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 81/1043 OF 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 1974 ( OFFICIAL JOURNAL , L 375 , P . 25 ) WAS VOID INASMUCH AS THE COMMISSION INCREASED THE RECEIPTS IN RESPECT OF THE SALE OF INTERVENTION CEREALS BY A SUM OF LIT 2 264 702 642 IN FAVOUR OF THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND ( HEREINAFTER REFERRED TO AS ' ' THE FUND ' ' ), AND INASMUCH AS IT REFUSED TO ACCEPT AS CHARGEABLE TO THE FUND A SUM OF LIT 1 876 422 089 IN RESPECT OF THE PAYMENT OF AID FOR SKIMMED-MILK POWDER USED FOR ANIMAL FEED , FOR THE STORAGE OF WINE AND FOR THE STORAGE OF CHEESE . ( A ) THE SALE OF INTERVENTION CEREALS
2 ARTICLE 1 OF REGULATION ( EEC ) NO 376/70 OF THE COMMISSION OF 27 FEBRUARY 1970 LAYING DOWN THE PROCEDURE AND CONDITIONS FOR THE DISPOSAL OF CEREALS HELD BY INTERVENTION AGENCIES ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1970 ( I ), P . 126 ) PROVIDES THAT SUCH SALES ARE TO BE CONDUCTED BY WAY OF INVITATION TO TENDER AND ARTICLE 3 ( 2 ) OF THAT REGULATION PROVIDES THAT THE SELLING PRICE MUST BE NOT LESS THAN THE LOCAL MARKET PRICE .
3 THE ITALIAN GOVERNMENT MAINTAINS THAT THE SALE OF CONSIDERABLE QUANTITIES OF CEREALS PURCHASED FROM INTERVENTION AGENCIES OF OTHER MEMBER STATES AND PUT UP FOR SALE IN ITALY DURING THE FIRST SEVEN MONTHS OF 1974 WAS CONDUCTED IN COMPLIANCE WITH THOSE REQUIREMENTS . THE COMMISSION CONTENDS , ON THE CONTRARY , THAT THE CEREALS DISPOSED OF BY THE AZIENDA DI STATO PER GLI INTERVENTI NEL MERCATO AGRICOLO ( HEREINAFTER REFERRED TO AS ' ' THE ITALIAN INTERVENTION AGENCY ' ' ) WERE SOLD BY IT AT PRICES WHICH WERE MARKEDLY LOWER THAN THE LOCAL MARKET PRICE .
4 AT THE PRESENT STAGE OF THE PROCEEDINGS THE PARTIES NO LONGER DISPUTE THAT AT THE RELEVANT TIME THE AVERAGE OF THE PRICES RECORDED ON THE MARKET PLACES IN ALESSANDRIA , MILAN , BOLOGNA , PADUA , ANCONA AND GROSSETO WAS ABOUT LIT 9 500 PER QUINTAL AND THAT THE SELLING PRICES OF INTERVENTION CEREALS CHARGED BY THE ITALIAN INTERVENTION AGENCY WERE BETWEEN LIT 8 000 AND LIT 8 200 PER QUINTAL .
5 NEVERTHELESS THE ITALIAN GOVERNMENT CONTENDS THAT IN 1973 AND 1974 THERE WAS A PARTICULAR ECONOMIC SITUATION WHICH LED THE ITALIAN AUTHORITIES TO INTRODUCE A TEMPORARY PRICE-FREEZE FOR CERTAIN PRODUCTS , SUCH AS PASTA PRODUCTS , WHICH WERE CONSUMED IN LARGE QUANTITIES . THE PRICES OF THE INTERVENTION CEREALS WERE DETERMINED ON THE BASIS OF THE PRICE-FREEZE . THE INTERVENTION CEREALS WERE DISPOSED OF BY THE ITALIAN INTERVENTION AGENCY IN ORDER TO FACILITATE , IN THE FACE OF SPECULATIVE OPERATIONS ON THE MARKET , THE MAINTENANCE OF THE FREEZE WHICH WOULD HAVE FAILED IF THE CEREALS HAD BEEN SOLD AT THE MARKET PRICE .
6 THAT ARGUMENT CANNOT BE ACCEPTED . WHILST CONSIDERATIONS OF A SOCIAL NATURE MAY JUSTIFY THE TAKING OF APPROPRIATE STEPS IN ORDER TO OBTAIN , AT A COMMUNITY LEVEL THE ADAPTION OF THE RELEVANT RULES , THEY MAY NOT HOWEVER LEAD TO AN INTERPRETATION OF THE COMMUNITY REGULATIONS WHICH IS CONTRARY TO THEIR WORDING AND OBJECTIVES .
7 IN THAT CONNECTION IT IS NECESSARY TO RECORD THAT THE PROVISIONS OF REGULATION NO 376/70 , ACCORDING TO WHICH THE SELLING PRICE OF THE INTERVENTION CEREALS PUT UP FOR SALE BY INTERVENTION AGENCIES MUST BE NO LESS THAN THE LOCAL MARKET PRICE , ARE INTENDED TO AVOID DETERIORATION OF THE MARKET AND THEREFORE TO GUARANTEE THE PROPER FUNCTIONING OF THE COMMUNITY INTERVENTION MEASURES .
8 IT FOLLOWS THAT , ON THIS POINT , THE APPLICATION MUST BE DISMISSED . ( B ) AIDS FOR SKIMMED-MILK POWDER
9 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 .
10 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 FEEDINGSTUFF . 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 .
11 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 .
12 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 . ' '
13 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 HAS BEEN GRANTED SHOULD BE ASSESSED AT 1% .
14 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 .
15 IN THOSE CIRCUMSTANCES IT HAS NOT BEEN ESTABLISHED THAT OF THE TOTAL QUANTITY WHICH HAD BEEN PROCESSED THE PERCENTAGE OF ACTUAL WASTE DIFFERED TO ANY APPRECIABLE DEGREE 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 .
16 CONSEQUENTLY THE OBJECTIONS MADE TO THE COMMISSION ' S DECISION MUST BE REJECTED IN SO FAR AS THEY RELATE TO AIDS FOR SKIMMED-MILK POWDER . ( C ) AIDS FOR THE STORAGE OF WINE
17 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 1974 IS BASED ON THE SAME REASONS AS THE SIMILAR REFUSAL IN RELATION TO THE PREVIOUS YEAR 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 .
18 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 .
19 THE ITALIAN GOVERNMENT DISPUTES THE LATTER INTERPRETATION WITHOUT HOWEVER SUBMITTING ANY ARGUMENTS OTHER THAN THOSE ALREADY EXAMINED IN THE AFOREMENTIONED JUDGMENT .
20 IT THEREFORE FOLLOWS THAT THIS PART OF THE APPLICATION MUST ALSO BE DISMISSED . ( D ) 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 THAT STORAGE CONTRACT MUST AT LEAST INCLUDE PROVISIONS ON THE QUANTITY OF CHEESE STORED , THE AMOUNT OF AID , THE 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 THAT 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 .