Report for the Hearing delivered in Case 333/85
I — Facts and procedure
1. The applicants
The applicants are German steel undertakings which manufacture and market steel tubes and pipes. Between them, they represent about 70% of German exports of those products to the United States of America. It is clear from the documents before the Court that the United States constitutes a major market, particularly for a fairly specific category of tubes, namely those known as OCTG (Oil country tubular goods) which are used in areas in which oil is extracted. The applicant companies are among the six manufacturers of OCTG tubes in the Federal Republic of Germany.
2. The relevant legal provisions
Following the adoption of a series of measures by the United States authorities concerning imports of steel products from the Community, in 1982 the Commission began negotiations which led to the conclusion with the United States on 21 October 1982 of an arrangement relating to steel (Official Journal 1982, L 307, p. 1). That arrangement provided that measures adopted by the United States authorities would be withdrawn in exchange for a limitation by the Community of exports of certain steel products set out in a list annexed to the text of the arrangement. Steel tubes and pipes were not contained in that list.
The 1982 arrangement was accompanied by an exchange of letters, also dated 21 October 1982, between the Community and the United States authorities. In that exchange, the Community declared that for the duration of the arrangement, that is to say, until the end of 1985, its annual exports of steel tubes and pipes would probably not exceed the average quantities of those products exported during the 1979-81 period. The exchange of letters also provides for a consultation procedure concerning the development of Community exports of tubes to the United States. In the English version of the exchange, which is the only one which is authentic, the agreement referred to above is expressed in the following terms:
After it became clear that United States imports of tubes and pipes from the Community had largely exceeded the level reached during the reference period, importation of such products was totally prohibited in November 1984. Subsequently, negotiations with the United States authorities were carried on by the Commission leading to the conclusion of a new agreement on 7 January 1985 (Official Journal 1985, L 9, p. 1). That arrangement, which is applicable until 31 December 1986, essentially provides that:
Pursuant to the 1985 arrangement, the Council laid down certain detailed rules for the implementation of that arrangement in Regulation No 60/85 of 9 January 1985 (Official Journal 1985, L 9, p. 13). In Annex III to the regulation, the Council allocated among the Member States the quantities to which the Community had agreed to limit its exports. It can be seen from the third recital in the preamble to the regulation that the Member States are to share out the amounts allocated to them among undertakings in accordance with objective criteria. However, with regard to OCTG tubes, the Council stated in Annex III to the regulation that a similar allocation was to be decided upon by the Council before il January 1985. Ihat allocation was in fact made on 6 August 1985 by Regulation No 2355/85 supplementing Regulation No 60/85 on the restriction of exports of steel pipes and tubes to the United States of America (Official Journal 1985, L 222, p. 1). That regulation includes a scale for allocation among the Member States according to which 43.8% of the Community quota for OCTG tubes was allocated to the Federal Republic of Germany (Italy: 32.5%, Greece: 7.6%, France: 5.3%, United Kingdom: 5.5%, Belgium: 5%, Netherlands: 0.2%, Luxembourg: 0.1%).
3. Subject-matter of the dispute
The applicants consider that the division of the Community quota into national sub-quotas, as determined by Regulation No 2355/85 in regard to OCTG tubes, is unfavourable to the German steel industry and thus operates to their disadvantage. They consider themselves directly and individually concerned by that regulation, which they seek to have declared void.
4. Procedure
The application initiating proceedings was lodged at the Court Registry on 12 November 1985.
The written procedure followed the normal course.
By decision of 18 June 1986, adopted under Article 95 (1) and (2) of the Rules of Procedure, the Court assigned the case to the Sixth Chamber. Upon 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. However, it asked the Council to reply to a question and that reply was received within the prescribed time-limit.
II — Conclusions
The applicant companies claim that the Court should:
The Council, the defendant, contends that the Court should:
III — Submissions and arguments of the parties
Admissibility
The Council, the defendant, expresses serious doubts as to the admissibility of the action. It points out that the second paragraph of Article 173 permits natural or legal persons to institute proceedings only against a decision addressed to them. While an individual may institute proceedings against any decision which, although in the form of a regulation, is of direct and individual concern to him, in this case the contested measure is a regulation in the proper sense of the term. In support of that argument, the Council, referring to the judgment of the Court of 5 May 1977 in Case 101/76 Koninklijke Scholten-Honig v Council and Commission [1977] ECR 797, contends that Regulation No 60/85, to which the contested regulation is merely complementary, produces legal effects with regard to all exporters of steel tubes and pipes in a general and abstract manner. The regulation covers exporters of those products whether they were carrying on their activities at the time of its adoption or were possible future exporters. It is thus wrong to claim that Regulation No 2355/85 is in some way a disguised decision.
However, if the Court regards the contested regulation as a decision addressed to the Member States in the form of a regulation, the Council contends that it cannot concern undertakings either directly or individually. When it adopted Regulation No 2355/85, the Council merely allocated the Community quota in respect of OCTG tubes among the Member States. In other words, the allocation of the national sub-quotas was solely a matter for the competent national authorities. Consequently, the applicant undertakings are directly concerned only by the decisions of the Member States. Moreover, if the applicants are not satisfied with the quantities allocated to them, they can always challenge the national decision before a national court relying on the unlawfulness of the Community regulation. In those circumstances, an action for annulment under Article 173 no longer lies. The Council adds that Regulations Nos 60/75 and 2355/85 contain no provision having, so to speak, automatic effect. On the contrary, it is for the Member States to take account, within the limits of the national ceiling, of any new exporter which might commence its operations on the market before 31 December 1986. In those circumstances, it cannot be claimed that the contested regulation individually identifies the undertakings concerned in a way comparable to a decision addressed to them.
The Council therefore considers that the application is not admissible because it does not fulfil the conditions laid down in the second paragraph of Article 173 of the Treaty, whether or not the contested measure is actually a regulation or a decision addressed to the Member States.
By way of introduction, the applicant undertakings emphasize that an action under Article 173 is not a subsidiary alternative to proceedings under Article 177 of the Treaty and that the legal interest which they seek to protect by means of the present action is clear. Since they supply 70% of Germany's exports of steel tubes and pipes to the United States, they have an individual interest in having the sub-quota for exports allocated by the Council to the Federal Republic of Germany correctly fixed. Moreover, in order for an action for annulment brought by an individual against a Community regulation to be admissible, it is sufficient to show that he is directly and individually concerned by the contested measure. In those circumstances it is not necessary to consider separately whether the measure is actually a regulation or merely a decision in the form of a regulation.
In this case, the applicants continue, the conditions laid down in Article 173 have been amply fulfilled. First, although it is true that it is for the national authorities to make a definitive allocation of the national sub-quotas fixed by the Council, those authorities are required to comply with the Objective criteria laid down in Regulation No 60/85 and with the principle of equal treatment. In those circumstances, determination of the national sub-quota, and a fortiori any reduction in the sub-quota, will necessarily lead to a reduction in the quantities which the various undertakings concerned may deliver. Consequently, in so far as the contested measure in this case entails a reduction in the German quota, it must necessarily have a negative effect on the applicant undertakings' export quota.
Those undertakings are therefore directly concerned by that measure. It is also clear that although the applicants are not mentioned by name in the contested measure, they are individually affected by its terms. The names of the undertakings concerned were known at the time when the contested regulation was adopted. Moreover, the Community quota was calculated on the basis of the quantities supplied by that limited number of undertakings and imported into the United States. In that regard, the applicants point out that the contested regulation dates from August 1985 and that its effect is retroactive to 1 January 1985. However, the six German producers of OCTG tubes had already obtained, during the first quarter of that year, provisional licences, issued in the context of the advance fixing system, which were still valid at the time that Regulation No 2355/85 was adopted. At that time, the undertakings concerned had thus been definitively identified.
Substance of the case
The applicant undertakings rely on two submissions against the contested regulation. First they allege a breach of essential procedural requirements inasmuch as the regulation contains no indication of the criteria applied in fixing the German sub-quota. The Council should have stated the reasons on which the scale for allocation of the quantities among the Member States was based not merely because it was required to do so under Article 190 of the Treaty but also because the exceptional nature of the rules at issue make it necessary to provide a clear and satisfactory statement of the reasons on which they are based. The fixing of a Community quota and the ensuing allocation of sub-quotas to the Member States is likely to influence the competitive position of the undertakings concerned and could even lead to a redistribution of market shares. Rules of such a nature should be accompanied by a statement of the reasons on which they are based which makes it possible to establish that they do not affect competition.
There is also a breach of the general principles of law and in particular of the principles of equality and proportionality inasmuch as the Council, when it adopted the contested regulation, made an arbitrary allocation of the Community quota and an unjustified reduction in the German sub-quota. In that connection, the applicant undertakings point out that although exports of steel tubes, including OCTG tubes, were not part of the initial arrangement concluded in 1982, they were none the less the subject of an exchange of letters between the United States and Community authorities in which it was stated that deliveries of such products to the United States market would also be limited. An upper limit was fixed on the basis of the patterns of trade existing in the 1979-81 period. However, in implementing the 1985 arrangement, the Council fixed the national sub-quotas on the basis of the patterns of trade existing in the 1979-83 period. Unlike the German exporters, many competing undertakings had increased the volume of their exports in 1983 notwithstanding the voluntary restrictions provided for in 1982. Consequently, the fact of taking account of the figures for trade in 1983 as was done in the contested regulation is necessarily unfavourable to the German exporters, all of whom had respected the quantities allocated to them under the 1982 agreement. In those circumstances, the contested allocation of the Community quota is manifestly arbitrary.
Finally, the applicant undertakings refer, in support of that point of view, to certain figures which may be summarized as follows. Under the voluntary restriction agreement of 1982 the German quota was calculated at 50.6% of the total Community quota in respect of tubes and pipes, including OCTG tubes. However, in the contested regulation, the Council allocated to German producers only 43.8% of the total quota. In reality, the German share is even smaller since the latter figure included a special quantity of 10000 tonnes reserved for one undertaking, namely Hoesch. Leaving aside that quantity, the real German share is only 39.5%. Thus, the Council, without any apparent justification, has reduced the German share from 50.6% to 39.5%.
For its part, the Council, the defendant in these proceedings, emphasizes first that Regulation No 2355/85 supplements Regulation No 60/85 and that, consequently, the statement of the reasons on which the latter regulation is based also applies to the contested regulation. In the Council's opinion, the 11 recitals in the preamble to Regulation No 60/85 constitute a sufficient statement of the reasons for the allocation of the Community quota which is the subject of these proceedings. It should be noted in particular that, according to the fifth recital in the preamble to Regulation No 60/85, the allocation among the Member States of the total export possibilities which the arrangement affords should take account of traditional trade patterns. It was precisely on the basis of that criterion that, when the national sub-quotas were fixed, account was taken of the exports of tubes carried out in the 1979-83 period, which was a period sufficiently long to be representative of the trade patterns at issue. It is therefore wrong to claim that the contested regulation does not contain enough information to make it possible to determine whether or not it is lawful.
The Council also explains that although there was an exchange of letters in 1982 between the Community and the United States authorities concerning steel tubes originating in the Community, it was in response to the concern of the United States authorities who feared that the restrictions on exports of steel products provided for in the 1982 arrangement would be circumvented by diversions of trade in the form of steel tubes not covered by that arrangement. For that reason, the Community declared that diversions of that sort would not take place as long as exports of tubes did not exceed the average volume of exports carried out during the period from 1979 to 1981. It was only in that context that those years were used as a reference period. Furthermore, no similar period was referred to in the 1985 arrangement. The Community and United States authorities also agreed in 1982 to a consultation procedure concerning the development of exports to the United States. Thus, the 1979-81 reference period constitutes a sort of threshold triggering consultations. Thus, before 1985 there existed no Community quota or national sub-quotas for steel tubes and pipes, including OCTG tubes. The applicant undertakings cannot therefore rely on the volume of their exports carried out during the 1979-81 period.
1 Language of the Case: German.