Judgment of the Court of 13 December 2001. - European Parliament v Council of the European Union. - Regulation (EC) No 2772/1999 - Beef labelling system - Competence of the Council. - Case C-93/00.



European Court reports 2001 Page I-10119



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1. Agriculture - Common organisation of the markets - Beef and veal - Beef labelling system - Regulation No 820/97 - Prolongation - Legal basis - Regulation No 2772/1999 - Invalidity

(Council Regulations No 820/97, Art. 19, and No 2772/1999)

2. Actions for annulment - Judgment ordering annulment - Effects - Limits imposed by the Court - Invalidity of Regulation No 2772/1999

(Art. 231, second para., EC; Parliament and Council Regulation No 1760/2000; Council Regulations Nos 820/97 and 2772/1999)

Summary

1. By prolonging, by means of Regulation No 2772/1999 providing for the general rules for a compulsory beef labelling system, the validity of the rules relating to the voluntary labelling system set out in Regulation No 820/97, the Council has in fact altered the temporal scope of Regulation No 820/97. However, that regulation could only be amended on a legal basis equivalent to that on which it had been adopted, that is to say, on the basis of the Treaty itself, and in conformity with the decision-making process provided for by the Treaty. The Council was therefore wrong to take Article 19 of Regulation No 820/97 as the basis for adopting Regulation No 2772/1999 and accordingly was not competent to adopt Regulation No 2772/1999 on the basis of that provision, so that Regulation No 2772/1999 must be annulled.

( see paras 41-44 )

2. Even though Regulation No 2772/1999 providing for the general rules for a compulsory beef labelling system has been replaced in the interim by Regulation No 1760/2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products and repealing Regulation No 820/97, its annulment could create a legal lacuna potentially affecting, in particular, decisions which the Member States may have taken in application of Regulation No 820/97 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products during the period covered by the extension of time provided for by Regulation No 2772/1999. For reasons of legal certainty, it is thus appropriate for the Court to have recourse to the power conferred on it by the second paragraph of Article 231 EC and to rule that the effects of those provisions of Regulation No 2772/1999 pursuant to which the Member States may have adopted decisions which could be affected by the annulment are to be regarded as definitive.

( see para. 48 )

Parties

In Case C-93/00,

European Parliament, represented by C. Pennera and E. Waldherr, acting as Agents, with an address for service in Luxembourg,

applicant,

v

Council of the European Union, represented by G. Maganza and J. Monteiro, acting as Agents, with an address for service in Luxembourg,

defendant,

supported by

Kingdom of Spain, represented by R. Silva de Lapuerta, acting as Agent, with an address for service in Luxembourg,

and by

Commission of the European Communities, represented by G. Berscheid, acting as Agent, with an address for service in Luxembourg,

interveners,

APPLICATION for annulment of Council Regulation (EC) No 2772/1999 of 21 December 1999 providing for the general rules for a compulsory beef labelling system (OJ 1999 L 334, p. 1),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, P. Jann, F. Macken, N. Colneric and S. von Bahr (Presidents of Chambers), A. La Pergola, J.-P. Puissochet, L. Sevón (Rapporteur), M. Wathelet, V. Skouris and J.N. Cunha Rodrigues, Judges,

Advocate General: C. Stix-Hackl,

Registrar: L. Hewlett, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the European Parliament, the Council and the Commission at the hearing on 3 July 2001,

after hearing the Opinion of the Advocate General at the sitting on 9 October 2001,

gives the following

Judgment

Grounds

1 By application lodged at the Court Registry on 10 March 2000, the European Parliament brought an action under Article 230 EC for annulment of Council Regulation (EC) No 2772/1999 of 21 December 1999 providing for the general rules for a compulsory beef labelling system (OJ 1999 L 334, p. 1, hereinafter the contested regulation).

2 By orders of the President of the Court dated 4 August and 13 September 2000 respectively, the Kingdom of Spain and the Commission of the European Communities were granted leave to intervene in the present case in support of the form of order sought by the Council.

Regulation (EC) No 820/97

3 On 21 April 1997 the Council adopted, on the basis of Article 43 of the EC Treaty (now, after amendment, Article 37 EC), Regulation (EC) No 820/97 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products (OJ 1997 L 117, p. 1).

4 Title I of Regulation No 820/97 organises a system for the identification and registration of bovine animals. In accordance with Article 3 of that regulation, the system in question comprises ear-tags to identify animals individually, computerised databases, animal passports and individual registers kept on each holding. The provisions concerning that system replace, so far as concerns bovine animals, those contained in Council Directive 92/102/EEC of 27 November 1992 on the identification and registration of animals (OJ 1992 L 355, p. 32).

5 Title II of Regulation No 820/97 concerns the labelling of beef and beef products. That regulation authorises operators or organisations wishing to do so to label beef in accordance with a system of approval by the Member States, and Article 16 sets out the information which may appear on the labels.

6 Article 12(1) of Regulation No 820/97 provides:

If an operator or an organisation, as defined in Article 13, wishes to label beef at the point of sale in such a way as to provide information concerning the origin or certain characteristics or production conditions of the labelled meat or of the animal from which it derives, it shall do so in accordance with this Title.

However, this Title shall not affect:

- compulsory indications as referred to in Article 3(1) of Council Directive 79/112/EEC [of 18 December 1978 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for sale to the ultimate consumer (OJ 1979 L 33, p. 1), as amended by Directive 97/4/EC of the European Parliament and of the Council of 27 January 1997 (OJ 1997 L 43, p. 21)], with the exception of point 7,

- ...

- the indications as referred to in [Council] Regulations (EEC) No 1208/81 [of 28 April 1981 determining the Community scale for the classification of carcases of adult bovine animals (OJ 1981 L 123, p. 3), in the version thereof amended by Council Regulation (EEC) No 1026/91 of 22 April 1991 (OJ 1991 L 106, p. 2)] and (EEC) No 1186/90 [of 7 May 1990 extending the scope of the Community scale for the classification of carcases of adult bovine animals (OJ 1991 L 119, p. 32)],

- indications relating to the health mark as provided for in [Council] Directive 64/433/EEC [of 26 June 1964 on health conditions for the production and marketing of fresh meat, in the version thereof amended and updated by Council Directive 91/497/EEC of 29 July 1991 (OJ 1991 L 268, p. 69), as amended by Council Directive 95/23/EC of 22 June 1995 (OJ 1995 L 243, p. 7)] and other similar indications provided for in the relevant veterinary legislation,

...

7 Article 19 of Regulation No 820/97 provides:

1. A compulsory beef-labelling system shall be introduced which shall be obligatory in all Member States from 1 January 2000 onwards. However, this compulsory system shall not exclude the possibility for a Member State to decide to apply the system merely on an optional basis to beef sold in that same Member State. The labelling system provided for in this Regulation shall apply until 31 December 1999.

On the basis of the report provided for in paragraph 3, the Council, acting by a qualified majority on a proposal from the Commission, shall therefore take a decision before 1 January 2000 on the general rules for a compulsory beef-labelling system to apply as from that date, in accordance with the Community's international commitments.

2. Save where otherwise decided by the Council, the labelling system compulsory as from 1 January 2000 shall, in accordance with the Community's international commitments, in addition to the labelling information referred to in Article 16(3), also require indication of the Member State or third country where the animal from which the beef is derived was born, the Member States or third countries where the animal was raised and the Member State or third country where the animal was slaughtered.

3. Member States shall submit to the Commission, by 1 May 1999, reports on the implementation of the labelling system for beef. The Commission shall submit to the Council a report on the situation regarding the implementation of beef labelling systems in the different Member States.

4. However, Member States where there is a sufficiently developed identification and registration system for bovine animals may before 1 January 2000 impose a compulsory labelling system for beef from animals born, fattened and slaughtered on their territory. Furthermore, they may decide that one or more of the items of information referred to in Article 16(1) and (2) must be indicated on labels.

5. A compulsory system as provided for in paragraph 4 must not lead to any disruption of trade between the Member States.

The implementation arrangements applicable in those Member States intending to apply the provisions of paragraph 4 shall require prior approval from the Commission.

6. By 1 January 2000, the Council, acting by a qualified majority on a proposal from the Commission, shall take a decision as to whether compulsory indication of data other than those provided for in paragraph 2 and extension of the scope of this Regulation to products other than those indicated in the first indent of Article 13 are possible and desirable.

The contested regulation

8 In accordance with Article 19(3) of Regulation No 820/97, the Commission presented to the European Parliament and to the Council on 13 October 1999 a report on the situation regarding the implementation of beef labelling systems in the different Member States (COM(1999) 486 final, hereinafter the Commission report). In that report, it recorded various shortcomings concerning the identification and registration of bovine animals. In that regard, it noted, first, that, in most Member States, passports were operational only in respect of animals born after 1 January 1998, next, that difficulties had been observed regarding the transfer of information about animals upon their being exported (on account of information being lost when a new passport was issued) and, lastly, that databases containing the relevant data would not be operational by the date envisaged.

9 The Commission report concluded that most Member States ..., by not being in a position to implement reliably compulsory labelling, would provoke an unsatisfactory situation of confusion, unfairness and uncertainty for the entire EU beef sector, from producer to consumer.

10 The Commission, taking those aspects into account, presented two proposals for regulations based on Article 152 EC:

- the first was designed to substitute, in place of Regulation No 820/97, a new regulation having the same object but providing for the introduction of compulsory indications by two separate steps, the second of which was to commence on 1 January 2003 (hereinafter the first Commission proposal);

- the second (hereinafter the second Commission proposal) was designed temporarily to prolong application of the labelling provisions prescribed by Regulation No 820/97 pending adoption of the first Commission proposal.

11 With regard to its second proposal, the Commission stated in its report as follows:

Rapid adoption of the proposal is necessary to avoid a collapse in the current voluntary labelling system and its automatic substitution with a compulsory system with no general rules to guide it.

However, if Council and Parliament fail to come to a decision before 31.12.99, the Commission has to reserve the possibility to present to Council an urgent proposal, for adoption before the end of the 1999, based on the existing Article 19 of Regulation (EC) No 820/97 (i.e. a decision reached by qualified majority of the Council on a proposal from the Commission). Such a proposal would be made in order to avoid a legal void through the automatic lapse in the voluntary system.

12 On 14 December 1999 the Council decided to adopt a decision on the basis of Article 19 of Regulation No 820/97 should the Parliament be unwilling, on its first reading in the context of the co-decision procedure, to accept the second Commission proposal without amendment, save for the addition of Article 37 EC as its legal basis along with Article 152 EC.

13 On 16 December 1999, on the first reading in the context of the co-decision procedure, the Parliament voted for various amendments to the second Commission proposal. It wanted certain items of information to become compulsory from 1 January 2000. A further amendment was designed to extend the voluntary system for eight months only, rather than for the period of one year proposed by the Commission.

14 On 21 December 1999 the Council adopted the contested regulation on the basis of Article 19 of Regulation No 820/97.

15 According to the second recital in the preamble to the contested decision, the general rules which it lays down for a compulsory beef labelling system are to be applicable on a provisional basis only, for a maximum period of eight months, so as to enable the European Parliament and the Council to come to a decision on the first Commission proposal.

16 The third recital in the preamble to the contested decision states that it is appropriate to establish simple general rules for a compulsory beef labelling system which all Member States can fulfil, and that those rules should refer to the provisions laid down in Article 12(1) of Regulation No 820/97.

17 In addition, the contested decision maintains in force the voluntary beef labelling system provided for by Regulation No 820/97.

18 Article 1 of the contested regulation provides:

1. Operators and organisations marketing beef within the meaning of Article 13 of Regulation (EC) No 820/97 shall label it in accordance with the rules referred to in the first, third and fourth indents of the second subparagraph of Article 12(1) of Regulation (EC) No 820/97.

However, Member States may continue to have recourse to the possibility provided for in Article 19(4) of Regulation (EC) No 820/97 after 1 January 2000. In this case, the provisions of Article 19(5) of Regulation (EC) No 820/97 shall continue to apply.

2. The rules relating to the voluntary system, which applied until 31 December 1999 in accordance with the provisions of Article 19 of Council Regulation (EC) No 820/97, will continue to be applicable to any voluntary indication, additional to the obligatory labelling system referred to in paragraph 1.

The action for annulment

19 The Parliament puts forward three pleas in law in support of its application. The first of those pleas alleges that the Council was not competent to adopt the contested regulation on the basis of Article 19 of Regulation No 820/97. The second plea alleges infringement of the Parliament's rights and powers, inasmuch as, if the regulation temporarily prolonging the applicability of the labelling provisions laid down by Regulation No 820/97 had been adopted on the correct legal basis, namely Article 152 EC, the Parliament should have intervened in its capacity as co-legislator. The third plea alleges failure by the Council to comply with the obligations resulting from Regulation No 820/97, inasmuch as, first, the Council amended the content of that regulation without having recourse to the legislative procedure involved in the co-decision process and, second, it failed to adopt within the period laid down in Article 19 of Regulation No 820/97 the general rules for a compulsory beef labelling system.

Arguments of the parties

The first plea

20 By its first plea, the Parliament claims that the Council was not empowered either to prolong the application of the voluntary beef labelling system beyond 31 December 1999 or to postpone the introduction of the compulsory beef labelling system. According to the Parliament, whilst it is true that the Council reserved to itself the power to implement Regulation No 820/97, the very principle of the compulsory beef labelling system and the date of its entry into force were fixed by that regulation. By altering those aspects, the Council did not adopt a measure in implementation of Regulation No 820/97; instead, it amended that regulation.

21 The Parliament asserts that the contested regulation contains no specific provision relating to the labelling of beef and cannot therefore be regarded as an implementing measure designed to establish a compulsory beef labelling system.

22 It maintains that the reference in the first subparagraph of Article 1(1) of the contested regulation to the rules mentioned in the first, third and fourth indents of the second subparagraph of Article 12(1) of Regulation No 820/97 merely serves a confirmatory purpose, inasmuch as those indents list the existing legislation relating to the labelling of foodstuffs (Directive 79/112, as amended by Directive 97/4), the Community scale for the classification of carcases of adult bovine animals (Regulation No 1208/81, as amended by Regulation No 1026/91, and Regulation No 1186/90) and the health mark (Directive 64/433, in the version thereof amended and updated by Directive 91/497, as amended by Directive 95/23).

23 The Parliament denies the validity of the proposition, put forward by the Council, that there exists a derived legal basis enabling a legislative act to be adopted by means of a simplified decision-making procedure within the context of the common agricultural policy, ignoring Article 37 EC.

24 According to the Parliament, there is no such thing as an act of a third type, existing alongside legislative acts and implementing acts. In its submission, the contested regulation is either a legislative act, in which case it must comply with the essential procedural requirements for its adoption as laid down in the Treaty, or it is an implementing act within the meaning of Article 202 EC.

25 In the alternative, the Parliament claims that, even assuming that the Council had the power to adopt an act of the third type, the authorisation contained in the second subparagraph of Article 19(1) and in Article 19(2) of Regulation No 820/97 was limited to setting up a compulsory labelling system by 1 January 2000.

26 The Council, on the other hand, maintains that it was competent to adopt the contested regulation on the basis of Article 19 of Regulation No 820/97.

27 It contends that there is nothing whatsoever in the Treaty to indicate that all legislative activity in the sphere of the common agricultural policy entails consultation of the European Parliament or a decision taken jointly with the Parliament. On the contrary, it is open to the legislature to provide that a legislative act adopted following consultation of the Parliament, or in the context of a decision taken jointly with that institution, is to have a derived legal basis not requiring the involvement of the latter.

28 The Council maintains in that regard that, had it wished to reserve to itself any implementing powers, it would have justified that step in the preamble to Regulation No 820/97, which it did not do.

29 The Council states that, in the present case, Article 19 of Regulation No 820/97 constituted a derived legal basis permitting it, on the basis of the experience gained in applying the voluntary labelling system, first, to make, where necessary, such adjustments as might prove essential in order to convert it to a compulsory system and, second, to lay down not detailed implementation arrangements but rather the general rules which were to apply from 1 January 2000.

30 Applying the principle that he who can do most can also do least, Article 19 of Regulation No 820/97 also enabled the Council to effect the transition from the old to the new regime, by means of the adoption of the contested regulation.

31 The Council contends that, in those circumstances, it did not exceed the powers conferred on it by the second subparagraph of Article 19(1) of Regulation No 820/97. On the contrary, it made use of the normal margin of discretion enjoyed by the legislature so as to take, before 31 December 1999, those measures which were essential in order to avoid the legal lacuna which would have arisen pending the setting-up of the definitive beef labelling system.

32 The Kingdom of Spain submits that the Council was competent, on the basis of Article 19 of Regulation No 820/97, to adopt the contested regulation, which did indeed lay down the general rules for a compulsory labelling system, by reference to the first, third and fourth indents of the second subparagraph of Article 12(1) of Regulation No 820/97.

33 The Commission states that, having regard to the amendments made by the Parliament to its second proposal, and taking into account the time-limit applicable, it had no choice, if a legal lacuna was to be avoided, but to have recourse to the procedure provided for in Article 19 of Regulation No 820/97.

34 It further asserts that Regulation No 820/97 does not define the concept of general rules, which meant that the Council, acting in the context of the procedure provided for in Article 19, enjoyed a wide discretion. According to the Commission, the adoption of the contested regulation did not constitute an abuse of process since, first, that regulation laid down labelling rules by prescribing the application of certain rules mentioned in Article 12 of Regulation No 820/97 and, second, it enabled certain Member States to continue to impose rules which are compulsory for operators.

Findings of the Court

35 The Court finds, as a preliminary point, that the contested regulation is essentially aimed at prolonging the validity of the rules relating to the voluntary labelling system, as established by Regulation No 820/97.

36 The contested regulation cannot be regarded as also containing the general rules for a compulsory beef labelling system which are referred to in the second subparagraph of Article 19(1) of Regulation No 820/97.

37 It should be noted in that regard that the only mention of any labelling obligation is to be found in the first subparagraph of Article 1(1) of the contested regulation, which, by reference to the first, third and fourth indents of the second subparagraph of Article 12(1) of Regulation No 820/97, merely lists the labelling rules already in existence.

38 Consequently, for the purposes of determining the application, all that is in fact necessary is to verify whether the Council was competent to provide for the prolongation of that voluntary labelling system.

39 It should be borne in mind in that regard that, in accordance with the second subparagraph of Article 7(1) EC, the Community institutions may act only within the limits of the powers conferred upon them by the Treaty.

40 According to the final sentence of the first subparagraph of Article 19(1) of Regulation No 820/97, [t]he labelling system provided for in this Regulation shall apply until 31 December 1999.

41 By prolonging, by means of the contested regulation, the validity of the rules relating to the voluntary labelling system, the Council has in fact altered the temporal scope of Regulation No 820/97.

42 However, that regulation could only be amended on a legal basis equivalent to that on which it had been adopted, that is to say, on the basis of the Treaty itself, and in conformity with the decision-making process provided for by the Treaty.

43 The Council was therefore wrong to take Article 19 of Regulation No 820/97 as the basis for adopting the contested regulation.

44 It follows that the first plea in law, alleging that the Council was not competent to adopt the contested regulation on the basis of Article 19 of Regulation No 820/97, is well founded, and the contested regulation must therefore be annulled.

45 Consequently, there is no need to rule on the question whether the Council was able, without infringing the rules regarding the powers of the institutions, to confer on itself competence to adopt, by means of a decision taken by a qualified majority on a proposal of the Commission, the general rules for a compulsory beef labelling system.

The second and third pleas

46 Since the first plea is well founded, there is no need to consider the second and third pleas.

Maintenance of the effects of the contested regulation

47 The Parliament and the Commission request that, in the event of annulment of the contested decision, its effects be maintained pending the valid adoption by the Parliament and the Council of a new measure. The Parliament states that its request is justified in the interests of consumers and by the need to maintain, at the very least, a voluntary labelling system.

48 Even though the contested regulation has been replaced in the interim by Regulation (EC) No 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products and repealing Council Regulation (EC) No 820/97 (OJ 2000 L 204, p. 1), its annulment could create a legal lacuna potentially affecting, in particular, decisions which the Member States may have taken in application of Regulation No 820/97 during the period covered by the extension of time provided for by the contested regulation. For reasons of legal certainty, it is thus appropriate for the Court to have recourse to the power conferred on it by the second paragraph of Article 231 EC and to rule that the effects of those provisions of the contested regulation pursuant to which the Member States may have adopted decisions which could be affected by the annulment are to be regarded as definitive.

Decision on costs

Costs

49 Under Article 69(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. The Parliament has asked that the Council be ordered to pay the costs and, since the latter has been unsuccessful, it must be ordered to do so. Pursuant to the first subparagraph of Article 69(4) of the Rules of Procedure, the Kingdom of Spain and the Commission, which have intervened in these proceedings, must bear their own costs.

Operative part

On those grounds,

THE COURT,

hereby:

1. Annuls Council Regulation (EC) No 2772/1999 of 21 December 1999 providing for the general rules for a compulsory beef labelling system;

2. Orders that the effects of those provisions of the contested regulation pursuant to which the Member States may have adopted decisions which could be affected by the annulment are to be regarded as definitive;

3. Orders the Council of the European Union to pay the costs;

4. Orders the Kingdom of Spain and the Commission of the European Communities to bear their own costs.