Report for the Hearing delivered in Case 336/85
I — Facts
1. Article 1 (2) (b) of Regulation No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (Official Journal, English Special Edition 1970 (I), p. 218) provides that the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (hereinafter called the Fund) is to finance intervention intended to stabilize the agricultural markets.
2. The main elements of a common fisheries policy were set out in 1970 by Regulation No 2141/70 of the Council of 20 October 1970 laying down a common structural policy for the fishing industry (Official Journal, English Special Edition 1970 (III), p. 703) and Regulation No 2142/70 of the Council of 20 October 1970 on the common organization of the market in fishery products (Official Journal, English Special Edition 1970 (III), p. 707). Articles 100 to 102 of the Act of Accession of 1972 confirmed and partly amended them in relation to access to fish stocks. In particular Article 102 provided that from the sixth year after accession at the latest, the Council, acting on a proposal from the Commission, was to determine conditions for fishing with a view to ensuring protection of the fishing grounds and conservation of the biological resources of the sea.
3. Regulations Nos 2141/70 and 2142/70 were replaced by Council Regulation No 100/76 of 19 January 1976 on the common organization of the market in fishery products (Official Journal, L 20, p. 1) and Council Regulation No 101/76 of 19 January 1976 laying down a common structural policy for the fishing industry (Official Journal, L 20, p. 19).
4. On 6 April 1976 the Council adopted Regulation No 811/76 temporarily authorizing certain systems of catch quotas in the fisheries sector (Official Journal, L 94, p. 1), in which it authorized Member States to limit the catches of their fishing fleets in accordance with international undertakings contracted or to be contracted. The first recital to the regulation stated that the fishery resources of the sea would be considerably endangered if catches were not controlled; ... the rational development of the production of fishery products might be disturbed if no limit were placed on the size of landings.
5. On 6 October 1976 the Commission sent the Council a proposal for a regulation establishing a Community system of conservation and management of fishery resources, on which the Council was not able to reach agreement, however, until 1983.
6. On 3 November 1976 the Council adopted what is known as the Hague Resolution and in Annex VI thereto stated that, pending the implementation of the Community measures then in preparation, the Member States would not take any unilateral measures in respect of the conservation of resources. It provided, however, that if no agreement was reached for 1977 within the international fisheries commissions and if subsequently no autonomous Community measures could be adopted immediately, the Member States would then adopt, as an interim measure and in a form which avoided discrimination, appropriate measures to ensure the protection of resources situated in the fishing zones off their coasts. Before adopting such measures, the Member State concerned would seek the approval of the Commission, which had to be consulted at all stages of the procedures.
7. On 18 February 1977 the Council adopted Regulation No 350/77 laying down certain interim measures for the conservation and management of fishery resources (Official Journal, L 48, p. 28), applicable until 31 December 1977 at the latest.
8. At a meeting on 31 January 1978 the Council approved the Commission communication according to which, in the absence of a common system, national measures could only be taken in so far as they were strictly necessary for the conservation and management of fishery resources and were nondiscriminatory and in conformity with the Treaty, and if the approval of the Commission had been sought beforehand (Official Journal, C 154, p. 5).
9. On 19 December 1978 the Council adopted interim measures applicable until a definite agreement was reached or, at the latest, until the end of March 1979.
10. On 1 January 1979 the transitional period provided for in Article 102 of the 1972 Act of Accession expired. On that date power to take measures intended to conserve maritime resources was to vest fully and definitively in the Community. Because it was not able to reach agreement on the Commission proposals, the Council adopted fresh interim measures during 1979 and in March 1980.
11. On 30 May 1980 the Council issued a declaration on the common fisheries policy (Official Journal, C 158, p. 2) in which it undertook to adopt a common overall fisheries policy by 1 January 1981 at the latest. In compliance with the Treaties and in conformity with the Resolution of 3 November 1976 (the Hague Agreement) the policy was to be based on rational and nondiscriminatory Community measures for the management of resources and conservation and reconstitution of stocks and fair distribution of catches.
12. In the conservation of resources the Community had also to take into account its international obligations.
13. In 1981 the Commission repeatedly amended its TAC proposals and ultimately submitted to the Council on 24 July 1981:
14. From 1 January 1982 until 31 March 1982 fishing activities in Community waters were once again governed by an interim Council decision, Decision 81/1052 of 29 December 1981 (Official Journal, L 379, p. 52) requiring Member States to take into account the TACs proposed by the Commission on 24 July 1981. Subsequently the Council adopted other provisional measures for 1982.
15. On 25 January 1983 the Council adopted Regulation No 170/83 of 25 January 1983 establishing a Community system for the conservation and management of fishery resources (Official Journal, L 24, p. 1). Article 3 provides for the fixing of TACs and Article 4 for the distribution of the available share of the TACs between the Member States. In application of that regulation the Council subsequently fixed the necessary TACs and quotas. However, it did not fix them for 1981.
16. In a telex message of 29 May 1984 the Commission informed the French Government that some of the expenditure for 1981 declared in the fisheries sector could not be financed out of the Fund since it had not been incurred in accordance with Community law, and that it considered all fish caught outside the quotas laid down by the Commission as ineligible for Community financing unless it was shown by the Member State that it had not given rise to Community expenditure. At issue were 6402.420 tonnes of fish of various kinds for the sum of FF 8015553.86.
17. The method adopted by the Commission for clearing accounts of the Fund for 1981 may be described as follows: since it did not have information to enable it to determine the quantity of fish caught outside the quota which gave rise to Community expense, the Commission regarded all fish caught in excess of the quota as involving expense to the Fund unless evidence was shown to the contrary. However, when it submitted the figures based on that maximum calculation to the Member States concerned it invited them to check the calculations and to submit any contradictory evidence for the purpose of correcting the figures.
18. In a letter dated 6 July 1984 the French Government replied that it could in no event share the Commission's opinion. It requested the Commission to inform it precisely of the figures which it had used and the methods of calculation which it had applied to reach that result. The Commission replied by telex on 27 August 1984.
19. By a memorandum of 5 September 1985 the Commission notified the French Government of its decision of 28 August 1985 on the clearance of the accounts presented by the French Republic in respect of the European Agricultural Guidance and Guarantee Fund, Guarantee Section, expenditure for 1981. The Commission refused to give clearance for intervention payments of FF 8015553.86 in respect of a total of 6402.420 tonnes of various fish.
II — Written procedure and conclusions of the parties
1. The application by the French Republic was lodged at the Court Registry on 12 November 1985.
2. 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.
3. The French Republic, the applicant, claims that the Court should:
4. The Commission, the defendant, contends that the Court should:
III — Submissions and arguments of the parties
A — The subject-matter of the action
1. With regard to the Commission's conclusions the French Republic, the applicant, states that its action concerns primarily the refusal to clear the accounts connected with the alleged disregard of quotas, in the amount of FF 8015553.86, but that that figure is included in two sums referred to in the Commission decision which would necessarily be affected if the Court were to consider the refusal to clear that amount unlawful. Those amounts are:
2. In the Commission's view the application does not relate to the whole of the decision but only to the refusal to give clearance for FF 8015553.86 for fishery products. Although its conclusions remain unaltered the Commission admits, however, in the rejoinder that the other figures may be affected if the figure of FF 8015553.86 is challenged and considers that in fact the parties are not at issue over the subject-matter of the action.
B — The substance of the action
The French Republic contends that the Commission Decision of 28 August 1985 infringes Community law and in particular Regulation No 729/70. The main issue in the action, which is based on Article 173 of the EEC Treaty, is Regulation No 729/70 and the power to take measures for the conservation of fishery resources in maritime waters.
In the reply to the defence the applicant submits, in the alternative, that the method used for calculating the sums at issue is wrong.
Regulation No 729/70
1. The French Republic states that the intervention payments it made in 1981 to stabilize markets were made pursuant to Article 3 of Regulation No 729/70, according to Community rules and within the framework of the common organization of the markets for fishery products as laid down at the time by Regulation No 100/76. The obligations imposed on Member States by that regulation did not include observance of quotas since the rules on quotas were not introduced by the Council until 25 January 1983.
2. The Commission contends that the reference to Articles 2 and 3 of Regulation No 729/70 in Regulation No 100/76 indicates that the Council did not intend to derogate from the basic principle governing the Fund, that only expenditure incurred in accordance with the Community rules is payable by the Community. In that respect it is not sufficient to observe the technical rules concerning intervention and export refunds; it is necessary to comply with all the obligations in a particular sector.
The power to take measures for the conservation of fishery resources of maritime waters
1. The French Republic claims that it was not bound to take measures for the conservation of resources and that in not doing so it was acting in compliance with Community law. It takes the view that in 1981 power to take such measures was vested in the Community and more particularly the Council; in the absence of binding measures taken by the Council neither the Commission nor the Member States could take conservation measures in its place.
2. The Commission contends that when in 1981 it requested the States to apply its proposals on total allowable catches and quotas it expressly referred to the case-law of the Court.
The calculation of the sums in issue
1. Alternatively the French Republic considers that the method of calculating the sums at issue is wrong. It submits that Regulation No 100/76 imposes no obligation on Member States to observe quotas. It may therefore be asked whether the Commission is seeking to apply Article 26 of Regulation No 3796/81, which did not enter into force until 1 January 1983. The applicant doubts that it may apply retroactively to 1981. Moreover, to its knowledge, the detailed rules for applying Article 26 have not yet been adopted.
2. The Commission contends that although it considered it relevant to show the Court in the statement of the facts the way it calculated the expenditure which was disallowed, it did not plead that argument in its defence because the French Republic's application in no way questioned the method of calculation: it was confined to challenging the Commission's refusal as a matter of principle.
1 Language of the Case: French.