Judgment of the Court (Sixth Chamber) of 11 February 1988. - The Queen v H. M. Commissioners of Customs and Excise, ex parte: The National Dried Fruit Trade Association. - Reference for a preliminary ruling: High Court of Justice, Queen's Bench Division - United Kingdom. - Dried grapes - Protective measures. - Case 77/86.



European Court reports 1988 Page 00757



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES - PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF DRIED FRUIT - FIXED-RATE COUNTERVAILING CHARGE BASED ON THE LOWEST WORLD-MARKET PRICE - NOT PERMITTED

( COUNCIL REGULATION NOS 516/77 AND 521/77; COMMISSION REGULATION NO 2742/82 )

Summary

COUNCIL REGULATION NO 521/77 EMPOWERS THE COMMISSION TO ESTABLISH, AS A PROTECTIVE MEASURE APPLICABLE TO THE IMPORTATION OF DRIED GRAPES INTO THE COMMUNITY, A MINIMUM IMPORT PRICE WHICH MAY EVEN EXCEED THE PRICES CHARGED WITHIN THE COMMUNITY, TOGETHER WITH A COUNTERVAILING CHARGE DESIGNED TO ENFORCE IT; THE QUESTION WHAT FORM THE DETAILED RULES MAY TAKE DEPENDS ON THE CIRCUMSTANCES .

BY ESTABLISHING IN REGULATION NO 2742/82 A COUNTERVAILING CHARGE AT A FIXED RATE EQUAL TO THE DIFFERENCE BETWEEN THE MINIMUM PRICE AND THE LOWEST WORLD-MARKET PRICE, HOWEVER, THE COMMISSION HAS EXCEEDED ITS POWERS; SUCH A RULE, WHICH WAS NOT NECESSARY TO AVERT DISTURBANCES ON THE COMMUNITY MARKET, HAS THE EFFECT OF INFLICTING AN ECONOMIC PENALTY ON A TRADER WHO HAS IMPORTED GOODS AT A PRICE WHICH, ALTHOUGH LOWER THAN THE MINIMUM PRICE, IS PERHAPS VERY CLOSE TO IT, WHEREAS THE AIM OF THE COUNTERVAILING CHARGE IS SOLELY TO ENFORCE THE MINIMUM PRICE SO AS TO ENSURE COMMUNITY PREFERENCE .

Parties

IN CASE 77/86

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE QUEEN' S BENCH DIVISION OF THE HIGH COURT OF JUSTICE OF ENGLAND AND WALES FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

THE QUEEN

AND

H . M . COMMISSIONERS OF CUSTOMS AND EXCISE, EX PARTE THE NATIONAL DRIED FRUIT TRADE ASSOCIATION,

ON THE VALIDITY OF COMMISSION REGULATION ( EEC ) NO 2742/82 OF 13 OCTOBER 1982 ON PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF DRIED GRAPES ( OFFICIAL JOURNAL 1982, L 290, P . 28 ), COUNCIL REGULATION ( EEC ) NO 2089/85 OF 23 JULY 1985 ESTABLISHING GENERAL RULES RELATING TO THE SYSTEM OF MINIMUM IMPORT PRICES FOR DRIED GRAPES ( OFFICIAL JOURNAL 1985, L 197, P . 10 ), COMMISSION REGULATION

( EEC ) NO 2237/85 OF 30 JULY 1985 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF THE MINIMUM IMPORT PRICE SYSTEM FOR DRIED GRAPES ( OFFICIAL JOURNAL 1985, L 209, P . 24 ) AND COMMISSION REGULATION ( EEC ) NO 2238/85 OF 31 JULY 1985 FIXING THE MINIMUM PRICE APPLICABLE TO DRIED GRAPES DURING THE MARKETING YEAR 1985/86 AS WELL AS THE COUNTERVAILING CHARGES TO BE IMPOSED WHERE THAT PRICE IS NOT OBSERVED, AND AMENDING COUNCIL REGULATION ( EEC ) NO 950/68 ( OFFICIAL JOURNAL 1985, L 209, P . 26 ),

THE COURT ( SIXTH CHAMBER ),

COMPOSED OF : G . C . RODRIGUEZ IGLESIAS, PRESIDENT OF THE FOURTH CHAMBER, ACTING AS PRESIDENT OF THE SIXTH CHAMBER, T . KOOPMANS, K . BAHLMANN, C . KAKOURIS AND T . F . O' HIGGINS, JUDGES,

ADVOCATE GENERAL : SIR GORDON SLYNN

REGISTRAR : D . LOUTERMAN, ADMINISTRATOR

AFTER CONSIDERING THE OBSERVATIONS SUBMITTED IN THE WRITTEN AND THE ORAL PROCEDURE ON BEHALF OF

THE NATIONAL DRIED FRUIT TRADE ASSOCIATION, THE DEFENDANT IN THE MAIN PROCEEDINGS, BY DAVID VAUGHAN QC, AND GERALD BARLING, BARRISTER, ACTING AS AGENTS,

THE COMMISSION OF THE EUROPEAN COMMUNITIES, BY D . GRANT LAWRENCE, A MEMBER OF ITS LEGAL DEPARTMENT, ACTING AS AGENT,

THE COUNCIL OF THE EUROPEAN COMMUNITIES, BY JOHN CARBERY, ADVISER IN THE LEGAL SERVICE OF THE GENERAL SECRETARIAT OF THE COUNCIL, ACTING AS AGENT,

THE GOVERNMENT OF THE HELLENIC REPUBLIC, BY FOTIS M . SPATHOPOULOS, LEGAL ADVISER AT THE OFFICE OF THE PERMANENT REPRESENTATIVE OF GREECE TO THE EUROPEAN COMMUNITIES,

AND THE OBSERVATIONS SUBMITTED IN THE WRITTEN PROCEDURE ON BEHALF OF

THE NETHERLANDS GOVERNMENT, BY I . VERKADE, SECRETARY-GENERAL OF THE MINISTRY OF FOREIGN AFFAIRS,

HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 12 MAY 1987,

AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 30 JUNE 1987,

GIVES THE FOLLOWING

JUDGMENT

Grounds

1 BY AN ORDER OF 3 MARCH 1986, LODGED AT THE COURT REGISTRY ON 13 MARCH 1986, THE QUEEN' S BENCH DIVISION OF THE HIGH COURT OF JUSTICE OF ENGLAND AND WALES REFERRED TWO QUESTIONS TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY, CONCERNING THE VALIDITY OF ( A ) COMMISSION REGULATION NO 2742/82 OF 13 OCTOBER 1982 ON PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF DRIED GRAPES ( OFFICIAL JOURNAL 1982, L 290, P . 28 ) AND ( B ) COUNCIL REGULATION NO 2089/85 OF 23 JULY 1985 ESTABLISHING GENERAL RULES RELATING TO THE SYSTEM OF MINIMUM IMPORT PRICES FOR DRIED GRAPES ( OFFICIAL JOURNAL 1985, L 197, P . 10 ), COMMISSION REGULATION NO 2237/85 OF 30 JULY 1985 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF THE MINIMUM IMPORT PRICE SYSTEM FOR DRIED GRAPES ( OFFICIAL JOURNAL 1985, L 209, P . 24 ), AND COMMISSION REGULATION NO 2238/85 OF 31 JULY 1985 FIXING THE MINIMUM PRICE APPLICABLE TO DRIED GRAPES DURING THE MARKETING YEAR 1985/86 AS WELL AS THE COUNTERVAILING CHARGES TO BE IMPOSED WHERE THAT PRICE IS NOT OBSERVED, AND AMENDING COUNCIL REGULATION ( EEC ) NO 950/68 ( OFFICIAL JOURNAL 1985, L 209, P . 26 ).

2 THE QUESTIONS AROSE IN THE COURSE OF AN ACTION BROUGHT AGAINST H . M . COMMISSIONERS OF CUSTOMS AND EXCISE BY THE NATIONAL DRIED FRUIT TRADE ASSOCIATION ( HEREINAFTER REFERRED TO AS "THE ASSOCIATION ") ON BEHALF OF ITS MEMBERS, WHO ARE IMPORTERS AND DISTRIBUTORS OF DRIED FRUIT IN THE UNITED KINGDOM AND WHO CLAIM TO HAVE SUFFERED LOSS OR EXPENSE ON ACCOUNT OF THE FIXING IN THE AFORESAID REGULATIONS OF MINIMUM PRICES AND COUNTERVAILING CHARGES ON THE IMPORTATION OF DRIED GRAPES .

3 ARTICLE 14 OF COUNCIL REGULATION NO 516/77 OF 14 MARCH 1977 ON THE COMMON ORGANIZATION OF THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES ( OFFICIAL JOURNAL 1977, L 73, P . 1 ) PROVIDES FOR THE POSSIBILITY OF APPLYING APPROPRIATE MEASURES TO TRADE WITH NON-MEMBER COUNTRIES IF THE MARKET IN ONE OR MORE PRODUCTS COVERED BY THAT REGULATION IS LIKELY TO BE EXPOSED TO SERIOUS DISTURBANCES WHICH MIGHT ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY .

4 PURSUANT TO THAT PROVISION, ARTICLE 2 ( 1 ) OF COUNCIL REGULATION NO 521/77 ( OFFICIAL JOURNAL 1977, L 73, P . 28 ) PROVIDES THAT, SHOULD SUCH A SITUATION ARISE, THE MEASURES WHICH MAY BE TAKEN ARE : THE FIXING OF A MINIMUM PRICE, IF THE PRICE OF THE IMPORTED PRODUCT FALLS BELOW THAT MINIMUM, A CONDITION MAY BE IMPOSED WHEREBY THE PRODUCT MAY BE IMPORTED ONLY AT A PRICE WHICH IS AT LEAST EQUAL TO SUCH MINIMUM; AND THE TOTAL OR PARTIAL SUSPENSION OF EXPORTS .

5 REFERRING TO THOSE PROVISIONS, ARTICLE 2 OF COMMISSION REGULATION NO 2742/82, MENTIONED ABOVE, INTRODUCED A MINIMUM PRICE FOR THE PRODUCT IN QUESTION, TOGETHER WITH A COUNTERVAILING CHARGE TO APPLY "IF THE MINIMUM PRICE IS NOT RESPECTED ". THE SYSTEM COVERED THE PERIOD UNTIL 31 AUGUST 1985 .

6 AN AMENDED SCHEME WAS LATER INTRODUCED BY COUNCIL REGULATION NO 2089/85 AND COMMISSION REGULATIONS NOS 2237/85 AND 2238/85, MENTIONED ABOVE .

7 IN THE PROCEEDINGS BEFORE THE NATIONAL COURT, THE ASSOCIATION CLAIMED THAT THOSE REGULATIONS WERE INVALID AND THAT THEREFORE THE COUNTERVAILING CHARGE ON THE IMPORTATION OF DRIED GRAPES COULD NOT LAWFULLY BE CHARGED .

8 IN THOSE CIRCUMSTANCES THE NATIONAL COURT STAYED THE PROCEEDINGS AND REFERRED THE FOLLOWING QUESTIONS TO THE COURT OF JUSTICE :

"( 1 ) WAS COMMISSION REGULATION ( EEC ) NO 2742/82 ( AS AMENDED FROM TIME TO TIME ), WHEN INTRODUCED OR AS CONTINUED AT ANY TIME ( AND IF SO WHEN ), INVALID AND UNLAWFUL BECAUSE IT PROVIDED FOR MEASURES WHICH WERE NOT AUTHORIZED BY COUNCIL REGULATIONS ( EEC ) NO 516/77 ( AND IN PARTICULAR ARTICLE 14 THEREOF ) AND NO 521/77 AND/OR AS CONTAINING PROVISIONS AND HAVING EFFECTS WHICH WERE DISPROPORTIONATE TO THE AIMS OF THOSE REGULATIONS AND/OR BECAUSE IT WAS NOT ADEQUATELY REASONED?

( 2 ) ARE COUNCIL REGULATION ( EEC NO 2089/85 AND COMMISSION REGULATION ( EEC ) NO 2237/85 AND/OR COMMISSION REGULATION ( EEC ) NO 2238/85 ( AS AMENDED ) INVALID AND UNLAWFUL AS CONTAINING PROVISIONS AND HAVING EFFECTS WHICH ARE DISPROPORTIONATE TO ANY AIMS FOR WHICH THOSE REGULATIONS WERE INTRODUCED AND/OR AS BEING INADEQUATELY REASONED?"

9 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE OBSERVATIONS SUBMITTED TO THE COURT AND THE PROVISIONS OF COMMUNITY LAW IN QUESTION WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

FIRST QUESTION

10 THE FIRST QUESTION RAISED BY THE NATIONAL COURT CONCERNS THE VALIDITY OF COMMISSION REGULATION NO 2742/82 .

11 IT IS DENIED THAT THE CONDITIONS FOR THE APPLICATION OF THE PROTECTIVE MEASURES WERE SATISFIED . IN PARTICULAR, THE ASSOCIATION MAINTAINS THAT THE PROTECTIVE MEASURES WERE ADOPTED IN RESPECT OF ALL DRIED GRAPES EXCEPT CURRANTS, NAMELY RAISINS AND SULTANAS . THE COMMUNITY, HOWEVER, PRODUCES ONLY SULTANAS, WHEREAS, THE ASSOCIATION POINTS OUT, RAISINS ARE NOT PRODUCED WITHIN THE COMMUNITY . THE ASSOCIATION CONCLUDES THAT THERE IS NOT AND NEVER CAN BE ANY SERIOUS DISTURBANCE, OR THREAT OF SUCH DISTURBANCE, ON THE COMMUNITY MARKET IN RAISINS .

12 IT SHOULD BE OBSERVED THAT IT IS NOT NECESSARY IN THIS CASE TO CONSIDER WHETHER DRIED GRAPES OTHER THAN CURRANTS MAY, IN THE LIGHT OF CERTAIN OF THEIR CHARACTERISTICS, BE DIVIDED INTO TWO CATEGORIES, NAMELY RAISINS AND SULTANAS, AS THE ASSOCIATION MAINTAINS . IT IS CLEAR FROM THE DOCUMENTS BEFORE THE COURT THAT THE CONTESTED MEASURES WERE ADOPTED ON THE BASIS OF THE VIEW THAT THE TWO KINDS MAY GENERALLY BE USED INTERCHANGEABLY .

13 IT HAS NOT BEEN ESTABLISHED THAT THAT BASIS IS INCORRECT . NEITHER THE REGULATIONS ON THE COMMON ORGANIZATION OF THE MARKETS IN THAT SECTOR NOR THE COMMON CUSTOMS TARIFF DRAWS ANY DISTINCTION OTHER THAN BETWEEN CURRANTS AND OTHER DRIED GRAPES; IN PARTICULAR, IN THE CONTEXT OF "OTHER DRIED GRAPES", THEY DO NOT DIFFERENTIATE BETWEEN RAISINS AND SULTANAS . IN THOSE CIRCUMSTANCES THE COMMISSION' S VIEW THAT THOSE LAST TWO KINDS OF DRIED GRAPE ARE TO BE CONSIDERED INTERCHANGEABLE MUST BE ACCEPTED UNLESS IT IS DEMONSTRATED THAT THOSE TWO KINDS OF PRODUCT CANNOT SATISFY THE SAME NEEDS, SO THAT THEY CANNOT BE SUBSTITUTED ONE FOR THE OTHER TO ANY EXTENT .

14 THE CLAIMS PUT FORWARD BY THE ASSOCIATION IN THAT CONNECTION ARE BASED SOLELY ON THE CULINARY TRADITIONS OF CERTAIN REGIONS OF GREAT BRITAIN AND OF IRELAND . HOWEVER, IN ORDER TO MEASURE THE DEGREE TO WHICH SUBSTITUTION IS POSSIBLE, REFERENCE MAY NOT EXCLUSIVELY BE MADE TO THE CUSTOMS OF A GIVEN REGION OR EVEN OF A SINGLE MEMBER STATE . MOREOVER, IT APPEARS FROM THE DOCUMENTS BEFORE THE COURT THAT IN SOME MEMBER STATES DRIED GRAPES OTHER THAN CURRANTS ARE OFTEN MARKETED INDISCRIMINATELY AS EITHER RAISINS OR SULTANAS .

15 THE ASSOCIATION ALSO MAINTAINS THAT THE MARKET FOR DRIED GRAPES WAS NOT THREATENED BY ANY DISTURBANCES DUE TO THE IMPORTATION OF RAISINS AT LOWER PRICES THAN THOSE CHARGED WITHIN THE COMMUNITY; IT CLAIMS THAT THE REASONS STATED IN REGULATION NO 2742/82 ARE UNPARTICULARIZED, SUPERFICIAL AND INADEQUATE IN EXPLAINING THE NEED FOR PROTECTIVE MEASURES, BECAUSE, ALTHOUGH THOSE PROTECTIVE MEASURES COVERED BOTH RAISINS AND SULTANAS, THE ONLY SPECIFIC REFERENCE IN THE RECITALS IN THE PREAMBLE TO THAT REGULATION TO ANY MARKET SITUATION RELATED EXCLUSIVELY TO SULTANAS, WITHOUT ANY MENTION BEING MADE OF THE SITUATION ON THE MARKET FOR RAISINS . EVEN IN THE CASE OF SULTANAS THE COMMISSION FAILED TO MENTION ANY CONSIDERATION OTHER THAN THAT "IMPORT PRICES REMAIN TOO LOW", WHICH, IN THE ASSOCIATION' S VIEW, CONSTITUTES PARTICULARLY DEFICIENT REASONING . THE ASSOCIATION GOES ON TO SAY THAT, EVEN SUPPOSING THAT THERE WERE A RISK OF SERIOUS DISTURBANCES ON THE MARKET, THAT RISK COULD NOT CONTINUE THROUGHOUT THE YEAR UNTIL THE FOLLOWING CROP BECAUSE THE COMMUNITY CROP COULD BE QUICKLY ABSORBED AFTER THE BEGINNING OF EACH MARKETING YEAR .

16 IT SHOULD FIRST BE OBSERVED THAT THOSE CONTENTIONS ARE BASED ON THE HYPOTHESIS, REFUTED ABOVE, THAT THERE ARE TWO CATEGORIES OF DRIED GRAPE OTHER THAN CURRANTS AND THAT THOSE CATEGORIES ARE NOT INTERCHANGEABLE .

17 IT SHOULD FURTHER BE RECALLED THAT THE THIRD RECITAL IN THE PREAMBLE TO REGULATION NO 521/77 STATES THAT "RECOURSE TO PROTECTIVE MEASURES DEPENDS ON THE EFFECT OF TRADE WITH THIRD COUNTRIES ON THE COMMUNITY MARKET; ... THE SITUATION ON THIS MARKET MUST THEREFORE BE ASSESSED BY TAKING ACCOUNT NOT ONLY OF THE FACTORS PECULIAR TO THE MARKET ITSELF BUT ALSO OF THOSE RELATING TO THE TREND OF THAT TRADE ".

18 THE RECITALS IN THE PREAMBLE TO REGULATION NO 2742/82 STATE THAT AT THE TIME OF ITS ADOPTION CERTAIN NON-MEMBER COUNTRIES WERE OFFERING PRODUCTS AT PRICES WHICH SIGNIFICANTLY UNDERCUT THE PRICES RULING IN THE COMMUNITY, AND THAT THE MARKETING OF COMMUNITY PRODUCTS WAS BADLY AFFECTED AS A RESULT, THAT STOCKS OF SULTANAS CONSTITUTED 60% OF THE HARVEST OF THE MARKETING YEAR 1981/82, THAT THOSE NON-MEMBER COUNTRIES WERE STILL CHARGING LOW PRICES AND THAT OTHER NON-MEMBER COUNTRIES WERE LIABLE TO FOLLOW THEIR LEAD .

19 IT WAS DEMONSTRATED DURING THE PROCEDURE BEFORE THE COURT, BY THE STATISTICS PRODUCED BY THE COMMISSION, THAT THERE WAS OBJECTIVE EVIDENCE SUBSTANTIATING THE PRESENCE OF CONTINUOUS DISTURBANCES, OR RISK OF DISTURBANCES, ON THE COMMUNITY MARKET FOR DRIED GRAPES DURING THE SUBSEQUENT MARKETING YEARS AS WELL . THE REASON WAS THAT IMPORTS, AND ESPECIALLY IMPORTS FROM TURKEY, HAD BEEN INCREASING, WHILE PRICES HAD BEEN STEADILY DECLINING ON THE WORLD MARKET . FURTHERMORE, ALTHOUGH IT HAD BEEN POSSIBLE FOR SURPLUS STOCKS TO BE ALMOST TOTALLY ABSORBED BY THE END OF THE YEAR ( PRECISELY BECAUSE OF THE MEASURES ADOPTED ), THE MARKET SITUATION NONE THE LESS REMAINED PRECARIOUS . BECAUSE THEY COULD BE

SUBSTITUTED FOR COMMUNITY PRODUCTS, THE IMPORTS WERE LIABLE TO ATTRACT PART OF THE INTERNAL DEMAND AND THEREBY CAUSE EVEN LARGER QUANTITIES TO BE TAKEN INTO STORAGE .

20 CONSEQUENTLY, THE COMMISSION' S VIEW THAT IMPORTS FROM NON-MEMBER COUNTRIES THROUGHOUT THE PERIOD IN QUESTION COULD HAVE DISTURBED THE COMMUNITY MARKET BY ATTRACTING DEMAND WHICH, IN THE ABSENCE OF THOSE IMPORTS, WOULD TO A CONSIDERABLE EXTENT AT LEAST HAVE ATTACHED ITSELF TO COMMUNITY PRODUCTS IS SUFFICIENTLY REASONED AND IS NOT TO BE REGARDED AS INCORRECT .

21 THE CLAIM IS ALSO MADE THAT, EVEN IF THE FIXING OF A MINIMUM PRICE WAS JUSTIFIED, IT WAS FIXED AT A LEVEL HIGHER THAN THE PRICE LEVELS APPLYING IN THE COMMUNITY .

22 IT SHOULD BE OBSERVED THAT THE FIXING OF A MINIMUM PRICE AT A LEVEL ABOVE THE EXISTING PRICES IN THE COMMUNITY IS NOT UNLAWFUL IN ITSELF UNLESS IT EXCEEDS THE LEVEL REQUIRED TO MAKE THE PROTECTIVE MEASURE EFFECTIVE . IN THIS INSTANCE, HOWEVER, IT DOES NOT APPEAR THAT THE MINIMUM PRICE EXCEEDED THAT LEVEL TO SUCH AN EXTENT AS TO CAST DOUBT ON ITS LEGALITY .

23 A FURTHER CRITICISM IS THAT THE MINIMUM PRICE WAS FIXED AT THE SAME LEVEL FOR PACKAGED PRODUCTS AS FOR THOSE IMPORTED IN BULK; REGULATION NO 2742/82 THEREBY ENCOURAGED THE IMPORTATION OF PACKAGED PRODUCTS .

24 THAT ARGUMENT CANNOT BE ACCEPTED . THE COMMISSION HAS RIGHTLY OBSERVED THAT IN ORDER TO ENSURE THE EFFICACY OF THE SYSTEM SET UP IT WAS NECESSARY TO TAKE ACCOUNT OF THE FACT THAT THE IMPORT PRICE OF THE PACKAGED PRODUCTS EASILY REACHED THE MINIMUM PRICE AND HENCE TO SET THE MINIMUM PRICE AS A FIXED SUM AND NOT ON THE BASIS OF A GRADUATED SCALE DEPENDING ON THE PACKAGING AND PRESENTATION OF THE PRODUCT .

25 THE ASSOCIATION GOES ON TO ARGUE THAT THE IMPOSITION OF THE COUNTERVAILING CHARGE IS UNLAWFUL ON THE GROUND THAT THE COMMISSION WAS NOT EMPOWERED, EITHER EXPRESSLY OR IMPLICITLY, TO ADOPT SUCH A MEASURE .

26 IT IS APPROPRIATE TO POINT OUT IN THIS CONNECTION THAT, ALTHOUGH THE IMPOSITION OF A COUNTERVAILING CHARGE WAS NOT EXPRESSLY PROVIDED FOR IN COUNCIL REGULATION NO 521/77, THAT DOES NOT NECESSARILY IMPLY THAT SUCH A MEASURE WAS PRECLUDED . ON THE CONTRARY, IT MAY BE CONCLUDED FROM THE FACT THAT THAT REGULATION AUTHORIZED THE TOTAL OR PARTIAL SUSPENSION OF IMPORTS THAT THE COMMISSION WAS EMPOWERED TO INTRODUCE A LESS RIGID SCHEME, NAMELY A MINIMUM PRICE WITH A COUNTERVAILING CHARGE . IT SHOULD BE RECALLED THAT IN ITS JUDGMENT OF 12 APRIL 1984 IN CASE 345/82 WOENSCHE V GERMANY (( 1984 /)) ECR 1995 THE COURT HELD THAT, SINCE THE COMMISSION WAS ENTITLED TO TAKE PROTECTIVE MEASURES LEADING TO A COMPLETE SUSPENSION OF IMPORTS FROM THIRD COUNTRIES, IT WAS, A FORTIORI, ENTITLED TO ADOPT LESS RESTRICTIVE MEASURES .

27 IN FACT, THE ASSOCIATION CONSIDERS THE CONTESTED MEASURE TO BE MORE SERIOUS THAN THE TOTAL SUSPENSION OF IMPORTS; HOWEVER, THAT VIEW IS UNFOUNDED . THE TOTAL SUSPENSION OF IMPORTS IS A MORE SERIOUS MEASURE THAN THE ONE IN DISPUTE, WHICH IS MERELY A RESTRICTION WHICH STILL PERMITS TRADERS TO IMPORT PRODUCTS IF THEY SEE FIT .

28 THE ASSOCIATION FURTHER MAINTAINS THAT, IN ANY CASE, THE APPLICATION OF A COUNTERVAILING CHARGE AT A FIXED RATE IS INVARIABLY UNLAWFUL .

29 THAT ARGUMENT IS FUNDAMENTALLY UNTENABLE . A COUNTERVAILING CHARGE IS NOT UNLAWFUL MERELY BECAUSE IT IS SET AT A FIXED RATE . ITS LEGALITY DEPENDS ON A WHOLE RANGE OF FACTORS, SUCH AS THE PRICES CHARGED FOR IMPORTS AND THE REQUIREMENTS OF EFFECTIVELY ACHIEVING THE DESIRED AIM .

30 NEVERTHELESS, THE ASSOCIATION CLAIMS THAT IN THIS INSTANCE THE COUNTERVAILING CHARGE IS CONTRARY TO THE PRINCIPLE OF PROPORTIONALITY BECAUSE, IN ORDER TO ACHIEVE THE AIM OF ENFORCING THE MINIMUM PRICE, IT WOULD BE SUFFICIENT TO SET A RATE EQUAL TO THE DIFFERENCE BETWEEN THE IMPORT PRICE AND THE MINIMUM PRICE .

31 THE COMMISSION, ON THE OTHER HAND, CONTENDS THAT THE COUNTERVAILING CHARGE WAS CALCULATED BY SUBTRACTING THE LOWEST WORLD MARKET PRICE FROM THE MINIMUM PRICE, ON THE GROUND THAT THE SYSTEM OF COUNTERVAILING CHARGES MUST TAKE ACCOUNT OF THE PRICES ON THE WORLD MARKET WHICH ARE MOST LIKELY TO CAUSE DISTURBANCES ON THE INTERNAL MARKET OF THE COMMUNITY .

32 IT SHOULD BE OBSERVED THAT THE AIM OF THE COUNTERVAILING CHARGE IS TO ENFORCE THE MINIMUM PRICE SO AS TO ENSURE COMMUNITY PREFERENCE IN THE MARKET FOR DRIED GRAPES OTHER THAN CURRANTS; THE AIM IS NOT TO INFLICT AN ECONOMIC PENALTY ON THE TRADER WHO HAS IMPORTED THEM BELOW THE MINIMUM PRICE . HOWEVER, THE INTRODUCTION OF A SINGLE, FIXED-RATE COUNTERVAILING CHARGE, IMPOSED EVEN WHERE THE DIFFERENCE BETWEEN THE IMPORT PRICE AND THE MINIMUM PRICE IS VERY SMALL, AMOUNTS TO AN ECONOMIC PENALTY AND THE COMMISSION HAS NOT ESTABLISHED THAT SUCH A SYSTEM IS NECESSARY FOR ATTAINING THE AIM OF REGULATION NO 521/77 .

33 IT FOLLOWS FROM ALL OF THE FOREGOING CONSIDERATIONS THAT REGULATION NO 2742/82 IS INVALID IN SO FAR AS IT INTRODUCED A COUNTERVAILING CHARGE AT A FIXED RATE EQUAL TO THE DIFFERENCE BETWEEN THE LOWEST WORLD-MARKET PRICE AND THE MINIMUM PRICE .

SECOND QUESTION

34 THE SECOND QUESTION CONCERNS THE VALIDITY OF COUNCIL REGULATION NO 2089/85 AND OF COMMISSION REGULATIONS NOS 2237/85 AND 2238/85 . THOSE REGULATIONS REPLACED THE RULES CONSIDERED IN THE CONTEXT OF THE FIRST QUESTION .

35 AS IT EXPLAINED AT THE HEARING, THE ASSOCIATION IS NOT CHALLENGING THE VALIDITY OF COUNCIL REGULATION NO 2089/85 . HOWEVER, IT DOES CONSIDER THAT THE NEW SYSTEM INTRODUCED BY THE COMMISSION IS UNLAWFUL BECAUSE IT IS NOT IN CONFORMITY WITH THE PRINCIPLE OF PROPORTIONALITY AND BECAUSE IT DOES NOT GIVE REASONS JUSTIFYING THE NEED FOR THE MEASURES IMPOSED .

36 THE ASSOCIATION REFERS MAINLY TO THE ARGUMENT, REJECTED ABOVE, THAT THE LEGISLATION DRAWS NO DISTINCTION BETWEEN RAISINS AND SULTANAS . ON THAT BASIS, IT ALSO PUTS FORWARD THE FOLLOWING ARGUMENTS :

( A ) THE MEASURES APPLY EVEN DURING PERIODS WHEN COMMUNITY PRODUCTION IS EXHAUSTED, AS WAS THE CASE IN MARCH AND APRIL 1986,

( B ) THE CONSIDERABLE INCREASE IN THE MINIMUM PRICE, WHICH IS FIXED AT TOO HIGH A LEVEL IN VIEW OF THE LEVEL OF THE GREEK MARKET PRICE, TOGETHER WITH THE FAILURE TO DISTINGUISH BETWEEN BULK IMPORTS AND PACKAGED IMPORTS, AND THE ABSENCE OF EFFECTIVE PROVISIONS TO DEAL WITH CHANGES IN THE MINIMUM PRICE DUE TO FREQUENT CURRENCY FLUCTUATIONS, CONTINUE TO CREATE VERY CONSIDERABLE UNCERTAINTY AND TO DISRUPT NORMAL TRADING PRACTICES,

( C ) THE SCALE OFTHE COUNTERVAILING CHARGES IS EXCESSIVELY HIGH, AND

( D ) THE PRINCIPLE OF PROPORTIONALITY IS FURTHER INFRINGED IN SO FAR AS THE NEW MINIMUM-PRICE SYSTEM HAS THE EFFECT OF EXCLUDING FROM THE "IMPORT PRICE" ANY PART WHATEVER OF THE TRANSPORT AND INSURANCE COSTS INCURRED IN BRINGING THE GOODS TO THE COMMUNITY PORT OF DESTINATION .

37 IT SHOULD BE NOTED THAT THE MAIN ARGUMENT IS BASED ON THE PREMISE, ALREADY REJECTED ABOVE, THAT THERE ARE TWO CATEGORIES OF DRIED GRAPES APART FROM CURRANTS, NAMELY RAISINS AND SULTANAS, WHICH ARE NOT INTERCHANGEABLE .

38 MOREOVER, IT IS APPARENT FROM THE PREAMBLES TO COUNCIL REGULATION NO 2089/85 AND COMMISSION REGULATION NO 2237/85 THAT, ON THE ONE HAND, THE REASONS FOR INTRODUCING PROTECTIVE MEASURES FOR THE WHOLE DURATION OF THE NEW PERIOD REMAIN THE SAME, NAMELY THE RISK OF DISTURBANCE ON THE MARKET ON ACCOUNT OF THE PRICES CHARGED BY THE NON-MEMBER COUNTRIES OF EXPORTATION, COMBINED WITH CURRENCY FLUCTUATIONS, AND, ON THE OTHER, ACCOUNT WAS TAKEN OF THE NEW MONETARY COEFFICIENTS FIXED HAVING REGARD TO THE FREQUENT CHANGES IN THE PARITIES .

39 LASTLY, IT SHOULD BE NOTED THAT ARTICLE 1 ( 2 ) OF REGULATION NO 2237/85 DESIGNATES THE FOB PRICE IN THE COUNTRY OF ORIGIN AND THE TRANSPORT AND INSURANCE COSTS AS THE FACTORS CONSTITUTING THE IMPORT PRICE .

40 IT FOLLOWS FROM ALL THE FOREGOING THAT CONSIDERATION OF THE SECOND QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF COUNCIL REGULATION NO 2089/85 OR OF COMMISSION REGULATIONS NOS 2237/85 AND 2238/85 .

Decision on costs

COSTS

41 THE COSTS INCURRED BY THE GREEK AND NETHERLANDS GOVERNMENTS AND BY THE COUNCIL AND COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED, IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS,

THE COURT ( SIXTH CHAMBER ),

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE QUEEN' S BENCH DIVISION OF THE HIGH COURT OF JUSTICE BY ORDER OF 3 MARCH 1986, HEREBY RULES :

( 1 ) CONSIDERATION OF THE FIRST QUESTION HAS DISCLOSED THAT COMMISSION REGULATION NO 2742/82 OF 13 OCTOBER 1982 ON PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF DRIED GRAPES ( OFFICIAL JOURNAL 1982, L 290, P . 28 ), AS AMENDED FROM TIME TO TIME, IS INVALID IN SO FAR AS IT ESTABLISHED A COUNTERVAILING CHARGE AT A FIXED RATE EQUAL TO THE DIFFERENCE BETWEEN THE LOWEST PRICE ON THE WORLD MARKET AND THE MINIMUM PRICE;

( 2 ) CONSIDERATION OF THE SECOND QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF COUNCIL REGULATION NO 2089/85 OF 23 JULY 1985 OR OF COMMISSION REGULATIONS NO 2237/85 OF 30 JULY 1985 AND NO 2238/85 OF 31 JULY 1985 .