Opinion of Mr Advocate General Sir Gordon Slynn delivered on 24 February 1987. - Commission of the European Communities v Italian Republic. - Additional levy in the milk and milk products sector. - Case 394/85.



European Court reports 1987 Page 02741



Opinion of the Advocate-General

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My Lords,

In 1984 substantial surpluses of milk products, with attendant serious financial burdens and marketing difficulties for the Community, led the Council to impose, for an initial five-year period, an additional levy on quantities of milk delivered beyond a guarantee threshold . The Council' s aim was to curb the increase in milk production and to permit the necessary adjustments to be made to regulate and stabilize the market .

Two regulations were made by the Council . The first, Regulation No 856/84 ( Official Journal 1984, L 90, p . 10 ), amended the basic regulation on the common organization of the market in milk and milk products ( Regulation No 804/68, Official Journal English Special Edition 1968 ( I ), p . 176 ); the second, Regulation No 857/84 ( Official Journal 1984, L 90, p . 13 ), adopted general rules for the application of the new levy . A further regulation, Regulation No 1371/84, was made by the Commission which laid down detailed rules for the application of the levy ( Official Journal 1984, L 132, p . 11 ).

The basic structure was that maximum quantities of production were fixed and Member States were required to implement the scheme . Basically, they had a choice between two formulae, one called formula A, where the level was payable by milk producers, and the other, formula B, where it was paid in the first place by purchasers of milk; and an option as to the reference year by which individual quantities were to be measured : 1981, 1982, or 1983 .

A discretion was given to adjust quantities in respect of specified categories of producers and to pay compensation to producers who undertook to discontinue their production indefinitely . Provision was also made for the grant of additional quantities within the limits laid down by the first regulation .

The machinery to collect the levy had to be set up by Member States . Producers were required to register and to disclose their 1981 sales; purchasers were required to show the amount by which they had exceeded the reference quantities . Dates were specified in the course of 1984 and 1985 for the various steps to be taken and for the Commission to be so notified .

On 27 November 1984 the Commission informed the Italian Minister for Agriculture that it appeared that the steps required to be taken by Italy at that stage had not been taken . Certainly, the Commission had not been informed that they had been taken . The Minister accepted that no national measures had been taken to implement the scheme apart from a Ministerial Decree of 8 November 1984 dealing with compensation to producers ceasing production . Accordingly, the Commission issued a reasoned opinion under Article 169 of the Treaty and on 2 December 1985 these proceedings were brought for a declaration that Italy was in breach of its obligations under the Treaty, since by that time all the relevant dates had passed .

In the meantime, Italy sought to persuade the Council and the Commission to amend the scheme because of the difficulties which it faced in applying the scheme . Some amendments were made by Council Regulations made in 1985, numbered 590, 591 and 1305 ( Official Journal 1985, L 68, pp.*1 and 5 and L 137, p . 12 ). The last-mentioned permitted associations of producers to be recognized for the allocation of reference quantities and also made a specific exemption for Italy to postpone for three years the application of Article 3(3 ) of Regulation No 857/84 which gave producers the right to choose a different reference year if their production had been affected by exceptional events .

It is clear that Italy has taken some steps . By decree of 8 November 1984, it provided compensation for producers who ceased production . By a further decree of 30 September 1985, it adopted formula A and certain reference quantities were allocated to producers and to associations once they were recognized to have legal personality . Moreover, the Court has been told this morning that by a decree of 22 December 1986 ( not yet published ) a union of producers was recognized for the purpose of implementing the regulation . Enquiries were also set in motion to obtain the necessary statistics .

It is, however, equally clear and is admitted that at the time proceedings were brought and today provisions other than those which I have mentioned have not been implemented, and in particular reference quantities have not been attributed to the union or to producers not members of an association .

The scheme was obviously a very complex one likely to cause administrative difficulties . The Italian Government has shown the extent to which the difficulties were accentuated by the structure of the industry in Italy and, in particular, by the large number of producers with a very small number of cows . It was difficult for Italy to collect the statistics for the purposes of allocating quotas, at any rate until the relevant groups or associations could be recognized . The Italian Government has also relied upon its efforts to pursuade the Council and the Commission to amend the scheme, efforts which were not entirely successful, and upon the fact that in 1984 the quantities of milk produced had decreased from the level produced in 1983 so that it is said that the quantity guaranteed was not exceeded, a fact not necessarily accepted by the Commission .

The Court has consistently ruled that administrative difficulties in the implementation of regulations do not provide a defence under Article 169 . It does not seem to me that it is possible or right for the Court to be involved in assessing the different degrees of difficulty which are put forward to explain why regulations have not been implemented . That may be a factor for the Commission in deciding when or whether to bring proceedings . It is sufficient for the Court to find that they have not been implemented .

Accordingly, it seems to me that the Court' s earlier decisions should be followed and it should be declared that, in failing to implement Council Regulations No 856/84 and No 857/84 and Regulation No 1371/84 of the Commission ( as amended by Council Regulations Nos 590/85, 591/85 and 1305/85 ), save as to the measures taken in the Ministerial Decrees of 8 November 1984 ( to compensate producers ceasing production ), 30 September 1985 and 22 December 1986, Italy is in breach of its Treaty obligations .

The Commission asks for a further declaration that Italy is also in breach of Article 5 of the Treaty in failing to carry out the measures necessary to give effect to the regulations . On what has been said in this case, it does not seem to me that such a request adds anything to the request for a declaration that the regulations have not been implemented .

In my view, Italy should pay the costs of the Commission in these proceedings .