4.

Of course these facts still do not justify a finding that the French Government has infringed the Treaty and that the application must succeed. A number of other objections, which the French Government regards as relevant, must also be examined. One of these objections is or particular importance, namely the observation that the provisions of Chapter VI of the Euratom Treaty have never been properly applied, but merely ostensibly and superficially, that they have not had any practical importance, and that there could not therefore be any point in having it established that France has not observed them. In this respect it should, in my opinion, be stressed first of all that the French Government has not maintained that these provisions have been completely without importance. In any event it was not contended that Articles 70 and 75, which provide for an annual report from the Member States to the Commission or the obligation to notify in certain cases, were never applied. This fact alone is of a certain importance in the consideration of the present case. For the rest, with regard to the defective operation of Chapter VI, ‘supplies’, various different aspects must be distinguished. One aspect relates to the system of Article 60 which mainly regulates the balancing of supply against demand for ores, source materials, etc., by the Supply Agency. According to the French Government this system has not been in operation in so far as it was possible to conclude contracts for the supply of natural uranium directly between suppliers and interested buyers and these contracts merely had to be notified to the Supply Agency subsequently; furthermore, contracts relating to special fissile materials have in reality been negotiated directly between the parties and merely given formal confirmation by the Supply Agency; and finally, supply contracts were usually concluded for a period of more than 10 years, which, according to the Treaty, should be the exception. In this respect it must first be conceded that Article 5 of the Supply Agency Rules of 5 May 1960, provides that the Commission may ask the Agency to apply a simplified procedure if, in respect of certain products, the Commission finds, on the initiative of the Agency and, after consulting the Consultative Committee, that there is a clear surplus of ‘supply over demand’. Then, after consulting the Consultative Committee the Agency lays down the general conditions that must be fulfilled by supply contracts concluded according to the simplified procedure. The contracts are negotiated directly between the parties concerned, then notified to the Agency and are ‘deemed to be concluded by it if no objection is notified by the Agency to the parties concerned within eight days from the time of receipt of the contracts’. This scheme was applied to natural uranium and thorium. By virtue of a notice issued by the Agency on 23 November 1960, the validity of which has been extended several times, these contracts could be negotiated directly and signed by the parties from 1 December 1960. The general conditions to which they are subject and which were laid down by the Agency were published in the Official Journal of 30 November 1960. They prescribe inter alia the information (concerning prices and intended use) that the contracts must contain and the period for which they may be concluded. When it is inquired whether Article 60 of the Euratom Treaty covers this simplified procedure it must certainly be borne in mind that the supply scheme as a whole represents a compromise between a planned economy and a free-enterprise economy. It is in the nature of such a system to seek to attain the essential aim of guaranteeing equal access to the sources of supply with an administrative apparatus as small as possible and to provide for the intervention of an administrative authority only in so far as it is absolutely necessary. In a situation where there is practically no demand (as was the case in particular in the years 1960 onwards when only contracts for very small quantities were concluded), that is, with a pronounced buyers' market, it is possible without any doubt to achieve the specified aim without the centralized balancing of supply and demand. This is possible in particular because in view of the market surveys conducted by the Supply Agency and the provision of general information for undertakings regarding supplies, sales, price trends, etc., the application of appropriate market prices seems ensured. In addition, the subsequent supervision by the Supply Agency which, as you know, has a right to object, may contribute to the achievement of the objective in question. Seen in this light, the simplified procedure is perfectly in accordance with the spirit and purpose of Article 60 of the Euratom Treaty. Moreover, it can scarcely be disputed that the establishment of this procedure is covered by the general wording of the last paragraph of Article 60 which merely provides that Agency rules ‘shall determine the manner in which demand is to be balanced against supply’. In any event I cannot see how one can speak in this respect of an impermissible relaxing of the system and a breach of the Treaty. Moreover, from what we have heard in the course of the proceedings it cannot be said either that this system was no longer functioning from 1965 onwards. According to the uncontradicted observations made by the Commission, contracts for large quantities of natural uranium were in fact still being concluded on this basis at world market prices in 1967 and 1969. With regard to the supply of enriched uranium which, like the supply of plutonium, necessarily takes place through the Supply Agency, as there is no simplified procedure in this respect, it must be observed that in this field, at least as far as enriched uranium is concerned, the monopoly of the United States Atomic Energy Commission is crucial and, on the other hand, few undertakings are possible buyers. Thus there is generally no balancing of several offers against applications as provided in the Treaty, and supplies are obviously effected without distinction according to the prices published in the Federal Register. Nevertheless, the intervention of the Supply Agency does not seem to be without significance. First, it should be borne in mind that in the case of plutonium there are other supplier-countries (England and Canada). With regard to enriched uranium, supplies within the scope of the agreement concluded in 1958 between Euratom and the USA (by virtue of a unanimous decision of the Council) must necessarily be effected with the participation of the Supply Agency, that is to say, on the basis of tripartite negotiations. In this respect it may automatically be assumed that here, in a field in which the policy of the State plays a crucial role, the participation of a Community body acting for all users carries considerable weight and exercises a positive influence. Thus the action of the Supply Agency was and is apparently important in the efforts to raise the limit of supplies, and the relevant negotiations were and are influenced decisively by the survey as to demand conducted by the Agency. Similarly, according to the statements made by the Commission, the Agency has collaborated in the preparation of standard contracts, the conclusion of skeleton-agreements and the collection of orders, and also concluded joint contracts regarding enriched uranium. Finally, the activity of the Agency in the execution of supply contracts and the completion of the necessary formalities is also of considerable value. Seen in this light, in my opinion, it is difficult to maintain that the provisions of the supply system of the Euratom Treaty and the intervention of the Agency have been valueless or without importance. This also applies moreover to the period after 1964, for even during this period, as the Commission has stated, without being contradicted, the supply of enriched uranium has been ensured by the Agency (including, apparently, supplies for French undertakings). I would refer here in particular to all the Commission's general reports, the special documentation relating to the Supply Agency, its turnover figures, the studies of plutonium demand for the years 1967 and 1969 and the relevant negotiations. Finally, with regard to the fact that the contracts relating to the supply of enriched uranium from the USA have usually been concluded for a period of more than 10 years, it must be pointed out that these derogations from the rule are expressly provided in Article 60 of the Euratom Treaty if the Commission agrees to them. Thus in this respect it is not possible to speak of a failure to observe the Treaty provisions, especially as the Commission has obviously ensured that the supply ceiling was not reached prematurely and that the supply to other users was not compromised. Moreover, the procedure described must be considered in the light of the fact that termination clauses exist. These enable other sources of supply to be sought, if necessary, and thus prevent complete dependence on the American suppliers. Accordingly, with regard to the first aspect of the allegation with which I have just dealt, that Chapter VI of the Treaty has been applied defectively and purely formally, it may be said that the observations of the French Government, compared with those of the Commission, are scarcely capable of establishing that the provisions in question are of no practical significance. Moreover, this also applies—to anticipate my conclusion—to the observation of the French Government that the Supply Agency has neglected to build up commercial stocks and that the Commission has not decided to build up emergency stocks, as mentioned in Article 72 of the Treaty. In this respect it should be borne in mind that Article 72 merely contains an enabling provision and only provides for a discretion. If this is not exercised it certainly does not justify the conclusion that Chapter VI has been of no importance in practice. Finally, nothing can be gained for the purposes of the defence from the objection that for years the Commission has not issued an opinion or recommendation under Article 70 of the Treaty. In this context it must be remembered that according to Article 70 of the Treaty the Member States must submit annually a report to the Commission on the development of prospecting and production, etc., that the reports are submitted to the Council together with an opinion from the Commission and that the Commission can make recommendations to the Member States with a view to the development of prospecting for and the exploitation of mineral deposits. Now it is true that the Commission expressly refrained from giving an opinion when submitting the first two reports covering the years 1958 and 1959 (this emerges from the Council's notes of May 1960 and May 1961) and that it did not become active until later. However, when all the circumstances are taken into account this conduct can scarcely be challenged. First, reference may be made to the declaration made by the Commission at the outset that in view of the measures taken with regard to prospecting, production, the market situation and the probable reserves, an opinion did not seem necessary. Then, as can be seen from a note from the Council in 1962 relating to the reports for the year 1960, the Commission had at this time apparently begun to carry out, together with the Supply Agency, studies concerning long-term supplies, which were still continuing in 1963. Moreover, it should be observed that the Advisory Committee to the Supply Agency did not complete its inquiry regarding a long-term comparison between demand and the quantities available until 1963, thereby enabling the Commission to develop its own views and to prepare measures. This explains why it was not until a Council note of March 1964 that an opinion of the Commission was mentioned. This opinion speaks of the necessity to undertake prospecting on a wide basis, to adopt measures within the framework of a common supply policy and to organize expert studies the results of which were in fact included in a report produced in 1966. In my opinion, this reveals that the Commission was conscious of its responsibilities and precludes a finding that the powers granted by Article 70 of the Treaty were not exercised. Thus although this may give the impression that the supply system of Chapter VI has not functioned as originally envisaged (when it was assumed that there was a shortage and that there would be a more rapid development of the use of uranium), on the other hand, it by no means leads to the conclusion that the provisions of Chapter VI have remained a dead letter or been applied in a manner contrary to the spirit and purpose of the system. In my opinion, it is clear, therefore, that the application cannot be dismissed on the ground that there is no practical point in having it established that the French Government has committed the infringement of the Treaty provisions of which it is accused.