OPINION OF MR ADVOCATE GENERAL

VERLOREN VAN THEMAAT

DELIVERED ON 15 DECEMBER 1983 ( 1 )

Mr President,

Members of the Court,

1. The facts

By letter dated 6 April 1981 the Commission notified Metalgoi SpA, an undertaking established in Brescia producing steel and steel products, of its reference production figures and production quota for the second quarter of 1981. The products involved were Group IV products as defined by-Decision No 2794/80/ECSC of 31 October 1980 (Official Journal 1980, L 291, p. 1), which was applicable during the last quarter of 1980 and the first half of 1981. By letter dated 1 February 1982 the Commission informed Metalgoi that it appeared that during the second quarter of 1981 it had exceeded the quota by 1428 tonnes. After Metalgoi had been granted a hearing on 28 May 1982, that figure was reduced to 1358 tonnes. By paragraph 2 of Decision No C (82) 1631/6 of 24 November 1982 (Official Journal 1982, C 324, p. 2) the undertaking was fined the sum of 101850 ECU (equivalent to LIT 136533999).

2. The application and the submissions pleaded

On 18 January 1983 Metalgoi brought an action against that decision. In its application it seeks a declaration that the decision of 24 November 1982 is void; in the alternative, it seeks a reduction of the fine and in the further alternative a longer period in which to pay the fine. It also claims an order for costs against the Commission. I will remind the Court that on 21 April 1983 the President of the Court, upon an application for interim relief, granted an order suspending payment of the fine on condition that Metalgoi furnished a guarantee of payment. In its application Metalgoi pleads three submissions, which I shall now consider in turn.

2.1. The first submission

The applicant's first submission is that the decision imposing the fine in unlawful because some of the products concerned do not fall within Group IV as defined by Decision No 2794/80. Its argument is as follows. The sections in question (T-bars and angle-bars) were not, so far as the breach of the quota is concerned, sold in that form but in the form of finished products (inter alia as fencing posts) to which Decision No 2794/80/ECSC docs not apply. Moreover, the sections themselves fall within Category VI, which was not brought into the quota system until Decision No 1831/81/ECSC was adopted; however, that decision was not yet in force during the period in which the quota is alleged to have been exceeded. That second argument must be rejected from the outset. As the Commission has rightly stated and as is also clear from the relevant provisions of both general decisions, Group IV, defined in Decision No 2794/80, was further divided into Categories IV, V and VI in Decision No 1831/81. The further argument put forward, to the effect that a different customs tariff classification is involved, is not relevant either, in this connexion, because the general decisions are not based on a customs nomenclature.

The first argument, namely that the sections concerned were sold as finished products, cannot be accepted either. There is nothing in the general decisions to indicate that steel which is produced and processed into finished products by the same undertaking is not subject to the production quotas. If that were the case, it would give integrated undertakings and unfair advantage. Such a situation cannot be reconciled with the fundamental principles of Article 58 of the ECSC Treaty. The first submissionmust therefore be dismissed in its entirety.

2.2. The second submission

By its second submission Metalgoi alleges that the Commission was wrong to refuse, or at any rate not to act upon, its request made by telex on 17 March 1981 for a quota adjustment under Article 14 of the general decision. As far as this submission is concerned, it need merely be stated that Metalgoi has not brought an action for failure to apply Article 14. The question whether or not the Commission received Metalgoi's telex message (which the Commission denies) is irrelevant as far as this possible ground of action is concerned.

If Article 14 is not applied, undertakings are not of course entitled to go ahead and exceed quotas on the strenght of their own view as to whether that hardship clause in applicable. In any case, the statements reproduced in page 3 of the transcript of the hearing held on 28 May 1982 (Annex 6 to the application) raise some doubt as to whether Metalgoi was in fact in such great financial difficulties as to justify application of Article 14. At that hearing Metalgoi's representative himself stated that its balance-sheet was positive.

2.3. The third submission

Metalgoi, submits, in the alternative, that the excess steel was exported to nonmember countries and did not therefore affect supply on the Common Market. As a general proposition that argument cannot succeed because the general decisions are, as I have stated, based on production only and take no account of sales. In its judgment of 11 May 1983 in Case 244/81 (Klöckner v Commission, [1983] ECR 1451) the Court in fact firmly rejected such an argument (paragraph 44). Whether a brach of a production quota in consequence of deliveries to nonmember countries must, for the purpose of fixing the amount of the fine, always be regarded with the same severity as a breach of a quota through s deliveries within the common market is, however, quite a different question. An argument in favour of such a distinction might perhaps be found in the preambles to the general decisions and in the fact that the system of delivery quotas applies only to deliveries within the common market. It is clear from the Court's judgment of 16 November 1983 in Case 188/81 (Thyssen v Commisson, [1983] ECR 3721) that it does not consider that the amount of a fine should always be fixed automatically. Nevertheless, in my view, the mere fact that a quantity of steel, equal to that by which the quota was exceeded, is exported to nonmember countries cannot in itself be regarded as an exceptional circumstance justifying departure from the normal scale of fines. For that to be the case, the undertaking concerned would at least have to show that through its exports to nonmember countries it had opened up new markets which were inaccessible to competing steel producers, that its exports were not contrary to international agreements and that they surpassed its usual export quota. Even when I raised a question on this point at the hearing, Metalgoi was, however, unable to indicate any exceptional circumstances of the kind I have just described which could justify a reduction of the fine. In connection with this third submission I can now also refer to the judgment of the Fifth Chamber of 30 November 1983 in Case 235/82 (Ferriere San Carlo v Commission and also to the opinion of Mr Advocate General Reischl delivered on 1 December 1983 in Case 348/82 (Odolesi v Commission). On pages 9 to 16 of his opinion my colleague examines in detail a similar plea concerning export transactions and on page 16 he states that he does not exclude the possibility that this factor may be relevant in determining the amount of the fine.

2.4. Other possible mitigating circumstances

However, as the Court will remember, at the hearing Metalgoi did not rely so much on those export transactions as on the fact that the amount by which the quota was exceeded corresponded to a sharp rise in its sales of the finished products in question. Here again, I would not rule out a priori the possibility that this circumstance could justify a reduction of the fine. But again Metalgoi would at least have to show that a new market had been opened up and that the sales of finished products did not therefore reduce the sales outlets of its competitors and could thus be regarded as an exceptional circumstance, within the meaning of Article 9 of the general decision, which could justify a reduction of the fine. I infer from paragraphs 22 and 24 of the Court's judgment in Case 188/82 (Thyssen) that the Court considers that the undertaking concerned must indeed prove the existence of exceptional circumstances. In my view, that has not been done in this case, so this _ argument put forward by the applicant must also be rejected.

As regards Metalgoi's alternative claim for an extension of the period in which the fine must be paid, the Commission explained at the hearing that it normally grants such requests if sufficient cause is shown.

3. Conclusion

I therefore conclude that Metalgoi's application should be dismissed in its entirety and that it should be ordered to pay the costs.

( 1 ) Translated from the Dutch.