1 BY ORDER OF 25 MARCH 1981 WHICH WAS RECEIVED AT THE COURT ON THE FOLLOWING 25 MAY , THE BUNDESVERWALTUNGSGERICHT ( FEDERAL ADMINISTRATIVE COURT ) REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE VALIDITY OF REGULATION NO 2107/74 OF THE COMMISSION OF 8 AUGUST 1974 LAYING DOWN PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF PRESERVED MUSHROOMS ( OFFICIAL JOURNAL 1974 , L 218 , P . 54 ), AND ALSO COMMISSION REGULATIONS NO 1412/76 OF 18 JUNE 1976 AND NO 2284/76 OF 21 SEPTEMBER 1976 FIXING FOR PURPOSES OF THE APPLICATION OF THE SYSTEM OF IMPORT LICENCES FOR PRESERVED MUSHROOMS THE PERCENTAGE APPLICABLE TO THE REFERENCE QUANTITY FOR IMPORTS IN THE THIRD AND FOURTH QUARTERS OF 1976 , RESPECTIVELY ( OFFICIAL JOURNAL 1976 , L 158 , P . 37 AND L 258 , P . 5 ).
2 THOSE REGULATIONS FALL WITHIN THE CONTEXT OF THE COMMUNITY RULES ON THE COMMON ORGANIZATION OF THE MARKET IN THE SECTOR OF PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES . DURING THE PERIOD IN QUESTION , THE INTRODUCTION OF PROTECTIVE MEASURES IN THIS SECTOR WAS GOVERNED FIRST BY REGULATION NO 1427/71 OF THE COUNCIL OF 2 JULY 1971 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( II ), P . 468 ) AND THEN BY REGULATION NO 1927/75 OF THE COUNCIL OF 22 JULY 1975 ( OFFICIAL JOURNAL 1975 , L 198 , P . 7 ), OF WHICH ARTICLE 7 ( 1 ), REPRODUCING THE WORDING OF ARTICLE 1 ( 1 ) OF REGULATION NO 1427/71 , READS AS FOLLOWS : ' ' IF , BY REASON OF IMPORTS OR EXPORTS , THE COMMUNITY MARKET IN ONE OR MORE . . . PRODUCTS . . . IS OR IS LIKELY TO BE EXPOSED TO SERIOUS DISTURBANCES WHICH MIGHT ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY , APPROPRIATE MEASURES MAY BE APPLIED IN TRADE WITH THIRD COUNTRIES UNTIL SUCH DISTURBANCES OR THE THREAT THEREOF HAS CEASED ' ' . THE SECOND SUBPARAGRAPH OF THE SAME PARAGRAPH AUTHORIZED THE COMMISSION TO ADOPT THE NECESSARY MEASURES .
3 BY TWO REGULATIONS ( NOS 1428/71 AND 1928/75 ), ADOPTED ON THE SAME RESPECTIVE DATES , THE COUNCIL HAD DEFINED THE DETAILED RULES FOR APPLYING PROTECTIVE MEASURES IN THE ABOVE-MENTIONED SECTOR ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1965-1972 , P . 86 AND OFFICIAL JOURNAL 1975 , L 198 , P . 11 ). ARTICLE 1 OF THOSE REGULATIONS PROVIDED SUBSTANTIALLY THAT , IN ORDER TO ASSESS WHETHER OR NOT A SITUATION SUCH AS THAT DESCRIBED ABOVE EXISTED , PARTICULAR ACCOUNT WAS TO BE TAKEN OF : ( A ) THE VOLUME OF IMPORTS OR EXPORTS EFFECTED OR FORESEEN ; ( B)THE QUANTITIES OF PRODUCTS AVAILABLE ON THE COMMUNITY MARKET ; ( C)THE PRICES FOR COMMUNITY PRODUCTS ON THE COMMUNITY MARKET OR THE FORESEEABLE TREND OF THOSE PRICES AND IN PARTICULAR ANY EXCESSIVE UPWARD OR DOWNWARD TREND THEREOF IN RELATION TO PRICES IN THE YEARS IMMEDIATELY PRECEDING ; ( D)WHERE THE ABOVE-MENTIONED SITUATION ARISES AS A RESULT OF IMPORTS , THE PRICES OBTAINING ON THE COMMUNITY MARKET AT A COMPARABLE STAGE , FOR PRODUCTS FROM NON-MEMBER COUNTRIES , AND IN PARTICULAR ANY EXCESSIVE DOWNWARD TREND IN THOSE PRICES . IN ADDITION ARTICLE 2 ( 2 ) OF THOSE REGULATIONS PROVIDED THAT PROTECTIVE MEASURES MIGHT BE TAKEN ONLY TO SUCH AN EXTENT AND FOR SUCH LENGTH OF TIME AS WAS STRICTLY NECESSARY .
4 IN APPLICATION OF THOSE RULES OF THE COUNCIL , THE COMMISSION ADOPTED REGULATION NO 1207/74 , CITED ABOVE . IN THE RECITALS IN ITS PREAMBLE TO THAT REGULATION , THE COMMISSION STATED THAT IMPORTS INTO THE COMMUNITY OF PRESERVED MUSHROOMS DURING THE 1973 MARKETING YEAR AND THE FIRST SIX MONTHS OF 1974 WERE CONSIDERABLY HIGHER THAN THOSE IN THE PREVIOUS YEARS , THAT THE OFFER PRICES FROM NON-MEMBER COUNTRIES WERE 20 TO 30% LESS THAN THE COST PRICE WITHIN THE COMMUNITY INDUSTRY AND THAT STOCKS OF PRESERVED MUSHROOMS PRODUCED WITHIN THE COMMUNITY WERE CONSIDERABLY LARGER THAN THOSE RECORDED IN PREVIOUS YEARS .
5 IN ARTICLE 3 OF THE REGULATION , THE COMMISSION RESERVED THE RIGHT TO LIMIT IMPORT LICENCES ISSUED TO EACH APPLICANT TO A GIVEN PERCENTAGE OF A REFERENCE QUANTITY EQUAL TO THE QUANTITY OF PRESERVED MUSHROOMS IMPORTED INTO THE COMMUNITY BY THE LATTER IN THE CORRESPONDING PERIOD IN 1973 OR TO THE AVERAGE QUANTITY OF ITS IMPORTS DURING THE SAME PERIOD IN THE YEARS 1971 TO 1973 . THEREAFTER , THE COMMISSION FIXED THAT PERCENTAGE IN SUCCESSIVE REGULATIONS FIRST AT 50% , NEXT AT 25% , THEN AT 40% FOR THE FIRST QUARTER OF 1976 AND 55% FOR THE SECOND QUARTER OF THE SAME YEAR . BY THE TWO REGULATIONS NOS 1412/76 AND 2284/76 , CITED ABOVE , THE PERCENTAGE WAS FIXED AT 70% FOR THE THIRD QUARTER AND 100% FOR THE FOURTH QUARTER OF 1976 . WITH EFFECT FROM 1 JANUARY 1977 , THE PROTECTIVE MEASURES INTRODUCED BY REGULATION NO 2107/74 WERE FINALLY ABOLISHED .
6 ON 9 JULY 1976 , THE APPELLANT IN THE MAIN ACTION , THE UNDERTAKING WUNSCHE HANDELSGESELLSCHAFT , APPLIED TO THE GERMAN AUTHORITIES FOR THE ISSUE OF A LICENCE TO IMPORT 1 000 TONNES OF PRESERVED MUSHROOMS FROM TAIWAN . THE AUTHORITIES REFUSED THE APPLICATION ON THE BASIS OF THE QUOTA SYSTEM DESCRIBED ABOVE AND THE UNDERTAKING THEN BROUGHT AN ACTION BEFORE THE VERWALTUNGSGERICHT ( ADMINISTRATIVE COURT ) FRANKFURT AM MAIN , CLAIMING THAT AFTER 1 JULY 1976 IT WAS NO LONGER JUSTIFIED IN MAINTAINING THAT SYSTEM . ITS ACTION WAS DISMISSED AND IT THEN BROUGHT AN APPEAL ON A POINT OF LAW BY WAY OF A DIRECT ACTION BEFORE THE BUNDESVERWALTUNGSGERICHT .
7 THOSE ARE THE CIRCUMSTANCES IN WHICH THE BUNDESVERWALTUNGSGERICHT REFERRED TO THE COURT THE FOLLOWING QUESTION : ' ' DID REGULATION ( EEC ) NO 2107/74 OF THE COMMISSION OF 8 AUGUST 1974 LAYING DOWN PROTECTIVE MEASURES APPLICABLE TO IMPORTS OF PRESERVED MUSHROOMS ( OFFICIAL JOURNAL 1974 , L 218 , P . 54 ) INFRINGE THE COMBINED PROVISIONS OF ARTICLE 7 ( 1 ) OF REGULATION ( EEC ) NO 1927/75 OF THE COUNCIL OF 22 JULY 1975 CONCERNING THE SYSTEM OF TRADE WITH THIRD COUNTRIES IN THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES ( OFFICIAL JOURNAL 1975 , L 198 , P . 7 ) AND ARTICLE 2 ( 2 ) OF REGULATION ( EEC ) 1928/75 OF THE COUNCIL OF 22 JULY 1975 LAYING DOWN DETAILED RULES FOR APPLYING MEASURES IN THE MARKET IN PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES ( OFFICIAL JOURNAL 1975 , L 198 , P . 11 ) IN SO FAR AS IT WAS RETAINED IN FORCE AFTER 30 JUNE 1976? ' '
8 SINCE THE PROVISIONS OF REGULATION NO 2107/74 REQUIRED FOR THEIR APPLICATION THE SUBSEQUENT FIXING OF A PERCENTAGE TO BE APPLIED TO THE REFERENCE QUANTITY AND THAT PERCENTAGE FOR THE LAST TWO QUARTERS OF 1976 WAS FIXED BY REGULATIONS NO 1412/76 AND 2284/76 , THE QUESTION PUT TO THE COURT IN REALITY CONCERNS THE VALIDITY OF THOSE TWO REGULATIONS .
9 THE APPELLANT IN THE MAIN ACTION DOES NOT DENY THAT IN 1974 THE SITUATION ON THE MARKET IN PRESERVED MUSHROOMS JUSTIFIED THE INTRODUCTION OF PROTECTIVE MEASURES SUCH AS THOSE PROVIDED FOR BY REGULATION NO 2107/74 . ON THE OTHER HAND , IT CONTENDS THAT , BY JUNE 1976 AT THE LATEST , NONE OF THE PRE-CONDITIONS FOR THE MAINTENANCE OF THOSE MEASURES ANY LONGER EXISTED . AT THAT TIME THE GERMAN MARKET IN PRESERVED MUSHROOMS , FOR WHICH 95% OF COMMUNITY IMPORTS ARE INTENDED , WAS SUFFERING FROM A SHORTAGE . IN THE ABSENCE OF OFFERS FROM NON-MEMBER COUNTRIES , A NUMBER OF IMPORT LICENCES WHICH HAD BEEN ISSUED COULD NOT BE USED TO THE FULL , AND COMMUNITY PRODUCTION , WHICH IS CONCENTRATED PARTICULARLY IN FRANCE , WAS NO LONGER ABLE TO SATISFY GERMAN DEMAND . THE PRICES OBTAINING ON THE MARKET FOR COMMUNITY PRODUCTS ROSE BY 90 TO 100% FROM JULY/AUGUST 1974 UNTIL THE SAME MONTHS IN 1976 , AND THE PRICES FOR IMPORTED PRODUCTS PARTICULARLY FROM TAIWAN ROSE IN PART BY AS MUCH AS 80% OVER THE SAME PERIOD .
10 IN THE OBSERVATIONS WHICH IT SUBMITTED TO THE COURT , THE COMMISSION STATES THAT THAT INFORMATION DOES NOT CORRESPOND TO THE INFORMATION DERIVING FROM THE DATA WHICH WERE AT ITS DISPOSAL WHEN REGULATIONS NOS 1412/76 AND 2284/76 WERE ADOPTED AND WHICH WERE CONFIRMED BY THE OFFICIAL STATISTICS PUBLISHED LATER . IN FACT , THE PROTECTIVE MEASURES DID NOT BEGIN TO PRODUCE THE INTENDED EFFECTS UNTIL THE FIRST TWO QUARTERS OF 1976 . AT THE TIME WHEN THE TWO REGULATIONS WERE ADOPTED , THE ACTUAL SITUATION ON THE MARKET DID NOT YET PERMIT THE ABOLITION OF THE PROTECTIVE MEASURES . IT APPEARED TO BE ABSOLUTELY ESSENTIAL TO OPEN THE FRONTIERS TO NON-MEMBER COUNTRIES GRADUALLY , IN ORDER TO AVOID JEOPARDIZING THE NORMALIZATION OF THE MARKET WHICH WAS TAKING SHAPE .
11 IN VIEW OF THOSE TWO CONFLICTING ARGUMENTS , IT IS NECESSARY TO CONSIDER WHETHER , AT THE TIME WHEN THE CONTESTED REGULATIONS WERE ADOPTED AND TAKING ACCOUNT OF THE SITUATION ON THE MARKET IN QUESTION AND THE DISCRETION CONFERRED UPON THE COMMISSION BY THOSE PROVISIONS , THE COMMISSION PROPERLY APPLIED ARTICLE 7 OF COUNCIL REGULATION NO 1927/75 AND ARTICLES 1 AND 2 OF COUNCIL REGULATION NO 1928/75 . AS MORE THAN 95% OF IMPORTS OF PRESERVED MUSHROOMS INTO THE COMMUNITY ARE INTENDED FOR THE FEDERAL REPUBLIC OF GERMANY , IT IS ABOVE ALL NECESSARY FOR THAT PURPOSE TO EXAMINE THE SITUATION ON THE GERMAN MARKET .
12 IN THAT REGARD , IT IS CLEAR FROM THE FIGURES PUBLISHED BY THE FEDERAL STATISTICS OFFICE THAT THE VOLUME OF IMPORTS INTO THE FEDERAL REPUBLIC OF GERMANY FROM NON-MEMBER COUNTRIES ROSE CONSIDERABLY IN 1973 AND 1974 . IN 1975 THE VOLUME OF THOSE IMPORTS WAS SIMILAR TO THAT OF IMPORTS IN 1973 . IT WAS NOT UNTIL 1976 THAT THE VOLUME OF IMPORTS FELL BELOW THAT LEVEL , ALTHOUGH IT REMAINED GREATER THAN THE VOLUME FOR THE YEARS PRIOR TO 1973 . THE MONTHLY FIGURES FOR 1976 , WHICH WERE PROVIDED BY THE COMMISSION AT THE COURT ' S REQUEST , SHOW FEW VARIATIONS FROM ONE MONTH TO THE NEXT AND , CONSEQUENTLY , SCARCELY SUPPORT THE CONTENTION THAT THERE WAS A LACK OF OFFERS FROM NON-MEMBER COUNTRIES FROM JUNE ONWARDS .
13 THE INFORMATION ON THE STOCKS OF PRESERVED MUSHROOMS IN FRANCE , WITH WHICH THE COMMISSION WAS PROVIDED BY THE ASSOCIATION NATIONALE INTERPROFESSIONNELLE DES FRUITS ET LEGUMES TRANSFORMES ( NATIONAL FEDERAL ASSOCIATION FOR PRODUCTS PROCESSED FROM FRUIT AND VEGETABLES ) SHOWS A CONSIDERABLE INCREASE IN STOCKS IN 1974 AND 1975 AND A SUBSTANTIAL DIMINUTION IN THOSE STOCKS IN 1976 . ON THE OTHER HAND , ACCORDING TO THE STATISTICS PRODUCED BY THE FEDERAL STATISTICS OFFICE , THE ANNUAL FIGURES FOR IMPORTS OF PRESERVED MUSHROOMS INTO THE FEDERAL REPUBLIC OF GERMANY FROM MEMBER STATES INDICATE A VIRTUALLY CONSTANT LEVEL , NOT ONLY FOR THE PERIOD IN QUESTION , BUT FOR EVERY YEAR FROM 1972 TO 1978 . FOR THOSE IMPORTS , TOO , THE MONTHLY FIGURES FOR 1976 SHOW FEW VARIATIONS .
14 AS FAR AS PRICES OBTAINING ON THE GERMAN MARKET ARE CONCERNED , THE APPELLANT IN THE MAIN ACTION PRODUCED A LETTER FROM A COMMERCIAL BROKER IN HAMBURG CONTAINING A LIST OF PRICES OF PRESERVED MUSHROOMS FROM NON-MEMBER COUNTRIES WHICH THE BROKER HAD CLEARED THROUGH CUSTOMS BETWEEN AUGUST 1974 AND DECEMBER 1976 . THAT LIST , WHICH DOES NOT INDICATE THE VOLUME OF SUCH IMPORTS , SHOWS A RISE IN PRICES OF 60 TO 70% BETWEEN THE BEGINNING OF THE PERIOD AND JULY 1976 .
15 SUCH A SIGNIFICANT RISE , WHICH , MOREOVER , IS DERIVED ONLY FROM FRAGMENTARY INFORMATION , IS NOT REFLECTED IN THE STATISTICS PRODUCED BY THE FEDERAL STATISTICS OFFICE , FROM WHICH IT APPEARS THAT THE RISE IN PRICES OF PRESERVED MUSHROOMS IN NON-MEMBER COUNTRIES DURING THE SAID PERIOD DID NOT EXCEED 30% OR THEREABOUTS . IN THAT REGARD , IT SHOULD BE RECALLED THAT , ACCORDING TO THE RECITALS IN THE PREAMBLE TO REGULATION NO 2107/74 , THE OFFER PRICES FROM NON-MEMBER COUNTRIES IN 1974 WERE 20 TO 30% LESS THAN THE COST PRICE WITHIN THE COMMUNITY INDUSTRY .
16 FINALLY , WITH REGARD TO THE PRICES OF THE PRODUCTS FROM MEMBER STATES , THE FIGURES OF THE FEDERAL STATISTICS OFFICE SHOW THAT THEY DECLINED CONSIDERABLY FROM 1972 TO 1974 BUT RECOVERED TO SOME EXTENT IN 1975 AND ROSE CONSIDERABLY DURING 1976 , WITHOUT , HOWEVER , UNTIL THE LATTER MONTHS OF THAT YEAR , FOR WHICH , MOREOVER , INFORMATION WAS NOT AVAILABLE AT THE TIME WHEN THE CONTESTED REGULATIONS WERE ADOPTED , REACHING THE LEVEL IN DM OF THE YEARS PRIOR TO 1972 .
17 IN THOSE CIRCUMSTANCES , IT CANNOT BE DENIED THAT THE COMMISSION KEPT WITHIN THE LIMITS OF ITS DISCRETION IN CONSIDERING , WHEN IT ADOPTED THE CONTESTED REGULATIONS , THAT THE SITUATION ON THE MARKET DID NOT YET PERMIT THE ABOLITION OF THE PROTECTIVE MEASURES INTRODUCED IN 1974 .
18 THE ANSWER TO THE QUESTION REFERRED TO THE COURT SHOULD THEREFORE BE THAT CONSIDERATION OF COMMISSION REGULATIONS NOS 1412/76 AND 2284/76 HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THEIR VALIDITY .