1.1

The common organization of the markets in products processed from fruit and vegetables is set up by Council Regulation (EEC) No 516/77 of 14 March 1977. ( 4 ) It governs, inter alia, preserved mushrooms, ( 5 ) the importation of which is subject to a system of import certificates. ( 6 )

The Council regulation set up a system of common prices and levies designed to stabilize the Community market; the possibility that that system might “in exceptional circumstances” prove inadequate demands that the Community “should be allowed to take any appropriate action as quickly as possible”. ( 7 ) That proviso is clarified by the following provisions :

1.2.

The detailed rules of application were therefore laid down by Council Regulation (EEC) No 521/77 of 14 March 1977, ( 9 ) which defines both the preconditions for the adoption of the protective measures and the nature of the measures which may be envisaged. In the case of imports subject to the system of import certificates, Article 2 makes provision for two possible types of protective measure:

Since the entry into force of the basic legislation, the Commission has had constant recourse to the protective clause contained therein and has adopted a series of regulations serving to restrict or suspend the issue of import certificates. Regulation No 3429/80, on the other hand, reflects a remarkable change in the policy pursued by the Commission in this sector.

(a)

Article 2 of Regulation No 3429/80, which provides for:

(b)

Article 1 of the same regulation, which provides that the importation into the Community of preserved mushrooms in quantities exceeding the quotas thereby determined is, during the first quarter of 1981, “subject ... to [the] levy of an additional amount of 175 ECU per 100 kilograms net.”

(i)

First, the conditions for the adoption of protective measures laid down by the basic regulations ( 17 ) were not satisfied at the time when the Commission adopted the contested regulation;

(ii)

Secondly, irrespective of whether the Commission's assessment of the state of the market at the time in question was lawful, the Commission was not empowered by the Council regulations to adopt a protective measure of the type under consideration.

1.

In adopting the contested measure, has the Commission exceeded the powers conferred on it by the Council? (lack of powers).

The preliminary question raised by the German court relates only to the validity of Article 1 of the Commission regulation. However, as the Commission stated at the hearing, the two components which make up the protective machinery form a composite whole, consisting of a system of quarterly quotas which, if exceeded, cause an additional fixed amount to be levied.

What are the factors liable to vitiate the competence of the Commission? At this stage of my opinion, I do not wish to consider whether the Commission has correctly applied the conditions laid down by the basic legislation for the adoption of the protective measure. In this first part, I should prefer to analyse, not the legality of the manner in which the Commission exercised its powers, but the very existence of powers on the part of the Commission to introduce a protective measure of the type under dispute.

1.1.

In line with the arguments put forward by Wünsche and the Commission, the view might be taken that the Council when instituting a new protective measure, enjoys powers which are independent of any intervention by the Commission; on the other hand, it might also be maintained that the Commission enjoys a certain power of adaptation with regard to the basic rules.

1.1.1.

According to Wünsche, it is a matter for the Council alone to decide on the nature and content of the protective measure to be adopted, the Commission merely having the freedom to select the most appropriate measure from amongst those set out in the basic regulation. In support of its view, Wünsche puts forward essentially two lines of argument:

1.1.2.

In the Commission's opinion the list set out in Article 2 (1) of Regulation No 521/77 is not exhaustive, since the basic regulations allow it a certain power of adaptation in the establishment of proper protective measures.

1.2.

In a consistent line of decisions the Court has indeed acknowledged that the Commission enjoys discretionary power in the exercise of the authority delegated by the Council when, as here, urgent measures based on an analysis of a complex economic situation are involved. ( 23 ) The fact remains, as Mr Advocate General Mayras rightly emphasized in his Opinion in Case 23/75, that this wide discretionary power must be exercised “within the framework of the principles laid down by the Council” and that it cannot in any event permit the Commission to “arrogate to itself a power which the Council has not expressly delegated to it”. ( 24 ) In the present instance, it seems that both Article 2 (1) of Regulation No 521/77 and Article 13 (2) of Regulation No 516/77 reserve to the Council alone the power to establish any new protective measure.

1.2.1.

The type of protective measure which is possible emerges from Article 2 (1) of Regulation No 521/77, which specifies the measures which may be decided on by the Commission. That is therefore the list of possible measures which should be consulted in the present case; the introduction of an additional amount chargeable whenever predetermined quotas are exceeded does not as such appear therein. However, the Court has held that the Commission has a degree of discretion :

Thus the introduction of a new protective measure presupposes at the very least that two complementary conditions are satisfied; the measure must be equivalent to, and less coercive than, the one for which it is substituted. The protective machinery set up by the Commission does not meet the requirement of similarity; the only provision with it might tentatively be linked relates to the creation of a system of minimum prices (Article 2 (1) (c) of Regulation No 521/77).

Like the Commission, I think that such a link is artificial. Certainly, the additional amount was calculated by reference to the cost price of French mushrooms; however, its objective is not to align the price of the product imported from outside the Community with that cost price, since it affects only the volume in excess of the quotas fixed for each country.

The protective machinery therefore rests principally on a quota system the limits of which are guaranteed by the levying of an additional amount as a deterrent; despite that characteristic, it cannot be compared to the classic measures whereby imports are suspended or discontinued, ( 28 )because it preserves traditional trade patterns. ( 29 )

It is therefore a measure sui generis, which cannot as such be based on Article 2 (1). That provision, adopted pursuant to Article 14 (2) of Regulation No 516/77, empowers the Commission to take the appropriate protective measures set out therein. Consequently, in exercising the power of adaptation granted to it, the Commission must have regard to the type of measure laid down by the basic legislation; it may adopt other measures, but only on condition that they constitute a less restrictive variant of the measures specified by the Council. On the other hand, it may not, without exceeding the scope of its authority, introduce an atypical protective measure. The Court has further held, on the subject of protective measures based on Article 115 of the EEC Treaty, that, being in derogation of Articles 9 and 30 thereof, they “must be strictly interpreted and applied”. ( 30 ) It seems to me that that solution may be applied to the present case; it presupposes at least that the Commission cannot absolve itself from compliance with the wishes expressed by the Council; if it were otherwise, the effectiveness of Article 2 (1) would be nullified. That conclusion is all the more imperative in relation to Article 13 (2) of Regulation No 516/77.

1.2.2.

In Wünsche's view, the latter article reserves to the Council alone the power to introduce a charge having equivalent effect to a customs duty in trade with non-member countries; consequently the Commission was not empowered to subject imports in excess of the predetermined quotas to the levy of the additional amount at issue. Without there being any need to inquire whether this may be applied to the restrictions placed by Community institutions on the freedom of trade with non-member countries, it should simply be recalled that the Court has declared that the Community has exclusive competence in the matter. ( 31 ) The latter point is worthy of attention. Article 13 of Regulation No 516/77 reaffirms clearly the principles laid down by this Court, but to which institution does it reserve the power to introduce restrictions on the freedom of trade with non-member countries?

It was thus a Council regulation which introduced the possibility of making the issue of an import certificate subject to a further formality, the detailed implementing rules being specified by the Commission; ( 32 ) as regards the regulation in which the Council repeated in essence the terms of the Commission regulation establishing the disputed protective machinery, it is expressly based on Article 13 (2), the Commission acting to ensure its application. ( 33 )

It may be seen from the above considerations as a whole that it is the business of the Council, and the Council alone, to impose, whether at national or Community level, such restrictions on the freedom of trade with non-member countries as are necessary for the protection of the common market in fruit and vegetables. By substituting itself for the Council — albeit temporarily — for the purpose of establishing a new type of protective measure, the Commission has therefore exceeded the scope of its authority by infringing, first, Article 13 (2) of Regulation No 516/77 and, secondly, Article 2 (1) of Regulation No 521/77. In a more general sense, the Commission has failed to observe the allocation of powers as laid down by the Treaty itself; Articles 40 (3) and 43 (3) reserve to the Council the power to adopt “all measures required to attain the objectives set out in Article 39 ...”, that is to say, measures which the common organization of the market may entail; this covers in particular measures restricting the importation of products from non-member countries. On the strength of those considerations as a whole, my conclusion therefore is that Commission Regulation No 3429/80 is invalid.

Consequently, consideration of the other arguments put forward by the parties may seem unnecessary. I shall deal with them briefly, in the alternative.

1.2.3.

The Commission points to the less restrictive effect of the protective system set up by the regulation at issue. It may, indeed, be maintained that the quota and the additional amount, in combination, are less restrictive on imports of preserved mushrooms from non-member countries than the other types of protective measure expressly set out by Article 2 (1) of Regulation No 521/77. In that regard, however, it should be pointed out that the Commission and Wünsche have put forward differing appraisals of the economic consequences of levying the additional amount. Without there being any need to go into the details of that controversy, it is sufficient to note the following points:

None the less, the Commission considers that the above system, which relieves importers of the commercial risks arising from the total or partial closure of the market while the year is in progress, enables traders to carry out better economic planning. It is more flexible than traditional protective measures because the additional amount is itself capable of modification; the additional amount is indeed a deterrent, but that is wholly in keeping with the objective sought, namely to secure compliance with the import quota whilst avoiding interruption in supply which might affect traditional patterns of trade.

It seems to me that the Commission correctly demonstrates the less restrictive character of the system which it has set up, by stressing first and foremost the quotas which it institutes in relation to which the additional amount is merely ancillary; whilst the latter may seem to be fixed at an excessive level, the reason is that it was set at a fixed rate for deterrent purposes.

The fact remains, however, that the less coercive effect is not, in itself, sufficient to justify the establishment of the protective machinery under dispute. The Commission must, on the one hand, have adopted an appropriate measure and, on the other hand, have correctly assessed the situation in the relevant market.

2.

Did the state of the market justify the adoption of the measure at issue? (inappropriate measure or manifestly incorrect assessment).

For the purpose of assessing whether the measure under consideration is commensurate with the objective pursued by the Commission, I would refer to the earlier discussion of the question of the less restrictive character of the protective measure instituted by the Commission. In the present case the protective machinery set up by the Commission meets the requirement of proportionality inasmuch as it preserves the traditional patterns of trade whilst protecting the Community market.

As the Court has already had occasion to emphasize, the Court allows the Commission a wide discretion with regard to the objective conditions which, under the basic rules, justify recourse to the protective clause. Indeed, according to the case-law of the Court, the Commission must have “manifestly and gravely exceeded the limits of the discretion which it enjoys with respect to the appraisal of economic information” before it may be penalized by having its regulation declared invalid. ( 36 ) The Court's review will, in that connection, be focused particularly on criteria which reflect the state of the market under consideration (such as the volume and trend of imports and stocks and the movement of prices for Community products and imports from non-member countries), on the basis of which the Commission must take its decision ( 37 ).

However, should the view be taken, as the Commission suggests in its observations, that any one of the criteria which it is obliged to take into account may on its own justify the measure adopted? I have already remarked in another case ( 38 ) that the conditions mentioned above seem to be complementary inasmuch as they relate to interdependent economic factors. In particular, it is only when the four criteria set out in the basic rules are satisfied that it is possible to have a comprehensive view of the state of a market. To be complete the Court's review must operate on all the economic criteria which the Commission must at least take into consideration when adopting protective measures. I shall therefore examine, in turn, each of the conditions set out by Article 1 of Council Regulation No 521/77, namely volume of imports, available quantities and prices.

(a)

Wünsche maintains that in the same period it had to contend with a positive shortage, which prevented it from taking supplies from French and Netherlands producers despite the increase in exports from France and the Netherlands into other Community countries. Wünsche concludes that the situation arose because the stock level was inadequate to satisfy commercial demand.

(b)

Wünsche cannot, however, deny that during 1980 French and Netherlands stocks were higher on average than in 1979, their rate of increase having accelerated until November; in December the stock level was in any event higher than the previously reached. In France, average stocks did not decline until 1981. In the Netherlands, the statistics are even more significant; the average stock level was about 3000 tonnes in 1979, then 5000 tonnes until October 1978, when it climbed to 12000 tonnes; only in the course of 1981 did the average return gradually to 5000 tonnes.

(a)

In Wünsche's view, the prices of the Community products increased in 1980, as did those of the imported products, which therefore became less competitive.

(b)

In the Commission's view, on the other hand, the price of Community preserved mushrooms declined in the course of 1980, but the prices of products from outside the Community nevertheless remained lower on average during that year, with the result that they retained their competitive advantage.

1.

Which court is competent to evaluate the economic circumstances giving rise to the protective measure under dispute? According to the plaintiff in the main proceedings, the task falls upon the national court by very reason of the division of functions under Article 177 of the Treaty.

2.

As to the onus of proof, the plaintiff in the main proceedings considers that it falls upon the Commission by very reason of the exceptional character of the protective measure. However, it is my opinion that, in the context of the preliminary ruling procedure, which is grafted on to the national proceedings, it is not for this Court to give judgment on a question which falls exclusively within the scope of domestic procedural law and hence within the jurisdiction of the national court.

On the basis of the above considerations, I conclude that the Court, in reply to the question put to it by the Verwaltungsgericht Frankfurt, should rule as follows :

Commission Regulation (EEC) No 3429/80 of 29 December 1980 adopting protective measures applicable to imports of preserved mushrooms is invalid.