Judgment of the Court of 13 March 1968. - W. Beus GmbH & Co. v Hauptzollamt München. - Reference for a preliminary ruling: Finanzgericht München - Germany. - Case 5-67.



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Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

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1 . AGRICULTURE - COMMON AGRICULTURAL POLICY - COMMON ORGANIZATION OF THE MARKETS - FRUIT AND VEGETABLES - ENTRY PRICE - DEDUCTION OF TAXES ON IMPORTS, INCLUDING THE GERMAN TURNOVER EQUALIZATION TAX - FIXING - DUTIES OF THE COMMISSION

( REGULATION NO 23 OF THE COUNCIL OF THE EEC OF 4 APRIL 1962, SIXTH SUBPARAGRAPH OF ARTICLE 11(2 ); REGULATION NO 65/65 OF THE COUNCIL OF THE EEC OF 13 MAY 1965, ARTICLE 1 )

2 . AGRICULTURE - COMMON AGRICULTURAL POLICY - COMMON ORGANIZATION OF THE MARKETS - FRUIT AND VEGETABLES - REFERENCE PRICE - FIXING - POWER OF THE COMMISSION TO EXERCISE ITS DISCRETION - REVIEW BY THE COURT

( REGULATION NO 23 OF THE COUNCIL OF THE EEC OF 4 APRIL 1962, SECOND SUBPARAGRAPH OF ARTICLE 11(2 ); REGULATION NO 65/65 OF THE COUNCIL OF THE EEC OF 13 MAY 1965, ARTICLE 1 )

3 . AGRICULTURE - COMMON AGRICULTURAL POLICY - OBJECTIVES - PROTECTION OF THE INTERESTS OF PRODUCERS AND CONSUMERS - CONFLICT OF INTERESTS - PRINCIPLE OF COMMUNITY PREFERENCE

( EEC TREATY, ARTICLE 39; ARTICLE 44(2 ))

4 . MEASURES ADOPTED BY COMMUNITY INSTITUTIONS - STATEMENT OF REASONS IN REGULATIONS - REQUIREMENT TO STATE THE REASONS ON WHICH THE MEASURE IS BASED - EXTENT

( EEC TREATY, ARTICLE 190 )

Summary

1 . THE EXPRESSION " OTHER TAXES ON IMPORTS " APPEARING IN THE SIXTH SUBPARAGRAPH OF ARTICLE 11(2 ) OF REGULATION NO 23, AS AMENDED BY ARTICLE 1 OF REGULATION NO 65/65/EEC COVERS THE TURNOVER EQUALIZATION TAX COLLECTED IN GERMANY (" UMSATZAUSGLEICHSSTEUER ") AS WELL AS THE COMMUNITY COUNTERVAILING CHARGE COLLECTED ON THE BASIS OF THE SAID REGULATIONS . IN CALCULATING THE ENTRY PRICE OF FRUIT AND VEGETABLES FROM THIRD STATES, IT IS NECESSARY THEREFORE TO DEDUCT FROM THE AMOUNT OF THESE TAXES THE PRICES RECORDED ON THE REPRESENTATIVE IMPORT MARKETS OF THE MEMBER STATES . SINCE THE SAID SIXTH SUBPARAGRAPH PROVIDES THAT THE ENTRY PRICE SHALL BE FIXED " ON THE BASIS OF THE LOWEST PRICES RECORDED ON THE REPRESENTATIVE IMPORT MARKETS ", THE COMMISSION MUST TAKE INTO ACCOUNT THE LOWEST PRICES RULING ON EACH MARKET DURING THE OBSERVATION PERIOD .

2 . THE EXPRESSION " CONSIDERABLE PART OF THE MARKETED OUTPUT THROUGHOUT THE YEAR OR DURING A PART THEREOF ", USED IN THE SECOND SUBPARAGRAPH OF ARTICLE 11(2 ) OF REGULATION NO 23, AS AMENDED BY THE SOLE ARTICLE OF REGULATION NO 65/65/EEC, SHOWS THAT THE COMMISSION HAS A CERTAIN AREA OF DISCRETION AS TO THE CHOICE OF VARIETIES TO BE CONSIDERED FOR FIXING THE REFERENCE PRICE FOR FRUIT AND VEGETABLES . THE COURT MUST THEREFORE CONFINE ITSELF WHERE NECESSARY TO CONSIDERING WHETHER OR NOT THE CHOICE MADE BY THE COMMISSION IS OF AN ARBITRARY NATURE .

3 . THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE EEC TREATY, WHICH ARE INTENDED TO SAFEGUARD THE INTERESTS OF FARMERS AND CONSUMERS, MAY NOT ALL BE SIMULTANEOUSLY AND FULLY ATTAINED . IN BALANCING THESE INTERESTS, THE COUNCIL MUST TAKE INTO ACCOUNT, WHERE NECESSARY, IN FAVOUR OF THE FARMERS THE PRINCIPLE KNOWN AS " COMMUNITY PREFERENCE ", WHICH IS ONE OF THE PRINCIPLES OF THE TREATY AND WHICH IN AGRICULTURAL MATTERS IS LAID DOWN IN ARTICLES 44(2 ).

4 . THE EXTENT OF THE REQUIREMENT, LAID DOWN BY ARTICLE 190 OF THE TREATY, TO STATE THE REASONS ON WHICH MEASURES ARE BASED, DEPENDS ON THE NATURE OF THE MEASURE IN QUESTION .

THE STATEMENT OF THE REASONS FOR A REGULATION MAY BE CONFINED TO INDICATING THE GENERAL SITUATION WHICH LED TO ITS ADOPTION, ON THE ONE HAND, AND THE GENERAL OBJECTIVES WHICH IT IS INTENDED TO ATTAIN ON THE OTHER . CONSEQUENTLY IT IS NOT POSSIBLE TO REQUIRE THAT IT SHOULD SET OUT THE VARIOUS FACTS, WHICH ARE OFTEN VERY NUMEROUS AND COMPLEX, ON THE BASIS OF WHICH THE REGULATION WAS ADOPTED, OR A FORTIORI THAT IT SHOULD PROVIDE A MORE OR LESS COMPLETE EVALUATION OF THOSE FACTS .

Parties

IN CASE 5/67

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT ( FINANCE COURT ), MUNICH, FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

W . BEUS GMBH AND CO ., MUNICH,

AND

HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) MUENCHEN, LANDSBERGERSTRASSE,

Subject of the case

ON THE VALIDITY OF REGULATION NO 144/65/EEC OF THE COMMISSION OF THE EEC OF 18 OCTOBER 1965 INTRODUCING A COUNTERVAILING CHARGE ON THE IMPORTATION OF OUTDOOR TABLE GRAPES FROM BULGARIA AND FROM ROMANIA ( OFFICIAL JOURNAL NO 172 OF 18 OCTOBER 1965, P.2720 ),

Grounds

P . 91

BY AN ORDER OF 25 JANUARY 1967, WHICH ARRIVED AT THE COURT ON THE FOLLOWING 8 FEBRUARY, THE FINANZGERICHT, MUNICH, UNDER ARTICLE 177 OF THE TREATY ESTABLISHING THE EEC PUT A PRELIMINARY QUESTION CONCERNING THE VALIDITY OF REGULATION NO 144/65/EEC OF THE COMMISSION INTRODUCING A COUNTERVAILING CHARGE ON IMPORTS OF OUTDOOR TABLE GRAPES FROM BULGARIA AND ROMANIA .

IT IS APPROPRIATE TO CONSIDER FIRST OF ALL WHETHER THIS REGULATION IS IN ITSELF INVALID BY REASON OF THE FACT THAT IT IS ALLEGEDLY BASED ON ERRORS COMMITTED IN THE CALCULATION OF THE ENTRY PRICE OR BECAUSE IT IS INSUFFICIENTLY REASONED .

THERE MUST THEN BE CONSIDERED THE VALIDITY OF CERTAIN PROVISIONS WHICH FORM THE BASIS OF REGULATION NO 144/65, THAT IS TO SAY, OF REGULATION NO 104/65/EEC OF THE COMMISSION AS WELL AS ARTICLE 11(2 ) OF REGULATION NO 23 OF THE COUNCIL AS THIS PARAGRAPH, HEREINAFTER REFERRED TO AS " ARTICLE 11(2 ) ( AS AMENDED ) ", WAS WORDED BY REGULATION NO 65/65/EEC OF THE COUNCIL .

P . 92

FINALLY IT WILL BE CONSIDERED WHETHER THE COMMISSION WAS REQUIRED TO AMEND OR REVOKE REGULATION NO 144/65 BEFORE THE DATE LAID DOWN FOR ITS EXPIRATION .

I - THE VALIDITY OF REGULATION NO 144/65

1 . THE CALCULATION OF THE ENTRY PRICE

A - THE DEDUCTION OF THE GERMAN " UMSATZAUSGLEICHSSTEUER " ( TURNOVER EQUALIZATION TAX ) AND OF THE COMMUNITY COUNTERVAILING CHARGE

THE COMMISSION WRONGLY INTERPRETED THE SIXTH SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23, BY CONSIDERING THAT THE CONCEPT OF " OTHER TAXES ON IMPORTS ", SPECIFIED BY THAT PROVISION, INCLUDED, ON THE ONE HAND, THE GERMAN TURNOVER EQUALIZATION TAX AND, ON THE OTHER HAND, THE COMMUNITY COUNTERVAILING CHARGE OF 3 U.A . APPLICABLE PRIOR TO THE ENTRY INTO FORCE OF REGULATION NO 144/65/EEC .

( A ) ACCORDING TO THE SIXTH SUBPARAGRAPH MENTIONED ABOVE, THE ENTRY PRICE IS FIXED, IN RESPECT OF PRODUCTS FROM THIRD COUNTRIES, " ON THE BASIS OF THE LOWEST PRICES RECORDED ON THE REPRESENTATIVE IMPORT MARKETS ( OF THE MEMBER STATES ), LESS THE CUSTOMS DUTIES ARISING FROM THE APPLICATION OF ARTICLE 23 OF THE TREATY, AND OF OTHER TAXES ON IMPORTS, AS WELL AS TRANSPORT COSTS FROM THOSE MARKETS TO THE COMMUNITY FRONTIER CROSSING POINTS . THE EXPRESSION " OTHER TAXES ON IMPORTS " DOES NOT APPEAR IN THE PROVISIONS OF THE TREATY WHICH CONCERN DUTIES COLLECTED BECAUSE OF OR AT THE TIME OF IMPORTATION AND WHICH MENTION " CUSTOMS DUTIES ", " CHARGES HAVING EQUIVALENT EFFECT ", " CUSTOMS DUTIES OF A FISCAL NATURE " AND " INTERNAL TAXATION " ( ARTICLES 9, 12 ET SEQ ., 18 ET SEQ . AND 95 ET SEQ .). BY CHOOSING THIS VOCABULARY THE AUTHORS OF THE SAID SIXTH SUBPARAGRAPH OBVIOUSLY INTENDED TO GIVE A WIDE SCOPE TO THIS CONCEPT, SO AS TO MAKE IT INCLUDE, IN ADDITION TO THE CUSTOMS DUTIES SPECIFICALLY MENTIONED BY THE PROVISION IN QUESTION, ALL DUTIES IMPOSED UPON A PRODUCT FROM THIRD COUNTRIES BY REASON OF THE FACT THAT IT CROSSES THE FRONTIERS OF THE COMMUNITY, WITHOUT ITS BEING NECESSARY TO ASCERTAIN WHETHER THE DUTY IN QUESTION WAS INTRODUCED BY THE COMMUNITY OR BY A MEMBER STATE, WHETHER IT FALLS UNDER THE TREATY OR, IF SO, HOW IT MUST BE CLASSIFIED WITH REGARD TO THE TREATY . THIS INTERPRETATION IS CORROBORATED BY THE EXPRESSION " ENTRY PRICE " WHICH REFERS TO THE PURCHASE PRICE OF THE PRODUCT AS IT IS AT THE ACTUAL MOMENT WHEN IT ARRIVES AT THE COMMUNITY FRONTIER AND, CONSEQUENTLY, HAS NOT YET BECOME SUBJECT TO THE DUTIES WHICH WILL BE IMPOSED UPON IT AT THE TIME OF OR BECAUSE OF IMPORTATION .

( B ) IT IS ALLEGED THAT THE REFERENCE PRICE INCLUDES CERTAIN TAXES LEVIED UPON NATIONAL TRADE IN COMMUNITY PRODUCTS, TAXES AGAINST WHICH SUCH A CHARGE AS THE TURNOVER EQUALIZATION TAX IS PRECISELY INTENDED TO COUNTERVAIL . CONSEQUENTLY, IN ORDER TO ENSURE COMPARABILITY BETWEEN REFERENCE PRICES AND ENTRY PRICES, THE LATTER MUST INCLUDE THE TURNOVER EQUALIZATION TAX .

P . 93

ACCORDING TO THE FIRST SUBPARAGRAPH OF ARTICLES 11(2 ) ( AS AMENDED ) OR REGULATION NO 23, THE FIXING OF A REFERENCE PRICE IS INTENDED TO " AVOID DISTURBANCES DUE TO OFFERS FROM THIRD COUNTRIES AT ABNORMAL PRICES ". THIS PROTECTION OF COMMUNITY PRODUCTS MUST CLEARLY ACT UPON ANY MARKET IN WHICH THESE PRODUCTS ARE IN COMPETITION WITH PRODUCTS FROM THIRD COUNTRIES . THIS CONSIDERATION IS PARTICULARLY IMPORTANT FOR THE PRODUCT, THE MARKETS AND THE PERIOD IN QUESTION IN THE PRESENT CASE . IN FACT, IN THE MONTH OF OCTOBER CONSIDERABLE QUANTITIES OF TABLE GRAPES ORIGINATING IN OTHER MEMBER STATES ARE OFFERED ON THE GERMAN MARKETS . HOWEVER, IT IS CLEAR, ON THE ONE HAND, THAT THESE IMPORTS ARE SUBJECT TO THE TURNOVER EQUALIZATION TAX AND, ON THE OTHER HAND, THAT THAT CHARGE CANNOT BE INCLUDED IN THE REFERENCE PRICE, WHICH IS FIXED ON THE BASIS OF PRICES RECORDED IN THE PRODUCER MEMBER STATES .

CONSEQUENTLY, IF THIS CHARGE WERE ACCEPTED AS A PART OF THE ENTRY PRICE, PRODUCTS FROM THIRD COUNTRIES WOULD BE PLACED, ON THE GERMAN MARKETS, IN A SITUATION MORE FAVOURABLE THAN WOULD THE PRODUCTS ORIGINATING IN OTHER MEMBER STATES, WHICH WOULD BE DIAMETRICALLY OPPOSED TO THE OBJECTIVE OF REGULATION NO 23 . THE DEDUCTION OF THE TURNOVER EQUALIZATION TAX IS THUS COMPATIBLE WITH REGULATIONS NOS 23 AND 65/65 .

( C ) THE OBJECTION IS RAISED, IN ADDITION, THAT THE DEDUCTION OF THE COMMUNITY COUNTERVAILING CHARGE COLLECTED DURING THE PREVIOUS PERIOD HAS A " CUMULATIVE EFFECT " AND THAT BY REDUCING THE ENTRY PRICE TO AN ARTIFICIALLY LOW LEVEL, IT CAN BE USED PRECISELY TO JUSTIFY THE INTRODUCTION OF A NEW COUNTERVAILING CHARGE .

IT FOLLOWS FROM THE COMBINED PROVISIONS OF THE FIFTH TO SEVENTH SUBPARAGRAPHS OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23, AND OF ARTICLE 2(1 ) OF THE SAID REGULATION NO 99/65/EEC OF THE COMMISSION THAT BEFORE DECIDING ON THE PRINCIPLE AMOUNT OF A COUNTERVAILING CHARGE TO BE INTRODUCED OR RETAINED FOR A PARTICULAR PERIOD THE COMMISSION IS REQUIRED TO OBSERVE THE REPRESENTATIVE MARKETS AND TO CALCULATE AN ENTRY PRICE DAILY .

CONSEQUENTLY THE DATA COLLECTED DURING THE OBSERVATION PERIOD MUST ENABLE THE COMMISSION TO EVALUATE AS PRECISELY AS POSSIBLE THE MOVEMENT OF PRICES TO BE EXPECTED FOR THE PERIOD TO COME .

ON THE OTHER HAND, THE PRICES TO BE EVALUATED CLEARLY CANNOT INCLUDE A COUNTERVAILING CHARGE, AS THE EVALUATION IS INTENDED PRECISELY TO DISCOVER WHETHER, AND IF SO TO WHAT EXTENT, THE INTRODUCTION OR RETENTION OF SUCH A CHARGE PROVES TO BE NECESSARY FOR THE PERIOD TO COME .

P . 94

CONSEQUENTLY, THE PRICES CALCULATED ON THE BASIS OF DATA RELATING TO THE OBSERVATION PERIOD MUST, FOR THEIR PART, BE DECIDED AFTER A DEDUCTION HAS BEEN MADE IN RESPECT OF THE COUNTERVAILING CHARGE IN FORCE DURING THAT PERIOD .

B - THE PRICES RECORDED ON THE REPRESENTATIVE MARKETS

THE REGULATION IS ALLEGED TO BE INVALID BECAUSE OF THE MANNER IN WHICH THE COMMISSION, IN FIXING THE COUNTERVAILING CHARGE, TOOK INTO CONSIDERATION THE PRICES RECORDED ON THE REPRESENTATIVE MARKETS DURING THE MARKET DAYS PRIOR TO THE ENTRY INTO FORCE OF THAT CHARGE . IN PARTICULAR THE COMPLAINT IS MADE THAT THE COMMISSION REFERRED ESSENTIALLY TO THE MUNICH MARKET WHERE THE PRICES WERE PARTICULARLY LOW, INSTEAD OF ACTING ON THE BASIS OF THE QUANTITIES OF BULGARIAN TABLE GRAPES SOLD ON EACH REPRESENTATIVE MARKET AND THUS OF ARRIVING AT A " WEIGHTED AVERAGE ".

UNDER THE TERMS OF THE SIXTH SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 THE ENTRY PRICE IS TO BE FIXED " ON THE BASIS OF THE LOWEST PRICES RECORDED ON THE REPRESENTATIVE IMPORT MARKETS ", LESS THE AMOUNT OF CUSTOMS DUTIES, OTHER TAXES ON IMPORTS AND TRANSPORT COSTS . IT FOLLOWS FROM THIS THAT THE COMMISSION MUST TAKE INTO ACCOUNT THE LOWEST PRICES RULING ON EACH MARKET DURING THE OBSERVATION PERIOD .

IT IS ACCEPTED THAT, DURING THE PERIOD FROM 11 TO 15 OCTOBER 1965, PRICES FOR BULGARIAN TABLE GRAPES WERE ONLY ABLE TO BE RECORDED ON FOUR REPRESENTATIVE MARKETS OF THE COMMUNITY, NAMELY DUESSELDORF, FRANKFURT, HAMBURG AND MUNICH . DURING THAT PERIOD AND FOR EACH OF THE SAID MARKETS THE LOWEST PRICES, LESS THE DEDUCTIONS WHICH HAVE BEEN MENTIONED, AMOUNTED RESPECTIVELY TO 12, 4, 14.8, 15.6 AND 10.7 U.A . ALL THESE PRICES WERE THUS LOWER THAN THE REFERENCE PRICE OF 15.9 U.A . AND WITH REGARD MORE PARTICULARLY TO THE MARKETS AT DUESSELDORF AND MUNICH, THIS DIFFERENCE AMOUNTED TO 3.5 AND 5.2 U.A . RESPECTIVELY, THUS EXCEEDING TO AN APPRECIABLE EXTENT THE AMOUNT OF 2 U.A . AT WHICH FIGURE THE DISPUTED COUNTERVAILING CHARGE WAS FIXED .

IT MUST BE ADDED THAT DURING THE ENTIRE PERIOD FROM 11 TO 15 OCTOBER INCLUSIVE THE PRICES ON THE MUNICH MARKET, WHICH IS WITHOUT DOUBT OF PARTICULAR IMPORTANCE IN TRADE IN THE PRODUCT IN QUESTION, WERE AT LEAST 4.8 U.A . LOWER THAN THE REFERENCE PRICE .

IT IS NOT POSSIBLE THEREFORE TO COMPLAIN THAT THE COMMISSION DISREGARDED THE LIMITS OF ITS DISCRETION BY CONSIDERING THAT, IN VIEW OF THE DATA RELATING TO THE PERIOD FROM 11 TO 15 OCTOBER 1965, IT WAS NECESSARY, FOR THE PERIOD TO COME, TO FIX THE ENTRY PRICE AT 13.9 U.A . AND CONSEQUENTLY TO INTRODUCE FOR THAT PERIOD A COUNTERVAILING CHARGE EQUAL TO THE DIFFERENCE BETWEEN 15.9 AND 13.9, THAT IS, 2 U.A .

2 . THE STATEMENT OF REASONS FOR REGULATION NO 144/65

IT IS ALLEGED THAT THE DISPUTED REGULATION DID NOT ENABLE THE CRITERIA OR THE FACTS WHICH LED TO THE FIXING OF THE ENTRY PRICE AT 13.9 U.A . TO BE ASCERTAINED . THE COMMISSION DID NOT SPECIFY WHETHER IT REGARDED BOTH THE GERMAN TURNOVER EQUALIZATION TAX AND THE COMMUNITY COUNTERVAILING CHARGE AS " OTHER TAXES ON IMPORT ", WITHIN THE MEANING OF THE SIXTH SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 . FURTHERMORE THE PREAMBLE TO THE DISPUTED REGULATION FAILED TO INDICATE THE DAYS AND THE MARKETS IN RESPECT OF WHICH PRICES LOWER THAN THE REFERENCE PRICE HAD BEEN RECORDED . FINALLY THE SAID PREAMBLE DID NOT INDICATE TO WHAT EXTENT, IN RESPECT OF THE PERIOD IN QUESTION, THERE EXISTED " DISTURBANCES DUE TO OFFERS FROM THIRD COUNTRIES AT ABNORMAL PRICES " ( FIRST SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 ).

P . 95

THE EXTENT OF THE REQUIREMENT LAID DOWN BY ARTICLE 190 OF THE TREATY TO STATE THE REASONS ON WHICH MEASURES ARE BASED, DEPENDS ON THE NATURE OF THE MEASURE IN QUESTION .

IT IS A QUESTION IN THE PRESENT CASE OF A REGULATION, THAT IS TO SAY, A MEASURE INTENDED TO HAVE GENERAL APPLICATION, THE PREAMBLE TO WHICH MAY BE CONFINED TO INDICATING THE GENERAL SITUATION WHICH LED TO ITS ADOPTION, ON THE ONE HAND, AND THE GENERAL OBJECTIVES WHICH IT IS INTENDED TO ACHIEVE ON THE OTHER .

CONSEQUENTLY, IT IS NOT POSSIBLE TO REQUIRE THAT IT SHOULD SET OUT THE VARIOUS FACTS, WHICH ARE OFTEN VERY NUMEROUS AND COMPLEX, ON THE BASIS OF WHICH THE REGULATION WAS ADOPTED, OR A FORTIORI THAT IT SHOULD PROVIDE A MORE OR LESS COMPLETE EVALUATION OF THOSE FACTS .

IT CANNOT BE COMPLAINED, FURTHER, THAT THIS REGULATION DID NOT INDICATE TO WHAT EXTENT, FOR THE PERIOD IN QUESTION, THERE WERE " DISTURBANCES DUE TO OFFERS FROM THIRD COUNTRIES AT ABNORMAL PRICES " ( FIRST SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 ). IN FACT, IN THE SYSTEM ESTABLISHED BY THIS PARAGRAPH SUCH " DISTURBANCES " DO NOT CONSTITUTE A DISTINCT CONDITION FOR THE ADOPTION OF A COUNTERVAILING CHARGE, BUT THEY ARE CONSIDERED TO COME INTO EXISTENCE AS SOON AS THE ENTRY PRICE, PROPERLY CALCULATED, IS LOWER THAN THE REFERENCE PRICE .

II - THE VALIDITY OF REGULATION NO 104/65

1 . THE JURISDICTION OF THE COURT

THE BEUS COMPANY HAS EMPHASIZED TO THE COURT THAT REGULATION NO 104/65 INFRINGED THE PROVISIONS OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 AND THAT ITS STATEMENT OF REASONS IS INSUFFICIENT .

THE COMMISSION RAISES THE OBJECTION THAT THESE COMPLAINTS ARE INADMISSIBLE ON THE GROUND THAT THEY GO BEYOND THE PURPOSE OF THE REFERENCE, AS BEUS DID NOT RAISE THEM BEFORE THE FINANZGERICHT, MUNICH .

P . 96

ACCORDING TO THE WORDING OF THE OPERATIVE PART OF THE DECISION REFERRING THE MATTER, THE COURT IS ASKED SIMPLY TO SAY " WHETHER REGULATION NO 144/65/EEC...IS VALID ".

THE COURT MAY THUS CONSIDER THIS COMPLAINT .

2 . THE SUBSTANCE OF THE COMPLAINT

A - IT IS ALLEGED THAT IN CALCULATING THE REFERENCE PRICE THE COMMISSION WRONGLY TOOK INTO CONSIDERATION THE PRICES RECORDED FOR THE ITALIAN VARIETY OHANEZ AND THAT THAT VARIETY HOLDS ONLY AN INSIGNIFICANT PLACE IN COMPARISON WITH THE REGINA VARIETY, THE ONLY OTHER ITALIAN VARIETY CONSIDERED BY THE COMMISSION FOR THE PURPOSE OF CALCULATING THE REFERENCE PRICE .

UNDER THE TERMS OF THE SECOND SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23, THE REFERENCE PRICE IS TO BE DETERMINED ON THE BASIS OF THE PRODUCER PRICES OF EACH MEMBER STATE . UNDER THAT PROVISION THE LATTER PRICES ARE CALCULATED ON THE BASIS OF THE PRICES RECORDED " FOR THE PRODUCTS OR VARIETIES WHICH REPRESENT A CONSIDERABLE PART OF THE MARKETED OUTPUT THROUGHOUT THE YEAR OR DURING A PART THEREOF ".

IT FOLLOWS FROM THE EXPRESSION " CONSIDERABLE PART OF THE...OUTPUT " THAT THE COMMISSION HAS A CERTAIN AREA OF DISCRETION AS TO THE CHOICE OF VARIETIES TO BE CONSIDERED . THE COURT MUST THEREFORE CONFINE ITSELF TO CONSIDERING WHETHER OR NOT THE CHOICE MADE BY THE COMMISSION IS OF AN ARBITRARY NATURE .

IT IS APPROPRIATE FIRST TO NOTE THAT THE REFERENCE PRICE ON THE BASIS OF WHICH THE COUNTERVAILING CHARGE WAS CALCULATED AND THAT CHARGE ITSELF WERE ONLY IN FORCE IN THE MONTH OF OCTOBER, SO THAT AN EXAMINATION MAY BE LIMITED TO THE DATA RELATING TO THAT MONTH .

UNDER THE TERMS OF THE AFOREMENTIONED PROVISION OF REGULATION NO 23, THE PRICES TO BE CONSIDERED FOR THE PURPOSE OF CALCULATING THE PRODUCER PRICE, WHICH IS THE PRINCIPAL FACTOR IN FIXING THE REFERENCE PRICE, ARE THOSE RECORDED " DURING THE THREE YEARS PRIOR TO THE DATE OF FIXING THE REFERENCE PRICE ", THUS IN THE PRESENT CASE IN 1962, 1963 AND 1964 . IT IS TRUE THAT THE PRODUCTION OF OHANEZ AMOUNTED IN THOSE YEARS ONLY TO 1.2 PER CENT, 1.4 PER CENT AND 1.3 PER CENT RESPECTIVELY OF TOTAL ITALIAN PRODUCTION . HOWEVER THE OHANEZ VARIETY WAS TAKEN INTO ACCOUNT AS REPRESENTATIVE OF THE PRODUCTION OF LATE GRAPES WHICH, ALTHOUGH IT AMOUNTS TO A MAXIMUM OF ONLY 4.5 PER CENT OF TOTAL ITALIAN PRODUCTION, NEVERTHELESS INCLUDES DISTINCT VARIETIES OF EARLY GRAPES AND GRAPES DESCRIBED AS THOSE OF THE SECOND AND THIRD PERIODS, WHICH CONSTITUTE THE GREAT MAJORITY OF TOTAL PRODUCTION . FROM A QUALITATIVE POINT OF VIEW IT IS THUS POSSIBLE TO ACCEPT IN RESPECT OF A LATE VARIETY THAT IT FORMS A " CONSIDERABLE PART OF THE...OUTPUT ", IN ANY CASE IN RELATION TO THE MONTHS OF OCTOBER AND NOVEMBER DURING WHICH THESE VARIETIES APPEAR ON THE MARKET AND PLAY A ROLE WHICH MUST BE TAKEN INTO ACCOUNT .

P . 97

IT APPEARS THAT THE OHANEZ GRAPES FORM PART OF THE MOST IMPORTANT LATE VARIETIES AND ARE SOLD AT RELATIVELY LOW PRICES . CONSEQUENTLY TO TAKE INTO ACCOUNT THE OHANEZ VARIETY FOR THE FIXING OF THE REFERENCE PRICE IN RESPECT OF THE MONTH OF OCTOBER DOES NOT APPEAR TO BE ARBITRARY .

UNDER THE AFOREMENTIONED PROVISION OF REGULATION NO 23, THE PRODUCER PRICE OF EACH MEMBER STATE IS TO CORRESPOND " TO THE AVERAGE OF THE PRICES RECORDED " FOR THE VARIETIES CONSIDERED . THE EXPRESSION " AVERAGE " USED WITHOUT QUALIFICATION NORMALLY MEANS THE ARITHMETICAL AVERAGE AND NOTHING IN THE SAID PROVISION LEADS TO THE CONCLUSION THAT BY THE USE OF THIS VOCABULARY A WEIGHTED AVERAGE IS MEANT . CONSEQUENTLY THE RESPECTIVE QUANTITIES OF THE RELEVANT VARIETIES AVAILABLE CANNOT HAVE ANY EFFECT ON THE CALCULATION OF THE " AVERAGE " IN QUESTION . ALTHOUGH THIS FACT MUST MAKE THE COMMISSION CAREFUL IN THE CHOICE OF VARIETIES WHICH IT CONSIDERS TO CONSTITUTE A CONSIDERABLE PART OF THE MARKETED OUTPUT, THE CIRCUMSTANCES MENTIONED ABOVE MAKE IT IMPOSSIBLE TO COMPLAIN OF A LACK OF CARE LIKELY TO AFFECT THE VALIDITY OF REGULATION NO 144/65 .

B - IT IS ALLEGED THAT THE PREAMBLE TO REGULATION NO 104/65 FAILS TO MENTION THAT FOR THE PURPOSES OF CALCULATING THE REFERENCE PRICE THE OHANEZ VARIETY WAS TREATED ON AN EQUAL FOOTING WITH VARIETIES WHICH WERE MUCH MORE IMPORTANT SUCH AS THE CHASSELAS DU MIDI, GROS VERT AND REGINA .

THAT STATEMENT IS INCORRECT, AS THE SECOND RECITAL OF THE PREAMBLE TO REGULATION NO 104/65 SETS OUT THESE VARIETIES WITHOUT DISTINCTION AS " APPEARING AMONG THE MOST IMPORTANT CULTIVATED IN THE COMMUNITY ", AND STATING THAT THE DATA RELATING TO THEM " ALLOW THE FIXING OF THE ARITHMETICAL AVERAGE OF PRODUCER PRICES IN ACCORDANCE WITH THE CRITERIA LAID DOWN IN ARTICLE 11(2 ) OF REGULATION NO 23 AND IN ARTICLE 1 OF REGULATION NO 99/65/EEC ".

III - THE VALIDITY OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23

IT IS ALLEGED THAT REGULATION NO 144/65 IS INVALID BECAUSE THE PROVISIONS OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 ARE INCOMPATIBLE WITH THE TREATY; THIS PARAGRAPH NO LONGER MAKES THE INTRODUCTION OF A COUNTERVAILING CHARGE SUBJECT TO THE CONDITION THAT " THE COMMUNITY MARKETS EXPERIENCE OR ARE THREATENED WITH SERIOUS DISTURBANCES RESULTING FROM IMPORTS FROM THIRD COUNTRIES AT PRICES LOWER THAN THE REFERENCE PRICE ", BUT ONLY TO " THE ENTRY PRICE OF A PRODUCT IMPORTED FROM THIRD COUNTRIES BEING LOWER THAN THE REFERENCE PRICE ". IT IS FURTHER ALLEGED THAT IN MOVING THUS TO A PURELY AUTOMATIC SYSTEM, THE NEW DRAFTING OF ARTICLE 11(2 ) GAVE A UNILATERAL PREFERENCE TO THE INTERESTS OF COMMUNITY PRODUCERS OF FRUIT AND VEGETABLES AND THUS INFRINGED ARTICLES 39(D ) AND ( E ) AND 110 OF THE TREATY .

AS APPEARS FROM ITS TITLE, REGULATION NO 23 IS TO BE FOUND WITHIN THE FRAMEWORK OF MEASURES INTENDED TO ESTABLISH A COMMON ORGANIZATION OF THE AGRICULTURAL MARKETS . FURTHER, IT FOLLOWS FROM ARTICLE 40(2 ) AND ( 3 ) OF THE TREATY THAT THESE MEASURES MUST BE ADOPTED : " IN ORDER TO ATTAIN THE OBJECTIVES SET OUT IN ARTICLE 39 " AND MAY " INCLUDE ALL MEASURES REQUIRED " FOR THAT PURPOSE . THESE OBJECTIVES, WHICH ARE INTENDED TO SAFEGUARD THE INTERESTS OF BOTH FARMERS AND CONSUMERS, MAY NOT ALL BE SIMULTANEOUSLY AND FULLY ATTAINED . IN BALANCING THESE INTERESTS, THE COUNCIL MUST TAKE INTO ACCOUNT, WHERE NECESSARY, IN FAVOUR OF THE FARMERS THE PRINCIPLE KNOWN AS " COMMUNITY PREFERENCE ", WHICH IS ONE OF THE PRINCIPLES OF THE TREATY AND WHICH IN AGRICULTURAL MATTERS IS LAID DOWN IN ARTICLE 44(2 ).

P . 98

LOOKED AT IN THE LIGHT OF THESE CONSIDERATIONS, IT DOES NOT APPEAR THAT ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 INFRINGED THE REQUIREMENTS OF THE TREATY . IN FACT, THAT PROVISION, CONSIDERED AS A WHOLE, INDICATES A DESIRE TO ENSURE PROTECTION FOR COMMUNITY PRODUCERS ONLY WITHIN REASONABLE LIMITS . IT IS SUFFICIENT TO MENTION THAT THE REFERENCE PRICE IS BASED ON THE MARKETS OF PRODUCER COUNTRIES " WHERE THE PRICES ARE LOWEST " AND THAT IT WILL NORMALLY BE LOWER THAN THE PRICES AT WHICH THE PRODUCTS OF A MEMBER STATE ARE SOLD IN OTHER MEMBER STATES, AS THESE PRICES ALSO INCLUDE THE TRANSPORT COSTS FROM ONE STATE TO ANOTHER AND ANY IMPORT DUTIES COLLECTED BY THE IMPORTING STATE . ALTHOUGH ARTICLE 11(2 ) ( AS AMENDED ) NO LONGER MAKES THE INTRODUCTION OF A COUNTERVAILING CHARGE DEPENDENT UPON THE THREAT OF SERIOUS DISTURBANCES, IT MUST BE CONSIDERED THAT THIS CRITERION ALLOWS VERY DIFFERENT APPLICATIONS, EVEN THOUGH THE NEW RULES LAY DOWN MORE OBJECTIVE CRITERIA .

IV - THE FAILURE OF THE COMMISSION TO AMEND OR REVOKE REGULATION NO 144/65

THE COMPLAINT IS MADE THAT THE COMMISSION DID NOT REVOKE OR AMEND REGULATION NO 144/65 BEFORE 31 OCTOBER 1965, AS PROVIDED FOR IN ARTICLE 2 OF THAT REGULATION SHOULD THE INTRODUCTION OF A COUNTERVAILING CHARGE OF 2 U.A . NO LONGER FULFIL THE CONDITIONS SPECIFIED IN ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23 AND THAT TAKING INTO ACCOUNT THE LATER MOVEMENT OF PRICES RECORDED ON THE REPRESENTATIVE MARKETS, THIS CONDITION WAS ACTUALLY FULFILLED .

UNDER THE TERMS OF ARTICLE 2 OF REGULATION NO 144/65, TOGETHER WITH ARTICLE 13 OF REGULATION NO 23, THE COMMISSION WAS REQUIRED TO HEAR THE MANAGEMENT COMMITTEE FOR FRUIT AND VEGETABLES BEFORE AMENDING OR REVOKING THE FIRST REGULATION . TAKING INTO ACCOUNT THE EXPERIENCE WHICH HAS BEEN GAINED FROM THE IMPLEMENTATION OF REGULATION NO 144/65, IT IS POSSIBLE TO PUT THE LAPSE OF TIME WHICH WOULD HAVE OCCURRED BETWEEN CONSULTING THE SAID COMMITTEE AND THE ENTRY INTO FORCE OF A REGULATION AMENDING OR REVOKING THE SAID REGULATION AT A MINIMUM OF THREE DAYS . THE PRESENT COMPLAINT AMOUNTS THEREFORE TO STATING THAT THE COMMISSION SHOULD HAVE COMMENCED THE CONSULTATIVE PROCEDURE AT THE LATEST ON 24 OCTOBER 1965 . CONSEQUENTLY, TAKING INTO ACCOUNT THE FACT THAT THE MARKETS WERE CLOSED ON 23 AND 24 OCTOBER, IT IS APPROPRIATE TO CONSIDER WHETHER THE SITUATION OF THE REPRESENTATIVE MARKETS AS IT APPEARED FROM 18 TO 22 OCTOBER INCLUSIVE, THE PERIOD IMMEDIATELY FOLLOWING THE OBSERVATION PERIOD PRECEDING THE ADOPTION OF REGULATION NO 144/65, REQUIRED THE REVISION OF THE FORECASTS PREVIOUSLY MADE .

P . 99

DURING THE PERIOD IN QUESTION, THE PRICES RECORDED ON THE REPRESENTATIVE MARKETS, CORRECTED IN ACCORDANCE WITH THE SIXTH SUBPARAGRAPH OF ARTICLE 11(2 ) ( AS AMENDED ) OF REGULATION NO 23, SHOWED A SUFFICIENTLY MARKED RISE IN COMPARISON WITH THE PREVIOUS SITUATION, AND EVEN THE LOWEST OF THE PRICES MENTIONED ABOVE WERE LOWER THAN THE REFERENCE PRICE BY LESS THAN 2 U.A . HOWEVER, AS WAS ESTABLISHED ABOVE, THE COUNTERVAILING CHARGE MUST TAKE EFFECT EACH TIME, NOT DURING THE OBSERVATION PERIOD WHICH PRECEDES THE ADOPTION OF THE REGULATIONS RELATING TO THAT CHARGE BUT DURING THE PERIOD WHICH FOLLOWS IT . THE COMMISSION WAS THUS ENTITLED TO RETAIN THE DISPUTED CHARGE SINCE IT COULD REASONABLY SUPPOSE THAT THAT CHARGE WOULD BE APPROPRIATE FOR THE DAYS TO FOLLOW . IN THIS CONNEXION, IT MAY BE STATED THAT AFTER 24 OCTOBER 1965 ON THE REPRESENTATIVE MARKET AT MUNICH THE DIFFERENCE BETWEEN THE CORRECTED PRICES AND THE REFERENCE PRICE VARIED BETWEEN 2.2 AND 1.9 U.A . THE FORECASTS MADE BY THE COMMISSION WERE NOT THEREFORE CONTRADICTED BY LATER DEVELOPMENTS .

GENERALLY, THE TIME-LAG BETWEEN OBSERVATION PERIODS AND IMPLEMENTATION PERIODS, WHICH IS INHERENT IN ANY SYSTEM SUCH AS THE ONE IN QUESTION, HAS THE NECESSARY CONSEQUENCE THAT, AS INCREASED BY THE COUNTERVAILING CHARGE, THE ENTRY PRICES FOR EACH DAY AND EACH REPRESENTATIVE MARKET ARE SOMETIMES SLIGHTLY HIGHER AND SOMETIMES SLIGHTLY LOWER THAN THE REFERENCE PRICE . IT IS NOT THEREFORE PROVED THAT IN THE PRESENT CASE THE COMMISSION NEGLECTED ITS DUTY .

IT FOLLOWS FROM ALL THE FOREGOING CONSIDERATIONS UNDER I TO IV ABOVE THAT AN EXAMINATION OF THE QUESTION SUBMITTED TO THE COURT BY THE FINANZGERICHT, MUNICH, HAS NOT REVEALED ANY FACTS LIKELY TO CAST DOUBT ON THE VALIDITY OF REGULATION NO 144/65/EEC .

Decision on costs

THE COSTS INCURRED BY THE COMMISSION OF THE EEC, WHICH SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE AND AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED, A STEP IN THE ACTION PENDING BEFORE THE FINANZGERICHT, MUNICH, THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

Operative part

THE COURT

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE FINANZGERICHT, MUNICH, BY ORDER OF THAT COURT OF 25 JANUARY 1967, HEREBY RULES :

AN EXAMINATION OF THE QUESTION REFERRED TO THE COURT BY THE FINANZGERICHT, MUNICH, HAS NOT REVEALED ANY FACT CAPABLE OF AFFECTING THE VALIDITY OF REGULATION NO 144/65/EEC OF THE COMMISSION OF 18 OCTOBER 1965 INTRODUCING A COUNTERVAILING CHARGE ON IMPORTS OF OUTDOOR TABLE GRAPES FROM BULGARIA AND ROMANIA;

AND DECLARES :

IT IS FOR THE FINANZGERICHT, MUNICH, TO DECIDE UPON THE COSTS OF THE PRESENT PROCEEDINGS .