CELEX: 62003CJ0041
Language: en
Date: 2005-07-14 00:00:00
Title: Judgment of the Court (Second Chamber) of 14 July 2005.#Rica Foods (Free Zone) NV v Commission of the European Communities.#Appeal - Arrangements for association of the overseas countries and territories - Imports of sugar and mixtures of sugar and cocoa - Regulation (EC) No 465/2000 - Safeguard measures - Article 109 of the OCT Decision - Commission's power of assessment - Principle of proportionality - Reasons.#Case C-41/03 P.

Case C-41/03 P
      Rica Foods (Free Zone) NV
      v
      Commission of the European Communities
      (Appeal –– Arrangements for association of the overseas countries and territories –– Imports of sugar and mixtures of sugar and cocoa –– Regulation (EC) No 465/2000 –– Safeguard measures –– Article 109 of the OCT Decision –– Commission’s power of assessment –– Principle of proportionality –– Reasons)
      Opinion of Advocate General Léger delivered on 17 February 2005 
      Judgment of the Court (Second Chamber), 14 July 2005 
      Summary of the Judgment
      1.     Association of the overseas countries and territories — Safeguard measures — Conditions for establishment — Discretion of
            the Community institutions — Judicial review — Limits
      (Council Decision 91/482, Art. 109)
      2.     Association of the overseas countries and territories — Safeguard measures concerning imports from the overseas countries
            and territories of sugar sector products with EC/OCT cumulation of origin — Principle of proportionality — Judicial review
            — Limits
      (Council Decision 91/482, Art. 109(2))
      3.     Association of the overseas countries and territories — Safeguard measures concerning imports from the overseas countries
            and territories — Safeguard measures which do not put in question the preferential status of goods originating in those countries
            — Exceptional and temporary nature of those measures
      (Council Decision 91/482, Art. 109(1))
      1.     The Community institutions have been given a wide discretion in the application of Article 109 of Decision 91/482 on the association
         of the overseas countries and territories, which empowers them to take or authorise safeguard measures when certain conditions
         are met. In those circumstances, the Community Courts must restrict themselves to considering whether the exercise of that
         discretion contains a manifest error or constitutes a misuse of power or whether the Community institutions clearly exceeded
         the bounds of their discretion. The depth of the Court’s review must be limited in particular where the Community institutions
         have to reconcile divergent interests and thus select options within the context of the policy choices which are their own
         responsibility.
      
      The status of that provision as an exception, which flows from its very nature, does not in any way diminish the discretion
         which the Commission has when it has the difficult task of reconciling divergent interests within the context of the policy
         choices which are its own responsibility.
      
      (see paras 52-54, 56)
      2.     As regards judicial review of compliance with the principle of proportionality laid down in Article 109(2) of Decision 91/482
         on the association of the overseas countries and territories, bearing in mind the wide discretionary power enjoyed by the
         Commission in particular in matters concerning safeguard measures provided for in Article 109(1) of that decision, the legality
         of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate in terms of the objective
         which the competent institution is seeking to pursue.
      
      (see para. 86)
      3.     Article 109 of Decision 91/482 on the association of the overseas countries and territories (OCTs) expressly authorises the
         Commission to take safeguard measures in the situations to which it refers. The fact that the Commission adopted this type
         of measure in respect of certain products originating in the OCTs does not undermine the preferential status which products
         originating in those countries enjoy under Article 101(1) of that decision, a safeguard measure being, by its very nature,
         exceptional and temporary.
      
      (see para. 94)
JUDGMENT OF THE COURT (Second Chamber)
      14 July 2005 (*)
      
      (Appeal – Arrangements for association of the overseas countries and territories – Imports of sugar and mixtures of sugar and cocoa – Regulation (EC) No 465/2000 – Safeguard measures – Article 109 of the OCT Decision – Commission’s power of assessment – Principle of proportionality – Reasons)
      In Case C-41/03 P,
      APPEAL under Article 49 of the Statute of the Court of Justice, brought on 29 January 2003,
      Rica Foods (Free Zone) NV, established in Oranjestad (Aruba), represented by G. van der Wal, advocaat,
      
      appellant,
      the other parties to the proceedings being:
      Commission of the European Communities, represented by T. van Rijn, acting as Agent, with an address for service in Luxembourg,
      
      defendant at first instance,
      Kingdom of the Netherlands, represented by H. Sevenster, acting as Agent, with an address for service in Luxembourg,
      
      Kingdom of Spain, represented by N. Díaz Abad and D. Miguel Muñez Pérez, acting as Agents, with an address for service in Luxembourg,
      
      French Republic, represented by G. de Bergues and L. Bernheim, acting as Agents, with an address for service in Luxembourg,
      
      interveners at first instance,
      THE COURT (Second Chamber),
      composed of C.W.A. Timmermans, President of the Chamber, R. Silva de Lapuerta, R. Schintgen (Rapporteur), G. Arestis and J. Klučka,
         Judges,
      
      Advocate General: P. Léger,
      Registrar: M. Ferreira, Principal Administrator,
      having regard to the written procedure and further to the hearing on 16 December 2004,
      after hearing the Opinion of the Advocate General at the sitting on 17 February 2005,
      gives the following
      Judgment
      1       By its appeal Rica Foods (Free Zone) NV (‘Rica Foods’) requests the Court to set aside the judgment of the Court of First
         Instance of the European Communities of 14 November 2002 in Joined Cases T-94/00, T-111/00 and T-159/00 Rica Foods and Others v Commission [2002] ECR II-4677 (‘the judgment under appeal’), by which that court dismissed its action for annulment of Commission Regulation
         (EC) No 465/2000 of 29 February 2000 introducing safeguard measures for imports from the overseas countries and territories
         of sugar sector products with EC/OCT cumulation of origin (OJ 2000 L 56, p. 39) (‘the contested regulation’).
      
       Legal framework
       Common organisation of the markets in the sugar sector
      2       By Regulation No 2038/1999 of 13 September 1999 on the common organisation of the markets in the sugar sector (OJ 1999 L 252,
         p. 1), the Council of the European Union consolidated Regulation (EEC) No 1785/81 of 30 June 1981, which had established that
         common organisation (OJ 1981 L 177, p. 4) and had been amended many times. The purpose of that organisation is to regulate
         the Community sugar market in order to increase employment and the standard of living among Community sugar producers.
      
      3       Support for Community production through guaranteed prices is limited to national production quotas (A and B quotas) allocated
         by the Council under Regulation No 2038/1999 to each Member State, which then divides them amongst its producers. Quota B
         sugar (‘B sugar’) is subject to a higher production levy than quota A sugar (‘A sugar’). Sugar produced in excess of the A
         and B quotas is termed ‘C sugar’ and cannot be sold within the European Community unless it is transferred to the A and B
         quotas for the following season.
      
      4       Extra-Community exports apart from C sugar benefit from export refunds under Article 18 of Regulation No 2038/1999, to make
         up for the difference between the price on the Community market and the price on the world market.
      
      5       The quantity of sugar which can benefit from an export refund and the total annual amount of refunds are governed by the World
         Trade Organisation (WTO) Agreements (‘the WTO Agreements’), to which the Community is a party and which were approved by Council
         Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within
         its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1).
         By the 2000/2001 marketing year at the latest, the quantity of sugar exported with refund and the total amount of refunds
         were to be limited to 1 273 500 tonnes and to EUR 499.1 million, which represents a reduction of 20% and 36% respectively
         in relation to the figures for the 1994/1995 marketing year.
      
       Arrangements for association of the overseas countries and territories with the Community
      6       Under Article 3(1)(s) EC the activities of the Community include the association of the overseas countries and territories
         (OCTs) ‘in order to increase trade and promote jointly economic and social development’.
      
      7       The Netherlands Antilles and Aruba form part of the OCTs.
      8       The association of the OCTs with the Community is governed by Part Four of the EC Treaty.
      9       The Council adopted on the basis of Article 136 of the EC Treaty (now, after amendment, Article 187 EC) several decisions
         concerning the association of the OCTs with the Community, including Council Decision 91/482/EEC of 25 July 1991 on the association
         of the overseas countries and territories with the European Economic Community (OJ 1991 L 263, p. 1), which, according to
         Article 240(1) thereof, is to apply for a period of 10 years from 1 March 1990.
      
      10     Various provisions of Decision 91/482 were amended by Council Decision 97/803/EC of 24 November 1997 amending at mid-term
         Decision 91/482/EEC (OJ 1997 L 329, p. 50). Decision 91/482, as amended by Decision 97/803 (‘the OCT Decision’), was extended
         until 28 February 2001 by Council Decision 2000/169/EC of 25 February 2000 (OJ 2000 L 55, p. 67).
      
      11     Article 101(1) of the OCT Decision provides:
      ‘Products originating in the OCTs shall be imported into the Community free of import duty.’
      12     Article 102 of the same decision provides:
      ‘Without prejudice to [Article] 108b, the Community shall not apply to imports of products originating in the OCTs, any quantitative
         restrictions or measures having equivalent effect.’
      
      13     The first indent of Article 108(1) of that decision refers to Annex II thereto for a definition of the concept of originating
         products and the methods of administrative cooperation relating thereto. Under Article 1 of that annex a product is to be
         considered as originating in the OCTs, the Community or the African, Caribbean and Pacific States (‘the ACP States’) if it
         has been either wholly obtained or sufficiently processed there.
      
      14     Article 3(3) of Annex II contains a list of types of working or processing which are insufficient to confer the status of
         originating products on products coming from the OCTs in particular.
      
      15     Article 6(2) of that annex, however, contains so-called ‘EC/OCT and the ACP/OCT cumulation of origin’ rules. It provides:
         
      
      ‘When products wholly obtained in the Community or in the ACP States undergo working or processing in the OCTs, they shall
         be considered as having been wholly obtained in the OCTs.’
      
      16     Under Article 6(4) of Annex II the EC/OCT and ACP/OCT cumulation of origin rules apply to ‘any working or processing carried
         out in the OCTs, including the operations listed in Article 3(3)’.
      
      17     Decision 97/803 inserted into the OCT Decision inter alia Article 108b, paragraph 1 of which provides: ‘[t]he ACP/OCT cumulation
         of origin referred to in Article 6 of Annex II shall be allowed for an annual quantity of 3 000 tonnes of sugar’. Decision
         97/803 did not, however, limit the application of the EC/OCT cumulation of origin rule.
      
      18     Article 109(1) of the OCT Decision authorises the Commission to take ‘the necessary safeguard measures’ when ‘as a result
         of the application of this Decision, serious disturbances occur in a sector of the economy of the Community or one or more
         of its Member States, or their external financial stability is jeopardised, or if difficulties arise which may result in a
         deterioration in a sector of the Community’s activity or in a region of the Community’. Under Article 109(2) of that decision,
         the Commission must choose ‘such measures as would least disturb the functioning of the association and the Community’. Furthermore,
         ‘[t]hese measures shall not exceed the limits of what is strictly necessary to remedy the difficulties that have arisen’.
      
       The safeguard measures taken to counter imports of sugar and mixtures of sugar and cocoa benefiting from the EC/OCT cumulation
            of origin rule
      19     Commission Regulation (EC) No 2423/1999 of 15 November 1999 introducing safeguard measures in respect of sugar falling within
         CN code 1701 and mixtures of sugar and cocoa falling within CN codes 1806 10 30 and 1806 10 90 originating in the overseas
         countries and territories (OJ 1999 L 294, p. 11) was adopted on the basis of Article 109 of the OCT Decision.
      
      20     By that regulation, applicable until 29 February 2000, the Commission made imports of sugar qualifying for EC/OCT cumulation
         of origin subject to a system of minimum prices and made imports of mixtures of sugar and cocoa (‘mixtures’) originating in
         the OCTs subject to the Community surveillance laid down in Article 308d of Commission Regulation (EEC) No 2454/93 of 2 July
         1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs
         Code (OJ 1993 L 253, p. 1).
      
      21     The Commission adopted the contested regulation also on the basis of Article 109 of the OCT Decision.
      22     The first, fourth, fifth, sixth and seventh recitals in the preamble to the contested regulation read as follows:
      ‘(1)  The Commission has noted that imports of sugar … and of mixtures … originating in … [the OCTs] have been increasing greatly
         since 1997, particularly those imports with EC/OCT cumulation of origin, which have gone from zero in 1996 to more than 48
         000 tonnes in 1999 … .
      
      (4)      In the past few years difficulties have arisen on the Community sugar market, a market in surplus. Sugar consumption is constant
         at some 12.7 million tonnes, while production is between 16.7 and 17.8 million tonnes. Any imports into the Community therefore
         involve a corresponding quantity of Community sugar which cannot be sold on that market having to be exported. Refunds for
         that sugar – within the limit of certain quotas – are charged to the Community budget (currently at around EUR 520/tonne).
         However, exports with refund are limited in volume by the [WTO Agreements] and have been reduced from 1 555 600 tonnes for
         the 1995/96 marketing year to 1 273 500 tonnes for the 2000/2001 marketing year.
      
      (5)      The operation of the CMO [common organisation of the markets] in sugar may be greatly destabilised by these difficulties.
         For the 2000/2001 marketing year, which starts on 1 July 2000, it is planned on the basis of the most cautious estimates currently
         available, to reduce Community producers’ quotas by some 500 000 tonnes … . Any further import of sugar or products with a
         high sugar content from the OCT will mean a greater reduction in the quota for Community producers and a greater guaranteed
         income loss for them.
      
      (6)      Imports occur in a period of some three months following applications for the issue of licences as a result of their period
         of validity. As a result, all imports taken together, including those in the months preceding the start of the 2000/2001 marketing
         year, dictate the situation on the market during that marketing year and generate the detrimental effects mentioned in recital
         (5) above.
      
      (7)      As a result of the difficulties there is a risk that a sector of Community activity will deteriorate.
      …’
      23     Article 1 of the contested regulation provides:
      ‘For products falling within tariff headings CN 1701, 1806 10 30 and 1806 10 90, EC/OCT cumulation of origin as referred to
         in Article 6 of Annex II to [the OCT Decision] shall be permitted for a quantity of 3 340 tonnes of sugar during the period
         of validity of this Regulation.
      
      For products other than unprocessed sugar, the sugar content of the imported product shall be taken into account for the purposes
         of complying with that limit.’
      
      24     The ninth recital in the preamble to the contested regulation indicates that the Commission decided on that quota of 3 340
         tonnes taking into account ‘that figure representing the sum of the highest annual volumes of imports of the products in question
         recorded in the three years preceding 1999, the year in which imports recorded an exponential rise, and in respect of which
         there is currently an OLAF investigation into suspected irregularities.’
      
      25     Under Article 2 of the contested regulation, imports of the products referred to in Article 1 are to be subject to the issue
         of an import licence, which is to be issued in accordance with the rules contained in Articles 2 to 6 of Commission Regulation
         (EC) No 2553/97 of 17 December 1997 on rules for issuing import licences for certain products covered by CN codes 1701, 1702,
         1703 and 1704 and qualifying as ACP/OCT originating products (OJ 1997 L 349, p. 26), which are to apply mutatis mutandis.
      
      26     Lastly, under Article 3 thereof, the contested regulation, which entered into force on 1 March 2000, is applicable until 30
         September 2000.
      
       Procedure before the Court of First Instance and the judgment under appeal
      27     By applications lodged at the Registry of the Court of First Instance on 19 and 28 April and on 9 June 2000 respectively,
         Rica Foods and two other companies (‘the applicants’), which are sugar processing undertakings established in the OCTs (Aruba
         and the Netherlands Antilles) brought actions, first, for the annulment of the contested regulation and, secondly, for damages
         allegedly suffered as a result of the adoption of that regulation (Joined Cases T-94/00, T-110/00 and T-159/00).
      
      28     By order of 12 July 2000 of the President of the Third Chamber of the Court of First Instance, the Kingdom of the Netherlands
         was granted leave to intervene in support of the form of order sought by inter alia Rica Foods, and by orders of 11 July 2000
         and 16 October 2001, respectively, of the President of the same Chamber, the Kingdom of Spain and the French Republic were
         granted leave to intervene in support of the form of order sought by the Commission, inter alia in Case T-94/00.
      
      29     In support of its action, Rica Foods relied in particular on three pleas in law alleging infringement of Article 109(1) of
         the OCT Decision, of the principle of proportionality and of the preferential status of the OCTs under the Treaty.
      
      30     By the judgment under appeal, the Court of First Instance, after joining the actions, dismissed them as unfounded.
      31     In relation in particular to the three aforementioned pleas in law, the Court of First Instance ruled as follows.
       The plea alleging infringement of Article 109(1) of the OCT Decision
      32     The Court of First Instance observed that the Community institutions have a wide discretion in the application of Article
         109 of the OCT Decision. In cases involving such a discretion the Community Court must restrict itself to considering whether
         the exercise of that discretion contains a manifest error or constitutes a misuse of power or whether the Community institutions
         clearly exceeded the bounds of their discretion (Case C-110/97 Netherlands v Council [2001] ECR I-8763, paragraph 61 and case-law cited therein) (paragraphs 86 and 87 of the judgment under appeal).
      
      33     In the case before it, the Court of First Instance found that the safeguard measure in question came within the second hypothesis
         described in Article 109(1) of the OCT Decision. It also confirmed the correctness of the Commission’s statements, inter alia
         in the fourth recital in the preamble to the contested regulation, justifying the adoption of that measure, according to which,
         due to the surplus on the market, any additional tonnes of sugar imported would lead to an increase in subsidised exports
         which, in turn, would be likely to be in conflict with the ceilings provided for by the WTO Agreements (paragraphs 95 to 105
         of the judgment under appeal). It found that those factors, taken together, established that there were difficulties within
         the meaning of that provision (paragraphs 108 to 121 of that judgment).
      
      34     Next, the Court of First Instance found that the Commission could have reasonably taken the view, as evidenced by the fifth
         and sixth recitals in the preamble to the contested regulation, that the increased imports of sugar and mixtures under the
         EC/OCT cumulation of origin rule might greatly destabilise the common organisation of the markets in sugar (paragraphs 122
         to 155 of the judgment).
      
       The plea alleging infringement of the principle of proportionality
      35     Several arguments were put forward by the applicants.
      36     First, the Council, when it adopted Decision 91/482, should have taken account of the fact that imports of agricultural products
         from the OCTs into the Community might lead to additional expenditure chargeable to the budget for the common agricultural
         policy. The growth in imports is the direct consequence of the OCT Decision.
      
      37     The Court of First Instance found that the fact that an increase in imports was already foreseeable in 1991 was irrelevant
         for determining whether the measure adopted in February 2000 constituted an appropriate and proportionate response to remedy
         the difficulties that had arisen within the meaning of Article 109(2) of the OCT Decision (paragraph 162 of the judgment under
         appeal).
      
      38     Second, the applicants submitted that the Commission had disregarded the temporary nature of the safeguard measure in question.
      39     On this point, the Court of First Instance noted the wide discretion which the Community institutions have in the application
         of Article 109 of the OCT Decision and found that the contested regulation, applicable from 1 March to 30 September 2000,
         ‘which limited duty-free access to the Community market for sugar originating in the OCT, within limits compatible with the
         situation on that market, whilst retaining preferential treatment for that product in a manner consistent with the objectives
         of the OCT Decision …, was a suitable instrument for attaining the objective sought by the Commission and did not go beyond
         what was necessary to do so’ (paragraphs 166 to 168 of the judgment under appeal).
      
      40     Third, the applicants complained that the Commission had not stated in the contested regulation the reasons why the introduction
         of a minimum price, such as that imposed by Regulation No 2423/1999, was no longer considered appropriate for attaining the
         objective pursued.
      
      41     The Court of First Instance stated in this regard that the applicants had not established ‘that the Commission, by restricting
         imports into the Community of sugar or mixtures qualifying for EC/OCT cumulation of origin to 3 340 tonnes for the period
         during which the contested regulation was in force, [had] adopted measures that were manifestly inappropriate or that it [had]
         carried out a manifestly erroneous assessment of the information available to it at the time when the contested regulation
         was adopted’ and found that, in any event, ‘at the time when the contested regulation was adopted imports of sugar qualifying
         for EC/OCT cumulation of origin were higher than at the time when Regulation No 2423/1999 was adopted, which [cast] doubt
         on the effectiveness of the measure introduced by the latter regulation, that is to say, a minimum import price for the product
         concerned’ (paragraphs 171 and 172 of the judgment under appeal).
      
      42     Fourth, the applicants maintained that the introduction of a ceiling of 3 340 tonnes of sugar for a period of five months
         infringed the principle of proportionality because imports made in 1999 were excluded from the calculation of the import quota,
         the figure used was incomprehensible, and the import quota was too low to allow for profitable exploitation of even one sugar
         processing factory.
      
      43     On that point, the Court of First Instance found that the Commission, which has to reconcile divergent interests, could reasonably
         fix, as evidenced by the ninth recital in the preamble to the contested regulation, the quota of 3 340 tonnes on the basis
         of the highest annual volumes of imports of the products in question recorded in the three years preceding 1999, in the light
         of the exponential rise in imports of sugar and mixtures into the Community under the EC/OCT cumulation of origin regime in
         1999, which created a risk of deterioration in the Community sugar sector (paragraphs 176 to 194 of the judgment under appeal).
      
      44     Lastly, the applicants maintained that Article 2(3) of the contested regulation, which provides that ‘applications for import
         licences shall be accompanied by a copy of the export licence’, infringes the principle of proportionality.
      
      45     The Court of First Instance rejected that argument on the grounds that ‘that condition makes it possible to ensure that import
         applications made in the context of the contested regulation relate to sugar which actually qualifies for EC/OCT cumulation
         of origin’ (paragraph 196 of the judgment under appeal).
      
       The plea relating to infringement of the preferential status of products originating in the OCTs
      46     On this point the Court of First Instance found that it cannot be inferred from the mere adoption of a safeguard measure under
         Article 109 of the OCT Decision that the preferential status of products originating in the OCTs has been infringed, provided
         that that measure is such as to iron out or reduce the difficulties which have arisen. It also found that the contested regulation
         does not impose any ceiling on imports of sugar originating in the OCTs under the ordinary rules of origin, if such production
         were to exist (paragraphs 202 to 210 of the judgment under appeal). 
      
       The appeal
      47     Rica Foods claims that the Court should:
      –       declare its appeal to be admissible;
      –       set aside the judgment under appeal and allow its claims put forward at first instance.
      48     The Commission contends that the Court should:
      –       dismiss the appeal as unfounded;
      –       order the appellant to pay the costs.
      49     The Spanish and French Governments contend that the Court should dismiss the appeal and order the appellant to pay the costs.
      50     In support of its appeal, Rica Foods puts forward five pleas in law:
      –       infringement of Article 109(1) of the OCT Decision, in that the Court of First Instance found that the Community institutions
         have a wide discretion in the application of that provision;
      
      –       infringement of the obligation to state reasons;
      –       infringement of Article 109(1) of the OCT Decision in that the Court of First Instance wrongly found that the circumstances
         relied on by the Commission to justify the adoption of the safeguard measure in question were ‘difficulties’ and ‘deterioration’
         within the meaning of that provision;
      
      –       infringement of Article 109(2) of the OCT Decision;
      –       infringement of the preferential status of the OCTs.
       The first plea, relating to infringement of Article 109(1) of the OCT Decision and to the scope of the Community institutions’
            discretion
      51     By its first plea, Rica Foods complains that the Court of First Instance misconstrued the scope of Article 109(1) of the OCT
         Decision by finding, in paragraph 86 of the judgment under appeal, that the Commission has a wide discretion in the application
         of that provision. Since that provision is an exception to the principle laid down in Article 101(1) of that same decision,
         which provides that products originating in the OCTs are to be imported into the Community free of import duty, it should
         have been interpreted narrowly.
      
      52     It must be observed that it is settled case-law of the Court that the Community institutions have been given a wide discretion
         in the application of Article 109 of the OCT Decision (see, to that effect, Case C-390/95 P Antillean Rice Mills and Others v Commission [1999] ECR I‑769, paragraph 48; Case C-110/97 Netherlands v Council, paragraph 61, and Case C-301/97 Netherlands v Council [2001] ECR I‑8853, paragraph 73).
      
      53     In those circumstances, the Community Courts must restrict themselves to considering whether the exercise of that discretion
         contains a manifest error or constitutes a misuse of power or whether the Community institutions clearly exceeded the bounds
         of their discretion (see Antillean Rice Mills, paragraph 48; Case C-110/97 Netherlands v Council, paragraph 62, and Case C-301/97 Netherlands v Council, paragraph 74).
      
      54     The depth of the Court’s review must be limited in particular where, as in the present case, the Community institutions have
         to reconcile divergent interests and thus select options within the context of the policy choices which are their own responsibility
         (see, to that effect, Case C-17/98 Emesa Sugar [2000] ECR I-675, paragraph 53).
      
      55     Accordingly, it is evident that the Court of First Instance correctly interpreted Article 109(1) of the OCT Decision in paragraphs
         86 and 87 of the judgment under appeal.
      
      56     The status of that provision as an exception, which flows from its very nature, does not in any way diminish the discretion
         which the Commission has when it has the difficult task of reconciling divergent interests within the context of the policy
         choices which are its own responsibility.
      
      57     Consequently, the first plea must be dismissed as unfounded.
       The second plea, relating to infringement of the obligation to state reasons
      58     By its second plea, Rica Foods submits that the judgment under appeal is vitiated by a failure to state reasons in that the
         Court of First Instance based its ruling on wrong or incomprehensible considerations, namely that: 
      
      –       any additional imports of sugar from the OCTs under the EC/OCT cumulation of origin rule would increase the surplus of sugar
         on the Community market;
      
      –       those additional imports would entail additional expenditure for the Community budget;
      –       imports of sugar originating in the OCTs for the 1999/2000 marketing year would affect the Community’s compliance with ‘Schedule
         CXL – European Communities’ annexed to the WTO Agreements.
      
      59     First, as to the grounds of the judgment under appeal finding that imports of sugar under the EC/OCT cumulation of origin
         rule would increase the surplus of sugar on the Community market, it is settled case-law that the Court of Justice has no
         jurisdiction to establish the facts or, in principle, to examine the evidence which the Court of First Instance accepted in
         support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules
         of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the Court of First
         Instance alone to assess the value which should be attached to the evidence produced to it (see, inter alia, Case C-185/95
         P Baustahlgewebe v Commission [1998] ECR I-8417, paragraph 24). Save where the clear sense of the evidence has been distorted, that appraisal does not
         therefore constitute a point of law which is subject as such to review by the Court of Justice (see, inter alia, Case C-8/95 P
         New Holland Ford v Commission [1998] ECR I-3175, paragraph 26; Joined Cases C-24/01 P and C-25/01 P Glencore and Compagnie Continentale v Commission [2002] ECR I-10119, paragraph 65; and Case C-122/01 P T. Port v Commission [2003] ECR I-4261, paragraph 27).
      
      60     In the present case, the Court of First Instance found:
      –       in paragraph 99 of the judgment under appeal, on the basis of the evidence at its disposal in the file, that there was a surplus
         on the Community sugar market;
      
      –       in paragraph 100 of the judgment, that the Community was under an obligation to import a certain quantity of sugar from non-member
         countries under the WTO Agreements; and
      
      –       in paragraph 101 of the judgment, that, in those circumstances, ‘if the production of Community sugar is not reduced, any
         additional imports of sugar under the EC/OCT cumulation of origin regime will increase the amount of surplus sugar on the
         Community market and will lead to an increase in subsidised exports’.
      
      61     The Court of First Instance infers from this, in paragraph 102 of the judgment under appeal, that ‘the Commission was right
         in stating … that any imports into the Community therefore involve a corresponding quantity of Community sugar which cannot
         be sold on that market having to be exported’.
      
      62     It must be held that the Court of First Instance’s assessment of the increase in the surplus on the Community market is a
         finding of fact which cannot be the subject-matter of an appeal, and, as noted by the Advocate General in paragraph 59 of
         his Opinion, the appellant has not even submitted, much less proven, that the Court of First Instance had distorted the clear
         sense of the evidence before it.
      
      63     Second, as regards the alleged additional expenditure for the Community budget caused by the sugar imports qualifying for
         EC/OCT cumulation of origin, Rica Foods states that the export refunds for A and B sugars are financed entirely by the producers
         through contributions which are passed on to consumers, so that the disputed imports have no impact on the Community budget.
      
      64     Suffice it to note that, in paragraphs 118 to 120 of the judgment under appeal, which have been particularly questioned by
         Rica Foods, the Court of First Instance did not in any way consider that the disputed imports would lead to additional expenditure
         for the Community budget. In fact, after having: 
      
      –       noted, in paragraph 118 of the judgment under appeal, that ‘the difficulties mentioned in the contested regulation are the
         fact that imports of sugar or mixtures qualifying for EC/OCT cumulation of origin increased greatly, the surplus on the Community
         sugar market giving rise to subsidised exports, and the obligations arising under the WTO Agreements’, and
      
      –       found, in paragraph 119 of the judgment, that ‘in view of the surplus on the Community market, imported sugar of OCT origin
         will be substituted for Community sugar, which must be exported in order to maintain the balance of the common organisation
         of the markets’,
      
      the Court of First Instance held, in paragraph 120 of the judgment, that ‘even if exports of Community sugar are to a large
         extent financed by the Community sugar industry and hence by the consumer, … the WTO Agreements limit export subsidies irrespective
         of who ultimately bears the cost of those subsidies, and that each additional import aggravates the situation on a market
         which is already in surplus’.
      
      65     Lastly, Rica Foods submits that imports of sugar qualifying for EC/OCT cumulation of origin were not such as to create difficulties
         for the Community in terms of its obligations under the WTO Agreements. It states that the Community had a sufficient margin
         to deal with the increase in the disputed imports.
      
      66     On this point the Court of First Instance held, in paragraphs 112 to 115 of the judgment under appeal, essentially that in
         view, first, of the surplus on the Community sugar market, which meant that any additional sugar imports into the Community
         involve a corresponding quantity of Community sugar having to be exported, and, second, of the obligations under the WTO Agreements
         which restrict export subsidies, an increase in imports of sugar or mixtures qualifying for EC/OCT cumulation of origin therefore
         constituted ‘difficulties’ within the meaning of Article 109(1) of the OCT Decision, particularly as the ceiling laid down
         in the WTO Agreements in regard to subsidies for sugar exports already necessitated a substantial reduction in Community production
         quotas for the 2000/2001 marketing year.
      
      67     It must be observed that, even if the additional subsidised exports of sugar which the imports of sugar originating in the
         OCTs might have caused would not reach the amounts and quantities laid down in the WTO Agreements, Rica Foods has not established
         that the Court of First Instance infringed its obligation to state reasons in finding that the Commission had not committed
         a manifest error of assessment in taking into account the purpose of the WTO Agreements, which is to limit export subsidies
         gradually, and in finding that increased imports of sugar under the EC/OCT cumulation of origin regime would, in turn, increase
         the total amount of export subsidies and create a risk of disturbances in the Community sugar sector.
      
      68     In the light of all of the foregoing considerations, the second plea must be rejected.
       The third plea, relating to infringement of Article 109(1) of the OCT Decision and relating to the concept of ‘difficulties’
            and ‘deterioration’ within the meaning of that provision
      69     By its third plea, Rica Foods maintains that the Court of First Instance wrongly found that the circumstances relied on by
         the Commission to justify the adoption of the contested regulation safeguard measure in question, namely increased imports
         into the Community of sugar and mixtures with EC/OCT cumulation of origin, the surplus Community production in the European
         market in sugar, the obligations under the WTO Agreements and the consequences for the common organisation of the market in
         sugar, constituted ‘difficulties’ and ‘deterioration’ within the meaning of Article 109(1) of the OCT Decision.
      
      70     Rica Foods submits, first, that the Court of First Instance distorted the reasons put forward by the Commission in finding,
         in paragraph 108 of the judgment under appeal, that the Commission had never claimed that each of the difficulties it had
         identified could on its own justify the adoption of a safeguard measure, but that, on the contrary, they were closely linked.
      
      71     It must be observed that a reading of the first, fourth and fifth recitals in the preamble to the contested regulation shows
         that the Commission considered that the combination of various factors, namely increases in the disputed imports, the surplus
         on the Community market and the restriction of export refunds as a result of the WTO Agreements, had caused difficulties within
         the meaning of Article 109(1) of the OCT Decision. Accordingly, it cannot be claimed that the Court of First Instance distorted
         the reasons put forward by the Commission in support of the safeguard measure in question.
      
      72     Second, Rica Foods maintains that it was foreseeable and even desired by the Community legislature that the OCT Decision lead
         to increases in the disputed imports. Moreover, the alleged ‘difficulties’ and ‘deterioration’ relied on by the Commission
         and accepted by the Court of First Instance were already present when Decision 91/482 was adopted and, in any event, when
         it was amended in 1997. Not only had there been a surplus within the context of the common organisation of the market in sugar
         since 1968, but new production and imports had been authorised since then on various occasions.
      
      73     In those circumstances, the Court of First Instance could not have found those factors to be ‘difficulties’ which risked causing
         ‘deterioration in a sector of the Community’s activity’ within the meaning of Article 109(1) of the OCT Decision.
      
      74     It must be observed that in paragraph 110 of the judgment under appeal, the Court of First Instance found that imports into
         the Community of sugar and mixtures with EC/OCT cumulation of origin had increased greatly since 1997, that is, after Decision
         91/482 had been adopted in 1991 or even after it had been amended in 1997.
      
      75     Moreover, even if it were established that that considerable increase had been foreseeable or even desired by the Community
         when Decision 91/482 was adopted, as the Advocate General observes in paragraph 81 of his Opinion, this could not prevent
         the Commission from finding that that increase, in the light of the surplus Community production and the obligations under
         the WTO Agreements, constituted a source of ‘difficulties’ within the meaning of Article 109(1) of the OCT Decision.
      
      76     Accordingly, in confirming the Commission’s position in paragraph 110 et seq. of the judgment under appeal, the Court of First
         Instance did not disregard the scope of Article 109(1) of the OCT Decision.
      
      77     Third, Rica Foods maintains that, contrary to the Court of First Instance’s ruling in paragraph 124 of the judgment under
         appeal, a reduction in the production quotas caused by the disputed imports has not affected the incomes of Community producers.
         In fact, the only effect of such a reduction is to encourage Community producers to cultivate other crops which also come
         within a guaranteed agricultural scheme.
      
      78     It must be held that, even if the opportunities for Community producers to turn to other crops were such as to cast doubt
         on the Court of First Instance’s assessment, in paragraphs 122 to 155 of the judgment under appeal, of the existence of deterioration
         or a risk of deterioration in a sector of the Community’s activity, it suffices to find that Rica Foods did not adduce any
         evidence before the Court of First Instance in support of its assertions and that, accordingly, the latter was correct in
         not taking account of them.
      
      79     Lastly, Rica Foods submits that the quantities of sugar and mixtures imported from the OCTs, which in 1999 accounted for 0.32%
         (for sugar) and 0.102% (for mixtures) of Community production, could not present a serious risk of disturbance in the common
         organisation of the market in sugar. By accepting the opposite proposition, the Court of First Instance committed an error
         of law.
      
      80     The Court notes, as it stated in paragraph 56 of Emesa Sugar, that as early as 1997 Community production of beet sugar exceeded the quantity consumed in the Community, cane sugar was
         imported from the ACP States to cater for specific demand for that product, and the Community was under an obligation to import
         a certain quantity of sugar from non-member countries under the WTO Agreements. Moreover, the Community was also required
         to subsidise sugar exports by granting export refunds within the limits laid down in those agreements. In those circumstances
         and in the light of the increasing growth in imports of sugar originating in the OCTs since 1997, the Commission was entitled
         to take the view, as the Court of First Instance rightly held in paragraphs 112 to 115 of the judgment under appeal, that
         any additional quantity of sugar reaching the Community market, even if minimal compared with Community production, would
         have obliged the Community to increase the amount of the export subsidies, within the limits mentioned above, or to reduce
         the quotas of European producers, and that those measures, which were contrary to the objectives of the common agricultural
         policy, would have disturbed the common organisation of the market in sugar, the balance of which was already precarious.
      
      81     In the light of all the foregoing considerations, the third plea must be rejected.
       The fourth plea, relating to infringement of Article 109(2) of the OCT Decision
      82     By its fourth plea, Rica Foods complains that the Court of First Instance ruled in paragraphs 157 to 197 of the judgment under
         appeal that the Commission had not infringed the principle of proportionality laid down in Article 109(2) of the OCT Decision
         by limiting imports of sugar and mixtures with EC/OCT cumulation of origin to 3 340 tonnes.
      
      83     The Commission was unable to justify, having regard to the interests it was seeking to protect, the level at which the disputed
         imports were limited. That level was negligible compared to Community production, imports or exports and quite insufficient
         to offer the sugar industries in the OCTs reasonable prospects for the future. By failing to recognise the arbitrary and unreasonable
         nature of the quantitative restriction imposed, which was unrelated to the alleged difficulties and deterioration relied on,
         the Court of First Instance disregarded the principle of proportionality.
      
      84     Article 109(2) of the OCT Decision reads as follows:
      ‘[P]riority shall be given to such measures as would least disturb the functioning of the association and the Community. These
         measures shall not exceed the limits of what is strictly necessary to remedy the difficulties that have arisen’.
      
      85     As the Court of First Instance stated in paragraph 158 of the judgment under appeal, the principle of proportionality, which
         is one of the general principles of Community law, requires that measures adopted by Community institutions do not exceed
         the limits of what is appropriate and necessary in order to attain the legitimate objectives 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 (Case C-331/88 Fedesa and Others [1990] ECR I‑4023, paragraph 13; Joined Cases C-133/93, C-300/93 and C-362/93 Crispoltoni and Others [1994] ECR I-4863, paragraph 41; Antillean Rice Mills, paragraph 52; and Case C-189/01 Jippes and Others [2001] ECR I‑5689, paragraph 81).
      
      86     As regards judicial review of compliance with that principle, bearing in mind the wide discretionary power enjoyed by the
         Commission in particular in matters concerning safeguard measures, as the Court of First Instance observed in paragraph 165
         of the judgment under appeal, the legality of a measure adopted in that sphere can be affected only if the measure is manifestly
         inappropriate in terms of the objective which the competent institution is seeking to pursue (Case C-301/97 Netherlands v Council, paragraph 145; Fedesa, paragraph 14; Crispoltoni, paragraph 42; and Jippes, paragraph 82).
      
      87     In paragraph 167 of the judgment under appeal, the Court of First Instance held that ‘it was reasonable for the Commission
         to consider that difficulties involving the risk that a sector of Community activity would deteriorate did exist at the time
         when the contested regulation was adopted’. It went on to state in paragraph 171 that the applicants ‘have not established
         that the Commission, by restricting imports into the Community of sugar or mixtures qualifying for EC/OCT cumulation of origin
         to 3 340 tonnes for the period during which the contested regulation was in force, adopted measures that were manifestly inappropriate
         or that it carried out a manifestly erroneous assessment of the information available to it at the time when the contested
         regulation was adopted’.
      
      88     As regards in particular the disputed quota, the ninth recital in the preamble to the contested regulation, as noted by the
         Court of First Instance in paragraph 182 of the judgment under appeal, states that that figure represents ‘the sum of the
         highest annual volumes of imports of the products in question recorded in the three years preceding 1999 …’. After examining,
         in paragraphs 183 to 186 of the judgment under appeal, the statistics drawn up by the Statistical Office of the European Communities
         (Eurostat) and the figures put forward by the Commission, the Court of First Instance found, in paragraph 187, that the considerations
         stated in the ninth recital in the preamble to the contested regulation were not improper. Such a finding of fact cannot be
         called into question on appeal if there has been no distortion of the evidence adduced before the Court of First Instance.
      
      89     The Court of First Instance added, in paragraph 193 of the judgment under appeal, that ‘the Commission took into account the
         interests of the OCT sugar producers by not fully suspending imports of sugar under the EC/OCT cumulation of origin regime’
         and that ‘it established the quota of 3 340 tonnes in Article 1 of the contested regulation on the basis of the highest level
         of imports of sugar and mixtures during the period 1996-1998’.
      
      90     It must be observed that Rica Foods has not adduced any evidence to establish that, in making those findings, the Court of
         First Instance disregarded the principle of proportionality, in the light of the limits on judicial review in an area where
         the Commission has the difficult task of reconciling divergent interests.
      
      91     Accordingly, the fourth plea must also be rejected.
       The fifth plea, relating to infringement of the preferential status of the OCTs
      92     By its fifth plea, Rica Foods maintains that, by failing, in paragraphs 198 to 211 of the judgment under appeal, to take account
         of the significant difference in treatment introduced by the safeguard measure between, on the one hand, imports of products
         originating in ACP States and most favoured nations and even certain other third countries and, on the other, imports of products
         originating in the OCTs, the Court of First Instance infringed their preferential status.
      
      93     However, it is clear, from a reading of paragraphs 198 to 210 of the judgment under appeal, that the Court of First Instance
         did take account of Rica Foods’ line of argument, because it stated why the contested regulation did not place the ACP countries
         and third countries in a competitive position which was more advantageous than that of the OCTs.
      
      94     In particular, in paragraph 203 of the judgment under appeal, the Court of First Instance states that Article 109 of the OCT
         Decision expressly authorises the Commission to take safeguard measures in the situations to which it refers. The fact that
         the Commission adopted such a measure in respect of certain products originating in the OCTs does not undermine the preferential
         status which products originating in those countries enjoy under Article 101(1) of the OCT Decision. A safeguard measure is,
         by its very nature, exceptional and temporary.
      
      95     Furthermore, as stated by the Court of First Instance in paragraph 205 of the judgment under appeal, the contested regulation
         concerns only sugar and mixtures imported under the EC/OCT cumulation of origin regime. It does not impose any ceiling on
         imports of sugar originating in the OCTs under the ordinary rules of origin, if such production were to exist.
      
      96     In its appeal, Rica Foods does not state why the Court of First Instance’s reasoning, as recapitulated here, is vitiated by
         an error of law.
      
      97     Since the fifth plea cannot be accepted either, the appeal must be dismissed.
       Costs
      98     Under Article 69(2) of the Rules of Procedure, which applies to appeals by virtue of Article 118, the unsuccessful party is
         to be ordered to pay the costs, if they have been asked for in the successful party’s pleadings. Since the Commission has
         asked for costs and Rica Foods has been unsuccessful, it must be ordered to pay the costs. The Kingdom of the Netherlands,
         the Kingdom of Spain and the French Republic must be ordered to bear their own costs, pursuant to Article 69(4) of the Rules
         of Procedure, which applies to appeals by virtue of Article 118.
      
      On those grounds, the Court (Second Chamber) hereby:
      1.      Dismisses the appeal;
      2.      Orders Rica Foods (Free Zone) NV to pay the costs;
      3.      Orders the Kingdom of the Netherlands, the Kingdom of Spain and the French Republic to bear their own costs.
      [Signatures]
      * Language of the case: Dutch.