Judgment of the Court of 22 September 1988. - Commission of the European Communities v Hellenic Republic. - Restrictions on trade in olive oil. - Case 272/86.



European Court reports 1988 Page 04875



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

1 . Action for failure by a Member State to fulfil its obligations - Proof of failure - Burden of proof on Commission - Production of evidence showing failure - Incumbent on Member State concerned to refute evidence

( EEC Treaty, Art . 169 )

2 . Member States - Obligations - Commission' s duty to ensure fulfilment - Duty of the Member States - Duty to cooperate with inquiries and proceedings before the Court relating to failure by a State to fulfil obligations

( EEC Treaty, Arts 5, 155, 164 and 169 )

Summary

1 . Although in proceedings under Article 169 of the Treaty it is incumbent upon the Commission to prove its allegation that obligations have not been fulfilled, the Member State in question is not entitled, where the Commission has produced sufficient evidence to show the failure to fulfil obligations, merely to deny its existence . It is incumbent on that State to contest substantively and in detail the information produced and the consequences thereof . If it does not do so, the allegations must be regarded as substantiated .

2 . The Member States are under a duty, by virtue of Article 5 of the Treaty, to facilitate the achievement of the Commission' s tasks, which consist in particular, pursuant to Article 155 of the EEC Treaty, in ensuring that the provisions of the Treaty and the measures taken by the institutions pursuant thereto are applied . A Member State' s refusal to cooperate with the Commission for the purpose of the latter' s investigations to establish whether or not Community law has been infringed by rules and practices applied in that State therefore constitutes a failure by that State to fulfil its obligations . The lack of cooperation is particularly serious where it persists before the Court . It prevents the Court from accomplishing the task entrusted to it by Article 164 of the Treaty, and therefore constitutes a serious impediment to the administration of justice .

Parties

In Case 272/86

Commission of the European Communities, represented by Xénophon Yataganas, a member of its Legal Department, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of its Legal Department, Jean Monnet Building, Kirchberg,

applicant,

v

Hellenic Republic, represented by Nikos Frangakis, a legal adviser to its Permanent Representation to the European Communities, and Asteris Pliakos, Agent for the Ministry of Commerce, with an address for service in Luxembourg at the Greek Embassy, 117 Val Sainte-Croix, Luxembourg,

defendant,

APPLICATION for a declaration that by prohibiting imports of olive oil from other Member States and from non-member countries and exports of the same product, with the exception of extra and fine quality virgin olive oil in packs not exceeding five litres, and by failing to provide the Commission with information in that regard, the Hellenic Republic has failed to fulfil its obligations under Articles 30, 34 and 5 of the EEC Treaty and under Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats ( Official Journal, English Special Edition 1966, p . 221 ), in particular Article 3 thereof,

THE COURT

composed of : Lord Mackenzie Stuart, President, G . Bosco, J . C . Moitinho de Almeida and G . C . Rodríguez Iglesias ( Presidents of Chambers ), T . Koopmans, U . Everling, Y . Galmot, C . N . Kakouris and F . A . Schockweiler, Judges,

Advocate General : J . L . da Cruz Vilaça

Registrar : D . Louterman, Administrator

having regard to the Report for the Hearing and further to the hearing on 23 February 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 28 April 1988,

gives the following

Judgment

Grounds

1 By an application received at the Court Registry on 10 November 1986, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that by prohibiting imports of olive oil from other Member States and from non-member countries and exports of the same product, with the exception of extra and fine quality virgin olive oil in packs not exceeding five litres, and by failing to provide the Commission with information in that regard, the Hellenic Republic has failed to fulfil its obligations under Articles 30, 34 and 5 of the EEC Treaty and under Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats ( Official Journal, English Special Edition 1966, p . 221 ), in particular Article 3 thereof .

2 After receiving complaints from a number of traders that imports of olive oil into the Hellenic Republic were encountering difficulties, the Commission sent a telex message on 13 August 1984 to the Greek authorities pointing out that since the accession of the Hellenic Republic no olive oil had been imported into the Hellenic Republic either from non-member coutries or from other Member States . Referring to the complaint made by an Italian trader that it had tried on two occasions to import olive oil into the Hellenic Republic but had not received authorization from the competent Greek authorities, the Commission asked whether olive oil of Community origin could be freely imported into the Hellenic Republic in accordance with the Community legislation and, in particular, requested details of the administrative formalities to which such imports were subject . Following two reminders by the Commission, on 4 April 1985 the Hellenic Republic replied that olive oil from Community countries could be freely imported .

3 With respect to exports, the Commission sent a telex message to the Greek Minister for Agriculture on 1 February 1985 mentioning reports according to which the Greek Government had taken measures prohibiting exports in bulk of extra and fine quality virgin olive oil to other Member States and non-member countries, or at least imposing certain conditions on such exports . By letter of 14 February 1985, the Greek Minister for Agriculture informed the Commission that the prolonged drought of the previous year had led to an acute shortage of extra and fine quality olive oil on the Greek market, with direct repercussions on prices . In those circumstances the Greek Government had decided temporarily not to approve exports of those two grades of olive oil . The Minister requested that the relevant Commission departments, in conjunction with the Greek Ministry of Agriculture, should seek a solution to that exceptional problem .

4 On 24 April 1985, the Commission formally called upon the Greek Government to submit its observations regarding the claim that those barriers to imports and exports and the failure to provide the information requested were in breach of Articles 30, 34 and 5 of the EEC Treaty and of Regulation No 136/66/EEC . The Commission received no reply, and on 21 October 1985 it delivered a reasoned opinion, essentially reiterating the arguments contained in its letter of formal notice .

5 By letter of 6 March 1986, the Hellenic Republic replied that an exceptional drop in production of extra and fine quality olive oil during the period 1984-85 had led to an excessive increase in prices . With a view to stabilizing the market and protecting consumers' income, the Greek Government had been obliged to adopt temporary measures withholding authorization for exports of the abovementioned categories alone . Imports of olive oil were unrestricted .

6 On 10 April 1986, the Commission sent the Greek Government a further letter of formal notice in which it stated that the Hellenic Republic had not only continued to apply the prohibition on exports of extra and fine quality olive oil but had also extended it to all types of edible olive oil and oil intended for industrial purposes . Only exports of extra and fine quality olive oil in packs not exceeding five litres were authorized .

7 No reply was received to that letter and therefore the Commission delivered a further reasoned opinion on 26 June 1986 . By letter of 18 July 1986 the Greek authorities informed the Commission that during the previous two months private traders and cooperatives had exported 55 000 tonnes of edible olive oil in bulk . The Commission subsequently brought the present action .

8 In reply to a question from the Court, the Greek Government stated that it had adopted control measures for the extra and fine grades from 10 January to 10 May 1985 . That period had been extended to 10 June 1985 .

9 On the basis of Article 21 of the Statute of the Court of Justice, the Court also requested the Greek Government, by letters of 23 October 1987, 14 and 27 January 1988, to explain the administrative formalities and to produce the provisions governing imports and exports of olive oil since 1984 .

10 In its letter of 26 November 1987 the Greek Government denied the existence, apart from the abovementioned temporary measures concerning exports, of any provision restricting imports and exports of olive oil . In its letter of 24 January 1988, the Greek Government admitted the existence of an administrative bank practice . The prescribed procedure required the submission of an application to the Bank of Greece or to one of its local branches and was intended both to enable the persons concerned to proceed with imports or exports and to prevent the illegal export of currency . In its telex message of 3 February 1988, the Greek Government gave some information regarding that procedure . It stated that applications were examined "from the point of view of exchange-control problems" and a check was made "that the unit price of the goods is not substantially lower than the known current prices ".

11 However, no applicable provisions were produced by the Greek Government . Even at the hearing, its representatives were unable to submit them .

12 Reference is made to the Report for the Hearing for a fuller account of the facts, the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .

The existence of restrictions on exports and imports of olive oil

13 The Hellenic Republic admits having prohibited exports of olive oil of extra and fine quality from 10 January to 10 June 1985 . It claims that the restrictions were justified by an acute shortage of olive oil of those grades .

14 With respect to the period after 10 June 1985, the Commission maintains that the Hellenic Republic not only continued to prohibit exports of extra and fine quality olive oil but extended the prohibition to all types of edible olive oil and lampante grade oil . Only edible olive oil in packs not exceeding five litres and olive-residue oil in any form could be exported .

15 The Commission also accuses the Hellenic Republic of having prohibited the importation of olive oil . Between 1981 and 1986, the Hellenic Republic imported only 2 005 tonnes of refined olive oil from Italy which, moreover, were immediately re-exported . The Commission therefore considers that the Greek olive oil market has remained inacccessible for a long period .

16 The Hellenic Republic, on the other hand, contends that, apart from the restrictions on exports between January and June 1985, exports and imports of olive oil from and into the Hellenic Republic were unrestricted . It claims that considerable quantities were exported during the period in question . As regards imports, the Hellenic Republic refers to a lack of interest on the part of traders owing to the fact that demand could be covered by domestic production .

17 It must be borne in mind that, as the Court held in its judgments of 25 March 1982 in Cases 96/81 and 97/81 Commission v Netherlands (( 1982 )) ECR 1791 and 1819, in proceedings under Article 169 of the Treaty it is incumbent upon the Commission to prove the allegation that the obligation has not been fulfilled . It is therefore necessary to determine whether the Commission has established the existence of restrictions on exports and imports of olive oil applied by the Greek Government in breach of the Treaty .

18 The Greek Government has admitted, in response to repeated questions from the Court, that an administrative bank procedure is applied in order to monitor the use of foreign currency . The Commission has informed the Court that, in the present proceedings, it does not challenge that procedure as such . It claims, however, that the application of that procedure leads in fact to restrictions on trade .

19 Such restrictions on exports of olive oil were admitted by the Greek Government as regards the period from 10 January to 10 June 1985 . For the subsequent period, the Commission refers to complaints made by various Community traders and the Italian Government to the effect that repeated efforts to export and import olive oil in bulk have proved fruitless . At the hearing, the representatives of the Greek Government were unable specifically to refute the allegations made in those complaints . Moreover, the figures produced by the Commission indicate that, with the exception of extra and fine quality virgin olive oil in packs not exceeding five litres, olive oil has been exported only in exceptional cases .

20 As regards imports, the parties agree that with the exception of a small quantity which was immediately re-exported, no olive oil has been imported into the Hellenic Republic since 1981, despite an acute shortage which, according to the Greek Government, prevailed on its market in 1984 and 1985 following a bad harvest . The explanation given by the Greek Government that the price of olive oil was higher in the other Member States, in particular Italy, than in the Hellenic Republic, with the result that olive oil originating in those States could not be sold on the Greek market, is not convincing . The applications from various traders produced by the Commission provide evidence of an interest in importing olive oil into the Hellenic Republic . The Greek Government has not been able to establish why those applications were not granted within a reasonable period .

21 It must therefore be held that the Commission has produced sufficient evidence to show that the Greek Government applied restrictions on exports and imports of olive oil . Since the administrative procedures were applied without distinction to the Hellenic Republic' s dealings with Member States and non-member countries, restrictions affecting the latter must be presumed . In those circumstances it was incumbent on the Hellenic Republic to contest substantively and in detail the information produced and the consequences thereof . The Greek Government has not submitted any information to the Court in that respect and therefore the Commission' s allegations must be regarded as substantiated .

Infringement of Articles 30 and 34 of the Treaty

22 Under Articles 30 and 34 of the Treaty, quantitative restrictions on imports and exports and all measures having equivalent effect are prohibited between Member States . Article 3 ( 1 ) of Regulation No 136/66/EEC prohibits such restrictions in trade with non-member countries . In the present case, the abovementioned restrictions applied by the Hellenic Republic constitute an infringement of those provisions .

23 Moreover, it must be borne in mind, as the Court has held on many occasions in the past ( see judgment of 7 February 1984 in Case 237/83 Jongeneel Kaas v Netherlands (( 1984 )) ECR 483 ), that once regulations have been adopted establishing a common organization of the market in a given sector, Member States are under an obligation to refrain from taking any measures which might undermine or create exceptions to it . Regulation No 136/66/EEC on the establishment of a common organization of the market in oils and fats does not empower the Member States to take action unilaterally . By restricting exports and imports of olive oil, the Hellenic Republic has therefore failed to comply with the mechanisms and principles governing the common organization of the market in oils and fats .

24 If the Hellenic Republic considered that economic difficulties in the olive oil sector necessitated the application of protective measures, it should have had recourse to the procedures provided for in Regulation No 136/66/EEC, in particular Article 13 thereof . The fact that the Commission did not reply to a letter from the Greek Minister for Agriculture seeking a solution to those problems did not relieve the Hellenic Republic of its duty to comply with the applicable Community law .

25 It must therefore be held that by prohibiting imports of olive oil from other Member States and from non-member countries and exports of the same product, with the exception of extra and fine quality olive oil in packs not exceeding five litres, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 34 of the EEC Treaty and under Regulation No 136/66/EEC .

The infringement of Article 5 of the EEC Treaty

26 The Commission also considers that by failing to provide the Commission with the information requested and by excessively delaying the transmission of such information the Hellenic Republic has failed to fulfil its obligations under Article 5 of the Treaty .

27 The Hellenic Republic states that any delays in communicating information were due not to unwillingness to cooperate with the Commission but to the division of responsibilities between several State departments .

28 It is apparent from the documents before the Court that the Commission repeatedly asked the Hellenic Republic to give details of the administrative formalities to which imports of olive oil were subject . That question remained unanswered .

29 It was only after repeated requests from the Court, based on Article 21 of the Statute of the Court of Justice, for details of the administrative formalities and copies of the national provisions governing imports and exports of olive oil since 1984 that the Hellenic Republic finally admitted the existence of an administrative bank practice in that respect . However, the Hellenic Republic did not produce any documents, even of a purely internal nature, on which that practice was based .

30 The Member States are under a duty, by virtue of Article 5 of the EEC Treaty, to facilitate the achievement of the Commission' s tasks, which consist in particular, pursuant to Article 155 of the EEC Treaty, in ensuring that the provisions of the Treaty and the measures taken by the institutions pursuant thereto are applied . It was for those purposes that the Commission asked for information .

31 The Greek Government' s refusal to cooperate with the Commission prevented the latter from obtaining information about an administrative practice and from determining whether it gave rise to barriers to trade in olive oil . That lack of cooperation was particularly serious because it persisted before the Court . The Court cannot accomplish the task entrusted to it by Article 164 of the Treaty, namely ensuring that in the interpretation and application of the Treaty the law is observed, where a government does not comply with its requests . The conduct of the Greek Government has therefore constituted in the present case a serious impediment to the administration of justice .

32 In those circumstances, it must be held that by failing to provide the Commission with the information requested, the Hellenic Republic has failed fo fulfil its obligations under Article 5 of the Treaty .

33 In view of all the foregoing considerations, it must be held that :

by prohibiting imports of olive oil from other Member States and from non-member countries and exports of the same product, with the exception of extra and fine quality virgin olive oil in packs not exceeding five litres, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 34 of the EEC Treaty and under Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats, in particular Article 3 thereof;

by failing to provide the Commission with the information requested in that regard, the Hellenic Republic has failed to fulfil its obligations under Article 5 of the Treaty .

Decision on costs

Costs

34 Under Article 69 ( 2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they are asked for in the other party' s pleadings . Since the Hellenic Republic has failed in its submissions, it must be ordered to pay the costs .

Operative part

On those grounds,

THE COURT

hereby :

( 1 ) Declares that by prohibiting imports of olive oil from other Member States and from non-member countries and exports of the same product, with the exception of extra and fine quality virgin olive oil in packs not exceeding five litres, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 34 of the EEC Treaty and under Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats, in particular Article 3 thereof;

( 2 ) Declares that by failing to provide the Commission with the information requested in that regard, the Hellenic Republic has failed to fulfil its obligations under Article 5 of the Treaty;

( 3 ) Orders the Hellenic Republic to pay the costs .