Joined Cases T-332/00 and T-350/00

Rica Foods (Free Zone) NV and Free Trade Foods NV

v

Commission of the European Communities

‛Association arrangements for the overseas countries and territories — Regulation (EC) No 2081/2000 — Imports of sugar and mixtures of sugar and cocoa — EC/OCT cumulation of origin — Safeguard measure — Application for annulment — Action for damages — Article 109 of the OCT Decision — Principle of proportionality — Misuse of powers’

Judgment of the Court of First Instance (Third Chamber), 14 November 2002 II-4761

Summary of the Judgment

Association of the overseas countries and territories — Safeguard measures for imports from the overseas countries and territories (OCTs) of sugar sector products with EC/OCT cumulation of origin — Conditions for introduction — Difficulties which may result in a deterioration in a sector of the Community's activity or in a region of the Community

Actions for annulment — Natural or legal persons — Measures of direct and individual concern to them — Regulation on safeguard measures for imports from the overseas countries and territories (OCTs) of sugar sector products ivith EC/OCT cumulation of origin — Undertakings established in the OCTs which have concluded contracts but are unable to perform them

Regulation No 2081/2000 providing for the continued application of safeguard measures for imports from the overseas countries and territories (OCTs) of sugar sector products with EC/OCT cumulation of origin is of direct and individual concern, within the meaning of the fourth paragraph of Article 230 EC, to sugar-processing undertakings established in the OCTs which export to the Community the products referred to in that regulation. First, the contested regulation leaves no discretion to the national authorities of the Member States responsible for implementing it. Secondly, the fact that the applicants had entered into contracts, performance of which had been prevented, in whole or in part, by the regulation distinguishes them individually for the purposes of the fourth paragraph of Article 230 EC. (see paras 45, 58)

Under Article 109(1) of Decision 91/482 on the association of the overseas countries and territories (OCTs) with the European Economic Community the Commission may take safeguard measures if difficulties arise which may result in a deterioration in a sector of the Community's activity or in a region of the Community. Under Regulation No 2081/2000 providing for the continued application of safeguard measures for imports from the OCTs of sugar sector products with EC/OCT cumulation of origin, it was reasonable for the Commission to consider, first, that the fact that imports of sugar and mixtures under the EC/OCT cumulation of origin regime increased greatly in the specific context of the surplus Community sugar market and the obligations under the WTO Agreements constituted ‘difficulties’ within the meaning of Article 109(1) of Decision 91/482. Secondly, given that any further import of sugar or products with a high sugar content from the OCTs will mean a greater reduction in the quota for Community producers and a greater guaranteed income loss for them, it was reasonable for the Commission to consider that the common organisation of the markets in sugar could be greatly destabilised by increased imports of sugar originating in the OCTs. (see paras 67, 96, 116-117, 119, 145)

By virtue of the principle of proportionality, the legality of a safeguard measure is subject to the condition that the means it employs must be appropriate to attain the legitimate objective pursued by the regulation in question and must not go further than is necessary to attain it and, where there is a choice of appropriate measures, it is necessary to choose the least onerous. The principle of proportionality is not infringed by Regulation No 2081/2000 providing for the continued application of safeguard measures for imports from the overseas countries and territories (OCTs) of sugar sector products with EC/OCT cumulation of origin, which imposed only an exceptional, partial and temporary restriction on the importation into the Community, free of customs duty, of sugar or mixtures under the EC/OCT cumulation of origin regime. That regulation, which limited duty-free access to the Community market for sugar originating in the OCTs, within limits compatible with the situation on that market, whilst retaining preferential treatment for that product in a manner consistent with the objectives of Decision 91/482 on the association of the OCTs with the European Economic Community, was a suitable instrument for attaining the objective sought by the Commission and did not go beyond what was necessary to do so. (see paras 143, 153, 174)

The Community institutions enjoy a wide discretion in the application of Article 109 of Decision 91/482 on the association of the overseas countries and territories (OCTs) with the European Economic Community. In cases involving such a discretion, the Community judicature must restrict itself to considering whether the exercise of that discretion contains a manifest error or constitutes a misuse of power or whether the Community institutions clearly exceeded the bounds of their discretion. The limitation of review by the Community Court is particularly necessary where the Commission is called upon to arbitrate between differing interests — in the present case, protection of the common organisation of the markets in sugar, on the one hand, and protection of the interests of the OCTs and undertakings established in the OCTs on the other. (see paras 149-150, 174)

Having regard to their nature and structure, the WTO agreements are not in principle among the rules in the light of which the Court is to review the legality of measures adopted by the Community institutions. The same holds true where the Community measure referred for review by the Community Court restricts trade between the Community and the overseas countries and territories, irrespective of their status within the WTO. It is only where the Community intended to implement a particular obligation assumed in the context of the WTO, or where the Community measure refers expressly to specific provisions of the WTO agreements, that it is for the Community Court to review the legality of the Community measure in question in the light of the WTO rules. (see para. 194)

A measure is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty. (see para. 200)

The statement of reasons required by Article 253 EC must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Community Court to exercise its power of review. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. A regulation introducing safeguard measures which is based on the second hypothesis described in Article 109(1) of Decision 91/482 on the association of the overseas countries and territories with the European Economic Community meets those requirements if it identifies the ‘difficulties’ which have arisen, explains how those difficulties entail the risk of ‘a deterioration in a sector of the Community's activity or in a region of the Community’ and contains information from which it is possible to assess whether the principle of proportionality provided for in Article 109(2) of Decision 91/482 has been observed. (see paras 207-208)