Opinion of Mr advocate-general Roemer

Mr President,

Members of the Court,

These cases, which were joined by order of the Court of 14 March 1963, for the purposes both of procedure and judgment, form the sequel to Cases 5 to 11/62 and 13 and 14/62 which the same applicants brought against the High Authority something over eighteen months ago. They relate to the efforts of the High Authority to obtain reliable figures on the consumption of ferrous scrap so as to establish a final statement of account for the ferrous scrap equalization scheme.

To these ends, the Directorate General of Steel of the High Authority sent letters on 27 November 1961 to the applicant undertakings which use electric furnaces for the purposes of their production, calling upon them to forward the originals or copies of the electricity invoices relating to their production from April 1954 to November 1958, to certify that the documents submitted covered the total consumption of electricity, and, if all accounting documents were not available to them, to ask the electricity companies for copies.

As the undertakings did not comply with this request, even after an exchange of correspondence with the High Authority, the latter adopted formal Decisions on 23 February 1962 requesting the undertakings to send the documents specified in the letters of 27 November 1961 within a given time limit. The Decisions were contested before the Court and were the issue in Cases 5 to 11/62 and 13 and 14/62.

While these proceedings were taking place, the High Authority sent registered letters to the applicant undertakings on 27 August 1962. It gave them a time limit for implementing the contested Decisions, and invited them to submit any comments in accordance with Article 36 of the Treaty. The undertakings submitted their comments in letters of September 1962; further correspondence with the High Authority followed.

The proceedings ended with the judgment of the Court of 14 December 1962 dismissing the applications.

As the electricity accounts called for had not reached the High Authority it adopted new Decisions on 18 December 1962, this time imposing fines on the undertakings together with periodic penalty payments for each day's delay in complying with the obligation to produce the electricity invoices, to run from the eighth day following notification of the Decisions. These pecuniary sanctions are the issue in the present cases. All the applicants seek the annulment of the Decisions of the High Authority, or alternatively the reduction of the fines by four fifths, five sixths or nine tenths and exoneration from the payment of the periodic penalty payments with which they are threatened. The High Authority considers that these applications are inadmissible and in any case unfounded and its conclusions are to this effect.

Legal Consideration

A — Admissibility

In considering the legal issues we find that several objections of the High Authority call for comment on certain questions of admissibility.

B — Substance

After these brief observations on problems of admissibility I turn now to the arguments on the substance.

I — Is the imposition of fines and periodic penalty payments justified on the merits?

1. The fines

The contested Decisions are based on Article 47 of the Treaty under which the High Authority may obtain information and have any necessary checks made. According to the third paragraph the High Authority may impose fines on undertakings which evade their obligations under decisions taken in pursuance of this Article. The maximum amount of such fines shall be 1 % of the annual turnover.

In the present case the individual Decisions of 23 February 1962 were taken in pursuance of the first paragraph of Article 47. They required the applicants to produce certain documents within fifteen days. The time limit laid down expired without the documents' reaching the High Authority and without the undertakings' having begun to make any efforts to procure from their electricity suppliers duplicates of the invoices demanded.

we can tnus say that, from me point of view of the external sequence of events and of the result sought, the conditions of Article 47 are fulfilled, because the third paragraph of Article 47 is not based on the concept that there can be no wrongful omission until the Court declares to be legal a decision of the High Authority imposing an obligation with a penal sanction for failure to carry it out. On the contrary the Decisions of the High Authority are directly binding and even applications to the Court have no suspensory effect.

But this first statement is not enough for the purposes of the application of a penal provision which Article 47 undoubtedly is. Other objective and subjective circumstances must be considered.

This applies first to the objection that it was impossible to perform the task set. This is surely important, for no-one may be punished for failing to do the impossible.

This objection presents two aspects which must be distinguished.

Consequently it is necessary to make certain distinctions for the purposes of the legal consideration.

But we nave not yet arrived at a final verdict upon the fundamental legality of the penal decisions. We must still consider certain viewpoints which may enter into account as grounds for justifying or exculpating the applicants.

2. The periodic penalty payments

The function of periodic penalty payments is not to punish an offence which has been committed; they serve on the contrary as a coercive measure to ensure future conduct.

In the present cases the High Authority decided that the undertakings would have to make periodic penalty payments as from the eighth day after the notification of the Decisions for each day's delay in fulfilling the obligation to supply the High Authority with the electricity invoices mentioned and to vouch for their completeness.

In assessing the legality or the periodic penalty payments the first important fact is also that the applicants have destroyed the accounting documents in their possession and that they allegedly did so, without exception, before the adoption of the Decisions imposing the periodic penalty payments. If the Decisions were aimed solely at compelling the production of the documents from the applicants' records we should need to establish that the result sought was impossible of achievement and consequently that the fixing of periodic penalty payments is illegal.

cut in the wording or the contested Decisions fixing the periodic penalty payments, just as in the interpretation of the Decisions of 23 February 1962 on obligations to be complied with, nothing compels us to suppose that the High Authority was concerned only with the originals of the electricity invoices and not with copies, to be obtained if the need arose. Thus, so long as it is not shown that copies can no longer be obtained, the Decisions fixing the periodic penalty payments cannot be cancelled on the ground they are aimed at the implementation of a Decision which is directed to an impossible end.

But another consideration deserves examination. After the destruction of the accounting documents at the applicants' premises, a change necessarily took place, as we have already mentioned, in the content of their obligation towards the High Authority. The obligation to produce documents is transformed into an obligation to procure copies from the electricity companies. This obligation is extinguished in an urgent request to the suppliers of electricity, and so does not include a responsibility for achieving the result sought by the High Authority, the realization of which depends upon the conduct of third parties, namely the electricity companies. From the wording of the coercive Decisions the conclusion must however be drawn that only the production of the required documents to the High Authority is considered, as constituting compliance with the obligation imposed on the applicants, sufficient to prevent new periodic penalty payments from accruing. The applicants are therefore to suffer the disadvantages of the failure to attain a result which depends also upon the will of third parties. In this respect, in my opinion, the Decisions exceed the admissible limits of a means of compulsion, which would not be so if they were limited to imposing penalties for each day in which the applicants did not endeavour to obtain the documents from the electricity companies. For this reason, they should be considered as illegal and should be annulled, since their amendment by the Court under Article 36 of the Treaty could only be contemplated in the case of errors in the extent of the sanctions fixed, and not in the wrongful fixing of the requirements as to the time when they fall due.

II — The amount of the penalty

Finally, the applicants have also raised objections with regard to the amount of the penalties and the assessment of the periodic penalty payments; in view of the conclusions to which I have just come, these objections call for comment only in so far as they relate to the fines.

Essentially, the applicants plead their weak economic situation and the vagueness of the legal position as regards the obligation to preserve accounting documents. In my opinion, the first of these arguments does not warrant examination for it was put forward in a quite general manner and was not substantiated. But the second argument does give rise to some reflections, although not exactly in the sense intended by the applicants, for in my view they are not being penalized for having infringed the obligation to keep accounting documents but for not having procured copies.

In so far as it is necessary to begin with the fact that the accounting documents were no longer in the hands of the applicants when the Decisions of February 1962 were adopted (this applies to Cases 3 to 10/63), it might be thought that the faulty interpretation by the applicants of the mandatory Decisions of 23 February 1962 and their incorrect assessment of their legality, which, looked at as factors for establishing innocence, failed to exonerate them from punishment, might nevertheless be regarded at least as errors mitigating the offence. There is in fact no doubt that the request of the High Authority of February 1962 concerned primarily the production, directly from the applicants, of the documents in their possession, while the applicants might have had certain doubts whether they were being called upon to procure copies from the electricity companies. Further, it is possible to take the view that there might be some reason for doubt about the assessment of the legality of an obligation with such wide scope.

For these cases then, in assessing me amount of the penalties, it may be material to consider that the impropriety of the applicants' conduct, for which they have in fact been punished, consisting solely of the failure to procure duplicate invoices, is to be rated less seriously than would have been the case had it been possible to accuse the applicants of continued failure to produce documents in their possession. From the point of view of legal consequences a distinction must be noted here, since there was greater certainty that the High Authority would obtain the information it required through the production, directly by the applicants, of documents in their possession than as the result of efforts to procure copies.

As already mentioned these observations admittedly do not apply in Case 2/63, a case in which the undertaking still possessed at least part of the documents called for after the notification of the Decision of February 1962 and only destroyed them in October 1962; here the offence consists in the non-production of documents which were available to the applicants.

I would not admit in mitigation the other circumstances indicated by the applicants (repeated inspections by the Société fiduciaire suisse or by the High Authority's inspectors or any instructions to the High Authority's inspectors not to extend the inspections beyond the three previous years). They were put forward in order to provide some justification for the destruction of the accounting documents. But since this destruction occurred after the delivery of the High Authority's letter of November 1961, the applicants could not have had any doubt of the intention of the High Authority to carry out new and comprehensive checks.

in its penal decisions, me High Minority fixed the fines at 1/2 % of the annual turnover. In doing so it kept very much below the maximum limit of 1 % of the annual turnover permitted by the Treaty (third paragraph of Article 47). But as we cannot see whether it has taken sufficient account, in the sense just indicated, of the destruction of the vouchers of which it was informed by the undertakings in September 1962, I consider that a corresponding amendment and reduction of the fines in Cases 3 to 10/63 may be advocated.

C — Summary

At the end of my deliberations I arrive at the following conclusion: the principal conclusions seeking the annulment of the Decisions imposing fines are admissible but unfounded. On the other hand the applicants are successful in their conclusions seeking the annulment of the periodic penalty payments fixed and, as regards Cases 3 to 10/63, also in their conclusions seeking the reduction of the said fines.

As to the annulment of the periodic penalty payments I see no grounds for ordering the applicants to pay the costs, for they informed the High Authority in September 1962 of the destruction of the accounting documents, that is to say, before the adoption of the contested Decision. Further, for the purposes of the decision on costs, the fact that the High Authority failed on several questions of admissibility should be taken into account. In Case 2/63 I propose that costs should be shared; in the other cases a decision on costs might be recommended under which the applicants would bear a somewhat smaller share of the total costs of the proceedings than the High Authority.

1 Translated from the German.