CELEX: 62004CJ0064
Language: en
Date: 2007-03-29 00:00:00
Title: Judgment of the Court (Third Chamber) of 29 March 2007.#Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland.#Failure of a Member State to fulfil obligations - Fishing licences - Regulation (EC) No 3690/93 - Vessels Cleopatra and Ocean Quest - Definitive transfer of those vessels to Argentina.#Case C-64/04.

Case C-64/04
      Commission of the European Communities
      v
      United Kingdom of Great Britain and Northern Ireland
      (Failure of a Member State to fulfil obligations – Fishing licences – Regulation (EC) No 3690/93 – Vessels Cleopatra and Ocean Quest – Definitive transfer of those vessels to Argentina)
      Opinion of Advocate General Kokott delivered on 13 July 2006 ?I 0000
      Judgment of the Court (Third Chamber), 29 March 2007 ?I 0000
      Summary of the Judgment
      1.     Fisheries – Common structural policy – Community system of fishing licences 
      (Council Regulations No 3690/93, Art. 5, and No 3699/93, Art. 8)
      2.     Fisheries – Common structural policy – Community system of fishing licences
      (Council Regulations No 3690/93, Art. 5, and No 3699/93, Art. 8)
      1.     The phrase ‘definitive withdrawal from fishing activities’ is defined neither by Article 5 of Regulation No 3690/93 establishing
         a Community system laying down rules for the minimum information to be contained in fishing licences nor by that regulation
         as a whole. It is, however, defined by Regulation No 3699/93 laying down the criteria and arrangements regarding Community
         structural assistance in the fisheries and aquaculture sector and the processing and marketing of its products and more precisely
         by Article 8(2) thereof, according to which measures to stop vessels’ fishing activities permanently may include, inter alia,
         permanent transfer to a non-Member State, provided such transfer is not likely to infringe international law or affect the
         conservation and management of marine resources.
      
      Although the purpose of those two regulations is different, there is nothing to indicate that that definition applies exclusively
         to Regulation No 3699/93 and that it cannot be used in the context of other instruments of secondary legislation relating
         to the sphere of fishing policy. Moreover, Regulation No 3699/93, which defines the concept, was adopted after Regulation
         No 3690/93, the Community legislature thus having knowingly intended to choose the same expression as that already used in
         Regulation No 3690/93.
      
      Accordingly, there is nothing to preclude that definition being used in the context of the implementation of Article 5 of
         Regulation No 3690/93 regarding the temporary or definitive suspension of fishing licences. 
      
      (see paras 29, 31-33)
      2.     The wording of Article 5 of Regulation No 3690/93 establishing a Community system laying down rules for the minimum information
         to be contained in fishing licences does not as such prohibit fishing capacity made available by the transfer of vessels to
         a non-Member State from being used to issue new fishing licences, since that article merely requires the flag Member State
         to withdraw the fishing licences relating to vessels which are subject to definitive withdrawal from fishing activities. Moreover,
         Article 8 of Regulation No 3699/93 laying down the criteria and arrangements regarding Community structural assistance in
         the fisheries and aquaculture sector and the processing and marketing of its products lays down, inter alia, what the measures
         to stop vessels’ fishing activities permanently may include and requires vessels deleted from the register to be excluded
         from fishing in Community waters. It does not, however, follow from that provision that the fishing capacity made available
         in the national register of fishing vessels by the permanent transfer of vessels to a non-Member State should not be used
         to issue new fishing licences 
      
      (see paras 43-44)
JUDGMENT OF THE COURT (Third Chamber)
      29 March 2007 (*)
      
      (Failure of a Member State to fulfil obligations – Fishing licences – Regulation (EC) No 3690/93 – Vessels Cleopatra and Ocean Quest – Definitive transfer of those vessels to Argentina)
      In Case C-64/04,
      ACTION under Article 226 EC for failure to fulfil obligations, brought on 13 February 2004,
      Commission of the European Communities, represented by T. van Rijn and B. Doherty, acting as Agents, with an address for service in Luxembourg, 
      
      applicant,
      v
      United Kingdom of Great Britain and Northern Ireland, represented by M. Bethell, acting as Agent, 
      
      defendant,
      THE COURT (Third Chamber),
      composed of A. Rosas, President of the Chamber, A. Tizzano, A. Borg Barthet, J. Malenovský (Rapporteur) and A. Ó Caoimh, Judges,
      Advocate General: J. Kokott,
      Registrar: R. Grass,
      having regard to the written procedure,
      after hearing the Opinion of the Advocate General at the sitting on 13 July 2006,
      gives the following
      Judgment
      1       By its application, the Commission of the European Communities requests the Court to declare that, by not withdrawing the
         fishing licences for the vessels Cleopatra and Ocean Quest following the definitive transfer of those vessels to Argentina, the United Kingdom of Great Britain and Northern Ireland
         has failed to fulfil its obligations under Article 5 of Council Regulation (EC) No 3690/93 of 20 December 1993 establishing
         a Community system laying down rules for the minimum information to be contained in fishing licences (OJ 1993 L 341, p. 93).
         
      
       Legal context
      2       The Agreement on relations in the sea fisheries sector between the European Economic Community and the Argentine Republic
         was approved on behalf of the Community by Council Regulation (EEC) No 3447/93 of 28 September 1993 (OJ 1993 L 318, p. 1;
         ‘the Fishing Agreement’). The ninth recital in the preamble to that agreement states that the parties to the Fishing Agreement
         are ‘convinced that this new type of cooperation in the fisheries sector will provide regular access to new fishing opportunities,
         further the aims of renewing and converting the Argentine fleet and restructuring the Community fleet and promote the rational
         exploitation of resources in the long term’. 
      
      3       Article 5(1) and (3) of the Fishing Agreement provides: 
      ‘1.      The Parties shall create suitable conditions for the establishment in Argentina of undertakings using capital originating
         in one or more Member States of the Community and the creation of joint enterprises and joint ventures in the fisheries sector
         between Argentinian and Community shipowners with the aim of jointly exploiting and, where appropriate, jointly processing
         Argentinian fishery resources under the conditions laid down in Protocol I and Annexes I and II. 
      
      …
      3.      As part of its policy for the restructuring of its fleet, the Community shall facilitate the inclusion of Community vessels
         in undertakings established or to be established in Argentina. To that end, and as part of its policy for the technical renovation
         of its fishing industry, Argentina shall facilitate the transfer of current fishing licences and issue the appropriate new
         licences pursuant to this Agreement.’ 
      
      4       Article 5 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), provided: 
      
      ‘1.      The Council, acting in accordance with the procedure laid down in Article 43 of [the] Treaty, shall, before 31 December 1993,
         establish a Community system which shall apply from a date no later than 1 January 1995 laying down rules for the minimum
         information to be contained in fishing licences, to be issued and managed by Member States. 
      
      From the date of application of the Community system, Member States shall be required to operate national systems of fishing
         licences. Except where otherwise provided, all Community fishing vessels shall be required to have a fishing licence, which
         is attached to the vessel.
      
      The above provisions shall apply without prejudice to any specific system which may be in force at the Community level or
         those required under present and future international agreements.
      
      2.      The licensing system shall apply to all Community fishing vessels in the Community fishing waters or operating in the waters
         of third countries or on the high seas. The Community minimum information requirements shall also apply to third country vessels
         fishing in Community fishing waters where provided for under international agreements.’ 
      
      5       Article 11 of Regulation No 3760/92 stated:
      ‘Having regard to Title I, on a multiannual basis and for the first time not later than 1 January 1994, the Council, acting
         in accordance with the procedure laid down in Article 43 of the Treaty, shall set the objectives and detailed rules for restructuring
         the Community fisheries sector with a view to achieving a balance on a sustainable basis between resources and their exploitation.
         Such restructuring shall also take account on a case-by-case basis of possible economic and social consequences and of the
         specificities of the fisheries regions.’ 
      
      6       According to the third recital in the preamble to Regulation No 3690/93, ‘the Community system should set out the rules concerning
         the minimum information to be contained in the fishing licences for each fishing vessel flying the flag of a Member State’.
      
      7       Article 1 of that regulation provides:
      ‘1.      A Community system of fishing licences shall be established laying down rules on the minimum information to be contained in
         the fishing licences referred to in Article 5 of Regulation (EEC) No 3760/92.
      
      2.      All Community fishing vessels shall be required to have a fishing licence for the vessel. 
      3.      The licence must be kept on board the vessel.
      4.      Fishing vessels shall be forbidden to catch, retain on board, transfer or land fish where a fishing licence has not been granted
         or where the fishing licence has been withdrawn or suspended.’ 
      
      8       Article 3 of Regulation No 3690/93 provides:
      ‘The flag Member State shall issue and administer fishing licences for the fishing vessels flying its flag, having due regard
         to the provisions of Article 11 of Regulation (EEC) No 3760/92.’ 
      
      9       Article 5 of Regulation No 3690/93 reads as follows:
      ‘The flag Member State shall suspend temporarily or definitively the fishing licences of vessels which are subject to temporary
         immobilisation and shall withdraw the fishing licences of vessels which are subject to definitive withdrawal from fishing
         activities.’ 
      
      10     Pursuant to Article 8(1) and (2) of Council Regulation (EC) No 3699/93 of 21 December 1993 laying down the criteria and arrangements
         regarding Community structural assistance in the fisheries and aquaculture sector and the processing and marketing of its
         products (OJ 1993 L 346, p. 1): 
      
      ‘1.      Member States shall take measures to adjust fishing effort to achieve at least the objectives of the multiannual guidance
         programmes referred to in Article 5. 
      
      Where necessary, Member States shall take measures to stop vessels’ fishing activities permanently or restrict them. 
      2.      Measures to stop vessels’ fishing activities permanently may include: 
      –       scrapping,
      –       permanent transfer to a third country, provided such transfer is not likely to infringe international law or affect the conservation
         and management of marine resources, 
      
      –       permanent re-assignment of the vessel in question to uses other than fishing in Community waters. 
      …
      Member States shall ensure that vessels concerned by such measures are deleted from the registration lists for fishing vessels
         and from the Community fishing vessel register. They shall also ensure that deleted vessels are permanently excluded from
         fishing in Community waters.’ 
      
      11     Article 9(1) of Regulation No 3699/93 stated: 
      ‘Member States may take measures to promote the re-orientation of fishing activities by encouraging the creation of temporary
         joint ventures and/or joint enterprises.’ 
      
      12     Regulation No 3699/93 was repealed by the first paragraph of Article 20 of Council Regulation (EC) No 2468/98 of 3 November
         1998 laying down the criteria and arrangements regarding Community structural assistance in the fisheries and aquaculture
         sector and the processing and marketing of its products (OJ 1998 L 312, p. 19); the terms of Articles 8(1) and (2) and 9(1)
         are identical to the corresponding provisions of Regulation No 3699/93. 
      
       Facts and pre-litigation procedure
      13     In the context of the Fishing Agreement, the vessels Cleopatra and Ocean Quest, flying the United Kingdom flag and registered in that Member State, were transferred to Argentina. That transfer took place
         when a joint enterprise was founded, bringing together Community and Argentine shipowners. Those vessels were deleted from
         the United Kingdom fishing vessel register in November 1996 and July 1997 respectively and entered in the Argentine register.
         
      
      14     The Commission found that the fishing licences relating to the vessels Cleopatra and Ocean Quest had been used for other vessels. 
      
      15     By letter of 19 April 2001, the Commission informed the United Kingdom that the re-use of fishing licences was contrary to
         the obligation under Article 5 of Regulation No 3690/93 requiring the competent national authorities to withdraw licences
         from vessels which are subject to definitive withdrawal from fishing activities. The Commission’s letter gave that Member
         State formal notice to submit its observations on the alleged failure to fulfil its obligations pursuant to the first paragraph
         of Article 226 EC. 
      
      16     In the absence of any response, on 16 January 2003 the Commission sent a reasoned opinion to the United Kingdom in which,
         firstly, it restated the arguments set out in the letter of formal notice and, secondly, called upon that Member State to
         fulfil its obligations within a period of two months from receipt of the reasoned opinion. 
      
      17     In its response of 20 March 2003 to the reasoned opinion, the United Kingdom put forward a number of arguments. Firstly, it
         stated that the United Kingdom authorities took the view that their only obligation was to remove the vessels Cleopatra and Ocean Quest from the national register of fishing vessels but not to withdraw the fishing licences relating to those vessels. Secondly,
         it submitted that the Commission confirmed the requirement to withdraw the fishing licences only after the owners of the vessels
         had entered into binding legal contracts obliging them to transfer the vessels to third parties. Finally, it considered that
         the attitude of those authorities was understandable and that procedures had been put in place to prevent similar fishing
         licence transfers in the future.
      
      18     Since it was not satisfied with those explanations, the Commission decided to bring the present action.
       The action
       Arguments of the parties
      19     According to the Commission, pursuant to Article 5 of Regulation No 3690/93, the flag Member State is to withdraw the fishing
         licences of vessels which are subject to definitive withdrawal from fishing activities. 
      
      20     The Commission submits that the obligation to withdraw fishing licences must be interpreted as meaning that the fishing capacity
         made available by such withdrawal may not be re-used for the issue of new licences to other vessels, since such re-use would
         be contrary to the first subparagraph of Article 8(1) of Regulation No 2468/98, pursuant to which Member States are to take
         measures to adjust fishing effort to achieve at least the objectives of the multiannual guidance programmes. If the Community
         authorised such re-use of licences relating to vessels definitively transferred to a non-Member State, the objective of reducing
         the fishing fleet would not be achieved. That would still be the case even though the definitive transfer took place in the
         context of the founding of a joint enterprise. 
      
      21     The United Kingdom notes that Article 8 of Regulation No 2468/98 makes no mention of fishing licences. Furthermore, since
         that regulation was adopted only after the events which gave rise to the present case, it cannot affect any obligation that
         the United Kingdom might have been under at the date on which those events occurred. 
      
      22     The United Kingdom submits, moreover, that the obligation to withdraw fishing licences pursuant to Article 5 of Regulation
         No 3690/93 cannot become effective until the Commission has agreed that the vessels concerned may be transferred to a joint
         enterprise and the Member State has been notified of that decision. In the present case, the owners of the vessels Cleopatra and Ocean Quest sold the licences relating to those vessels before the Member State was notified of the Commission’s decision approving the
         plan to transfer the vessels to a joint enterprise. Since the owners were no longer the holders of the licences, the United
         Kingdom did not infringe any obligation under Article 5 of that regulation. 
      
      23     According to the United Kingdom, the real ‘mischief’ of the case lies in the fact that the owners of the vessels Cleopatra and Ocean Quest received money both from the sale of the licences relating to those vessels and from the Community, whereas such a sale should
         have had the effect of depriving them of the possibility of receiving assistance relating to the founding of a joint enterprise.
         Although the Commission had been informed that the licences remained in circulation, it nevertheless decided to pay Community
         assistance to the owners, applying a test of ‘good faith’ that it has not however extended to the United Kingdom. 
      
      24     Since the transfer of a vessel in the context of the Fishing Agreement amounts to a definitive withdrawal within the meaning
         of Article 5 of Regulation No 3690/93, the United Kingdom has established a procedure to ‘freeze’ a vessel’s licence as soon
         as an application for the founding of a joint enterprise is received by the competent department. The licence can come back
         into effect only if the application for the founding of a joint enterprise is withdrawn or the transfer of a vessel to such
         an enterprise is not approved by the Commission. Consequently, the United Kingdom maintains that it has ensured that, in future,
         there will be no further cases of re-use of licences. 
      
       Findings of the Court 
      25     The Court observes, as a preliminary point, that it is common ground in the present case that the vessels Cleopatra and Ocean Quest were entered in the Argentinian register of fishing vessels and that, accordingly, they were definitively transferred to
         Argentina. 
      
      26     The complaint raised by the Commission in its application for a declaration by the Court, as set out in paragraph 1 of the
         present judgment, is that by not withdrawing the fishing licences relating to those vessels following their definitive transfer
         to Argentina, the United Kingdom has failed to fulfil its obligations under Article 5 of Regulation No 3690/93. 
      
      27     It is appropriate to recall that, pursuant to the provisions of Article 5 of Regulation No 3690/93, where a fishing vessel
         is subject to definitive withdrawal from fishing activities, the licence relating to that vessel is to be withdrawn. 
      
      28     Thus, before the Court considers the substance of the Commission’s complaint, preliminary issues arise as to, first, what
         exactly constitutes definitive withdrawal of a fishing vessel from fishing activities and, second, whether the definitive
         transfer of such a vessel to Argentina in the context of the founding of a joint enterprise can be treated in the same way
         as a definitive withdrawal from fishing activities within the meaning of Article 5 of Regulation No 3690/93. 
      
       Definitive withdrawal from fishing activities
      29     It is common ground, first, that neither Article 5 of Regulation No 3690/93 nor that regulation as a whole gives any indication
         as to how the phrase ‘definitive withdrawal from fishing activities’ is to be understood. However, in Regulation No 3699/93,
         more precisely in Article 8(2) thereof, it is stated that measures to stop vessels’ fishing activities permanently may include,
         inter alia, scrapping, permanent transfer to a non-Member State, provided such transfer is not likely to infringe international
         law or affect the conservation and management of marine resources, and permanent re-assignment of the vessel in question to
         uses other than fishing in Community waters. 
      
      30     Regulations No 3690/93 and No 3699/93 differ greatly in both subject-matter and purpose. Regulation No 3690/93, as is clear
         more particularly from the third recital in its preamble, sets out the rules concerning the minimum information to be contained
         in fishing licences, whereas Regulation No 3699/93 lays down the criteria and arrangements regarding Community structural
         assistance in the fisheries and aquaculture sector. 
      
      31     However, although the purpose of those two regulations is different, there is nothing to indicate that the meaning of ‘measures
         to stop vessels’ fishing activities permanently’ applies exclusively to Regulation No 3699/93 and that it cannot be used in
         the context of other instruments of secondary legislation relating to the sphere of fishing policy. 
      
      32     Regulation No 3699/93, which defines the measures to stop vessels’ fishing activities permanently, was, moreover, adopted
         after Regulation No 3690/93. As is clear from most language versions of Regulation No 3699/93, particularly from the German,
         Spanish, French and Italian versions, the Community legislature knowingly intended to choose the same expression as that already
         used in Regulation No 3690/93. 
      
      33     Accordingly, there is nothing to preclude the definition ensuing from Regulation No 3699/93 being used in the context of the
         implementation of Article 5 of Regulation No 3690/93 regarding the temporary or definitive suspension of fishing licences.
         
      
      34     The various ‘measures to stop vessels’ fishing activities permanently’ listed in Article 8(2) of Regulation No 3699/93 include,
         in particular, ‘permanent transfer to a third country’. In the present case it is not disputed that the fishing vessels Cleopatra and Ocean Quest were transferred to ‘a third country’, namely the Argentine Republic. 
      
      35     Accordingly, the question next arises whether the permanent transfer of such vessels to Argentina, in the context of the founding
         of a joint enterprise, may be treated as definitive withdrawal from fishing activities within the meaning of Article 5 of
         Regulation No 3690/93. 
      
      36     The wording of Article 8(2) of Regulation No 3699/93 in no way precludes the notion of ‘measures to stop vessels’ fishing
         activities permanently’ being applied to the permanent transfer of vessels on the basis of an international agreement concluded
         between the Community and a non-Member State. On the contrary, that provision makes express reference, in its second indent,
         to compliance with international law and, consequently, with international agreements. 
      
      37     For its part, the Fishing Agreement does not preclude a transfer of fishing vessels in accordance with its provisions being
         classified as a ‘measure to stop vessels’ fishing activities permanently’ within the meaning of Community law.
      
      38     It follows that the permanent transfer of vessels to a non-Member State pursuant to an international agreement constitutes
         a measure to stop vessels’ fishing activities permanently within the meaning of Article 8(2) of Regulation No 3699/93. Accordingly,
         in the present case, the definitive transfer of the vessels Cleopatra and Ocean Quest to Argentina must be regarded as a ‘measure to stop vessels’ fishing activities permanently’ for the purposes of Community
         law. 
      
       The withdrawal of fishing licences and the issue of new fishing licences 
      39     Accordingly, the question arises whether, in the present case, the fishing licences of the vessels Cleopatra and Ocean Quest, which were both transferred definitively to Argentina, were withdrawn by the competent United Kingdom authorities. 
      
      40     The United Kingdom maintains that the rights conferred by the fishing licences on the former owners of the vessels Cleopatra and Ocean Quest were sold to third parties who used them for other vessels. It follows that the licences relating to those vessels were indeed
         withdrawn. 
      
      41     The Commission does not dispute the fact that the fishing licences relating to the vessels Cleopatra and Ocean Quest were withdrawn. However, it points out that the fishing capacity made available by the transfer of those vessels was used
         for other vessels. 
      
      42     In that regard, the Commission submits that it follows from Article 5 of Regulation No 3690/93 that, where vessels have been
         permanently transferred to a non-Member State, the Member State must not merely withdraw the licences relating to the vessels
         thus transferred, but must refrain from utilising the fishing capacity thus made available in the national register to issue
         new licences. Such use would be contrary to the objectives of Article 8 of Regulation No 2468/98, a provision which forms
         part of a Community policy for the restructuring of the Community fleet.
      
      43     It should be noted, first, that the wording of Article 5 of Regulation No 3690/93 does not prohibit, as such, utilisation
         of fishing capacity made available by the transfer of vessels to a non-Member State to issue new licences, since that article
         merely requires the flag Member State to withdraw the fishing licences relating to vessels which are subject to definitive
         withdrawal from fishing activities. It follows from the foregoing that the United Kingdom complied with that obligation to
         withdraw fishing licences. 
      
      44     Secondly, Article 5 of Regulation No 3690/93, the sole provision referred to in the Commission’s pleadings, makes no reference
         to Article 8 of Regulation No 3699/93 at all, even as amended by Regulation No 2468/98. In any event, the latter article lays
         down, inter alia, what the measures to stop vessels’ fishing activities permanently may include and requires vessels deleted
         from the register to be excluded from fishing in Community waters. It does not, however, follow from that provision that the
         fishing capacity made available in the national register of fishing vessels by the permanent transfer of vessels to a non-Member
         State should not be used to issue new fishing licences. 
      
      45     Even if the Commission could, under the procedure laid down in Article 226 EC, have taken action against the United Kingdom
         on the basis of other provisions of Community law in respect of the system for issuing new fishing licences, as the Advocate
         General observed in point 45 of her Opinion, it is common ground that the breach of such provisions does not constitute the
         subject-matter of the failure to fulfil obligations complained of (see Case C‑6/04 Commission v United Kingdom [2005] ECR I‑9017, paragraphs 58 to 60; Case C‑225/04 Commission v France [2006] ECR I‑5251, paragraph 24; and Case C‑34/04 Commission v Netherlands [2007] ECR I‑0000, paragraph 53). 
      
      46     It follows from all the foregoing that the complaint relied on by the Commission in its action, alleging infringement of Article
         5 of Regulation No 3690/93, is unfounded and, therefore, that complaint must be dismissed without there being any need to
         examine the argument put forward by the United Kingdom in its defence that, since the transfer to Argentina of the vessels
         Cleopatra and Ocean Quest took place before the adoption of the Commission’s decision approving that transfer, there was no effective obligation to
         withdraw the fishing licences pursuant to Article 5 of Regulation No 3690/93. 
      
      47     In those circumstances, the action brought by the Commission must be dismissed. 
       Costs
      48     Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
         applied for in the successful party’s pleadings. Since the United Kingdom has applied for costs and the Commission has been
         unsuccessful, the latter must be ordered to pay the costs.
      
      On those grounds, the Court (Third Chamber) hereby:
      1.      Dismisses the action;
      2.      Orders the Commission of the European Communities to pay the costs.
      [Signatures]
      * Language of the case: English.