Emesa Sugar (Free Zone) NV v Aruba.
Date: 2000-02-08
2 Those questions were raised in proceedings between Emesa Sugar (Free Zone) NV (Emesa) and the Government of Aruba concerning the conditions for importation into the Community of quantities of sugar which Emesa processes and packs on that island.
Legal background
8 Article 133(1) of the EC Treaty (now, after amendment, Article 184(1) EC) provides that customs duties on imports into the Member States of goods originating in the OCTs are to be completely abolished in conformity with the progressive abolition of customs duties between Member States in accordance with the provisions of that Treaty.
9 According to Article 136 of the EC Treaty (now, after amendment, Article 187 EC):
For an initial period of five years after the entry into force of this Treaty, the details of and procedure for the association of the countries and territories with the Community shall be determined by an Implementing Convention annexed to this Treaty.
Before the Convention referred to in the preceding paragraph expires, the Council shall, acting unanimously, lay down provisions for a further period, on the basis of the experience acquired and of the principles set out in this Treaty.
18 In the seventh recital in the preamble to Decision 97/803, which followed that proposal, the Council observes that it is appropriate for fresh disruption [to] be avoided by taking measures to create a framework conducive to regular trade flows and at the same time compatible with the common agricultural policy.
19 To that end, Decision 97/803 inserted in the OCT Decision, among other amendments, Article 108b, which allows ACP/OCT cumulation of origin for sugar up to a specified annual quantity. Article 108b(1) and (2) provide:
1. The 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 ...
2. For the purposes of implementing the ACP/OCT cumulation rules referred to in paragraph 1, forming sugar lumps or colouring shall be considered as sufficient to confer the status of OCT-originating products (but there is no mention of the milling of sugar).
The dispute before the national court
28 To answer those questions, it must be borne in mind at the outset that association of the OCTs with the Community is to be achieved by a dynamic and progressive process which may necessitate the adoption of a number of measures in order to attain all the objectives mentioned in Article 132 of the Treaty, having regard to the experience acquired through the Council's previous decisions (see Case C-310/95 Road Air v Inspecteur der Invoerrechten en Accijnzen [1997] ECR I-2229, paragraph 40, and Case C-390/95 P Antillean Rice Mills and Others v Commission [1999] ECR I-769, paragraph 36).
29 However, although the OCTs are associated countries and territories having particular links with the Community, they are not part of it and are, as regards the Community, in the same situation as non-member countries (see Opinion 1/78 of 4 October 1979 [1979] ECR 2871, paragraph 62, and Opinion 1/94 of 15 November 1994 [1994] ECR I-5267, paragraph 17). In particular, free movement of goods between the OCTs and the Community does not exist without restriction at this stage, in accordance with Article 132 of the Treaty (Antillean Rice Mills, cited above, paragraph 36).
30 Furthermore, the second paragraph of Article 136 of the Treaty authorises the Council to adopt decisions concerning the association on the basis of the experience acquired and of the principles set out in the Treaty. It follows that whilst the Council, when adopting such decisions, must take account of the principles embodied in Part Four of the Treaty, and in particular of the experience acquired, it must also take into account the other principles of Community law, including those relating to the common agricultural policy (Antillean Rice Mills, cited above, paragraphs 36 and 37).
The possibility of reviewing the OCT Decision after the first five years of its application (seventh and ninth questions)
34 Moreover, as the Court has repeatedly stated, 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 discretion 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 (see, in particular, Case C-372/96 Pontillo [1998] ECR I-5091, paragraphs 22 and 23).
38 It should be noted that although the dynamic and progressive process characterising the association of the OCTs with the Community requires that account be taken by the Council of the experience acquired as a result of its earlier decisions, the fact nevertheless remains, as is made clear in paragraph 30 of this judgment, that the Council, when adopting measures under the second paragraph of Article 136 of the Treaty, must take account both of the principles set out in Part Four of the Treaty and of the other principles of Community law, including those relating to the common agricultural policy.
39 In weighing the various objectives laid down by the Treaty, whilst taking overall account of the experience acquired as a result of its earlier decisions, the Council, which enjoys for that purpose a considerable margin of discretion reflecting the political responsibilities entrusted to it by Articles 40 to 43 (now, after amendment, Articles 34 EC to 37 EC) and 136 of the EC Treaty, may be prompted, in case of need, to curtail certain advantages previously granted to the OCTs.
40 In this case, it is common ground that the reduction to 3 000 tonnes a year of the quantity of sugar which may qualify for ACP/OCT cumulation of origin constitutes a restriction as compared with the OCT Decision. However, provided it is established that the application of the rule on cumulation of origin in the sugar sector was liable to lead to significant disturbances in the functioning of a common market organisation (a matter which will be considered in paragraphs 51 to 57 of this judgment), the Council, after weighing the objectives of association of the OCTs against those of the common agricultural policy, was entitled to adopt, in compliance with the principles of Community law circumscribing its margin of discretion, any measure capable of bringing to an end or mitigating such disturbances, including the removal or limitation of advantages previously granted to the OCTs.
45 Without its being necessary to dispose of the question whether the tariff quota laid down in Article 108b of the amended OCT Decision may be regarded as a quantitative restriction or the question whether ACP/OCT cumulation rules confer on the goods in question an OCT origin for the purpose of applying the import rules laid down in Article 133(1) of the Treaty, it should be noted that the products concerned can be imported in excess of the quota only against payment of customs duties.
48 As to whether the tariff quota fixed by Article 108b of the amended OCT Decision is compatible with the second paragraph of Article 136 of the Treaty, it need merely be observed that that provision states expressly that the Council is to act on the basis of the experience acquired and of the principles set out in this Treaty. As the Court held in Antillean Rice Mills, cited above, paragraph 37, those principles include the ones relating to the common agricultural policy.
53 It should be borne in mind that in a sphere such as this, in which the Community institutions have a broad discretion, the lawfulness of a measure can be affected only if the measure is manifestly inappropriate having regard to the objective pursued. The Court's review must be limited in particular if the Council has to reconcile divergent interests and thus select options within the context of the policy choices which are its own responsibility (see Case C-280/93 Germany v Council [1994] ECR I-4973, paragraphs 90 and 91; Case C-44/94 Fishermen's Organisations and Others [1995] ECR I-3115, paragraph 37; and Case C-150/94 United Kingdom v Council [1998] ECR I-7235, paragraph 87).
56 It is clear from the documents before the Court that at the date of Decision 97/803, first, Community production of beet sugar exceeded the quantity consumed in the Community; in addition 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 WTO agreements. Second, the Community was also required to subsidise sugar exports by granting export refunds, within the limits laid down in the WTO agreements. In those circumstances, the Council was entitled to take the view that any additional quantity of sugar reaching the Community market, even if minimal compared with Community production, would have obliged the Community institutions to increase the amount of the export subsidies, within the limits mentioned above, or to reduce the quotas of European producers, which would have disturbed the common organisation of the market in sugar, the balance of which was precarious, and would have been contrary to the objectives of the common agricultural policy.
69 That question must be answered in the affirmative, subject to fulfilment of the conditions laid down by the Court in Joined Cases C-143/88 and C-92/89 Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest [1991] ECR I-415, paragraph 33, according to which interim measures may be ordered by a national court only:
- if that court entertains serious doubts as to the validity of the Community measure implemented by the authority against which the interim measures are applied for and, should the question of the validity of the contested measure not already have been brought before the Court of Justice, itself refers that question to the Court of Justice;
- if there is urgency and a threat of serious and irreparable damage to the applicant;
- and if the national court takes due account of the Community's interests.