details required by Regulation No 833/68 an indication of the denaturing undertaking and the undertaking supplying the sugar.
Even in the event of the German administration's causing the admissibility of the application and thus the right to the denaturing premium to depend on such additional information, the sole consequence thereof would be that the domestic regulation, which would then be contrary to the Community law directly applicable, would as a result incur the censure of the national courts. But the validity of Regulation No 833/68 would not be affected thereby.
In reality it seems, moreover, to be established — as is stated by the agent of the Commission — that the German intervention agency considers as admissible, as it must, any application complying with the Community Regulation alone and that the supplementary details referred to in the Regulation of 8 August 1968 may be validly supplied, subsequently to the application, by way of regularization.
Our opinion therefore is that you should rule that an examination of the questions put forward reveals no detail of such a nature as to affect the validity of Articles 1 (1) and 2 of Regulation No 354/69 of the Commission or of Article 2 (2), second sentence, of Regulation No 833/68 of the Commission.
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1
)	Translated from the French.