Opinion of Mr Advocate General Mancini
Mr President,
Members of the Court,
1. My Opinion relates to the actions brought in Cases 187/85 and 188/85 by the EEC Seed Crushers' and Oil Processors' Federation (hereinafter referred to as Fediol) for a declaration that Decisions 85/233 and 85/239, adopted by the Commission of the European Communities on 16 and 18 April 1985 respectively, are void. By means of those decisions — which are based on Council Regulation (EEC) No 2176/84 of 23 July 1984 on protection against dumped or subsidized imports from countries not members of the European Economic Community (Official Journal 1984, L 201, p. 1) — the Commission terminated the anti-subsidy proceedings which had been initiated as a result of a complaint submitted by Fediol concerning imports into the Community of soya meal originating in Brazil and Argentina (see Official Journal 1985, L 106, p. 19, and L 108, p. 28).
2. In order to gain a better grasp of the problems submitted to the Court, it is appropriate to refer to the relevant legislation. That legislation consists of Regulation No 2176/84, cited above, which has amended and updated the provisions adopted in conformity (a) with the international obligations imposed on the Community by Article VI of the General Agreement on Tariffs and Trade (GATT) (Nations unies, Recueil des traités, Vol. 55, p. 187) and (b) with the rules on interpretation laid down, in connection with the Tokyo Round, in the so-called Anti-subsidy Code (Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade, concluded in Geneva on 12 April 1979).
3. The Commission has raised an objection in limine litis against the admissibility of certain claims put forward by Fediol, although it has not made a separate application to that effect. According to the Commission, those claims seek a declaration from the Court that the contested practices constitute a subsidy for the purposes of Community law. The Commission's objection is supported by Ciara in Case 187/85.
4. I now turn to the substance of the case. Fediol alleges in the first place that the decision concerning imports from Argentina (Case 187/85) infringes Article 3 of Regulation No 2176/84. In its view, that infringement consists in the Commission's failure to acknowledge that the following practices constitute subsidies: (a) the imposition of differential taxes on exports of soya meal and (b) the raising of obstacles in the way of exports of soya beans. The applicant also alleges that Article 7 of the regulation has been infringed. It maintains that the Commission failed to carry out an exhaustive investigation into the facts and, in particular, that its enquiries into the nature, the extent and the impact of the practices complained of were inadequate.
5. The submission alleging an infringement of Article 3 as regards the Argentinian and Brazilian practices referred to under (a) and (b) is based on a detailed criticism of the concept of a subsidy adopted by the Commission. According to Fediol, that concept is too narrow, particularly because it is based on whether the subsidy is capable of constituting an effective charge on the resources of the State which grants it. Instead, according to the applicant, there are a number of arguments demonstrating that the concept should be defined in broad terms.
6. The Commission holds the opposite view. In its opinion, to the limits which the regulation sets to the adoption of countervailing measures (material injury to Community industry and the existence of a Community interest) must be added three further requirements, that is to say the subsidy must (a) be granted by the State, (b) constitute a charge on the public account, and (c) give an advantage to the recipients. Particular importance attaches to the second condition. Admittedly, Article 3 does not refer to it. However, that condition is laid down in point (1) of the illustrative list, which, as is clear from the context in which it is set and from its comprehensive wording, establishes a general criterion. Hence it is necessary to read points (a) to (h) in the light of that condition and to regard it as inherently applicable to any other practice, even though such practice may not be provided for in the illustrative list and may even be aimed at subsidizing production or transportation unconnected with exports.
7. In considering the arguments summarized above and the applicant's criticisms, it is advisable to bear in mind the principles on which the Court bases the power of review which Community law confers upon it with regard to subsidies. According to the first Fediol judgment, the Court may not intervene in the exercise of the discretion reserved to the Community authorities by the regulation. However, notwithstanding the existence of that discretion, it is required to review the legality of the measure terminating the proceeding. When challenging such a measure, therefore, a complainant is entitled to put before the Court any matters which would facilitate a review as to whether the Commission has observed the procedural guarantees ... has committed manifest errors in its assessment of the facts, has omitted to take into consideration any essential matters of such a nature as to give rise to a belief in the existence of subsidization or has based the reasons for its decision on considerations amounting to a misuse of powers (paragraph 30 of the judgment).
8. Now that the validity of the criteria which determine the extent to which a subsidy constitutes a burden for the State and an advantage for the recipients has been established, it is necessary to ascertain whether the Commission has correctly applied them to the Argentinian and Brazilian practices complained of by Fediol. As I said earlier, those practices consist of (a) the system of differential taxation established by those two countries in respect of exports of soya-based products and (b) the raising of obstacles by those States in the way of exports of soya beans.
9. That brings me to Fediol's criticisms of the decision concerning imports from Brazil (Case 188/85). Those criticisms raise four kinds of problems. In the first place, it is necessary to ascertain whether, in assessing a practice concerning soya beans (supra, under (c)), the Commission was right to deny that it constituted a subsidy. Then it will be necessary to establish whether the Commission was correct in deciding that two practices concerning exports of soya oil (supra, under (d) and (e)) and the practices relating to soya meal could not be equated. Next, consideration will have to be given to the assessment on the basis of which the defendant declared that the Community had no interest in offsetting the practices deemed to constitute subsidies for exports of soya meal (supra, under (f) and (g)). Finally, it will be necessary to raise the question whether, after submitting a proposal to the Council to impose duty in respect of those practices, the Commission was lawfully entitled to terminate the proceeding.
10. I now turn to the practices of concessionary financing for exports of soya oil and of exempting from taxation the profits realized on such exports. The applicant maintains that those practices constituted an indirect subsidy for exports of soya meal since the traders concerned transferred the benefits resulting from those practices to the soya meal sector.
11. The last two practices challenged by Fediol consist in concessionary financing for exports of soya meal and the grant of tax benefits in respect of hedging transactions concluded by seed crushers on foreign markets. Having recognized that those practices constituted subsidies and calculated the amount of those subsidies at 7.66 and 0.09% respectively of the f.o.b. value, the Commission submitted a proposal to the Council to impose a duty thereon but not to collect it at once (4 January 1985). Subsequently, however, after establishing that the Brazilian Government had abolished the concessionary financing programme with effect from September 1983, and having regard to the misgivings which the prospect of imposing a duty had raised in the Council, the Commission changed its mind. It stated that the interests of the Community did not require the adoption of countervailing measures and the proceeding could be terminated.
12. A preliminary point. In its reply Fediol waived its complaints concerning hedging transactions and recognized the limited impact of such transactions. The following considerations are therefore concerned solely with the practice of concessionary financing for exports of soya meal.
13. The second criticism is also tenuous. As I have just said, Articles 9, 11 and 12 of Regulation No 2176/84 make it quite clear that the Commission enjoys an independent power of assessment from the date on which representations are made to it until the date on which the Council takes the final decision. Hence, depending on the circumstances, the Commission may decide whether or not to initiate a proceeding, whether to pursue it or to terminate it, whether or not to impose provisional duties, whether to allow those duties to lapse on the expiry of the period for which they are imposed or whether to ask the Council to extend them and, finally, whether or not to submit a proposal to the Council to impose definitive duties.
14. That brings me to the third criticism, according to which the Commission exceeded its powers by implicitly withdrawing the proposal which it had submitted to the Council. In the light of the considerations set out in the two preceding paragraphs, that allegation cannot in my view be upheld any more than those which preceded it. If, as I have shown, the investigation is conducted exclusively by the Commission until definitive action is taken by the Council, there is no doubt that the Commission may decide to terminate the proceeding even after requesting the Council to impose definitive measures.
15. In the light of all the foregoing considerations, I suggest that the Court dismiss both of the applications lodged on 18 June 1985 by Fediol against the Commission of the European Communities.
1 Translated from the Italian.