OPINION OF MR ROMEMER — JOINED CASES 73 AND 74/63 HANDELSVERENIGING ROTTERDAM v MINISTER VAN LANDBOUW

Mr President Members of the Court,

The College van Beroep voor het Bedrijfsleven, a Netherlands administrative court whose judgments are not subject to appeal, has made reference to the Court under Article 177 of the EEC Treaty for a ruling on certain difficulties of interpretation and on the legality of certain Decisions of the Commission, questions which arose in two cases brought before it by the same parties on identical problems.

These are the facts on which the national proceedings are based:

Owing to the economic difficulties of German manufacturers of fondant paste caused by a large increase in imports of fondant paste from other countries of the Economic Community, where production costs — in particular raw material prices — are lower, the Federal Government several times applied to the EEC Commission for protective measures to be taken. The Commission granted its requests, and under Article 226 of the Treaty authorized the Federal Republic to impose coutervailing duties on the import of fondant paste from Belgium and the Netherlands, on the express condition that these states did did not already impose corresponding export duties (Decision of the Commission of 27 July 1960). The original authorization was extended and varied several times (Decisions of the Commission of 21 December 1960, 28 June 1961 and 22 December 1961), and finally by the Decision of 27 February 1962.

The Netherlands Minister of Agriculture and Fisheries, on the basis of the above-mentioned reservation contained in these Decisions, issued an order imposing a duty on fondant paste providing for the payment of certain countervailing duties on the export of fondant paste to the Federal Republic of Germany. This order entered into force on 5 August 1960 and, after various amendments, its latest version is dated 2 April 1962.

These rules affected the plaintiffs in the Netherlands proceedings, the second plaintiff because it manufactures dry fondant powder, the first plaintiff because it exports fondant powder to the Federal Republic. For the exports made between January and March 1962 the first plaintiff received several notices of assessment requesting the payment of certain sums by way of countervailing duties.

Legal proceedings were brought to obtain the annulment of the notices of assessments. The actions were founded not only on submissions drawn from Netherlands law but also on arguments based on Community law.

Considering that in order to give judgment on these actions it is necessary to answer questions of Community law, and in view of the obligation for national courts of last instance to refer these problems to the European Court of Justice for a preliminary ruling, the College van Beroep suspended the proceedings and referred to this Court the following questions:

During the written proceedings the Dutch parties submitted their observations on the reference and the defendant referred to the arguments which it had maintained before the Netherlands court. The EEC Commission and the Government of the Federal Republic of Germany also submitted their observations.

Legal Consideration

I — Preliminary questions

Before I embark on the reply to be given to the questions posed, certain preliminary questions should be examined, some of which are raised by the Commission and some by the Federal Republic of Germany.

1. The Commission points out that the first question does not mention among the authorizing Decisions of the Commission that of 22 December 1961, although it is also of importance to the facts in the case because it extended to 28 February 1962 the authorization granted on 28 June 1961 and because the exports in question occurred during the period from January to March 1962. It proposes that, giving a logical interpretation to the order making the reference, the Court should extend its examination to this unmentioned Decision. There should be no objection to this, for in fact it is apparent from the grounds given in the order making the reference that the Netherlands court, in order to deal with all the objections submitted by the plaintiffs, examined all the authorizing Decisions. The fact that this Decision was not expressly mentioned in the questions referred to the Court is plainly the result of an oversight.

2. The Commission further remarks that the Articles of the Treaty expressly referred for interpretation are not the only ones of importance in the national proceedings. In particular, the Netherlands court itself interpreted Article 12 of the Treaty when it declared that the fondant paste in question fell within its provisions and that the countervailing duties authorized by the Commission were charges having equivalent effect to customs duties which, under Article 12, should not have been reintroduced. The Commission therefore raises the question whether the Court should not draw attention to the obligation of national courts to submit to it all questions of interpretation and whether it should not give judgment also on the scope of Article 12 of the Treaty, in spite of the absence of a question on this point.

3. finally, the federal Government raised further questions, the reply to which may influence both the order to be followed in examining the points contained in the reference and the admissibility of certain questions. They allude to the scope of the jurisdiction of the Court laid down in subparagraph (b) of the first paragraph of Article 177 which mentions rulings on the validity of acts of the institutions of the Community.

II — Answers to the individual questions

After these preliminary remarks, I now turn to the answers to the individual questions, and I shall adhere, after all that has been said, to the sequence adopted in the order making the reference.

First Question:

Do the authorizations contained in the various Decisions of the Commission apply equally to the Netherlands and do they cover the imposition of an export duty by the exporting state?

In contrast to the other parties to the proceedings, the plaintiffs in the Netherlands proceedings are alone in having expressed doubts as to whether an affirmative answer should be given to the first question of interpretation.

The following points in the Decisions themselves are of importance in this connexion:

In the first Decision, the ninth recital expressly states that one suitable means of remedying the difficulties consists in raising the prices for fondant paste, in the form either of a duty on its entry into the Federal Republic or of a duty on its exportation from the exporting country.

in the operative part of the Decisions, so far as it is not limited purely and simply to extending earlier Decisions, the authorization is always expressed to be subject to the condition that the exporting state does not already impose a countervailing duty on the export. All the Decisions, except the first, expressly fix the amount of the duty where the exporting state does impose it. Finally, all the Decisions are unanimous in describing the Netherlands as addressee and they are addressed to that State.

I therefore have no objection to acknowledging that, in view of all the circumstances, a reasonable interpretation of the Decisions must find that they contain an authorization for the Netherlands, even though it did not take the same form for that country as for the Federal Republic.

Second Question :

The second question is subdivided into two parts which are complementary, as the Federal Government justly remarked. The question here is whether the Decisions are valid inasmuch as they comprise authorizations for the exporting countries although they did not

request an authorization.

The plaintiffs in the Netherlands proceedings plead invalidity; the EEC Commission and the Federal Government on the other hand believe that the Decisions are valid.

It is certain, first of all on the basis of the wording of Article 226, that this protective clause operates only at the request of the Member State which desires protection. The State concerned within the meaning of Article 226 (2) can only be a State in which a sector of the economy is in serious difficulties which are liable to persist or a State which establishes a serious deterioration in the economic situation of a given area. It must further be admitted that the wording of Article 226 could lead to doubts as to whether the protective measures provided also include authorizations for other Member States. These doubts arise from the words a Member State may apply for authorization to take protective measures in order to rectify the situation and adjust the sector concerned to the economy of the Common Market (French text: un Etat membre peut demander à être autorisé à adopter des mesures de sauvegarde permettant de rééquilibrer la situation et d'adapter le secteur interessé a l'économie du marché commun). But I am sure that the clear sense and purpose of this provision enable the literal interpretation of the text to be modified. The essential purpose of Article 226 should be regarded as being to ensure the most efficacious protection possible. This purpose is decisive; the choice of means and procedure is in principle reserved to the Commission, as appears especially from paragraph (2) which authorizes the Commission in general terms to determine the protective measures which it considers necessary and to specify the circumstances and the manner in which they are to be put into effect. In doing this, the Commission may, under paragraph (3), depart from the rules of the Treaty; the only requirement is that it should give priority to such measures as will least disturb the functioning of the Common Market. It must be deduced from this last-mentioned reservation that in a given case the Commission must not confine itself to measures which only have effect in the actual state which is in need of protection. The Commission has justly pointed out that it might not appear equitable, in fixing countervailing duties as protective measures, to deprive of the receipts from that duty the Member State which gained a competitive advantage by making special efforts to achieve rationalization. But if the Comsion were able to order, in the context of the circumstances and manner in which the protective measures are to be put into effect (Article 226 (2)), that the importing state should put at the disposal of the exporting state the receipts coming from the countervailing duties (which in principle appears beyond dispute), it should also be permitted directly to authorize the exporting state to impose the duties.

In support of this proposition, reference can also be made to Article 46 of the Treaty which likewise contains a kind of protective clause against adverse effects upon the competitive position produced by national market organizations. In this typical case, the Treaty expressly provides that the importing States which are put at a disadvantage shall apply a countervailing charge unless the Member State, the national market organization of which is affecting the competitive situation, imposes a countervailing charge on export.

finally, it may be recalled that the effects on trade are the same, irrespective of whether the duty be imposed on export or import, and thus that the exporters are not made to bear an additional burden as a result of the authorization granted to their own state.

Consequently, the Decisions of the Commission are not illegal although they contain an authorization for the Netherlands in addition to that granted to the Federal Republic.

Third Question, first part:

The third question contains, first, a preliminary question of the interpretation of Article 226, which should, however, at the same time help in judging the legality of the Decisions. We must see whether the difficulties referred to in Article 226 also include those which arise only from the application of the provisions of the Treaty.

The federal Government, like the Commission, has expressed the opinion that it is precisely these difficulties which constitute the principal cause for the application of Article 226. In support of this they have put forward arguments which seem to me to be sound.

Finally, reference must be made to the parallel case of Article 37 of the ECSC Treaty. On this subject the Court has stated in its judgment in Cases 2 and 3/60 (Rec. 1961) that this provision served to guard against the consequences which might result from the application of the Treaty provisions.

Consequently, there is no reason for interpreting Article 226 restrictively and for not recognizing that it is applicable to the difficulties which result from the normal application of the Treaty.

Third Question, second part:

The validity of the Commission's Decisions has also been thrown in doubt in the Netherlands proceedings by the argument that the Commission applied Article 226 in order to avoid the procedure under Article 235.

The objections of the plaintiffs in the Netherlands proceedings are based on the following reasoning:

The purpose of Article 226 is to authorize provisional measures to compensate for economic difficulties and to adapt the economy to that of the Common Market. The difficulties in which the German sugar-processing industry found itself resulted from a difference in the prices of raw materials in force in the different Member States. This difference originates in the different structures of the national market organizations for agricultural products; it can be eliminated only by developing market organizations within the framework of the common agricultural policy. As such a modification of the national market organizations is not at present foreseeable, it must be assumed that the difficulties which have been found to exist are not of a temporary nature. Consequently, the only means of remedying the situation would be to supplement the Treaty under Article 235.

This line of reasoning is correct in principle, but it does not provide a ground for laying a complaint at the door of the Commission. In fact the Commission was well aware of the nature of the economic difficulties which it should help to eliminate when it issued the first authorizing Decision. At that time, as appears from the preamble to the Decisions, the procedure of Article 235 had already been set in motion. But by its very nature it is a relatively long one (the Council decides unanimously on a proposal from the Commission and after consulting the Assembly). In the end, it resulted in the Council's Decision of 4 April 1962 providing for the imposition of a countervailing duty on certain goods processed from agricultural products (Official Journal. 1962, p. 999).

Thus the only question can be whether Article 226 could be called in aid to cover a transitional period of a peculiar nature, that is to say, until the entry into force of a supplement to the Treaty adopted under Article 235, which would once more permit the normal application of the Treaty. I consider that the provisions of Article 226 are not infringed if they are used in this way to remedy difficulties in a particular case for which a general and permanent regulation can be awaited with certainty in the form of a supplement to the Treaty, the necessity for which is generally recognized. There is no question here of avoiding Article 235, but rather of reasonably complementing this long procedure, a measure without which it would have been impossible to bring assistance to the threatened industry of a Member State for several years.

4. In sum then, the questions of validity submitted to the Court provide no basis for finding that the authorizing Decisions are invalid.

III — Examination of further questions

But we should ask ourselves whether the subject matter of the proceedings is thus exhausted or whether other problems arise. The general form in which the third question is framed might give rise to an extension of the examination: it speaks of other grounds for the invalidity of the Decisions; there is also the argument of the plaintiffs in the Netherlands proceedings to be considered.

1. In principle, as regards the drafting of the third question, I am of the view that a national court cannot pose a completely general question on the validity or invalidity of acts of the institutions in its order making the reference. As in national law (cf. paragraph 80 Bundesverfassungsgerichtsgesetz; Geiger, Kommentar zum Gesetz über das Bundesverfassungsgericht 1952, note 4 on paragraph 80, note 1 on paragraph 84, note 3 on paragraph 85; Lechner, Kommentar zum Bundesverfassungsgerichtsgesetz 1954, note 2 on paragraph 80), the court making the reference must clearly state the questions on which it requests a preliminary ruling and must indicate the grounds which are said to entail the invalidity of a particular act. That is as far as the opinion of the Court of Justice may extend. If it were otherwise, the matter in dispute, other than in annulment proceedings, would not be precisely defined and the Court would have to make an examination from all imaginable points of view, which might be contrary to the intention of the parties in the national proceedings. Its answer to a question framed in general terms would then have a scope which would perhaps not correspond to its knowledge of all the facts underlying a decision, and such an answer would have legal effects which — contrary to the intention of the Treaties — would extend beyond the proceedings giving rise to the reference.

2. If, then, an exhaustive examination of the Decisions which are the object of the reference is out of the question, we must perhaps decide on an extensive interpretation of the order making the reference with the aid of the reasons on which it is based and its factual elements, and that may lead to other questions.

3. But all the supplementary arguments that the plaintiffs in the Netherlands proceedings put forward in the course of the written procedure and during the oral proceedings represent an entirely new departure from the order making the reference and seek to extend the scope of that order. To admit these arguments for discussion and to consider them seems to me to be entirely out of the question because the character of the procedure of reference for preliminary rulings would thereby be distorted. What is primarily important is that the institution of the reference procedure interrupts the proceedings before the national court. The parties cannot therefore continue the national proceedings before another court by developing new arguments after the stay of proceedings. For them, the national proceedings remain in the state in which they were when the order making the reference was made.

IV — To sum up, I propose the following answers to the questions referred:

Question No 1

The Decision of the Commission of 27 July 1960, extended on 21 December 1960, renewed on 28 June 1961, extended on 22 December 1961 and renewed on 27 February 1962, includes an authorization for the Netherlands to impose a duty on the exportation of fondant paste to the Federal Republic.

Question No 2

The Decisions are valid, although the Netherlands did not request an authorization.

Question Mo 3

Even in so far as the Decisions were not published, they are still to be regarded as valid. They do not infringe any essential procedural requirement; on the contrary the statement of the reasons on which they are based satisfies the requirements of the Treaty.

According to the case law of the Court the question of costs is one for the court which made the reference; the costs of the Commission and of the Federal Republic are not recoverable.

1 Translated from the German.