Judgment of the Court of 9 July 1970. - Commission of the European Communities v French Republic. - Case 26-69.



European Court reports 1970 Page 00565

Danish special edition Page 00097

Greek special edition Page 00383

Portuguese special edition Page 00427



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

++++

1 . ACTION FOR FAILURE OF A STATE TO FULFIL ITS OBLIGATIONS - ADMISSIBILITY - FAILURE ALREADY ENDED WHEN ACTION BROUGHT - LEGAL INTEREST IN THE ACTION

( EEC TREATY, ARTICLE 169 )

2 . AGRICULTURE - COMMON AGRICULTURAL POLICY - COMMON ORGANIZATION OF THE MARKETS - MARKETS IN OILS AND FATS - DISTINCTION FROM CUSTOMS TREATMENT

( EEC TREATY, ARTICLE 40; REGULATION NO 136/66/EEC OF 22 SEPTEMBER 1966 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKETS IN OILS AND FATS )

3 . " PROTOCOL 1.7 " ANNEXED TO THE EEC TREATY - EXEMPTION FROM CUSTOMS DUTIES - RELATIONSHIP TO THE COMMON ORGANIZATION OF THE AGRICULTURAL MARKETS AND THE COMMON COMMERCIAL POLICY - NEW SITUATION IMPEDING THE APPLICATION OF " PROTOCOL 1.7 " - NECESSITY FOR ADAPTATION - OBJECTIONS ON THE MEMBER STATE CONCERNED, THE COMMISSION AND THE COUNCIL - EQUIVOCAL SITUATION CREATED BY THE INACTION OF THE INSTITUTIONS AND THE SILENCE OF THE REGULATION - FAILURE NOT PROVED

( PROTOCOL ON GOODS ORIGINATING IN AND COMING FROM CERTAIN COUNTRIES AND ENJOYING SPECIAL TREATMENT WHEN IMPORTED INTO A MEMBER STATE, KNOWN AS " PROTOCOL 1.7 " )

Summary

1 . THE COURT, ALTHOUGH NOT IN A POSITION TO DETERMINE HOW FAR IT IS EXPEDIENT FOR THE COMMISSION TO BRING AN ACTION UNDER ARTICLE 169 OF THE EEC TREATY, MAY CONSIDER WHETHER, HAVING REGARD TO THE CIRCUMSTANCES THE COMMISSION HAS A SUFFICIENT LEGAL INTEREST . THIS INTEREST MAY CONTINUE EVEN THOUGH AT THE TIME WHEN THE ACTION WAS BROUGHT THE ALLEGED FAILURE HAS VIRTUALLY CEASED .

2 . REGULATION NO 136/66 IMPLEMENTING ARTICLE 40 OF THE TREATY, ESTABLISHED A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS BASED ON A PRICE POLICY WHICH IS DETERMINED IN ACCORDANCE WITH A NUMBER OF OBJECTIVES CONCERNING THE LEVEL OF AGRICULTURAL INCOME, THE PUTTING INTO EFFECT OF A COHERENT PRODUCTION POLICY, COMPETITIVE CONDITIONS OF TRADE IN THE DIFFERENT PRODUCTS, THE STABILIZATION OF THE MARKETS AND THE FIXING OF AN APPROPRIATE PRICE LEVEL TO CONSUMERS . THIS POLICY IS PUT INTO EFFECT BY MEANS OF A COMPLEX SYSTEM OF STEPS INVOLVING PURCHASE, STORAGE AND SALES BY INTERVENTION AGENCIES, A SET OF REGULATIONS ON IMPORTS BY MEANS OF A SYSTEM OF LEVIES AND REFUNDS, AS WELL AS MEASURES FOR RESTORING THE BALANCE AND PROTECTIVE MEASURES IN CASE OF DISTURBANCES AFFECTING THE MARKET IN QUESTION . THE INTERVENTION AND PROTECTION TECHNIQUE UNDER REGULATION NO 136/66 IS DIFFERENT FROM SYSTEMS BASED EXCLUSIVELY ON THE APPLICATION OF CUSTOMS DUTIES BOTH IN ITS AIM AND IN THE MEANS WHICH IT EMPLOYS .

3 . THE PROTOCOL ON GOODS ORIGINATING IN AND COMING FROM CERTAIN COUNTRIES AND ENJOYING SPECIAL TREATMENT WHEN IMPORTED INTO A MEMBER STATE, ANNEXED TO THE EEC TREATY, HAS THE PURPOSE OF PRESERVING EXISTING PATTERNS OF TRADE BETWEEN CERTAIN MEMBER STATES AND CERTAIN THIRD COUNTRIES . AFTER THE ENTRY INTO FORCE OF REGULATION NO 136/66 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS THE OBJECTIVE OF PROTOCOL I.7 CAN HOWEVER BE ACHIEVED AS REGARDS THE IMPORTATION OF OLIVE OIL BY MEANS WHICH ARE IN CONFORMITY WITH THE NEW SITUATION CREATED BY THE SAID REGULATION AND COMPATIBLE WITH THE PRINCIPLES UNDERLYING THE COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS .

WHILST NOT EXCLUDING ANY STEPS TAKEN BY THE MEMBER STATE HOLDING THE RIGHTS RESERVED UNDER PROTOCOL I.7, SUCH AN ADAPTATION COULD ONLY BE THE TASK OF THE COMMUNITY INSTITUTIONS COMPETENT TO IMPLEMENT THE COMMON AGRICULTURAL POLICY AND TO REGULATE THE COMMUNITY' S RELATIONSHIP WITH THIRD COUNTRIES . SINCE THE SILENCE OF REGULATION NO 136/66 ON THIS POINT HAS CREATED AN EQUIVOCAL SITUATION, A FAILURE TO FULFIL ITS OBLIGATIONS CANNOT BE ALLEGED AGAINST A MEMBER STATE WHICH HAS EXCLUDED FROM THE APPLICATION OF THE LEVY INTRODUCED BY THE SAID REGULATION IMPORTS OF OLIVE OIL WHICH HAVE PREVIOUSLY BENEFITED FROM THE PREFERENCE UNDER PROTOCOL I.7 .

Parties

IN CASE 26/69

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, GEORGES LE TALLEC, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF ITS LEGAL ADVISER, EMILE REUTER, 4 BOULEVARD ROYAL, APPLICANT,

V

FRENCH REPUBLIC, REPRESENTED BY RENAUD SIVAN, AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY AND GUY DE LACHARRIERE, MINISTER PLENIPOTENTIARY, DIRECTOR OF LEGAL SERVICES AT THE MINISTRY FOR FOREIGN AFFAIRS, ACTING AS AGENTS, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE EMBASSY OF THE FRENCH REPUBLIC, DEFENDANT,

Subject of the case

APPLICATION FOR A DECLARATION THAT THE FRENCH REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS BY EXEMPTING FROM PAYMENT OF THE LEVY, WITHIN THE LIMIT OF A QUOTA FIXED ANNUALLY, IMPORTS OF OLIVE OIL ORIGINATING IN AND COMING FROM TUNISIA,

Grounds

1 BY APPLICATION OF 14 JUNE 1969 THE COMMISSION HAS BROUGHT BEFORE THE COURT UNDER ARTICLE 169 OF THE EEC TREATY AN ACTION WITH A VIEW TO ESTABLISHING A FAILURE ON THE PART OF THE FRENCH REPUBLIC TO FULFIL ITS OBLIGATIONS UNDER REGULATION NO 136/66/EEC OF THE COUNCIL OF 22 SEPTEMBER 1966 ( OJ 1966, P . 3025; OJ 1965-1966, ( ENGLISH SPECIAL EDITION NOVEMBER 1972 ) P . 221 ) ON THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS, BY EXCLUDING FROM THE APPLICATION OF THE LEVY WITHIN THE LIMITS OF A QUOTA FIXED ANNUALLY IMPORTS OF OLIVE OIL ORIGINATING IN AND COMING FROM TUNISIA .

I - THE LEGAL INTEREST IN TAKING PROCEEDINGS

2 PRIOR TO THE ENTRY INTO FORCE OF REGULATION NO 136/66, IMPORTS INTO FRANCE OF TUNISIAN OLIVE OIL ENJOYED AN EXEMPTION FROM CUSTOMS DUTIES UNDER THE PROVISIONS OF THE PROTOCOL ON GOODS ORIGINATING IN AND COMING FROM CERTAIN COUNTRIES AND ENJOYING SPECIAL TREATMENT WHEN IMPORTED INTO A MEMBER STATE, ANNEXED TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY ( KNOWN AS " PROTOCOL I.7 " ).

3 AFTER THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS UNDER THE PROVISIONS OF THE SAID REGULATION THE FRENCH GOVERNMENT, RELYING ON PROTOCOL I.7 EXCLUDED SUCH IMPORTS FROM THE APPLICATION OF THE LEVY .

4 AS A RESULT OF THE FIRST MEASURES PUBLISHED TO THIS EFFECT IN THE JOURNAL OFFICIEL OF THE FRENCH REPUBLIC THE COMMISSION BY LETTER OF 1 AUGUST 1967 ADDRESSED TO THE FRENCH MINISTER FOR FOREIGN AFFAIRS RAISED OBJECTIONS AND GAVE THE DEFENDANT AN OPPORTUNITY TO SUBMIT ITS OBSERVATIONS UNDER ARTICLE 169 OF THE TREATY .

5 THE TREATMENT IN QUESTION HAVING BEEN EXTENDED BY A NOTICE PUBLISHED IN THE JOURNAL OFFICIEL OF THE FRENCH REPUBLIC, THE COMMISSION ON 3 MAY 1968 DELIVERED A REASONED OPINION IN WHICH IT FOUND THAT THERE HAD BEEN A FAILURE TO COMPLY WITH THE TREATY AND REQUIRED THAT THE MATTER BE RECTIFIED WITHIN A PERIOD OF ONE MONTH .

6 THIS ACT ON THE PART OF THE COMMISSION WAS FOLLOWED BY THE PUBLICATION OF A NEW NOTICE IN THE JOURNAL OFFICIEL OF THE FRENCH REPUBLIC CONTINUING THE SAME TREATMENT IN RESPECT OF THE YEAR 1969 .

7 AN ASSOCIATION AGREEMENT BETWEEN THE COMMUNITY AND THE TUNISIAN REPUBLIC SIGNED IN TUNIS ON 28 MARCH 1969 CAME INTO FORCE ON 1 SEPTEMBER 1969 ( OJ L 198, P . 1 ).

8 WITH A VIEW TO CARRYING THIS AGREEMENT INTO EFFECT REGULATION NO 1471/69/CEE OF THE COUNCIL ( OJ L 198, P . 93 ) WAS ADOPTED ON 23 JULY 1969 ON IMPORTS OF OLIVE OIL FROM TUNISIA .

9 IT THUS APPEARS THAT THE ACTION WAS BROUGHT BY THE COMMISSION JUST AT A TIME WHEN THE FAILURE ALLEGED AGAINST THE DEFENDANT HAD VIRTUALLY CEASED THROUGH THE SUBSTITUTION FOR THE TREATMENT ON IMPORTATION IN FORCE IN THE FRENCH REPUBLIC OF THE TREATMENT PROVIDED FOR UNDER ARTICLE 5 OF ANNEX I TO THE ASSOCIATION AGREEMENT .

10 IN THESE CIRCUMSTANCES THE COURT, ALTHOUGH NOT IN A POSITION TO DETERMINE HOW FAR IT WAS EXPEDIENT FOR THE COMMISSION TO BRING THE ACTION UNDER ARTICLE 169, MUST CONSIDER WHETHER THE COMMISSION STILL HAS A SUFFICIENT LEGAL INTEREST .

11 EVEN BEFORE THE ACTION WAS BROUGHT THE COMMISSION' S ATTITUDE WAS SET OUT IN THE LETTER OF 1 AUGUST 1967 AND THE REASONED OPINION OF 3 MAY 1968 AND THE TIME-LIMIT LAID DOWN BY THIS OPINION EXPIRED AT A TIME WHEN THE FAILURE COMPLAINED OF WAS STILL CONTINUING .

12 IN AN EXCHANGE OF LETTERS CONTEMPORANEOUS WITH THE SIGNING OF THE ASSOCIATION AGREEMENT IT IS ON THE OTHER HAND EXPRESSLY PROVIDED THAT AS REGARDS THE PRODUCTS LISTED IN ANNEXES I AND II TO THE AGREEMENT - WHICH INCLUDE OLIVE OIL - THE APPLICATION OF PROTOCOL I.7 IS ONLY SUSPENDED FOR THE DURATION OF THE AGREEMENT, WHICH WAS ENTERED INTO FOR A PERIOD OF FIVE YEARS AND " SHALL AGAIN TAKE EFFECT WHEN THE LATTER IS NO LONGER IN FORCE ".

13 FINALLY, IN VIEW OF THE IMPORTANCE OF THE PROBLEMS RAISED BY THE APPLICATION OF PROTOCOL I.7 FROM THE POINT OF VIEW BOTH OF THE COMMON ORGANIZATION OF AGRICULTURAL MARKETS AND OF THE COMMON COMMERCIAL POLICY, THERE CAN BE NO DOUBT AS TO THE LEGAL INTEREST IN THE ACTION BROUGHT BY THE COMMISSION .

II - THE SUBSTANCE

14 IN THE COMMISSION' S VIEW THE INTRODUCTION BY MEANS OF REGULATION NO 136/66 OF A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS, CHARACTERIZED IN PARTICULAR BY THE COLLECTION OF LEVIES, PUT AN END TO THE " CUSTOMS TREATMENT " APPLICABLE UNDER PROTOCOL I.7 TO IMPORTS INTO FRANCE OF OLIVE OIL ORIGINATING IN TUNISIA .

15 THE DEFENDANT RELIES ON THE SAME PROTOCOL, HAVING REGARD TO ITS PURPOSE, IN ORDER TO JUSTIFY THE CONTINUATION OF A SYSTEM OF EXEMPTION IN FAVOUR OF SUCH IMPORTS NOTWITHSTANDING THE INTRODUCTION OF A LEVY BY REGULATION 136/66, UNTIL THE ENTRY INTO FORCE OF THE PROVISIONS OF THE ASSOCIATION AGREEMENT BETWEEN THE COMMUNITY AND THE TUNISIAN REPUBLIC .

16 PROTOCOL I.7 HAS THE PURPOSE OF PRESERVING EXISTING PATTERNS OF TRADE BETWEEN ON THE ONE HAND CERTAIN MEMBER STATES AND ON THE OTHER HAND VARIOUS THIRD COUNTRIES WITH WHICH THESE STATES MAINTAIN TRADITIONAL LINKS .

17 AS REGARDS MORE PARTICULARLY THE INDEPENDENT COUNTRIES BELONGING TO THE FRANC AREA - INCLUDING THE TUNISIAN REPUBLIC - A DECLARATION OF INTENT ANNEXED TO THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY, AFTER EXPRESSING THE ANXIETY " TO MAINTAIN AND INTENSIFY THE TRADITIONAL TRADE FLOWS BETWEEN THE MEMBER STATES OF THE EUROPEAN ECONOMIC COMMUNITY AND THESE INDEPENDENT COUNTRIES AND TO CONTRIBUTE TO THE ECONOMIC AND SOCIAL DEVELOPMENT OF THE LATTER ", OFFERS THESE COUNTRIES NEGOTIATIONS WITH A VIEW TO CONCLUDING CONVENTIONS FOR ECONOMIC ASSOCIATION WITH THE COMMUNITY .

18 IT THEREFORE SEEMS THAT THE INTENTION ENVINCED BY THE FRENCH GOVERNMENT OF AVOIDING ANY MEASURE WHICH MIGHT HAVE LED TO A DETERIORATION OF COMMERCIAL RELATIONS WITH TUNISIA IN THE SECTOR IN QUESTION IN THE PRESENT ACTION, IS BASED ON THE OBJECTIVES OF BOTH PROTOCOL I.7 AND THE AFOREMENTIONED DECLARATION OF INTENT .

19 NEVERTHELESS, AFTER THE ENTRY INTO FORCE OF REGULATION NO 136/66 THIS OBJECTIVE COULD ONLY BE ACHIEVED BY MEANS WHICH ARE IN CONFORMITY WITH THE NEW SITUATION CREATED BY THAT REGULATION .

20 REGULATION NO 136/66 IMPLEMENTING ARTICLE 40 OF THE TREATY, ESTABLISHED A COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS BASED ON A PRICE POLICY WHICH IS DETERMINED IN ACCORDANCE WITH A NUMBER OF OBJECTIVES CONCERNING THE LEVEL OF AGRICULTURAL INCOME, THE PUTTING INTO EFFECT OF A COHERENT PRODUCTION POLICY, COMPETITIVE CONDITIONS OF TRADE IN THE DIFFERENT OILS AND FATS, THE STABILIZATION OF THE MARKETS AND THE FIXING OF AN APPROPRIATE PRICE LEVEL TO CONSUMERS .

21 THIS POLICY IS PUT INTO EFFECT BY MEANS OF A COMPLEX SYSTEM OF STEPS INVOLVING PURCHASES, STORAGE AND SALES BY INTERVENTION AGENCIES, A SET OF REGULATIONS ON IMPORTS AND EXPORTS BY MEANS OF A SYSTEM OF LEVIES AND REFUNDS, AS WELL AS MEASURES FOR RESTORING THE BALANCE AND PROTECTIVE MEASURES IN CASE OF DISTURBANCES AFFECTING THE MARKET IN QUESTION .

22 UNDER THE PROVISIONS OF ARTICLE 3 ( 2 ) OF REGULATION NO 136/66, SAVE IN CASE OF EXPRESS DEROGATION, " THE LEVYING OF ANY CUSTOMS DUTY " IS INCOMPATIBLE WITH THE PROVISIONS OF THAT REGULATION .

23 IT THEREFORE SEEMS THAT THE INTERVENTION AND PROTECTION TECHNIQUE UNDER REGULATION NO 136/66 IS DIFFERENT FROM THE SYSTEMS OF CUSTOMS TREATMENT UNDER PROTOCOL I.7 BOTH IN ITS AIM AND IN THE MEANS WHICH IT EMPLOYS .

24 THIS INNOVATION WHICH RESULTS FROM THE EXTENSION OF THE COMMON AGRICULTURAL POLICY TO THE SECTOR IN QUESTION NO LONGER ALLOWS THE MERE APPLICATION OF DUTY-FREE IMPORT, CONCEIVED FOR THE PURPOSE OF A SYSTEM OF PROTECTION BASED EXCLUSIVELY ON THE APPLICATION OF CUSTOMS DUTIES, WITHOUT REGARD TO ANY ORGANIZATION OF THE MARKET .

25 IN THESE CIRCUMSTANCES, THE PURPOSE OF PROTOCOL I.7 HAD TO BE ACHIEVED, AS FROM THE ENTRY INTO FORCE OF REGULATION NO 136/66 BY MEANS OF PROVISIONS COMPATIBLE WITH THE PRINCIPLES FORMING THE BASIS OF THE COMMON ORGANIZATION OF THE MARKET IN OILS AND FATS .

26 CONSEQUENTLY THE EXERCISE OF RIGHTS RESERVED TO THE FRENCH REPUBLIC BY PROTOCOL I.7 HAD TO BE ADAPTED TO THE NEW ORGANIZATIONAL TECHNIQUE INTRODUCED BY REGULATION NO 136/66 .

27 WHILST NOT EXCLUDING ANY STEPS TAKEN BY THE MEMBER STATE HOLDING THE RIGHTS RESERVED BY PROTOCOL I.7, SUCH AN ADAPTATION COULD ONLY BE THE TASK OF THE COMMUNITY INSTITUTIONS COMPETENT TO IMPLEMENT THE COMMON AGRICULTURAL POLICY AND TO REGULATE THE COMMUNITY' S RELATIONSHIP WITH THIRD COUNTRIES, TAKING INTO ACCOUNT THE COMMON NATURE OF THE ORGANIZATION FOR THE SECTOR OF THE MARKET IN QUESTION AND THE CONSEQUENCES, BOTH COMMERCIAL AND FINANCIAL, WHICH AFFECT THE WHOLE COMMUNITY BY ANY DEROGATION FROM THE PRINCIPLES OF THE REGULATION .

28 IT WOULD THEREFORE HAVE BEEN THE COMMISSION' S TASK TO SUGGEST AND THE COUNCIL' S TO ENACT, AT THE TIME WHEN REGULATION NO 136/66 WAS ADOPTED, EXPRESS PROVISIONS FOR THE PURPOSE OF REGULATING THE PROBLEM RESULTING FROM THE EFFECT UPON THE PREFERENCE UNDER PROTOCOL I.7 OF THE NEW LEGAL SITUATION CREATED BY THE ORGANIZATION OF THE MARKET IN OILS AND FATS .

29 SUCH PROVISIONS APPEAR ALL THE MORE NECESSARY SINCE THE AUTHORS OF REGULATION NO 136/66 MUST HAVE KNOWN THAT AN ASSOCIATION AGREEMENT WITH THE TUNISIAN REPUBLIC WAS ENVISAGED BY WHICH THE PREFERENCE IN FAVOUR OF IMPORTS OF OLIVE OIL WOULD IN SOME MEASURE BE CONTINUED .

30 IN THESE CIRCUMSTANCES IT WOULD HAVE BEEN ADVISABLE TO ADOPT CERTAIN DEROGATIONS FROM REGULATION NO 136/66 IN RESPECT OF THE INTERIM PERIOD BETWEEN THE INTRODUCTION OF THE ORGANIZATION OF THE MARKET IN OILS AND FATS AND THE ENTRY INTO FORCE OF THE ASSOCIATION AGREEMENT .

31 THE FACT THAT REGULATION NO 136/66 IS SILENT ON THE POINT MAY HAVE GIVEN RISE TO THE QUESTION WHETHER THE UNCHANGED EXERCISE OF THE RIGHTS DERIVING FROM PROTOCOL I.7 WAS, AT ANY RATE PROVISIONALLY, COMPATIBLE WITH THE PROVISIONS OF THAT REGULATION .

32 BEARING IN MIND THE EQUIVOCAL NATURE OF THE SITUATION THUS BROUGHT ABOUT, THE FRENCH REPUBLIC CANNOT BE ACCUSED OF ANY FAILURE TO FULFIL ITS OBLIGATIONS .

33 THE APPLICATION BROUGHT BY THE COMMISSION MUST THEREFORE BE REJECTED AS NOT SUFFICIENTLY WELL FOUNDED .

Decision on costs

34 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE, THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .

35 THE COMMISSION HAS FAILED IN ITS SUBMISSIONS .

Operative part

THE COURT,

HEREBY :

1 . DISMISSES THE APPLICATION;

2 . ORDERS THE COMMISSION OF THE EUROPEAN COMMUNITIES TO PAY THE COSTS .