Judgment of the Court (Sixth Chamber) of 5 October 1999. - Kingdom of Spain v Council of the European Union. - Fisheries - Regulation laying down limits on and distributing fishing opportunities among Member States - Fishing quota exchanges - Annulment. - Case C-179/95.



European Court reports 1999 Page I-06475



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

1 Fisheries - Conservation of the resources of the sea - System of fishing quotas - Allocation between Member States of the volume of available catches - Judicial review - Limits - Anchovy fishing opportunities increased in area VIII - Whether a manifest error of appraisal or misuse of powers - Conditions - Whether the biological equilibrium of those resources has been disturbed - Where biological, socio-economic and technical analyses are lacking or inconclusive - Irrelevant

(Council Regulations No 3760/92, Arts 4(1) and 8(4), No 3362/94 and No 746/95, Annex I, fifth heading)

2 Fisheries - Conservation of the resources of the sea - System of fishing quotas - Allocation between Member States of the volume of available catches - Common total admissible catch fixed for areas VIII and IX and transfer of quotas from area IX to area VIII authorised - Whether in breach of the obligation to ensure the rational and responsible exploitation of resources - No such breach - Whether in breach of the principle of relative stability - No such breach

(Council Regulations No 3760/92, Arts 2(1) and 8(4), No 685/95, Annex IV, point 1.1(i), final sentence, and No 746/95, Annex I, fifth heading)

Summary

1 Where, in implementation of the common agricultural policy, the Council is called upon to evaluate a complex economic situation, its discretion is not limited to the nature and scope of the measures to be taken but extends, in certain measure, to the finding of basic facts. That is the position when, pursuant to Article 8(4) of Regulation No 3760/92 establishing a Community system for fisheries and aquaculture, the Council fixes total allowable catches and distributes fishing opportunities among Member States. In reviewing the exercise of such a power, the Court must confine itself to examining whether there has been a manifest error or misuse of power or whether the authority in question has clearly exceeded the bounds of its discretion.

In the case of its allocation of Area VIII anchovy quotas to France and Spain under Regulation No 3362/94 fixing, for certain fish stocks and groups of fish stocks, the total allowable catches for 1995 and certain conditions under which they may be fished, the Council acted by way of precaution and not on the basis of proven scientific data. In those circumstances, the increase - under the fifth heading of Annex I to Regulation No 746/95 amending Regulation No 3362/94 - of anchovy fishing opportunities in area VIII cannot be considered to be vitiated by manifest error or misuse of power or clearly to exceed the bounds of the discretion enjoyed by the Council unless there are sufficient grounds for believing that it disturbed the biological equilibrium of those resources.

Furthermore, although Article 4(1) of Regulation No 3760/92 requires Community measures laying down the conditions of access to waters and resources to be drawn up in the light of available biological, socio-economic and technical analyses, the absence of such analyses or the fact that they are inconclusive cannot prevent the Council from adopting such measures as it deems necessary for achieving the objectives of the common fisheries policy. In those circumstances, not only is the Council justified in imposing stricter conservation measures but it may also, provided that it exercises appropriate caution, allow increased access to fishing resources.

2 In fixing (in point 1.1(i) of Annex IV to Council Regulation No 685/95 on the management of the fishing effort relating to certain Community fishing areas and resources) a common total allowable anchovy catch for areas VIII and IX and in authorising (under the fifth heading of Annex I to Regulation No 746/95) a transfer of quotas from area IX to area VIII, the Council did not act in breach of its obligation under Article 2(1) of Regulation No 3760/92 to ensure the rational and responsible exploitation of resources. Even though the anchovy stocks in those two areas are biologically different, and in the absence of sufficient evidence to demonstrate that the contested provisions have the effect of disturbing the biological equilibrium of resources in area VIII, the Council was entitled to lay down measures for the two stocks to be managed jointly.

Nor do the above provisions undermine the principle of relative stability laid down in Article 8(4)(ii) of Regulation No 3760/92. The latter provision, under which fishing opportunities are to be distributed for each of the stocks concerned in such a way as to assure the relative stability of the fishing activities of each Member State, expressly states that, at the request of the Member States directly concerned, account may be taken of regular quota exchanges since 1983, with due regard to the overall balance of shares. It follows that, provided that the overall equilibrium of the shares is preserved, that principle may be affected by exchanges which had already been effected when Regulation No 3760/92 was adopted and does not preclude subsequent exchanges. Moreover, the transfer to France of 80% of Portugal's fishing opportunities, to be fished only in waters under the sovereignty or jurisdiction of France, which was effected by means of a common total admissible catch covering areas VIII and IX, does not have the effect of increasing fishing opportunities in those areas taken together. Nor does it adversely affect the fishing opportunities allocated in area VIII, taken separately, to Member States not privy to the exchange.

Parties

In Case C-179/95,

Kingdom of Spain, represented by A. Navarro González, Director-General of Community Legal and Institutional Affairs, and R. Silva de Lapuerta, Abogado del Estado, acting as Agents, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard Emmanuel Servais,

applicant,

v

Council of the European Union, represented by J. Carbery, Legal Adviser, and G.-L. Ramos Ruano, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of A. Morbilli, General Counsel of the Legal Affairs Directorate at the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendant,

supported by

Commission of the European Communities, represented by T. van Rijn, Legal Adviser, and B. Vilá Costa, a public official on secondment to its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of the same Service, Wagner Centre, Kirchberg,

intervener,

APPLICATION for annulment of the final sentence of point 1.1(i) of Annex IV to Council Regulation (EC) No 685/95 of 27 March 1995 on the management of the fishing effort relating to certain Community fishing areas and resources (OJ 1995 L 71, p. 5) and of the fifth heading, on anchovies, in Annex I to Council Regulation (EC) No 746/95 of 31 March 1995 amending Regulation (EC) No 3362/94 fixing, for certain fish stocks and groups of fish stocks, the total allowable catches for 1995 and certain conditions under which they may be fished (OJ 1995 L 74, p. 1),

THE COURT

(Sixth Chamber),

composed of: G. Hirsch, President of the Second Chamber, acting as President of the Sixth Chamber (Rapporteur), J.L. Murray and H. Ragnemalm, Judges,

Advocate General: S. Alber,

Registrar: D. Louterman-Hubeau, Principal Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 2 July 1998, the Kingdom of Spain, represented by R. Silva de Lapuerta, the Council, represented by J. Carbery and G.-L. Ramos Ruano, and the Commission, represented by T. Van Rijn and J. Guerra Fernández, a member of its Legal Service, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 17 September 1998,

gives the following

Judgment

Grounds

1 By application lodged at the Court on 9 June 1995, the Kingdom of Spain brought an action under the first paragraph of Article 173 of the EC Treaty (now, after amendment, the first paragraph of Article 230 EC) for the annulment of the final sentence of point 1.1(i) of Annex IV to Council Regulation (EC) No 685/95 of 27 March 1995 on the management of the fishing effort relating to certain Community fishing areas and resources (OJ 1995 L 71, p. 5) and of the fifth heading, on anchovies, in Annex I to Council Regulation (EC) No 746/95 of 31 March 1995 amending Regulation (EC) No 3362/94 fixing, for certain fish stocks and groups of fish stocks, the total allowable catches for 1995 and certain conditions under which they may be fished (OJ 1995 L 74, p. 1).

2 By order of the President of the Court of 15 November 1995, the Commission was granted leave to intervene in support of the Council.

Legal background

3 Article 161(i)(f) of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23, hereinafter `the Act of Accession') allocated 90% of the total allowable catches (hereinafter `TACs') of anchovies in International Council for the Exploitation of the Sea (hereinafter `ICES') area VIII to Spain and 10% to France. Further, pursuant to the principle of the relative stability of each Member State's fishing activities for each of the fish stocks concerned (hereinafter `the principle of relative stability') laid down in Article 4(1) of Council Regulation (EEC) No 170/83 of 25 January 1983 establishing a Community system for the conservation and management of fishery resources (OJ 1983 L 24, p. 1) the substance of which is restated in Article 8(4) of Council Regulation (EEC) No 3760/92 of 20 December 1992 establishing a Community system for fisheries and aquaculture (OJ 1992 L 389, p. 1), the anchovy TAC in ICES areas IX and X and in the Committee for Eastern Central Atlantic Fisheries (hereinafter `CECAF') area 34.1.1 was divided between Spain and Portugal as to Spain approximately 48% and Portugal 52%.

4 Regulation No 3760/92 was adopted on the basis of Article 43 of the EC Treaty (now, after amendment, Article 37 EC). Under Article 3(e) and (f), the following definitions are to apply for the purposes of the regulation:

`(e) "exploitation rate" refers to the catches of a stock over a given period as a proportion of the total stock;

(f) "fishing effort" of a vessel is the product of its capacity and its activity, and fishing effort of a fleet or group of vessels is the sum of the fishing effort of each individual vessel.'

5 Article 4 of Regulation No 3760/92 provides:

`1. In order to ensure the rational and responsible exploitation of resources on a sustainable basis, the Council, acting, except where otherwise provided, in accordance with the procedure laid down in Article 43 of the Treaty, shall establish Community measures laying down the conditions of access to waters and resources and of the pursuit of exploitation activities. These measures shall be drawn up in the light of the available biological, socio-economic and technical analyses and in particular of the reports drawn up by the Committee provided for in Article 16.

2. These provisions may, in particular, include measures for each fishery or group of fisheries to:

(a) establish zones in which fishing activities are prohibited or restricted;

(b) limit exploitation rates;

(c) set quantitative limits on catches;

(d) limit time spent at sea taking account, where appropriate, of the remoteness of the fishing waters;

(e) fix the number and type of fishing vessels authorised to fish,

(f) lay down technical measures regarding fishing gear and its method of use;

(g) set a minimum size or weight of individuals that may be caught;

(h) establish incentives, including those of an economic nature, to promote more selective fishing.'

6 Article 8(1) of Regulation No 3760/92 provides that, in accordance with Article 4, the exploitation rate may be regulated by restricting for the period concerned the volume of catches authorised and, if necessary, the fishing effort. In cases where a limitation of catches is not appropriate, the exploitation rate may be regulated solely by a restriction of the fishing effort.

7 Under Article 8(4)(i) and (ii) of Regulation No 3760/92, the Council, acting by qualified majority on a proposal from the Commission, is to determine for each fishery or group of fisheries, on a case-by-case basis, the total allowable catch and/or total allowable fishing effort, where appropriate on a multi-annual basis and to distribute the fishing opportunities between Member States in such a way as to assure each Member State relative stability of fishing activities for each of the stocks concerned. However, following a request from the Member States directly concerned, account may be taken of the development of mini-quotas and regular quota swaps since 1983, with due regard to the overall balance of shares.

8 Under Article 9(1) of Regulation No 3760/92, Member States may, after notifying the Commission, exchange all or part of the fishing availabilities allocated to them.

9 Article 16 of Regulation No 3760/92 requires the Commission to set up under its auspices a Scientific, Technical and Economic Committee for Fisheries. The Committee is to be consulted at regular intervals and to draw up an annual report on the situation with regard to fishery resources and developments concerning fishing activity, with reference to biological and technical factors. It is also to report on the economic implications of the fishery resources situation. The Committee is to report annually on the work done and required, to the extent provided for in Article 41(a) of the EC Treaty (now Article 35(a) EC), in the field of scientific and technical research for the fisheries and aquaculture sector.

10 Council Regulation (EC) No 3362/94 of 20 December 1994 fixing, for certain fish stocks and groups of fish stocks, the total allowable catches for 1995 and certain conditions under which they may be fished (OJ 1994 L 363, p. 1), which was adopted on the basis, inter alia, of Article 8(4) of Regulation No 3760/92, laid down the TACs for 1995. For anchovies, it laid down, for ICES area VIII, a TAC of 33 000 tonnes divided as to Spain 29 700 tonnes and France 3 300 tonnes, with no distinction being drawn according to where fish were caught. For ICES areas IX and X (CECAF area 34.1.1), it laid down a TAC of 12 000 tonnes divided as to Spain 5 740 tonnes and Portugal 6 260 tonnes, to be fished only in waters under the sovereignty or within the jurisdiction of the Member State concerned or in international waters in the area concerned.

11 Regulation No 685/95 was adopted on the basis of Article 43 of the Treaty. Under Article 11(1), the Member States concerned are, in accordance with Article 9 of Regulation (EEC) No 3760/92, to exchange fishing possibilities allocated to them under the conditions referred to in Annex IV, point 1.

12 Under point 1.1 of Annex IV,

`Exchanges between France and Portugal will be tacitly renewable for the period 1995 to 2002, subject to the possibility of annual amendment of the conditions thereof by each Member State at the time of the annual fixing of TACs and quotas.

Exchanges concern the following TACs:

(i) a common TAC for anchovy being fixed for ICES areas VIII and IX, 80% of Portugal's fishing possibilities will be transferred every year to France. Quantities must be fished exclusively in waters under the sovereignty or jurisdiction of France;

...'.

13 Regulation No 746/95 was adopted on the basis of Article 8(4) of Regulation No 3760/92. As is apparent from the third and fourth recitals in the preamble, the objectives of that regulation include facilitating exchanges of fishing possibilities allocated to certain Member States and, in relation more particularly to anchovy fishing possibilities, allowing transfers of part of a quota from the zone of allocation to an adjacent zone.

14 According to the fifth heading in Annex I to Regulation No 746/95, up to 5 008 tonnes of the 6 260 tonne quota of anchovy allocated to Portugal in ICES areas IX and X (CECAF area 34.1.1) may be fished in ICES sub-area VIII waters under the sovereignty or within the jurisdiction of France.

15 At the Council meeting of 27 March 1995, when Regulation No 685/95 was adopted, the Spanish delegation had a unilateral statement inserted into the minutes stating that provisions intended to secure joint management of anchovy TACs in ICES areas VIII and IX had to take account of biological differences between anchovy stocks and not disturb current equilibria.

16 In support of its action, the Kingdom of Spain relies on two pleas in law alleging breach of Article 39 of the EC Treaty (now Article 33 EC) and of Regulation No 3760/92 respectively.

The plea alleging breach of Article 39 of EC Treaty

17 By its first plea, the Spanish Government argues that the contested provisions fail to take account of the objectives of the common fisheries policy laid down in Article 39 of the Treaty and in particular those intended to ensure optimum utilisation of the factors of production and to stabilise the markets.

18 It claims, first, that one of the mechanisms established by Regulation No 3760/92 to guarantee the conservation of fishery resources is to limit catches of threatened species and distribute the TACs laid down for that purpose amongst the Member States (subject to their being entitled to engage in exchanges) in accordance with the principle of relative stability. As a result, such catches are managed on the basis of national quotas, and the Member States remain free to adopt appropriate measures for their distribution and use, provided that such measures are compatible with Community law and the common fisheries policy (see Case 46/86 Romkes [1987] ECR 2671 and Joined Cases C-251/90 and C-252/90 Wood and Cowie [1992] ECR I-2873).

19 Secondly, it claims that when it laid down the provisions of Regulation No 3362/94, which fixed the anchovy TAC for 1995 in ICES area VIII at 33 000 tonnes, the Council gave consideration to scientific advice available to it, in particular the advice of the Scientific, Technical and Economic Committee for Fisheries, and came to the conclusion that that was the only TAC capable of ensuring a rational and responsible exploitation of resources. The TAC was intended to stabilise fishing efforts and the exploitation of resources, while at the same time preserving and quantifying certain of Spain's historical fishing rights, so as scientifically to ensure continued exploitation. Consequently, any measure which results in that TAC being exceeded endangers the conservation of the species and infringes Article 39 of the Treaty.

20 The Spanish Government contends that the contested provisions do have that result because the fact that they allow part of the anchovy quota in ICES area IX allocated to Portugal by Regulation No 3362/94 to be fished not there but in ICES area VIII makes possible an increase in the anchovy TAC for area VIII from 33 000 to 38 008 tonnes without the increase being justified by a fresh scientific report.

21 Thirdly, the fact that the Council fixed a precautionary TAC for anchovy caught in ICES area VIII is no justification for the contested provisions. First of all, precautionary TACs are mandatory conservation measures since, once they have been exhausted, the Member State concerned must prohibit fishing of the stock forthwith. Secondly, precautionary TACs are always fixed on the basis of historical catches and scientific reports. The judgment in Mondiet (Case C-405/92 [1993] ECR I-6133) does not imply that scientific and technical reports are wholly without value and that the Council has a free hand in regard to its decisions, but that where there are no such reports or they are inconclusive, the Council may impose more rigorous conservation measures. In this case, by contrast, the consequence of following the Council's premiss would be that conservation measures would not be adopted when the reports recommend that they should be.

22 Finally, the Commission's arguments based on exchanges of fishing opportunities between Spain and France, and the judgment in Commission v France (Case C-52/95 [1995] ECR I-4443), are not relevant to this case. First of all, Spain and France have always exchanged quotas in a manner compatible with Community law, which is not the position in this case. Secondly, the fact that France exceeded its anchovy quota and that its conduct was sanctioned by the judgment in Commission v France, cited above, merely shows that France does not comply with its obligations in regard to fisheries, but does not justify the Council breaking Community fisheries law.

23 The Council observes first of all that the accession in 1986 of the Kingdom of Spain and the Portuguese Republic to the Community brought with it serious adaptation problems as regards fisheries, that the process of integrating two Member States into the common fisheries policy was a gradual one, and that the contested provisions form part of an agreement laboriously drawn up by the Council. It points to the seriousness of the problems surrounding anchovy fishing in ICES area VIII and notes that quota swapping by Portugal and France was intended to promote the integration of Portugal and Spain.

24 The Council goes on to observe that the anchovy stock in ICES area VIII is not in biological danger and that the current TAC, which is precautionary, is not based on an exact scientific prediction. The essential difference between precautionary TACs and analytical TACs is that precautionary TACs apply to stocks for which no forecasts of catches based on analytical assessment are available. Where the Council has access to an analytical assessment of stock, it lays down an analytical TAC corresponding to a specified management objective. Precautionary TACs are laid down where it is not possible to assess the exact degree to which stocks have been exploited. Such TACs do not necessarily satisfy conservation requirements, though they are generally fixed at levels regarded as biologically safe, but more often meet other objectives.

25 There has not been overfishing of anchovy stocks in ICES area VIII but, in order to ensure an increase in France's quota, the Council had to increase the TAC by a factor of ten to comply with Article 161 of the Act of Accession which allocates 90% of that TAC to Spain and 10% to France. Since there was a risk that that solution might result in stock being overfished, the Council and Commission authorised the transfer of anchovy fishing opportunities from waters to the west of the Iberian Peninsula (ICES areas IX and X; CECAF area 34.1.1) to waters in the Gulf of Gascony to the north of Spain (ICES area VIII). The Council did not, in so doing, overstep the limits of its powers or breach the fundamental principles of the common fisheries policy laid down in the Treaties.

26 The Council acknowledges that, in fixing a common TAC for anchovy stocks in ICES area VIII and ICES areas IX and X, the Council and Commission were carrying out the wishes of the French Republic and the Portuguese Republic, since those transfers are to be decided by the Member States under Article 9 of Regulation No 3760/92 and remain within the prerogative of the Member States. However, the Council did not infringe Article 39 of the Treaty because it did not, in endorsing what had been agreed between the Member States, jeopardise the anchovy stock in ICES area VIII.

27 The Commission points out, inter alia, that the Kingdom of Spain regularly exchanges anchovy fishing opportunities with France in the exercise of the legitimate power conferred on it by Article 9 of Regulation No 3760/92, and that the domain of anchovy fishing in ICES area VIII is particularly sensitive socio-economically, as is clear from the judgment in Commission v France, cited above.

28 In that connection, it must be observed that it is settled case-law that, in pursuing the objectives of the common agricultural policy, the Community institutions must secure the permanent harmonisation made necessary by any conflicts between those objectives taken individually and, where necessary, give any one of them temporary priority in order to satisfy the demands of the economic factors or conditions in view of which their decisions are made (Case 29/77 Roquette Frères [1977] ECR 1835, paragraph 30; Case C-311/90 Hierl v Hauptzollamt Regensburg [1992] ECR I-2061, paragraph 13; Mondiet, cited above, paragraph 51; and Case C-280/93 Germany v Council [1994] ECR I-4973, paragraph 47).

29 It is also settled case-law that when, pursuant to Article 8(4) of Regulation No 3760/92, the Council fixes TACs and distributes fishing opportunities among Member States, it has to evaluate a complex economic situation. In such circumstances, its discretion is not limited solely to the nature and scope of the measures to be taken but also, to some extent, to the finding of basic facts. In reviewing the exercise of such a power, the Court must confine itself to examining whether there has been a manifest error or misuse of power or whether the authority in question has clearly exceeded the bounds of its discretion (Case C-4/96 NIFPO and Northern Ireland Fishermen's Federation [1998] ECR I-681, paragraphs 41 and 42).

30 In this case, it must first be observed that, as the Council and the Commission have pointed out without being contradicted, the contested provisions were adopted to tackle the serious problems affecting anchovy fishing in ICES area VIII.

31 Next, it must be noted that when the Council fixed a TAC of 33 000 tonnes of anchovy in ICES area VIII, it did so by way of precaution and not on the basis of proven scientific data. In those circumstances, the increase by 5 008 tonnes, under the fifth heading of Annex I to Regulation No 746/95, of anchovy fishing opportunities in that area cannot be considered to be vitiated by manifest error or misuse of power or clearly to exceed the bounds of the discretion enjoyed by the Council unless there are sufficient grounds for believing that it disturbed the biological equilibrium of those resources. The Court finds that the Spanish Government has not proved that it did.

32 Furthermore, although Article 4(1) of Regulation No 3760/92 requires Community measures laying down the conditions of access to waters and resources to be drawn up in the light of available biological, socio-economic and technical analyses, the absence of such analyses or the fact that they are inconclusive cannot prevent the Council from adopting such measures as it deems necessary for achieving the objectives of the common fisheries policy (see, as regards Article 2(1) of Regulation No 170/83, the substance of which is restated in Article 4(1) of Regulation No 3760/92, the judgment in Mondiet, cited above, paragraph 31). In those circumstances, contrary to the Spanish Government's claim, not only is the Council justified in imposing stricter conservation measures but it may also, provided that it exercises appropriate caution, allow increased access to fishing resources.

33 Finally, in so far as it alleges that the Council infringed the principle of relative stability when distributing fishing quotas among the Member States, the Spanish Government's first plea overlaps with the second part of its second plea and must be examined together with it.

34 Accordingly, the plea alleging infringement of Article 39 of the Treaty cannot be upheld.

The plea alleging breach of Regulation No 3760/92

35 By its second plea in law, which may be divided into two parts, the Spanish Government claims that, by adopting the contested provisions, the Council breached Regulation No 3760/92. It alleges, first, that the Council failed to have regard to the overall objective of the common fisheries policy set out in Article 2(1) of that regulation, namely the rational and responsible exploitation of living marine aquatic resources. Secondly, it alleges breach of the principle of relative stability laid down in Article 8(4)(ii) of that regulation.

Breach of the obligation to ensure the rational and responsible exploitation of living marine aquatic resources

36 First of all, the Spanish Government claims that the anchovy TAC for 1995, which was initially fixed at 33 000 tonnes in ICES area VIII and 12 000 tonnes in ICES areas IX and X (CECAF area 34.1.1), was altered by the contested provisions without the slightest scientific basis and increased to 38 008 tonnes in ICES area VIII. That alteration amounts to a breach of Regulation No 3760/92 because it runs counter to the objective of rational and responsible exploitation of resources and produces the opposite result, namely over-exploitation of anchovy resources in ICES area VIII. Furthermore, the TAC was effectively altered without the procedure laid down in Regulation No 3760/92 for that purpose being followed.

37 There is a clear biological difference between anchovy stocks in ICES area VIII and those in ICES area IX, as is apparent from the ICES' working group reports assessing stocks of mackerel, horse mackerel, sardine and anchovy, and scientific studies made in 1986 and 1992 on identifying anchovy stocks. In addition, the two stocks are separated by a vast geographical area in which fishing fleets do not fish anchovy, only sardines, which is less economical. For those reasons, the two stocks cannot be managed jointly.

38 None of the examples of quota swapping cited by the Council bear any relation to this case because they were concerned with a single stock in adjacent zones, whereas the contested provisions relate to an exchange between different stocks, resulting in an unwarranted increase in the TAC for one particular stock. That is why in those examples exchanges between different management areas of the same stock do not alter the TAC for any one stock. The rules here in question, by contrast, alter the TAC for one particular stock, namely the anchovy stock in ICES area VIII, since they allow exchange against a quota allocated in respect of a different stock.

39 In the Council's submission, whilst the exchange in this case admittedly relates to two different biological stocks and is unusual, it is not unprecedented. Analogous situations have arisen in relation to other stocks, even if they tend to be rare and have never given rise to a dispute.

40 There is no justification for the allegation that the Council infringed Regulation No 3760/92 in fixing a common anchovy TAC for ICES areas VIII and IX, as the conservation of the stocks concerned does not call for separate TACs. In fact, the stocks' health is without question satisfactory and the quota in one area could therefore be transferred to another without any particular stock being endangered.

41 It is sufficient for the Court to observe here that, even though the anchovy stocks in the two areas under consideration are biologically different, it has been found at paragraph 31 above that the Spanish Government has not produced sufficient evidence to demonstrate that the contested provisions have the effect of disturbing the biological equilibrium of resources in ICES area VIII. In those circumstances, the Council was entitled to lay down measures for the two stocks to be managed jointly.

42 Secondly, Regulation No 685/95 was adopted under the procedure set out in Article 43 of the Treaty and Regulation No 746/95 was adopted under the procedure laid down in Article 8(4) of Regulation No 3760/92. The Spanish Government cannot therefore claim that the contested provisions altered the anchovy TAC in ICES area VIII outside the prescribed procedures.

43 Accordingly, the first part of the second plea must be rejected and there is no need to consider whether the examples of exchanges of fishing opportunities cited by the parties are comparable to the exchange in this case.

Infringement of the principle of relative stability

44 Secondly, the Spanish Government submits that, in adopting the contested provisions, the Council increased the TAC and redistributed the anchovy quota in ICES area VIII without taking account of the principle of relative stability. In ICES area VIII, a new anchovy quota of 5 008 tonnes was allocated to a country, namely Portugal, which had never had a quota there, in flagrant breach of the obligation to preserve the percentage shares laid down for each of the two Member States between whom the stock was divided, namely Spain and France.

45 By contrast, if the Council had increased the anchovy quota in ICES area VIII in the usual way, that is by adopting a new TAC on the basis of fresh scientific and technical studies, the new TAC would have been distributed according to percentages guaranteed to each Member State under the principle of relative stability, so that Spain would have obtained the quota of the new TAC to which it would have been entitled had its percentage share been maintained.

46 In the Spanish Government's submission, quota exchanges between the Member States have not thus far resulted in any TACs being altered nor have they altered the original distribution pattern which was fixed on the basis of the principle of relative stability, as each Member State has retained the fixed percentage share due to it. In this case, by contrast, Portugal, which holds an anchovy quota in ICES area IX, is now allowed to fish part of that quota (namely 5 008 tonnes) in ICES area VIII waters under the sovereignty or jurisdiction of France. If Portugal transferred that quota to France, ships flying the flag of France would not be able to fish against it in ICES area IX, only in ICES area VIII, thus increasing the anchovy TAC in that area, in a departure from the previous distribution pattern which was established on the basis of the principle of relative stability, and without guaranteeing that Spain's percentage share would be preserved.

47 The Council claims that its allocation of 90% of the anchovy TAC in ICES area VIII to Spain was compatible with Article 161 of the Act of Accession and the principle of relative stability. The additional amount of anchovy which Portugal can exchange with France obviously does not form part of the TAC laid down for ICES area VIII. While the Council acknowledges that that situation may not follow from a strict interpretation of the principle of relative stability, it contends that in this case it took a wider view aimed at preserving the overall equilibrium of anchovy quotas fished around the Iberian Peninsula. Its interpretation should be understood against the more general backdrop of Spain's integration into the common fisheries policy.

48 In this regard, the Court finds it necessary to observe first of all that, whereas Article 8(4)(ii) of Regulation No 3760/92 provides that fishing opportunities are to be distributed for each of the stocks concerned in such a way as to assure the relative stability of the fishing activities of each Member State, that article expressly states that, following a request from the Member States directly concerned, account may be taken of regular quota exchanges since 1983, with due regard to the overall balance of shares.

49 It follows that the principle of relative stability may be affected by exchanges between Member States which had already been effected when Regulation No 3760/92 was adopted. In those circumstances, it must also be acknowledged that that principle does not preclude subsequent exchanges, provided that the overall equilibrium of the shares is preserved.

50 Next, Article 9(1) of Regulation No 3760/92 expressly permits the Member States to exchange fishing availabilities after notifying the Commission.

51 Finally, in this case the exchange was not made by means of a simple agreement between the Member States concerned after notifying the Commission but was the result of two regulations issued by the Council of which the first, Regulation No 685/95, was adopted on the basis of Article 43 of the Treaty, which also comprises the basis for Regulation No 3760/92, on which the Spanish Government relies. The Council therefore expressly and specifically authorised the exchange in question, which it stated would be effected by a TAC which, in a departure from the previously prevailing position, would be common to ICES areas VIII and IX.

52 As regards the circumstances in which that exchange was authorised, it must first of all be noted that the transfer to France of 80% of Portugal's fishing opportunities, to be fished only in waters under the sovereignty or jurisdiction of France, which was effected by means of a common TAC covering ICES areas VIII and IX, does not have the effect of increasing fishing opportunities in those areas taken together or of affecting Spain's overall share in those areas.

53 Secondly, that exchange does not adversely affect the fishing opportunities allocated in ICES area VIII, taken separately, to Member States not privy to the exchange. Spain continues to enjoy a 29 700 tonne quota in ICES area VIII.

54 Finally, the exchange in question has not been shown to jeopardise resources in the areas concerned or, therefore, to have an adverse effect on the rights of Member States, such as Spain, to quotas in those areas.

55 The contested provisions cannot therefore be considered to have an adverse effect on the principle of relative stability laid down in Article 8(4)(ii) of Regulation No 3760/92. The second part of the second plea cannot therefore be accepted either.

56 Since none of the pleas in law have been upheld, the action must be dismissed in its entirety.

Decision on costs

Costs

57 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to pay the costs if they have been applied for in the successful party's pleadings. Since the Council applied for an order for costs against the Kingdom of Spain and the Kingdom of Spain has been unsuccessful, it must be ordered to pay the costs. Pursuant to the first paragraph of Article 69(4) of the Rules of Procedure, the Commission, as intervener, shall bear its own costs.

Operative part

On those grounds,

THE COURT

(Sixth Chamber)

hereby:

1. Dismisses the action; 2. Orders the Kingdom of Spain to pay the costs;

3. Orders the Commission of the European Communities to pay its own costs.