1 By application lodged at the Court Registry on 29 November 1988, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by adopting Law No 1571/85 and the measures for its implementation, which partially maintain in effect exclusive importation and marketing rights for petroleum products in Greece, certain measures concerning importation, exportation and marketing procedures and a system of maximum consumer prices which restrict the importation and exportation of such products from or to other Member States, the Hellenic Republic has failed to fulfil its obligations under Articles 30, 34 and 37(1 ) of the EEC Treaty .
2 Article 7(2 ) of Law No 1571/85 of 21 October 1985 on the organization of petroleum policy and the marketing of petroleum products ( Greek Official Gazette No 192 of 14.11.1985, Series I ) provides that imports of crude oil and petroleum products are to be made exclusively by the State in accordance, in particular, with Article 1 of the law and subject, in particular, to Article 4 .
3 According to Article 1(2 ) of that law "the State shall be exclusively entitled to refine and consequently to import crude oil ".
4 Article 4 of the law concerns the adjustment of the State monopoly over the marketing of petroleum products . Until 31 December 1985 companies engaged in the distribution of petroleum products were required to obtain their supplies exclusively from the State . By virtue of Article 4(1 ) and ( 2 ), such companies have been entitled since 1 January 1986 to obtain supplies from the supplier of their choice up to a given percentage of the requirements of the Greek market . Since that date, that percentage has gradually been raised, attaining 100% as from 1 January 1990 . Article 4(3 ) of Law No 1571/85 provides, however, that the percentage to be supplied by the State marketing monopoly may be changed "in order to obviate possible repercussions of any national or international crises on public security and national defence ".
5 By virtue of Article 9 of Law No 1571/85 and Ministerial Decree No 3662 of 17 February 1987 ( Greek Official Gazette No 121 of 16.3.1987, Series II ), each distribution company is required to submit annually to the Greek authorities a programme, known as a "procurement programme", setting forth its projected sales of petroleum products for the following year by geographical area, and the supplies corresponding thereto . Article 9(4 ) of the law provides that distribution companies must produce, in support of their programme, copies of contracts establishing that they will obtain from Greek public-sector refineries supplies equal to the percentage of the requirements of the domestic market which corresponds to the unadjusted part of the State marketing monopoly, and from the public-sector refineries or refineries established in other Member States supplies equal to 70% of the percentage corresponding to the adjusted part of that monopoly . The procurement programmes may be reviewed in the course of the year . Both the programmes and any amendments made thereto are subject to the approval of the Greek authorities, which, if they consider a programme to be unjustified, may require it to be amended or guarantees to be provided in order to ensure that it will be adhered to .
6 Furthermore, the quantity of petroleum products which each distribution company is entitled to obtain from the supplier of its choice is determined in accordance with the provisions of Ministerial Decree No 3663 of 17 February 1987 ( Greek Official Gazette No 121 of 16.3.1987, Series II ). That quantity ( known as "the marketing quota ") depends on several factors, including the percentage of Greek market requirements corresponding to the adjusted part of the State marketing monopoly and the quantity of petroleum products sold by the company in question during the previous year . According to Article 4 of the decree, any company may transfer the whole or part of its quota to another company, but this results in a reduced quota being assigned to the transferor in the following year if the other factors used to calculate the quota remain constant .
7 Under Article 3 of Ministerial Decree No 3663, the distribution companies are required to submit to the Greek authorities, prior to any importation of petroleum products and in respect of each shipment, a declaration specifying inter alia the country of origin and the import price .
8 Similarly, by virtue of Ministerial Decree No 5414 of 12 March 1987 ( Greek Official Gazette No 115 of 16.3.1987, Series II ), adopted pursuant to Article 12 of Law No 1571/85, distribution companies are required to submit a declaration to the Greek authorities, prior to any exportation of petroleum products . That declaration must include an attestation to the effect that the exportation does not affect the obligation of the company in question to cover the needs of the Greek market in accordance with its procurement programme .
9 Article 15(1 ) of Law No 1571/85 provides that the right to trade in petroleum products is conditional on the grant of prior authorization by the Greek authorities . Such authorization is issued only on certain conditions, including a requirement for the undertaking concerned to own tankers, the minimum and maximum numbers of tankers which may be owned being laid down by ministerial decree .
10 Article 11 of the aforesaid law provides for the fixing of maximum consumer prices for petroleum products refined in Greece or imported from abroad . Those prices are established by reference to a basic price fixed by taking various factors into account . Under that article, the factors taken into account in fixing the basic price are to be determined by the authorities, but must relate to national or international economic data which take account inter alia of market trends such as the price fob Italy of finished petroleum products and the ratio between the cost of the finished products refined in Greece and the average production cost of the same products refined in the other Member States . The basic price, which is initially calculated in United States dollars and subsequently converted into drachmas, is fixed as a rule for a period of three months . Various items are added to the basic price so calculated, including storage costs, in order to obtain the marketing price . The maximum consumer price is obtained by adding the State taxes to the marketing price .
11 Reference is made to the Report for the Hearing for a fuller account of the national legislation, the course of the procedure and the submissions and arguments of the parties, which are mentioned and discussed hereinafter only in so far as is necessary for the reasoning of the Court .
12 In its application the Commission argued that the possibility which under Article 4(3 ) of Law No 1571/85 the Greek Government has retained of readjusting the State monopoly over the marketing of petroleum products was contrary to Articles 30 and 37 of the Treaty . However, in its reply the Commission stated that it was not seeking a declaration against Greece on that point . That provision of Law No 1571/85 must therefore be regarded as falling outside the scope of the proceedings . Admissibility ( a ) Prior authorization to trade in petroleum products
13 In its application the Commission maintains that Article 15(1 ) of Law No 1571/85 is contrary to Article 30 inasmuch as it makes the right to trade in petroleum products in Greece conditional on the grant of prior authorization by the Greek authorities .
14 Greece contends that this complaint is not referred to either in the letter of formal notice or in the reasoned opinion, and must therefore be declared inadmissible .
15 The Commission points out that Article 15 of Law No 1571/85 is mentioned in the reasoned opinion and that the letter of formal notice refers to the conditions which must be fulfilled by undertakings wishing to trade in petroleum products .
16 In that regard it must be borne in mind first of all that, as the Court has consistently held ( see, in particular, the judgment in Case C-217/88 Commission v Germany [1990] ECR I-2879, paragraph 10 ) an application brought under Article 169 of the EEC Treaty can be based only on the arguments and submissions already set forth in the reasoned opinion .
17 It is necessary further to observe that although in its reasoned opinion the Commission criticized one of the conditions for the grant of authorization to trade in petroleum products, it did not maintain that the requirement for such authorization was in itself contrary to the provisions of the Treaty .
18 Accordingly, the complaint relating to the obligation for undertakings wishing to trade in petroleum products in Greece to obtain prior authorization from the Greek authorities must be declared inadmissible . ( b ) Complaints concerning the system of maximum consumer prices
19 The Commission argues that the system of maximum consumer prices for petroleum products is contrary to Article 30 of the Treaty, inter alia because taking the "market trend" factor into account renders the determination of prices uncertain, the method of calculating the "storage cost" encourages distribution companies to obtain their supplies from Greek refineries, and it is the task of the Greek authorities to determine the factors involved in order to fix the basic price .
20 Greece points out that those three complaints are not set out in the reasoned opinion and must therefore be considered inadmissible .
21 The Commission maintains that, in its reasoned opinion, it challenged the system of fixing maximum consumer prices for imported petroleum products generally and that those complaints therefore constitute merely the development of an argument put forward during the pre-litigation procedure .
22 With regard to the complaint based on the fact that the Greek authorities are empowered to determine the factors taken into account in order to fix the basic price, it is clear from the Commission' s reply that this complaint relates to the content of the rules adopted by the Greek authorities and, more particularly, to the "market trend" and "storage cost" factors . Accordingly, it is not a separate complaint from the complaints relating to those two factors and there is no need to rule on it separately .
23 It must be observed that the reasoned opinion does not make any reference to the "market trend" and "storage cost" factors . Although the legislation in force during the pre-litigation procedure provided that the "market trend" and "storage cost" factors were to be taken into account in the context of the price-fixing machinery, the Commission formulated the complaints relating to those factors for the first time in the reply .
24 Furthermore, the Commission' s argument to the effect that the complaints relating to the "market trend" and "storage cost" factors merely develop an argument put forward during the pre-litigation procedure cannot be accepted . As the Court has held on several occasions ( see, in particular, the judgment in Case 274/83 Commission v Italy [1985] ECR 1077, paragraph 21 ), the reasoned opinion must contain a coherent and detailed statement of the reasons which led the Commission to conclude that the State in question has failed to fulfil one of its obligations under the Treaty . Accordingly, even if the Commission intended to contest the system of maximum consumer prices in general, it was under an obligation to state, in its reasoned opinion, the actual reasons why it considered that system to be contrary to the provisions of the Treaty .
25 It follows that the complaints concerning the "market trend" and "storage cost" factors must be declared inadmissible . ( c ) The complaints not set out in the application
26 In its application the Commission stated that it was seeking a declaration against Greece inter alia "for all the reasons set out in the letter of formal notice and in the reasoned opinion ".
27 Greece maintains that the complaints of which at least the gist is not set out in the application are inadmissible .
28 The objection of inadmissibility raised by Greece must be upheld . According to Article 19 of the Protocol on the Statute of the Court of Justice of the European Communities and Article 38(1)(c ) of the Rules of Procedure, the application must state, inter alia, the grounds on which the application is based . Accordingly, in any application made under Article 169 of the Treaty, the Commission must indicate the specific complaints on which the Court is called upon to rule and, at the very least in summary form, the legal and factual particulars on which those complaints are based .
29 It must also be pointed out that any action brought under Article 169 is preceded by a pre-litigation procedure which may lead the Commission to abandon, as in this case, certain complaints set out in the letter of formal notice or in the reasoned opinion . Consequently, it is indispensable that the complaints upon which the Court is called to rule should be indicated in the application for the purpose of the precise delimitation of the subject-matter of the action .
30 It follows that the complaints set out in the letter of formal notice and in the reasoned opinion but not in the application must be declared inadmissible . Substance ( a ) The right of the State with regard to the importation of crude oil
31 The Commission points out that Article 7(2 ) of Law No 1571/85 confers on the State the exclusive right to import crude oil . It claims that this provision is contrary to Articles 30 and 37(1 ), because it precludes any possibility of importation by traders other than the State .
32 According to Article 37(1 ), Member States are progressively to adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States .
33 Furthermore, Article 30 provides that quantitative restrictions on imports and all measures having equivalent effect are prohibited between Member States . As the Court has consistently held ( see, primarily, the judgment in Case 8/74 Procurer du Roi v Dassonville [1974] ECR 837, paragraph 5 ), that provision applies to all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade .
34 According to Article 7(2 ) of Law No 1571/85, crude oil is to be imported exclusively by the State in accordance with Article 1 of that law . Article 1(2 ) provides that "the State shall be exclusively entitled to refine and consequently to import crude oil ". It appears from those provisions that the State has the exclusive right to import crude oil intended for refining .
35 It must be emphasized, however, that, quite apart from any provision conferring an exclusive right of importation on the State, the fact that the State has a refining monopoly enables it to control both the volume of imports of crude oil intended for refining and the conditions under which those imports are carried out . In other words, the fact that those imports are effected exclusively by the State, or under its control, is inherent in the existence of the State refining monopoly . Consequently, the legislative provisions conferring on the State the exclusive right to import crude oil intended for refining merely confirms the existence of a prerogative which is indissociable from the State refining monopoly .
36 In those circumstances, the legality, from the point of view of Community law, of the Greek State' s exclusive right with regard to the importation of crude oil cannot be called in question unless the legality under Community law of the State refining monopoly is itself contested . However, the Commission has expressly stated that it is not challenging the State refining monopoly .
37 It follows that the complaints relating to the right of the State with regard to the importation of crude oil must be dismissed . ( b ) The State' s rights with regard to the importation and marketing of petroleum products
38 The Commission further claims that Article 7(2 ) and Article 4(1 ) of Law No 1571/85 are contrary to Articles 30 and 37(1 ) inasmuch as they confer on the State the exclusive right to import and market finished petroleum products and deprive distribution companies of the possibility of procuring from undertakings established in other Member States the quantity of supplies corresponding to the unadjusted part of the State marketing monopoly .
39 In its defence Greece contends first that Article 7(2 ) and Article 4(1 ) of Law No 1571/85 do not confer a monopoly on the State within the meaning of Article 37(1 ), because, at the date when the defence was lodged, the State' s rights with regard to the importation and marketing of finished petroleum products were limited to 25% of the requirements of the domestic market .
40 In that regard it must be pointed out that the action brought under Article 169 is for a declaration that Greece has failed to fulfil its obligations under the Treaty and that it has failed to put an end to that infringement within the time set by the Commission in its reasoned opinion . It follows that, for the purposes of these proceedings, the scope of the State' s rights with regard to the importation and marketing of petroleum products must be determined by reference to the situation existing when the time which Greece was given in order to comply with the reasoned opinion ran out .
41 At that time the Greek State had, by virtue of Article 7(2 ) and Article 4(1 ) and ( 2 ) of Law No 1571/85 and the measures implementing those provisions, the exclusive right to import and market a quantity of petroleum products corresponding to 65% of the requirements of the domestic market . Accordingly, when the time within which it was to comply with the reasoned opinion ran out, Greece had the power to exert an appreciable influence on imports of petroleum products from other Member States by virtue both of its right with regard to the importation of petroleum products and its right with regard to the marketing of such products . It follows that, for the purposes of these proceedings, the rights of the Greek State with regard to the importation and marketing of petroleum products must be regarded as constituting a State monopoly of a commercial character within the meaning of Article 37 .
42 Furthermore, as the Court has held(in particular, in the judgment in Case 78/82 Commission v Italy [1983] ECR 1955, paragraph 11 ), it is clear not only from the wording of Article 37 but also from its position in the general scheme of the Treaty that the article is designed to ensure compliance with the fundamental rule of the free movement of goods throughout the common market, in particular by the abolition of quantitative restrictions and measures having equivalent effect in trade between Member States, and thereby to maintain normal conditions of competition between the Member States should a given product, in one or other of those States, be subject to a national monopoly of a commercial character .
43 In that regard it must be observed that, according to Article 9(4 ) of Law No 1571/85, distribution companies are required to obtain their supplies from Greek public-sector refineries to the extent of a percentage of the requirements of the domestic market corresponding to the unadjusted part of the marketing monopoly . It is plain from that provision that, by maintaining in force the State' s rights with regard to the importation and marketing of petroleum products, Greece is seeking, as it has itself acknowledged, to secure an outlet for the products of its public-sector refineries .
44 It follows that to maintain in force the State' s rights with regard to the importation and marketing of petroleum products gives rise to discrimination within the meaning of Article 37(1 ) against exporters established in other Member States .
45 Secondly, Greece contends that it is not contrary to Article 30 to maintain such rights in force, because the products marketed by the State may be imported products or products processed from imported raw materials or semi-finished products .
46 That argument cannot be accepted . As stated above ( in paragraph 43 ), the maintenance in force of the rights in question is designed to guarantee an outlet for the products of the Greek public-sector refineries . Such a measure therefore constitutes a barrier to imports of petroleum products from other Member States, whether or not the raw material used by the Greek public-sector refineries is itself imported .
47 Thirdly, Greece contends that it is justified to maintain those rights in force on grounds of public security . Greece' s special geopolitical situation makes it essential to adopt measures designed to ensure that the country has a regular supply of crude oil and petroleum products . That aim can be achieved only by maintaining public-sector refineries in operation . Accordingly, it is necessary to require distribution companies to obtain a proportion of their supplies from those refineries until such time as it is possible for them to market their products at competitive prices .
48 Admittedly, in its judgment in Case 72/83 Campus Oil Ltd v Minister for Industry and Energy [1984] ECR 2727, paragraph 51, the Court stated that a Member State which is totally or almost totally dependant on imports for its supplies of petroleum products may rely on grounds of public security within the meaning of Article 36 of the Treaty for the purpose of requiring importers to cover a certain proportion of their needs by purchases from a refinery situated in its territory at prices fixed by the competent ministry on the basis of the costs incurred in the operation of that refinery, if the production of the refinery cannot be freely disposed of at competitive prices on the market concerned .
49 However, it must be pointed out that Greece has not shown that if the State' s rights with regard to the importation and marketing of petroleum products were not maintained in force, the public-sector refineries would be unable to dispose of their products on the market at competitive prices and thereby ensure their continued operation . Consequently, the argument relied upon in that regard by Greece must be dismissed .
50 It must therefore be held that, by maintaining in force the rights of the State with regard to the importation and marketing of petroleum products, the Hellenic Republic has failed to fulfil its obligations under Articles 30 and 37(1 ). ( c ) The system of marketing quotas and annual procurement programmes
51 The Commission argues that the obligation imposed on distribution companies by Article 9 of Law No 1571/85 to submit annual procurement programmes for petroleum products and the system of marketing quotas applicable to those companies, as laid down by Decree No 3663, are contrary to Article 30 because they restrict the marketing of imported products and deprive distribution companies of the possibility of exploiting the market share which they would be able to acquire if there were freedom of competition .
52 Greece raises the objection, in the first place, that the obligation to submit annual procurement programmes and the system of marketing quotas have no effect either on imports or on freedom of competition, because the procurement programmes constitute an objective inventory of each company' s needs and neither the programmes nor the marketing quotas are rigid .
53 It must be observed that the fact that the programmes and any amendments made thereto are subject to the approval of the Greek authorities means that distribution companies are not free to determine the volume of their business and the conditions under which it is carried on or to adapt to fluctuations on the market . That system of approval therefore constitutes a measure capable of hindering intra-Community trade within the meaning of Article 30 .
54 As regards the marketing quotas, it should be observed that the system established by Ministerial Decree No 3663 may remain in force even after the abolition of the State' s rights with regard to the marketing of petroleum products . Furthermore, that system consists of fixing, in the light of a number of factors, the quantity of petroleum products which distribution companies may purchase from the supplier of their choice during the coming year . As a result, it deprives distribution companies of the possibility of freely determining the quantity of products which they purchase from Community exporters . Greece' s argument based on the fact that the marketing quotas are transferable is immaterial in that respect, if only because whether a company can import a quantity of petroleum products in excess of its quota depends on whether another company is willing to assign part of its own quota . It follows that, regardless of the percentage by which the State marketing monopoly is adjusted, the system of marketing quotas constitutes a measure capable of hindering intra-Community trade within the meaning of Article 30 .
55 Greece contends, in the second place, that the obligation to submit annual procurement programmes and the system of marketing quotas are essential in order for the State to exercise its right with regard to the marketing of petroleum products .
56 As far as that argument is concerned, it is sufficient to point out that the maintenance in force of the Greek State' s rights in respect of the marketing of petroleum products constitutes a measure prohibited by Articles 30 and 37(1 ). Consequently, the argument relied upon by Greece cannot have the effect of taking the measures in question outside the scope of the prohibition laid down by Article 30 .
57 Greece argues, in the third place, that the submission of procurement programmes is essential in order to enable the Greek authorities to determine future petroleum policy and thereby ensure at all times that the country' s requirements for petroleum products are covered .
58 In that regard it must first be borne in mind that, as the Court stated in its judgment Campus Oil Ltd, cited above ( paragraph 35 ), the aim of ensuring a minimum supply of petroleum products at all times is capable of constituting an objective covered by the concept of public security within the meaning of Article 36 of the EEC Treaty . However, measures adopted on the basis of Article 36 cannot be justified unless they are necessary for the attainment of the objective pursued by that article and that objective is not capable of being achieved by measures which are less restrictive of intra-Community trade ( see the judgment in Case C-196/89 Nespoli and Crippa [1990] ECR I-3647, paragraph 15 ).
59 It is true that the submission of procurement programmes contributes towards ensuring that the country is supplied with petroleum products at all times . The information contained in those programmes - relating to sales forecasts of distribution companies by geographical area and to their sources of supply - permits the Greek authorities to establish the extent to which the country' s minimum requirements for petroleum products could be covered by the operations of distribution companies in the event of a crisis and to determine the policy to be pursued with regard to the purchasing and refining of crude oil in order to guarantee a minimum supply of petroleum products at all times .
60 However, Greece has not put forward any argument purporting to show that the power conferred on the authorities to approve procurement programmes and the amendments made thereto - and consequently to interfere with the conditions under which the distribution companies operate - which is the source of the barrier to intra-Community trade, is essential in order to ensure a minimum supply of petroleum products for the country at all times . In that regard it should be observed that there are in Greece two public - sector refineries whose production capacity exceeds the country' s minimum requirements in a period of crisis . As a result, the country' s supply of petroleum products can be ensured by requiring distribution companies to notify to the Greek authorities in due time their procurement programmes and any significant amendments made thereto in the course of their implementation .
61 In those circumstances the barrier to intra-Community trade resulting from the power conferred on the Greek authorities to approve the procurement programmes and any amendments made thereto cannot be regarded as justified in the light of Article 36 .
62 It must therefore be held that, by adopting Ministerial Decree No 3662, which provides that the annual procurement programmes of distribution companies for petroleum products and any amendments made thereto are to be subject to the approval of the Greek authorities, and by adopting Ministerial Decree No 3663 which establishes a system of marketing quotas, the Hellenic Republic has failed to fulfil its obligations under Article 30 . ( d ) Import and export procedures
63 The Commission claims that Article 3 of Ministerial Decree No 3663 is contrary to Article 30 inasmuch as it introduces a system of prior authorization for imports of petroleum products . It also maintains that Article 12 of Law No 1571/85 and Ministerial Decree No 5414 are contrary to Articles 34 and 37(1 ) inasmuch as they introduce a system of authorization for exports of petroleum products . Furthermore, it argues that even if the aforesaid national provisions imposed only an obligation as to notification, they would be contrary to Articles 30, 34 and 37 in so far as their purpose was to ensure compliance with the marketing quotas .
64 Greece contends that the national provisions in question impose on importers and exporters a mere obligation to notify import and export operations, which has no effect on the exercise of the corresponding right to import or export . It considers that such information is necessary for the purpose of supervising the implementation of the annual procurement programmes . In its view, those provisions are therefore not contrary to Articles 30, 34 and 37 .
65 It should be observed, in the first place, that the Commission has failed to produce any evidence establishing that the national provisions in question impose more than a mere obligation to notify import and export operations .
66 The Commission argues, however, that even so the provisions in question are contrary to Articles 30, 34 and 37, since they are intended for the purpose of supervising the quota system and, consequently, of ensuring its continued existence .
67 Consideration of the documents before the Court has disclosed no factors of such a kind as to suggest that there is any link at all between the systems of compulsory notification provided for by the aforementioned ministerial decrees and the maintenance of the quota system .
68 Accordingly, the complaint concerning Article 3 of Ministerial Decree No 3663 and also Ministerial Decree No 5414, which lay down the procedures for notifying import and export operations, must be dismissed . ( e ) The requirement relating to transport capacity
69 The Commission claims that the obligation imposed on distribution companies by Article 15(3)(d ) of Law No 1571/85 to have at their disposal a number of tankers in order to qualify for authorization to trade in petroleum products may restrict imports of petroleum products and is therefore contrary to Article 30 .
70 It must be observed that the Commission has not put forward any legal or factual grounds to show that the obligation in question, which constitutes a trading rule applicable to domestic and imported products alike, may hinder intra-Community trade .
71 That complaint must therefore be declared to be unfounded . ( f ) The system of maximum consumer prices
72 As has already been stated ( paragraphs 19 to 25 above ), certain complaints made against the system of maximum consumer prices must be declared inadmissible . In addition to those complaints the Commission argues that the system of maximum consumer prices does not take sufficient account of the costs associated with imported products, such as transport costs, and attaches disproportionate weight to national criteria . In its view, therefore, the system is contrary to Article 30 .
73 In that regard it must be observed that the Greek rules relating to the system of maximum consumer prices for petroleum products provide for account to be taken, in the context of the machinery for fixing prices, of numerous factors relating both to imported and to domestic products .
74 Furthermore, as Greece has pointed out, the Commission' s complaints are couched in vague and general terms . Furthermore, the Commission has not put forward any arguments in support of those complaints .
75 Those complaints must therefore be dismissed .