61978C0232
OPINION OF MR ADVOCATE GENERAL REISCHL
DELIVERED ON 4 JULY 1979 (
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Mr President,
Members of the Court,
The case in respect of which I give my opinion today is concerned with the compatibility of some features of what the French Government calls a national organization of the market in mutton and lamb with the provisions of Community law.
In its application the Commission has given particulars of this French system which is administered by the Office National Interprofessionnel du Bétail et des Viandes [National Cattle and Meat Trades Board] and whose import regulations — leaving out of account non-member countries — in practice only have relevance now in relation to the United Kingdom. I take the liberty of referring to this description and of merely mentioning the following features of the system by means of which it is intended to stabilize prices on the French market, which is of course unable to obtain sufficient supplies from home production.
Thus for example, the importation of frozen mutton and lamb, with certain exceptions, is in principle forbidden. In so far as such importation is permitted — that is, in the case of live animals and fresh and refrigerated meat — national threshold prices play a part and an import licence is required. It appears that the importation procedure is to grant a general import licence restricted as to the amount to be imported and its duration, within the framework of which individual import licences are issued. Imports are permitted only when the prices quoted in France reach or exceed the level of the threshold price. Should these quoted prices in France stay below the threshold price for one week then the issue of import licences is suspended and resumed only if the level of the threshold price is reached in the following week. If the level of the threshold price on the French market is not reached for two successive weeks that leads to a ban on imports which is lifted only if the level of the threshold price is exceeded' during two consecutive weeks.
In addition a surcharge is levied on the importation of live animals for slaughter and on fresh and refrigerated meat. Six different flat rates are applicable in this connexion which vary according to the national prices quoted weekly. These rates, like the threshold price, are adjusted at regular intervals to the trend of costs; when the surcharge is calculated the trend of the currencies of the exporting countries, for example the depreciation of the pound sterling, is taken into consideration.
This set of rules has already been the subject-matter of Case 58/77, in which the application was brought by the Irish Republic, and which was discontinued, because the French and Irish Governments reached a settlement under the terms whereof as from 1 January 1978 Irish mutton and lamb were granted free access to the French market under certain conditions.
By a letter of January 1978 the British Government protested to the Commission against the discriminatory treatment of British traders interested in export and in the following month it also complained to the Commission about the notification by the French Government of an increase in the import surcharge.
The Commission, which considers that the French rules infringe the Treaty in so far as they impede trade, thereupon initiated proceedings under Article 169 of the EEC Treaty for a declaration that the French Government had infringed the Treaty. The Directorate-General for Agriculture had already sent a telex message to the French Government on 16 January 1978 requesting it to give its views, which was done on 21 January 1978. The proceedings were then initiated by a letter from the Commission dated 2 February 1978 to the Permanent Representation of France. The latter expressed its opinion on this letter in a letter of 18 April 1978, in which special attention was drawn to the serious economic consequences of an immediate discontinuance of the import system in view of the lower British price level and the fact that there were still no appropriate Community rules. Nevertheless the Commission delivered a reasoned opinion on 22 May 1978. As France did not comply with the request contained in it within the period of one month which had been laid down, the Commission finally brought the matter before the Court of Justice on 23 October 1978.
The Commission in its application claims that the Court should declare that the French Republic, by continuing after 1 January 1978 to apply its national system for the importation of mutton and lamb from the United Kingdom, has failed to fulfil its obligations under Articles 12 and 30 of the EEC Treaty.
During the oral procedure the Commission, having regard to the judgment of the Court of 29 March 1979 in Case 231/78, Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland, [1979] ECR, and to the time-limits laid down in Articles 35, 36 and 42 of the Act of Accession, amended its application by claiming that the Court should declare that France had failed to fulfil its obligations under the Treaty from the date of accession in respect of quantitative restrictions on imports, from 1 January 1975 in respect of measures having equivalent effect and from 1 July 1977 wich reference to charges having an effect equivalent to customs duties.
My view on these claims, which the French Government has continued to dispute energetically during the oral procedure, is as follows.
1.
It must first of all be stated that it is common ground that the suspension of and also the ban on imports provided for in the French rules are to be regarded as quantitative restrictions on imports within the meaning of Article 30 of the EEC Treaty, that the need to obtain an import licence ranks as a measure having equivalent effect — in which connexion reference may for example be made to the judgment of the Court of 16 March 1977 in Case 68/76, Commission of the European Communities v French Republic [1977] 1 ECR 515 — and that the import charges are to be regarded as charges having an effect equivalent to customs duties within the meaning of Article 12 of the EEC Treaty.
It is also not disputed that the measures which have been mentioned may be regarded as constituent elements of a national market organization as defined in the judgment of the Court of 10 December 1974 in Case 48/74, Charmasson v Minister for Economic Affairs and Finance (Paris) [1974] 2 ECR 1383. Consequently a decision as to their legality is not determined solely by the Treaty provisions which have been quoted; on the contrary it depends on the question whether the facts that they are incorporated in a national organization of the market and that a common organization of the market in this sector has not been established are material.
2.
In this connexion Article 60 (2) of the Act of Accession is relevant. It reads:
‘In respect of products not covered, on the date of accession by a common organization of the market, the provisions of Title I concerning the progressive abolition of charges having equivalent effect to customs duties and of quantitative restrictions and measures having equivalent effect shall not apply to those charges, restrictions and measures if they form pan of a national market organization on the date of accession.
This provision shall apply only to the extent necessary to ensure the maintenance of the national organization and until the common organization of the market for these products is implemented.’
In this connexion there arises the question, to which the Commission in the first place limited its assessment, whether it is still possible to rely on Article 60 (2), even after the expiration of the time-limit laid down in Article 9 (2) of the Act of Accession, that is to say after 1977, in other words whether therefore Article 60 (2) may be regarded as one of the ‘special provisions’ within the meaning of Article 9 (2) which provides that:
‘Subject to the dates, time-limits and special provisions provided for in this act, the application of the transitional measures shall terminate at the end of 1977’.
The French Government energetically advocates this view. Referring to the preparatory work for the Act of Accession it points out that the principle of a transitional period was not laid down in that Act as it was in Article 8 of the EEC Treaty. The Act of Accession provides in Part Four thereof and also in annexes and protocols only for various transitional measures to which periods of varying duration either have applied or still apply. It is especially important to bear in mind that Article 9 (2) not only mentions a basic time-limit but also contains reservations in respect of which the vague concept ‘special provisions’ is significant. Article 60 (2) must be regarded as one such special provision. Having regard to substantial structural differences and divergences in the agricultural policy, which, as has been demonstrated by the price differences, became apparent precisely in the case of mutton and lamb, it is an important transitional measure for agriculture. If it is compared with Article 45 of the EEC Treaty and if it is borne in mind that Article 60 (2) — unlike the other special provisions which contain a formal temporal limitation — does not mention a date, then it only remains to conclude that the case-law relating to the EEC Treaty itself, which was developed by the Court in its judgment in the Charmasson case (Case 48/74 [1974] 2 ECR 1383) is not a precedent applicable to the Act of Accession, that consequently even after the expiration of the time-limit laid down in Article 9 (2) the principle of the free movement of goods cannot be relied on as against a national organization of the market as long as there is no common organization of the market in the relevant sector.
The Commission opposes that argument in this case as it has already done in Case 118/78 C.J. Meijer B.V. v Department of Trade; Ministry of Agriculture, Fisheries and Foods and Commissioners of Customs and Excise, judgment of 29 March 1979 and in Case 231/78, which dealt with import restrictions in the context of the British organization of the market in potatoes. It consistently puts forward the view that national obstacles to trade cannot in any circumstances be justified after the end of 1977 by reference to the existence of a national organization of the market and to Article 60 (2) of the Act of Accession.
As far as concerns this difference of opinion I need only call attention to the fact that in the judgment in Case 231/78, in the elaboration of which the French arguments to which I have referred were before the Court, because France intervened in that case in support of the United Kingdom, the Court upheld the Commission's view.
If I correctly understand the position there were three considerations to which the Court attached importance in coming to its decisions. First the general system of the Act of Accession had to be taken into consideration and then the relationship between Article 60 and the general Treaty provisions relating to the foundation and structure of the Community and also to the principles underlying the common agricultural policy had to be borne in mind, and finally account had to be taken of the principle of equal treatment of Member States in the light of the fundamental rules for the proper functioning of the Common Market. This led to the basic finding that the rules relating to the proper functioning of the Common Market take precedence and that the reservations connected therewith and the derogations therefrom are in any case not to be given a wide interpretation. This led further to the conclusion that, because special provisions within the meaning of Article 9 (2) presuppose a specific temporal limitation, Article 60 (2) cannot be regarded as such a special provision, and this made it clear that measures which impede the free movement of goods can no longer be justified by reference to special national organizations of the market after the expiration of the period laid down in Article 9 (2), that is to say after 1977. The Court went out of its. way to emphasize that should there be gaps in the common agricultural policy after that date they must not be allowed to constitute an obstacle to the implementation of the general rules applicable to the Common Market; if after the expiration of the said period special measures proved to be still necessary, they could not in any case be adopted unilaterally and with reference to national organizations of the market.
Those considerations in fact also point the way to the solution of the present dispute in the sense that since 1 January 1978 there has no longer been any legal justification for the retention of the French restrictions relating inter alia to imports of mutton and lamb from the United Kingdom.
However I should like as well to consider some additional arguments put forward by the French Government during the oral procedure, which in its opinion must lead to a different view of the matter.
Thus the French Government has submitted that the problems connected with the French organization of the market in mutton and lamb differ from those which arose in Case 231/78. It states that it is of primary importance to bear in mind that the negotiations concerning the common organization of the market are at a very far advanced stage and that an early conclusion of them may be expected. This is material in relation to certain wording used in the judgment in Case 231/78 according to which national market organizations and obstacles to trade connected therewith could not continue to exist for an ‘indefinite period’.
However, this argument has really no prospect of success. Although in the judgment of Case 231/78 the principle was evolved that derogations from the general rules under Article 60 (2) are not permissible after the end of 1977, the question whether for the time being there is no prospect at all of the abolition of national organizations of the market or whether — as is most likely to be the case with mutton and lamb — they will be replaced relatively soon after the expiration of the transitional period laid down in Article 9 (2) can naturally not be decisive, since in this connexion there is not the slightest reservation discernible.
The French Government also referred to the trend of prices in the United Kingdom, on the one hand, and in France, on the other hand, which has been approximately the same during the last few years and has linked to this trend the expectation that soon conditions would prevail which would permit the free movement of goods even if the French rules remain in force.
However, according to the principles laid down in the said judgment this must also be irrelevant, because it is impossible to proceed on the basis that the Act of Accession grants a supplementary time-limit having regard to economic trends for measures which themselves contravene the Treaty. Furthermore it must not be overlooked — quite apart from the fact that in any case the obligation to apply for an import licence is to be regarded as an unlawful measure having an effect equivalent to a quantitative restriction on imports — that even at the present time considerable price differences are still to be discerned and that it can by no means be said for certain when these differences will be reduced to an amount which makes the levying of an import charge and a temporary ban on imports unnecessary.
The French Government also draws attention to the fact that there is also a national organization of the market in mutton and lamb in the United Kingdom which has clearly not been modified and that this is in breach of the principle of equal treatment. Quoting figures which are certainly impressive it points out that the effect of abolishing the French measures would be fierce competition from cheap British mutton and lamb which would constitute a considerable threat to the economy in certain less-favoured areas of France.
On this point it must on the one hand be said that Community law certainly does not require national market organizations to be abolished but merely that obstacles to the free movement of goods connected therewith be removed. It comes therefore as no surprise that, as far as concerns the British organization of the market in mutton and lamb, which clearly does not include any import arrangements, no such modifications are called for as in the case of the French organization of the market which actually impedes imports. It is, on the other hand, by no means certain that the expected effects on the pattern of the French economy, if the Commission's argument is accepted, will materialize to the extent which is feared. In fact it must not be forgotten — as has also been unambiguously stressed in the Court's judgment in Case 231/78 — that Community law precludes only unilateral national measures after the end of the transitional period; it does not on the other hand in any way preclude measures adopted by the Community — for example in the form of aids, which have already been contemplated in a Commission proposal — if warranted by the circumstances.
Finally the French Government has also submitted — and it regards this as running to some extent counter to a strict interpretation of Article 60 (2) of the Act of Accession — that the Community institutions even after the expiration of the transitional period have come down in favour of a flexible application of Community provisions relating to agriculture and in this connexion the derogations from Regulation No 1422/78 or the lowering of the price of British butter by means of aids may be recalled; furthermore there has been no hesitation in regarding Article 102 of the Act of Accession, which is concerned with measures for the protection of fishing grounds, in spite of its imprecise wording, as a ‘special provision’ which permits derogations from Article 9.
In this connexion — in so far as Article 102 of the Act of Accession is concerned — it is sufficient to point out that this provision by reason of its manifest temporal limitation — which is the issue according to Case 231/78 — may unhesitatingly be regarded as a ‘special provision’ within the meaning of Article 9 (2) of the Act of Accession. As for the rest it is, on the one hand, sufficient to reflect that in no case was there any question of obstacles to trade, that is of a breach of the important principle of the free movement of goods and, on the other hand, it is also important to bear in mind that the Court is not concerned with national measures which have been adopted unilaterally but with derogations from Community rules which the Community institutions have authorized.
So it only remains for me to conclude that, with reference to the Commission's application in its original form, the Court should declare that, by continuing to apply its national system to imports of mutton and lamb from the United Kingdom after 1 January 1978, the French Republic has failed to fulfil its obligations under Article 12 and Article 30 of the EEC Treaty.
3.
However, with reference to the Commission's application as amended during the oral procedure there still remains the question whether there are any grounds for the wider conclusion that the French import arrangements even before the expiry of the transitional period mentioned in Article 9 of the Act of Accession must be regarded as infringing the Treaty as from the various dates given by the Commission.
On this question, since the Commission is no doubt primarily concerned with adapting the legal situation in France to Community law as speedily as possible, the view might be taken that there is no point in carrying out an investigation into the more distant past. Therefore it would be possible for the question whether Article 60 (2) of the Act of Accession is a special provision for the benefit of the new Member States to remain open, because in this case it is sufficient to find that that Article could not in any case be applied after 1 January 1978 and that in consequence even if it is given a broad interpretation, France could not derive any rights from it after that date.
However if it is nevertheless desired to consider the question which has been raised the following brief observations may be made in connexion therewith.
The Commission believes that it can find support for its point of view primarily in the grounds of the Court's judgment in Case 231/78. There in fact it is stated that the Act of Accession cannot be interpreted as having established for an indefinite period in favour of the new Member States a legal position which, as far as concerns the elimination of quantitative restrictions, is different from that laid down by the Treaty for the original Member States. Reference is also made to the fact that, if Article 60 (2) were regarded as a ‘special provision’ within the meaning of Article 9 (2) of the Act of Accession, it would in effect establish a persisting inequality between the original Member States and the new Member States, the latter being in a position to prevent or restrict the importation of certain agricultural products coming from the Community, whereas the former would be obliged under the Treaty to refrain from any restriction on imports of the same products, even if they came from a new Member State which was availing itself of Article 60 (2). This part of the judgment (paragraph 17 of the decision) also states that the original Member States only accepted such inequalities on a provisional basis.
On the one hand I very much doubt however whether it is in fact possible to infer conclusively from this wording that in the Court's view Article 60 (2) of the Act of Accession in any case only applies for the benefit of the new Member States. Thus it must not be forgotten that the judgment delivered in Case 231/78 was concerned with the potato market and that there were clearly no national organizations of the market in potatoes in the old Member States; that is why it focuses attention so unequivocally on the obligations imposed on the original Member States in the Treaty. Moreover in that part of the judgment — not the operative part — reference is made, especially with regard to the interpretation of Article 60 (2) as a ‘special provision’, which is not intended to be linked to the transitional period, to ‘inequality’, since it has been established, as far as concerns the relationship of the original Member States to each other since the Charmasson judgment, that after the expiration of the transitional period they can no longer rely on national organizations of the market for the purpose of maintaining restrictions on imports. Furthermore it does not seem to me to be wrong to attribute ‘provisional inequalities’ to the fact that during the transitional period of Article 9 (2) of the Act of Accession, when in contrast the transitional period under the Treaty had already expired, obstacles to trade were only possible in the relations between the old and the new Member States but not in the case of the same products between the old Member States.
On the other hand in answer to such an attempted interpretation, apart from the fact that the need to treat old and new Member States equally was stressed in the said judgment, attention would have to be drawn to the manifestly reciprocal system of Article 60 (2) and on this point I would agree with the representative of the French Government. Unlike Article 60 (1), which plainly applies only to the new Member States, Article 60 (2) is objective in the sense that it refers to certain products, namely to those which on the date of accession were not covered by a common organization of the market. As far as concerns these products Article 60 (2) provides that the provisions of Title I concerning the progressive abolition of charges having equivalent effect to customs duty and of quantitative restrictions and measures having equivalent effect shall not apply to those charges, restrictions and measures if they form part of a national market organization on the date of accession. As a result of the foregoing, especially if the obligations deriving from Articles 35, 36 and 42, which are clearly reciprocal, are borne in mind, it becomes in my opinion clear that Article 60 (2) did not only apply unilaterally to the new Member States.
Finally the Commission's statements in Cases 118/78 and 231/78 about the history of the origin of Article 60 (2) are also still relevant. When that provision was being drawn up it was obviously the general conviction that the original Member States could retain barriers to free movement of goods arising from a national organization of the market until a common organization of the market had been set up. The situation of the new Member States had to be adjusted to that situation and, viewed in this way, Article 60 (2) was not in fact initially regarded as a transitional measure. However after it had subsequently been made clear by the Charmasson judgment delivered in 1974 that derogations from the principle of free movement of goods could be valid only during the transitional period, even if there was still no common organization of the market at the end of that period, it is impossible, if unequal treatment is to be avoided, to understand this principle in its application to the new Member States as meaning anything other than the expression ‘transitional period’ must mean that of the Act of Accession.
I therefore believe that there are no grounds for finding that France, by maintaining its own import arrangements for mutton and lamb had disregarded Community law even before 1 January 1978.
4.
I therefore propose that the Court should allow the Commission's claim in its original form and should declare that the French Republic by applying its national import arrangements to imports of mutton and lamb from the United Kingdom after 1 January 1978 has failed to fulfil its obligations under Article 12 and Article 30 of the EEC Treaty. Further in accordance with the Commission's claim the defendant should be ordered to bear the costs.
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