1 THE APPLICATION , WHICH WAS LODGED ON 8 OCTOBER 1976 , SEEKS AN ORDER FOR THE PAYMENT OF DAMAGES BY THE EUROPEAN ECONOMIC COMMUNITY IN COMPENSATION FOR THE INJURY WHICH THE APPLICANT CLAIMS TO HAVE SUFFERED AS A RESULT OF COMMISSION REGULATION NO 1497/76 OF 23 JUNE 1976 , WHICH CAME INTO FORCE ON 11 JULY 1976 ( OJ 1976 , NO L 167 , P . 27 ), THE EFFECT OF WHICH WAS TO MODIFY CERTAIN COMPENSATORY AMOUNTS .
2 IN SUPPORT OF THE APPLICATION THE APPLICANT MAINTAINS THAT AS A RESULT OF THE MODIFICATION IT WAS PREVENTED FROM PERFORMING IN FULL CONTRACTS OF SALE , ENTERED INTO BEFORE THE ENTRY INTO FORCE OF THE REGULATION , FOR THE DELIVERY TO TWO DANISH COMPANIES AND TO ONE ENGLISH COMPANY OF PRODUCTS UNDER TARIFF SUBHEADING 23.07 B I ( C ) 1 CONTAINING MORE THAN 50 % BY WEIGHT OF TAPIOCA . AS THE MONETARY COMPENSATORY AMOUNTS AND THE ACCESSION COMPENSATORY AMOUNTS PROVIDED FOR IN RESPECT OF DELIVERIES OF THE PRODUCTS IN QUESTION WERE MODIFIED BY REGULATION NO 1497/76 , THE APPLICANT HAD TO LIMIT THE LOSS RESULTING FROM THAT MODIFICATION BY UNDERTAKING TO DELIVER ALTERNATIVE PRODUCTS UNDER MORE ONEROUS CONDITIONS IN RETURN FOR PARTIAL TERMINATION OF THE ORIGINAL CONTRACTS . BY OMITTING TO PROVIDE IN THE REGULATIONS FOR ADEQUATE TRANSITIONAL MEASURES TO PROTECT THE LEGITIMATE EXPECTATIONS OF THE TRADERS CONCERNED , WITHOUT THE OMISSION BEING JUSTIFIED BY AN OVERRIDING MATTER OF PUBLIC INTEREST , THE COMMISSION FLAGRANTLY VIOLATED A SUPERIOR RULE OF LAW , THUS INCURRING THE LIABILITY OF THE COMMUNITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY .
3 ARTICLE 1 OF REGULATION NO 1497/76 PROVIDES THAT ' FOR PRODUCTS FALLING WITHIN SUBHEADING 23.07 B I ( C ) 1 . . . OF THE COMMON CUSTOMS TARIFF , CONTAINING MORE THAN 50 % BY WEIGHT OF PRODUCTS FALLING WITHIN HEADING NO 07.06 . . . THEREOF THE ACCESSION COMPENSATORY AMOUNTS OR MONETARY COMPENSATORY AMOUNTS SHALL BE THOSE APPLICABLE TO PRODUCTS FALLING WITHIN SUBHEADING 07.06 A THEREOF ' . TARIFF SUBHEADING 23.07 B I ( C ) 1 OF THE COMMON CUSTOMS TARIFF REFERS TO SWEETENED FORAGE AND OTHER PREPARATIONS OF A KIND USED IN ANIMAL FEEDING ' CONTAINING MORE THAN 30 % BY WEIGHT OF STARCH ' AND ' LESS THAN 10 % BY WEIGHT OF ( MILK ) PRODUCTS . ' TARIFF HEADING NO 07.06 REFERS , INTER ALIA , TO A GROUP OF NUTRITIOUS ROOTS AND TUBERS ' WITH HIGH STARCH CONTENT ' , MOST OF WHICH ARE CLASSIFIED UNDER TARIFF SUBHEADING 07.06 A . ON THE ENTRY INTO FORCE OF REGULATION NO 1497/76 THERE WERE NO MONETARY COMPENSATORY AMOUNTS APPLICABLE TO THE PRODUCTS UNDER TARIFF SUBHEADING 07.06 A AND THE ACCESSION COMPENSATORY AMOUNTS APPLICABLE TO TRADE WITH THE UNITED KINGDOM WERE LESS THAN THOSE APPLICABLE TO PRODUCTS COVERED BY SUBHEADING 23.07 B I ( C ) 1 . THUS , AS REGARDS THE PRODUCTS FALLING WITHIN SUBHEADING 23.07 B I ( C ) 1 , WHICH ARE REFERRED TO IN ARTICLE 1 , THE EFFECT OF REGULATION NO 1497/76 , WHICH WAS INTENDED TO IMPROVE THE FUNCTIONING OF THE SYSTEM OF COMPENSATORY AMOUNTS IN AGRICULTURE , WAS TO ABOLISH THE MONETARY COMPENSATORY AMOUNTS AND TO REDUCE THE ACCESSION COMPENSATORY AMOUNTS APPLICABLE TO TRADE WITH THE UNITED KINGDOM . THERE WAS AT THAT TIME NO PROVISION FOR THE APPLICATION OF ANY AMOUNT TO TRADE IN THOSE PRODUCTS WITH DENMARK .
4 AS REGARDS IN PARTICULAR THE ACCESSION COMPENSATORY AMOUNTS APPLICABLE TO TRADE WITH THE UNITED KINGDOM , A SYSTEM OF ADVANCE-FIXING HAD BEEN INTRODUCED BY THE COMMUNITY RULES IN FORCE AT THAT TIME FOR THE PRODUCTS FALLING WITHIN SUBHEADING 23.07 B I ( C ) 1 . THE APPLICANT HAS STATED THAT IT OBTAINED , SUBJECT TO GIVING SECURITY , EXPORT LICENCES FIXING IN ADVANCE THE AMOUNT APPLICABLE TO THOSE EXPORTS . SINCE REGULATION NO 1497/76 CONTAINS NO PROVISIONS WHICH ADVERSELY AFFECTS THE ABOVE-MENTIONED SYSTEM OF ADVANCE FIXING , THE MODIFICATION OF THE ACCESSION COMPENSATORY AMOUNTS COULD NOT IN THIS INSTANCE HAVE AFFECTED THE RIGHT OF THE APPLICANT TO EXPORT ITS PRODUCT TO THE UNITED KINGDOM ON THE BASIS OF THE AMOUNT FIXED IN ADVANCE AND , THUS , COULD NOT BE REGARDED AS THE ACTION GIVING RISE TO THE LOSS WHICH IT CLAIMS TO HAVE SUFFERED AS A RESULT OF THAT REGULATION . THE DEFENDANT HAS EXPRESSLY ACKNOWLEDGED THAT AS A RESULT OF THE SYSTEM OF ADVANCE FIXING THE APPLICANT ELIMINATED THE RISK OF A MODIFICATION OF THE ACCESSION COMPENSATORY AMOUNTS APPLYING TO ITS EXPORTS TO THE UNITED KINGDOM . IN THOSE CIRCUMSTANCES , THE QUESTION OF THE POSSIBLE LIABILITY OF THE COMMISSION CAN ONLY ARISE IN THIS INSTANCE IN RELATION TO THE ABOLITION , AS A RESULT OF REGULATION NO 1497/76 , OF THE MONETARY COMPENSATORY AMOUNTS WHICH , UNDER THE COMMUNITY RULES IN FORCE AT THE TIME , COULD NOT BE FIXED IN ADVANCE . IT IS APPROPRIATE TO CONSIDER THE LEGAL BASIS FOR THE APPLICATION IN THE LIGHT OF THE FOREGOING LIMIT ON ITS SUBJECT MATTER .
5 THE SYSTEM OF COMPENSATORY AMOUNTS INTRODUCED BY REGULATION NO 974/71 OF THE COUNCIL OF 12 MAY 1971 ( OJ , ENGLISH SPECIAL EDITION 1971 ( I ), P . 257 ) IS INTENDED PRINCIPALLY TO SAFEGUARD THE LEVEL OF PRICES IN THE MEMBER STATES CONCERNED AGAINST THE DISTURBANCES WHICH MIGHT BE CAUSED BY MONETARY INSTABILITY AND MIGHT JEOPARDIZE A NORMAL TREND OF BUSINESS IN AGRICULTURE . THE AIM OF THE SYSTEM OF COMPENSATORY AMOUNTS IS , IN PARTICULAR , TO OBVIATE THE DIFFICULTIES WHICH MONETARY INSTABILITY MAY CREATE FOR THE PROPER FUNCTIONING OF THE COMMON ORGANIZATIONS OF THE MARKET , RATHER THAN TO PROTECT THE INDIVIDUAL INTERESTS OF TRADERS . IN THAT REGARD , ARTICLE 6 OF REGULATION NO 974/71 , TO WHICH REFERENCE IS MADE BY REGULATION NO 1497/76 , EMPOWERS THE COMMISSION TO ACT IN ACCORDANCE WITH A SPECIFIC PROCEDURE TO FIX NOT ONLY THE COMPENSATORY AMOUNTS BUT ALSO THE DETAILED RULES FOR THE APPLICATION OF THE REGULATION , INCLUDING THOSE ' WHICH MAY INCLUDE OTHER DEROGATIONS FROM THE REGULATIONS ON THE COMMON AGRICULTURAL POLICY ' . THUS , REGULATION NO 1497/76 , WHICH WAS INTRODUCED WITHIN THE CONTEXT OF THAT POWER , IS A LEGISLATIVE MEASURE ADOPTED BY THE COMMUNITY IN THE AREA OF ECONOMIC POLICY IN THE HIGHER INTEREST OF THE PROPER FUNCTIONING OF SUCH MARKET ORGANIZATIONS . IN THOSE CIRCUMSTANCES , ALTHOUGH THE POSSIBILITY OF PROTECTING THE LEGITIMATE INTERESTS OF THE TRADER CANNOT BE EXCLUDED , NEVERTHELESS THE COMMUNITY COULD ONLY BE RENDERED LIABLE FOR THE DAMAGE SUFFERED BY SUCH TRADERS AS A RESULT OF THE ADOPTION OF LEGISLATIVE MEASURES GOVERNING THE ABOVE SYSTEM IF IN THE ABSENCE OF ANY OVERRIDING PUBLIC INTEREST THE COMMISSION WERE TO ABOLISH OR MODIFY THE COMPENSATORY AMOUNTS APPLICABLE IN A SPECIFIC SECTOR WITH IMMEDIATE EFFECT AND WITHOUT WARNING AND IN THE ABSENCE OF ANY APPROPRIATE TRANSITIONAL MEASURES AND IF SUCH ABOLITION OR MODIFICATION WAS NOT FORESEEABLE BY A PRUDENT TRADER .
6 IT IS CLEAR THAT IN THIS INSTANCE THE REGULATION AT ISSUE DID NOT TAKE EFFECT IMMEDIATELY AND WITHOUT WARNING , SINCE ITS ENTRY INTO FORCE HAD BEEN FIXED FOR THE FIFTEENTH DAY AFTER ITS PUBLICATION IN THE OFFICIAL JOURNAL OF THE EUROPEAN COMMUNITIES . FURTHERMORE , THE FILE SHOWS THAT AN ANNOUNCEMENT IN THE ' ERNAHRUNGSDIENST ' OF 19 JUNE 1976 INFORMED THE INTERESTED PARTIES THAT THE COMMISSION WAS INTENDING TO ADOPT A REGULATION TO SUBJECT TO THE SAME TARIFF CLASSIFICATION AS TAPIOCA ANY PRODUCT COMPOSED OF MORE THAN 50 % OF TAPIOCA . THE APPLICANT ACKNOWLEDGES THAT IT BECAME AWARE OF THAT ANNOUNCEMENT ON 22 JUNE 1976 .
7 IN THE LIGHT OF THOSE CIRCUMSTANCES THE COMMISSION CANNOT BE SAID TO HAVE ADOPTED THE MEASURE IN DISPUTE WITH IMMEDIATE EFFECT AND WITHOUT WARNING IN VIOLATION OF THE PRINCIPLE OF THE PROTECTION OF THE LEGITIMATE EXPECTATION OF THE PARTIES CONCERNED . IT IS ALSO UNJUSTIFIED TO ALLEGE THAT THE COMMISSION FAILED TO ADOPT APPROPRIATE TRANSITIONAL MEASURES TO ACCOMPANY THE ENTRY INTO FORCE OF THE REGULATION AT ISSUE , ENABLING THE INTERESTED PARTIES AND IN PARTICULAR THE APPLICANT TO AVOID THE RISK OF AN UNFORESEEABLE MODIFICATION OF THE COMPENSATORY AMOUNTS . ON THAT POINT THE APPLICANT MAINTAINS THAT THE COMMISSION COULD AT LEAST HAVE AUTHORIZED PERFORMANCE IN FULL OF THE CONTRACTS CONCLUDED FINALLY AND IRREVOCABLY BEFORE THE ENTRY INTO FORCE OF THE REGULATION OR BEFORE THE TRADER BECAME AWARE OF THE PROPOSALS FOR ITS ADOPTION .
8 IN THE PRESENT CASE THE ' RESPECT FOR EXISTING CONTRACTS ' REFERRED TO BY THE APPLICANT WOULD AMOUNT TO GRANTING TO THE CONTRACTS CONCLUDED A GUARANTEE EQUIVALENT TO THAT WHICH THEY NORMALLY OBTAIN FROM FIXING THE COMPENSATORY AMOUNT IN ADVANCE . THE COMMUNITY RULES ON MONETARY COMPENSATORY AMOUNTS APPLICABLE HERE MADE NO PROVISION FOR SUCH AMOUNTS TO BE FIXED IN ADVANCE . ALTHOUGH IN CERTAIN CASES CONCERNING MONETARY COMPENSATORY AMOUNTS WHICH CANNOT BE FIXED IN ADVANCE THE COMMISSION HAS MADE PROVISION FOR TRANSITIONAL MEASURES OUT OF A DESIRE TO RESPECT EXISTING CONTRACTS , NEVERTHELESS , THE CASES IN WHICH SUCH MEASURES HAVE BEEN ADOPTED DIFFER WIDELY FROM THE PRESENT AND RELATE , IN PARTICULAR TO CASES IN WHICH THE COMPENSATORY AMOUNTS IN QUESTION WERE LEVIED RATHER THAN GRANTED ON IMPORTS AND EXPORTS AND THUS CONSTITUTED AN INCREASED BURDEN ON THE TRADER .
9 AT ALL EVENTS , THE ADOPTION OF TRANSITIONAL MEASURES ON THE BASIS OF THE PRINCIPLE REFERRED TO BY THE APPLICANT COULD ONLY HAVE BEEN ENVISAGED BY THE COMMISSION IF IT APPEARED THAT THE MODIFICATION OF THE MONETARY COMPENSATORY AMOUNTS IN QUESTION COULD NOT HAVE BEEN FORESEEN BY A PRUDENT TRADER . ON THE OTHER HAND , THE VERY FACT THAT THE REGULATION RELATING TO THOSE AMOUNTS HAD NOT PROVIDED FOR THEM TO BE FIXED IN ADVANCE , ALTHOUGH THAT POSSIBILITY EXISTED IN RELATION TO THE ACCESSION COMPENSATORY AMOUNTS , SHOULD HAVE WARNED A PRUDENT TRADER THAT THE COMMISSION INTENDED THE SYSTEM OF MONETARY COMPENSATORY AMOUNTS TO BE VERY FLEXIBLE . THUS , IN THE LIGHT OF THE STRUCTURE OF THE COMMUNITY RULES APPLICABLE AND TAKING INTO ACCOUNT THE NATURE AND AIMS OF THE MACHINERY FOR MONETARY COMPENSATORY AMOUNTS , IN PARTICULAR , WHERE SUCH AMOUNTS ARE GRANTED RATHER THAN LEVIED ON EXPORTS , IT SEEMS IMPOSSIBLE THAT A MODIFICATION OF THE MONETARY COMPENSATORY AMOUNTS COULD BE REGARDED AS UNFORESEEABLE BY A PRUDENT TRADER . THAT SUCH A MODIFICATION WAS NOT UNFORESEEABLE IN THIS INSTANCE IS ALL THE MORE CLEAR FROM THE EXPRESS PROVISION FOR IT IN THE CONTRACT CONCLUDED BY THE APPLICANT ON 20 MAY 1976 WITH THE DANISH COMPANY DLG IN WHICH THE VENDOR RESERVED THE RIGHT TO SUPPLY A SIMILAR PRODUCT SHOULD THE MONETARY COMPENSATORY AMOUNTS IN FORCE WHEN THE CONTRACT WAS CONCLUDED BE MODIFIED OR ABOLISHED .
10 IN FACT , AS THE PRODUCT IN DISPUTE CONTAINS 90 % OF TAPIOCA AND 10 % OF MOLASSES IT COULD , EVEN BEFORE THE ENTRY INTO FORCE OF REGULATION NO 1497/76 , HAVE BEEN DEFINED AS HAVING A ' HIGH STARCH CONTENT ' AND THEREFORE HAVE BEEN CLASSIFIED UNDER SUBHEADING 07.06 A , WHICH REFERS TO PRECISELY THAT TYPE OF PRODUCT . THE POSSIBILITY OF THE MONETARY COMPENSATORY AMOUNTS APPLICABLE TO PRODUCTS FALLING WITHIN SUBHEADING 07.06 A BEING APPLIED TO SUCH A COMPOUND COULD STILL LESS BE RULED OUT SINCE , ACCORDING TO INFORMATION PROVIDED BY THE COMMISSION AND NOT CONTESTED BY THE APPLICANT , AS A RESULT OF THE DIFFERENCE EXISTING BETWEEN THE COMPENSATORY AMOUNTS APPLYING TO EACH CATEGORY OF PRODUCT EXPORTS OF THE COMPOUND IN QUESTION WERE TENDING MORE AND MORE TO REPLACE EXPORTS OF THE BASIC PRODUCT .
11 THE RESULT OF ALL THE FOREGOING IS THAT THE CONDITIONS FIXED FOR THE ENTRY INTO FORCE OF REGULATION NO 1497/76 DO NOT AMOUNT TO A FLAGRANT VIOLATION OF A SUPERIOR RULE OF LAW FOR THE PROTECTION OF THE INDIVIDUAL SUFFICIENT TO INCUR THE LIABILITY OF THE COMMUNITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE TREATY . THE APPLICATION MUST THEREFORE BE DISMISSED AS UNFOUNDED .