JUDGMENT OF 30. 9. 1982 — CASE 108/81 AMYLUM v COUNCIL
In Case 108/81
THE COURT (Second Chamber) composed of: O. Due, President of Chamber, A. Chloros and F. Grévisse, Judges, Advocate General: G. Reischl Registrar: H.A. Rühi, Principal Administrator
gives the following
JUDGMENT
Facts and Issues
I — Facts and written procedure
A — Background to the dispute
ANNEX II
B — Procedure
II — Conclusions of the parties
III — Submissions and arguments of the parties
First submission : breach of the general principle that legislation may not be retroactive
Second submmion as to a breach of the obligation to state the reasons upon which a measure is based.
Third argument staling to infringement of Article 22: oj the EEC Treaty jnj Amcie 2 oj Council Deemon of 21 April 1988 on the repkeement of financial contributions from Member States by the Communities' own resources
IV — Oral procedure
Decision
I — First submission: Breach of the principle that Community measures may not have retroactive effect
II — Second submission: Breach of the duty to state the reasons upon which a measure is based
III — Third submission: Infringement of Article 201 of the Treatv and Article 2 of the decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources
IV — Costs
I —. Facts and written procedure
A —. Background to the dispute
1. By a preliminary ruling of 25 October 1978 given in Joined Cases 103 and 145/77 Royal Scholten-Honig (Holdings) Limited v Intervention Board for Agricultural Produce; Tunnel Refineries Limited v Intervention Board for Agricultural Produce [1978] ECR 2037 the Court of Justice held that Council Regulation No 1111/77 of 17 May 1977 laung down common provisions for isoglucose was invalid to the extent to which Anieles 8 and 9 thereof imposed a production lew on isoglucose ot five unus of account per ICC kg of dry matter for the period corresponding to the sugar marketing year 1977/78. The Court stated, in fact, that the system established by the above-mentioned provisions offended against the general principle of equality (in that case as between sugar producers and isoglucose producers). The Court added, however, that the ruling left the Council free to take any necessary measures compatible with Community law for ensuring the proper functioning of the market in sweeteners.
2. Following that judgment, on 25 June 1979 the Council adopted, on the basis of a proposal for a regulation drawn up bv the Commission, Regulation No 1293/79 (Official Journal L 162, p. 10, with corrigendum in Official Journal L 176. p. 37) amending Regulation No 1111/77. That regulation entered into force, pursuant to Amele 5 thereof, on 1 July 1979.
3. Regulation No 1293/79 amended Regulation No 1111/77 m the light of tne ludgmen'. of the Court of Justice of 25 October 1978 In view of the fact that the most appropriate means for avoiding inequality ol treatment was to subiect isoglucose production to rules analogous to those applying to sugar production until 30 June 1980, Regulation No 1293/79 introduced inter alia for the same period a temporary system of isoglucose production (cf. sixth recital). The seventh recital justifies the rules for allocating and fixing the quotas. The eighth recital states that it is necessary to fix a specific amount of the production levy applicable to isoglucose production.
4. By separate judgments of 29 October 1980 delivered in Case 138/79 SA Roquette Frères v Council of the European Communities [1982] ECR 3333 and Case 139/79 Maizena GmbH v Council of the European Communities [1982] ECR 3393 the Court declared Regulation No1203/79 to be soid lor infringement of essential procedural requirements on the ground that tne regulation had been adopted on 25 June 1975 in the absence oi the Parliament's opinion required by Amele 43 of the Treaty, on the proposal which had been referred to the Parliament on 19 March 1979. However, in the statement of the grounds upon which the judgment was based, the Court rejected all the substantive arguments adduced against the system of production quotas introduced by that regulation and in particular against the basic quotas fixed for the applicants in the two cases.
5. By Council Regulation (EEC) No 1592/80 of 24 June 1980 (Official Journal L 160, p. 12), which was adopted while Cases 138/79 and 139/79 were pending before the Court, the Council declared that the system of production quotas for isoglucose as laid down by Article 9 of Regulation No 1111/77 (as amended by Regulation No 1293/79) was to apply during the period from 1 July 1980 to 30 June 1981.
6. By an application, which was lodged at the Court Registry on 21 August 1980, Roquette Frères, a company incorporated under French law, which manufactures amongst other products isoglucose in its factory at Lestrem (Pas-de-Calais), requested the Court to declare invalid as against it Article 2 of and Annex II to Council Regulation (EEC) No 1592/80 of 24 June 1980 on the application of the system of production quotas in the sugar and isoglucose sectors during the period from 1 July 1980 to 30 June 1981.
7. A similar action was brought on 5 August 1980 against those provisions by Maizena, a company incorporated under German law.
8. Those cases were registered at the Court under Nos 179/80 for Roquettes Council and 176/80 for Maizena v Council.
9. On 10 January 1981, that is to say while Cases 176 and 179/80 were pending before the Court, the Council, after obtaining the opinion of the European Parliament which was delivered on 9 February 1981, adopted the following two regulations.
10. By order of 2 April 1981 the Court took note that Maizena GmbH wished to withdraw its action in Case 176/80 and ordered the case to be removed from the Court Register.
11. Case 179/80 is, however, still pending before the Court.
B —. Procedure
1. By an application lodged at the Court Registry on 4 May 1981 G. R. Amylum NV requested the Court to declare void Council Regulation (EEC) No 387/81.
2. In us defence dated 30 June 1981 which was received at the Court Registrv on 1 July 1981 the Council maintained that the application was unfounded.
3. The applicant lodged itsus reply at the Court Registry on 14 August 1981
4. By an application received at the Court Registry on 29 July 1981 theCommission requested the Court to allow it to intervene in support of the Council.
5. The Council of the European Communities lodged its rejoinder on 17 October 1981.
6. The applicant lodged its answer to the intervention of the Commission on 8 January 1982.
7. On hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.
8. By an order of 24 March 1982 the Court, having heard the views of the Advocate General, decided, pursuant to Article 95 (1) and (2) of the Rules of Procedure, to assign the case to the Second Chamber.
II —. Conclusions of the parties
1. By an originating application G. R. Ąmvlum.W' ciaimł that the Court should
2. In its defence the Council of the European Communities contends that the Court should dismiss as unfounded the application brought by the applicant and order the applicant to pay the costs.
3. In its intervention the Commission supports the conclusions of the Council seeking.
4. In its reply the applicant maintains its conclusions.
5. In its rejoinder the Council of the European Communities maintains the conclusions which it presented in its defence. Furthermore it requests the Coun to declare the new ground invoked by the applicant to be inadmissible and, in the alternative, to declare it to be unfounded.
6. In its answer to the observations of the intervener, the applicant maintains its conclusions.
III —. Submissions and arguments of the parties
I. The applicant maintains that the Council has contravened the generalprinciple that laws may not be retroactive by reinstating the quota and levy system for the production of isoglucose during the marketing year 1979/80.
2. The Council of the European Communities, the defendant, considers for its part tnat the case-law of the Court clearK demonstrates, in particular in its ludement in Case 98/78 Racke [1979] EC R ö9 at paragraph 2Z thai retroactive Communis measures are bv no means exciuded as a matter of principle. However, tne Court has sought to make retroac:i\e Community measures subiect io judicial review to ensure that they obsen r in particular the following conditions:
3. The Commission of the European Communities, intervening in support of the Council's conclusions, points out that:
1. The applicant states that Regulation No ife/781 confines itself, as regards the statement of its reasons, merely to recalling that the Court found the scheme to restrict isoglucose production to be substantively in conformity with Community law. The applicant considers that such a statement of reasons may on the most favourable view suffice to explain why the Council intended to reintroduce a system of production quotas for isoglucose. However, the applicant is inclined to think that the statement of reasons is incorrect since the Court, in the context of an action for nullity, was not required to pronounce on the conformity with Community law of the machinery established by the Council by its Regulation No 1293/79. In that context, in fact, the Court merely rejected the applicants' substantive allegations which in no way prejudges the conformity of the provisions in question with the law.
2. The defendant, the Council of the European Communities, considers for its pan that those allegations are unfounded.
3. The Commission ol the European Communities considers that the cium relating to a breach of the duty to pive the reasons on which a measure is eased does not stand up to a simple reading of the recitals oi Regulation No 387/81 and states that it ennrelv supports tne Council's arguments retuiing that allegation
1. In its reply the applicant makes a further submission relating to the Council's lack of competence to create new own resources.
2. In its rejoinder, the Council of the European Communities considers the fresh issue raised by the applicant to be inadmissible and unfounded.
3. The Commission, for its part, considers that the fresh submission is neither admissible nor well-founded.
IV —. Oral procedure
1. By application lodged at the Court Registrv on 4 May 1981 G. R. Amylum NY. a limned company incorporated under Belgian law, brought an action beîore the Court under the second paragrapn of Article 173 of the EEC Treaty for a declaration that Council Regulation (EEC) No 387/81 of 12 February 1981 (Official Journal 1981 L 44. p. 1) amending Council Regulation (EEC) No 1111/77 of 17 May 1977 laving down common provisions tor isoglucose (Official Journal 1977 L 134. p 41 is void inasmuch as Article 1 (3) and (4) of that regulation reinstates, in respect of the same period, that is to say with retroactive effect, the system of quotas laid down by Regulation No 1293/79 in respect of the period running from 1 July 1979 to 30 June 1980.
2. Council Regulation No 1293/79 of 25 June 1979, which amended the aforementioned Regulation No 1111/77 in particular by inserting in it a new Article 9, was in fact declared void by judgments of the Court of 29 October 1980 in Case 138/79 Roquette Frères SA v Council of the European Communities [1980] ECR 3333 and in Case 139/79 Maizena GmbH v Council of the European Communities [1980] ECR 3393 because it was adopted in the absence of the opinion of the Parliament, required by Article 43 of the Treaty.
3. In support of its action the applicant claims in its application first that the contested regulation offends against the principle that Community measures should not have retroactive effect and secondly that the statement of the reasons upon which the measure was based is insufficient. In its reply the applicant makes a further submission based on the Council's lack of competence to create an isoglucose production levy.
I —. First submission: Breach of the principle that Community measures may not have retroactive effect
4. As the Court has alreadv held, in particular in its judgments of 25 January 1979 in Case 98/78 Racke [1979] ECR 69 and Case 99/78 Decker [1979]. ECR 101, although in general the principle of legal certainty, as the applicant states, precludes a Community measure from taking effect from a point in time before :ts publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected.
5. As regards the first of those two conditions it is well to call to mind certain matters of fact or law which are moreover well known to the parties. During the period of application ot the contested regulation sugar producers were, in particular, subiect to quotas and production levies. Isoglucose is a product which may be substituted for sugar and is in direct competition with it. Any Community decision concerning one of those products necessarily has repercussions on the other. Having regard to that situation, although by judgments of 29 October 1980 the Court declared Regulation No 1293/79 void for infringement of an essential procedural requirement, namely the absence of the Parliament's opinion, the Court nevertheless considered that it was a matter for the Council, in view of the fact that isoglucose production was contributing to an increase in sugar surpluses and that it was open to it to impose restrictive measures on that production, to take such measures in the context of the agricultural policy as it judged to be useful, regard being had to the similarity and interdependence of the two markets and the specific nature of the isoglucose market.
6. If, following the declaration of the nullity of Regulation No 1293/79, the Council had adopted no measure restrictive of isoglucose production — in the present case the reinstatement with effect from 1 July 1979 of the quotas allocated and the levies imposed on the producers — the objective which it was pursuing, namely the stabilization, in the general interest, of the sugar market, could not have been achieved or could only have been achieved to the detriment of sugar producers, who alone would have had to finance the costs of Community surpluses, or even to the detriment of the Community as a whole, whilst isoglucose producers whose production competed with that of sugar undertakings would have escaped all restraints.
7. The Court is unable to uphold the argument put forward by the applicant that the application of Regulation No 1293/79, until it was declared void by the Court, had held isoglucose producers to observe the quotas which it laid down and thus rendered superfluous their reinstatement by the contested regulation. In fact, in addition to the legal basis which the contested regulation gave to the system of quotas during the period in question from 1 July 1979 to 30 June 1980, the maintenance of levies during that period, which was necessary to attain the objectives of public interest pursued by the Council, mnde it necessary to fix the quotas upon which the amount of those levies depended
8. Thus the Council was lawfully entitled to consider that the objective to be achieved in the general interest, namely the stabilization of the Community market in sweeteners without arbitrary discrimination between traders, required the contested provisions to be retroactive in nature and thus the first of the conditions which the Court lays down for the applicability rattorte tempons of a Community measure to a date prior to the date of its publication may be regarded as satisfied.
9. To ascertain whether the second of the conditions set out above is satisfied it is necessary to inquire whether the action of the Council in publishing on 17 February 1981 Regulation No 387/81 has frustrated a legitimate expectation on the part of the applicants to the effect that the production of isoglucose would not be regulated during the period from 1 July 1979 to 30 June 1980, the period to which that regulation makes applicable Article 9 relating to quotas and production levies on isoglucose which it inserted in Regulation No 1111/77.
10. It should first be pointed out that the contested provisions of Regulation No 387/81 do not include any new measures and merely reproduce the provisions of Council Regulation No 1293/79 declared void by the Court on 29 October 1980.
11. In view of the fact that Council Regulation No 1293/79 of 25 June 1979 retained its full effect within the Community legal order until it was declared void, so that the national authorities responsible for its implementation were required to subject the production of isoglucose to the restrictive system which it laid down, such a legitimate expectation could only be founded on the unforeseeabihty of the reinstatement with retroactive effect of the measures contained in Regulation No 1293/79 declared void by the Court.
12. In the present case the applicant cannot claim any legitimate expectation worthy of protection.
13. In the first place the traders concerned by the rules in question are limited in number and are reasonably well aware of the interdependence of the markets in liquid sugar and isoglucose, of the situation of the Community market in sweeteners and therefore of the consequences which, following thedeclaration that Regulation No 1293/79 was void, the imposition on the production of sugar in respect of the period from 1 July 1979 to 30 June 1980 of stabilization measures from which the production of isoglucose would have been entirely exempt might have had.
14. Secondly by adopting successively Regulations Kos 1111/77, 1293/79 and 1592/8G, the latter regulation extending the effects of the previous one in respect of the period from 1 July 1980 to 30 June 1981 the Council had clearly manifested its intention of regulating the production of all sweeteners in the Community and to that end of subjecting the production of isoglucose to a restrictive system based on a system of quotas and production levies.
15. Thirdly it could not have escaped the notice of the applicant that in both judgments of the Court of 29 October 1980 which declared void Regulation No 1293/79 (which also fixed its own production quota), the Court rejected the grounds on which the applicant companies Roquette and Maizena were contesting the substantive validity of that regulation and was at pains, at the same time as pronouncing it void for failure to obtain the Parliaments opinion, to state that such nullity was without prejudice to the Council's power following the present judgment to take all appropriate measures pursuant to the first paragraph of Article 176 of the Treaty.
16. Finally, from the publication of the Commission's proposal in the Official Journal of 2Z December 19SC (C 334. p. 2i the applicant knew that the Commission had. as earlv as 3 December 19SC. submitted to the Council a proposal tor a regulation amending, in particular. Regulation No 1111/77. in order to reinstate, for the period from 1 july 1979 to 30 June 1988. the svsiem of Quotas and levies in the torm ir. anich that svstcm had been laid down bv Regulation No 1293/'79 and in which it was to be reinstated bv the contested provisions ot Regulation No 3$7/'Sl
17. In challenging the retroacuwi\ of those provisions the applicant turther claims that they disturb tne institutional equilibrium of tne Communities. Tnat claim cannot be upheld On the one hand, tnere is no provision or the Treaty which precluded the Párnámén, irom ücip.i; caiieo upon to express us views on a retroactive reinstatement of Regulation No 1293/79 although it had not given its opinion on that regulation. On the other hand, the fact that the Court, in declaring that regulation void, did not think fit to make use of the power given to it by the second paragraph of Article 174 to state which of the effects of the regulation which it had declared void should be considered definitive, gives no ground for regarding the retroactive effect given to the contested provisions of Regulation No 387/81, adopted by the Council in the context of the first paragraph of Article 176 of the Treaty, as a trespass on the prerogatives of the Court.
II —. Second submission: Breach of the duty to state the reasons upon which a measure is based
18. The applicant claims that the Council has given inadequate reasons for the retroactive effect given to Regulation No 387/81 and therefore has infringed the provisions of Article 190 of the Treaty.
19. According to the case-low of the Court the statement of the reasons on which a measure is based, which is required by Article 190 of the Treaty, must be adapted to the nature of the measure in question. It must enable the reasoning of the Community institution responsible for the measure to emerge clearly and unequivocally so as to enable those concerned to recognize the reasons for the measure adopted and the Court to exercise its power of review.
20. The statement of the reasons on which Council Regulation No 387/81 is based states first ihat Council Regulation (EEC) No 1111/77 of 17 May 1977 laying down common provisions for isoglucose, in the version established bv Regulation (EEC) No 1293/79, provided for the application ot a svsiem of production quotas for the period from 1 July 1979 to 30 June 1980 and. secondly that in Cases 138/79 and 139/79 the Court of Justice of the European Communities, on 29 October 1980, annulled Regulation (EEC) No 1293/79, which amended Regulation (EEC) No 1111/77, on the grounds of an infringement of an essential procedural requirement; ... in reiecting all the alleged complaints of breach of the principles of the law of competition, of proportionality and of nondiscrimination made against the system of production quotas introduced by Regulation (EEC) No 1293/79, the Court affirmed that the latter regulation was substantively in conformity with Community law; ... it is therefore appropriate to reinstate inter aita the system of quotas concerned retroactively.
21. Laconic as these reasons may be, they satisfy the requirement laid down by Article 190 of the Treaty. In fact, by referring to the system of production quotas, which moreover was well known to those concerned, the provisions of the preamble to the contested regulation set forth in essence the objective pursued by the institution responsible for the contested measure, namely to ensure continuity in time of the system restricting isoglucose production — a svstem in respect of which the Court, in its judgments in Cases 138/79 and 139/79 of 29 October 1980, rejected the substantive criticisms made against it by the applicant undertakings — in order to ensure an equal division of burdens on the production of isoglucose and that of liquid sugar which are in direct competition on the market in sweeteners.
22. The submission as to breach of the requirement to state the reasons on which the measure was based must therefore be rejected as unfounded.
III —. Third submission: Infringement of Article 201 of the Treatv and Article 2 of the decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources
23. In its replv the applicant put forward a new submission based on the Council's lack of competence to create by means of Regulation No 3S7/81 a lew on the production of isoglucose. The applicant takes the view that that lew is revenue accruing to the Community budget which was not provided for bv the legislation at the time at which Council Decision 70/243 of 21 April l970 on the replacement of financial contributions from Member States bv tne Communities* own resources was adopted (Official Journal. English Specia! Edition 197; (1). p. 22*). The Council therefore did not have the po^cr to introduce the contested lew but, in pursuance of Article 201 of the Treatv, was able merely to recommend us adoption by the Member States in accordance with their respective constitutional requirements.
24. The defendant and the intervener consider that submission to be inadmissible by virtue of Article 42 (2) of the Rules of Procedure of the Court of Justice which allows no fresh issue to be raised during the course of the procedure unless it is based on matters of law or of fact which have come to light in the course of the written procedure.
25. In the present case, the new submission made by the applicant cannot be regarded as being based on matters of law or of fact, which have come to light, in the course of the written procedure, since it is based on an alleged illegality which was capable of being known and pleaded as from the moment when Regulation No 387/81 came into existence. Nor, on the other hand, can it be regarded as amplifiying a submission made previously because it is only in the reply that the legal rule alleged to have been infringed is mentioned and the cause of nullity thus invoked was referred to neither directly nor by implication in the application originating the proceedings.
26. The submission made by the applicant therefore raises an entirely fresh issue which is inadmissible since it is out of time under Article 42 (2) of the Rules of Procedure.
27. Although it is true that the applicant also seeks to rely on the provisions of Article 92 (2) of the Rules of Procedure which enables the Court at any time of its own motion to consider whether there exists any absolute bar to proceeding with the case, that provision, concerned as it is only with such absolute bars, does not allow a party to raise a fresh issue which is out of time and breach of the provisions of Article 42 (2) of the Rules of Procedure.
28. However, since the submission relates to the powers of the author of the contested measure, the Court considers that it should state the reasons why the Council was competent to impose a levy on the production of isoglucose.
29. Subject to the procedural conditions which it lays down, Article 43 of the Treatv assigns to the Council the task of creating the common organization of the agricultural markets and laying down the rules relating thereto. By virtue of Article 40 (3) of the Treaty, that common organization in one of the forms provided for by paragraph (2) of that article, which comprises inter alia a market organization, may include all measures required to attain the objectives set out in Article 39, in particular regulation of prîtes, aids for the production and marketing of the various products, storage and carryover arrangements and common machinery for stabilizing imports or exports.
30. Under the first subparagraph of Article 9 (8) of Council Regulation No 1111/77 as supplemented by the contested provisions of Regulation No 387/81, the isoglucose production levy is charged on the producer in respect of the quantity of iscglucose production which exceeds the basic quota without exceeding the maximum quota. Under the second subparagraph the amount of the isoglucose production levy is to be equal to the share of the sugar production levy borne by the sugar manufacturers fixed for the 1979/80 sugar year pursuant to Article 28 of Regulation No 3330/74. That share of the levy itself results from a complex method of calculation which is laid down in Article 27 of the latter regulation and makes sugar producers bear, by way of levies, the losses incurred by the Community as a result of the disposal of the quantity produced which exceeds human consumption in the Community. Thus the isoglucose production levy was established in order to contribute to stabilizing the Community market in sweeteners and, in particular, as the seventh recital in the preamble to Regulation No 1111 /77 indicates, to expon costs.
31. It follows from the foregoing that the isoglucose production levy comes within the terms of Articles 39 and 40 of the Treatv and that the Council was competent to establish it and to lay down detailed rules for its operation pursuant to Article 43 which, moreover, is referred to by the contested Regulation No 387/81.
32. As regards the Council Decision of 21 April 1970 on ihr replacement of financial contributions from Memoer States rn me Communities' own resources, adopted in pursuance of Article 201 ot the Treatv bv the Member States in conformity with the provisions of that article, it should first be stressed that its purpose is to define own resources allocated to the Community budget and not to stipulate the Communits institutions which are competent to impose duties, taxes, charges, levies or other forms of revenue. As a measure adopted under budgetary law, that decision does not prevent the Council from creating a levy such as the one imposed on the production of isoglucose where the power of the Council to create that levy has its basis, as has been said, in the provisions of the Treaty relating to the common agricultural policy.
33. Furthermore, Article 2 (a) of the decision of 21 April 1970 includes in Communities' own resources revenue coming from contributions and other duties provided for within the framework of the organization of the markets in sugar. In view of the developments which were inevitably to take place in Community production and marketing of sugar and, consequently, the need to adapt contributions, levies, refunds and price support measures to those developments in the requirements of the Community markets in sugar, it was not conceivable that the scope of application of the decision of 21 April 1970 could have been limited merely to the levies which were provided for when it was adopted, that is to say to the levies laid down at that time by Regulation No 1069/67 of the Council of 18 December 1967 establishing a common organization of the market in sugar (Official Journal, English Special Edition 1967, p. 304). Although isoglucose was only produced in significant amounts in the Community several years after the adoption of the decision of 21 April 1970, the direct competition which it provides for liquid sugar on the market in sweeteners means that it must be included amongst the products which are marketed on the markets in sugar within the terms of the decision of 21 April 1970.
34. It follows that the Council was competent to adopt the contested provisions contained in Regulation No 387/81 and that no provision of budgetary law affected that power.
IV —. Costs
35. Under the terms of Article 69 of the Rules of Procedure the unsuccessful party is to be ordered to pav the costs if they have been asked for in the successful party's pleading The applicant has failed in all its submissions and must therefore be ordered to pay all the costs including those of the intervener.
On those grounds, THE COURT (Second Chamber) hereby:
1 Dismisses as unfounded the application for a declaration that Council Regulation No 387/81 is void;
2 Orders the applicant to pay the costs including those of the intervener.
1 According to the applicant those tinân are ol rei and decleration laws the owndrawal of integral measures laws concerning panici subject-matter in ör' of rOtrcïto legitimate rriu4.:fit of the parties concerned in no longer worths of protection and cases where retroactivity is necessary for compelling reasons which land over the certains