Opinion of Mr Advocate General Tesauro

Mr President,

Members of the Court,

1. The Court of Appeal, London, has referred to the Court of Justice for a preliminary ruling five questions concerning the interpretation of certain provisions of Council Regulation (EEC) No 3796/81 of 29 December 1981 on the common organization of the market in fishery products (hereinafter referred to as the basic regulation), Council Regulation (EEC) No 2202/82 of 28 July 1982 laying down general rules for the granting of financial compensation in respect of certain fishery products, and Commission Regulation (EEC) No 3137/82 of 19 November 1982 laying down detailed rules for the granting of financial compensation in respect of certain fishery products.

2. I do not intend to embark on a detailed description of the legislation in issue, a full account of which is given in the Report for the Hearing, to which I refer for further details.

3. The central concern of the legislation before the Court is reflected in the finding that, in order to improve the profitability of production in the fishing industry, it is necessary for there to be fair competition in that market between products of good quality and uniform standard (fourth recital in the preamble to the basic regulation).

4. Given the special features of the market in fishery products, it was considered that the formation of producers' organizations, whose members would be bound by certain rules in the matter of production and marketing, would contribute to the attainment of those objectives (sixth recital in the preamble to the basic regulation).

5. The legislation in issue also provides for the determination of a withdrawal price below which the producers' organizations may intervene, by withdrawing from the market the products of their own members which have not reached the price indicated, and at the same time receive financial compensation (imputed finally to the Community budget) in respect of quantities withdrawn (Articles 9, 12 and 13 of the basic regulation).

6. Finally, Article 13(3) of the basic regulation provides for financial compensation to be reduced in proportion to the volume of withdrawals, thereby encouraging fishermen to adjust their deliveries to market requirements (17th recital).

7. The summary account given above, although necessarily brief and selective, seems to me to bring out with sufficient clarity the essence and purpose of the Community scheme, that is to say the achievement of market stability, brought about principally by means of producers' organizations.

8. I therefore now move on to summarize the facts underlying the dispute in the main proceedings.

9. In its first question, the Court of Appeal asks whether the provisions of the EEC Treaty, the basic regulation, Council Regulation No 2202/82 and Commission Regulation No 3137/82 are to be interpreted as requiring a Member State to pay to a producers' organization financial compensation in respect of withdrawals of fish which have been graded and marketed in accordance with Council Regulation (EEC) No 103/76, if that producers' organization has failed to a significant extent to comply with the Community marketing standards laid down by the latter regulation in respect of other fish of the withdrawn species put up for sale but not withdrawn during the same period.

10. I would say straight away that, even on the level of strict logic, it seems at the very least strange for someone, on the one hand, to alter the market mechanisms by marketing a product which does not comply with the quality standards, thereby increasing supplies and depressing prices, and, on the other hand, to claim compensation for that portion of production complying with Community marketing standards which it has not been possible to sell at the withdrawal price.

11. Coming now to the strictly legal aspects of the interpretation of the provisions at issue, I must straight away point out that the arguments put forward by the producers' organizations in support of a construction of the legislation in question which would allow the financial compensation claimed to be granted to them, appear to me not at all convincing.

12. Although such arguments are not at first sight entirely without foundation, they do not, in my view, do adequate justice to a systematic interpretation of the provisions relied on.

13. A closer analysis of the provisions relating to the common organization of the market in fishery products enables the correctness of this proposition to be demonstrated.

14. Secondly, the system of calculating and paying financial compensation presupposes that all the fish placed on the market and not withdrawn have been correctly graded.

15. It should also be borne in mind that other provisions contained in the legislation in issue, such as for example Article 6 of Commission Regulation No 3137/82, which provides that producers' organizations are to keep a register showing, in addition to the quantities withdrawn from the market, the monthly quantities put up for sale during the fishing year, clearly proceed on the assumption that the quantities marketed are in compliance with the rules laying down the quality requirements for the products in question.

16. As regards finally the existence of specific penalties for breach of the obligation to observe the marketing standards and, in particular, the provision for withdrawal of recognition from the association which is liable for that offence, it does not seem to me, in the light of the considerations set out above, that that can entail an obligation on the national authorities to grant financial compensation even where there has been a significant failure to comply with the standards in question.

17. To that it may be added that, to allow financial compensation to be paid to a producers' organization which, having failed significantly to observe Community marketing standards, has conducted itself in a manner which is incompatible with the objectives pursued by the Community scheme would be to introduce a further element disruptive of the market in fishery products, inasmuch as it would penalize other organizations which have borne the costs necessary for ensuring compliance with the marketing standards on the part of their own members.

18. The considerations set out in relation to the first question make it unnecessary for me to examine the second and third questions raised by the national court. I turn therefore to a consideration of the fourth and fifth questions in which the Court is asked whether, and to what extent, the failure by a producers' organization properly to grade fish put up for sale, but not withdrawn, in breach of Community marketing standards can be said to be an infringement of limited importance of the rules for financial compensation, within the meaning of Article 13 of Commission Regulation No 3137/82; and, if that article may be applied to a failure properly to grade fish put up for sale, whether the Member State, before refusing to pay any compensation, must: (a) first consider whether the infringement is of limited importance, and in so doing, (b) consider the quantity of fish of the relevant species put up for sale but not withdrawn which has not been properly graded.

19. Under the provision to which the national court makes reference, where a producers' organization or one of its members has committed an infringement of limited importance of the rules for financial compensation, and that organization can prove to the satisfaction of the Member State concerned that the infringement was committed without intent to defraud or in the absence of gross negligence, the Member State is to withhold an amount equal to 10% of the Community withdrawal price applicable to the quantities in question which have been withdrawn and which did not receive a carryover premium.

20. Having said that, I would add straightaway that the very formulation of that question puzzles me somewhat, as the Court of Appeal itself stated that the organizations in question had failed to a significant extent to comply with the Community marketing standards, and I find it hard to understand how an infringement may at the same time be significant and of limited importance.

21. As regards finally the determination of the importance of the infringement, it does not seem to me that it falls to the national authorities to carry out that task.

22. In the light of the considerations developed above, I accordingly propose that the Court should give the following replies to the questions raised by the Court of Appeal:

1 Original language: Italian.

2 OJ 1981 L 379, p. 1.

3 OJ 1982 L 235, p. 1.

4 OJ 1982 L 335, p. 1.

5 OJ 1976 L 20, p. 29.

6 OJ 1980 L 200, p. 82.

7 The questions raised were the following:(2) If the answer to Question I is that financial compensation must be paid to a producers' organization, is that compensation to be calculated: (a) by reference to the toul quantity of fish of the relevant species put up for sale even if some of that quantity of fish of the relevant species was put up for sale in breach of Community marketing standards, or (b) by reference to the total quantity of fish of the relevant species put up for sale reduced pro tanto to reflect the quantity of fish of that species put up for sale in breach of Community marketing standards (3) If the answer to Question 2 is that compensation is to be calculated by reference to the quantity of fish as reduced to reflect the quantity put up for sale in breach of Community marketing standards, is the burden upon the Member State to establish the extent of the producers' organization's failure or upon the producers' organization to show the extent of its compliance?