Order of the Court of First Instance (Third Chamber) of 15 June 2000. - Aduanas Pujol Rubio SA and Others v Council of the European Union and Commission of the European Communities. - Non-contractual liability - Single European Act - Customs agent - Action manifestly unfounded in law. - Case T-614/97.



European Court reports 2000 Page II-02387



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1. Non-contractual liability - Scope - Acts of the Community institutions or acts of servants of the Community - Meaning - Whether instruments of primary Community law are covered - Not covered - Position where damage is attributable to the Single European Act

(EC Treaty, Arts 7a (now, after amendment, Art. 14 EC) and 215, second para. (now Art. 288, second para., EC))

2. Non-contractual liability - Conditions - Legislative acts involving economic policy decisions - Sufficiently clear breach of a higher-ranking rule of law for the protection of individuals

(EC Treaty, Art. 215, second para. (now Art. 288, second para., EC))

3. Community law - Principles - Protection of legitimate expectations - Conditions

4. Non-contractual liability - Breach by the Community institutions of a legal obligation to act - Demise of the profession of customs agent as a result of the Single European Act - Obligation of the institutions to act - None - Obligation of the Community to compensate members of the profession - None

(EC Treaty, Art. 215, second para. (now Art. 288, second para., EC))

Summary

1. As regards non-contractual liability on the part of the Community, the cause of the damage suffered by customs agents resulting from the abolition of customs and tax frontiers between Member States is not attributable to the Council or the Commission. The direct and determining cause of that damage is neither the adoption of measures of secondary legislation nor the absence of adequate compensation and support measures, but Article 13 of the Single Act, which inserted in the EEC Treaty an Article 8a which later became Article 7a (now, after amendment, Article 14 EC); this provides in particular that the internal market shall comprise an area without internal frontiers. The Single Act, which was adopted by the Member States, is not, therefore, attributable to the above institutions and consequently cannot give rise to non-contractual liability on the part of the Community.

( see para. 19 )

2. The non-contractual liability of the Community for damage caused either by legislative measures adopted by its institutions or wrongful failure to adopt such measures, can only be incurred if there has been a breach of a higher-ranking rule of law for the protection of individuals. Moreover, if the institution has adopted the measure in the exercise of a broad discretion, the Community cannot be rendered liable unless the breach is clear, that is to say, if it is of a manifest and serious nature.

( see para. 24 )

3. The right to rely on the principle of the protection of legitimate expectations extends to any individual who is in a situation in which it is apparent that the Community administration has led him to entertain reasonable expectations. On the other hand, a person may not plead a breach of this principle unless the administration has given him precise assurances.

( see para. 32 )

4. Omissions by the Community institutions give rise to liability on the part of the Community only when the institutions have infringed a legal obligation to act under a provision of Community law.

Since the termination of the activities of customs agents was not attributable to either the Council or the Commission, they were under no obligation to make good the damage which might arise as a result. In particular, there is no need to consider whether there is any general principle of law by virtue of which the Community would be obliged to compensate a person who has been subject to a measure expropriating his property or restricting his freedom to enjoy his right to property since the Community cannot be obliged to make good damage caused by acts which cannot be imputed to it. It follows that the Community is not obliged to compensate members of that profession.

( see paras 21-22, 35-37 )

Parties

In Case T-614/97,

Aduanas Pujol Rubio SA, established in Barcelona, Spain, and the 115 applicants named in the annex,

represented by S. Muñoz Machado, of the Madrid Bar, with an address for service in Luxembourg at the Chambers of A. May, 398 Route d'Esch,

applicants,

v

Council of the European Union, represented by M.C. Giorgi, G. Houttuin and G.-L. Ramos Ruano, Legal Advisers, acting as Agents, with an address for service in Luxembourg at the office of A. Morbilli, General Counsel of the Legal Affairs Directorate in the European Investment Bank, 100 Boulevard Konrad Adenauer,

and

Commission of the European Communities, represented by H. van Lier, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

defendants,

APPLICATION for compensation for the damage allegedly suffered by the applicants, consisting in the costs of restructuring or liquidating their businesses, which were incurred as a result of the establishment, with effect from 1 January 1993, of the internal market in accordance with the Single European Act, and the consequent discontinuance of the activities which they had hitherto carried on as customs agents in the field of intra-Community trade,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,

Registrar: H. Jung,

makes the following

Order

Grounds

Facts giving rise to the action and legal context

1 Article 13 of the Single European Act (the Single Act), which was signed in Luxembourg on 17 February 1986 and in The Hague on 28 February 1986 and entered into force on 1 July 1987, supplemented the EEC Treaty by inserting an Article 8a, which, pursuant to paragraph 9 of Article G of the Treaty on European Union, became Article 7a of the EC Treaty (now, after amendment, Article 14 EC), which provides as follows:

The Community shall adopt measures with the aim of progressively establishing the internal market over a period expiring on 31 December 1992, in accordance with the provisions of this Article ...

The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty.

2 The completion of the internal market required the creation amongst the Member States of the EEC of an area without internal frontiers and thus entailed the abolition of tax frontiers and customs controls within the Community upon expiry of the period fixed by the abovementioned provision, that is to say by 1 January 1993.

3 The completion of the internal market was bound to have a serious effect on the continuation of certain economic activities directly connected with customs and tax controls at internal Community borders.

4 In that respect it had a particular impact on customs agents who, for reward, carry out on behalf of other persons the customs formalities required for goods to be taken across borders. Agents en douane carry out those formalities on behalf of and in the name of other persons. Commissionnaires en douane carry out the same formalities on behalf of others but in their own name.

5 The applicants claim that, as a result of the completion of the internal market with effect from 1 January 1993, and the consequent discontinuance of their activity as customs agents connected with intra-Community trade, they have incurred costs of restructuring or liquidating their businesses.

Procedure

6 Under those circumstances the applicants brought this action for damages by application lodged at the Court Registry on 31 December 1997.

7 By order of the President of the Fifth Chamber of the Court of First Instance of 29 June 1998, the proceedings in Case T-614/97 were stayed, firstly, until the Tribunal Supremo (Spanish Supreme Court) gave judgment on the actions brought before it by the applicants under numbers 372/95, 374/95, 375/95, 378/95 and 404/95 and, secondly, until the Court of Justice gave its decision terminating the related proceedings initiated by the appeal against the judgment of the Court of First Instance of 29 January 1998 in Case T-113/96 Dubois et Fils v Council and Commission [1998] ECR II-125. That judgment had dismissed an action for damages under Article 178 and the second paragraph of Article 215 of the EC Treaty (now Article 235 EC and the second paragraph of Article 288 EC) seeking compensation from the Community for the damage allegedly suffered by a French customs agent by reason of the establishment of the internal market with effect from 1 January 1993 in accordance with the Single Act, and by reason of the resulting discontinuance of the activity of customs agent in intra-Community trade.

8 By order of 8 July 1999 in Case C-95/98 P Dubois et Fils v Council and Commission [1999] ECR I-4835, the Court of Justice dismissed the appeal as being partly manifestly inadmissible and partly manifestly unfounded.

9 In view of this order, the Court of First Instance requested the parties to submit their observations on the further course of the proceedings.

10 In their observations, the applicants informed the Court that the Tribunal Supremo had dismissed their action.

Forms of order sought by the parties

11 The applicants claim that the Court should:

- resume the proceedings notwithstanding the order in the case of Dubois et Fils v Council and Commission, referred to above;

- declare the Council and the Commission liable under the second paragraph of Article 215 of the Treaty for the damage consisting in the costs of restructuring or liquidating their businesses, caused by the discontinuance of their activities as customs agents in the field of intra-Community trade with effect from 1 January 1993, the Spanish court having ruled that they could not be indemnified for such costs by the Spanish State;

- order the Council and the Commission to pay them respectively the amounts set out in the annex by way of compensation for such damage;

- order the Council and the Commission to pay the costs.

12 The Council contends that the Court should:

- rule that there is no justification for resuming the proceedings following the order in the case of Dubois et Fils v Council and Commission, referred to above;

- rule that the case should not proceed to judgment;

- order the applicants to pay the costs.

13 The Commission contends that the Court should rule that there is no justification for continuing the proceedings following the order in the case of Dubois et Fils v Council and Commission, referred to above.

Law

14 Under Article 111 of the Rules of Procedure, where an action is manifestly inadmissible or manifestly lacking any foundation in law, the Court may, by reasoned order, without taking further steps in the proceedings, give a decision on the action. In the present case, the Court considers that it has sufficient information from the documents in the file to give a decision without taking further steps in the proceedings.

15 To begin with, it must be observed that, according to settled case-law (see, in particular, the judgment in Case C-146/91 KYDEP v Council and Commission [1994] ECR I-4199, paragraph 19), the Community's non-contractual liability under the second paragraph of Article 215 of the Treaty is dependent on the coincidence of a series of conditions as regards the unlawfulness of the acts alleged against the Community institutions, the fact of damage and the existence of a causal link between the conduct of the institution and the damage complained of. If one of those conditions is not satisfied, the application must be dismissed in its entirety without it being necessary to examine the other preconditions for such liability (see the judgments in the case of KYDEP v Council and Commission, cited above, paragraph 81, and Case C-104/97 P Atlanta v Council and Commission [1999] ECR I-6983, paragraph 65).

16 The applicants state that the damage for which they seek compensation consists in the costs of restructuring or liquidating their businesses, incurred as a result of the discontinuance, with effect from 1 January 1993, of their activities as customs agents in the field of intra-Community trade. They contend that the damage has three different causes. First, it arises from the defendants' adoption of measures of secondary law which had the effect of suddenly abolishing customs formalities between Member States with effect from 1 January 1993. Second, damage has been caused by the absence of adequate compensation and support measures. Third, damage arose from the incorrect application of Council Regulation (EEC) No 3904/92 of 17 December 1992 on measures to adapt the profession of customs agent to the internal market (OJ 1992 L 394, p. 1).

17 With regard to the first two alleged causes of damage, the applicants contend that, in implementing the Single Act, the defendants ought either to have abolished customs formalities by stages or adopted compensation or support measures.

18 In essence, therefore, they contend that the defendants ought to have ensured that the discontinuance of the activity of intra-Community customs agent did not compel the members of that profession to restructure or liquidate their businesses or to bear the resulting costs.

19 In this connection, it must be observed that the termination of the applicants' activity as customs agents within the Community is the result of the abolition of customs and tax frontiers between Member States, the direct and determining cause of which is neither the adoption of measures of secondary law nor the absence of adequate compensation and support measures, but Article 13 of the Single Act, which inserted in the Treaty an Article 8a, which later became Article 7a, which provides that the internal market shall comprise an area without internal frontiers. The Single Act was adopted by the Member States. It is not therefore, attributable to the defendants and consequently cannot give rise to non-contractual liability on the part of the Community (see the order in the case of Dubois et Fils v Council and Commission, cited above, paragraphs 18 to 20).

20 As the main or only object of the applicants' businesses at the time of the completion of the internal market was to carry on intra-Community activities as customs agents, it follows that, regardless of the circumstances under which that profession was brought to an end, it was bound to give rise to restructuring or liquidation costs which are not attributable to the defendants.

21 Furthermore, the defendants had no obligation to ensure that the termination of the activity of intra-Community customs agents did not compel the applicants to restructure or liquidate their businesses or to bear the resulting costs.

22 First, as the termination of the activity in question was not attributable to the defendants, they were under no obligation to make good the damage which might arise as a result. In particular, there is no need to consider whether there is any general principle of law by virtue of which the Community would be obliged to compensate a person who has been subject to a measure expropriating his property or restricting his freedom to enjoy his right to property and breach of which would entitle him to bring an action on the basis of the second paragraph of Article 215 of the Treaty. Such an obligation to grant compensation would be conceivable only in relation to acts emanating from the Community institutions, since the Community cannot be obliged to make good damage caused by acts which cannot be imputed to it.

23 Second, the applicants' arguments concerning the illegality of the defendants' acts and omissions are manifestly unfounded in law.

24 On this point, it must be observed that, if the unlawful act complained of concerns a legislative measure, as in this case, the Community can incur liability only if there has been a breach of a higher-ranking rule of law for the protection of individuals. Moreover, if the institution has adopted the measure in the exercise of a broad discretion, the Community cannot be rendered liable unless the breach is clear, that is to say, if it is of a manifest and serious nature. These criteria also apply in the case of a wrongful omission (see the judgment in the case of Dubois et Fils v Council and Commission, cited above, paragraphs 59 and 60).

25 In the first place, the applicants claim that the measures of secondary law which had the effect of abolishing customs formalities within the Community with effect from 1 January 1993 were illegal.

26 They begin by stating that the defendants ought to have removed customs formalities only progressively over a period between the entry into force of the Single Act and 31 December 1992, the cut-off date by which the single market was to have been established. This argument is based on Article 13 of the Single Act, the first paragraph of which provides that the Community shall adopt measures with the aim of progressively establishing the internal market over a period expiring on 31 December 1992.

27 Assuming that the term progressively gives rise to a legal obligation on the defendants' part and that such obligation can be categorised as a higher-ranking rule of law for the protection of individuals, it relates to the establishment of the internal market as a whole, which presupposed the complete abolition of obstacles to the free movement of goods, persons, services and capital, and not the individual implementation of each of a very large number of specific measures requested for the purpose. Moreover the abolition of customs formalities, which was only one of those measures, necessarily presupposed the prior removal of most of those obstacles and could not therefore, in any case, take place until a late stage of the work towards the progressive establishment of the internal market.

28 The applicants also contend that, by adopting measures of secondary law with the effect of abolishing customs formalities, the defendants infringed the principle of proportionality because the hardship caused to customs agents as a profession was disproportionate.

29 In this connection it must be observed that, first, the actual fact of the discontinuance of the intra-Community activity of customs agents is not attributable to the defendants and they are not bound to made good the resulting damage. Second, as regards the circumstances of such discontinuance, it has just been observed that, as the abolition of customs formalities necessitated the removal of most of the obstacles, relating in particular to the free movement of goods, the Community had no option but to adopt measures with the object of discontinuing the said activities at a late stage of the work towards the progressive establishment of the internal market.

30 Consequently, the argument that, by adopting measures of secondary law with the effect of abolishing customs formalities, the defendants infringed the principle of proportionality is manifestly unfounded.

31 Finally, the applicants contend breach of the principle of the protection of legitimate expectations.

32 The Court observes that the right to rely on the principle of the protection of legitimate expectations extends to any individual who is in a situation in which it is apparent that the Community administration has led him to entertain reasonable expectations. On the other hand, a person may not plead a breach of this principle unless the administration has given him precise assurances (see the judgment in the case of Dubois et Fils v Council and Commission, cited above, paragraph 68).

33 In the present case, the Court finds that the applicants have adduced no evidence showing or permitting a presumption that the Community institutions led them to entertain reasonable expectations that the institutions would adopt suitable compensation or support measures.

34 Consequently the argument alleging breach of the principle of the protection of legitimate expectations is manifestly unfounded.

35 Second, the applicants complain that the defendants failed to adopt compensation measures. As the effect of this omission was that customs agents alone had to bear the cost of the beneficial effects of the establishment of the single market for the other operators in that market, this was a breach of the principles of equity and proportionality.

36 On this point, it must be observed that omissions by the Community institutions give rise to liability on the part of the Community only when the institutions have infringed a legal obligation to act under a provision of Community law (see the judgment in the case of KYDEP v Council and Commission, cited above, paragraph 58).

37 However, it has been pointed out above that the defendants had no obligation to make good the damage which may have arisen from the discontinuance of the intra-Community activity of customs agents.

38 The argument is therefore manifestly unfounded.

39 In addition, the Court finds that it is clear from a Commission Communication to the Council, the European Parliament and the Economic and Social Committee entitled Customs agents: adapting the profession to the advent of the single market [SEC (92) 887 final, the Commission Communication], that various support measures were taken in order to take account of the socio-economic consequences of the completion of the internal market for that profession.

40 Thus, after a study financed by the European Social Fund was commissioned in 1991 by the Commission (Commission Communication, pp. 6 to 11, point II), the Community adopted three categories of measures.

41 First, the European Social Fund classified customs agents as long-term unemployed, thereby enabling them to benefit from schemes for training, employment support and specific measures, including assistance with career guidance, which it funded (Commission Communication, pp. 14 to 16, point IV.1).

42 Second, the Interreg scheme supported the restructuring of the firms affected, the training and reorganisation of their staff, the conversion and refitting of goods-handling sites at frontiers and the creation of replacement jobs (Commission Communication, pp. 16 and 17, point IV.2).

43 Third, and in addition to the measures described above, which all fall under the structural funds, measures not financed under the structural funds were proposed and adopted. As one of those measures, the Council adopted Regulation No 3904/92.

44 It follows that, without being required to do so, the Community institutions adopted various support measures with the object of complementing the work of Member States.

45 With regard to the third alleged cause of damage, namely the misapplication of Regulation No 3904/92, the applicants contend, first, that in Spain the aid granted under that regulation was granted almost entirely to public authorities. Second, the conditions for the presentation of projects and the criteria for assessing them were not published.

46 On this point, it must be observed that Regulation No 3904/92, which only had the object of specifying the complementary Community measures contributing to the work undertaken by Member States (eighth recital of the regulation), merely laid down the general framework of those measures and entrusted the Member States with the implementation thereof. Accordingly, Article 2(2) of the regulation provided for the possibility of Community operations designed to assist enterprises primarily involved in carrying out intra-Community customs formalities. In particular, the grant of such assistance was conditional upon the designation by Member States of eligible areas (first paragraph of Article 3 of the regulation) and the presentation of applications for assistance by the competent authorities designated by the Member States (Article 6 of the regulation). It follows that, in each Member State, it was the duty of the State in question, not that of the Council or the Commission, to draw up lists of potentially eligible projects. The acts complained of by the applicants in relation to this aspect of the implementation of Regulation No 3904/92 in Spain are therefore not attributable to the defendants.

47 Consequently the application must be dismissed as manifestly unfounded in law.

Decision on costs

Costs

48 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings.

49 Since the applicants have been unsuccessful, they must be ordered to bear their own costs and pay those of the Council, as applied by the latter. The Commission shall bear its own costs.

Operative part

On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber)

hereby orders:

1. The action is dismissed as manifestly unfounded in law.

2. The applicants shall bear their own costs and pay those of the Council.

3. The Commission shall bear its own costs.