Opinion of Mr Advocate-General Gand

Mr President,

Members of the Court,

Two actions have been brought under Case numbers 25/65 and 26/65 respectively, by two Italian steel undertakings, Simet and Feram, against the individual decisions of the High Authority of 11 February 1965 fixing the contributions due from these undertakings to the ferrous scrap equalization scheme at 252974228 lire and at 105899634 lire respectively. The two actions are also brought against general Decision No 7/63 of 3 April 1963 relating to the drawing up of the equalization accounts in respect of imported ferrous scrap.

You have joined these cases for the purposes of the oral procedure and of the judgment although the problems posed by the two cases are quite different. Simet was subjected to an estimated assessment by the inductive method based on the consumption of electricity and Feram was assessed on the basis of its declarations. As a result of the joinder I will deliver a single opinion covering both cases and I will examine in turn the admissibility of the two applications, the criticisms which both make against general Decision No 7/63 and finally the complaints directed against each of the contested individual decisions.

I — Admissibility of the applications

1. The High Authority maintains in the first place that the two applications are out of time. The applicants in fact were respectively notified of the contested decisions on 20 March 1965 (Simet) and 19 March 1965 (Feram). Their applications, which were sent from Turin on 21 April by registered parcel post, arrived at the Luxembourg customs on Friday 30 April at 5 p.m. but, by reason of the two holidays which followed (Saturday 1 May and Sunday 2 May), the Court was only informed of this on 3 May and took delivery of the applications on 4 May on which date they were entered at the Registry. The High Authority remarks that, taking account of the extension of time on account of distance prescribed for Italy, they ought to have reached the Registry at the latest on 30 April in the case of Simet and 29 April in the case of Feram. This was what it maintained in two applications made under Article 91 of the Rules of Procedure but, as you will recall, .the decision on these applications was reserved for the final judgment by virtue of orders made on 13 July 1965.

II — General Decision No 7/63

It is from this point of view that I shall now examine the arguments developed in the two applications against general Decision No 7/63 on the basis of which the contested statements of account were drawn up. The complaints put forward are numerous but for the greater part you have already had occasion to deal with and dismiss them. Furthermore the applicants are only entitled to invoke them in so far as there exists a direct legal connexion between the contested measure and the general decision (Case 21/64, Macchiorlati, judgment of 31 March 1965, Rec., 1965, p. 245).

First complaint. This is infringement of an essential procedural requirement consisting in the fact that the High Authority did not, before it adopted the decision, obtain the unanimous assent required by Article 53 (b) of the Treaty. The unanimous assent of the Council is necessary in the setting up of the financial arrangements for the purposes indicated in paragraph (a) of the same article but you have held that this requirement only applied where the very basis of the financial arrangements of equalization was affected or altered and this was not so in particular in the case of a decision instituting a system of credit interest (judgment of 13 July 1965, Lemmerz-Werke and Mannesmann, Rec. 1965, pp. 860 and 914). The same solution clearly applies here.

Alter this complaint, the legal nature of which is clear, the applicants go on to develop a series of other complaints of the widest variety which in the reply they attempt to show, often in an arbitrary manner, as amounting to misuse of powers. In fact this is, as we shall see, a general criticism of the policy followed by the High Authority ever since the establishment of the equalization scheme and of the results of that policy. On these matters, which have given rise to lengthy argument both in the written procedure and in the oral proceedings, I will endeavour to be as thorough but also as brief as possible.

The first complaint against the High Authority is that it disregarded the recommendations which the Council attached to its unanimous assent relating to Decision No 14/55. It is said that whereas the Council had recommended that the equalization levies should not fee increased except for very serious reasons and that an excessive increase in the consumption of scrap should be avoided, the rates of levy and consumption have simply grown larger. Even supposing that these recommendations could have any binding force, Decision No 7/63 — the only one which is criticized—does not appear to have disregarded them. The various interest charges remarked upon by the applications do not stem from that decision but from earlier general decisions, in particular from Decision No 7/61 the legality of which has already been confirmed by your judgment in the Lemmerz-Werke case. As regards the increase in the consumption of scrap, this has clearly nothing to do with the contested general decision.

Similarly, the serious frauds which are said to have been committed and to have caused injury to the Community undertakings and which the applicants assess at several tens of milliards of francs, will perhaps one day give rise to an action founded on the High Authority's liability (see your judgment of 2 June 1965, Feram and others, Rec., 1965, p. 402). But for the present it is impossible to find that they constitute a defect in Decision No 7/63.

On the other hand at is easier to understand the substance of the complaint that the High Authority did not make known the criteria on the basis of which the data appearing in the annexes to the decision in dispute were obtained and that it did not sufficiently specify in that decision the calculations which it took as the basis for its action. The tables annexed to the decision merely contain the aggregate results and not the details constituting those results. It is alleged in consequence that there has been an infringement of Article 47 of the Treaty which requires the High Authority to publish such data as could be useful to Governments or to any other parties concerned. But your judgment of 22 March 1966 in the case of Macchiorlati (Rec., 1966, p. 82) refused to assign this meaning to Article 47, since what was concerned was the equalization scheme.

There is one matter on which the applicants laid particular stress in the course of the oral proceedings. They had at first maintained that the calculation of the data necessary for determining the equalization charge meant that the consumers of internal scrap bore the heaviest charge since the calculation involved reducing the weighted cost price for this scrap and increasing the price for imported scrap. To what might appear as a complaint of discrimination against the consumers of internal scrap the High Authority replied that all the undertakings operating within the Community could benefit from imported scrap and that, since the problem was confined to the choice which each undertaking could freely make for itself, it was impossible to speak of discrimination. However, with the assistance of a table produced by Feram after the written procedure had been closed so far as it was concerned —a table which was the subject of lengthy comment by its Counsel during the oral proceedings—the applicants sought to dispute even the correctness of the data adopted for the purpose of calculating the equalization rate. This amounts to alleging that Decision No 7/63 is illegal. You have this document in the file. Starting with the average weighted prices for internal scrap for five of the Community countries, these prices having been indicated in a letter from the High Authority of 5 February 1965, the applicants deduce what they call a Community average by a purely arithmetical operation and this average does not correspond to the one adopted in the various annexes to Decision No 7/63 under the title weighted average. The fact is that the reasoning of the two parties is quite different. The Community average is purely arithmetical and takes no account, as the High Authority has done, of the quantity of scrap bought by each country of the Community. It is therefore not surprising that the figures obtained do not agree. The method applied by the High Authority derives directly from general Decision No 18/60 which is not contested and the applicants have submitted nothing which could prove that this method is in conflict with the Treaty.

The reply also alleges that two other articles of the Treaty have been infringed: Article 17 by reason of the fact that the High Authority failed to publish a general report on the activity of the bodies responsible for the equalization scheme, and Article 78 because it did not publish a report on the balance sheet relating to the scheme nor did it submit such a report to the auditor. But, even assuming that the submissions had not been presented out of time, these articles do not in any event place any duty on the High Authority in this matter and there is no connexion between these alleged obligations and Decision No 7/63.

Finally, still on the subject of general Decision No 7/63, the applicants remarked that, as the High Authority has itself admitted, this decision does not create any obligation on the part of the undertakings to make payments. They ask how, in these circumstances, the contested individual decisions, which are based on this general decision, can give rise to such obligations. Their criticism is therefore directed not to the legality of Decision No 7/63 but to its effects. However, if an answer is necessary, one can agree with the defendant when it says that the general decision fixes the criteria which determine the obligations on the part of undertakings and that the obligation to make payments on the part of these undertakings only arises with the individual decisions concerning each of them.

It seems to me therefore that none of the [numerous complaints against general Decision No 7/63 can he upheld.

III — The individual decision addressed to Simet

In order to criticize the individual decision which it is contesting, Simet, to whose arguments I shall presently come, adopts two consecutive standpoints. It maintains that the High Authority could not in the present case carry out an estimated assessment by the inductive method. It adds that, even supposing that it were entitled to use this method, it did so in an arbitrary and defective manner since the figures it adopted were incorrect. These are two points which have to be examined.

1. The power which was used in the present case has its basis in Article 2 of Decision No 13/58 which provides that, should the undertakings fail to declare the factors for calculating the contriibutions, the High Authority shall be entitled to carry out an estimated assessment. It is also entitled to correct on its own initiative declarations in support of which no valid proof can be supplied. These principles are reaffirmed by Article 15 of Decision No 16/58. This is therefore a subsidiary, exceptional method which is only applicable when certain conditions are satisfied.

2. The calculation was carried out under conditions with which you are familiar. The consumption of electricity used in the furnace, ascertained from the invoices, is assessed at 31543620 kWh for the period from 1 June 1956 to 13 November 1958. Then, in accordance with the result arrived at by the committee of experts in respect of a furnace with a capacity of six to seven metric tons, one takes a consumption of 850 kWh per metric ton of steel produced, which gives a production of 37111 metric tons of steel. Finally, the ratio between the specific input of scrap and steel produced is assessed at 1015 kg per metric ton, taking account of scrap reused. The result is a figure of 37668 metric tons of bought scrap which forms the basis of assessment.

IV — The individual decision affecting Feram

Application 26/65 made by Feram need not detain us so long. The contested decision of 11 February 1965 states first that the amounts of the contributions due must be calculated, taking account of the exemption of steel castings, on a basis of assessment of 32805 metric tons which was communicated to the undertaking. Following the posting on 8 April 1963 of a statement of account drawn up in accordance with Decision No 7/63, Feram, although it did not point out any errors in this statement, by a letter of 29 May 1963 criticized the functioning of the equalization scheme and also general Decisions Nos 7/61 and 7/63. The first of these criticisms, acording to the contested decision, forms the subject-matter of this company's application in Case 9/64 which was then pending before this Court and which you dismissed in your judgment of 2 June 1965, and therefore does not have to be refuted in the decision. Similarly there is no need, in an individual decision, to go into criticisms relating to principles established by general decisions. The High Authority therefore fixes the sum to be paid toy Feram, after deducting sums already paid and the corresponding interest credited, at 105899634 lire.

Feram devotes only a few lines of its application to the decision of 11 February 1965. You will recall that you refused to grant yet another extension of time for the production of a reply after it had allowed the previous extension to expire.

It simply maintains that the declarations which it addressed to Campsider amount to 31394 metric tons, the details of which it gives by reference to each accounting period. This discloses a discrepancy to its detriment of 1411 metric tons which ought to be deducted from the quantity calculated by the High Authority. It therefore complains that the decision of 11 February 1965, allegedly based on its declarations, obviously fails to give an adequate statement of the reasons on which it is based.

This argument cannot succeed. It may well toe that the monthly declarations which the company sent to Campsider are as it has indicated. It must be added, however, that as the result of checks carried out at its premises it admitted that the figures adopted in the contested decision were correct, as is apparent from the documents which the High Authority annexed to its statement of defence. I also refer to a letter from the CPFI of 4 April 1960, which was the sequel to an earlier discussion and which communicated to Feram a table determining the amended basic tonnage at 35279 metric tons, the exemption for steel castings at 2774 metric tons and the tonnage subject to contribution at 32805 metric tons, that is to say, the figure which appears in the contested decision. Feram confirmed these figures toy letter of the following 20 April for the periods between 1 April 1954 and 30 November 1958, that is to say, for the whole duration of the equalization scheme. It is logical, therefore, that the decision should have been drawn up on the basis of these figures.

However, when the date for the oral proceedings had already been fixed, the applicant produced in support of its claims a number of documents only two of which can concern the contested individual decision.

The first is a letter from Oampsider of 4 September 1956, communicating the final state of affairs established by the CPFI, according to which, in respect of the period from 1 April 1954 to 31 March 1955 and of an assessable tonnage of 10588 metric tons, there only remained due the sum of 948018 lire, which was paid immediately. From this the applicant concludes that the whole of the period must be deleted from the disputed statement of account. But, as is stated in your judgment of 21 January 1965 in Case 108/63, Merlini, ([1965] ECR 11), it follows from the nature of the equalization scheme that the fixing of contributions remains essentially provisional until the final closure of accounts. You came to the same conclusion in your judgment of 15 March 1966 in Case 30/65, Macchiorlati, (Rec. 1966, p. 78). For so long as the accounts are not closed there can be no final state of affairs, even for a given period, and an undertaking must be prepared for a possible review of its situation according to the development of the scheme. Feram was well aware of this and therefore gave its approval in 1960 to the table sent to it by the CPFI which once again embraced the period from 1 April 1954 to 31 March 1955.

As for the other document, this is described as a final statement of account showing Feram's debt to be 80847708 lire. It must be said that this document, which immediately follows the letters from Campsider and the CPFI but gives no indication of its origin, was drawn up by the applicant itself. It should be added that it wholly ignores Feram's debt for the period from 1 April 1954 to 31 March 1955 and that the tonnages notified moodily which it mentions do not agree with those which appear in the application. This document therefore is not worthy of any further consideration.

Having concluded my observations I come to the following opinion:

1 Translated from the French