Opinion of Mr Advocate General Mischo delivered on 18 November 1988. - The Queen v Ministry of Agriculture, Fisheries and Food, ex parte Jaderow Ltd. - Reference for a preliminary ruling: High Court of Justice, Queen's Bench Division - United Kingdom. - Fishing - Licences - Conditions. - Case C-216/87.



European Court reports 1989 Page 04509



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1 . Whilst in the Opinion which I have just delivered in Case C-3/87 ( Agegate Ltd ) I had to examine the conditions relating to crew composition to which the grant of fishing licences is subject in the United Kingdom, I must now give my opinion on the operating conditions which British fishing vessels fishing against fishing quotas allocated to the United Kingdom must observe .

The first question

2 . The first question submitted by the Divisional Court of the Queen' s Bench Division of the High Court of Justice of England and Wales is worded as follows :

"Where a Member State grants a fishing licence to a company registered in that Member State in respect of a fishing vessel owned by that company and flying the flag of and duly registered in that Member State, and where the licence contains conditions ( all of which must be satisfied at all times ) expressed to be designed to ensure that the vessel has 'a real economic link' with the Member State in question, is a licence condition in the following form :

' The vessel must operate from the United Kingdom, Isle of Man or Channel Islands; without prejudice to the generality of this requirement a vessel will be deemed to have been so operating if, for each six-month period in each calendar year ( i.e . January to June and July to December ) either :

( a ) at least 50% by weight of the vessel' s landings or transhipment of stocks to which this or any other licence in force at the relevant time, relates have been landed and sold in the United Kingdom, Isle of Man or Channel Islands or transhipped by way of sale within British fishery limits; or

( b)other evidence is provided of the vessel' s presence in a United Kingdom, Isle of Man or Channel Islands port on at least four occasions at intervals of at least 15 days' ,

inconsistent with Community law either by reason of its terms and/or its relationship with the two other conditions of the licence ( which are the subject of Case C-3/87 ), and in particular is such a condition

( a ) inconsistent with the common structural policy of the fishing industry as set out in, inter alia, Council Regulation ( EEC ) No 101/76;

( b ) inconsistent with the common organization of the market in fishery products as set out in, inter alia, Council Regulation ( EEC ) No 3796/81;

( c ) prohibited by Articles 7, 34, 40, 48 to 51, 52 to 58 or 59 to 66 of the EEC Treaty or any of those provisions;

( d)invalid by reason of its being disproportionate, inequitable or contrary to the applicants' legitimate expectations;

( e)outside the powers of the United Kingdom or unlawful under Article 5(2 ) of Council Regulation ( EEC ) No 170/83 being by reason of the aforesaid matters contrary to applicable Community provisions?"

3 . It appears that the first sentence of the provision in question lays down a general condition ( the vessel must operate from the United Kingdom, Isle of Man or Channel Islands ) which is deemed to be fulfilled when one of the tests described in points ( a ) (" the landings test ") or ( b ) (" the presence test ") is satisfied .

4 . It is therefore necessary to examine whether that general condition is compatible with Community law . Since the test requiring the vessel to be periodically present in a United Kingdom port is very closely linked to the general condition, I shall examine it at the same time .

A -The general condition and the test requiring the periodic presence of each vessel in a port of the country of registration

5 . In point ( a ) of the second part of its question the High Court of Justice inquires whether the provisions in question are compatible with Council Regulation ( EEC ) No 101/76 of 19 January 1976 laying down a common structural policy for the fishing industry ( Official Journal L 20, 28.1.1976, p . 19 ) and, in point ( e ), whether they are still within the powers of the Member States .

6 . In its judgment of 19 January 1988 in Case 223/86 Pesca Valentia Ltd v Minister for Fisheries and Forestry, Ireland, and the Attorney General (( 1988 )) ECR 83, the Court held that, pending the entry into force of certain Community measures provided for in Regulation No 101/76,

"the Member States may apply their own rules in respect of fishing in the maritime waters coming under their sovereignty or within their jurisdiction ( Article 2 ) and define their structural policy for the fishing industry ( Article 1 ). Furthermore it should be noted that the provisions of the regulation refer to fishing vessels 'flying the flag' of a Member State or 'registered' there, leaving these terms to be defined in the legislation of the Member States .

Consequently, in the present state of Community law, the Member States have the power, in the framework of the common rules laid down by this regulation or in application of its provisions, to adopt measures regulating sea-fishing undertaken in maritime waters within their jurisdiction by vessels flying their flag ." ( Paragraphs 13 and 14 of the judgment .)

7 . Community law does not therefore restrict the power which each Member State has under public international law to determine the conditions on which it allows a vessel to fly its flag . Furthermore, Regulation No 101/76 allows the Member States to take measures regulating fishing in the maritime waters falling within their jurisdiction by vessels flying their flag . In my view, a rule which applies to the waters falling within the jurisdiction of a Member State must logically also apply to the fishing activities pursued by the same vessels in the waters of other Member States, in the waters of non-member countries and in international waters in so far as it concerns catches of fish which are to be counted against the quotas allocated in the waters in question to that State by a Community regulation .

8 . Secondly, the right of each State to define the conditions to which it subjects authorization for a vessel to fly its flag implies, in my view, the right to require the vessel in question to operate from its ports .

9 . The existence of such a right cannot, in particular, be called in question if one considers the provisions of the Geneva Convention of 29 April 1958 on the High Seas . It entered into force on 30 September 1962 and eight Member States, including the United Kingdom and Spain, have ratified it or acceded to it . Article 5 of that convention has the following wording :

"1.Each State shall fix the conditions for the grant of its nationality to ships, for the registration of ships in its territory, and for the right to fly its flag . Ships have the nationality of the State whose flag they are entitled to fly . There must exist a genuine link between the State and the ship; in particular, the State must effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag .

2 . Each State shall issue to ships to which it has granted the right to fly its flag documents to that effect ." ( My emphasis .)

10 . Article 10 of the Convention goes on to provide as follows :

"1 . Every State shall take such measures for ships under its flag as are necessary to ensure safety at sea with regard inter alia to :

( a ) the use of signals, the maintenance of communications and the prevention of collisions;

( b)the manning of ships and labour conditions for crews taking into account the applicable international labour instruments;

( c)the construction, equipment and seaworthiness of ships .

2 . In taking such measures each State is required to conform to generally accepted international standards and to take any steps which may be necessary to ensure their observance ."

11 . It appears from those provisions that a Member State may not be criticized for considering that it would be unable to carry out the prescribed verifications if each vessel was not periodically present in one of its ports .

12 . Even so, it might be objected that conditions for registration have nothing to do with conditions for granting licences . However, it is difficult to see why a Member State could not lay down, at the time of granting licences, a condition to which it could already make a vessel' s registration subject .

13 . Are the frequency of the prescribed visits ( four times every three months ) and the interval required between them ( at least 15 days ) of such a nature as to prevent such a vessel from providing services in other Member States and in particular from selling its catches in a Spanish port? That might be the case if it was physically impossible or too costly for a vessel to make the prescribed visits to a British port, to fish in waters some distance away from those ports, such as those to the west of Ireland, and to sell its catches in ports relatively far away, such as those of Spain . If that was the case, it might be a question of a measure having an effect equivalent to a quantitative restriction on exports . That is a question of fact, which only the national court can decide . In deciding that question, the United Kingdom court is fully entitled to proceed from the principle that it is normal for a British vessel to begin and end its fishing trips in a United Kingdom port . I do not share the Commission' s opinion that requiring a British vessel to visit a United Kingdom port is the same as requiring it to make a detour via Denmark .

14 . In the same context, it must be borne in mind that the aim of the system established by Regulation No 101/76 laying down a common structural policy for the fishing industry is to assure a fair standard of living for those persons who live by that industry ( fifth recital ). That category of persons may be considered to include the persons who, on shore, in the ports, provide the services which the vessels and the fishermen need, such as the sale of food and fuel, the maintenance and repair of vessels and the processing and transporting of fish .

15 . Agegate Ltd has in fact appended to its observations in Case C-3/87 voluminous documents ( affidavits, expert studies ) showing how far certain British ports, in particular Milford Haven, could develop if former Spanish fishing vessels called at them regularly . Jaderow Ltd has also appended to its observations press cuttings along the same lines . Those companies do not therefore seem to consider that the condition requiring the periodic presence of their vessels in a British port would make it impossible for them, from the economic point of view, to pursue their operations . They merely point out that the rule requiring them not to have more than 25% Spanish fishermen aboard their vessels, making them liable to penalties, prevents them from making such calls, and that the interval of 15 days which must elapse between each visit is too long .

16 . Next, it may be noted that Council Regulation ( EEC ) No 3796/81 of 29 December 1981 on the common organization of the market in fishery products ( Official Journal L 379, 31.12.1981, p . 1 ) does not contain any rule which could be said to be contravened by the British measures .

17 . It is true that, even though the regulation does not expressly mention them, the rules of the Treaty relating to the free movement of goods are automatically incorporated therein, from the expiry of the transitional period at the latest, ( 1 ) as is in fact stated in the 30th recital of the preamble to the regulation . However, it has just been seen that it is only if the national court reached the conclusion that the presence test actually prevents British vessels from selling their catches in the ports of other Member States that the test might be regarded as being contrary to Article 34 of the Treaty .

18 . Furthermore, Article 27(2 ) of Regulation No 3796/81, which was mentioned by the Commission and which provides that,

"without prejudice to other Community provisions, the Member States shall take the necessary steps to ensure that all fishing vessels flying the flag of one of the Member States enjoy equal access to ports and first-stage marketing installations together with all associated equipment and technical installations",

does not prohibit a Member State from requiring its own vessels to be regularly present in its own ports .

19 Nor can the general condition and the test regarding the periodic presence of vessels in a United Kingdom port be regarded as contrary to the articles of the Treaty prohibiting all discrimination against natural or legal persons of other Member States ( Articles 7, 48 to 51, 52 to 58 or 59 to 66 ), since those rules concern only vessels registered in the United Kingdom and belonging to United Kingdom companies .

20 As regards Article 40(3 ) of the Treaty, it cannot be applicable since the measure concerned is a national measure applying to all vessels and to all companies engaged in sea fishing in the State in question .

21 As regards the general principles of Community law referred to in point ( d ) of the second part of the national court' s question, I would make the following points .

22 The Court has held that any national authority responsible for applying Community law must observe its general principles ( see the judgment of 27 September 1979 in Case 230/78 Zuccherifici SpA and Another v Minister for Agriculture and Forestry and Others (( 1979 )) ECR 2749 ). Even if it is considered established - which may however be contested - that the general condition and the test regarding the presence of vessels in ports constitute measures adopted solely in order to implement the Community quota system, the fact remains that, according to the established case-law of the Court,

"the field of application of the principle of legitimate expectation cannot be extended to the point of generally preventing new rules from applying to the future effects of situations which arose under the earlier rules especially in a field such as the common organization of the markets, the purpose of which necessarily involves constant adjustment to the variations of the economic situations in the various agricultural sectors ".

That rule was referred to most recently in paragraph 19 of the judgment of 20 September 1988 in Case 203/86 Spain v Council, with regard to national rules antedating Spain' s accession promoting the expansion of milk production in that country when the milk quotas decided on by the Council were in future to block that expansion . I consider that those principles also apply with regard to a measure adopted in the context of rules which are related to a common organization of the markets and which are themselves also based on Article 43 of the Treaty .

23 Furthermore, the Court has stated in a staff case ( judgment of 14 June 1988 in Case 33/87 Christianos v Court of Justice (( 1988 )) ECR 2995 ) that :

"the applicant cannot rely upon the principle of legitimate expectation in order to secure the maintenance of advantages which he enjoyed under previous rules" ( paragraph 17 ) and

"an official may not rely on the principle of legitimate expectation in order to oppose the proper application of a new provision of the staff regulations" ( paragraph 23 ).

24 The applicants cannot therefore properly rely on the principle of legitimate expectation .

25 It is clear, moreover, from the foregoing that, far from the being arbitrary, the general condition and the presence test were adopted with a legitimate aim in view, namely to ensure that vessels can be subjected to the essential technical, administrative and social controls and that the fishing industry of the State whose flag they fly benefits from the economic results of their fishing activities . In so far as the presence test does not prevent catches from being sold in non-British ports, even distant ports, it cannot be regarded as being disproportionate to the objective pursued either .

26 In point ( e ) of its first question, the High Court of Justice of England and Wales also asks the Court to consider the question of the power of a Member State to adopt a measure such as that in question with reference to Article 5(2 ) of Regulation ( EEC ) No 170/83 of 25 January 1983 establishing a Community system for the conservation and management of fishery resources ( Official Journal L 24, 27.1.1983, p . 1 ).

27 Now, in my Opinion in Case C-3/87 we have just seen that under that article the Member States are in fact responsible for determining the detailed rules for the utilization of the quotas allocated to them . For the reasons which I set out in that Opinion, I consider that rules under which the catch of species subject to quotas is made subject to the condition that such operations must be carried on from a port of the country of registration come within the administration of the quotas as do rules relating to the composition of the vessels' crews, in so far as they enable the number of vessels which could fish for the species of fish subject to the quotas to be controlled .

28 If the practical details of such rules do not constitute a measure having an effect equivalent to a quantitative restriction on exports, which is a matter for the national court to determine, those rules must be considered compatible with Community law and Article 5(2 ) of Regulation No 170/83 may therefore be a proper legal basis for them, even if the Member State in question could in any event have adopted them on the basis of its power to lay down the conditions on which it allows a vessel to fly its flag .

29 It may therefore be concluded that a national provision which makes the grant of a fishing licence for a fishing vessel flying the flag of a Member State subject to the condition that, in order to be able to fish for species subject to quotas, that vessel must operate from that country and under which the vessel' s periodic presence in a port of that country is accepted as proof of compliance with that condition is not incompatible with Community law . Nor is such a condition unlawful if seen in relation with the two other conditions at issue in Case C-3/87 ( Agegate ), which I considered lawful .

B -The test relating to landings and the sale of catches

30 A vessel is also deemed to have been operating from the United Kingdom, the Isle of Man or the Channel Islands if, for each of the six-month periods in each calendar year, at least 50% by weight of the fish to which a licence relates have been landed and sold in one of those territories or transhipped by way of sale within British fishery limits .

31 I would say immediately that I consider this test incompatible with Article 34 of the Treaty relating to quantitative restrictions on exports and measures having an equivalent effect .

32 According to the established case-law of the Court,

"Article 34 of the Treaty concerns national measures which have as their specific object or effect the restriction of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member State and its export trade, in such a way as to provide a special advantage for national production or for the domestic market of the State in question ". ( 2 )

33 According to Article 4(1 ) of Regulation ( EEC ) No 802/68 of the Council of 27 June 1968 on the common definition of the concept of the origin of goods ( Official Journal, English Special Edition, 1968 ( I ), p . 165 ), "goods wholly obtained or produced in one country shall be considered as originating in that country ". As regards products of sea fishing, Article 4(2)(f ) of that regulation provides that they are to be regarded as being wholly obtained or produced in one country if they are "taken from the sea by vessels registered or recorded in that country and flying its flag ".

34 The origin of fish is thus determined on the basis of the flag or registration of the vessel which catches them . ( 3 ) Consequently, the catches of vessels flying the United Kingdom flag constitute goods of British origin and their landing and direct sale in another Member State without passing through British territory constitutes an export .

35 It follows that any obstacle to such an export is prohibited by Article 34 of the Treaty . I consider that the landings test, as laid down in this case by the United Kingdom rules, constitutes such an obstacle . The requirement that at least 50% of a British vessel' s catches must be landed and sold in the United Kingdom, the Isle of Man or the Channel Islands in a given period is in practice tantamount to prohibiting any direct exportation of that quantity of fish from the United Kingdom to other Member States . Even if the view is taken that it does not constitute a true quantitative restriction on exports because in the final analysis it does not prevent exports, it constitutes at least a measure having an equivalent effect since it makes exportation more difficult, more time-consuming and more costly .

36 I do not share the United Kingdom' s view that the operating condition has neither the purpose nor the specific effect of restricting patterns of exports and does not establish a difference in treatment between national trade and export trade . Even if the objective pursued by the United Kingdom is to make sure that the quotas allocated to it are not circumvented, the measure in question has a real and specific effect on exports which it affects directly and in a discriminatory way .

37 This fact distinguishes the present case in particular from the Groenveld, ( 4 ) Oebel ( 5 ) and Jongeneel Kaas ( 6 ) cases in which the Court did not find any breach of Article 34, although it was alleged that the national rules in question had the effect of impeding exports . First of all, in each of those cases, rules concerning the conditions of production of certain goods and not directly concerning their exportation were at issue . Secondly, in each instance the Court was able to find that those rules applied objectively to the production of the goods in question, without any distinction as to whether they were intended for the national market or for export .

38 As regards the other way of satisfying the landings test, namely transhipment by way of sale within British fishery limits, it is also of such a nature as to impede direct exports to other Member States owing to the delays and extra costs which it is likely to entail and therefore also constitutes a measure having an equivalent effect, prohibited under Article 34 of the Treaty .

39 It therefore remains to examine whether, as with the residence condition in Case C-3/87 Agegate, the need to restrict access to a Member State' s fishing quotas to the population of that Member State who live by the fishing industry does not constitute a legitimate objective such as to justify a possible derogation from one of the fundamental rules of the Community, in this case the rule prohibiting in intra-Community trade all quantitative restrictions on exports and all measures having equivalent effect .

40 I unequivocally favour a negative reply to that question, for the following reasons .

41 First, the condition that 75% of the fishermen fishing against the quotas of a Member State must ordinarily reside in that Member State and the rule requiring a vessel' s periodic presence in a port of that country seem to me sufficient to ensure that the benefit of that Member State' s quota actually goes to those truly forming part of that Member State' s fishing Community . To require in addition that a specific proportion of the catches of those fishermen must be landed and sold in that Member State goes beyond what is necessary for achieving the objective pursued . The fact that in the last resort the United Kingdom does not prohibit exports and that the landings test relates only to 50% of a vessel' s catches provides a contrario evidence .

42 Secondly, Article 6(1 ) of Council Regulation ( EEC ) No 2241/87 of 23 July 1987 establishing certain control measures for fishing activities ( Official Journal L 207, 29.7.1987, p . 1 ), which repealed and replaced Regulation ( EEC ) No 2057/82 of 29 June 1982 ( Official Journal L 220, 29.7.1982, p . 1 ) and which is based on Article 11 of Regulation No 170/83, provides that : "At the time of landing after each voyage, the skipper of each fishing vessel, the length of which is over 10 m, flying the flag of, or registered in, a Member State or his agent shall submit to the authorities of the Member States whose landing places he uses a declaration, for the accuracy of which the skipper shall be held primarily responsible, indicating, as a minimum, for each stock or group of stocks subject to a TAC or quota, the quantities landed and indicating the location of catches by reference to the smallest zone for which a TAC or quota has been fixed and administered ".

43 Article 7 of Regulation No 2241/87 also requires the skipper of a fishing vessel flying the flag of a Member State to inform the authorities of that Member State of transhipment or landing operations, whatever the place of landing and even if it is situated outside the territory of the Community . In the case of a transhipment taking place in a port or in the maritime waters subject to the sovereignty or jurisdiction of a Member State, the skipper of the receiving vessel must also inform the competent authorities of the Member State in question about the transhipment .

44 It follows from those provisions that the quota system itself expressly provides for the right of a fishing vessel, first, to land its catches in Member States other than that whose flag it flies, as well as directly in a non-member country, and, secondly, to tranship them in a port or in the maritime waters falling within the jurisdiction of such another Member State .

45 I therefore consider that a Member State is not entitled to rely on the necessity to restrict "its" quotas to "its" fishermen so as to prevent vessels flying its flag from landing their catches in other Member States or from transhipping them in the ports and maritime waters falling within the jurisdiction of other Member States .

46 For the sake of completeness, I would also point out that I do not consider relevant the reference made by the United Kingdom in this context to the judgment of 14 July 1976 in Joined Cases 3, 4 and 6/6 Cornelis Kramer and Others (( 1976 )) ECR 1279, in which the Court justified the reduction in intra-Community trade that the fixing of catch quotas is likely to entail in the short term by the long-term effects which such measures necessarily have on trade . ( 7 ) Whereas in Kramer the fishing quotas themselves were at issue in so far as, owing to the restriction of fishing efforts which they entail, they reduce the quantities of fish available and thus the quantities which can be traded, in the present case the United Kingdom rules accentuate that reduction in the "production" of fish so as to restrict trade in the quantities of fish actually caught .

47 On the basis of all the foregoing considerations I propose that the first question should be answered as follows :

"Community law does not prohibit a Member State from making the grant of fishing licences for vessels which are entered in its registers and whose catches are counted against the quotas allocated to it subject to the condition that those vessels must operate from the State in question and that they must be periodically present in a port of that State .

However, Article 34 of the EEC Treaty must be construed as precluding a Member State from making the grant of a fishing licence subject to the condition that at least 50% by weight of the fish for the catching of which the licence was granted must be landed in a port of the Member State whose flag the vessel flies or that the same percentage of catches must be transhipped by way of sale within the fishery limits of that Member State ."

The second question

48 By its second question the national question inquires in substance whether the competent authorities of the Member State in question are entitled to disregard, as far as compliance with the operating condition is concerned, all other evidence of economic, financial and fiscal links between the vessel, its owners and managers and the Member State in question .

49 That question was raised because the company Jaderow Ltd, the applicant in the main proceedings, considers that the existence of a genuine link or a real economic link between the vessel and the Member State of registration is sufficiently proved by the owning company' s domiciliation of the vessel or vessels in the United Kingdom and by the fact that taxes on profits and VAT are paid in that country .

50 There is no doubt that all those factors are evidence of the existence of economic links between the United Kingdom and the vessels in question but it appears simply from reading Article 5 of the Convention on the High Seas that the Member State in question cannot be criticized for taking the view that those factors alone do not enable it effectively to exercise its jurisdiction and supervision in technical, administrative and social matters over vessels flying its flag .

51 It must not be forgotten in this regard that the countries which offer so-called flags of convenience also require companies owning vessels registered with them to have their registered office in their own country and to pay there the taxes laid down by the law .

I therefore propose that the second question should be answered as follows :

"The fact that the authorities of a Member State apply the operating condition so as to exclude consideration of other factors which may be evidence of economic, financial and fiscal links between the vessel, its owners and the Member State in question does not affect the compatibility of the condition in question with Community law ."

(*) Original language : French .

( 1 ) See in this regard the judgment of 14 July 1976 in Joined Cases 3, 4 and 6/76 Kramer and Others (( 1976 )) ECR 1279, paragraph 54 .

( 2 ) See the judgment of 7 February 1984 in Case 237/83 Jongeneel Kaas v Netherlands (( 1984 )) ECR 483, paragraph 22 .

( 3 ) Judgment of 28 March 1985 in Case 100/84 Commission v United Kingdom (( 1985 )) ECR 1169, paragraph 18 .

( 4 ) Judgment of 8 November 1979 in Case 15/79 Groenveld v Produktschap voor Vee en Vlees (( 1979 )) ECR 3409 .

( 5 ) Judgment of 14 July 1981 in Case 155/80 Oebel (( 1981 )) ECR 1993 .

( 6 ) Judgment of 7 February 1984 in Case 237/83 Jongeneel Kaas v Netherlands (( 1984 )) ECR 483 .

( 7 ) See also in this regard the judgment of 16 June 1987 in Case 46/86 Romkes (( 1987 )) ECR 2671, paragraph 24 .