Important legal notice

61986C0264

European Court reports 1988 Page 00973

Opinion of the Advocate-General

A - Facts

1.1 . Article 20 of Council Regulation No 3796/81 on the common organization of the market in fishery products, ( 1 ) which replaced Regulation No 100/76, provides that the Common Customs Tariff duties are to be suspended inter alia for tuna for the industrial manufacture of products falling within heading 16.04 . The reason for this provision - as is stated in the recitals in the preamble to the regulation - is that Community production of tuna for food-processing industries is inadequate . In addition, Article 24 of the regulation provides that if, by reason of imports or exports, the Community market in one or more of the products specified in Article 1 ( 2 ) experiences serious disturbances appropriate measures may be applied in trade with non-member countries . In view of yellowfin tuna prices on the international market action was subsequently taken under Article 24 in the form of a system of surveillance of imports into France . ( 2 )

2.2 . Council Regulation No 3796/81 further provides, in Article 17, that compensation is to be granted if necessary to Community producers of tuna in respect of the tuna specified in Annex III thereto in order to ensure - as is made clear in the recitals - that the income level of the relevant Community producers is not threatened by a fall in import prices for tuna for the canning industry . Article 17 also provides that a Community producer price is to be fixed for the products referred to in paragraph ( 1 ) thereof on the basis of the average of prices recorded in respect of a significant proportion of Community output on representative wholesale markets or in representative ports during the three fishing years immediately preceding the fixing of that price, that the Council is to adopt general rules for granting the compensation provided for in paragraph ( 1 ) and is to fix the Community producer price referred to in paragraph ( 4 ), and that detailed rules for the application of Article 17 are to be adopted in accordance with the procedure laid down in Article 33 ( that is to say by the Commission in conjunction with the Management Committee for Fishery Products ).

3.3 . By Regulation No 3605/85 3 the Council, acting on the basis of the aforementioned provision, fixed the Community producer price for yellowfin tuna at ECU 1 479 per tonne for the 1986 fishing year . In Regulation No 1196/76 4 the Council had also previously laid down general rules for the granting of compensation to producers of tuna for the canning industry in respect of the common organization of the market in fishery products then in force . According to those rules an average Community market price is to be established each month for each of the products listed in the annex to the regulation ( which include yellowfin on the basis of the weighted average of the mean monthly prices recorded for each product ( Article 2 ). Article 3 provides that for each of the products listed in the annex to the regulation compensation is to be granted to Community tuna producers if at the same time the quarterly average Community market price and the entry price ( now within the meaning of the second subparagraph of Article 21 ( 3 ) of Regulation No 3796/81 ) are less than 90% of the Community producer price . Article 4 provides that compensation is to be granted only if an examination reveals that the situation recorded on the Community market is the consequence of the level of prices on the world market for tuna and that a fall in the price on the Community market has not been caused by an abnormal increase in the quantities produced . According to Article 5 the compensation for all the quantities of tuna delivered to the canning industry during the three-month period for which prices have been recorded is not to exceed the difference between the Community producer price and the price actually obtained by the Community producer . Article 5 goes on to provide that such compensation may not, however, in any case exceed the difference between the Community producer price and the quarterly average Community market price ( established on the basis of average monthly prices ). Finally, Article 7 provides that detailed rules for the application of the regulation are to be adopted and the maximum amount of compensation is to be fixed in accordance with the management committee procedure .

"The maximum amount of the compensation shall be at the level which is necessary to ensure that the fall in prices on the Community market does not threaten the income which producers of tuna derive from sale of the quantities produced, be it on the Community market or on that of third countries ".

5.5 . This means - as became clear during the proceedings - that the maximum amount of compensation does not simply correspond to the difference between the Community producers' price and the quarterly average Community market price . An additional relevant factor is the relationship between total income during the quarter in respect of which compensation is granted and the weighted average of total income of the Community producer derived from the corresponding quarters of the years 1983 to 1985 ( for details I refer to a technical memorandum produced to the Court ).

6.6 . As the aforementioned surveillance measures were insufficient and substantial imports at low prices were recorded, the Commission adopted Regulation No 2470/86 ( 4 ) on 31 July 1986 in which compensation for tuna producers was provided for for the first time . The maximum amount of compensation for yellowfin tuna weighing more than 10 kg each was fixed at ECU 170 per tonne and for yellowfin tuna weighing not more than 10 kg each at ECU 185 per tonne ( whereas the difference between the Community producer price and the quarterly average Community market price would have amounted to ECU 315 per tonne and ECU 344 per tonne respectively ).

7.7 . On 21 October 1986 the French Republic instituted proceedings before the Court in respect of those two Commission regulations seeking a declaration that the regulations were void and in the alternative - as regards the first regulation - a declaration that Article 2 ( 3 ) thereof is void ( as was made clear during the hearing in response to a question put by the Judge-Rapporteur ).

B - Analysis

8.8 . It now falls to me to examine whether that application - supported by the Spanish Government - may be granted . Such an examination requires two sets of arguments to be distinguished : first those which relate to the formal statement of reasons upon which the regulations are based and secondly those which relate to the validity of the regulations in substantive law .

( 1 ) Contrary to the order in which they appear in the application I will begin with the latter set of arguments .

9.9 . The essential contention in that regard ( for details I refer to the Report for the Hearing ) is that the Commission regulations are not consistent with Council Regulations Nos 3796/81 and 1196/76 . According to the provisions laid down by the Council only the price considerations referred to in Article 5 of Regulation No 1196/76 are relevant in determining the maximum amount of compensation; the Commission was on the other hand not empowered to limit the amount of compensation in the manner in which it had done so, namely by taking account of the quantities of tuna landed, because this amounted to penalization of increases in production . It was submitted that a rule such as that introduced by Regulation No 2469/86 ( which was so imprecise that it left the Commission a large degree of discretion ) could not be regarded as a detailed rule for the application of Regulation No 1196/76 within the meaning of Article 7 thereof . If such a rule had been considered necessary the Council itself should have included it in the general rules laid down in Article 17 of Regulation No 3796/81, as that would have been the only way to comply with the principle of the hierarchy of legal rules as it is applied in Community law .

10.10 . ( a ) With regard to the last-mentioned fundamental question, namely whether a rule such as that contained in Article 2 ( 3 ) of Regulation No 2469/86 could be adopted as part of the detailed rules to be laid down by the Commission or whether it falls within the general rules to be adopted by the Council in accordance with Article 17 of Regulation No 3796/81, there are in my view no conclusive reasons for answering the question in the manner regarded as correct by the applicant and the intervener .

11.11 . In that connection it is significant in my opinion that Article 155 of the EEC Treaty which lays down the Commission' s powers refers generally to the exercise of the powers conferred on it by the Council for the implementation of the rules laid down by the latter . There is absolutely no differentiation in Article 155 according to the relative importance of the legal rules and it is not implicit in the provision that only powers of a very ancillary nature may be conferred on the Commission with precise instructions as to the criteria to be taken into account .

12.12 . It is also significant that there is nothing in the relevant decisions of the Court which supports the applicant' s view and that, on the contrary, those decisions contain substantial indications that the Commission' s view is correct .

13.13 . In that connection I would refer, for example, to the Court' s judgment in Case 25/70 ( 5 ) in which it was stated that only the basic elements of agricultural regulations adopted under the third subparagraph of Article 43 ( 2 ) of the EEC Treaty need be laid down; in which it was, however, emphasized that provisions implementing the basic regulations may be adopted according to a different procedure either by the Council itself or by the Commission; and in which it was specifically stressed that the management committee procedure enables the Council to delegate to the Commission an implementing power of appreciable scope .

14.I also refer to the Court' s judgment in Case 57/72 ( 6 ) in which it was stated that a significant freedom of decision may be left to the Commission which excludes any automatism and which is to be exercised in the light of the objectives of the economic policy laid down by the basic regulation ( as is also indicated in the judgment, the Commission could exercise the powers necessary to ensure the functioning of a given system ).

15.I refer in addition to the Court' s judgment in Case 23/75 ( 7 ) in which it was made clear that the term "implementation" within the meaning of Article 155 of the EEC Treaty must be given a wide interpretation ( with the consequence that wide powers of discretion and action may be conferred on the Commission in the sphere of the common agricultural policy ); and in which it was emphasized that the management committee procedure enables the Council to give the Commission an appreciably wider power of implementation with extensive competence the limits of which must be judged with regard to the basic general objectives of the organization of the market and less in terms of the literal meaning of the enabling provision .

16.Finally, I also refer to the fact that this line of authority has continued in recent decisions of the Court as can be seen in its judgment in Case 27/85 ( 8 ) where it was stated that the Commission' s power of implementation in the sphere of the common agricultural policy must be given a wide interpretation and that in that sphere the Commission had wide powers of discretion and action the limits of which must be fixed with regard to the general objectives of the organization of the market in question .

18.15 . ( aa ) It is absolutely clear in my opinion that that is not the case with regard to the basic regulation on the common organization of the market in fishery products, in regard to which the applicant has moreover presented scarcely any argument .

19.16 . Article 17 of Regulation No 3796/81 to which reference has already been made provides - in a very general manner - in relation to the compensation to be paid to tuna producers merely that it is to be granted "if necessary" ( in which connection it is significant that the statement of reasons for the regulation states that the compensation is intended to maintain the income level of tuna producers when it is threatened by a fall in import prices for tuna for the canning industry ). When Article 17 adds in relation to the compensation, that the Council is to adopt general rules ( 9 ) for granting the compensation and that detailed rules for the application of the regulation are to be adopted in accordance with the management committee procedure, no inference can, however, be drawn as to the matters which must be attributed to the one or the other set of rules . All that is clear from this provision is that the Council is to fix the Community producer price; it does not dictate the inference that the Council is prohibited from delegating extensive powers to the Commission and in particular the power to adopt all rules which - in the Commission' s words - are necessary for a correct application of the compensation provision .

20.17 . ( bb ) The dispute thus also focused on the interpretation of Regulation No 1196/76 and the question whether the contested Commission regulations were compatible with that regulation .

21.18 . As the Court is aware, the applicant took the view ( in which it was supported by the Spanish Government ) that in Regulation No 1196/76 the Council gave a detailed definition of the term "if necessary" which is found in Article 17 of Regulation No 3796/81 ( and which was also contained in Regulation No 100/76 which preceded it ) and that consequently - once it is established that the conditions contained in Article 3 are satisfied ( fall in prices on the Community market and in entry prices below a specific level ) and that the requirements of Article 4 are also satisfied ( the situation on the Community market must be the consequence of the level of prices on the world market ) - the Commission has merely to settle in accordance with the management committee procedure under Article 5 of the regulation the matters requiring calculation ( determination of the quarterly average price ) and the method of verifying the selling price actually obtained . The maximum amount of compensation must therefore be understood as meaning the difference referred to in Article 5 of Regulation No 1196/76 which may not exceed the difference between the Community producer price and the quarterly average market price . When it comes to the maintenance of the income level of tuna producers, it follows that only a level corresponding to the Community producer price is to be taken into consideration . In the applicant' s view the rules laid down by the Commission in Regulation No 2469/86 amount, however, to a penalization of increases in production because the quantities produced are to be taken into account in fixing the maximum amount of compensation, and this could not have been intended . Those rules are unnecessary for the purpose of preventing the compensation paid amounting to over-compensation, to which the Commission also referred, since that could be achieved by means of Article 4 of Regulation No 1196/76 .

22.19 . It seems to me - if I may say so immediately - that the argument put forward by the applicant and the intervener in this respect should not be upheld and that the Commission has better arguments on its side when it says that, in the light of the whole scheme of the rules and their objectives, the Commission must have the power to fix the maximum amount of compensation by reference to factors other than those referred to in Article 5 of Regulation No 1196/76 .

23.20 . That view in fact finds immediate support in certain terms used in Articles 5 and 7 of the Council regulation . Thus it is striking that Article 5 states that "the compensation shall not exceed ..." (" die Ausgleichsentschaedigung belaeuft sich ... hoechstens ..."; "de compensenserende vergoeding kan ten hoogste gelijk zijn ..."; "le montant de l' indemnité compensatoire est limité à ..."; "l' importo dell 'indennità compensativa é limitato alla differenzia ..."). However, if the applicant' s interpretation were adopted, it would have been more appropriate to choose a wording such as that contained in Council Regulation No 3117/85 ( 10 ) which provides : "the indemnity shall be equal to the difference between the selling price received by the producer and the guaranteed minimum price ". The fact that such wording has not been used justifies the inference that the term "shall not exceed" points to some other method of calculation . Also significant is the fact that Article 7 of Regulation No 1196/76 states that the maximum amount of compensation is to be laid down by means of the management committee procedure . The choice of that procedure and the express reference to a maximum amount would, however, not be easily comprehensible if merely the relatively simple mathematical operation referred to in Article 5 of the regulation were in point ( namely the determination of the difference between the Community producer price and the quarterly average selling price obtained by the producer ).

24.21 . The most important point, however - if, in view of the wording of the Council provisions, there is no clarity in the sense contended for by the applicant - is what would appear to be suggested by the purpose of the rules and what may be inferred, at least by implication, from Article 4 of the Council regulation .

C -Conclusion

(*)Translated from the German.

( 1 )(1) Official Journal 1981, L 379, p. 1.

( 2 )(2) Commission Regulation No 293/86 of 10 February 1986 (Official Journal 1986, L 35, p. 7) which was adopted in order to extend the operation of Commission Regulation No 3150/85.

( 3 )(3) Official Journal 1986, L 211, p. 19.

( 4 )(4) Official Journal 1986, L 211, p. 22.

( 5 )(5) Judgment of 17 December 1970 in Case 25/70 Einfuhr - und Vorratsstelle foer Getreide und Futtermittel v Koester, Berodt & Co. ((1970)) ECR 1161.

( 6 )(6) Judgment of 14 March 1973 in Case 57/72 Westzucker GmbH v Einfuhr und Vorratsstelle foer Zucker ((1973)) ECR 321.

( 7 )(7) Judgment of 30 October 1975 in Case 23/75 Rey Soda v Cassa Conguaglio Zucchero ((1975)) ECR 1279, paragraphs 10 to 14 of the decision.

( 8 )(8) Judgment of 11 March 1987 in Case 27/85 Vandemoortele NV v Commission ((1985)) ECR 1129.

( 9 )(9) There is no reference to "general rules" in the German-language version - see Amtsblatt 1981 No L 379, p. 10.

( 10 )(10) Council Regulation No 3117/85 of 4 November 1985 laying down general rules on the granting of compensatory indemnities in respect of sardines (Official Journal 1985, L 297, p. 1).

( 11 )(11) Judgment of 17 November 1987 in Joined Cases 142 and 156/84 British-American Tobacco Company Ltd and R. J. Reynolds Industries Inc. v Commission of the European Communities, supported by Philip Morris Inc. and Rembrandt Group Ltd ((1987)) ECR 4487.

( 12 )(12) Judgment of 29 February 1984 in Case 37/83, Rewe-Zentrale AG v Director of the Landwirtschaftskammer Rheinland, ((1984)) ECR 1229.

( 13 )(13) Judgment of 30 September 1982 in Case 108/81, G. R. Amylum v Council ((1982)) ECR 3107, paragraph 21 of the decision, at p. 3135.

( 14 )(14) Judgment of 15 March 1984 in Case 64/82, Tradax Graanhandel BV v Commission ((1984)) ECR 1359.

( 15 )(15) Judgment of 27 September 1979 in Case 230/78, SpA Eridania - Zuccherifici Nazionali and SpA Società Italiana per l' Industria degli Zuccheri v Minister of Agriculture and Forestry, Minister for Industry, Trade and Craft Trades, and SpA Zuccherifici Meridionali, ((1979)) ECR 2749.