OPINION OF MR ADVOCATE-GENERAL

DUTHEILLET DE LAMOTHE

DELIVERED ON 12 OCTOBER 1971 ( 1 )

Mr President,

Members of the Court,

In 1970 the Federal Republic of Germany, for various reasons irrelevant to an understanding of the present case, prohibited the import into territory of mushrooms originating in the People's Republic of China.

It was easy to enforce this prohibition when the German importer wanted to import from China or a third country directly into Germany, that is to say, to effect a ‘straight’ import, to employ the usual jargon.

On the other hand, the problem was much more delicate when the importer wanted to buy Chinese mushrooms in free circulation in one of the countries of the Community.

Until the issue of Regulation No 865/68 of 28 June 1968 the Federal authorities normally had automatically to issue the licence requested within a very short period since the goods were in free circulation in a Member State.

They could refuse only if they have previously received from the Commission the authorization provided for in the first paragraph of Article 115 of the Treaty, which, in exceptional cases and in particular in cases of deflection of trade, allows a Member State to exclude from Community treatment certain products originating in third countries but already in free circulation in one or more of the other Member States.

Such authorization, as regards mushrooms originating in China, was not requested by the Federal Republic of Germany until 11 September 1970 and was not given by the Commission until 15 September.

It is this situation which is the origin of the present proceedings.

On 4 September 1970 the Book company applied for an import licence for a quantity of Chinese mushrooms valued at DM 150000 in respect of which it had a firm offer and which it claimed to be in free circulation in the Netherlands

On 9 September 1970 it reminded the competent Federal authority, that is to say, the Bundesamt für Ernährung und Forstwirtschaft, of its application.

Finally on 11 September it repeated its application by telex.

This telex message gave rise to lively activity on the part of the Federal authorities. On the same day indeed:

1. The Federal German representative in Brussels, alerted by the Federal Ministry for Agriculture, informed the Commission by telex that the Federal authorities had received an application for an import licence for a quantity of Chinese mushrooms to the value of DM 125000 and that the Federal Government was requesting the Commission to authorize the Federal Republic as a matter of urgency to exclude such imports from Community treatment ‘including (I quote) the import contemplated’ in the above-mentioned application.

2. The Bundesamt replied to the Bock company that it had decided to refuse its application for a licence as soon as (I quote) ‘the Commission has given its authorization in accordance with Article 115 of the Treaty’.

The Bock company made fresh efforts which were unsuccessful.

On 15 September the Commission took the decision requested authorizing the Federal Republic to exclude from Community treatment mushrooms originating in the People's Republic of China in free circulation in the Benelux countries. This decision contained a sentence to which I shall return shortly and which related to applications for licences ‘currently and duly pending before the Federal authorities’.

On 21 September the Bundesamt, on the basis of this authorization, expressly informed the Bock company of the rejection of its application.

The Bock company therefore brought an action before the Verwaltungsgericht for a declaration that the Bundesamt had acted illegally.

At the same time it brought the present application before you for the annulment of the provision in the Commission's Decision of 15 September 1970 to the effect that the authorization to exclude the said products from Community treatment ‘likewise covers imports of these products in respect of which applications for licences are currently and duly pending’.

I

The first question posed by this case is that of admissibility.

A — The Commission, by a very subtle argument, maintains, first, that the contested provision was of no concern to the Bock company which cannot therefore rely on the provisions of the second paragraph of Article 173 of the Treaty. The Commission argues as follows. When in the contested provision it mentioned applications currently and duly pending, it did not intend the word ‘duly’ to refer to the proper lodging of the application, that is to say the form, vouchers, etc., but the proper conduct of the national authorities which had kept the application pending. The provision was intended to avoid legitimating delays in the issue of licences, such delays being contrary to Community rules and therefore of an unlawful nature. The Commission states that if the contested decision is interpreted in this way it is obvious that it does not affect the applicant. Regulation No 865/68, which is applicable to the products in question, prohibits any quantitative restriction in trade between Member States and the Commission directive of 22 December 1969 treats as a quantitative restriction any inordinate delay in the granting of licences. In the present case the Commission maintains that the Federal authorities failed to fulfil this requirement of promptitude since, having received an application, the urgency of which had been indicated to them, at the latest on 7 September, they had still not come to a decision on 11 September when the Federal Government applied to the Commission. Thus, according to the defendant, the application submitted by the Bock company was wrongly kept under consideration by the Bundesamt when the decision of 15 September was taken and therefore the provision in this decision covering applications which were duly pending did not apply to it and was therefore of no concern to the applicant. This reasoning is attractive in many respects. It is even supported to a certain extent by the fact that a Federal court has already expressly censured the behaviour of the Bundesamt by stressing that it had acted unlawfully in not issuing the licence applied for on a date very clearly prior to the Commission's decision. Nevertheless, I have certain scruples about suggesting that you should uphold a plea of inadmissibility based on such an interpretation of the contested provision, for several reasons.

1. The judgment of the Verwaltungsgericht is based not on a breach of Community law but on a breach of obligations derived solely from Federal domestic law; it is therefore extremely difficult to adduce from that judgment a decisive argument for the interpretation of the contested Community measure.

2. It is true that the wording, both in French and German, is ambiguous. If it provided that it applied ‘to applications duly lodged and currently pending’ before the Federal authorities, the Commission's argument would certainly be fallacious. If, on the other hand, it provided that it applied to applications ‘lodged and currently duly pending’ before the competent Federal authorities, the Commission's argument would certainly be well-founded. But the difficulty arises from the fact that the phrase ‘which are currently and duly pending’, taken literally, can just as easily bear the meaning which the Commission accords it as that which the applicant gives it and which moreover the Federal authorities gave it.

3. Since any literal interpretation is therefore impossible, the meaning of these provisions must, in my opinion, be sought by relating them to the application which was the cause of their adoption and the general context in which the problem was posed for the Commission at the time. One point is certain: the federal Government had asked the Commission for an authorization under the first paragraph of Article 115 of the Treaty for the purpose not only of preventing future imports but also an import for which it had already been requested to issue a licence. The wording of the communication from the German permanent representative is clear. I quote to you the main passages from it: ‘Beg to inform that Federal Government faced with application to import preserved mushrooms … originating in the People's Republic of China in free circulation in the Netherlands to the value of DM 125000 … Authorization is therefore requested by the Federal Government as a matter of urgency to exclude from Community treatment the import of preserved products of tariff heading 20.02-21 originating in the People's Republic of China and in free circulation in any Member State (other imports by indirect means are to be expected of the applicant, who is known) including the import contemplated in the abovementioned application to import.’ The parties are at issue on one point. The Commission maintains that the application for a licence to which the telex message from the permanent representative refers is an application lodged by the Lütjens company for an import valued at DM 125000 and not that of the Bock company which is valued at DM 150000. The applicant claims that the Federal Government was referring not only to the import contemplated by Lütjens but also to the import contemplated by itself. The question is difficult, for it seems that although the only application for a licence precisely referred to is that submitted by Lütjens (DM 125000), the Federal Government likewise alludes, as you could see, to other probable imports of the same kind. But the point is, in my opinion, of little importance in resolving the question which is put to you today. Indeed, one point is certain: the Commission knew perfectly well that an application for a licence had been pending since at least 11 September, if not well before. Today it states that the period allowed the Federal authorities to decide such an application was at the most 4 days. But if one agrees with the Commission on this point this means that when the Commission took its decision on 15 September it could not have been unaware that the application for a licence in respect of which a special provision had been requested was no longer, according to the Commission's present argument, duly pending before the Federal authorities. If it had therefore intended to exclude all applications which were no longer duly pending from the scope of its decision, it ought to have drafted that decision in a negative or a restrictive form by providing, for example, that ‘This authorization shall apply to imports of the said products not yet effected, except where licences applied for should have been issued before the adoption of this decision’, or any other such wording However, it did not do so. The wording that it used could have been and was in fact interpreted, both by the Bundesamt and by the applicant, as being intended to ‘cover’, if this expression may be permitted, the case of companies in the same position as the Bock company. The good faith and fairness of the Commission are well known to the Court; it cannot be imagined that it deliberately used an ambiguous wording intended, in case of disputes, to place any responsibility arising from the authorization requested on the Federal authorities. The most likely interpretation is therefore, in my opinion, that the Commission intended, by means of the contested provision, to extend the scope of the authorization granted to the Federal authorities to permit them to reject applications which — on the one hand, were in due form, and — on the other hand, had not yet been the subject of a decision granting or refusing a licence. In my opinion, it was not until much later, when the matter had reached the stage of litigation, that the legal department of the Commission sought to give the contested provision an interpretation compatible with the position adopted by their colleagues in other departments with regard to the obligation on the Member States to grant licences requested in the sphere of intra-Community trade in the shortest possible time. One final consideration persuades me to suggest this interpretation to you. If the provisions of Community law specified a fixed period for the granting by the national authorities of the licences required for intra-Community imports, the Commission's argument could, perhaps, be accepted. But they merely provide that the time-limits must not be (I quote) ‘excessive in relation to the normal course of the various transactions’ to which they apply. It follows from this that, under the system proposed by the Commission and in the event of proceedings against one of the numerous Community provisions having the same objective and the same scope as the contested provision, you would have to consider the admissibility of the application. (1) by deciding a question of substance, that is to say, whether the period in which the national authorities decided an application for a licence was excessive or normal; (2) by yourselves deciding this question of substance, which at first sight appears to come within the competence of the national court, subject to its asking you to give any necessary preliminary ruling under Article 177 of the Treaty. For all these reasons, I think that the case of the Bock company came within the scope of the contested provision, and therefore that the provision was of concern to the company.

B — It you accept this, as I do, the second question of admissibility raised by the Commission appears to me relatively more simple. The Commission maintains in the alternative that even if it is accepted that the contested provision was ‘of concern’ to the Bock company, it was neither of direct nor of individual concern to it. The facts of the present case, considered in the light of the principles laid down in your judgment in Tœpfer v Commission of 1 July 1965 ([1965] ECR 405) lead me to suggest that you should reject this argument. 1. The contested provision merely authorized the Federal Government to exclude the contemplated import from Community treatment. However, as I told you just now when quoting from the Federal Government's telex message, since that provision was specifically adopted to prevent imports of the same kind and particularly since the competent Bundesamt had moreover indicated to the Bock company before the Comission's decision was taken that it was only waiting for that decision before formally rejecting the application for a licence, it would in my opinion betray excessive formalism to accept that in fact the said provision was not of direct concern to the Bock company. 2. If this provision was of concern to the Bock company it was, in my opinion, of individual concern to it. The Verwaltungsgericht has stated that only the Bock company had an application for an import licence for Chinese mushrooms still pending before 15 September and added that this fact was not contested. The Commission and the Bundesamt maintain that there was also an application from the Lütjens company, which I mentioned to you with regard to the telex message from the German permanent representative to the Commission of 11 September. However that may be, the number and the identity of these importers had become ‘fixed and ascertainable’. As you held in your judgment in Tœpfer, this fact allows interested parties to benefit from the provisions of the second paragraph of Article 173. Thus, if it is accepted that the contested provision was of concern to the Bock company, this being the only difficult point, in my opinion, in the question of admissibility raised, we have a measure which, although in the form of a decision addressed to the German Government, is of direct and individual concern to the Bock company, whose application is accordingly admissible.

II

If the application is admissible it seems to me to be well-founded.

The company relies on two substantive grounds: retroactivity and violation of the principle of proportionality.

I should have certain scruples about conceding that the retroactive character which the contested provision possesses to a certain extent and in a certain way would be sufficient, in itself, to justify the annulment of that provision.

The requirements of economic law have already led the Court to reject too narrow a conception of the principle of non-retroactivity.

As I said to you in the Rewe Zentrale case, these requirements must sometimes lead to a distinction being drawn between retroactivity stricto sensu and a new situation which certain contemporary experts in public law call ‘the immediate application of new provisions to pre-existing situations’.

In any event, on each occasion mat you have considered to be legitimate what may have appeared to be an encroachment on the general principle of confidence in legal positions you have always stressed that such encroachments are justified by the necessity to infringe a general principle of law to a greater or lesser extent in order to achieve the end pursued.

You have, in fact, by a very original and very interesting construction, to some extent interpreted the principle of non-retroactivity in relation to the principle of proportionality.

This line or decisions, in my view, must lead you in the present case to annul the contested provision on the ground that the extension which it effects of rules laid down for the future to preexisting situations was not absolutely necessary in order to attain the end pursued.

I agree with the Commission when it says that the danger of deflections of trade alone justifies the adoption of the measures provided for by Article 115, and, on this point, the validity of the provisions of the Commission's decision relating solely to the future seems to me indisputable.

However, the risk inherent in not applying those measures adopted for the future to the application, or at most to the two applications, for licences pending before the Federal authorities was really too insignificant, in my opinion, to justify even a slight encroachment on the principle of non-retroactivity.

The Verwaltungsgencht calculated that the licence requested by the Bock company represented 0.08 % of annual imports into the Federal Republic of Germany of the products in question, including imports from Taiwan which were merely subject to a quota.

Even if one admits, as does the Commission, that the Lütjens company's application must be added to that of the Bock company, since, according to the total price known to us, the former application seems to cover a quantity slightly less than, or at most equal to, the quantity which the Bock company wanted to import, one arrives at the conclusion that the maximum tonnage for which licences were pending at the date in question represented at most 0.15 or 0.16 % of Federal imports of the product in question.

This is certainly an extremely small quantity.

In these circumstances it seems to me difficult to concede that the desire to prevent operations on such a small scale could justify the application of provisions adopted for the future to operations already undertaken.

There remains to be considered a matter of form raised by the applicant.

The latter maintains mat under Article 115 of the Treaty the Commission, when it has before it an application by a Member State for the exclusion from Community treatment of goods originating from one or more other Member States, must address a recommendation to the State or States in question, and that it is only failing this', that is, in the absence of any result from this recommendation, that the Commission can authorize exclusion from Community treatment.

The applicant's interpretation of Article 115 of the Treaty appears to me to be correct.

The procedure provided seems to me to comprise two stages:

— the recommendation stage; then, if this does not produce the desired results,

— the stage of the authorization of exclusion from Community treatment.

It is true that in the French and Italian versions of the Treaty the provision to be interpreted is not very clear on this point, but the German and Dutch versions are much more explicit.

It is also true that in the present case no recommendation was addressed to the Benelux countries before the authorization was granted by the Commission to the Federal Republic of Germany.

Nevertheless, it seems to me that the submission cannot be accepted for two reasons, the second of which, in my opinion, is of a very subordinate nature.

1. The procedural rules established by Article 115 of the Treaty determine the details of a relationship between the Commission and Member States. In my opinion, it follows from this that they do not have direct effect, that they do not create individual rights and that individuals have no interest in them and therefore cannot invoke them.

2. in addition and quite secondarily, the alleged formal defect would not have any influence, in my opinion, on the propriety of the contested provision.

In fact, the Commission has explained to you, and has certainly convinced me, that although it had not formally made a recommendation, it had, for a very long time, and on numerous occasions, made representations to the Member States concerned without obtaining any result and that the situation would almost certainly not have changed if it had made a formal recommendation.

In these circumstances, the omission or a formality which was known to be futile would not constitute, in my opinion, a defect sufficiently substantial to vitiate the contested provision.

However, as I have just said, the provision seems to me defective for reasons not of form but of substance.

My conclusion is that it should be annulled and that the Commission should bear the costs.

( 1 ) Translated from the French.