CELEX: 61999CC0228
Language: en
Date: 2001-04-03
Title: Opinion of Mr Advocate General Geelhoed delivered on 3 April 2001. # Silos e Mangimi Martini SpA v Ministero delle Finanze. # Reference for a preliminary ruling: Tribunale civile e penale di Cagliari - Italy. # Agriculture - Common organisation of the markets - Export refunds - Withdrawal - Interpretation and validity of Regulations (EC) Nos 1521/95 and 1576/95 - Failure to state reasons. # Case C-228/99.

Important legal notice

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61999C0228

Opinion of Mr Advocate General Geelhoed delivered on 3 April 2001.  -  Silos e Mangimi Martini SpA v Ministero delle Finanze.  -  Reference for a preliminary ruling: Tribunale civile e penale di Cagliari - Italy.  -  Agriculture - Common organisation of the markets - Export refunds - Withdrawal - Interpretation and validity of Regulations (EC) Nos 1521/95 and 1576/95 - Failure to state reasons.  -  Case C-228/99.  

European Court reports 2001 Page I-08401

Opinion of the Advocate-General

1. In this reference for a preliminary ruling the Tribunale (District Court) di Cagliari (Italy) raises questions concerning inter alia the validity of Commission Regulation (EC) No 1521/95 of 29 June 1995 and Commission Regulation (EC) No 1576/95 of 30 June 1995 fixing the export refunds on cereal-based compound feedingstuffs by which export refunds on compound feedingstuffs were fixed at zero.Legal background2. Article 9(1) of Council Regulation (EEC) No 1766/92 of 30 June 1992 on the common organisation of the market in cereals provides as follows:Imports into the Community, or exports therefrom, of any of the products listed in Article 1 shall be subject to the submission of an import or export licence which may be issued by Member States to any applicant, irrespective of the place of his establishment in the Community. Where the levy or refund is fixed in advance, the advance fixing shall be noted on the licence which serves as supporting document for such advance fixing.The import or export licence shall be valid throughout the Community. The issue of such a licence shall be conditional on the lodging of a security guaranteeing that importation or exportation will be effected during the period of validity of the licence; the security shall be forfeited in whole or in part if the transaction is not effected, or is only partially effected, within that period.3. Article 13 of this regulation states as follows:1. To the extent necessary to enable the products listed in Article 1 to be exported in the state referred to therein or in the form of goods listed in Annex B on the basis of quotations or prices for those products on the world market, the difference between those quotations or prices and prices in the Community may be covered by an export refund.2. The refund shall be the same for the whole Community. It may be varied according to use or destination.The refund shall be granted on application.Refunds shall be fixed at intervals in accordance with the procedure laid down in Article 23.Where necessary the Commission may, at the request of a Member State or on its own initiative, alter the refunds in the intervening period.3. The amount of the refund applicable to exports of products listed in Article 1 and of goods listed in Annex B shall be that applicable on the day of exportation.4. However, in the case of products listed in Article 1(1)(a) and (b), the refund applicable on the day on which application for the licence is lodged, adjusted for the threshold price which will be in force during the month of exportation, shall be applied to an export to be effected during the period of validity of the licence if the applicant so requests when applying for the licence.A corrective amount may be fixed. It shall be applied to refunds fixed in advance. The corrective amount shall be fixed at the same time as the refund according to the same procedure; however, where necessary the Commission may, at the request of a Member State or on its own initiative, alter the corrective amounts in the intervening period.The provisions of the first and second subparagraphs may be applied, in whole or in part, to any of the products listed in Article 1(1)(c) and (d) and to any products listed in Article 1 which are exported in the form of goods specified in Annex B....7. Where examination of the market situation shows that the application of the provisions concerning the advance fixing of the export refund has given rise, or may give rise, to difficulties, a decision may be taken, in accordance with the procedure laid down in Article 23, to suspend the application of those provisions for the period strictly necessary.In cases of extreme urgency, the Commission may, after examination of the situation on the basis of all the information available to it, decide to suspend advance fixing for a maximum of three working days.Applications for licences accompanied by applications for advance fixing lodged during the period of suspension shall be rejected.4. Also of relevance to the present proceedings is Article 1 of Regulation (EEC) No 1913/69 of the Commission of 29 September 1969 on the granting and the advance fixing of the export refund on cereal-based compound feedingstuffs, as amended by Commission Regulation (EC) No 1707/94 of 13 July 1994. This provides as follows:During a given month the export refund on cereal-based compound feedingstuffs shall be fixed per tonne of cereals contained in the compound feedingstuffs, taking account of the following criteria:(a) the average of the refunds granted during the previous month for the most commonly used basic cereals, adjusted on the basis of the threshold price for these cereals in force during the current month;(b) the average of the levies for the most commonly used basic cereals, calculated for the first 25 days of the previous month and adjusted on the basis of the corresponding threshold price in force during the current month;(c) outlets and conditions of sale for the products in question on the world market;(d) the need to avoid disturbances on the Community market;(e) the economic aspects of the exports concerned.5. Article 3 of Commission Regulation (EEC) No 3665/87 of 27 November 1987 laying down common detailed rules for the application of the system of export refunds on agricultural products lays down rules governing the regime which applies to the day of export.1. The day of export means the date on which the customs authority accepts the export declaration in which it is stated that a refund will be applied for.2. The date of acceptance of the export declaration shall determine:(a) the rate of the refund where the refund is not fixed in advance;(b) any adjustments to be made to the rate of the refund where it is so fixed.3. Any other act having the same effect in law as the acceptance of the export declaration shall be deemed to be equivalent to such acceptance.4. The day of export shall be used to establish the quantity, nature and characteristics of the product exported.5. The document used for export to enable products to quality for a refund must include all information necessary for the calculation of the amount of the refund, and in particular:(a) a description of the products in accordance with the nomenclature used for refunds;(b) the net mass of the products or, where applicable, the unit of measurement to be taken into account in calculating the refund; and,(c) in so far as is necessary for calculating the refund, particulars of the composition of the products or the relevant reference.If the document mentioned in this paragraph is the export declaration, this document must also include these references and the reference "refund code".6. At the time of such acceptance, or of such equivalent act, the products shall be placed under customs control until they leave the customs territory of the Community.6. The Commission frequently fixes export refunds on cereal-based compound feedingstuffs by means of regulation. For example, Regulation (EC) No 1415/95 of 22 June 1995, which entered into force on 23 June 1995, sets the amount of refund for maize and maize products at ECU 74.93 per tonne. Regulation No 1521/95 of 29 June 1995, which entered into force on 30 June 1995, and Regulation No 1576/95 of 30 June 1995, which entered into force on 1 July 1995, fixed no amount for refunds and thus abolished them in practice. Regulation (EC) No 1652/95 of 6 July 1995, which entered into force on 7 July 1995, reintroduced the refund and fixed the amount for maize and maize products at ECU 62.51 per tonne.Facts and procedure7. Silos e Mangimi Martini SpA (hereinafter: Silos) is an Italian undertaking which engages in the production of finished and semi-finished cattle feed in Sardinia and Ravenna. It has, for many years, exported its products to countries outside the European Union.8. In May 1995 it applied for and obtained two export licences, valid until 30 June 1995, each for 3 000 tonnes of cereal-based cattle feed. The products to which the first of the two licences related were exported at different times, the final export taking place on 30 June 1995. The export of the products referred to in the second licence commenced on 10 June 1995 and was continued on 12, 20, 21 and 30 June 1995. The competent customs authorities accepted the export declaration on 30 June 1995.9. The following export refund regime is relevant to the present case. At the time the export licences were issued to Silos, Commission Regulation No 1217/95 of 30 May 1995 was in force in respect of the amount of the refund, followed by Regulation No 1415/95 of 22 June 1995 which increased the amount of the refund from ECU 74.34 to ECU 74.93.The refunds were abolished by subsequent Regulation No 1521/95 of 29 June 1995 and set again at zero by Regulation No 1576/95 of 30 June 1995. However, they were reintroduced and fixed at ECU 62.51 per tonne by Regulation No 1652/95 of 6 July 1995.10. Silos requested that the customs authorities pay the sum of ITL 383 616 074 by way of Community export refunds. This request for payment was declined since Regulation No 1521/95, which had fixed the amount of the export refunds at zero, was applicable at the time the export declaration was accepted. Silos subsequently brought proceedings against the Ministero delle Finanze dello Stato (Ministry of Finance) before the Tribunale di Cagliari. In those proceedings it requested that the court refer certain questions regarding the validity and interpretation of Regulation No 1521/95 and Regulation No 1576/95 to the Court of Justice for a preliminary ruling.11. The Tribunale di Cagliari subsequently referred five questions which form the subject-matter of the present proceedings:(1) Does Commission Regulation No 1576/95 of 30 June 1995 repeal Commission Regulation No 1521/95 of 29 June 1995 and, if so, must the latter be held to have had no legal effects on 30 June 1995?(2) Must Commission Regulation No 1521/95 of 29 June 1995 be interpreted as meaning that it may be applied to export operations already underway and already completed on the same day on which the regulation itself was published and thus made available to the operators concerned?(3) Is Commission Regulation No 1521/95 of 29 June 1995 invalid and thus of no legal effect for lack of a statement of reasons?(4) Is Commission Regulation No 1576/95 of 30 June 1995 likewise invalid and thus of no legal effect for lack of a statement of reasons?(5) Do the export operations of 30 June 1995 fall within the scope of Commission Regulation (EC) No 1415/95 of 22 June 1995 as a result of the invalidity of the abovementioned regulations, or by the repeal referred to in Question 1?The Tribunale also adds that there are, in its view, reasonable doubts as to the validity of Regulation No 1521/95 and Regulation No 1576/95 having regard to the obligation to state reasons for the measures concerned.Observations submitted to the Court12. Firstly, Silos points out that Regulation No 1576/95 reproduces the wording of Regulation No 1521/95, supplemented in the preamble by the statement of reasons which was absent from Regulation No 1521/95. Regulation No 1576/95 does not refer to Regulation No 1521/95. This means that Regulation No 1521/95 is repealed from the outset. Unlike where a regulation is withdrawn, a repealed regulation produces no effects save where the repealed decision established rights for the benefit of certain citizens who would suffer harm as a consequence of the withdrawal. Since Regulation No 1521/95 is repealed, Regulation No 1576/95 applies to the export on 30 June 1995.13. Secondly, Silos contends that Regulation No 1521/95 is not valid since it lacks a statement of reasons. The abolition of the export refund is exceptional in nature and thus requires a statement of reasons which is consistent therewith. This is particularly true since the movement in the price of maize on the world market makes the abolition unrealistic, unjustifiable and unforeseeable. Silos refers to Article 190 of the EC Treaty (now Article 253 EC).14. Silos' third observation relates to the contradictory nature of Regulation No 1521/95. The Commission let it be known informally that the entry into force of the GATT agreements had resulted in the suspension of the export refunds. Since the GATT agreements did not enter into force until 1 July 1995 they can provide no justification for Regulation No 1521//95 which was already in force on 30 June 1995. Furthermore, at that time the price difference between maize on the world market and maize on the Community market had actually increased. That should have resulted precisely in an increase in the export refund. Finally, the reintroduction of refunds on 7 July 1995 also highlighted the intrinsically contradictory nature of Regulation No 1521/95.15. Fourthly, Silos takes the view that the obligation to provide a statement of reasons is not satisfied also in respect of Regulation No 1576/95. The observations on the contradictory nature of Regulation No 1521/95 also apply to Regulation No 1576/95.16. Fifthly, Silos contends that Regulation No 1521/95 was introduced after the export declaration had been accepted by the competent customs authorities, was unforeseeable and had unlawful retroactive effect. Silos points out that the Official Journal became available to the public only after the customs operations had already been completed. In brief, its legitimate expectations were damaged since it was not aware that the export refund might be abolished (having regard also to the development of the market) and had been unable to examine the regulation in time. Silos' good faith is also relevant and in that respect it refers to the recognition of good faith in the European case-law. Inter alia an undertaking is protected by good faith in circumstances in which no deception or obvious negligence may be attributed to the person concerned. It should not suffer harm beyond normal commercial risk. Silos claims that in this case its good faith is beyond all doubt.17. In brief, Silos considers that Regulation No 1415/95 must be regarded as applicable to its export operations.18. By way of introduction the Commission examines certain aspects of the common organisation of the market in cereals. It points to the large proportion of the Community budget which is spent on export refunds on cereals.19. According to the 10th recital in the preamble to Regulation No 1766/92, the function of the export refunds is to cover the difference between prices outside and within the Community. The objective is not to create a guarantee mechanism for undertakings but is rather an instrument to facilitate exports. In that respect the Commission enjoys a broad margin of discretion in fixing refunds. The Commission may fix refunds but, under Article 13 of Regulation No 1766/92, is not obliged to do so.20. The Commission requires maximum flexibility in order to be able to adapt the refunds to the many fluctuations in the markets which are subject to many factors such as, for example, climatic conditions. In order to discourage speculation the Commission follows a set procedure with which all undertakings in the sector are familiar.21. This procedure basically involves the management committee meeting at a fixed time every Thursday afternoon and the measures being adopted the same evening and published the following morning. Generally speaking, they also enter into force at that time. Often the undertakings have already been informed of the draft measures, before they are formally adopted, through the national representatives on the management committee or via a professional organisation. Moreover, in cases of urgency the Commission may adjust the refunds without involving the management committee.22. Moreover, a specific mechanism is available to undertakings, so-called advance fixing, which enables undertakings to obtain the refund which applied at the time of the application for an export licence and therefore not the refund at the time of the export itself. This possibility limits the risk run by undertakings. Moreover, since 1 July 1995 advanced fixing has been compulsory.23. The Commission then sets out the situation on the cereals markets in June 1995. Under Article 2 of Regulation No 1766/92 the marketing year for cereals runs from 1 July to 30 June. The final months of the year are of particular importance in the development of the market because the prices are then already influenced by expectations relating to the next harvest. It is always an uncertain period. In 1995, however, further particular uncertainties arose. For example, reform of the common agriculture policy within the European Union was announced and the prices of certain varieties of wheat and maize rose sharply. Finally, the entry into force of the GATT rules caused instability. There was a danger that undertakings would also try and take advantage of the less stringent regulations in force prior to 1 July 1995.24. In the face of this exceptional market situation the Commission decided to suspend export refunds until there was greater clarity as regards developments. This resulted in Regulation No 1521/95 on which the management committee was not consulted. However, this regulation could not remain in force for long because on 1 July 1995 a new regulatory framework was to enter into force. It was on these specific grounds that the Commission drew up a new regulation on 1 July 1995, the preamble to which refers to this new framework.25. As regards the first question referred by the national court, the Commission takes the view that Regulation No 1521/95 was not repealed by Regulation No 1576/95 (see also the previous paragraph). A careful reading of the Official Journal shows that the wording of the preamble to Regulation No 1576/95 differs from that of Regulation No 1521/95. Regulation No 1576/95 has no retroactive effect.26. The Commission states as following in respect of the second question. It follows from Article 2 of Regulation No 1521/95, read in conjunction with Article 13(3) of Regulation No 1766/92 (in the version in force on 30 June 1995) and Article 3(1) and (2) of Regulation No 3665/87, that Regulation No 1521/95 applies to all transactions in respect of which the export declaration was accepted on 30 June 1995. That acceptance determines the time of export. According to the settled case-law of the Court, undertakings acquire no right at all until the facts establishing that right arise. This applies all the more clearly in a case where the sudden changes in tariffs are an essential element of the system as, moreover, the undertakings concerned are aware. Furthermore, undertakings can insure against changes in tariffs by means of advanced fixing.27. In the alternative, the Commission contends that the Court has also recognised retrospective effect - and thus, a fortiori, direct effect - in cases where when the purpose to be achieved so demands and when the legitimate expectations of those concerned are duly respected. What is clear is that those concerned could have no legitimate expectation that the tariff previously in force would be maintained.Finally, the Commission refers to the judgment of the Court in Westzucker which related to a regulation which set the premium for denaturing sugar at zero from the day of publication. The Court confirmed the direct effect of the regulation and, furthermore, acknowledged that particular reasons did not have to be stated for direct effect.28. The third and fourth questions relate to the statement of reasons for Regulation No 1521/95 and Regulation No 1576/95. The Commission places emphasis on the fifth recital in the preamble to the two regulations which refers to the need to take into account the situation on the world market and to avoid disturbances on the Community market. The Commission also refers to a standard judgment of the Court, that is to say Schwarze, in which the Court rules - in connection with the common agricultural policy - that the obligation to state reasons is limited. This limited obligation to state reasons certainly applies to cases such as the present where the Commission often has to respond to market developments within a matter of hours. It also refers to the fact that any statement of reasons must also be translated subsequently into the eleven languages of the European Union.29. In the view of the Commission the fifth question need not be answered since it assumes that Regulation No 1521/95 is invalid. The Commission considers that this cannot be the case. In addition, the Commission notes that the institution whose act has been declared void is required - by analogy with Article 176 of the EC Treaty (now Article 233 EC) - to take a new measure. The fact that a measure is invalid does not mean that the provisions repealed by that measure become applicable again. Any other view would result in Regulation No 1521/95 having to be regarded as non-existent or the Court itself being given the power to fix the export refund independently. The Commission's preference - in the, in its view hypothetical, event that Regulation No 1521/95 is declared invalid - would be for the Court to maintain the effects of the regulation until the Commission has replaced it by means of a new regulation.The case-law of the Court regarding the system of export refunds30. The question of the validity of Regulation No 1521/95 (and Regulation No 1576/95) is central to this case. The answer to this question is determined to a considerable degree by the case-law of the Court regarding the common agricultural policy, and export refunds in particular.Below I will outline the most important case-law relevant to this case. In doing so I will examine, in succession, the objectives of the system of export refunds, the Commission's broad discretion, the Commission's obligation to state reasons and, finally, the trader's perspective: do the general principles of law provide protection in respect of the Commission's exercise of its discretion?Objective of export refunds31. The system of export refunds forms part of the common organisation of the market in cereals. I should point out that the Commission refers to the 10th recital in the preamble to Regulation No 1766/92, the basic regulation relating to the common organisation of the market in cereals. That recital provides as follows:Whereas the creation of a single Community market for cereals involves, apart from a system of guaranteed prices, the introduction of a single trading system at the external frontiers of the Community; whereas a trading system including levies and export refunds, combined with intervention measures, also serves to stabilise the Community market, in particular by preventing price fluctuations on the world market from affecting prices ruling within the Community; whereas, therefore, provision should be made for charging a levy on imports from third countries and for the payment of a refund on exports to those countries, both being designed to cover the difference between prices ruling outside and within the Community; whereas, moreover, in respect of products processed from the cereals to which this Regulation applies, account should be taken of the need to ensure a measure of protection for the Community processing industry.32. It is established, as the Court also acknowledges, that the system of export refunds is intended to produce stability in the common market and to ensure that agricultural products can be sold to non-member countries. The export refunds do not serve to ensure exporters a decent income. Their purpose is to enable rapid and effective advance intervention in a rapidly changing market. Frequent change is a central characteristic of the system of European agricultural law. Legislation must constantly be adapted to changing economic circumstances and changing policy priorities.The broad discretion of the Commission33. The common agricultural policy is characterised by direct and radical intervention in economic practices concerning the production, processing and marketing of agricultural products. In order to render such intervention effective, the administration requires flexible and broad discretion. A further particular aspect of the system is that the discretion is exercised by laying down generally binding provisions, that is to say the Commission regulations by which the export refunds are fixed at intervals. The nature of these regulations is also particular: the frequency with which they are amended is very high and, furthermore, they are directed at a very limited group of persons.34. The Commission has a wide discretionary power in taking measures to implement the common agricultural policy. This power is not, however, unlimited. Naturally, account must be taken - in respect of the export of compound feedstuffs which underlies this dispute - of the in part very general criteria of Article 1 of Regulation No 1913/69, as amended by Regulation No 1707/94. In Racke the Court states in which respects the exercise of this power is subject to review by the Court: In reviewing the legality of the exercise of such discretion, the Court must examine whether it contains a manifest error or constitutes a misuse of power or whether the authority did not clearly exceed the bounds of its discretion. I will examine these criteria in detail below.35. The criterion of manifest error or a misuse of power means, in my view, that this power must be exercised for the sake of the objectives of the common agricultural policy.In Crispoltoni and Others the Court examined the matter in greater detail. In pursuing the objectives of the common agricultural policy set out in Article 39 of the Treaty, the Community institutions must secure the permanent harmonisation made necessary by any conflicts between those aims taken individually and, where necessary, allow 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. That harmonisation must preclude the isolation of any one of those objectives in such a way as to render impossible the realisation of other objectives. If no harmonisation has been carried out, there may have been a misuse of power.In Crispoltoni and Others the Court continued: The Court of Justice has held that a measure may amount to a misuse of powers only if it appears, on the basis of objective, relevant and consistent factors, to have been taken with the exclusive purpose, or at any rate the main purpose, of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case.In Denmark v Commission the Court points out that the Commission must also take account of considerations of commercial policy when fixing export refunds. The export refund cannot be so high that it does more than offset the difference between the Community price and the world price. Otherwise, the export refund would make it possible for products to be sold below the world price, which could provoke a reaction by the Community's trading partners. Such a rate of refund might therefore jeopardise the attainment of one of the objectives of the common commercial policy set out in Article 110 of the Treaty, namely the harmonious development of world trade. The difference between the Community price and the world price determines the maximum level of the refund, but says nothing about the minimum level thereof.36. If it is established that a measure is taken for the sake of the common agricultural policy and there can therefore be no question of manifest error or a misuse of power, the Commission's discretion is great indeed. That discretion is certainly great in fixing export refunds since - as the Commission emphasises in particular in its written observations - the relevant regulations provide that export refund may be granted. The Court has already ruled previously on a case in which the Commission suddenly set a tariff at zero. In Westzucker, which related to premiums for denaturing sugar, the Court defended such a measure by stating that [n]o obligation exists, therefore, by virtue of the regulation, permanently to maintain the system of denaturing premiums, with the result that those premiums may be reduced or even suspended entirely, according to the development of production and market fluctuations.37. Moreover, this judgment means, in my view, that the Commission's discretion is great, but that this discretion is by no means unlimited. It is necessary to consider - and here I refer back to Racke - whether or not the authority clearly exceeded the bounds of its discretion.38. The first limitation may lie in the procedure which is followed. The usual procedure is for the level of the export refund to be fixed after a (weekly) meeting of the management committee. The involvement of the management committee enables the Commission to [cooperate closely] with the national authorities charged with the management of the market sectors concerned.The Court has also acknowledged a more active role of the management committee.In Racke the Court states that [i]t is for the Commission, acting according to the procedure known as the management committee procedure, to decide as to the existence of a risk of disturbance. Moreover, the Commission may, in the meantime, adjust the level of the refund on its own initiative. In the present case the management committee was not consulted.In short, the management committee does not have to be involved, but it should be wherever possible.39. A second limitation may lie in the time of the entry into force. Article 191 of the EC Treaty (now Article 254 EC), as interpreted by the Court, permits entry into force on the day of publication. There is no dispute about that. What is more interesting is the legal consequence. In academic writings a distinction is drawn between actual retroactive effect and direct effect. In principle retroactive effect is not permitted, but there are exceptions. In Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest, for example, the Court agreed with the subsequent fixing of levies as a consequence of certain exceptional, unforeseeable, events, that is to say the fall in the value of the dollar and the collapse of world sugar prices. The Court has consistently held that: Although in general the principle of legal certainty precludes a Community measure from taking effect from a point in time before its publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.40. The present case does not involve any actual retrospective effect but it does involve a provision having direct effect. The Court places a broad interpretation on direct effect. I refer to the judgment of the Court of 4 July 1973 in Westzucker. According to a generally accepted principle, the laws amending a legislative provision apply, unless otherwise provided, to the future consequences of situations which arose under the former law. The Court considers that the time of placing in the Official Journal (and the actual availability thereof) is central. However, I take the view that the difference between retroactive effect and direct effect is not always that great in respect of agricultural traders. For example, the placing of Regulation No 1521/95 in the Official Journal was not particularly relevant in respect of Silos. This is because it was required to effect the export on the relevant date. In my view, the foregoing means that direct effect per se is permitted, but - as stated in Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest - consideration must be given to whether or not the legal certainty of the individual is breached as a result of that direct effect.The obligation to state reasons41. The third limitation on discretion lies in the obligation to state reasons for a regulation. To begin with I would like to take the settled case-law of the Court regarding the statement of reasons required by Article 190 of the Treaty. According to that case-law, the statement of reasons must show clearly and unequivocally the reasoning of the Community institution which enacted the measure so as to inform the persons concerned of the justification for the measure adopted and to enable the Court to exercise its powers of review, but it is not required to go into every relevant point of fact and law.A considerable amount of case-law already exists concerning the obligation to state reasons for Commission regulations which are comparable with Regulation No 1521/95 and Regulation No 1576/95. The Commission refers to the standard judgment of the Court in Schwarze, in which the Court ruled - in connection with the common agricultural policy - that the Commission was entitled to confine itself to setting out in a general form the essential factors to and the procedure which formed the background to its evaluation of the facts without its being necessary to specify the facts themselves. In my view the Commission is also right to observe that a comprehensive obligation to state reasons is not really conceivable in the case of regulations such as those at issue in view of the speed with which the Commission has to respond to economic developments. Nevertheless, certain reasons must be stated to enable a review of the regulation by the Court and thus to comply with Article 190 of the Treaty. However, more detailed reasons are naturally required where a decision deviates from usual practice. This is also my reading of the judgment of the Court in Moskof.The trader's perspective: protection of legal certainty42. However, the need to amend the rules, often very quickly, is balanced by the trader's need to be able to have legitimate expectation of the law as it stands at the time he takes a commercial decision. In my view, the protection of the trader's legal certainty, the fourth limitation, is of limited relevance. That is because the trader participates in a market in which economic circumstances and price fluctuations are the order of the day. The same is true of fluctuations in the export subsidies which respond to them.43. In addition, I attach importance to the following. Council Regulation (EEC) No 1766/92 of 30 June 1992 on the common organisation of the market in cereals provides for an instrument by means of which the undertaking concerned can avoid the risk of a sudden change in the export refund, that is to say so-called advance fixing, whereby the refund which applied at the time when the application for an export certificate was made is decisive. It is for the trader to decide whether or not to make use of this instrument. For the sake of completeness, I should point out that the advance fixing is indeed compulsory in the cereal sector following the entry into force of Regulation (EC) No 3290/94 on 1 July 1995.44. The relevance of legal principles from which an individual can derive protection is also limited, but not non-existent. I refer primarily to the principle of proportionality which - and I cite the judgment in The Queen v Minister of Agriculture - has the following effect in respect of the common agricultural policy:The Court has consistently held that the principle of proportionality is one of the general principles of Community law. By virtue of that principle, the lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures are appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued.However, with regard to judicial review of compliance with those conditions it must be stated that in matters concerning the common agricultural policy the Community legislature has a discretionary power which corresponds to the political responsibilities given to it by Articles 40 and 43 of the Treaty. Consequently, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue. ...The Court thus acknowledged the principle of proportionality also - albeit to a limited degree - in matters concerning the common agricultural policy.45. In its judgment in Hoche the Court noted that no general Community principle of objective fairness exists.The Court has also ruled that there is no general legal principle in Community law that a Community provision which is in force may not be applied by a national authority if it causes the person concerned hardship which the Community legislature would clearly have sought to avoid if it had envisaged that eventuality when enacting the provision....Consequently, in taking part voluntarily and in their own interest in tendering procedures such as those in issue in the main proceedings traders must themselves assume the risks inherent in such operations, provided that the Commission does not change the economic position or the legislation in force in an unforeseeable and arbitrary manner.Therefore, only in the event of unforeseeable and arbitrary changes in the legislation - and I assume that this relates to cumulative requirements - does the aggrieved trader stand a chance of bringing a successful claim.It is interesting that Advocate General Lenz puts forward a broad view in this case. He links the absence of a general principle of objective unfairness to the danger that it could otherwise have the effect of leaving the national courts and tribunals free to decide in individual cases whether or not they were to apply a provision of Community law. However, this danger does not arise if the ruling as to fairness in a particular case is delivered by the Court itself. The Advocate General considers the principle of objective unfairness to be a facet of the principle of proportionality.46. The principle of the protection of legitimate expectations manifests itself in two forms of expectation which may require protection. The first relates to protection against infringement of existing rights. In that respect the Court states as follows in the abovementioned judgment in Crispoltoni and Others:It should be noted that whilst the protection of legitimate expectations is one of the fundamental principles of the Community, traders cannot have a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained; this is particularly true in an area such as the common organisation of the markets whose purpose involves constant adjustments to meet changes in the economic situation ... . It follows that traders cannot claim a vested right to the maintenance of an advantage which they derive from the establishment of the common organisation of the markets and which they enjoyed at a given time ... .The second - which is relevant in this case - concerns the protection of legitimate expectations. As is evident from the case-law of the Court, the protection of legitimate expectations is even less consistent with the common agricultural policy where constant account must be taken of the changing economic reality. It appears to me that a prudent trader can arm himself against changes in legislation or even benefit from them.The Court has recognised the legitimate interest of agricultural traders in connection with the common agricultural policy in only one very special case. This concerned the so-called SLOM farmers who entered into a temporary undertaking not to market milk. Their legitimate expectation that they would be able to supply milk again upon the expiry of the temporary undertaking was breached by the introduction of an additional levy on milk.47. In its written observations Silos again refers to the Court's recognition of good faith. In my view good faith is of limited relevance in the present case which concerns the validity of a generally binding provision. It is rather the case - even though Community law has recognised the protection of legitimate expectations - that such protection can be invoked only by traders which act in good faith.Summary48. The power of the Commission to adopt regulations in this field is characterised by flexibility, that is to say a broad substantive margin of discretion coupled with great speed of action. However, this power is not unlimited. Firstly, it is necessary to consider whether or not there has been a misuse of power, in other words whether or not the regulation is consistent with the objectives of the common agricultural policy. Secondly, it is necessary to consider whether or not the Commission has otherwise clearly exceeded the bounds of its discretion. In this regard there could have been a failure to state reasons. The protection of the legal certainty of the undertakings concerned is of limited relevance.The third and central question: the validity of Regulation No 1521/9549. In previous cases the Court has always defended the Commission's exercise of its discretion. However, I should stress that the present case referred to the Court by the national court is exceptional. That is because an export refund on the export of compound feedstuffs was paid throughout 1995 save on exports which took place in a short period around 1 July of that year. In such an exceptional case it is not immediately clear as to whether the Commission has remained within the bounds of the very broad discretion which is granted to it.50. According to Racke, it is evident that the Court subjects the Commission's margin of discretion to limited review. The first criterion laid down in Racke relates to a possible misuse of power or indeed whether or not Regulation No 1521/95 is consistent with the objectives of the common agricultural policy. In my view the relevance of this criterion is of limited relevance to the present case. Even where there is uncertainty as to whether or not a measure may be for the sake of the common agricultural policy, the benefit of the doubt lies with the Commission. I can find no reason in the case-files to examine whether or not the Commission adopted the regulation to attain an objective which is inconsistent with the common agricultural policy.51. I also assess this case on the basis of the second criterion in Racke, that is to say: has the Commission not otherwise clearly exceeded the bounds of its discretion?52. It follows from the case-law of the Court that the exercise of the discretion is, albeit to a limited degree, subject to review by the Court. The Court must be able to review the exercise of that power. This imposes requirements on the reasons given for a decision. In my view, the Commission is under a greater obligation to state reasons where it adopts a decision which deviates from normal practice. I consider normal practice to be the consistent policy of the Commission in the light of existing market conditions. The more a Commission decision is consistent with normal practice, the more limited the obligation to state reasons. However, the reverse is also true. The more a decision deviates from normal practice, the more explicit the grounds the Commission must state. If that were not the case, a standard set of reasons could cover any given decision. Judicial review would thus become impossible. I can see from the case-law analysed above that the Court clearly did not wish to draw such a far-reaching conclusion.53. Furthermore, the importance of the legal certainly of the undertakings concerned requires that explicit and specific reasons be stated for a decision which deviates radically from normal practice. Although the undertakings concerned cannot expect that an export refund will be maintained - they have no right to a refund under the system of the common agricultural policy - the Commission must take account of their legitimate interests in its decision-making. Where no great changes occur in prices or other circumstances, they should not have to - and indeed cannot - make allowances for unexpected and abrupt changes in refunds.54. Regulation No 1521/95, which reduced refunds from almost ECU 75 to zero, indisputably deviates from the normal practice which the Commission had followed in fixing export subsidies in the cereals sector until the end of June 1995. Consequently, I also place strict requirements on the statement of reasons. They must be discernible and also able to support the decision taken. In the course of the proceedings before the Court - as is also evident from the hearing on 31 January 2001 - the Commission focused its reasons on three factors:1. the entry into force of the new GATT rules,2. the movement in prices outside the European Union,3. the danger of speculation by traders.The Commission contends that these three factors, taken together, led to an exceptional market situation which justifies exceptional measures.55. The entry into force of the new GATT rules on 1 July 1995, which is the first circumstance that the Commission cites, cannot, in my view, constitute an independent ground for the sudden suspension of the export refund. Even if the entry into force of these rules does result in an adjustment in price levels on the internal market and on the world market, it can in no way lead to an abrupt change in market circumstances. That is because the entry into force is not an unforeseeable event since the new rules were laid down one year earlier and even the date of the entry into force had been known to traders since that time. They would allow for the economic repercussions of the new rules in their market conduct and pricing in the period preceding 1 July 1995. This is bound to be reflected in the movement in price levels well before this date. In that respect I should point out that the traders concerned - and the Commission also emphasises this fact - consist of a limited number of experienced and well-informed undertakings.56. The second circumstance which the Commission cites - the movement in prices on the world market - is no more convincing. The Commission contends that the prices of some wheat and maize varieties rose sharply. However, this contention is not substantiated by facts. On the contrary, I can only conclude from the facts which the parties have furnished that the price situation was stable. There can be no question of large fluctuations. This relative lull on the market is reflected in the level of the export refunds as in force until 30 June 1995 and again as of 7 July 1995. For the sake of completeness, I should point to Silos' uncontradicted contention that in the relevant period the difference between the price on the Community market and the world market price had in fact gradually increased, thus making the suspension of the refunds all the more difficult to explain.57. Thirdly, the Commission points to the danger of speculation by traders on account of the uncertain market situation. The Commission argues that two factors made the situation uncertain. One, the period around 1 July each year is one of uncertainty over prices. That is because the transition to the new marketing year for cereals takes place on 1 July. Two, in 1995 this uncertainty was greater than otherwise inter alia on account of the abovementioned new GATT rules. I take the view that the Commission has failed to show that an extreme market situation existed around 1 July. I have already dealt above with the possible effects of the new GATT rules on prices around 1 July 1995. It is likewise not possible to regard the transition to the new marketing year for cereals as an unforeseeable event which can have a sudden effect on prices. The undertakings operating on the international markets in cereals monitor developments in the most important areas of production on a permanent basis. The possible economic consequences of favourable or unfavourable weather or of diseases and epidemics can be seen early on in price movements. In brief, the Commission has by no means shown that an extreme market situation existed. Consequently, there was also no particular danger of speculation. For the sake of completeness, I should also point to the following. At the hearing Silos also noted that the export certificates in this sector expired on 30 June. The undertakings concerned were therefore required to export the amounts covered by the export certificates by 30 June 1995, thus reducing substantially the scope for speculation, such as it was. The Commission did not contest this point.58. Moreover, if the uncertainties on the market to which the Commission refers were in fact real - which, in my view, is not the case - they would have to have manifested themselves in the course of June 1995. In that case it would have been logical for the uncertainties also to have been reflected in the export subsidy which was fixed in Regulation No 1415/95 on 22 June 1995. However, at that time the export subsidies were increased very slightly to almost ECU 75. In short, if the Commission's argument does stand up to scrutiny, it at most confirms that Regulation No 1415/95 and Regulation No 1521/95 are mutually inconsistent. Under such circumstances the sudden and abrupt suspension of the export subsidy points to a certain arbitrariness. I should also point out, by way of illustration, that on 7 July 1995, that is to say one week later, the export subsidies were reintroduced at a level of ECU 62.51 by a new regulation.59. This brings me to the following conclusion. Exceptional market situations can result in the suspension of import subsidies. Where there is great uncertainty over price movements on the Community market or on the world market, or on both, the grounds on which the export subsidies could be based may cease to apply. However, the arguments with which the Commission attempts to demonstrate the existence of such an exceptional - uncertain - market situation around 1 July 1995 fall short in every respect. The movements in prices on the markets in cereals in June 1995 specifically reveal a stable picture. The Commission's arguments are not even supported by the facts. If these arguments must nevertheless be regarded as sufficient, they do not support the policy pursued by the Commission in any respect. It is impossible to understand why the Commission adopted a regulation by which it increased the export subsidy in an - according to it - extreme market situation on 22 June and then suspended it by a regulation on 29 June. Such conduct points to a certain arbitrariness.60. Furthermore, none of the arguments which the Commission put forward in these proceedings to justify the decision set out in Regulation No 1521/95 appear in the preamble to this regulation. Under Article 190 of the Treaty, regulations, directives and decisions must state the reasons on which they are based. These reasons must be discernible from the decision itself. Although the Court has considered, since its judgment in Schwarze, that the obligation on the Commission to state reasons is limited in its implementation of the common agricultural policy, the particular grounds of the Commission must be discernible where there is a deviation from normal practice. In that regard I refer to paragraph 52 of this Opinion. Since Regulation No 1521/95 is completely devoid of such particular grounds, I conclude that this fact alone renders it invalid.61. However, my objections to the failure to state reasons in Regulation No 1521/95 go even further. Exactly the same reasons were stated for Regulation No 1415/95 of 22 June 1995, by which the export subsidy was raised slightly, and Regulation No 1521/95, by which the export subsidy was abolished. A statement of reasons which is based on two diametrically different decisions does not constitute a statement of reasons but an oracle which an individual can at most believe but not understand.62. For the sake of completeness, I should also point out that the (standard) statement of reasons given in Regulation No 1521/95 is, in an important respect, in direct conflict with the content of the regulation. That is because the fifth recital in the preamble states: Whereas, however, in fixing the rate of refund it would seem advisable to base it at this time on the difference in the cost of raw inputs widely used in compound feeding-stuffs as the Community and world markets, allowing more accurate account to be taken of the commercial conditions under which such products are exported. In that recital the Commission appears to assume that the differences between the cost level on the world market and that on the Community market can be clearly identified, allowing more accurate account to be taken of the commercial conditions under which such products are exported. However, before the Court the Commission contends that the movement in price levels was so uncertain that the export refund had to be suspended as a result.63. In this regard I have formed my opinion taking the case-law of the Court in Hoche as a basis. In that judgment the Court rules that traders must themselves assume the risks inherent in such operations, provided that the Commission does not change the economic position or the legislation in force in an unforeseeable and arbitrary manner . I take the view that by adopting Regulation No 1521/95 the Commission introduces unforeseeable and arbitrary changes into existing provisions and, furthermore, that not even the slightest reason for these changes is to be found in the regulation. I therefore propose that the Court should answer the third question referred by the national court as follows: Regulation No 1521/95 must be regarded as invalid since the Commission has made clearly improper use of its margin of discretion and because it has stated clearly incorrect or incomplete reasons for this regulation.Answers to the other questionsThe first question64. I consider that the answer to this question can be brief. There is no reason to conclude that Regulation No 1576/95 repeals Regulation No 1521/95. My view is based on the following consideration. The Commission has the power, also outside the weekly meeting of the management committee, to adjust the export refund at any time in the intervening period. Where it exercises this power, this does not in principle mean that the previous rule is repealed. Nor do I infer from the preamble to Regulation No 1576/95 that it intended to repeal the previous regulation. On the contrary, I can se no reason to doubt the reasoning which the Commission set out in its written observations to the Court. There was a very specific reason for the introduction of Regulation No 1576/95. A new regulatory framework came into force on 1 July 1995. Reference thereto had to be made in the preamble, as was in fact done.The second question65. In light of the answer to the third question, this question need not be answered. Only if it has been established that Regulation No 1521/95 is valid does the question arise as to whether or not it may be applied to export operations already underway and already completed on the day on which it was published. However, should the Court give a different answer to the third question, I take the view that the answer must be as follows: Regulation No 1521/95 may be applied to export operations already underway and already completed on the same day on which the regulation itself was published and thus made available to the operators concerned.66. The decisive factor in answering this question is, in my view, the fact that the direct effect of regulations such as the one in question is established practice, which is also confirmed by the Court. In that respect it is significant that the direct effect of the tariffs - as the Commission also states in its written observations - is an essential element of the system as, moreover, the undertakings concerned are aware.The fourth question67. Here the national court seeks to ascertain the Court's view on the validity of Regulation No 1576/95. In my view, the nature of this regulation does not differ substantially from that of Regulation No 1521/95. My comments on the latter regulation also apply mutatis mutandis to Regulation No 1576/95. I also propose that the Court should likewise declare this regulation invalid. I would, however, like to clarify two points.68. Firstly, Regulation No 1576/95 enters into force as of 1 July 1995, as stipulated in Article 2 thereof. The regulation is not given retrospective effect. That means that this regulation - if it is valid - has no effect in respect of the export of compound feedingstuffs which took place on 30 June 1995.69. Secondly, this regulation contains - unlike Regulation No 1521/95 - a recital of a substantive nature. This recital reads as follows: Whereas, as a result of the market situation refunds are not to be fixed. However, read in conjunction with the preceding recitals - which say nothing about the current market situation - it could just have easily had the opposite content. Moreover, as reasoning for an exceptional measure which assumes an exceptional market situation it is completely insufficient. In its written observations Silos observes that Regulation No 1576/95 seeks to state the reasons which were lacking in Regulation No 1521/95. In the light of the concise nature of the recital, I consider that Silos' view is incorrect and also irrelevant. Furthermore, I consider convincing the Commission's view that there was a very specific reason behind the introduction of Regulation No 1576/95 (see also my answer to the first question at paragraph 59 above).The fifth question70. The fifth question relates to the legal effect of a ruling declaring Regulation No 1521/95 invalid. This question also need be answered only if the Court decides to declare the regulation invalid in accordance with my opinion. If the Court also decides to declare Regulation No 1576/95 invalid, it would be advisable also to deal with the legal effect of such a ruling in answering the fifth question referred by the national court.71. I consider that, on the main point, it is necessary to concur with the reasoning of the Commission. If the regulation is declared invalid, it is for the competent Community institution, in this case the Commission, to adopt a new decision. The Commission refers inter alia to the judgment in Van Landschoot, in which the Court rules that it is for the institution concerned to adopt appropriate measures to implement the judgment. In this case that means that the Commission must adopt a regulation which is consistent with the situation which existed on the relevant markets at the end of June 1995. The margin of discretion available to the Commission would thus be respected.72. There is no need for transitional rules pending the introduction of a new measure.73. Although neither Silos nor the Commission asks for consideration to be given the other effects of a ruling declaring Regulation No 1521/95 and Regulation No 1576/95 invalid, I consider it appropriate to give them brief consideration.74. In principle, a judgment of the Court in proceedings for a preliminary ruling declaring a Community act to be invalid takes effect from the date on which the act entered into force, with all the consequences which that entails. The Court may, however, limit in the judgment itself the temporal effects of a ruling declaring a Community regulation invalid, where that is justified by overriding considerations of legal certainty. Significant financial consequences can constitute such overriding considerations. The Court may make an exception in favour of the party to the main proceedings which brought an action before the national court against the national measure implementing the regulation, as in the case of Silos. In its judgment in Lomas and Others, the Court also made an exception in favour of persons entitled who had initiated proceedings or made an equivalent complaint under the applicable national law before that date. In conclusion, I would observe that the Court rarely exercises its power to limit the temporal effects of a ruling.75. I consider that in this case there is no need to fear such serious financial consequences that the Court has to limit the temporal effect of its ruling. I would point to the following:- only a small number of undertakings are affected, that is to say the undertakings which exported compound cereal-based feedingstuffs during the period from 30 June to 6 July 1995;- the ruling declaring the regulation invalid relates only to the quantities of compound feedingstuffs for which an export declaration was accepted in the abovementioned period.Therefore, the consequences are - certainly having regard to the annual budget of the common agricultural policy - limited in nature. Moreover, in principle the consequences for that budget should not be greater than if the export refund had not been suspended for a short time in 1995.ConclusionIn the light of the foregoing considerations, I propose that the Court should answer as follows the questions referred for a preliminary ruling by the Tribunale di Cagliari:(1) First question: There are no grounds for concluding that Commission Regulation (EC) No 1576/95 of 30 June 1995 fixing the export refunds on cereal-based compound feedingstuffs repeals Commission Regulation (EC) No 1521/95 of 29 June 1995.(2) Second question: In light of the answer to the third question, this question need not be answered. However, should the Court give a different answer to the third question, the answer must be as follows:Commission Regulation No 1521/95 of 29 June 1995 fixing the export refunds on cereal-based compound feedingstuffs may be applied to export operations already underway and already completed on the same day on which the regulation itself was published and thus made available to the operators concerned.(3) Third question: Commission Regulation No 1521/95 of 29 June 1995 fixing the export refunds on cereal-based compound feedingstuffs must be regarded as invalid since the Commission has made clearly improper use of its margin of discretion and because it has stated clearly incorrect or incomplete reasons for this regulation.(4) Fourth question: Commission Regulation (EC) No 1576/95 of 30 June 1995 fixing the export refunds on cereal-based compound feedingstuffs must also be regarded as invalid since the Commission has made clearly improper use of its margin of discretion and because it has stated clearly incorrect or incomplete reasons for this regulation.(5) Fifth question: The ruling declaring invalid Regulation (EC) No 1521/95 of 29 June 1995 and Regulation (EC) No 1576/95 of 30 June 1995 fixing the export refunds on cereal-based compound feedingstuffs has the following legal effect. It is for the competent Community institution, in this case the Commission, to adopt a new regulation which is consistent with the situation which existed in June 1995. There is no need for transitional rules pending the introduction of the new regulation.