1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 11 FEBRUARY 1982 THE ITALIAN REPUBLIC BROUGHT AN ACTION , PURSUANT TO THE FIRST PARAGRAPH OF ARTICLE 173 OF THE EEC TREATY , FOR A DECLARATION THAT COMMISSION DECISION 81/1044/EEC AF 16 NOVEMBER 1981 CONCERNING THE CLEARANCE OF THE ACCOUNTS PRESENTED BY THE ITALIAN REPUBLIC IN RESPECT OF THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND , GUARANTEE SECTION , EXPENDITURE FOR 1975 ( OFFICIAL JOURNAL , L 375 , P . 27 ) WAS VOID INASMUCH AS THE COMMISSION REFUSED TO CHARGE TO THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND ( HEREINAFTER REFERRED TO AS ' ' THE FUND ' ' ) A SUM OF LIT 8 395 731 522 IN RESPECT OF THE PAYMENT OF AIDS FOR SKIMMED-MILK POWDER USED FOR ANIMAL FEED , FOR THE STORAGE OF DRIED MEAT , FOR THE STORAGE OF WINE , FOR THE RE-STORAGE OF WINE AND FOR THE STORAGE OF CHEESE . ( A ) AIDS FOR SKIMMED-MILK POWDER
2 ARTICLE 1 OF REGULATION ( EEC ) NO 990/72 OF THE COMMISSION OF 15 MAY 1972 ON DETAILED RULES FOR GRANTING AID FOR SKIMMED MILK PROCESSED INTO COMPOUND FEEDINGSTUFFS AND FOR SKIMMED-MILK POWDER FOR USE AS FEED ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( II ), P . 428 ) PROVIDES THAT AID IS TO BE GRANTED FOR SKIMMED-MILK POWDER ONLY AFTER IT HAS BEEN USED IN THE MANUFACTURE OF COMPOUND FEEDINGSTUFFS FOR ANIMALS UNDER THE CONDITIONS LAID DOWN IN ARTICLE 4 . THE LATTER PROVISION LAYS DOWN THE REQUIREMENTS WHICH SUCH COMPOUND FEEDINGSTUFFS MUST FULFIL .
3 THE ITALIAN GOVERNMENT MAINTAINS THAT THE COMMISSION SHOULD HAVE CHARGED TO THE FUND A SUM REPRESENTING PROCESSING WASTE , THAT IS TO SAY THAT PROPORTION OF THE SKIMMED-MILK POWDER WHICH IS LOST FOR PURELY TECHNICAL REASONS IN THE COURSE OF THE MANUFACTURE OF THE COMPOUND FEEDINGSTUFFS . THE AIDS PAID BY THE ITALIAN INTERVENTION AGENCY TO THE MANUFACTURERS COVERED SUCH LOSSES UP TO A MAXIMUM OF 2% OF THE TOTAL AMOUNT OF THE AID .
4 ACCORDING TO THE COMMISSION ONLY THE MILK PRODUCT ACTUALLY USED FOR ANIMAL FEED IS ELIGIBLE FOR COMMUNITY AID . IF THE ITALIAN GOVERNMENT ' S VIEW WERE ADOPTED AID WOULD HAVE TO BE GRANTED FOR ANY QUANTITY OF THE MILK PRODUCT USED IN THE PROCESS OF MANUFACTURING ANIMAL FEED .
5 THE COMMISSION ' S POINT OF VIEW MUST BE REGARDED AS CORRECT . IT ACCORDS WITH THE ACTUAL WORDING OF THE PROVISIONS OF REGULATION NO 990/72 AND IS BASED ON THE RECITALS IN THE PREAMBLE THERETO WHICH , AFTER REFERRING TO THE NECESSITY OF MAKING CERTAIN CHANGES TO THE EXISTING REGULATIONS , STATE EXPRESSLY THAT THERE IS A NEED TO ENSURE ' ' THAT THE SKIMMED MILK AND SKIMMED-MILK POWDER FOR WHICH AID IS GRANTED ARE IN FACT USED AS FEED . ' '
6 THE ITALIAN GOVERNMENT ALSO CLAIMS THAT THE COMMISSION , EVEN IF ITS INTERPRETATION IS CORRECT , IS NOT ENTITLED TO REDUCE THE EXPENDITURE IN QUESTION BY 2% SINCE THE RATE OF 2% IS THE MAXIMUM LAID DOWN BY THE ITALIAN RULES . IN REALITY THE AVERAGE PERCENTAGE OF WASTE FOR WHICH THE AID HAD BEEN GRANTED SHOULD BE ASSESSED AT 1% .
7 AS EVIDENCE THE ITALIAN GOVERNMENT SUBMITTED TO THE COURT A TABLE WHICH , HOWEVER , RELATED TO ONLY 25% OF THE TOTAL QUANTITY OF MILK POWDER PROCESSED INTO ANIMAL FEED IN ITALY DURING THE YEARS 1974 AND 1975 . IN RELATION TO THAT QUANTITY THE AVERAGE LOSS AMOUNTED TO 1.745% IN 1974 AND 1.464% IN 1975 .
8 IN THOSE CIRCUMSTANCES IT HAS NOT BEEN ESTABLISHED THAT OF THE TOTAL QUANTITY WHICH HAD BEEN PROCESSED THE PERCENTAGE OF ACTUAL WASTE DIFFEREND TO ANY APPRECIABLE EXTENT FROM THE MAXIMUM RATE OF 2% WHICH WAS LAID DOWN BY THE ITALIAN RULES AND WHICH THE COMMISSION ADOPTED AS A BASIS AT THE TIME OF CLEARANCE .
9 CONSEQUENTLY THE OBJECTIONS MADE TO THE COMMISSION ' S DECISION MUST BE REJECTED IN SO FAR AS THEY RELATE TO AIDS FOR SKIMMED-MILK POWDER . ( B ) AIDS FOR THE STORAGE OF DRIED MEAT
10 ARTICLE 2 OF REGULATION ( EEC ) NO 2600/74 OF THE COMMISSION OF 11 OCTOBER 1974 AMENDING REGULATION ( EEC ) NO 289/71 AS REGARDS DETAILED RULES FOR GRANTING PRIVATE STORAGE AID FOR CERTAIN DRIED OR DRIED AND SMOKED PIGMEAT PRODUCTS ( OFFICIAL JOURNAL 1974 , L 277 , P . 34 ) PROVIDES THAT THE STORAGE OF DRIED HAMS OR DRIED AND SMOKED HAMS IS TO COMMENCE ON THE FIRST DAY OF THE SIXTH MONTH FOLLOWING THE COMMENCEMENT OF DRYING OR DRYING AND SMOKING .
11 THE DISPUTE BETWEEN THE PARTIES IS IN RELATION TO THE PHRASE ' ' COMMENCEMENT OF DRYING OR DRYING AND SMOKING ' ' . THE ITALIAN GOVERNMENT TAKES THE VIEW THAT THOSE OPERATIONS COMMENCE ON THE DATE ON WHICH THE FIRST CONSIGNMENT OF FRESH PRODUCTS UNDER EACH STORAGE CONTRACT IS WEIGHED . THE COMMISSION CONSIDERS THAT THE OPERATION HAS BEGUN ONLY WHEN ALL THE PRODUCTS MAKING UP THE CONSIGNMENT TO BE STORED HAVE BEEN COVERED BY IT .
12 IN THAT CONNECTION THE COMMISSION RECALLS THAT DRIED OR DRIED AND SMOKED HAM IS DESCRIBED IN ARTICLE 1 OF REGULATION NO 2600/74 AS HAM WHICH HAS UNDERGONE A MATURING PERIOD OF AT LEAST FIVE MONTHS . CONSEQUENTLY ONLY A PRODUCT WHICH HAS ALREADY BEEN MATURED FOR SUCH A PERIOD IS ELIGIBLE FOR COMMUNITY AID IN RESPECT OF THE STORAGE OF DRIED OR DRIED AND SMOKED HAMS .
13 THE VIEW ADVANCED BY THE COMMISSION MUST BE ACCEPTED . THE INTERPRETATION GIVEN BY THE ITALIAN GOVERNMENT WOULD LEAD TO THE PRODUCTS IN QUESTION BEING SUBSIDIZED , AT LEAST IN PART , EVEN DURING THE MATURING PERIOD , WHEREAS THE SYSTEM OF AIDS IS INTENDED TO ENABLE THE WITHDRAWAL FROM THE MARKET OF PRODUCTS WHICH FULFIL ALL THE CONDITIONS FOR THEM TO BE PUT ON THE MARKET .
14 THIS PART OF THE APPLICATION IS THEREFORE UNFOUNDED . ( C ) AIDS FOR THE STORAGE OF WINE
15 THE ITALIAN GOVERNMENT ADMITS THAT THE COMMISSION ' S REFUSAL TO CHARGE TO THE FUND THE AMOUNT IN DISPUTE IN RELATION TO THE AID FOR THE STORAGE OF WINE FOR THE YEAR 1975 IS BASED ON THE SAME REASONS AS THE SIMILAR REFUSAL IN RELATION TO 1973 AND THAT THE ITALIAN REPUBLIC ' S ACTION IN RESPECT OF THAT REFUSAL WAS DISMISSED BY THE COURT IN ITS JUDGMENT OF 27 JANUARY 1981 IN CASE 1251/79 ( ITALIAN REPUBLIC V COMMISSION OF THE EUROPEAN COMMUNITIES ( 1981 ) ECR 205 ). NEVERTHELESS IT REQUESTS THE COURT TO RE-EXAMINE THE PROBLEM IN QUESTION .
16 AS THE ITALIAN GOVERNMENT RIGHTLY RECALLS , THE JUDGMENT OF 27 JANUARY 1981 DECIDED THAT THE ITALIAN INTERVENTION AGENCY HAD NOT PAID AIDS FOR THE STORAGE OF WINE IN THE YEAR 1973 , IN ACCORDANCE WITH THE RELEVANT COMMUNITY RULES , BECAUSE THE STORAGE CONTRACTS HAD NOT BEEN CONCLUDED BEFORE A SPECIFIC DATE . THE COURT HELD THAT ACCORDING TO THE RELEVANT PROVISIONS OF COMMUNITY LAW A STORAGE CONTRACT IS NOT CONCLUDED UNTIL THE WRITTEN INSTRUMENT HAS BEEN PREPARED AND IT HAS BEEN ESTABLISHED THAT THE CONDITIONS GOVERNING THE COMMUNITY AID HAVE BEEN FULFILLED .
17 THE ITALIAN GOVERNMENT DISPUTES THE LATTER INTERPRETATION WITHOUT HOWEVER SUBMITTING ANY ARGUMENTS OTHER THAN THOSE ALREADY EXAMINED IN THE AFOREMENTIONED JUDGMENT .
18 IT THEREFORE FOLLOWS THAT THIS PART OF THE APPLICATION MUST ALSO BE DISMISSED . ( D ) AIDS FOR THE RE-STORAGE OF WINE
19 THE PARTIES ARE IN AGREEMENT THAT THIS PART OF THE APPLICATION RAISES THE SAME QUESTION AS THAT RAISED IN RELATION TO THE STORAGE OF WINE SINCE THE AID FOR RE-STORAGE IS SUBJECT TO THE REQUIREMENT THAT A STORAGE CONTRACT HAS BEEN ' ' CONCLUDED ' ' AT THE TIME OF RE-STORAGE .
20 IT THEREFORE FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THIS PART OF THE APPLICATION MUST ALSO BE DISMISSED . ( E ) AIDS FOR THE STORAGE OF CHEESE
21 ARTICLE 10 ( 2 ) OF REGULATION ( EEC ) NO 971/68 OF THE COUNCIL OF 15 JULY 1968 LAYING DOWN GENERAL RULES FOR THE INTERVENTION ON THE MARKET IN GRANA PADANO AND PARMIGIANO-REGGIANO CHEESES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 251 ) PROVIDES THAT PRIVATE STORAGE AID IN RESPECT OF THOSE CHEESES IS TO BE CONDITIONAL ON THE CONCLUSION OF A STORAGE CONTRACT BETWEEN THE INTERVENTION AGENCY AND ANY PERSON CAPABLE OF FULFILLING THE REQUIREMENTS OF SUCH A CONTRACT .
22 THE ITALIAN GOVERNMENT MAINTAINS THAT , ACCORDING TO THE PRACTICE OF THE ITALIAN INTERVENTION AGENCY , THE DRAWING UP BY A STATE OFFICIAL OF THE RECORD OF ENTRY INTO STORAGE IN WHICH THE DATE OF COMMENCEMENT OF THE STORAGE IS STATED , MUST BE DEEMED TO CONSTITUTE THE CONCLUSION OF A CONTRACT .
23 IN THE COMMISSION ' S VIEW A STORAGE CONTRACT IS NOT CONCLUDED FOR THE PURPOSES OF ARTICLE 10 OF REGULATION NO 971/68 , UNTIL THE MOMENT WHEN THE WRITTEN INSTRUMENT CONTAINING THE TERMS OF THE CONTRACT IS SIGNED BY THE STORER AND THE REPRESENTATIVE OF THE INTERVENTION AGENCY . IN THAT CONNECTION IT RECALLS THAT ACCORDING TO ARTICLE 11 OF REGULATION NO 971/68 THE STORAGE CONTRACT MUST AT LEAST INCLUDE PROVISIONS ON THE QUANTITY OF CHEESE STORED , THE AMOUNT OF AID , THE RELEVANT DATES RELATING TO THE EXECUTION OF THE CONTRACT , CONDITIONS TO BE LAID DOWN AS TO THE MINIMUM QUANTITY OF CHEESE PER LOT AND THE INSPECTION MEASURES .
24 IN ESSENCE THE ITALIAN GOVERNMENT RELIES ON THE ARGUMENT TO THE EFFECT THAT THE CONCLUSION OF A STORAGE CONTRACT IS GOVERNED BY NATIONAL LAW . UNLIKE THE COMMUNITY PROVISIONS RELATING TO THE STORAGE OF WINE , WHICH WERE THE SUBJECT OF THE JUDGMENT OF 27 JANUARY 1981 , THOSE RELATING TO THE STORAGE OF CHEESE DO NOT LAY DOWN ANY PARTICULAR REQUIREMENT AS TO THE FORM OF THE CONTRACT . UNDER ITALIAN LAW THE GENERAL RULES OF THE CIVIL CODE PROVIDE THAT A CONTRACT IS CONCLUDED AT THE MOMENT WHEN THE INTENTIONS OF THE TWO PARTIES CONCUR . BY SENDING AN APPLICATION FOR THE CONCLUSION OF A STORAGE CONTRACT TO THE ITALIAN INTERVENTION AGENCY THE STORER MAKES AN OFFER TO THAT AGENCY WHICH IT ACCEPTS WHEN THE REPORT RECORDING THE QUANTITIES OF STORED CHEESE IS DRAWN UP . THE WRITTEN INSTRUMENT , IN THE FORM OF THE GENERAL TERMS , WHICH THE STORER IS LATER INVITED TO SIGN , MERELY SUMMARIZES FOR ACCOUNTING PURPOSES THE OPERATIONS WHICH HAVE ALREADY BEEN COMPLETED .
25 THE COMMISSION , LIKE THE ITALIAN GOVERNMENT , STARTS FROM THE PREMISE THAT IN THE PRESENT CASE THE QUESTION OF THE CONCLUSION OF THE STORAGE CONTRACT IS GOVERNED BY ITALIAN LAW . NEVERTHELESS THE PROVISIONS OF NATIONAL LAW APPLICABLE TO THE ACTIVITIES OF THE ITALIAN INTERVENTION AGENCY PROVIDE THAT THE CONTRACT BETWEEN THE AGENCY AND A STORER IS CONCLUDED AT THE MOMENT WHEN THE LATTER APPENDS HIS SIGNATURE TO THE INSTRUMENT OF ACCEPTANCE BY WHICH HE UNDERTAKES TO COMPLY WITH THE CONDITIONS SET OUT IN THE GENERAL TERMS .
26 IT IS NECESSARY TO POINT OUT THAT ALTHOUGH THE PROVISIONS OF COMMUNITY LAW DO NOT EXPRESSLY LAY DOWN THE FORM OF THE CONTRACT FOR THE STORAGE OF CHEESE , THEY ARE BASED ON THE ASSUMPTION THAT EVERY STORAGE OPERATION MUST BE PRECEDED BY THE CONCLUSION OF A WRITTEN CONTRACT IN ORDER TO BE ELIGIBLE FOR THE COMMUNITY AID PROVIDED FOR IN ARTICLE 10 ( 2 ) OF REGULATION NO 971/68 .
27 THAT REQUIREMENT ARISES IN THE FIRST PLACE FROM THE RECITALS IN THE PREAMBLE TO REGULATION NO 971/68 WHICH , AFTER RECALLING THAT PRIVATE STORAGE MUST CONTRIBUTE TO THE ATTAINMENT OF A BALANCED MARKET , STATE THAT COMMUNITY RULES SHOULD BE PROVIDED TO ENSURE THE ORDERLY FUNCTIONING OF SUCH STORAGE AND THAT , TO THAT END , IT IS NECESSARY IN PARTICULAR THAT ' ' THE STORAGE CONTRACT SHOULD BE DRAWN UP IN ACCORDANCE WITH COMMUNITY PROVISIONS . ' '
28 IT FURTHER FOLLOWS FROM THE RELEVANT COMMUNITY PROVISIONS AND IN PARTICULAR FROM ARTICLE 11 OF REGULATION NO 971/68 , WHICH LISTS CERTAIN PROVISIONS WHICH MUST BE INCLUDED IN THE CONTRACT , THAT THE STORAGE CONTRACT MAY ONLY BE IN THE FORM OF A WRITTEN INSTRUMENT . THE SAME CONCLUSION IS TO BE DERIVED FROM ARTICLE 17 ( 2 ) OF REGULATION ( EEC ) NO 1107/68 OF THE COMMISSION OF 27 JULY 1968 ON DETAILED RULES OF APPLICATION FOR INTERVENTION ON THE MARKET IN GRANA PADANO AND PARMIGIANO-REGGIANO CHEESES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( II ), P . 382 ) ACCORDING TO WHICH THE STORER IS TO CEASE TO QUALIFY FOR AID IF THE QUANTITIES OF CHEESE SPECIFIED IN THE CONTRACT ARE WITHDRAWN FROM STORAGE BEFORE THE DATE OF EXPIRY OF THE CONTRACT .
29 FINALLY , THE SAME INTERPRETATION IS DICTATED BY THE OBJECTIVES OF THE SYSTEM OF INTERVENTION IN QUESTION . THAT SYSTEM , WHICH IS PART OF THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS , IS INTENDED TO CONTRIBUTE TO THE STABILIZATION OF THOSE MARKETS BY MEANS OF , INTER ALIA , THE GRANT OF COMMUNITY AID FOR THE PRIVATE STORAGE OF CERTAIN CHEESES . SUCH STABILIZATION CAN BE ACHIEVED ONLY IF THE COMMUNITY PROVISIONS ENSURE THAT THE QUANTITIES OF CHEESE WHICH ARE THE SUBJECT OF STORAGE CONTRACTS ARE ACTUALLY WITHDRAWN FROM THE MARKET .
30 IT FOLLOWS THAT A CONTRACT OF STORAGE IS NOT CONCLUDED , FOR THE PURPOSES OF REGULATION NO 971/68 , UNTIL THE MOMENT WHEN THE WRITTEN INSTRUMENT IS SIGNED . MOREOVER , IT IS IN ORDER TO COMPLY WITH THAT REQUIREMENT LAID DOWN BY COMMUNITY LAW THAT THE PROVISIONS OF ITALIAN LAW GOVERNING THE ACTIVITIES OF THE ITALIAN INTERVENTION AGENCY LAY DOWN THE DETAILED RULES IN ACCORDANCE WITH WHICH THE STORAGE CONTRACTS ARE TO BE SIGNED .
31 CONSEQUENTLY , THE COMPLAINT MADE BY THE ITALIAN GOVERNMENT AGAINST THE REFUSAL TO CHARGE TO THE FUND CERTAIN EXPENDITURE CONCERNING AID FOR THE STORAGE OF CHEESE CANNOT BE UPHELD .
32 IN THE LIGHT OF ALL THE FOREGOING CONSIDERATIONS THE APPLICATION MUST BE DISMISSED .