Opinion of Mr advocate-general Gand

Mr President,

Members of the Court,

On 25 and 27 October 1965 the undertaking W. Beus imported into the Federal Republic 34257 kg of outdoor table grapes from Bulgaria. On that occasion, in addition to customs duties and the turnover equalization tax imposed on importation, the customs collected a countervailing charge of DM 8 per 100 kg laid down by Regulation No 144/65 of the Commission of 18 October 1965. Considering that the collection of this latter charge was unlawful, the undertaking made an appeal to the Finanzgericht, Munich, which, although the wording of Article 177(b) of the Treaty allows it to do so, did not consider that it could itself decide upon the validity of that regulation, but referred the question to you by a decision of 25 January last.

It is appropriate first of all to consider the disputed measure in the framework of the common organization of the market in fruit and vegetables established by Regulation No 23 of the Council. Contrary to what is found in the regulations of the same day concerning cereals, eggs and other products, protection against imports from third countries is given not by a levy but by the collection of ad valorem customs duties. Nevertheless, in order to avoid the collapse of prices on a market which is typified by a sudden offer of large quantities of fruit which are rapidly perishable, Article 11(2) of Regulation No 23 provides protective measures consisting either in the suspension of imports or in the institution of a countervailing charge by the Commission. These measures may only be taken where the Community markets experience or are threatened with serious disturbances resulting from imports from third countries made at prices lower than a reference price calculated annually on the basis of the average prices recorded during a certain period on certain Community markets. The amount of the countervailing charge is equal to the difference between the reference price and the entry price of the imported product.

It appeared very quickly that, taking into account the particular characteristics of the market in fruit and vegetables, this system was not as effective as the system provided for in the other common organizations of the markets; in addition, after long and difficult discussions, Regulation No 65/65 of the Council replaced Article 11(2) of Regulation No 23 by provisions which were appreciably stricter.

According to its present wording, Article 11(2) no longer makes provision for the suspension of imports on a Community scale, but only the institution of a countervailing charge. The object of that charge is to avoid disturbances due to offers from third countries at abnormal prices, but it no longer presupposes the proof of the existence or the threat of serious disturbances on these markets; it is enforced when the entry price has fallen below the reference price and, as previously, is equal to the difference between these two prices and is of the same amount in all the Member States. Furthermore the new wording settles the method of calculation both of the reference price and of the entry price in a more precise manner. In its present form the system closely resembles that which exists, for example, for cereals in which the levy, which is equal to the difference between the entry price (cif price) and the threshold price, is compulsorily collected by the Member States. It is different, from the point of view of procedure, since the countervailing charge is fixed by a regulation of the Commission after consultation with the Management Committee.

Thus whilst the old rules led only once to the imposition of a duty on Bulgarian grapes this was done four times in application of the new wording in 1965 by Regulations Nos 122/65, 138/65, 144/65 and 155/65.

It is the validity of Regulation No 144/65 — published in the Official Journal of 18 October 1965 — which is disputed. A countervailing charge of two u.a. per 100 kg net (that is, DM 8) was imposed on imports of outdoor table grapes from Bulgaria and Romania from the third day following publication in the Official Journal until 31 October. Nevertheless the Commission was to revise the regulation before that date if the measures which it brought into being no longer corresponded to the conditions of Article 11(2) of Regulation No 23.

In referring the case to you, the Finanzgericht confines itself to saying that the doubts of the plaintiff as to the legality of the regulation do not appear a priori to be unfounded. The question is in fact delicate in respect of certain matters; this will be seen by recalling the arguments set out both in their written observations and at the Bar by the Beus company and by the Commission, and which go over all the complaints made concerning the regulation.

I —. The first complaint concerns its lega basis, through Regulation No 144/65, that is to say, Article 11(2) of Regulation No 23 as worded at present, which is alleged to infringe Articles 39 and 110 of the Treaty. More precisely it is claimed that the system adopted prevents the harmonious development of world trade and the progressive abolition of restrictions on international trade which, according to Article 110, are among the basic reasons for the customs union established between the Member States. Likewise, and above all because of its automatic nature, it is claimed, it tends only to guarantee the standard of living of producers in accordance with Article 39(1) (b), but totally neglects the other objectives of the common agricultural policy, in particular those which deal with the availability of supplies and with reasonable prices from which consumers should benefit (Article 39(1)(d) and (e)). In support of its arguments the Beus company emphasizes the development which has taken place in the common organization of the market in fruit. Although it has mentioned the special position of this market from the beginning because of the perishable character of the products, the Commission, in its first proposals to the Council in 1961, saw sufficient protection in respect of imports from third countries in the customs duties of the common external tariff. The original wording of Regulation No 23, however, introduces a safeguard clause in the form of a prohibition on imports or of a countervailing charge, and the present wording of Article 11(2) increases even further the protection from which the Community producer benefits. How could such different rules contribute equally to the attainment of the objectives laid down by the Treaty?

II —. There is a second point which is the nub of the question. There is reason to impose a countervailing charge when the entry price of a product imported from third countries is lower than the reference price and Article 11(2) shows how these two prices are fixed, the prices which must be taken into account and the deductions which, where necessary, must be made. The regulation is only legal, therefore, if certain conditions of fact are fulfilled, and it is their presence which was above all disputed before the Court of first instance. But before you the argument extended to questions of law which govern the facts. What must be the method of calculating the entry price? It is around this point that the entire discussion turned and it is that which must first of all be decided in order to establish whether the regulation was properly introduced. The sixth subparagraph of Article 11 (2) reads as follows: The entry price… shall be fixed on the basis of the lowest price recorded on the representative import markets referred to in the immediately foregoing subparagraph, less customs duty arising from the application of Article 23 of the Treaty and less other taxes on imports as well as transport costs from those markets to the Community frontier crossing points. Article 2 of Regulation No 99/65 of the Commission, adopted for the application of the above provision, states which markets are to be regarded as representative. There is one for Italy, France and the Netherlands, two (Brussels and Antwerp) for Belgium and the Grand Duchy and four for the Federal Republic, which are Hamburg, Munich, Frankfurt and Düsseldorf.

III —. Then we meet another criticism which is linked to that which we have just seen and which is as follows. Supposing that the regulation was valid at the moment when it was adopted, it would no longer have been so in any case on the dates when it was applied to the imports made by the Beus company, that is, on 25 and 27 October. The regulation was applicable until 31 October, but according to Article 2(2) the Commission undertook to revise it before the latter date if the measures included in it no longer corresponded to the conditions of Article 11(2) of Regulation No 23, that is to say, if the import prices after all deductions equalled the reference price.

IV —. There remains one final complaint made against Regulation No 144/65, namely that'it is vitiated by the inadequacy of the statement of reasons on which it is based. The statement of reasons deals first of all with the Treaty and Regulation No 23 and reproduces the wording of Article 11(2) of that regulation. Then after stating that Regulation No 104/65 fixed the reference price for outdoor table grapes at 15.9 u.a. for the month of October, it states that the import prices on the representative markets have been for several days on certain markets at a level lower than the reference price in respect of products from Bulgaria. It ends by saying that for the supplying countries in question the entry price was 13.9 u.a.

I am of the opinion, further, that it is for the Finanzgericht to decide upon the costs of the present proceedings.

1 Translated from the French.