JUDGMENT OF 14. 3. 1973 — CASE 57/72 WESTZUCKER v EINFUHR-UND VORRATSSTELLE ZUCKER
In Case 57/72 Reference to the Court, under Article 177 of the EEC Treaty, by the Hessischer Verwaltungsgerichtshof for a preliminary ruling in the action pending before that court between
THE COURT composed of: R. Lecourt, President, R. Monaco and P. Pescatore (Rapporteur), Presidents of Chamber, A. M. Donner, J. Mertens de Wilmars, H. Kutscher and C. Ó Dálaigh, Judges, Advocate-General: H. Mayras Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
I — Facts and procedure
II — Observations submitted to the Court
J. As to the validity of Article 1 (1) of Regulation No 354/69 (first question)
2. As to the validity of Article 2 of Regulation No 354/69 (second question)
3. As to the validity of Article 2 (2), last sentence, of Regulation No 833/68 (third question)
Grounds of judgment
On the first question
As to the powers of the Commission
As to the state of the market and the choice of the methods of intervention
On the second question
On the third question
Costs
I —. Facts and procedure
(a). the intervention price for white sugar operative in the zone having the greatest surplus in the Community;
(b). the standard amounts for the technical costs of denaturing and the transport charges;
(c). the foreseeable market prices in the important consumer regions of the Community for animal feeding stuffs with which white sugar for denaturing has to compete;
(d). the comparison between the nutritive value of white sugar and the nutritive value of the competing animal feeding stuffs;
(e). the whole of the sugar surplus available for denaturing in the Community, account being taken of the nature and quality of such sugar.
1. Article 1 (1) of Regulation No 354/69 of the Commission of 26 February 1969, altering the premiums for denaturing sugar fixed by Regulation No 840/68;
2. Article 2 of the said Regulation No 354/69;
3. Article 2 (2), second sentence, of Regulation No 833/68 of the Commission of 28 June 1968, laying down rules concerning denaturing of sugar for animal feeding stuffs.
II —. Observations submitted to the Court
J. As to the validity of Article 1 (1) of Regulation No 354/69 (first question)
(a). Article 1 of Regulation No 354/69 only ostensibly fixed a denaturing premium; in fact, it suspended the fixing of such premiums and prohibited national intervention agencies from issuing denaturing certificates. The denaturing premium should really only have been fixed at 0 units of account if the market price of maize in the Community had been as high as the intervention price of white sugar, increased by the cost of denaturing and marketing; such had not been the case at that time.
(b). In order to eliminate surpluses, the Council laid down the order in which the denaturing and exporting of sugar should be resorted to; it gave priority to denaturing.
(c). The reasoning underlying Regulation No 354/69 is erroneous. It does not tally with the actual situation on 26 February 1969 as it was known or ought to have been known to both the Management Committee and the Commission.
(d). In adopting Regulation No 354/69, the Commission allowed itself to be guided by considerations not germane to the matter in order to facilitate the acquisition by Italy of 75000 metric tons of white sugar, on the one hand, and to permit an increase in the volume of exports of sugar from the French Antilles, on the other hand.
(a). As to the power of decision, the Commission is, by Article 9 (8) of Regulation No 1009/67, expressly charged with fixing the amount of denaturing premiums according to the so-called Management Committee procedure. That power included the power to fix, at least temporarily, the amount of the premium at zero and, as a result, provisionally to suspend the grant of the premium.
(b). As it cannot be contested that the Commission has the power to fix the amount of the denaturing premium at zero, it remains to be seen whether Article 1 of Regulation No 354/69 observed the criteria set by Article 2 of Regulation No 768/68.
(c). The export of sugar from the French Antilles to the United States under favourable conditions has no bearing on the measures to be taken in the context of the European market for sugar; such export would, in any event, have been preferable to the payment of high denaturing premiums.
(d). The Commission considers that it has exercised its discretionary power in a manner which took correct account of the various interests present. Under the conditions existing at 26 February 1969, it would not have been possible for it to come to any other decision. It is certainly not guilty of a misuse of power.
2. As to the validity of Article 2 of Regulation No 354/69 (second question)
(a). The reasoning of Regulation No 354/69 does not indicate why it came into force on the same day as it was published; this fact alone is capable of casting doubt on the validity of Article 2 of the Regulation.
(b). Nor does the object of the Regulation justify such a measure.
(c). The immediate entry into force of Regulation No 354/69 caused heavy losses to undertakings which, relying on the existing system, had bought white sugar for denaturing and had possibly already sold it to a manufacturer of food for animals as sugar intended for animal feeding stuffs at a price agreed upon in relation to the denaturing premium. Protection for these prior contracts should have been assured, as it has been in the framework of other common organizations of the agricultural markets.
(d). Moreover, the Commission should have taken account of the situation created in particular in the Federal Republic of Germany by the requirement of additional conditions for presenting applications for premium certificates; the applicant should have been able to lodge his application only after the purchase of white sugar and the resale of sugar for denaturing to a manufacturer of animal foods. In putting an immediate stop to denaturing, the Commission intervened in already existing legal situations in the Federal Republic of Germany without any objective necessity, thus jeopardizing interests which merited protection.
(a). Having become convinced that nothing justified, at least provisionally, the further grant of the denaturing premium, the Commission had to take care that the entry into force of Regulation No 354/69 was fixed in such a way that its effect was not nullified. As any application duly lodged gives a right to the premium certificate which cannot be withdrawn, the Commission had to act in such a way that, between publication and entry into force of the Regulation, there was no further time still to lodge quick applications.
(b). The situation at 26 February 1969 in no way excluded the risk of an excessive flow of premium applications in the event of granting a period of grace.
(c). As to the statement of reasons, the Court could, as in Case 17/67, find in the provisions laid down by it (the Regulation) serious reasons for considering that any delay between publication and entry into force could, in this case, have been prejudicial to the Community. In fact, it would have been superfluous expressly to state in the wording of the Regulation how the various interests arose with regard to the reduction of the premium to zero and the fact that there were no longer any real surpluses, and the inference that the Commission necessarily drew from this for the entry into force of its decision.
(d). The argument that the immediately applicable measure taken by the Commission produces retroactive results for dealings in hand ignores the fact that, by guaranteeing the amount of the premium applied for during the whole period of validity of the certificate, Regulations Nos 768/68 and 833/68 afford sufficient protection of confidence. The certificates already issued are not affected by the reduction of the premium; confidence in the maintenance of the premium does not need more extensive protection.
(e). The German applicants were not placed in a discriminative position for which an additional period of grace could alone compensate. All Member States have required, in one form or another, at least an indication of the denaturing undertaking before payment of the premium. Furthermore, as the German intervention agency always issued a premium certificate immediately and was content to receive the additional information required in the Federal Republic before payment of the premium, the obligation to include all this information in the application was not a serious handicap for German traders.
3. As to the validity of Article 2 (2), last sentence, of Regulation No 833/68 (third question)
1. By order dated 21 July 1972, received at the Court Registry on 4 August 1972, the Hessischer Verwaltungsgerichtshof, under Article 177 of the EEC Treaty, referred questions relating to the validity of certain provisions of Regulation No 833/68 of the Commission of 28 June 1968, laying down rules concerning the denaturing of sugar for animal feeding stuffs (OJ No L 151, p. 29) and Regulation No 354/69 of the Commission of 26 February 1969, altering the premiums for denaturing sugar (OJ No L 49, p. 14).
2. The Court is asked by the first question to rule on the validity of Article 1 (1) of Regulation No 354/69 which fixed the premium for denaturing white sugar at 0 units of account per 100 kgs.
3. The plaintiff in the main action, for its part, accuses the Commission of having exceeded ist powers in suspending payment of the premium, of having ignored the priority accorded to the payment of premiums for denaturing as opposed to refunds on exports, of having been influenced by an incorrect appreciation of the state of the market and, lastly, of having shown an improper complacency in regard to certain national interests, to the detriment of the industry carrying out denaturing of sugar.
4. The principles of the common organization of the market in sugar were established by Regulation No 1009/67 of the Council of 18 December 1967 (OJ No 308, p. 1), which lays down a body of measures intended to stabilize the market in question and to guarantee the maintenance of prices fixed by the Council.
5. The general rules on the denaturing of sugar for animal feeding stuffs were laid down by Regulation No 768/68 of the Council of 18 June 1968 (OJ No L 143, p. 12), on the basis of Article 9 (7).
6. Article 9 (2) of Regulation No 1009/67 expressly gave a discretionary character to the grant of denaturing premiums, in contrast to the permanent and obligatory character of other interventions provided for by the same Regulation.
7. That power, which is given by Article 9 (2) of Regulation No 1009/67 to intervention agencies, can only be exercised within the framework of conditions to be determined in accordance with Article 9 (7) and (8), that is in conformity, on the one hand, with the general rules laid down by the Council and, on the other hand, with the detailed rules of application laid down by the Commission in accordance with the so-called Management Committee procedure.
8. It follows that, subject to the general rules laid down by the Council, the Commission has the right to decide on both the grant and the amount of denaturing premiums and that, therefore, it has the power to decide whether they should be suspended.
9. The plaintiff in the main action points out that the Commission was obliged to recognize the priority which, in the opinion of the former, existed in favour of denaturing premiums as opposed to refunds on exports.
10. Regulation No 1009/67 admits of no intention of the Community legislature to establish any priority between the different forms of intervention on the market for sugar.
11. According to the opinion of the plaintiff in the main action, the Commission relied on an incorrect appreciation of the economic situation at the time in question in relation as much to the actual market data as to the provisions for future contingencies, as surpluses existed on the market which required denaturing premiums to be maintained.
12. As stated in the recitals in the Preamble to Regulation No 768/68 of the Council, in order to fix the denaturing premium objective tests should be adopted, taking account of the most rational use in relation to the situation on the sugar market and the competitive position of sugar with regard to other animal feeding stuffs for which it can be a substitute.
13. Although certain of these criteria are capable of being determined relatively precisely, others must be estimated approximately or on a flatrate basis.
14. Thus the Commission enjoys a significant freedom of evaluation, which must be exercised in the light of the objectives of the economic policy laid down by Regulation No 1009/67 within the framework of the common agricultural policy.
15. The allegations of the plaintiff in the main action have revealed no indication of such an error or such a misuse of power.
16. Finally, the plaintiff in the main action contends that the provision in dispute was vitiated by the fact that during the preparatory discussions of Regulation No 354/69 by the Management Committee, the Commission yielded to improper pressures from the French and Italian Governments to promote certain interests of those States to the detriment of the industry concerned with the denaturing of sugar.
17. One of the aims of the Management Committee procedure is to enable the Commission to prepare its intervention measures in close cooperation with the national authorities charged with the management of the market sectors concerned.
18. The second question is whether Article 2 of Regulation No 354/69, which specified the entry into force of the Regulation on a date coinciding with that of publication in the Official Journal of the Communities, is valid.
19. Under the terms of Article 191 of the EEC Treaty, Regulations shall enter into force on the date specified in them or, in the absence thereof, on the twentieth day following their publication.
20. The Commission, likewise, was under no obligation to provide for transitional provisions.
21. Finally it is asked whether Article 2 (2), second sentence, of Regulation No 833/68 of the Commission is valid in that it permits Member States to require additional information in applications for the grant of denaturing premiums over and above that specified in the first sentence of that provision.
22. The plaintiff in the main action submits that, by making use of that authorization, the German authorities have discriminated against their own nationals in making it more difficult for contracts which could give, rise to the benefit of a denaturing premium to be concluded.
23. After specifying the information which must be contained in every application for the grant of a denaturing premium — the name and address of the applicant, the nature and quantity of the sugar to be denatured and the Member State where denaturing will take place — Article 2 of Regulation No 833/68 states that Member States may require additional information.
24. The provision criticized does not permit national authorities to add new conditions to those specified in the Regulations in question but merely authorizes Member States to ask applicants for fuller information than the extremely summary information required by the Regulation.
25. The validity of this enabling provision cannot therefore be held in doubt.
26. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.
On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge Rapporteur; Upon hearing the oral observations of the plaintiff in the main action and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 40, 43, 155, 177 and 191; Having regard to Regulation No 1009/67 of the Council of 18 December 1967, on the common organization of the market in sugar, Regulation No 768/68 of the Council of 18 June 1968, laying down general rules on the denaturing of sugar for animal feeding stuffs, Regulation No 833/68 of the Commission of 28 June 1968, laying down rules concerning denaturing of sugar for animal feeding stuffs, Regulation No 840/68 of the Commission of 28 June 1968, fixing premiums for denaturing sugar for animal feeding stuffs and Regulation No 354/69 of the Commission of 26 February 1969, altering the premiums for denaturing sugar fixed by Regulation No 840/68; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the questions refered to it by the Hessischer Verwaltungsgerichtshof, by order of that court dated 21 Juli 1972, hereby rules: