Opinion of Mr advocate-general Gand

Mr President,

Members of the Court,

The six questions put to you by the Hessisches Finanzgericht will give you an opportunity not only to give your opinion on a problem of great importance for the efficient functioning of the common organization of the markets within the framework of the European Economic Community. They will also induce you to give some precise answers on the position and the effect of Article 177 in the complex of the rules of the Treaty fixing your jurisdiction and the judicial guarantees accorded to the nationals of Member States.

The facts are simple. On 31 January 1964 the Schwarze undertaking of Bremen obtained from the Einfuhr- und Vorratsstelle für Getreide und Futtermittel (EVSt) import certificates for 1100 metric tons of barley to be imported from the Netherlands during the course of February. At this point the EVSt set a rate of DM 96.75 per metric ton for the levy prescribed by Article 2 of Regulation No 19 of the Council, on the progressive establishment of a common organization of the market in cereals. It is known that the levy rate equals the difference between the free-at-frontier price for the exporting Member State calculated and fixed every week by the EEC Commission and the threshold price of the importing Member States calculated each year by that country less a flat rate deduction aimed at facilitating trade between Member States of the Communities.

the objection made to the EVSt that the rate of levy should be reduced by DM 15 per metric ton, and also the proceedings before the Hessisches Finanzgericht, centred entirely on the Commission's decision of 24 January 1964 fixing the free-at-frontier price for barley imports into the Federal Republic of Germany from the Netherlands at 301 guilders per metric ton on the basis of which the EVSt fixed the levy at the disputed rate.

The appeal lodged by Schwarze against this decision, which was addressed to the Federal Republic, was based on objectives both of form and of substance: it was alleged that the decision was not supported by a statement of reasons as Article 190 of the EEC Treaty required, and that it was based upon the price of American barley imported into the Netherlands, not that of barley harvested in that country. This allegedly contravened Regulations Nos 19 and 89. In view of this double defect the decision of 24 January 1964 did not bind the Member States and the EVSt ought not to have taken it into account in fixing the rate of the levy, although the Federal Government had failed to object to this decision within the period prescribed by Article 173.

It is under these circumstances that the Hessisches Finanzgericht, on the joint application of both parties, has put to you the following six questions. In view of the doubts which have been expressed from time to time on whether some of these questions are admissible, having regard to the provisions of Article 177, it is worth setting these questions out in full.

The first problem—this is the subject of Questions 1 and 2—is whether the Commission's decision of 24 January 1964 fixing the free-at-frontier price was one which required a statement of reasons. If it was, must each decision be supported by a statement of the specific reasons enumerated by the Finanzgericht, or is it enough for the Commission to rely on grounds stated in a previous decision?

assuming—and me Commission does not contest this—that it took as its basis barley harvested outside the Netherlands, Question 3 asks you to interpret Articles 2 and 3 of Regulation No 19. Can the free-at-frontier price be determined on the basis of rates relating to cereals originating in countries outside the Community but in circulation in the exporting Member State?

Question 4: if the decision was not supported by an adequate statement of reasons or if basing it upon prices relating to cereals harvested outside the Community is illegal, but if it was nevertheless not challenged by the Federal Republic within the period fixed by Article 173, is the decision absolutely void, voidable or binding upon German importers?

Questions 5 and 6: if the answer to Question 4 is that the decision is neither absolutely void or inapplicable to German importers, can a German importer challenge it under the second paragraph of Article 173 of the Treaty although he is only indirectly affected, on the ground that the rate of levy was calculated on incorrectly fixed quotations? If it is so, is an appeal admissible at any time during the two months following the date on which it was informed as a result of the reference for a preliminary ruling on Question 4 that the decision was binding?

As you can see, those who formulated these questions have omitted none of the aspects or consequences, however remote, of the dispute before them. Some of the questions which they have put to you run the risk of involving you so deeply that it would be worthwhile to consider first whether they are admissible. As the Commission has pointed out, what the Finanzgericht is in effect asking you is whether the decision of 24 January 1964 should be held to be void or binding, and, if binding, whether this is only for the Member States to whom it was addressed, or also for importers. It is this question of the validity of the decision which is, put to you in Question 4, and to which the three earlier questions, presented to you in the form of questions of interpretation of Article 190 and Articles 2 and 3 of Regulation No 19. are merely a prelude.

The question relates to a decision which the Member State to which it was directed has not challenged within the period prescribed by Article 173. It is put by an importer who, under case-law which is now settled, does not fall within the category of persons entitled to rely upon Article 173 (see, for instance, Case 38/64: Getreide-Import Gesellschaft v EEC Commission, [1965] ECR).

It is clear, moreover, from the judgment of the Finanzgericht that the considerations which, in their view, weigh against holding the decision to be valid do not relate to the question of its legal existence but to the question of its legality in the widest sense: was the statement of reasons non-existent or inadequate, did it infringe Regulation No 19 in that the price of barley imported into the Netherlands was taken into consideration?

Is this the context in which subparagraph (b) of the first paragraph of Article 177 of the EEC Treaty gives you jurisdiction to give preliminary rulings on the validity of acts of the institutions of the Community? It would appear from your judgment of 18 February 1964 in Joined Oases 73 and 74/63, Internationale Crediet ([1964] ECR) that the answer is in the affirmative. This case, referred to you by a Netherlands court, dealt in particular with the validity of decisions of the Commission addressed to Member States. After the Government of the Federal Republic had submitted its observations, Mr Advocate-General Roemer made an exhaustive examination of the two aspects of the problem. He considered that the validity referred to in Article 177 exceeded the bounds of normal validity and extended to validity in its widest sense, despite the difference in the terms used by this Article and by Article 73 respectively; he also considered that Article 177 permitted the Court to examine the legality of decisions addressed to Member States. The same view can, indeed must be implied from your judgment because, after examining the questions put to you, in particular the extent of the powers of the Commission to authorize a Member State to adopt protective measures under the provisions of Article 226 of the Treaty, powers which it had used in the decisions challenged in that case, you concluded that examination of the questions referred to the Court reveals no factor capable of affecting the validity of the said decisions. A similar view had already been developed in some of the grounds of your judgment of 14 December 1962 (Joined Cases 31 and 33/62: Milchwerke Heinz Wöhrmann and Lütticke [1962] ECR 501).

The French Government objects that you are being asked to give a ruling on a specific measure emanating from one of the institutions of the Community, and thus to decide whether to annul that measure. This objection would be valid of it were purely a question of interpretation; it cannot, however, be sustained when it is a reference for a preliminary ruling which refers, as allowed by Article 177, to the validity of one of the acts of the Commission.

The final point is that Question 4 is not confined to asking whether the alleged irregularities make the decisioninvalid — which is a matter of examining the decision itself; it also refers to the nature of this possible invalidity and this is a question of interpretation of the Treaty to which I shall return presently.

After making these observations, I should like to return to the two essential points put to you which have already been set out in full in the written and oral procedures.

A — Was there a duty to support the decision by a statement of reasons and was the statement of reasons given adequate?

1. In the majority or cases me common organizations of the argicultural markets have replaced all other frontier protective measures by a system of levies with the purpose of making up the difference between the prices prevailing within and outside the importing Member State. In the cereals sector the levy follows the price variation on the markets, daily for cif prices and weekly for free-at-frontier prices. Thus the free-at-frontier price fixed by the Commission is one of the two factors on which the internal levy is based, the other being the threshold price for the importing Member State. The price-fixing is carried out on the basis of the criteria mentioned in Regulation No 89 of the Commission the free-at-frontier price is equal to the most favourable price for the importing Member State on the most representative markets for export into that country plus freight costs.

2. Counsel for Schwarze has, for reasons which one can easily understand, raised serious doubts as to the nature of the method by which the Commission fixes the free-at-frontier price. In his submission the binding nature of the levy is derived from Regulation No 19. This alone has legal effect. The actual price-fixing is merely an agreement on a set of facts which can be delegated to a group of independent experts and which in any case cannot create any new rights or obligations. It is, we are told, a measure sui generis; it is not a decision within the meaning of Article 189 of the Treaty. This view is completely contrary to the case-law of this Court and must be rejected. As the Commission has stressed, the effect of Regulation No 19 is to create an obligation to fix a levy, but not a given levy; the amount of the levy can only be fixed by reference to a specific free-at-frontier price, itself fixed by an individual, specific decision. In any case even it it were a measure sui generis which did not fall into the category envisaged by Article 189, what provision of Community law could be relied on to show that such a measure must be supported by a statement of reasons? Article 190, which is the provision upon which the applicant bases the main part of its case, relates only to Regulations, directives and decisions.

3. You will find in the file or the case a copy of the decision of 24 January 1964. The statement of reasons in this decision refers to the Treaty and the decision of the Commission of 21 December 1962 fixing the free-at-frontier prices for cereals, flour, groats and meal; it is based—although it does not say this—on the prices known to the Commission.

4. When Article 190 provides that a decision must be supported by a statement of reasons, it is stating a general rule which must be adapted to the widely differing natures of the measures of the Community's institutions; there are measures in the nature of Regulations, or those which affect only individuals; there are decisions relating to the status of an official, or those taken within the field of the economy; there are authorizations of all kinds granted to Member States within the framework of the Treaty. This obligation, as the Court stated clearly in Case 24/62 (Government of the Federal Republic of Germany v EEC Commission [1963] ECR is not taking mere formal considerations into account but seeks to give an opportunity to the parties of defending their rights, to the Court of exercising its supervisory functions and to Member States and to all interested nationals of ascertaining the circumstances in which the Commission has applied the Treaty. This means that the decision must contain an indication of the agreed essential facts and the legal considerations which influenced it in taking the action which it did.

B —. Can a decision fixing free-at frontier prices be based on quotations for cereals coming from outside the Community, when the prices are negotiated inside the exporting Member State, or must they be confined to cereals harvested within that country? This is largely a question of interpretation of Articles 2 and 3 of Regulation No 19.

C —. If you adopt the point of view which I have suggested, you need go no further in replying to the questions put to you by the German court. The others only arise if this decision is not held to be valid.

D —. There remain two further questions on the admissibility under Article 173 of an appeal lodged by an importer and of the conditions under which the time-limit for such appeal operates. They need not be considered, in view of the reply which I would give to Question 4 if it arose. This is only one reason for not troubling you with it.

1 Translated from the French.