JUDGMENT OF 23. 1. 1980 — CASE 35/79 GROSOU v MINISTRY OF FOREIGN TRADE

In Case 35/79 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunale Amministrativo Regionale del Lazio [Regional Administrative Court], for a preliminary ruling in the action pending before that court between

THE COURT composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Summary of the written observations lodged with the Court

III — Oral procedure

Decision

Costs

I —. Facts and procedure

(a). 10% to the Ministry of Defence;

(b). 10% to local consumer organizations (these bodies are commercial public undertakings active in the distribution sector);

(c). 80% to undertakings active commercially and industrially in the frozen beef and veal sector.

1. Is it possible to infer from Regulation No 2861/77 and the other regulations concerning the market in meat, as well as from the Treaty, that a management system (as mentioned in the fourth recital in the preamble to the said regulation) for the national share of the quota based on a number of criteria for apportionment corresponding to objective differences in the situations of the traders concerned is acceptable in so far as compatible with the principles of liberty and equality to which reference has been made?

2. Secondly, can such criteria consist in establishing in advance, as is the case with the Ministerial Decree of 22June 1978, that the three specified categories of traders shall each have individual access to three separate portions of the national share of the Community quota?

3. Thirdly, can one of those predetermined portions be assigned in advance to one of the persons concerned, albeit one with very distinctive characteristics?

II —. Summary of the written observations lodged with the Court

(a). meat imported under a GATT quota cannot be subject to provisions designed to govern the use to which the allotted quantities are put;

(b). in the management of their shares Member States may not pursue national objectives of economic policy which are not expressly laid down by Community rules;

(c). at all events, the principle of equality of treatment for Community citizens must be ensured.

(1). If the principle of free access to the quota for all persons concerned irrespective of the category to which they belong (wholesalers, processors, retailers) — which is irrelevant for the purpose of determining that concern— is accepted, what needs to be considered is not a number of apportionment criteria corresponding to a presumed number of categories but only one and the same criterion, identical for all, consisting of the volume of imports from nonmember countries during a sufficiently representative period in the past; those imports cannot in any event constitute a basis for discrimination as regards apportionment; the activity to be taken into account for this purpose is purchases from intervention agencies, restricted to specific traders, and to the exclusion of other traders even if such restrictions have been fixed or allowed, in one way or another, by Community regulations.

(2). The apportionment criteria may not consist in establishing in advance, as the Ministerial Decree of 22 June 1978 does, that the three specified categories of traders shall each have individual access to three separate portions of the national share of the Community quota.

(3). A predetermined portion may not be allotted to a single trader, even one with very distinctive characteristics.

1. Persons who, irrespective of any activity of their own (whether or not by way of trade or business) pursued within the territory of the Member States, have free, equal, continuous and uninterrupted access to the import of quantities covered by the Community tariff quota opened for 1978 in proportion to activity proved to be pursued in the sector of the importation of frozen beef and veal are persons concerned in the Community.

2. In any event it is not permissible for Member States, upon the basis of the power of management conferred upon them by Council Regulation No 2861/77, to determine their own criteria for access to the quota by persons concerned in the Community in order to take account of the personal characteristics or the situations and activities of citizens established within their territories; nor is it permissible for them to decide that predetermined categories shall have separate access to special portions of the national share of the quota or for portions of such quota to be allocated in advance to a given trader.

1. Regulation No 2861/77 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 AII b) of the Common Customs Tariff (1978) authorizes Member States to determine the categories of traders who may participate in the apportionment as well as the criterion or criteria to be adopted for the purpose of such apportionment provided that free access to the share of the quota allocated to the Member State in question is ensured for all persons concerned in a nondiscriminatory manner.

2. & 3. The criteria to be taken into consideration may not consist of establishing in advance that distinct categories of traders shall each have separate access to special portions of the national share of the quota, nor is it permissible for a portion of this quota to be allotted in advance to a single trader.

III —. Oral procedure

1. By an order of 4 December 1978, received at the Court on 1 March 1979, the Tribunale Amministrativo Regionale del Lazio, referred to the Court under Article 177 of the EEC Treaty three questions on the interpretation of Council Regulation No 2861/77 of 19 December 1977 opening, allocating and providing for the administration of a Community tariff quota for frozen beef and veal falling within subheading 02.01 A lib) of the Common Customs Tariff (1978) (Official Journal L 330, p. 7).

2. Regulation No 2861/77 opens a Community tariff quota for frozen beef and veal totalling 38500 tonnes expressed as boned or boneless meat for 1978. Article 2 distributes this volume between the Member States, allocating a share of 11050 tonnes to Italy.

3. The fourth recital in the preamble to the Regulation states that since the tariff quota in question is relatively small it ought to be possible to provide for a system of allocation based on a single apportionment between the Member States, without thereby derogating from its Community nature and that it appears best to leave to each Member State the choice of a management system for its share of the quota. Article 3 of the Regulation provides that Member States shall take all appropriate steps to guarantee all persons concerned, established within their territories, free access to the quota shares allocated to them.

4. The use by the persons concerned of the share allocated to Italy is governed by the decree of the Minister for Foreign Trade of 20 May 1978 as amended by the decree of the Ministry for Foreign Trade of 22 June 1978 (Gazzetta Ufficiale Nos 143 and 174 respectively). In the amended version the decree provides for the share to be distributed between the persons concerned so that 10% is allocated to the Ministry of Defence, 10% to local consumer bodies on the basis of the number of inhabitants in the locality and 80% to commercial and industrial undertakings and traders engaged in retail sales. In addition the decree further divides that quantity of 80% between the commercial and industrial undertakings on the one hand and traders engaged in retail sales on the other. The subdivision between the two categories is on an equal basis as regards 30% of the said quantity, as regards 10% it is based upon the amounts of value added tax paid, and as regards 60% it is based upon the quantities of frozen beef and veal imported from nonmember countries in 1977 as well as upon the proportion of purchases made from the intervention agency.

5. In the first and second questions, which are best examined together, the Tribunale Amministrativo asks whether Regulation No 2861/77 and other rules of Community law allow a management system for the national share of a Community quota which is based on a number of criteria for apportionment corresponding to objective differences in the situations of the traders concerned and whether those criteria can result in three specified categories of traders each having individual access to three separate portions of the national share of the Community quota.

6. First of all it should be recalled that in 1962 the Community undertook under the General Agreement on Tariffs and Trade (GATT) to open each year a Community tariff quota for frozen beef and veal from nonmember countries consolidated at a duty of 20%. The quotas in question are opened each year by Council regulations which determine their apportionment between the Member States and, using roughly similar terms, leave the management of the shares allotted to the authorities of the Member States.

7. In its judgment in Case 131/73 of 12 December 1973 (Grosoli [1973] ECR 1555) which concerned the interpretation of Council regulations on the opening of Community tariff quotas of frozen beef and veal for 1968 and 1969, the Court has already had occasion to state that the management of the shares was left to the Member States to apportion them according to their own administrative provisions but that reference by the regulations to such provisions could not be interpreted as extending the technical and procedural rules designed to ensure compliance with the general terms of the quota and the principle of equal treatment for those entitled to take advantage of it.

8. That interpretation, which sets out the limits of the power delegated to Member States to adopt administrative measures is also valid for Regulation No 2861/77 which opens the Community tariff quota for 1978. It is to be noted in this regard that Council Regulation No 3063/78 of 18 December 1978 opening the Community tariff quota for 1979 (Official Journal L 366, p. 6) also leaves the choice of the management system for the shares to the Member States whilst stating in the recitals in the preamble that such a system should ensure both equal and continuous access to the quota for all persons concerned and an allocation which is appropriate from an economic viewpoint.

9. It is on the basis of those facts that the questions submitted by the Tribunale Amministrativo should be answered. Although, as stated in the judgment of 12 December 1973 cited above, the limits of the power of administration of a Member State are exeeded by the introduction of conditions of use designed to pursue objectives of economic policy which are not the subject of provisions adopted by the Community, neither the wording nor the objects of Regulation No 2861/77 nor the Community nature of the tariff quota in question prevent a Member State from making arrangements falling within the limits of its power of administration for access to the share which it has been allocated by the persons concerned. The administration of that share may, under the specific conditions of the market for frozen beef and veal within the territory of a Member State, reasonably involve the expediency or even the necessity of defining the different categories of persons concerned and of determining in advance the total quantity to which each of those categories may lay claim.

10. Such a system of utilization does not exceed the limits of the power of administration left to the Member State concerned so long as it does not deprive some persons concerned of access to the share allocated to that State and the different categories of traders as well as the total quantities to which those categories have access are not determined in an arbitrary manner. In order to comply with those requirements the Member State concerned may find itself obliged to resort to a number of criteria.

11. Whilst it is consequently true that regular importers of frozen beef and veal cannot be disqualified from access to the national share of the quota, they are not necessarily the only traders interested in the meat imported upon favourable conditions. It is essential to state in this regard that the concept of persons concerned in Article 3 of Regulation No 2861/77 has a wider scope than that of importers concerned referred to in previous regulations, for example in Article 3 of Council Regulation No 3167/76 of 21 December 1976 opening the Community tariff quota for frozen beef and veal for 1977 (Official Journal L 357, p. 14).

12. The answer to the first and second questions of the Tribunale Amministrativo should therefore be that neither Regulation No 2861/77 nor other rules of Community law preclude a management system for the national share of the Community tariff quota for frozen beef and veal based upon a number of criteria to define the different categories of traders and to fix the total amounts to which each of the categories is to have access, provided that such criteria are not determined in an arbitrary way and do not result in depriving some of the persons concerned of access to the share in question.

13. By its third question the national court wishes to know whether a part of the national share, determined in advance on the basis of a criteria for apportionment, may be allotted in advance to a single trader even one with especially distinctive characteristics.

14. It follows from the considerations put forward in relation to the first two questions that the answer to the third question must be in the affirmative so long as the position occupied by the trader in question is determined in accordance with criteria held compatible with Community law. The fact that under national law one category of traders consists of a single large-scale trader is not sufficient by itself to prove that the criteria adopted by that national law are arbitrary. The answer to the third question is therefore covered by that given to the first two questions.

15. The costs incurred by the Government of the Italian Republic and by the Commission of the European Communities which have submitted observations to the Court are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, THE COURT, in answer to the questions submitted to it by the Tribunale Amministrativo Regionale del Lazio, by order of 4 December 1978, hereby rules:

1 Official Journal 1976, L 279, p. 3.

2 Translator's note: The words in the Community do not occur in the English text of Regulation No 2861/77.