1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 8 DECEMBER 1985, THE COMMISSION BROUGHT AN ACTION BEFORE THE COURT UNDER ARTICLE 169 OF THE EEC TREATY FOR A DECLARATION THAT, BY FAILING TO ADOPT WITHIN THE PRESCRIBED PERIODS THE MEASURES NECESSARY TO APPLY THE ADDITIONAL LEVY IN THE MILK AND MILK PRODUCTS SECTOR, THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER COUNCIL REGULATION ( EEC ) NO 856/84 OF 31 MARCH 1984 AMENDING REGULATION ( EEC ) NO 804/68 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL L 90, P.*10 ), COUNCIL REGULATION ( EEC ) NO 857/84 ADOPTING GENERAL RULES FOR THE APPLICATION OF THE LEVY REFERRED TO IN ARTICLE 5C OF REGULATION ( EEC ) NO 804/68 IN THE MILK AND MILK PRODUCTS SECTOR ( OFFICIAL JOURNAL L 90, P . 13 ), COMMISSION REGULATION ( EEC ) NO 1371/84 OF 16 MAY 1984 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF THE ADDITIONAL LEVY REFERRED TO IN ARTICLE 5C OF REGULATION ( EEC ) NO 804/68 ( OFFICIAL JOURNAL 1984, L 132, P.*11 ) AND UNDER ARTICLE 5 OF THE TREATY .
2 THE COMMUNITY RULES AT ISSUE REQUIRE THE MEMBER STATES TO ADOPT, BEFORE CERTAIN DATES, MEASURES IMPLEMENTING THE ADDITIONAL LEVY SCHEME IN THE MILK AND MILK PRODUCTS SECTOR . IN PARTICULAR, THE MEMBER STATES WERE TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES TO PRODUCERS AND PURCHASERS OF MILK, DESIGNATE THE NATIONAL AGENCY RESPONSIBLE FOR CHARGING THE LEVY AND CHOOSE BETWEEN SEVERAL OPTIONS CONCERNING THE DETAILED RULES FOR THE IMPLEMENTATION OF THE LEVY .
3 AS REGARDS THAT CHOICE OF OPTIONS, THEY HAD TO CHOOSE IN PARTICULAR BETWEEN A FORMULA, CALLED FORMULA A, UNDER WHICH REFERENCE QUANTITIES WERE ATTRIBUTED TO MILK PRODUCERS, AND ANOTHER FORMULA, CALLED FORMULA B, UNDER WHICH REFERENCE QUANTITIES WERE ALLOCATED TO PURCHASERS OF MILK . THEY ALSO HAD TO DECIDE WHETHER THEIR NATIONAL TERRITORY WAS TO BE DIVIDED INTO SEVERAL REGIONS FOR THE PURPOSES OF APPLYING FORMULAS A AND B AND, WHERE THAT WAS DONE, CHOOSE BETWEEN THE TWO FORMULAS IN REGARD TO EACH REGION . THEY WERE ALSO REQUIRED TO ESTABLISH RULES FOR THE ADJUSTMENT OF THE REFERENCE QUANTITIES IN FAVOUR OF PRODUCERS WHOSE MILK PRODUCTION HAD BEEN AFFECTED BY A NATURAL DISASTER OR ACCIDENTAL EVENTS .
4 MOREOVER, THE RULES PERMITTED THE MEMBER STATES TO ADOPT SPECIFIC MEASURES TO PROMOTE THE RESTRUCTURING OF MILK PRODUCTION, IN PARTICULAR BY GRANTING COMPENSATION TO PRODUCERS UNDERTAKING TO DISCONTINUE MILK PRODUCTION DEFINITIVELY .
5 AS REGARDS THE FIRST PERIOD OF APPLICATION OF 12 MONTHS, THOSE MEASURES WERE TO BE ADOPTED AND COMMUNICATED TO THE COMMISSION BEFORE 1 MAY 1984, 1 OCTOBER 1984 OR 31 DECEMBER 1984, AS THE CASE MIGHT BE .
6 SINCE THE ITALIAN REPUBLIC HAD NOT INFORMED THE COMMISSION WITHIN THE PRESCRIBED PERIODS OF THE IMPLEMENTING MEASURES WHICH IT HAD ADOPTED, THE COMMISSION SENT IT A FORMAL NOTICE ON 27 NOVEMBER 1984 AND ISSUED A REASONED OPINION ON 18 MARCH 1985 . THE REPLIES OF THE ITALIAN REPUBLIC SHOWED THAT IT HAD FULFILLED ITS OBLIGATIONS ONLY IN REGARD TO TWO PRECISE POINTS : IT HAD OPTED FOR FORMULA A AND HAD DECIDED THAT ITALY WAS TO BE REGARDED AS A SINGLE REGION FOR THE PURPOSES OF IMPLEMENTING THAT FORMULA . THE COMMISSION THEREFORE BROUGHT THIS ACTION .
7 SUBSEQUENT TO THE BRINGING OF THE ACTION, THE COUNCIL ADOPTED SEVERAL REGULATIONS AMENDING THE RULES CONCERNING THE ADDITIONAL LEVY, IN PARTICULAR REGULATION NO 590/85 OF 26 FEBRUARY 1985 ( OFFICIAL JOURNAL L 68, P . 1 ) AND REGULATION NO 1305/85 OF 23 MAY 1985 ( OFFICIAL JOURNAL L 137 . P . 12 ). ESSENTIALLY, THOSE REGULATIONS MAKE THREE AMENDMENTS TO THE SCHEME . FIRST OF ALL, THEY MAKE IT POSSIBLE TO TRANSFER TO OTHER PRODUCERS OR PURCHASERS OF MILK INDIVIDUAL REFERENCE QUANTITIES WHICH HAVE NOT BEEN UTILIZED BY THE PERSONS TO WHOM THEY WERE ALLOCATED . SECONDLY, THEY MAKE IT POSSIBLE FOR A GROUP OF PRODUCERS OR PURCHASERS TO BE REGARDED AS A SINGLE PRODUCER OR PURCHASER FOR THE PURPOSES OF THE ALLOCATION OF REFERENCE QUANTITIES . FINALLY, THEY AUTHORIZE THE ITALIAN REPUBLIC TO POSTPONE FOR THREE YEARS THE INTRODUCTION OF RULES FOR THE ADJUSTMENT OF REFERENCE QUANTITIES IN FAVOUR OF PRODUCERS WHOSE MILK PRODUCTION HAS BEEN AFFECTED BY A NATURAL DISASTER OR ACCIDENTAL EVENTS .
8 REFERENCE IS MADE TO THE REPORT FOR THE HEARING FOR A FULLER ACCOUNT OF THE FACTS OF THE CASE, THE COURSE OF THE PROCEDURE AND THE ARGUMENTS OF THE PARTIES .
9 THE ITALIAN REPUBLIC DOES NOT DENY THAT IT HAS FAILED TO FULFIL THE VARIOUS OBLIGATIONS REFERRED TO .
10 AS REGARDS THE OBLIGATION TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES, WHICH IS THE BASIS OF THE ADDITIONAL LEVY SCHEME, IT PUTS FORWARD TWO JUSTIFICATIONS .
11 THE ITALIAN REPUBLIC' S FIRST JUSTIFICATION IS THAT, IN THE ABSENCE OF STATISTICAL DATA ON THE SALES AND PURCHASES OF THE VARIOUS TRADERS, IT HAD TO CARRY OUT A SURVEY ON THAT SUBJECT BEFORE BEING ABLE TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES, WHICH MADE IT IMPOSSIBLE FOR IT TO COMPLY WITH THE TIME-LIMITS LAID DOWN . FURTHERMORE, BY MAKING THE RULES GOVERNING THE ADDITIONAL LEVY CONSIDERABLY MORE FLEXIBLE IN REGULATIONS NOS*590/85 AND 1305/85, CITED ABOVE, THE COUNCIL RECOGNIZED THAT THE OBLIGATION TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES RAISED INSOLUBLE PROBLEMS IN ITALY .
12 IN REPLY TO THE ARGUMENT THAT IT WAS NECESSARY TO CARRY OUT AN INQUIRY BEFORE IT WAS POSSIBLE TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES IT SHOULD BE POINTED OUT THAT, ACCORDING TO SETTLED CASE-LAW, A MEMBER STATE MAY NOT PLEAD PROVISIONS, PRACTICES OR CIRCUMSTANCES EXISTING IN ITS INTERNAL LEGAL SYSTEM IN ORDER TO JUSTIFY A FAILURE TO COMPLY WITH OBLIGATIONS AND TIME-LIMITS ARISING FROM COMMUNITY LAW .
13 FURTHERMORE, IN AMENDING THE RULES AFTER THE ACTION HAD BEEN BROUGHT, THE COUNCIL DID NOT RECOGNIZE THAT THE OBLIGATION TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES CAUSED INSUPERABLE DIFFICULTIES FOR CERTAIN MEMBER STATES .
14 IN THAT REGARD, IT MUST BE POINTED OUT IN THE FIRST PLACE THAT IN INTRODUCING A SCHEME FOR TRANSFERRING INDIVIDUAL REFERENCE QUANTITIES WHICH HAD NOT BEEN UTILIZED, THE COUNCIL MAINTAINED THE PRINCIPLE OF THE ALLOCATION OF INDIVIDUAL REFERENCE QUANTITIES .
15 IN THE SECOND PLACE, IT SHOULD BE NOTED THAT IT WAS NOT DECIDED TO ASSIMILATE GROUPS OF PRODUCERS AND PURCHASERS TO INDIVIDUAL PRODUCERS AND PURCHASERS FOR THE PURPOSES OF THE ALLOCATION OF REFERENCE QUANTITIES BECAUSE OF THE DIFFICULTIES CAUSED TO CERTAIN MEMBER STATES BY THE EXISTENCE OF A LARGE NUMBER OF PRODUCERS AND PURCHASERS . IT CAN BE SEEN FROM THE LAST RECITAL IN THE PREAMBLE TO REGULATION NO 590/85 AND FROM THE FIRST RECITAL OF THE PREAMBLE TO REGULATION NO 1305/85 THAT THE PURPOSE OF THAT AMENDMENT OF THE RULES WAS TO PERMIT MEMBERS OF GROUPS TO ADJUST THE AMOUNT THEY PRODUCE OR PURCHASE IN ORDER TO AVOID HAVING TO PAY THE ADDITIONAL LEVY .
16 IN THE THIRD PLACE, IT CAN BE SEEN FROM THE SECOND RECITAL IN THE PREAMBLE TO REGULATION NO 1305/85 THAT ACCOUNT WAS TAKEN OF THE SPECIAL POSITION OF ITALY ONLY IN REGARD TO A POINT TOTALLY ACCESSORY TO THE AMENDMENTS ADOPTED, NAMELY THE POSSIBILITY FOR ITALY TO POSTPONE FOR THREE YEARS THE INTRODUCTION OF RULES FOR THE ADJUSTMENT OF REFERENCE QUANTITIES IN FAVOUR OF PRODUCERS WHOSE MILK PRODUCTION WAS AFFECTED BY A NATURAL DISASTER OR ACCIDENTAL EVENTS .
17 IT FOLLOWS FROM THE FOREGOING THAT THE FIRST JUSTIFICATION FOR THE FAILURE TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES CANNOT BE ACCEPTED .
18 AS A SECOND JUSTIFICATION FOR THE FAILURE TO ALLOCATE INDIVIDUAL REFERENCE QUANTITIES, THE ITALIAN REPUBLIC CONTENDS THAT THAT FAILURE DID NOT HAVE ANY EFFECT ON THE REALIZATION OF THE OBJECTIVES PURSUED, SINCE DURING THE FIRST PERIOD OF 12 MONTHS TOTAL MILK PRODUCTION IN ITALY DID NOT EXCEED THE GUARANTEED TOTAL QUANTITY ALLOCATED TO IT .
19 THAT JUSTIFICATION MUST ALSO BE REJECTED . THE ITALIAN REPUBLIC HAS JEOPARDIZED THE REALIZATION OF THE OBJECTIVES OF THE ADDITIONAL LEVY SCHEME BY NOT ADOPTING THE REQUIRED IMPLEMENTING MEASURES WITHIN THE PRESCRIBED PERIODS . IT CANNOT JUSTIFY THAT VIEW BY RELYING ON THE FACT, WHICH, MOREOVER, HAS NOT BEEN PROVED, THAT THE TOTAL GUARANTEED QUANTITY ALLOCATED TO IT HAS NOT BEEN EXCEEDED .
20 IN THOSE CIRCUMSTANCES, IT MUST BE DECLARED THAT THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER COUNCIL REGULATIONS NOS 856/84 AND 857/84 AND COMMISSION REGULATION NO*1371/84 .
21 IN VIEW OF THOSE FAILURES TO COMPLY WITH SPECIFIC PROVISIONS, THERE IS NO NEED TO CONSIDER WHETHER THE ITALIAN REPUBLIC HAS THEREBY ALSO FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 5 OF THE TREATY .