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Mr President,
Members of the Court,
1.The Commission has brought these proceedings against the United Kingdom under Article 169 of the EEC Treaty seeking a declaration that the United Kingdom has failed to comply with its obligations under Community law by introducing in 1986 new conditions in fishery licences that must be issued before British-registered vessels can engage in fishing activities. The Kingdom of Spain has intervened in support of the Commission.
The conditions at issue concern the operation and crewing of vessels and are intended to ensure that British vessels fishing against British fishing quotas have a real economic link to the United Kingdom. The conditions were introduced with effect from 1 January 1986 and are the second set of conditions in a series of rules enacted by the United Kingdom in order to combat so-called ‘quota hopping’. (*1)
2.The Court is familiar with both conditions since that relating to the operation of vessels was the subject of the Court's judgment of 14 December 1989 in the preliminary-ruling proceedings in Jaderow (*2) and that relating to the vessel's crew, embracing a nationality requirement and a residence requirement, was the subject of the Court's judgment of the same date in the proceedings for a preliminary ruling in Agegate (*3).
The Commission lodged its application in the present case in September 1989, that is before delivery of the judgments in Jaderow and Agegate. The rest of the written procedure took place after those judgments.
In its application in this case the Commission has expressed the same views as in Jaderow and in Agegate.
The Commission is continuing the present infringement proceedings largely because it considers that the changes made in the conditions by the United Kingdom after the judgments in Jaderow and Agegate are not sufficient to satisfy the requirements of Community law.
It should be pointed out that in a press release of 23 May 1990 (*4) the United Kingdom gave notice that the residence requirement would no longer be enforced and that in addition in a number of detailed respects the format of the crewing condition was to be adapted in accordance with the requirements which the United Kingdom inferred from the Agegate judgment. It is also appropriate to point out that (i) the United Kingdom has stated that it was later decided that Spanish and Portuguese fishermen would be treated in the same way as fishermen from other Member States for the purposes of the crewing requirement as from 1 January 1991, and (ii) the conditions regarding the operation of vessels have been relaxed somewhat. The United Kingdom has stressed that those subsequent amendments do not betoken any acknowledgment that the previous conditions were incompatible with Community law. It should finally be noted that the United Kingdom has stated that the plaintiffs in the Jaderow and Agegate cases have, in the light of those amendments, discontinued those proceedings before the national court.
For its part, the Commission, following the judgment in Agegate, has dropped one complaint in its application concerning a condition that the crew and skipper of a vessel should pay contributions to the British social security scheme.
Accordingly, the Commission's action embraces only the following complaints:
first, the condition regarding the operation of vessels as formulated in 1986 is incompatible with Community law, in particular Article 34 of the EEC Treaty,
secondly, the condition regarding the composition of a vessel's crew is incompatible with Community law, in particular Article 48 of the EEC Treaty, because it treats Portuguese and Spanish citizens differently from citizens of other Member States,
thirdly, the residence requirement is incompatible with Community law, in particular Article 48 of the EEC Treaty.
Since the United Kingdom has acknowledged that the residence requirement is incompatible with Community law, it is only as regards the first two complaints that there is any dispute between the parties.
The dispute stems not least from the disagreement as to the significance of certain specific paragraphs in the Jaderow and Age-gate judgments in assessing the lawfulness of those conditions.
The full text of the condition is as follows:
‘the vessel must operate from the United Kingdom, Isle of Man or the Channel Islands: without prejudice to the generality of this requirement a vessel will be deemed to have been so operating if for each six month period in each calendar year (i. e. January to June or July to December) either
50% by weight of the vessel's landings or trans-shipments of stocks to which this or any other licence issued relates, have been landed and sold in the United Kingdom, Isle of Man or Channel Islands or trans-shipped by way of sale within British Fishery Limits: or
other evidence is provided of the vessel's presence in a United Kingdom, Isle of Man or Channel Islands port on at least 4 occasions at intervals of at least 15 days.’
A short review of the relevant paragraphs in the Jaderow judgment is necessary in order to show why there is still disagreement between the Commission and the United Kingdom as to the lawfulness of this condition.
The Court's starting point was the finding that the aim of the condition is to ensure that vessels that may fish against British quotas have a real economic link to the United Kingdom and it accordingly held that Community law as it now stands:
does not preclude a Member State, in authorizing one of its vessels to fish against national quotas, from laying down conditions designed to ensure that the vessel has a real economic link with that State if that link concerns only the relations between that vessel's fishing operations and the populations dependent on fisheries and related industries;
does not preclude a Member State, in authorizing one of its vessels to fish against national quotas, from laying down the condition, in order to ensure that there is a real economic link as defined above, that the vessel is to operate from national ports, if that condition does not involve an obligation for the vessel to depart from a national port on all its fishing trips’ (emphasis added).
The Court further held that Community law as it now stands:
It is apparent from that judgment that it would be incompatible with Community law if the requirement of landing catches at national ports in fact entailed an obligation for the vessel to land catches at those ports. On the other hand such a landing requirement is compatible with Community law if it is only one amongst several possible means of showing that fishing operations are carried out from national ports, that is to say that there exist alternative forms of evidence. One such alternative is the possibility of proving that vessels fished from national ports by means of evidence of their periodic presence in national ports. One precondition for such an evidentiary rule to be lawful is that it should not hinder normal fishing operations. On that basis the Court held that Community law as it now stands:
In its application the Commission claimed that the operating condition was in itself incompatible with Article 34 of the EEC Treaty, in particular because compliance with the landing requirement imposes an economic burden on the vessel's owner. For understandable reasons, in its reply and at the hearing the Commission had to adapt its submissions and arguments in the light of the Court's interpretation of the relevant Community rules in Jaderow.
The Commission is now primarily claiming that the condition regarding the operation of vessels from British ports is incompatible with Community law because one of the express preconditions under the Jaderow judgment for such a condition to be lawful, namely that the rules regarding proof of periodic presence in British ports should not hinder normal fishing operations is not fulfilled. In support of that contention it referred in its reply to an affidavit submitted in the proceedings before the national court in Jaderow.
The United Kingdom contends first that the Court should refuse to take a decision on the question whether, as the Commission claims in its reply, the operating condition hinders normal fishing operations and secondly, in the alternative, that the operating condition does not hinder normal fishing operations and is therefore lawful.
The United Kingdom contends that the Commission is endeavouring to widen the scope of the case by claiming — for the first time in the reply — that the operating condition hinders normal fishing operations. The Commission has thus infringed Article 169 of the Treaty and Article 42 of the Rules of Procedure. Article 169 of the Treaty has been infringed because the administrative procedure solely concerned the question of the extent to which the operating condition in itself
was in breach of Article 34 of the Treaty and the common organization of the market in fishery products. The submissions made by the Commission in its reply concern something different since they raise new legal questions which can only be understood and addressed in the context of the judgment in Jaderow. The United Kingdom has had no opportunity to comment on those questions in the light of the legal situation as it now exists on the basis of the principles laid down in the Jaderow judgment. The United Kingdom further claims that Article 42(2) of the Rules of Procedure has been infringed since a new plea in law has been raised which alters the subject-matter of the case. Finally, the United Kingdom claims that Article 42(1) of the Rules of Procedure has been infringed since the Commission has referred in its reply to new evidence without giving any reason for the delay in offering it.
The Commission on the other hand argues that in its reply it has not gone beyond the subject-matter of the case as determined during the administrative procedure under Article 169 of the Treaty. According to the Commission the subject-matter of these proceedings is still a declaration that the conditions that were introduced in fishing licences by the United Kingdom in 1986 are incompatible with the EEC Treaty, and in particular Article 34. It points out that it is still maintaining, after the delivery of the judgment in Jaderow, that the operating conditions are incompatible with Article 34 of the Treaty. In its reply it merely introduced a new plea in law in support of its contentions. The Commission considers that it was justified in introducing such a new plea because the Jaderow judgment, which was delivered after the lodging of the application in this case, contained an interpretation of the relevant provisions of Community law, whereby new matters of law came to light within the meaning of Article 42(2) of the Rules of Procedure.
7.At first sight it may seem appropriate to uphold that procedural objection raised by the United Kingdom. The real issue in the case has been altered as a result of the Commission's new plea and it seems to me doubtful whether the judgment in Jaderow can be regarded as a new matter of law which, pursuant to Article 42(2) of the Rules of Procedure, could justify the introduction of a new plea in law.
On the other hand I do not believe that the consideration on which that provision in the Rules of Procedure is founded, namely the desire to protect the rights of the defence, conclusively precludes the Court from considering the merits of the Commission's new plea.
It will be apparent from what is set out below that I take the view that a decision on the merits would not represent a significant interference with the United Kingdom's rights of the defence. The new plea is in legal terms simple. The United Kingdom had an opportunity to state its views on the matter both in its rejoinder and at the hearing. The burden of proof is on the Commission and not on the United Kingdom. It is the Commission which must establish that the rule on presence in port hinders normal fishing operations. The evidence that has in fact been submitted consisted of declarations given before the national court in the proceedings in Jaderow and was therefore familiar to the United Kingdom.
Even if strict application of Article 169 and Article 42 would perhaps militate against consideration of the merits of the new plea in law, I shall nevertheless, in view of the particular circumstances of the case, suggest that the Court decide on the merits of the Commission's plea that the operating condition introduced in 1986 is incompatible with Community law because the rule on presence in port hinders normal fishing operations.
The Commission, supported by Spain, claims that normal fishing operations are hindered if for each six-month period in each calendar year vessels must be present in a United Kingdom port on at least four occasions at intervals of at least 15 days.
The Commission bases its arguments on a broad interpretation of the condition laid down by the Court that the rule on presence in port and similar evidence of fishing operations being carried out from national ports must not hinder normal fishing operations. At its most extensive, the Commission's claim is that such conditions must not restrict ship-owners' freedom to organize their fishing operations. The Commission has gone so far as to say that it might prove difficult or even practically impossible to modify the operating condition in such a way as to eliminate all obstacles to vessels carrying on fishing operations in a normal manner. Specifically the Commission has claimed that:
—in view of the requirement that vessels be present in port at 15-day intervals, the rule interferes with the fishing operations of most fishermen who return to port at shorter intervals (the Commission has referred in this connection to an affidavit from a ship's skipper submitted in the national proceedings in Jaderow), and
—in view of the fact that the rule requires a vessel's presence on at least four occasions within a six-month period, it may interfere with operations in distant fishing areas where vessels cannot return to ports in the United Kingdom for long periods.
It seems to me clear that those views put forward by the Commission cannot be accepted.
They are based, as the United Kingdom has correctly pointed out in my opinion, on too wide an interpretation of the Court's condition for accepting the lawfulness of operating conditions such as that at issue here. The Commission fails to take due account of the fact that in Jaderow the Court based its decision on the fundamental acceptance that (i) a close economic link between the vessel and the country of registration can be required, (ii) that requirement can be enforced by means of the condition that fishing operations must be carried out from national ports, and (iii) vessels can in principle be called on to show that they satisfy the operating condition by the alternative requirement of either landing their catches or else by their presence in ports in the United Kingdom.
The Court's proviso cannot be construed so broadly that it deprives the rule on presence in port, which the Court has accepted in principle, of any real substance.
I can see no call in the present case to consider further the question of the scope of the Court's proviso. I consider that it is clear that the Commission has produced no evidence whatsoever that the rule on presence in port hinders normal fishing operations, even if the concept of normal fishing operations is construed widely.
First of all it appears that the affidavit from the skipper of a fishing boat submitted by the Commission to the effect that the rule on presence in port would in fact restrict the possibility of fishing normally rests on a misconception of the rule on presence in port. The skipper in question believed that a vessel which returned to a British port at 10-day intervals would not be able to meet the requirement in the rule of 15-day intervals. That view is erroneous. According to information supplied by the United Kingdom, the rule is in fact applied in such a way that a vessel which, for example, enters a British port on the first, the eleventh and the twenty-first day of a month is regarded as having been present in port on two occasions in accordance with the rule, namely on the first and the twenty-first day of the month.
Significance also attaches in this respect to the fact that in the proceedings before the national court in the Jaderow case the applicants reached an agreement with the defendant British Ministry that, while the case was pending, the applicants would comply with the operating condition so long as the Ministry did not enforce compliance with the crewing condition. In addition the affidavits submitted by the United Kingdom which were also submitted to the national court in the Jaderow case confirm that in fact the interested parties did not regard compliance with the operating condition as either particularly economically disadvantageous or burdensome.
Nor has the Commission demonstrated that the rule on presence in port hinders the normal conduct of distant fishing operations. The Commission was unable to dispute the statement by the United Kingdom that the distant fishing operations carried out by British fishing vessels are of such relatively short duration that the rule on presence in port does not hinder the normal conduct of such operations.
I therefore consider that the Commission has failed to substantiate its complaint regarding the operating condition and accordingly propose that this part of the Commission's case against the United Kingdom be dismissed.
This condition is worded as follows:
‘At least 75% of the crew must be British citizens, or EEC nationals (excluding until 1 January 1988, any Greek nationals and, until 1 January 1993 any Spanish or Portuguese nationals who are not the spouse or child under 21 of Greek, Spanish or Portuguese workers already installed in the United Kingdom in accordance with the transitional arrangements on the free movement of workers following the accession of Greece, Spain and Portugal to the Communities as provided for in the relevant Accession Treaties) ordinarily resident in the United Kingdom, Isle of Man or Channel Islands; residence means residence on shore and for this purpose service aboard a British shop does not count as residence in the United Kingdom, Isle of Man or Channel Islands.’
This condition thus embraces a requirement as to the nationality of the crew and also a requirement as to the residence of the crew.
As mentioned above, following the judgment in Agegate, the United Kingdom has acknowledged that the residence requirement is incompatible with Community law.
The United Kingdom has also acknowledged that in the light of the Agegate judgment the nationality requirement cannot be enforced against Spanish and Portuguese fishermen who were already employed at the time of accession as workers on British territory or on board a British vessel where the employment relationship displays a sufficiently close link with that territory.
On the other hand the United Kingdom considers that the nationality requirement can be maintained as against other Spanish and Portuguese workers during the transitional period laid down in the Act of Accession for Spain and Portugal. In that respect the United Kingdom refers to Articles 55 and 56 of the Act of Accession as regards Spain and Articles 215 and 216 of the Act of Accession as regards Portugal. Pursuant to those provisions, during the transitional period the original Member States may maintain existing restrictions on the free movement of Spanish and Portuguese workers.
The Commission claims that the transitional rules in the Act of Accession are not applicable to the condition at issue. The condition is a more stringent form of a pre-existing condition and was introduced at a time when, under the Act of Accession, new more restrictive conditions could not be laid down for Spanish and Portuguese workers.
In Agegate the Court interpreted Article 55 and Article 56 of the Act of Accession. After reviewing the judgments in Peskeloglou and in Lopes da Veiga, it held that Articles 55 and 56 do not preclude national legislation or a national practice whereby Spanish workers are excluded up to 1 January 1993 from 75% of the crew of those vessels, provided that such a restriction, introduced after the 1985 Act of Accession, does not in any circumstances make the position of Spanish workers more unfavourable and that the restriction does not concern Spanish nationals already employed at the time of accession as workers on British territory or on board a British vessel where the employment relationship displays a sufficiently close link with that territory (paragraph 41).
The decisive questions are, therefore:
whether the condition at issue is, as regards Spanish and Portuguese workers, to be regarded as more restrictive than the preexisting condition, and
if so, whether it was introduced at a time when more restrictive conditions could not be introduced.
As far as the first question is concerned, it is of course correct that the amendment made by the United Kingdom authorities in connection with the accession of Spain and Portugal to the European Communities was primarily a necessary consequence of the accession of those countries. The previous crewing condition was based on a distinction between nationals of European Community Member States and those of non-member countries. If Spanish and Portuguese workers could still not be taken into account for the purposes of the 75% requirement after the accession of Spain and Portugal, the condition had to be reformulated. There would have been a basis for such an amendment, taken in isolation, in the transitional rules in the Act of Accession.
However, that is not conclusive. At the same time the United Kingdom authorities took the opportunity to alter the scope of the condition. Whereas it had previously applied to fishing for all fish, whether or not covered by quotas, within British fishing limits, the scope of the condition was henceforth amended so that on the one hand the condition applied only to fishing for fish covered by quotas and on the other it applied irrespective of whether the fishing operations were carried out within British fishing limits or outside them.
The United Kingdom claims that those amendments do not make the condition more restrictive. It points out inter alia that the practical significance of the original condition for the vessels concerned must be seen against the background of the corresponding Irish condition, which I have considered in my Opinion in Case C-280/89 Commission v Ireland, under which British vessels in respect of which the 75% crewing requirement was not satisfied could not fish inside Irish fishing limits.
In my view the alteration in the scope of the crewing requirement, which was not a necessary consequence of the accession of Spain and Portugal, serves to render that condition more restrictive within the meaning attributed to that term by the Court in Peskeloglou and Agegate. Following that amendment, the condition comes into play as regards fishing for every species of fish covered by British quotas, irrespective of where the fishing operations are carried out. The alteration is thus quite clearly perceived as being more restrictive by the fishing interests concerned. The reference for a preliminary ruling and the parties' observations in Age-gate show that the fishing interests concerned regarded the alteration as a serious restriction on the fishing operations they were able to carry out under the former rules.
The question is, therefore, whether that alteration was made at a time when the prohibition in the Act of Accession on making existing rules more restrictive did not apply.
The United Kingdom claims first of all that the alteration in the crewing condition was introduced before Spain and Portugal joined the Community on 1 January 1986 since at the beginning of December 1985 the British Agriculture Minister had already stated in a press release that the new condition would apply to all fishing licences with effect from 1 January 1986. In the alternative the United Kingdom claims that the alteration complies with the requirements of Community law because the condition took effect from the date of the accession of Spain and Portugal.
I do not consider that there is any need to examine further when the amendments to the crewing condition were introduced and when they in point of fact led to changes in the terms of fishing licences already issued. (7) It is, in my view, sufficient to assume that the alterations were to take effect from 1 January 1986.
The decisive question is therefore whether the transitional rules in the Act of Accession permit the existing rules to be made more restrictive with effect from the date of the accession of the new Member States.
The Court has pointed out in the Agegate case that transitional provisions in acts concerning the accession of new Member States which entail derogations from the fundamental rules of Community law must be interpreted restrictively and that they can constitute only authorization ‘to maintain existing restrictions’. (8) An amendment of the crewing requirement taking effect from the date of the accession of Spain and Portugal cannot reasonably be said to represent the maintenance of existing rules. To the extent, therefore, that it applies to Spanish and Portuguese workers, the amendment has the effect of rendering the existing condition more restrictive, something that is not authorized in the transitional provisions of the Act of Accession and is therefore incompatible with Article 48 of the Treaty. (9)
The Commission has also claimed that the crewing requirement is incompatible with Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community (10) and Regulation (EEC) No 1251/70 of the Commission of 29 June 1970 on the right of workers to remain in the territory of a Member State after having been employed in that State. (11) The Commission has pointed out that the crewing requirement does not take sufficient account of the rights to equal treatment under those regulations which are enjoyed by the members of the families of workers, irrespective of their nationality. The United Kingdom does not appear to have disputed the Commission's claims in this regard.
The Commission has claimed that the crewing requirement is also incompatible with Article 52 of the Treaty on the right of establishment of self-employed persons and with Article 59 on freedom to provide services. That submission was originally in any event logical in so far as Article 52 was concerned because one question in Agegate was whether the so-called ‘share fishermen’ were workers within the meaning of Article 48 or self-employed persons within the meaning of Article 52. The Court held, as we know, that share fishermen are to be regarded as workers. Accordingly, I find it difficult to see what significance Article 52 and Article 59 might have as regards the lawfulness of the crewing condition at issue and the Commission has indeed not expounded that point. On that basis I consider that it would not be appropriate for the Court to hold that the crewing requirement also constitutes a breach of Article 52 and Article 59 of the EEC Treaty.
On the basis of the foregoing observations I suggest that the Court:
—declare that by introducing in fishery licences with effect from 1 January 1986 a new condition regarding the composition of the crew the United Kingdom has infringed its obligations under Article 48 of the Treaty, Regulation No 1612/68 of the Council and Regulation No 1251/70 of the Commission;
—for the rest, dismiss the action against the United Kingdom;
—order each of the parties to bear its own costs; and
—order the Kingdom of Spain to bear its own costs.
*1 Original language: English.
*2 The first United Kingdom rules were enacted in 1983 and were not the subject of any proceedings before the Court of Justice. They contained inter alia provisions on the composition of the crew. The second set of rules are those at issue in these proceedings. They were the subject of the judgments in the preliminary ruling proceedings in Jaderow and Age-gate which are considered below. The third set of rules was enacted in 1988 and contains certain requirements relating in particular to ownership. It was the subject of the judgment of the Court of 25 July 1991 in the preliminary-ruling proceedings in Case C-221/89 The Queen v Secretary of State for Transport, ex parte Factortame Limited [1991] ECR I-3905, not yet published, and the judgment of 4 October 1991 in Case C-246/89 Commission v United Kingdom [1991] ECR I-4585.
In the eyes of the United Kingdom quota hopping is the phenomenon whereby vessels having no previous link to the United Kingdom re-register under the British flag so that they can then fish against the quotas which arc allocated each year by the Community to the United Kingdom within the framework of the common fishery policy. In practice it is chiefly Spanish vessels which have re-rcgistcrd under the British flag.
The number of vessels involved in such ‘quota hopping’ is said to be relatively small, namely at tne beginning of 1989 some 150 vessels out of a total British fishing fleet of 10000 vessels (see R. Churchill in Common Market Law Review 1990, p. 212).
*3 Case C-216/87 The Queen v Ministry of Agriculture, Fisheries and Food, ex parte Jaderow Limiten [1989] ECR 4509.
*4 Case C-3/87 The Queen v Ministry of Agriculture, Fisheries and Food, ex parte Agegate Limited [1989] ECR 4459.
*5 The United Kingdom has stated that the general method of giving notice of the introduction of new conditions for the issue of fishing licences is the issue of a press release from the Ministry in question. From the date of the entry into force of those conditions, the new conditions are inserted in the fishing licences actually issued.
*6 Those articles of the Act of Accession are substantively identical.
Article 55 is as follows:
‘Article 48 of the EEC Treaty shall only apply, in relation to the freedom of movement of workers between Spain and the other Member States, subject to the transitional provisions laid down in Articles 56 to 59 of this Act.’
Article 56 provides:
‘1. Articles 1 to 6 of Regulation (EEC) No 1612/68 on the freedom of movement of workers within the Community shall apply in Spain with regard to nationals of the other Member States and in the other Member States with regard to Spanish nationals, only as from 1 January 1993.'
The Kingdom of Spain and the other Member States may maintain in force until 31 December 1992, with regard to nationals of the other Member States and to Spanish nationals respectively, national provisions, or those resulting from bilateral arrangements, making prior authorization a requirement for immigration with a view to pursuing an activity as an employed person and/or taking up paid employment. ...’
(6) Case 77/82 Peskeloglou v Bundesanstalt fur Arbeit [1983] ECR 1085 and Case 9/88 Lopes da Veiga v Staatssecretaris van Justitie [1989] ECR 2989.
(7) The information we have been given reveals that, for understandable reasons, the changes to the fishing licences were in fact first introduced in the period after 1 January 1986. The United Kingdom has emphasized, however, that it was in any event clear that the alterations were to have effect as from 1 January 1986.
(8) According to paragraph 39, a transitional provision ‘... being a derogation from the principle of the free movement of workers laid down in Article 48 of the EEC Treaty, must be interpreted restrictively and ... consequently, whilst the old Member States and those which acceded to the Community are authorized to maintain existing restrictions, they may not in any circumstances during the transitional period make more stringent the conditions governing the taking-up of employment by new restrictive measures.’
(9) The Commission has suggested that the prohibition on altering existing restrictions to make them more stringent may perhaps have taken effect as from the signature of the Act of Accession and in this respect it has referred to a Joint Declaration made when the Act of Accession was signed, see OJ 1985 L 302, p. 480. The Joint Declaration states in particular: ‘The present Member States and the new Member States undertake not to apply to nationals of the other Member States who reside or work, in accordance with regulations, on their territory, any new restrictive measure that they may adopt after the date of signature of this Act in the field of the residence and employment of aliens.’
As will be apparent from the foregoing, there is no need in the present proceedings to take a position on that submission. I would however point out that in any event the Joint Declaration concerns only persons who already reside or work in accordance with regulations in the territory of the host State (see also in this respect the Opinion of Advocate General Mischo in Agegate, paragraph 33).
(10) OJ, English Special Edition 1968 (II), p. 475.
(11) OJ, English Special Edition 1970 (II), p. 402.