Opinion of Mr advocate-general Roemer

Mr President,

Members of the Court,

The subject of the application to which my opinion today refers is the customs law of the EEC, or more precisely, the competence of the Commission to grant tariff quotas for the benefit of individual Member States at lower rates than those of the common external tariff.

With the first alignment of national customs duties on the common external tariff there occurred on 1 January 1962, within the Federal Republic, a considerable increase in the customs duties on wines intended for distilling (from 4.60 DM per hectolitre to between 14.05 and 26.05 DM per hectolitre), while at the same time the internal duty applicable to other Member States was reduced from 3.60 DM to 3.20 DM per hectolitre.

Since before this period a considerable percentage of the German demand for wine intended for distilling was met from non-Member States, the Government of the Federal Republic on 16 June 1961 requested the grant of an import quota at a reduced rate of 4.60 DM per hectolitre. It also asked that no time limit should be placed on the quota which would in principle amount to 40 % of the total imports of the previous year and, in 1962, for the first time, to 500000 hectolitres. Later, the request was reduced to 450000 hectolitres and limited to the year 1962.

The Commission allowed this request in part by a Decision of 11 May 1962, that is, it granted a quota of 100000 hectolitres at the rate of 4.60 DM per hectolitre. The remainder of the request is deemed to have been refused by implication.

It is against this Decision, which was addressed to the Federal Government with an accompanying letter of 22 May 1962, and which was published in the Official Journal of 1962, No 44, at p. 1368, that the present application is made with the object of annulling that part of the Decision which constitutes a refusal.

The numerous heads of complaint may be summarized as follows:

I shall mention these in detail during the course of the legal examination.

Legal consideration

A — Questions of admissibility

It appears from the facts that the request for a quota and the Decision refusing it both relate to the year 1962. It is thus impossible for this application to succeed in obtaining approval of that part of the quota which was requested for 1962 and refused. The question therefore arises whether there is no material legal interest in the proceedings and whether the applicant has no need of legal protection. The Court should examine the question of its own motion. It gives rise to the following considerations.

The proceedings were not concluded in 1962, principally because of our rules of procedure, and not because of the conduct of the parties. In proceedings of this and of a similar nature relating to decisions of the Executives of the Communities which have legal effects limited in time, it frequently happens that owing to the expiry of the time limit, it is impossible to achieve the object of the action. On the other hand, it must not be overlooked that the applicant still has some interest in obtaining a decision by the Court, because the dispute refers to questions of principle which may be of importance in the case of a similar request for a quota submitted by the applicant for 1963 as well as for other similar cases in the future. If this interest were not of itself sufficient, legal questions of great importance would remain unanswered and the Court would be unable for the future to fulfil its task of ensuring the observance of the law in the interpretation and application of the Treaty.

I therefore cannot raise any objection to the admissibility of the application.

B — The substance of the application

The contested Decision is based upon Article 25 (3) of the EEC Treaty, which reads : In the case of the products listed in Annex II to this Treaty, the Commission may authorize any Member State to suspend, in whole or in part, collection of the duties applicable, or may grant such Member State tariff quotas at a reduced rate of duty or duty free, provided that no serious disturbance of the market of the products concerned results therefrom.

As the Commission stated in the course of the proceedings, its Decision is based in the first place on the premise that the negative prerequisite to Article 25 (3) (provided that no serious disturbance of the market of the products concerned results therefrom) has not been fufilled, which of necessity would have entailed the refusal of the request. Furthermore, and as a subsidiary point, it applied considerations in the exercise of its discretion, which it must do when there is no reason to expect any serious disturbance. These considerations led it to the conclusion that the grant of a quota was not justified, since the production of the Community would allow an adequate supply both in quantity and in quality to the producers of wine spirits in the Federal Republic.

In my opinion, this twofold reasoning is not wholly clear from the text of the Decision. However, the preamble to the Decision contains phrases which indicate that the Commission did not restrict its considerations to the question of serious disturbance but extended them to include the possibilities of supply to German producers, so that to some extent it is possible to speak of principal and subsidiary considerations.

It is in these terms that I should like to develop my examination.

I — Principal Considerations

Was the Commission prevented from granting a quota having regard to the serious disturbances which might be expected?

1. Infringement of an essential procedural requirement

In the applicant's opinion, the Decision which was taken above all lacks an adequate statement of reasons and therefore infringes Article 190 of the Treaty.

The essence of the statement of reasons is contained in the following sentences : On the basis of the existing information it has been possible to ascertain that the production of the wines in question within the Community is amply sufficient. The grant of a tariff quota of the volume requested might therefore lead to serious disturbances of the market in the products in question …

The Commission considers that this is a sufficient indication of the basis of its thinking and that for a well informed Member State, this statement of reasons would be adequate. Moreover, in the course of the oral procedure, its Agent suggested revising, in the light of the Treaty of Rome, the case law of the Court concerning the obligation to give reasoned decisions.

We know that up to the present the Court has always safeguarded with particular care the observance of the rules concerning the provision of reasons, as has been shown, inter alia, by its undertaking an investigation of its own motion.

On many occasions the Court has stressed that a decision must contain an indication of the essential findings of fact and of the legal considerations which were determining factors in the adoption of the measure, so that interested parties, and also the Court itself, may consider whether the decision is well founded.

In Cases 36 to 38/59 and 40/59, the Court adopted the view that it is precisely those decisions which are based upon an evaluation of the economic situation as a whole which require a very full statement of reasons and, in Cases 1/57 and 14/57, it even said expressly that the words In the present circumstances cannot in fact be regarded as a statement of the essential findings of fact upon which the legal justification of the measure depends.

The wording of the text of the Treaty provides no reason for applying a different criterion to the EEC Treaty from that applied to the ECSC Treaty, for in both cases one might describe it as a solemn requirement that decisions and even, in particular contrast to national law, regulations (corresponding to general decisions under the ECSC Treaty) shall state the reasons on which they are based. To propose that precisely in the case of the EEC Treaty the obligation to state reasons should be weakened seems to me, however, to be singularly inappropriate in view of the novelty of the subject matter with which the Executives of the EEC have to deal.

In particular, I would like to reject the proposition that the statement of reasons for the decision can be proportionate to the other opportunities to obtain information available to the parties to whom the decision is addressed, because we know from other actions that it is a matter of controversy as to who, in cases similar to the present one, apart from the persons mentioned in the decision, is affected by it and has a right to make an application. Moreover, and I believe the applicant to be right on this point, one must not forget the useful function which the obligation to state reasons performs for the purposes of a logical strengthening of the protection afforded by the law, insofar as it forces the Executives, when they formulate the statement of reasons for a decision, to give careful consideration to the conditions giving rise to the decision.

Of course, this is not to say that the Executives must produce an analysis with all the arguments of those affected by the Decision or even that they should elaborate a theory to cover all imaginable objections. In this respect, it is impossible to take seriously the objection raised by the defendant in the course of the oral procedure, namely, that the requirements with regard to particulars of fact and law of a statement of reasons should not be taken to such an extent that the Commission would be obliged to furnish copies of voluminous statistics or a summary of the anticipated content of a possible reference to the Court. Nobody has in mind any such exaggeration of the duty to provide reasons. If, however, the Commission invokes a criterion as important as that of serious disturbances, a mere reference in the Decision to existing information is not sufficient, above all because it creates the false impression that what is concerned is the information provided by the applicant or uncontested values. It is required rather to state the essential figures and facts the evaluation of which has led it to its Decision — that is, to give information regarding the state of the market and its development (the extent of supply and demand) having regard to its trend over several years. This requirement is all the more reasonable when a substantial part of the quota (approximately one quarter of the amount requested) has been granted thus disproving to this extent the existence of any serious disturbance.

Apart from the details concerning the importation of distilling wines into the Federal Republic, which is important in another connexion, the Decision, as we have seen, does not contain any indication of the figures.

We must therefore find that the Decision does not meet the requirements of Article 190 of the EEC Treaty and that it should be annulled, unless it can be justified by the subsidiary considerations.

However, I will not now immediately turn to the subsidiary considerations, but will examine, in the interests of a full treatment of the subject, whether the other submissions of the applicant with regard to the principal considerations are valid.

2. Infringement of the Treaty

Regarding the question of the infringement of the Treaty, the applicant makes several complaints. In particular it objects that:

The following considerations require attention.

As against this, with the assistance of general information drawn from the official agricultural statistics of the Community, the applicant attempts to resolve the difficulties and to outline a picture of the true market situation. Calculating on the basis of the figures relating to the total consumption of wine, the consumption of table wine and the home consumption of producers in France and Italy, it arrives at the conclusion that, after deducting these quantities from the production of white wine, there is no surplus to be found to meet the demand of producers of spirits. I cannot judge whether this conclusion is correct for it is possible that home consumption of producers may be included in the figures relating to the consumption of table wine. In addition, it may be objected that white wine is not consumed as a table wine in the same proportions as red wine. However, it does seem to me safe to say that by taking into consideration table wine and home consumption of producers the comparative figures provided by the Commission require considerable amendment.

If, in view or these elements or uncertainty, one is not prepared to accept the applicant's calculations, then an attempt must be made to evaluate the state of the market by means of other evidence.

For this purpose the following arguments are relevant.

Final inferences

All these factors do not show us a picture of a market suffering from an overproduction of white wine suitable for distillation.

No other facts have been put forward which could give rise to fears of a serious disturbance of the market in the event of the grant of a quota. The principal argument of the Commission, therefore, fails and its Decision is proved also to be wrong in fact.

II — Subsidiary Considerations

The twofold justification for the Decision obliges me to examine the Commission's subsidiary considerations before we pronounce our final decision. Under this head, the Commission argues that, even applying the discretionary powers granted to it by Article 25 (3), it had no grounds for granting the quota.

These subsidiary considerations concerning the exercise of discretionary powers are the subject of a series of complaints; in the first instance, of a lack of statement of reasons.

C — Summary

The results of my examination may be summarized as follows :

The Decision of the Commission, in its principal as well as in its subsidiary lines of reasoning, is shown to contain errors of form and errors of substance, which clearly call for its annulment.

My opinion therefore is that the Decision should be annulled and that costs be awarded against the defendant.

1 Translated from the German.

2 Case 18/57, Rec. 1958-1959, p. 14.

3 Case 6/54, Rec. 1954-1955, p. 219; Case 2/56, Rec. 1957, p. 36; Case 9/56, Rec. 1958, p. 29; Case 18/57, Rec. 1958-1959, p. 114; Case 14/61, Rec. 1962 p. 523.

4 Rec. 1960, p. 89.

5 Rec. 1957, p. 219.

6 Document of 30 June 1960.

7 Document of 30 June 1960. Chapter Wine, Table, p. 2.