Judgment of the Court (Fourth Chamber) of 18 March 1987. - SA Société pour l'exportation des sucres v Office belge de l'économie et de l'agriculture (OBEA). - Reference for a preliminary ruling: Tribunal de première instance de Bruxelles - Belgium. - Standing invitation to tender for the supply of white sugar to UNRWA - Forfeiture of security - Proportionality. - Case 56/86.



European Court reports 1987 Page 01423



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1 . AGRICULTURE - COMMON AGRICULTURAL POLICY - FOOD AID - IMPLEMENTATION - STANDING INVITATION TO TENDER FOR THE SUPPLY OF WHITE SUGAR TO UNRWA - QUALITY CONTROL - QUALITY INFERIOR TO THE STANDARD - DISCOVERY AFTER DELIVERY - CONSEQUENCES

( COMMISSION REGULATION NO 434/82, ARTS 1 ( 2 ), 9 ( 5 ) AND 10 ( 1 ))

2 . COMMUNITY LAW - PRINCIPLES - PROPORTIONALITY - CRITERIA FOR ASSESSMENT

3 . AGRICULTURE - COMMON AGRICULTURAL POLICY - FOOD AID - IMPLEMENTATION - STANDING INVITATION TO TENDER FOR THE SUPPLY OF WHITE SUGAR TO UNRWA - SECURITY SCHEME - FAILURE TO COMPLY WITH REQUIREMENTS WITH REGARD TO QUALITY - FORFEITURE OF THE WHOLE SECURITY - PRINCIPLE OF PROPORTIONALITY - BREACH - NONE

( COMMISSION REGULATION NO 434/82, ART . 7 ( 3 ))

Summary

1 . THE QUALITY CONTROL OF SUGAR PROVIDED FOR IN COMMISSION REGULATION NO 434/82 ON A STANDING INVITATION TO TENDER FOR THE SUPPLY OF WHITE SUGAR TO UNRWA AS FOOD AID, AS AMENDED BY REGULATION NO 939/82, MUST NORMALLY BE CARRIED OUT AT THE TIME OF LOADING . HOWEVER, ACCOUNT MAY BE TAKEN OF THE RESULTS OF THAT CONTROL EVEN IF THEY ARE KNOWN ONLY AT A LATER DATE .

IF, AFTER UNRWA HAS DISPOSED OF THE GOODS, IT PROVES THAT THE SUGAR WAS OF A QUALITY LOWER THAN THE STANDARD QUALITY, ARTICLE 10 OF REGULATION NO 434/82 DOES NOT REQUIRE THE NATIONAL INTERVENTION AGENCY OF THE EXPORTING MEMBER STATE TO PAY THE TENDERER THE PRICE INITIALLY AGREED ON FOR SUGAR OF THE STANDARD QUALITY EVEN IF ALL THE DOCUMENTS REQUIRED BY THAT ARTICLE HAVE BEEN DRAWN UP BY UNRWA .

2 . IN ORDER TO DETERMINE WHETHER A PROVISION OF COMMUNITY LAW IS IN CONFORMITY WITH THE PRINCIPLE OF PROPORTIONALITY IT IS NECESSARY TO VERIFY WHETHER THE MEANS WHICH IT EMPLOYS ARE APPROPRIATE TO ACHIEVE THE OBJECTIVE PURSUED AND WHETHER OR NOT THEY GO BEYOND WHAT IS NECESSARY TO ACHIEVE IT .

3 . ARTICLE 7 ( 3 ) OF REGULATION NO 434/82 MUST BE INTERPRETED AS MEANING THAT THE SECURITY FOR TENDER IS FORFEITED IN ITS ENTIRETY IF THE SUGAR SUPPLIED IS NOT OF THE STANDARD QUALITY EVEN IF THE BENEFICIARY OF THE AID HAS ALREADY DISPOSED OF IT . THAT PROVISION DOES NOT INFRINGE THE PRINCIPLE OF PROPORTIONALITY SINCE THE LOSS OF THE SECURITY IS NOT UNJUSTIFIED WHERE A PRINCIPAL OBLIGATION GUARANTEED BY IT HAS NOT BEEN FULFILLED AND THE PENALTY DOES NOT GO BEYOND WHAT IS NECESSARY FOR THE DESIRED DISSUASIVE EFFECT .

Parties

IN CASE 56/86

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TRIBUNAL DE PREMIERE INSTANCE (( COURT OF FIRST INSTANCE )), BRUSSELS, FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

SOCIETE POUR L' EXPORTATION DES SUCRES SA, A COMPANY INCORPORATED UNDER BELGIAN LAW, WHOSE REGISTERED OFFICE IS IN ANTWERP

AND

OFFICE BELGE DE L' ECONOMIE ET DE L' AGRICULTURE (( BELGIAN OFFICE FOR THE ECONOMY AND AGRICULTURE )) ( OBEA )

ON THE INTERPRETATION OF CERTAIN PROVISIONS OF COMMISSION REGULATION NO 434/82 ON A STANDING INVITATION TO TENDER FOR THE MOBILIZATION OF COMMUNITY WHITE SUGAR FOR THE UNITED NATIONS RELIEF AND WORKS AGENCY FOR PALESTINE REFUGEES ( UNRWA ) AS FOOD AID ( OFFICIAL JOURNAL L*111, P.*13 )

THE COURT ( FOURTH CHAMBER )

COMPOSED OF : C . KAKOURIS, PRESIDENT OF CHAMBER, T . KOOPMANS AND G.*C . RODRIGUEZ IGLESIAS, JUDGES,

ADVOCATE GENERAL : J . MISCHO

REGISTRAR : D . LOUTERMAN, ADMINISTRATOR

AFTER CONSIDERING THE OBSERVATIONS SUBMITTED ON BEHALF OF

THE SOCIETE POUR L' EXPORTATION DES SUCRES, THE PLAINTIFF IN THE MAIN PROCEEDINGS, BY LEON GOFFIN AND JEAN-LOUIS LODOMEZ, OF THE BRUSSELS BAR,

OFFICE BELGE DE L' ECONOMIE ET DE L' AGRICULTURE ( OBEA ), THE DEFENDANT IN THE MAIN PROCEEDINGS, BY MONIQUE FRUY, OF THE BRUSSELS BAR,

THE COMMISSION OF THE EUROPEAN COMMUNITIES, BY DENISE SORASIO, A MEMBER OF ITS LEGAL DEPARTMENT,

HAVING REGARD TO THE REPORT FOR THE HEARING AND FURTHER TO THE HEARING ON 10 DECEMBER 1986,

AFTER HEARING THE OPINION OF THE ADVOCATE GENERAL DELIVERED AT THE SITTING ON 22 JANUARY 1987,

THE GOVERNMENT OF THE KINGDOM OF BELGIUM, BY THE MINISTER FOR ECONOMIC AFFAIRS,

GIVES THE FOLLOWING

JUDGMENT

1

Grounds

BY JUDGMENT OF 20 FEBRUARY 1986, WHICH WAS RECEIVED AT THE COURT ON 26 APRIL 1986, THE TRIBUNAL DE PREMIERE INSTANCE, BRUSSELS, REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY

THREE QUESTIONS ON THE INTERPRETATION OF A NUMBER OF PROVISIONS OF COMMISSION REGULATION NO 434/82 OF 25 FEBRUARY 1982 ON A STANDING INVITATION TO TENDER FOR THE MOBILIZATION OF COMMUNITY WHITE SUGAR FOR THE UNITED NATIONS RELIEF AND WORKS AGENCY FOR PALESTINE REFUGEES ( UNRWA ) AS FOOD AID ( OFFICIAL JOURNAL L*55, P.*34 ), AS AMENDED BY REGULATION NO 939/82 OF 21 APRIL 1982 ( OFFICIAL JOURNAL L 111, P.*13 ).

2 THOSE QUESTIONS WERE RAISED IN PROCEEDINGS BETWEEN THE SOCIETE POUR L' EXPORTATION DES SUCRES, WHOSE REGISTERED OFFICE IS IN ANTWERP, AND THE OFFICE BELGE DE L' ECONOMIE ET DE L' AGRICULTURE ( OBEA ), THE BELGIAN INTERVENTION AGENCY .

3 THE PLAINTIFF IN THE MAIN PROCEEDINGS WAS DECLARED THE SUCCESSFUL TENDERER FOR THE SUPPLY OF 755 TONNES OF SUGAR TO UNRWA ON THE BASIS OF THE AFORESAID REGULATION . DELIVERY TOOK PLACE AND THE DONEE AGENCY DISPOSED OF THE GOODS BUT SUBSEQUENT CHECKS MADE IN BELGIUM ON SAMPLES TAKEN BEFORE EMBARKATION SHOWED THAT ALL THE SAMPLES WERE OF SUGAR OF QUALITY 3 ( AN INFERIOR QUALITY ) AND NOT 2 ( WHICH IS THE STANDARD QUALITY ) ON THE SOLE GROUND THAT THE COLOURING OF THE SOLUTION EXCEEDED BY 0.7 OF A POINT THE MARGIN OF 6 POINTS, WHICH WAS THE MAXIMUM LIMIT FOR THE STANDARD QUALITY, ALTHOUGH ALL THE OTHER CRITERIA FOR THAT QUALITY WERE SATISFIED .

4 THE MAIN PROCEEDINGS CONCERN THE OBEA' S OBLIGATION IN THE CIRCUMSTANCES TO PAY THE PRICE ORIGINALLY AGREED AND TO RELEASE THE SECURITY LODGED BY THE SUCCESSFUL TENDERER .

5 IN ORDER TO RESOLVE THE MATTER THE TRIBUNAL DE PREMIERE INSTANCE, BRUSSELS, REQUESTED THE COURT TO GIVE A PRELIMINARY RULING ON THE FOLLOWING QUESTIONS :

"1 . MUST ARTICLE 9 ( 4 ) AND ( 5 ), THE THIRD SUBPARAGRAPH OF ARTICLE 10 ( 1 ) AND ARTICLES 15 ( 2 ) AND ( 3 ) BE INTERPRETED AS MEANING THAT THE QUALITY CONTROL NECESSARY TO ESTABLISH THAT THE SUGAR WAS OF QUALITY 2 HAD TO BE CARRIED OUT ( I ) BEFORE IT WAS LOADED, ( II ) BEFORE THE DEADLINE FOR ITS DELIVERY, ( III ) BEFORE THE DELIVERY OF THE DOCUMENTS DRAWN UP BY UNRWA OR ( IV ) BEFORE UNRWA DISTRIBUTED THE SUGAR AND THAT ONCE ONE OF THOSE EVENTS HAD OCCURRED THE DEFENDANT WAS NO LONGER ENTITLED TO CHECK THE QUALITY OF THE SUGAR OR DISPUTE THAT IT WAS OF STANDARD QUALITY?

2 . MUST ARTICLE 10 BE INTERPRETED AS MEANING THAT WHEN THE DOCUMENTS REFERRED TO IN THAT ARTICLE HAVE BEEN DRAWN UP BY UNRWA AND UNRWA HAS TAKEN POSSESSION OF THE GOODS THE DEFENDANT MUST PAY THE PRICE ORIGINALLY AGREED AND NOT ONLY A PRICE CORRESPONDING TO SUGAR OF A QUALITY INFERIOR TO THE AGREED STANDARD QUALITY? DOES THE FACT THAT UNRWA ISSUED THE CERTIFICATE OF RECEIPT ON 13 AUGUST 1982 WITHOUT ANY RESERVATION AS TO THE STANDARD QUALITY OF THE SUGAR MEAN THAT THE DEFENDANT MUST PAY THE PRICE ORIGINALLY AGREED?

3 . MUST ARTICLE 7 ( 3 ) BE INTERPRETED AS MEANING THAT ALL OR PART OF THE SECURITY FOR TENDER MUST BE RETAINED BY THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND IF THE SUGAR IS OF QUALITY 3 AND NOT OF QUALITY 2 EVEN THOUGH THE RECIPIENT HAS ACTUALLY TAKEN POSSESSION OF THE SUGAR DELIVERED WHICH WAS INFERIOR IN QUALITY TO THAT AGREED?

4 . HAVING REGARD TO THE NATURE OF THE PLAINTIFF' S DEFAULT, IS THE LOSS OF THE SECURITY COMPATIBLE WITH THE GENERAL PRINCIPLE OF PROPORTIONALITY?"

6 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE COMMUNITY PROVISIONS AT ISSUE, THE FACTS OF THE CASE AND THE OBSERVATIONS MADE TO THE COURT, WHICH ARE MENTIONED OR DISCUSSED HEREINAFTER ONLY IN SO FAR AS IS NECESSARY FOR THE REASONING OF THE COURT .

FIRST QUESTION

7 THE FIRST QUESTION ASKS WHEN THE QUALITY OF THE SUGAR MUST BE CHECKED AND WHETHER ACCORDING TO THE REGULATION AT ISSUE IT MAY, WHERE APPROPRIATE, BE CHECKED SUBSEQUENTLY .

8 ARTICLE 9 ( 5 ) OF THE REGULATION AT ISSUE PROVIDES THAT SAMPLING AND ANALYSIS ARE TO BE CARRIED OUT BY EXPERTS APPROVED BY THE AUTHORITIES OF THE EXPORTING MEMBER STATE . IT REFERS TO "QUALITY CONTROL AT THE TIME OF LOADING ". ARTICLE 15 ( 1 ) OF THE REGULATION REQUIRES THE SUCCESSFUL TENDERER TO INFORM THE COMPETENT AUTHORITY OF THE EXPORTING MEMBER STATE AND UNRWA AS SOON AS POSSIBLE OF THE NAME OF THE VESSEL AND THE EXPECTED DATE OF ARRIVAL OF THE VESSEL AT THE PORT OF UNLOADING . ARTICLE 15 ( 3 ) PROVIDES THAT "IF THE SUGAR IS OF A QUALITY LOWER THAN THE STANDARD QUALITY IT SHALL BE REJECTED AT THE TENDERER' S RISK ." THOSE PROVISIONS THUS ESTABLISH A SYSTEM FOR CHECKING QUALITY PRIOR TO SHIPMENT, FOR ONLY SUCH CHECKING ALLOWS THE SUGAR TO BE REJECTED SHOULD IT PROVE TO BE OF A QUALITY INFERIOR TO THE STANDARD QUALITY .

9 A SITUATION SUCH AS THE ONE IN THE MAIN PROCEEDINGS WHERE THE RESULTS OF THE CHECK ON QUALITY ARE KNOWN ONLY AFTER DELIVERY OF THE GOODS IS NOT PROVIDED FOR IN THE REGULATION . IT DOES NOT, HOWEVER, FOLLOW THAT CHECKING IN THOSE CIRCUMSTANCES MUST BE REGARDED AS UNLAWFUL OR THAT NO ACCOUNT MAY BE TAKEN OF ITS RESULTS .

10 THE CHECKING OF QUALITY IS AN ESSENTIAL ELEMENT IN THE SYSTEM, FOR IT IS CLEAR BOTH FROM THE RECITALS AND THE PROVISIONS OF THE REGULATION, ESPECIALLY ARTICLE 1 ( 2 ), THAT "THE SUGAR MUST BE OF STANDARD QUALITY AS DEFINED IN ARTICLE 1 OF REGULATION ( EEC ) NO 793/72 ". IF IT HAS NOT BEEN POSSIBLE TO COMPLETE CHECKS ON QUALITY BEFORE SHIPMENT IT IS THEREFORE LAWFUL TO DO SO SUBSEQUENTLY AND TO DRAW THE RELEVANT INFERENCES FROM THE RESULTS .

11 CONSEQUENTLY, THE ANSWER TO THE FIRST QUESTION MUST BE THAT THE QUALITY CONTROL OF THE SUGAR UNDER COMMISSION REGULATION NO 434/82 OF 25 FEBRUARY 1982, AS AMENDED BY COMMISSION REGULATION NO 939/82 OF 21 APRIL 1982, MUST NORMALLY BE CARRIED OUT BEFORE SHIPMENT . HOWEVER, ACCOUNT MAY BE TAKEN OF THE RESULTS OF THAT CONTROL EVEN IF THEY ARE KNOWN ONLY AT A LATER DATE .

SECOND QUESTION

12 IN ORDER TO ANSWER THE SECOND QUESTION IT IS NECESSARY TO TAKE ACCOUNT OF UNRWA' S LEGAL POSITION IN RELATION TO THE SUCCESSFUL TENDERER AND TO THE NATIONAL INTERVENTION AGENCY AND THE FUNCTION OF THE DOCUMENTS TO BE DRAWN UP BY UNRWA UNDER THE SYSTEM ESTABLISHED BY REGULATION NO 434/82 .

13 IT MUST BE POINTED OUT FIRST OF ALL THAT UNRWA, THE AGENCY RESPONSIBLE FOR RECEIVING AND DISTRIBUTING THE FOOD AID SUPPLIED BY THE COMMUNITY, CANNOT BE TREATED AS A PURCHASER SO FAR AS ITS RELATIONS WITH THE SUCCESSFUL TENDERER ARE CONCERNED . ITS LEGAL RELATIONS ARE WITH THE EUROPEAN ECONOMIC COMMUNITY .

14 THE LEGAL RELATIONS OF THE SUCCESSFUL TENDERER ARE ESTABLISHED NOT WITH UNRWA BUT THE NATIONAL INTERVENTION AGENCY OF THE EXPORTING MEMBER STATE AND THOSE RELATIONS ARE GOVERNED BY THE PROVISIONS OF COMMUNITY LAW . THE PLAINTIFF IN THE MAIN PROCEEDINGS IS THEREFORE WRONG IN CITING PRINCIPLES OF THE LAW OF THE INTERNATIONAL SALE OF GOODS .

15 IN ORDER TO DEFINE THE ROLE ASSIGNED TO THE DOCUMENTS TO BE DRAWN UP BY UNRWA IT MUST BE OBSERVED THAT ARTICLE 10 ( 1 ) OF THE REGULATION SUBJECTS PROVISIONAL PAYMENT EQUAL TO 90% OF THE PRICE AND FINAL PAYMENT TO PROOF THAT THE DELIVERY HAS TAKEN PLACE .

16 FOR THE PURPOSES OF PROVISIONAL PAYMENT IT IS CLEAR FROM THE FIRST SUBPARAGRAPH OF ARTICLE 10 ( 1 ) AND ARTICLE 9 ( 4 ) THAT IT IS SUFFICIENT TO PRODUCE PROOF THAT THE VESSEL HAS ENTERED THE PORT OF DESTINATION WITH THE GOODS STILL ON BOARD . ARTICLE 10 ( 1 ) PROVIDES THAT "THIS PROOF SHALL CONSIST OF A CERTIFICATE FROM UNRWA OR A SPECIALIZED INTERNATIONAL CONTROL AND SURVEILLANCE AGENCY APPROVED BY UNRWA . THE CERTIFICATE SHALL BE MADE OUT IN PARTICULAR ON THE BASIS OF THE RELEVANT TRANSPORT DOCUMENTS TOGETHER WITH AN ESTIMATE OF THE QUANTITY OF SUGAR IN QUESTION ."

17 SO FAR AS FINAL PAYMENT IS CONCERNED, IT IS NOT SUFFICIENT THAT THE GOODS HAVE ARRIVED IN PORT . IN ADDITION, IT IS NECESSARY THAT THE SUGAR SHOULD HAVE BEEN "DELIVERED TO THE STIPULATED PORT OF UNLOADING ON QUAYSIDE OR IN LIGHTER OR IN CONTAINERS ON QUAYSIDE, IN ACCORDANCE WITH THE PRESCRIBED CONDITIONS ." THESE ARE THE CONDITIONS OF DELIVERY WHICH MUST BE CERTIFIED BY THE DOCUMENTS DRAWN UP BY UNRWA . THE FUNCTION OF THE DOCUMENTS IS THUS TO SHOW THAT THE GOODS HAVE ACTUALLY BEEN UNLOADED "IN ACCORDANCE WITH THE PRESCRIBED CONDITIONS ".

18 THE EXPRESSION "PRESCRIBED CONDITIONS" SIGNIFIES IN THE FIRST PLACE CONDITIONS IN REGARD TO QUANTITY . WHEREAS FOR PROVISIONAL PAYMENT IT IS SUFFICIENT TO GIVE "AN ESTIMATE OF THE QUANTITY OF SUGAR IN QUESTION", FOR FINAL PAYMENT IT IS NECESSARY TO GIVE PRECISE PARTICULARS . IT ALSO REFERS TO THE CONDITIONS OF DELIVERY LAID DOWN IN ARTICLE 9 OF THE REGULATION WHICH REQUIRES THE SUGAR TO BE SUPPLIED IN BAGS WITH VERY PRECISE SPECIFICATIONS . THE DOCUMENTS DRAWN UP BY UNRWA MAY FURTHER CERTIFY THAT THE GOODS HAVE ARRIVED AT THE DESTINATION WITHOUT BEING DAMAGED IN THE COURSE OF TRANSPORT .

19 ON THE OTHER HAND, THE QUALITY OF THE SUGAR IS NOT CERTIFIED IN THE DOCUMENTS DRAWN UP BY UNRWA . UNDER THE SCHEME ESTABLISHED BY THE REGULATION IT IS FOR THE INTERVENTION AGENCY OF THE EXPORTING MEMBER STATE AND NOT UNRWA TO MONITOR QUALITY .

20 ARTICLE 10 IS CONFINED TO PROVIDING IN RELATION TO FINAL PAYMENT THAT IT IS TO BE MADE AS SOON AS THE INTERVENTION AGENCY OF THE EXPORTING MEMBER STATE HAS RECEIVED THE DOCUMENTS DRAWN UP BY UNRWA . THAT PROVISION DOES NOT GOVERN THE CONSEQUENCES OF ANY DEFECT IN QUALITY OF THE SUGAR OR FAILURE TO COMPLY WITH ONE OR OTHER OF THE CONDITIONS OF DELIVERY .

21 THOSE CONSEQUENCES ARE THE SUBJECT OF OTHER PROVISIONS OF THE REGULATION, IN PARTICULAR ARTICLE 7, PARAGRAPHS ( 3 ) TO ( 5 ) OF WHICH LAY DOWN THE CONDITIONS FOR THE RELEASE OF THE SECURITY, AND ARTICLE 15, PARAGRAPH ( 2 ) OF WHICH PROVIDES FOR A PRICE REDUCTION SHOULD THERE BE DELAY IN DELIVERY AND PARAGRAPH ( 3 ) OF WHICH STATES THAT "IF THE SUGAR IS OF A QUALITY LOWER THAN THE STANDARD QUALITY IT SHALL BE REJECTED AT THE TENDERER' S RISK ."

22 IF, AS IN THE PRESENT CASE, THE RESULTS OF CHECKING THE QUALITY WERE NOT KNOWN UNTIL AFTER UNRWA HAD DISPOSED OF THE SUGAR, IT IS NO LONGER POSSIBLE TO REJECT THE GOODS . IT DOES NOT HOWEVER FOLLOW THAT THE INTERVENTION AGENCY IS OBLIGED TO PAY THE PRICE ORIGINALLY AGREED, WHICH WAS FOR A QUALITY SUPERIOR TO THAT OF THE SUGAR ACTUALLY DELIVERED . THERE IS NO BASIS FOR SUCH AN OBLIGATION EITHER IN ARTICLE 10 OR IN ANY OTHER PROVISION OF THE REGULATION .

23 THE ANSWER TO THE SECOND QUESTION MUST THEREFORE BE THAT IF, AFTER UNRWA HAS RECEIVED POSSESSION OF THE GOODS, IT PROVES THAT THE SUGAR WAS OF A QUALITY LOWER THAN THE STANDARD QUALITY, ARTICLE 10 OF REGULATION NO 434/82 DOES NOT REQUIRE THE NATIONAL INTERVENTION AGENCY OF THE EXPORTING MEMBER STATE TO PAY THE TENDERER THE PRICE INITIALLY AGREED FOR SUGAR OF THE STANDARD QUALITY EVEN IF ALL THE DOCUMENTS REQUIRED BY THAT ARTICLE HAVE BEEN DRAWN UP BY UNRWA .

THIRD QUESTION

24 THE THIRD QUESTION ASKS THE COURT FIRST OF ALL TO INTERPRET ARTICLE 7 ( 3 ) OF REGULATION NO 434/82, AS AMENDED BY REGULATION NO 939/82 . THAT PROVISION READS AS FOLLOWS :

"THE SECURITY FOR TENDER :

( A ) SHALL BE FORFEITED, EXCEPT IN CASE OF FORCE MAJEURE, IN RESPECT OF THE QUANTITY OF SUGAR WHICH THE SUCCESSFUL TENDERER HAS NOT DELIVERED TO THE PORT OF UNLOADING ON QUAYSIDE OR IN LIGHTER OR IN CONTAINERS ON QUAYSIDE, IN ACCORDANCE WITH THE PRESCRIBED CONDITIONS, AND AFTER PRODUCTION OF COPY NO 1 OF THE EXPORT LICENCE DULY ENDORSED AND STAMPED BY THE COMPETENT AUTHORITY OF THE MEMBER STATE REFERRED TO IN ARTICLE 6 ( 2 ) ( E );

( B ) SHALL BE RELEASED IF THE TENDER IS NOT ACCEPTED ."

25 IT IS CLEAR FROM THE ACTUAL WORDING OF THAT PROVISION THAT THE SECURITY MUST BE FORFEITED IF THE PRESCRIBED CONDITIONS ARE NOT SATISFIED . THOSE CONDITIONS RELATE TO THE OBLIGATIONS OF THE SUCCESSFUL TENDERER, FOR THE PURPOSE OF THE SECURITY IS TO ENSURE THAT SUCH OBLIGATIONS ARE FULFILLED .

26 ONE OF THE PRINCIPAL OBLIGATIONS OF THE SUCCESSFUL TENDERER LAID DOWN IN PARTICULAR IN ARTICLE 1 ( 2 ) OF THE REGULATION IN QUESTION IS TO DELIVER SUGAR OF THE STANDARD QUALITY .

27 IN THE SECOND PART OF THE THIRD QUESTION THE NATIONAL COURT ASKS WHETHER THE LOSS OF THE SECURITY IS CONSISTENT WITH THE GENERAL PRINCIPLE OF PROPORTIONALITY, HAVING REGARD TO THE NATURE OF A DEFAULT SUCH AS THAT OF A SUCCESSFUL TENDERER WHO DELIVERS SUGAR WHICH SATISFIES ALL THE CRITERIA AS TO STANDARD QUALITY SAVE AS REGARDS COLOUR .

28 IN ORDER TO DETERMINE WHETHER A PROVISION OF COMMUNITY LAW IS IN CONFORMITY WITH THE PRINCIPLE OF PROPORTIONALITY IT IS NECESSARY TO VERIFY WHETHER THE MEANS WHICH IT EMPLOYS ARE APPROPRIATE TO ACHIEVE THE OBJECTIVE PURSUED AND WHETHER OR NOT THEY GO BEYOND WHAT IS NECESSARY TO ACHIEVE IT .

29 AS IS APPARENT FROM THE RECITALS AND PROVISIONS OF REGULATION NO 434/82 ITS OBJECTIVE IS INTER ALIA TO ENSURE THAT THE SUGAR DELIVERED IS OF THE STANDARD QUALITY AS DEFINED IN COUNCIL REGULATION NO 793/72 OF 17 APRIL 1972 FIXING THE STANDARD QUALITY FOR WHITE SUGAR ( OFFICIAL JOURNAL L 94, P.*1 ). IN THAT RESPECT THE VARIOUS CRITERIA THEREIN ADOPTED MAY NOT BE CONSIDERED SEPARATELY FOR THEY WERE LAID DOWN CUMULATIVELY BY THE COMMUNITY LEGISLATURE IN THE AFORESAID REGULATION FROM WHICH IT IS CLEAR THAT THE STANDARD QUALITY MAY BE REGARDED AS REPRESENTATIVE FOR THE COMMUNITY PRODUCTION .

30 THE IMPORTANCE OF THE ABOVEMENTIONED OBJECTIVE SHOULD NOT BE UNDERESTIMATED EITHER FROM THE POINT OF VIEW OF THE REQUIREMENTS INHERENT IN FOOD AID OR FROM THE POINT OF VIEW OF THE PRINCIPLE THAT TENDERERS SHOULD BE SUBJECT TO THE SAME CONDITIONS .

31 THE MEANS EMPLOYED TO ACHIEVE THAT OBJECTIVE IS A STANDARD ONE IN TRANSACTIONS UNDER THE COMMON ORGANIZATION OF THE AGRICULTURAL MARKETS : FORFEITURE OF THE SECURITY . THAT FORFEITURE, WHICH REPRESENTS 77*750 ECU ON A TRANSACTION INVOLVING 755 TONNES OF SUGAR, IS NOT UNJUSTIFIED SINCE A PRINCIPAL OBLIGATION GUARANTEED BY THE SECURITY HAS NOT BEEN FULFILLED AND THE PENALTY DOES NOT GO BEYOND WHAT IS NECESSARY FOR THE DESIRED DISSUASIVE EFFECT .

32 THE ANSWER TO THE THIRD QUESTION MUST THEREFORE BE THAT ARTICLE 7 ( 3 ) OF REGULATION NO 434/82 MUST BE INTERPRETED AS MEANING THAT THE SECURITY FOR TENDER IS FORFEITED IN ITS ENTIRETY IF THE SUGAR SUPPLIED IS NOT OF THE STANDARD QUALITY EVEN IF THE BENEFICIARY OF THE AID HAS DISPOSED OF IT . THAT PROVISION DOES NOT INFRINGE THE PRINCIPLE OF PROPORTIONALITY .

Decision on costs

COSTS

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

Operative part

ON THOSE GROUNDS,

THE COURT ( FOURTH CHAMBER ),

IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE TRIBUNAL DE PREMIERE INSTANCE, BRUSSELS, BY JUDGMENT OF 20 FEBRUARY 1986, HEREBY RULES :

( 1 ) THE QUALITY CONTROL OF THE SUGAR PROVIDED FOR IN COMMISSION REGULATION NO 434/82 OF 25 FEBRUARY 1982, AS AMENDED BY COMMISSION REGULATION NO 939/82 OF 21 APRIL 1982, MUST NORMALLY BE CARRIED OUT AT THE TIME OF LOADING . HOWEVER, ACCOUNT MAY BE TAKEN OF THE RESULTS OF THAT CONTROL EVEN IF THEY ARE KNOWN ONLY AT A LATER DATE .

( 2 ) IF, AFTER UNRWA HAS DISPOSED OF THE GOODS, IT PROVES THAT THE SUGAR WAS OF A QUALITY LOWER THAN THE STANDARD QUALITY, ARTICLE 10 OF REGULATION NO 434/82 DOES NOT REQUIRE THE NATIONAL INTERVENTION AGENCY OF THE EXPORTING MEMBER STATE TO PAY THE TENDERER THE PRICE INITIALLY AGREED ON FOR SUGAR OF THE STANDARD QUALITY EVEN IF ALL THE DOCUMENTS REQUIRED BY THAT ARTICLE HAVE BEEN DRAWN UP BY UNRWA .

( 3 ) ARTICLE 7 ( 3 ) OF REGULATION NO 434/82 MUST BE INTERPRETED AS MEANING THAT THE SECURITY FOR TENDER IS FORFEITED IN ITS ENTIRETY IF THE SUGAR SUPPLIED IS NOT OF THE STANDARD QUALITY EVEN IF THE BENEFICIARY OF THE AID HAS DISPOSED OF IT . THAT PROVISION DOES NOT INFRINGE THE PRINCIPLE OF PROPORTIONALITY .