61980J0112

1 . COMMON COMMERCIAL POLICY - TRADE WITH NON-MEMBER COUNTRIES - COMMUNITY PROTECTIVE MEASURES - PERMISSIBILITY - CONDITIONS

( EEC TREATY , ART . 110 )

2 . AGRICULTURE - COMMON ORGANIZATION OF MARKETS - AMENDMENT OF RULES - PRINCIPLE OF PROTECTION OF LEGITIMATE EXPECTATION - APPLICATION - LIMITS

1 . ARTICLE 110 OF THE EEC TREATY , WHICH STATES THAT MEMBER STATES ' ' AIM TO CONTRIBUTE , IN THE COMMON INTEREST , TO THE HARMONIOUS DEVELOPMENT OF WORLD TRADE , THE PROGRESSIVE ABOLITION OF RESTRICTIONS ON INTERNATIONAL TRADE AND THE LOWERING OF CUSTOMS BARRIERS ' ' , CANNOT BE INTERPRETED AS PROHIBITING THE COMMUNITY FROM ENACTING , UPON PAIN OF COMMITTING AN INFRINGEMENT OF THE TREATY , ANY MEASURE LIABLE TO AFFECT TRADE WITH NON-MEMBER COUNTRIES EVEN WHERE THE ADOPTION OF SUCH A MEASURE IS REQUIRED BY THE RISK OF A SERIOUS DISTURBANCE WHICH MIGHT ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY AND WHERE THE MEASURE IS LEGALLY JUSTIFIED BY THE PROVISIONS OF COMMUNITY LAW .

2 . ALTHOUGH THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION IS ONE OF THE FUNDAMENTAL PRINCIPLES OF THE COMMUNITY , NEVERTHELESS THE FIELD OF APPLICATION OF THIS PRINCIPLE CANNOT BE EXTENDED TO THE POINT OF GENERALLY PREVENTING NEW RULES FROM APPLYING TO THE FUTURE EFFECTS OF SITUATIONS WHICH AROSE UNDER THE EARLIER RULES IN THE ABSENCE OF OBLIGATIONS ENTERED INTO WITH THE PUBLIC AUTHORITIES . THIS IS PARTICULARLY TRUE IN A FIELD SUCH AS THE COMMON ORGANIZATION OF MARKETS , THE PURPOSE OF WHICH NECESSARILY INVOLVES CONSTANT ADJUSTMENT TO THE VARIATIONS OF THE ECONOMIC SITUATION IN THE VARIOUS AGRICULTURAL SECTORS .

IN CASE 112/80

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE HESSISCHES FINANZGERICHT ( FINANCE COURT , HESSE ) ( VIITH SENATE ) FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

FIRMA ANTON DURBECK , FRANKFURT AM MAIN ,

AND

HAUPTZOLLAMT FRANKFURT AM MAIN-FLUGHAFEN ( PRINCIPAL CUSTOMS OFFICE , FRANKFURT AM MAIN AIRPORT )

ON THE VALIDITY OF COMMISSION REGULATION ( EEC ) NO 687/79 OF 5 APRIL 1979 ( OFFICIAL JOURNAL 1979 , L 86 , P . 18 ), IN CONJUNCTION WITH AMENDING REGULATIONS ( EEC ) NO 797/79 OF 23 APRIL 1979 ( OFFICIAL JOURNAL 1979 , L 101 , P . 7 ) AND NO 1152/79 OF 12 JUNE 1979 ( OFFICIAL JOURNAL 1979 , L 144 , P . 13 ),

1 BY ORDER DATED 24 MARCH 1980 WHICH WAS RECEIVED AT THE COURT ON 18 APRIL 1980 THE HESSISCHES FINANZGERICHT REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION AS TO THE VALIDITY OF COMMISSION REGULATION NO 687/79 OF 5 APRIL 1979 ( OFFICIAL JOURNAL L 86 , P . 18 ) AND OF AMENDING REGULATIONS NO 797/79 OF 23 APRIL 1979 ( OFFICIAL JOURNAL L 101 , P . 7 ) AND NO 1152/79 OF 12 JUNE 1979 ( OFFICIAL JOURNAL L 144 , P . 13 ) PROVIDING FOR THE TEMPORARY SUSPENSION OF THE RELEASE INTO FREE CIRCULATION IN THE COMMUNITY OF DESSERT APPLES ORIGINATING IN CHILE .

2 THAT QUESTION WAS RAISED DURING AN ACTION BETWEEN A GERMAN IMPORTER OF FRESH FRUIT ORIGINATING IN NON-MEMBER COUNTRIES AND THE GERMAN CUSTOMS AUTHORITIES REGARDING THE REFUSAL BY THOSE AUTHORITIES TO ALLOW CERTAIN QUANTITIES OF DESSERT APPLES ORIGINATING IN CHILE TO BE RELEASED INTO FREE CIRCULATION IN THE FEDERAL REPUBLIC OF GERMANY ON THE GROUND THAT THE ENTRY INTO FREE CIRCULATION OF THOSE QUANTITIES WAS PROHIBITED BY THE REGULATIONS CITED ABOVE .

I - PRELIMINARY CONSIDERATIONS

3 IT IS APPARENT FROM THE INFORMATION CONTAINED IN THE ORDER MAKING THE REFERENCE FOR A PRELIMINARY RULING THAT THE PROHIBITION IN QUESTION COMES UNDER THE COMMUNITY RULES ON THE COMMON ORGANIZATION OF THE MARKET IN FRUIT AND VEGETABLES PROVIDED FOR BY REGULATION NO 1035/72 OF THE COUNCIL OF 18 MAY 1972 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( II ), P . 437 ).

4 THE FIRST SUBPARAGRAPH OF ARTICLE 29 ( 1 ) OF THAT REGULATION , AS AMENDED BY REGULATION NO 2454/72 OF THE COUNCIL OF 21 NOVEMBER 1972 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( NOVEMBER ), P . 60 ), IS WORDED AS FOLLOWS :

' ' ( 1 ) APPROPRIATE MEASURES MAY BE APPLIED IN TRADE WITH THIRD COUNTRIES IF :

- BY REASON OF IMPORTS OR EXPORTS , THE COMMUNITY MARKET IN ONE OR MORE OF THE PRODUCTS REFERRED TO IN ARTICLE 1 EXPERIENCES OR IS THREATENED WITH SERIOUS DISTURBANCES WHICH MAY ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY ; OR

-FOR THE PRODUCTS LISTED IN ANNEX III A , THE WITHDRAWAL OR BUYING-IN OPERATIONS EFFECTED PURSUANT TO ARTICLES 18 AND 19 CONCERN SIGNIFICANT QUANTITIES ' ' .

ARTICLE 39 ( 2 ) FURTHER PROVIDES THAT IF THE SITUATION MENTIONED IN PARAGRAPH ( 1 ) ARISES ' ' THE COMMISSION SHALL , AT THE REQUEST OF A MEMBER STATE OR ON ITS OWN INITIATIVE , DECIDE UPON THE NECESSARY MEASURES ; THE MEASURES SHALL BE COMMUNICATED TO THE MEMBER STATES AND SHALL BE IMMEDIATELY APPLICABLE ' ' .

5 IN ORDER TO IMPLEMENT THOSE PROVISIONS ON 19 DECEMBER 1972 THE COUNCIL ADOPTED REGULATION NO 2707/72 ' ' LAYING DOWN THE CONDITIONS FOR APPLYING PROTECTIVE MEASURES FOR FRUIT AND VEGETABLES ' ' ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1972 ( 28-30 DECEMBER ), P . 3 ). ARTICLE 1 OF THAT REGULATION PROVIDES THAT :

' ' IN ORDER TO DETERMINE WHETHER THE SITUATION REFERRED TO IN THE FIRST INDENT OF ARTICLE 29 ( 1 ) OF REGULATION ( EEC ) NO 1035/72 EXISTS , ACCOUNT SHALL BE TAKEN IN PARTICULAR OF :

( A ) THE ACTUAL OR PROBABLE VOLUME OF IMPORTS OR EXPORTS ,

( B ) THE AVAILABILITY OF PRODUCTS ON THE COMMUNITY MARKET ,

( C ) THE PRICES OF DOMESTIC PRODUCTS RECORDED ON THE COMMUNITY MARKET , OR THE PROBABLE TREND OF THOSE PRICES , AND IN PARTICULAR THEIR TENDENCY TO FALL OR RISE EXCESSIVELY IN RELATION TO BASIC PRICES OR , WITH REGARD TO PRODUCTS WHICH DO NOT HAVE BASIC PRICES , IN RELATION TO THE PRICES OF PRECEDING YEARS ,

( D)IF THE SITUATION REFERRED TO IN THE FIRST PART EXISTS BY REASON OF IMPORTS :

- THE PRICES ON THE COMMUNITY MARKET OF PRODUCTS EXPORTED FROM THIRD COUNTRIES AND IN PARTICULAR THEIR TENDENCY TO FALL EXCESSIVELY ,

-QUANTITIES FOR WHICH WITHDRAWALS ARE OR MAY BE EFFECTED . ' '

ARTICLE 3 OF THE SAME REGULATION PROVIDES INTER ALIA AS FOLLOWS :

' ' ( 1 ) THE MEASURES WHICH MAY BE TAKEN PURSUANT TO ARTICLE 29 ( 2 ) AND ( 3 ) OF REGULATION ( EEC ) NO 1035/72 ARE :

- WHEN THE SITUATION COVERED BY THE FIRT INDENT OF PARAGRAPH ( 1 ) OF THAT ARTICLE EXISTS , THE SUSPENSION OF IMPORTS OR EXPORTS OR THE LEVYING OF EXPORT TAXES ;

. . .

( 2)SUCH MEASURES MAY ONLY BE TAKEN IN SO FAR , AND FOR AS LONG , AS THEY ARE STRICTLY NECESSARY .

( 3)THE MEASURES PROVIDED FOR IN PARAGRAPH ( 1 ) SHALL TAKE ACCOUNT OF THE THE SPECIAL POSITION OF PRODUCTS IN TRANSIT TO THE COMMUNITY . THEY SHALL APPLY ONLY TO PRODUCTS EXPORTED FROM , OR INTENDED FOR , THIRD COUNTRIES . THEY MAY BE LIMITED TO PRODUCTS EXPORTED FROM , ORIGINATING IN , . . . CERTAIN COUNTRIES , OR TO CERTAIN QUALITIES , SIZE GRADES OR GROUPS .

. . . ' '

6 IN SPRING 1979 THE COMMISSION FOUND THAT THE SITUATION ON THE DESSERT APPLE MARKET IN THE COMMUNITY AT THAT TIME WAS PARTICULARLY CRITICAL AND MIGHT BE AGGRAVATED BY THE PROBABLE IMPORTATION FROM NON-MEMBER COUNTRIES , IN PARTICULAR FROM COUNTRIES IN THE SOUTHERN HEMISPHERE , OF DESSERT APPLES ESTIMATED TO BE 380 000 TONNES . IN THE BELIEF THAT THAT SITUATION FULFILLED THE CONDITIONS LAID DOWN IN THE FIRST INDENT OF ARTICLE 29 ( 1 ) OF REGULATION NO 1035/72 OF THE COUNCIL AND ARTICLE 1 OF REGULATION NO 2707/72 OF THE COUNCIL , IT CONSIDERED THAT IT WAS ABLE TO ACT ON THE BASIS OF THOSE PROVISIONS AND ADOPT UNDER ARTICLE 29 ( 2 ) OF REGULATION NO 1035/72 AND ARTICLE 3 OF REGULATION NO 2707/72 THE PROTECTIVE MEASURES PROVIDED FOR BY THOSE REGULATIONS .

7 BEFORE ADOPTING THOSE MEASURES , HOWEVER , INVOLVING THE TEMPORARY SUSPENSION OF IMPORTS FROM NON-MEMBER COUNTRIES , AT THE BEGINNING OF MARCH 1979 THE COMMISSION TRIED TO SECURE THE AGREEMENT OF THE MAIN EXPORTING COUNTRIES IN THE SOUTHERN HEMISPHERE TO A VOLUNTARY LIMITATION OF THEIR OWN EXPORTS TO THE COMMUNITY WITH A VIEW TO OBTAINING A TOTAL REDUCTION OF PROBABLE EXPORTS FROM 380 000 TONNES TO 310 000 TONNES . THAT FIGURE REPRESENTED A REDUCTION OF ROUGHLY 18% IN RELATION TO THE IMPORTS WHICH WERE ENVISAGED IN THAT FINANCIAL YEAR AND A REDUCTION OF ROUGHLY 5% IN RELATION TO THE AVERAGE VOLUME OF IMPORTS DURING THE THREE PREVIOUS YEARS . IN THE CASE OF CHILE , WHOSE PLANNED EXPORTS TO THE COMMUNITY WERE ESTIMATED TO BE 75 000 TONNES , A REDUCTION IN PROPORTION TO EXPORTS IN THE THREE PREVIOUS YEARS WOULD HAVE RESULTED IN A RESTRICTION OF THOSE EXPORTS TO 42 000 TONNES .

8 IT WAS POSSIBLE FOR AN AGREEMENT TO BE REACHED WITH SOUTH AFRICA , ARGENTINA , AUSTRALIA AND NEW ZEALAND . CHILE , HOWEVER , WHICH CONTENDED THAT EXPORT CONTRACTS HAD ALREADY BEEN CONCLUDED FOR MUCH LARGER QUANTITIES OF APPLES , INSISTED ON BEING ABLE TO EXPORT 55 000 TONNES INSTEAD OF THE 42 000 TONNES PROPOSED .

9 WHEN IT SAW THAT AN AGREEMENT WITH CHILE WAS NOT POSSIBLE AND IN VIEW OF THE INFORMATION WHICH IT HAD ABOUT THE GOODS IN THE COURSE OF TRANSIT FROM THAT COUNTRY , THE COMMISSION ADOPTED , BY REGULATION NO 687/79 OF 5 APRIL 1979 , ' ' PROTECTIVE MEASURES IN RESPECT OF IMPORTS OF DESSERT APPLES ORIGINAT- ING IN CHILE ' ' ( OFFICIAL JOURNAL L 86 , P . 18 ) SO AS TO LIMIT THOSE IMPORTS TO 42 000 TONNES .

10 ARTICLE 1 OF THAT REGULATION PROVIDES THAT :

' ' THE PLACING IN FREE CIRCULATION IN THE COMMUNITY OF APPLES FALLING UNDER SUBHEADING 08.06 A II OF THE COMMON CUSTOMS TARIFF ORIGINATING IN CHILE SHALL BE SUSPENDED DURING THE PERIOD 25 APRIL TO 15 AUGUST 1979 ' ' .

ON 6 APRIL 1979 THE COMMISSION INFORMED THE CHILEAN GOVERNMENT THAT IT WAS PREPARED TO RECONSIDER THE MEASURES IN QUESTION IN THE EVENT OF ITS APPEARING THAT THE QUOTA OF 42 000 TONNES ALLOCATED TO CHILE WAS NOT ATTAINED ON 25 APRIL .

11 THE CHILEAN MISSION SUBSEQUENTLY INFORMED THE COMMISSION ON 17 APRIL 1979 THAT THREE SHIPS HAVING ON THAT DATE A CARGO OF 6 400 TONNES ON BOARD WHICH HAD BEEN TAKEN INTO ACCOUNT IN THE EARLIER ESTIMATES COULD NOT REACH A COMMUNITY PORT BEFORE 25 APRIL 1979 . IN VIEW OF THAT INFORMATION ON 23 APRIL 1979 THE COMMISSION ADOPTED REGULATION ( EEC ) NO 797/79 AMENDING THE PROTECTIVE MEASURES PROVIDED FOR BY REGULATION NO 687/79 AND ADDING A SECOND PARAGRAPH TO ARTICLE 1 THEREOF STATING THAT IN THE CASE OF APPLES WHICH LEFT CHILE NOT LATER THAN 12 APRIL 1979 IN VESSELS BOUND FOR A COMMUNITY PORT PLACING IN FREE CIRCULATION IN THE COMMUNITY WAS TO BE SUSPENDED ONLY AS FROM 5 MAY 1979 .

12 ON 5 MAY 1979 THE COMMISSION ASCERTAINED THAT CERTAIN CARGOES REFERRED TO IN THE LIST DRAWN UP BY THE CHILEAN AUTHORITIES WERE NOT BOUND FOR THE COMMUNITY MARKET AND THAT ONLY 38 600 TONNES OF THE QUANTITIES ALLOCATED TO CHILE HAD BEEN IMPORTED . IT ALSO KNEW THAT TWO VESSELS CARRYING CARGOES OF SOME 3 800 TONNES HAD REACHED COMMUNITY PORTS BETWEEN 5 AND 19 MAY 1979 AND THAT THE GOODS HAD BEEN PLACED IN A CUSTOMS WAREHOUSE . ON 12 JUNE 1979 , THEREFORE , THE COMMISSION ADOPTED REGULATION NO 1152/79 ' ' AMENDING FOR THE SECOND TIME REGULATION NO 687/79 LAYING DOWN PROTECTIVE MEASURES IN RESPECT OF IMPORTS OF DESSERT APPLES ORIGINATING IN CHILE ' ' WHICH REPLACED THE SECOND PARAGRAPH OF ARTICLE 1 OF REGULATION NO 687/79 BY A NEW PROVISION WHICH , IN THE CASE OF APPLES SHIPPED IN VESSELS WHICH HAD REACHED A COMMUNITY PORT BEFORE 19 MAY 1979 , POSTPONED THE DATE FROM WHICH RELEASE INTO FREE CIRCULATION IN THE COMMUNITY WAS SUSPENDED TO 17 JUNE 1979 .

13 THE PLAINTIFF IN THE MAIN ACTION , THE UNDERTAKING ANTON DURBECK , AN IMPORTER AND WHOLESALER OF FRUIT AND VEGETABLES , HAD MADE CONTRACTS FOR THE IMPORTATION OF SOME 300 000 BOXES OF CHILEAN DESSERT APPLES . OF THAT QUANTITY 180 000 BOXES HAD BEEN IMPORTED AT THE TIME OF THE ADOPTION OF COMMISSION REGULATION NO 687/79 , THAT IS TO SAY ON 5 APRIL 1979 . THE SHIP CARRYING THE REMAINING QUANTITIES WAS DUE TO LEAVE CHILE BETWEEN 18 AND 20 APRIL 1979 BUT IN VIEW OF THE MEASURES ADOPTED BY THE COMMISSION AND ITS REFUSAL TO GRANT A REQUEST FOR AN EXEMPTION FOR 2 000 TONNES SENT TO IT BY TELEX MESSAGES OF 10 AND 12 APRIL 1979 , THE PLAINTIFF IN THE MAIN ACTION CANCELLED THE PURCHASE CONTRACT AND CONTRACT OF AFFREIGHTMENT FOR THOSE QUANTITIES .

14 ON 25 JULY 1979 IT IMPORTED BY AIR INTO THE FEDERAL REPUBLIC OF GERMANY TWO BOXES OF CHILEAN DESSERT APPLES WEIGHING 45 KILOGRAMS AND APPLIED TO THE GERMAN AUTHORITIES FOR THE RELEASE INTO FREE CIRCULATION OF THOSE GOODS . THE COMPETENT CUSTOMS OFFICE REJECTED THAT APPLICATION ON THE GROUND OF THE PROTECTIVE MEASURES ADOPTED BY THE COMMUNITY IN COMMISSION REGULATIONS NOS 687/79 , 797/79 AND 1152/79 IN REGARD TO IMPORTS OF DESSERT APPLES ORIGINATING IN CHILE .

15 THE PLAINTIFF IN THE MAIN ACTION CHALLENGED THAT DECISION BEFORE THE HESSISCHES FINANZGERICHT CONTENDING AMONGST OTHER THINGS THAT THE LEGAL BASIS FOR THAT DECISION , NAMELY THE REGULATIONS CITED ABOVE , WAS VOID SINCE THOSE REGULATIONS HAD BEEN ADOPTED IN BREACH OF REGULATIONS NOS 1035/72 AND 2707/72 OF THE COUNCIL , ARTICLE 110 OF THE TREATY AND THE PROVISIONS OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE ( GATT ), AND THE PRINCIPLES OF THE PROTECTION OF LEGITIMATE EXPECTATION AND NON-DISCRIMINATION . WITH A VIEW TO SETTLING THE ISSUE THEREBY RAISED THE FINANZGERICHT REFERRED THE FOLLOWING QUESTION TO THE COURT FOR A PRELIMINARY RULING :

' ' IS COMMISSION REGULATION ( EEC ) NO 687/79 OF 5 APRIL 1979 ( OFFICIAL JOURNAL L 86 , P . 18 ), IN CONJUNCTION WITH AMENDING REGULATIONS ( EEC ) NO 797/79 OF 23 APRIL 1979 ( OFFICIAL JOURNAL L 101 , P . 7 ) AND NO 1152/79 OF 12 JUNE 1979 ( OFFICIAL JOURNAL L 144 , P . 13 ), VALID?

' '

16 ON 13 JULY 1979 THE CHILEAN GOVERNMENT SOUGHT , PURSUANT TO THE GENERAL AGREEMENT , THE OPENING OF CONSULTATIONS WITH THE EEC IN APPLICATION OF ARTICLE XXIII OF THAT AGREEMENT ON WHICH THE PLAINTIFF IN THE MAIN ACTION AND THE COMMISSION GAVE THEIR VIEWS DURING THE ORAL PROCEDURE BEFORE THE COURT .

II - CONSIDERATION OF THE QUESTION SUBMITTED

17 FROM THE STATEMENT OF THE REASONS UPON WHICH THE ORDER MAKING THE REFERENCE IS BASED AND THE BACKGROUND INFORMATION PROVIDED DURING THE PROCEEDINGS BEFORE THE COURT IT APPEARS THAT THE COURT IS CALLED UPON IN THIS CASE TO DECIDE AS TO THE VALIDITY UNDER COMMUNITY LAW OF REGULATIONS NOS 687/79 , 797/79 AND 1152/79 AND TO CONSIDER IN PARTICULAR WHETHER THEY INVOLVE :

- AN INFRINGEMENT OF ARTICLE 190 OF THE TREATY IN SO FAR AS THE STATEMENT OF THE REASONS ON WHICH THEY ARE BASED , AS REQUIRED BY THAT PROVISION , IS INSUFFICIENT ;

- AN INFRINGEMENT OF ARTICLE 29 ( 1 ) OF REGULATION NO 1035/72 OF THE COUNCIL AND ARTICLES 1 TO 3 OF REGULATION NO 2707/72 OF THE COUNCIL ;

- AN INFRINGEMENT OF ARTICLE 110 OF THE TREATY AND THE PROVISIONS OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE ;

- FAILURE TO OBSERVE THE GENERAL PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION AND THE PRINCIPLE PROHIBITING DISCRIMINATION .

( A ) THE STATEMENT OF THE REASONS ON WHICH REGULATIONS NOS 687/79 , 797/79 AND 1152/79 ARE BASED

18 THE QUESTION HAS BEEN RAISED IN RELATION TO THE REASONS GIVEN AS THE BASIS FOR THE REGULATIONS IN QUESTION WHETHER THE FACT THAT THE PREAMBLE TO REGULATION NO 687/79 MENTIONS REGULATION NO 1035/72 ONLY AND MAKES NO REFERENCE TO REGULATION NO 2707/72 CONSTITUTES A DEFECT OF FORM WHICH BY VIRTUE OF ARTICLE 190 OF THE TREATY AFFECTS THE VALIDITY OF THAT REGULATION AND CONSEQUENTLY THAT OF THE AMENDING REGULATIONS NOS 797/79 AND 1152/79 ALSO .

19 FROM THE PREAMBLE TO REGULATION NO 687/79 AND IN PARTICULAR FROM THE FIRST RECITAL THEREIN IT MAY BE SEEN THAT THAT REGULATION DEFINES ITS LEGAL BASIS BY REFERENCE TO ARTICLE 29 OF REGULATION NO 1035/72 PARAGRAPH ( 1 ) OF WHICH DESCRIBES , IN THE FIRST SUBPARAGRAPH , THE TYPE OF SITUATION REQUIRING INTERVENTION BY THE COMMISSION WHICH MAY INVOLVE THE ADOPTION OF PROTECTIVE MEASURES , WHILST THE SECOND SUBPARAGRAPH STATES THAT THE COUNCIL , ACTING ON A PROPOSAL FROM THE COMMISSION , ' ' SHALL ADOPT RULES FOR THE APPLICATION OF THIS PARAGRAPH ' ' .

20 SINCE THE VERY OBJECT OF REGULATION NO 2707/72 IS TO DETERMINE THE CONDITIONS FOR THE APPLICATION OF REGULATION NO 1035/72 , IT FOLLOWS IN THIS CASE THAT THE REFERENCE TO ARTICLE 29 OF REGULATION NO 1035/72 CONTAINED IN COMMISSION REGULATION NO 687/79 IS A SUFFICIENT STATEMENT OF THE REASONS ON WHICH REGULATION NO 687/79 IS BASED AS IT ENABLES THOSE CONCERNED TO IDENTIFY THE FACTORS WHICH THE COMMISSION TOOK INTO ACCOUNT WHEN ADOPTING THE PROTECTIVE MEASURES IN ISSUE .

( B ) INFRINGEMENT OF ARTICLE 29 ( 1 ) OF REGULATION NO 1035/72 AND ARTICLES 1 TO 3 OF REGULATION NO 2707/72

21 IT IS COMMON GROUND THAT THE PROTECTIVE MEASURES ADOPTED BY THE COMMISSION IN THIS CASE ARE OF THE TYPE WHICH UNDER ARTICLE 3 ( 1 ) OF REGULATION NO 2707/72 MAY BE ADOPTED IN APPLICATION OF ARTICLE 29 OF REGULATION NO 1035/72 IF THE SITUATION REFERRED TO IN THE FIRST INDENT OF PARAGRAPH ( 1 ) THEREOF ARISES , THAT IS TO SAY IF ' ' THE COMMUNITY MARKET IN ONE OR MORE OF THE PRODUCTS REFERRED TO IN ARTICLE 1 EXPERIENCES OR IS THREATENED WITH SERIOUS DISTURBANCES WHICH MAY ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY ' ' .

22 ARTICLE 1 OF REGULATION NO 2707/72 EXPRESSLY DEFINES THE FACTORS WHICH THE COMMISSION MUST TAKE INTO ACCOUNT IN ORDER TO DETERMINE WHETHER SUCH A SITUATION EXISTS . ARTICLE 2 OF THAT REGULATION , WHICH CONCERNS A SITUATION DIFFERENT FROM THAT OBTAINING HERE , IS NOT RELEVANT TO THE PRESENT CASE . BY ARTICLE 1 AFORESAID , WHEN ADOPTING THE PROTECTIVE MEASURES IN ISSUE , THE COMMISSION WAS REQUIRED TO ASSESS THE SITUATION ON THE MARKET IN QUESTION BY TAKING ACCOUNT OF

( A ) THE ACTUAL OR PROBABLE VOLUME OF IMPORTS OR EXPORTS ,

( B ) THE AVAILABILITY OF PRODUCTS ON THE COMMUNITY MARKET ,

( C ) THE PRICES OF DOMESTIC PRODUCTS AND THE PROBABLE TREND OF THOSE PRICES , IN PARTICULAR THEIR TENDENCY TO FALL OR RISE EXCESSIVELY IN RELATION TO BASIC PRICES , AND

( D ) THE PRICES ON THE COMMUNITY MARKET OF PRODUCTS EXPORTED FROM THIRD COUNTRIES AND IN PARTICULAR THEIR TENDENCY TO FALL EXCESSIVELY , AND QUANTITIES FOR WHICH WITHDRAWALS WERE OR MIGHT BE EFFECTED .

23 REGULATIONS NOS 687/79 , 797/79 AND 1152/79 SHOULD THEREFORE BE EXAMINED IN THE LIGHT OF THOSE FACTORS TO DETERMINE WHETHER THEY COMPLY WITH THE PROVISIONS OF THE FIRST INDENT OF ARTICLE 29 ( 1 ) OF REGULATION NO 1035/72 AND ARTICLES 1 AND 3 OF REGULATION NO 2707/72 .

24 WITH THAT IN VIEW CONSIDERATION SHOULD BE GIVEN FIRST OF ALL TO WHETHER THE COMMISSION EXERCISED ITS DISCRETION CORRECTLY AT THE TIME WHEN THE AFORESAID MEASURES WERE DECIDED UPON WHEN ASSESSING THE SITUATION ON THE MARKET IN QUESTION AS REGARDS THE AVAILABLE QUANTITIES OF THE PRODUCTS INVOLVED .

25 THE PARTIES AGREE THAT IN SPRING 1979 THE QUANTITIES AVAILABLE WERE CONSIDERABLE . THE AMOUNTS INVOLVED REFLECTED BOTH THE QUANTITIES RESULTING FROM THE 1978/79 HARVEST COMPARED TO THOSE RESULTING FROM HARVESTS IN PREVIOUS SEASONS AND THE QUANTITIES OF PRODUCTS WHICH HAD BEEN THE SUBJECT OF INTERVENTION MEASURES AND WERE HELD IN STOCK AT THE TIME UNDER CONSIDERATION . THE FIGURES FOR THE HARVEST FOR THE 1978/79 SEASON INDICATE FIRST THAT , INSTEAD OF DECREASING , THE VOLUME OF THAT HARVEST , ESTIMATED TO BE 6 661 000 TONNES , WAS ROUGHLY 30% IN EXCESS OF THE HARVEST FOR THE 1977/78 SEASON .

26 THERE IS NO DOUBT THAT FOR THE PURPOSE OF ASSESSING THE SITUATION ON THE MARKET ONLY PRODUCTS WHICH MEET THE QUALITY STANDARDS OF THE COMMON ORGANIZATION OF THE MARKETS CAN ENTER INTO CONSIDERATION SINCE THOSE PRODUCTS ARE THE ONLY CAPABLE OF BEING MARKETED AND BEING THE SUBJECT OF INTERVENTION MEASURES ; HOWEVER , IT HAS NOT BEEN DEMONSTRATED THAT THE QUANTITIES OF APPLES NOT MEETING THOSE QUALITY STANDARDS DIFFERED APPRECIABLY IN 1978/79 FROM THOSE IN EARLIER YEARS , OR THAT PRODUCERS OR TRADERS USED MOST OF THEIR STORAGE CAPACITY TO STORE PRODUCTS WHICH COULD NEITHER BE MARKETED NOR BE THE SUBJECT OF INTERVENTION MEASURES OR , FINALLY , THAT THERE WERE ABUSES OR MAJOR ERRORS IN THE APPLICATION OF COMMUNITY STORAGE MEASURES .

27 IN ORDER TO DETERMINE THE SIZE OF THE QUANTITIES OF DESSERT APPLES AVAILABLE ON THE COMMUNITY MARKET IN SPRING 1979 THE COMMISSION HAD FURTHER TO CONSIDER , IN ADDITION TO QUANTITIES HARVESTED IN THE YEAR IN QUESTION , QUANTITIES HELD IN COLD STORES , BOTH THOSE WHICH HAD BEEN THE SUBJECT OF INTERVENTION MEASURES AND THOSE HELD IN PRIVATE STOCKS . THE RELEVANT FIGURES SUPPLIED DURING THE PROCEEDINGS REVEAL THAT THE QUANTITIES OF DESSERT APPLES HELD IN STORAGE HAD REACHED SOME 1 500 000 TONNES ON 1 MARCH 1979 , WHICH REPRESENTS AN INCREASE IN THE REGION OF 18 % AND 40 % COMPARED TO THE SAME PERIODS IN 1977 AND 1978 RESPECTIVELY . IRRESPECTIVE OF WHETHER SUCH FIGURES TAKE ACCOUNT ONLY OF THE PRODUCTS CONTAINED IN COLD STORES AND THOSE MEETING THE QUALITY STANDARDS , IT IS INCONTESTABLE THAT WHEN CONSIDERED ALSO IN RELATION TO THE TREND IN DOMESTIC PRODUCTION , THE FIGURES RELATING TO THE STOCKS EXISTING IN SPRING 1979 DISCLOSED INCREASINGLY SERIOUS DIFFICULTIES FOR THE DISPOSAL OF DOMESTIC DESSERT APPLES ON THE COMMUNITY MARKET .

28 THOSE DIFFICULTIES MIGHT MOREOVER HAVE BEEN AGGRAVATED APPRECIABLY FIRST BY THE TREND OF DOMESTIC PRICES AT THE TIME UNDER CONSIDERATION AND SECONDLY BY THE EXTENT OF THE WITHDRAWAL MEASURES TAKEN IN SPRING 1979 AND PROBABLE THEREAFTER .

29 AS REGARDS THE FIRST POINT , IT APPEARS FROM THE INFORMATION SUPPLIED TO THE COURT DURING THE COURSE OF THE ORAL PROCEDURE THAT IN FEBRUARY TO APRIL 1979 MARKET PRICES ON MOST OF THE NATIONAL MARKETS IN THE COMMUNITY WERE UNDER THE BASIC PRICE , FIXED AT 21.26 EUROPEAN UNITS OF ACCOUNT IN ACCORDANCE WITH ARTICLE 16 OF REGULATION NO 1035/72 ON THE BASIS OF THE AVERAGE OF THE PRICES NOTED ON THE REPRESENTATIVE MARKETS OF THE COMMUNITY DURING THE THREE PREVIOUS YEARS . FURTHERMORE , A COMPARISON BETWEEN THE PRICES IN EACH OF THOSE THREE YEARS SHOWS THAT IN MARCH 1979 PRICES CHARGED ON MOST OF THE NATIONAL MARKETS IN THE COMMUNITY HAD NOT REACHED THE PRICE LEVEL PREVAILING IN THE PREVIOUS YEARS BUT REVEALED A CLEAR DOWNWARD TREND LIKELY TO AGGRAVATE CONDITIONS FOR THE DISPOSAL OF THE PRODUCTS IN QUESTION AND TO INCREASE SEVERELY THE ALREADY EXTREMELY HEAVY BURDEN OF STORAGE ARRANGEMENTS .

30 AS REGARDS THE SECOND POINT , THE AFORESAID INFORMATION FURTHER REVEALS THAT ON 1 MARCH 1979 THE QUANTITIES IN RESPECT OF WHICH WITHDRAWAL MEASURES HAD BEEN TAKEN HAD REACHED 90 000 TONNES AND ON 1 APRIL HAD INCREASED TO 143 512 TONNES , THUS INDICATING A RAPID RATE OF INCREASE WHILST WITHDRAWAL MEASURES HAD NOT EXCEEDED 2 450 TONNES IN 1978 AND 115 000 TONNES IN 1977 . FROM FORECASTS BASED ON PREVIOUS YEARS IT WAS THEREFORE REASONABLE TO EXPECT WITHDRAWAL MEASURES TO BE EFFECTED IN RESPECT OF STILL LARGER QUANTITIES AND CONSEQUENTLY A DISTURBING AGGRAVATION OF THE CRITICAL SITUATION ON THE MARKET IN QUESTION .

31 CONSEQUENTLY , IT IS UNDENIABLE THAT THE COMMISSION HAD REASON TO ASSUME THAT THE SITUATION ON THAT MARKET WAS LIKELY TO DETERIORATE SERIOUSLY OWING TO THE ACTUAL OR PROBABLE VOLUME OF IMPORTS OF THE PRODUCTS IN QUESTION FROM NON-MEMBER COUNTRIES AND THAT SUCH A DETERIORATION MIGHT TURN INTO A DISTURBANCE WHICH MIGHT ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY .

32 AS FAR AS THE PROBABLE VOLUME OF IMPORTS IS CONCERNED , THE PAPERS PLACED BEFORE THE COURT SHOW THAT IMPORTS IN THE REGION OF 380 000 TONNES WERE TO BE EXPECTED FROM THE MAIN COUNTRIES IN THE SOUTHERN HEMISPHERE IN THE PERIOD MARCH TO AUGUST 1979 , WHICH WOULD REPRESENT AN INCREASE IN IMPORTS EVEN IN COMPARISON TO THE PREVIOUS YEAR IN WHICH THE HARVEST OF DOMESTIC APPLES HAD BEEN PARTICULARLY POOR .

33 EVEN IF IT ASSUMED THAT THE QUALITY OF IMPORTED APPLES WAS SUPERIOR TO THAT OF DOMESTIC APPLES IN THAT PERIOD , THE FACT STILL REMAINS THAT THE QUALITY OF DOMESTIC APPLES WAS NOT SO INFERIOR THAT THE TWO CATEGORIES OF APPLES WERE NOT LARGELY INTERCHANGEABLE .

34 NOR IS THE ARGUMENT OF THE PLAINTIFF IN THE MAIN ACTION THAT THE SUPPLY OF IMPORTED APPLES MIGHT HAVE THE EFFECT OF PROMOTING THE SALE OF DOMESTIC APPLES TENABLE . SUCH AN EFFECT , EVEN IF IT EXISTS , WOULD ONLY BE TEMPORARY ; IN THE LONG RUN IMPORTS FROM NON-MEMBER COUNTRIES WOULD CREATE A DEMAND WHICH , IN THE ABSENCE OF IMPORTS , WOULD BE DIRECTED TO DOMESTIC PRODUCTS .

35 IN VIEW , THEREFORE , OF THE QUANTITIES OF DOMESTIC DESSERT APPLES AVAILABLE ON THE COMMUNITY MARKET , BOTH THOSE FROM THE 1978/79 HARVEST AND THOSE STORED IN COMMUNITY AND PRIVATE COLD STORES , AND THE EXTENT OF PROBABLE INTERVENTION MEASURES AND PRICE TRENDS IN THE COMMUNITY IN PARTICULAR , IT DOES NOT APPEAR THAT THE COMMISSION ERRED IN ASSESSING THE TRUE SITUATION ON THE MARKET IN QUESTION BY ASSUMING THAT A VOLUME OF IMPORTS FROM COUNTRIES IN THE SOUTHERN HEMISPHERE ESTIMATED TO BE 380 000 TONNES MIGHT SUBSTANTIALLY AGGRAVATE THE DIFFICULTIES ON THAT MARKET AND WERE LIKELY TO CREATE A SERIOUS DISTURBANCE , WITHIN THE MEANING OF ARTICLE 29 OF REGULATION NO 1035/72 , ON THAT MARKET WHICH MIGHT JEOPARDIZE THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY , PARTICULARLY THOSE IN SUBPARAGRAPHS ( A ), ( B ) AND ( C ) THEREOF .

36 THE FACT THAT THE PROTECTIVE MEASURES IN DISPUTE , ENACTED BY REGULATION NO 687/79 , WERE AMENDED TWICE BY REGULATIONS NOS 797/79 AND 1152/79 MAY NOT BE TAKEN AS SIGNIFYING THAT THE COMMISSION ' S ASSESSMENT OF THE SITUATION ON THE MARKET IN THE SPRING OF 1979 WAS INCOMPLETE OR MISTAKEN . AS THE PREAMBLE TO THOSE REGULATIONS SHOWS , THE EXPLANATION FOR THOSE AMENDMENTS IS SIMPLY THAT MORE DETAILED KNOWLEDGE WAS ACQUIRED OF THE TRUE QUANTITIES IN THE COURSE OF TRANSIT AND ACTUALLY INTENDED TO BE RELEASED INTO FREE CIRCULATION IN THE COMMUNITY , WHICH FORMED PART OF THE IMPORT QUOTA FOR CHILE .

37 NOR CAN THE FACT THAT THE COMMISSION DID NOT ADOPT ANY PROTECTIVE MEASURE FOR 1979/80 DESPITE A HARVEST STILL BIGGER THAN IN 1978/79 BE TAKEN AS CRUCIAL EVIDENCE THAT THE COMMISSION ' S APPRAISAL WAS ILL-FOUNDED ; THAT APPRAISAL RELATED ONLY TO THE SITUATION ON AND THE NEEDS OF THE MARKET AS THEY EXISTED IN THE SPRING OF 1979 AND CANNOT BE JUDGED BY CONSIDERATIONS ARISING FROM A MARKET SITUATION IN A SUBSEQUENT YEAR .

38 WHEN A SITUATION SUCH AS THAT CONSIDERED ABOVE ARISES , AMONG THE MEASURES WHICH MAY BE ADOPTED PURSUANT TO ARTICLE 29 ( 2 ) AND ( 3 ) OF REGULATION NO 1035/72 , ARTICLE 3 ( 1 ) OF REGULATION NO 2707/72 MAKES EXPRESS PROVISION FOR THE SUSPENSION OF IMPORTS OR EXPORTS OR THE LEVYING OF EXPORT TAXES .

39 THE COMMISSION ' S ATTEMPT TO SECURE THE AGREEMENT OF THE EXPORTING COUNTRIES TO A VOLUNTARY RESTRICTION OF THEIR EXPORTS TO THE COMMUNITY BEFORE IT DECIDED ON THE TEMPORARY SUSPENSION OF IMPORTS FROM CHILE CANNOT , IN VIEW OF ARTICLE 29 , BE REGARDED AS UNACCEPTABLE UNDER COMMUNITY LAW SINCE THAT ATTEMPT REFLECTS THE COMMUNITY ' S ENDEAVOUR NOT TO ADOPT EXCEPT AS A LAST RESORT COERCIVE MEASURES SUCH AS THOSE IN ISSUE , IN SPITE OF THE FACT THAT IT DID HAVE THE POWER TO ENACT THEM UNDER ARTICLE 3 OF REGULATION NO 2707/72 .

40 SUCH AN ATTEMPT IS ALL THE MORE LEGITIMATE SINCE REGULATION NO 2707/72 , ARTICLE 3 ( 2 ) OF WHICH PROVIDES THAT ANY PROTECTIVE MEASURES DECIDED UPON BY THE COMMISSION MAY BE ADOPTED ONLY ' ' IN SO FAR , AND FOR AS LONG , AS THEY ARE STRICTLY NECESSARY ' ' , IMPLIES THAT WHEN THE COMMISSION BELIEVES THAT THE CONDITIONS REQUISITE FOR THE APPLICATION OF SUCH MEASURES ARE FULFILLED , IT MUST OBSERVE THE PRINCIPLE OF PROPORTIONALITY UNDERLYING THE COMMUNITY LEGAL ORDER .

41 THE FACT THAT WHEN ADOPTING REGULATIONS NOS 797/79 AND 1152/79 AMENDING REGULATION NO 687/79 THE COMMISSION TOOK INTO CONSIDERATION ONLY GOODS WHICH HAD LEFT CHILE TO THE EXCLUSION OF THOSE IN THE COURSE OF BEING LOADED DOES NOT AMOUNT TO A FAILURE TO OBSERVE THE PRINCIPLE OF PROPORTIONALITY WITH REGARD TO THE LAST-MENTIONED PRODUCTS . THE FIRST SUBPARAGRAPH OF ARTICLE 3 ( 3 ) OF REGULATION NO 2707/72 STATES IN FACT THAT ANY PROTECTIVE MEASURES ADOPTED ARE TO TAKE ACCOUNT OF THE SPECIAL POSITION OF PRODUCTS ' ' IN TRANSIT ' ' . THE FACT THAT IN REGULATIONS NO 797/79 AND NO 1152/79 THE COMMISSION TOOK ACCOUNT ONLY OF GOODS ALREADY BEING TRANSPORTED BY SEA AT THE TIME WHEN THE PROTECTIVE MEASURES IN ISSUE WERE ADOPTED CONSTITUTES A PROPER APPLICATION OF REGULATION NO 2707/72 WHICH THE COMMISSION COULD NOT INTERPRET WIDELY WITHOUT PUTTING AT RISK THE EFFICACY OF THE PROTECTIVE MEASURES DECIDED UPON .

( C ) INFRINGEMENT OF ARTICLE 110 OF THE TREATY AND OF THE PROVISIONS OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE

42 A FURTHER CHARGE LEVELLED AGAINST THE PROTECTIVE MEASURES IN ISSUE IS THAT SINCE THEY COMPRISE A SUSPENSION OF IMPORTS FROM NON-MEMBER COUNTRIES THEY ARE IN BREACH OF THE GUIDING PRINCIPLE OF THE COMMON COMMERCIAL POLICY LAID DOWN IN ARTICLE 110 OF THE TREATY TO WHICH ARTICLE 37 OF REGULATION NO 1035/72 MAKES EXPRESS REFERENCE .

43 IT SHOULD BE REMEMBERED IN THIS REGARD THAT ACCORDING TO ARTICLE 37 OF REGULATION NO 1035/72 THAT REGULATION ' ' SHALL BE SO APPLIED THAT APPROPRIATE ACCOUNT IS TAKEN , AT THE SAME TIME , OF THE OBJECTIVES SET OUT IN ARTICLES 39 AND 110 OF THE TREATY ' ' . THAT REFERENCE TO THE TWO ARTICLES SHOWS THAT THE REGULATION IS INTENDED TO MAINTAIN A REASONABLE BALANCE BETWEEN THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY AND THE INTERESTS OF WORLD TRADE TO WHICH REFERENCE IS MADE IN ARTICLE 110 .

44 ARTICLE 110 OF THE TREATY , WHICH STATES THAT MEMBER STATES ' ' AIM TO CONTRIBUTE , IN THE COMMON INTEREST , TO THE HARMONIOUS DEVELOPMENT OF WORLD TRADE , THE PROGRESSIVE ABOLITION OF RESTRICTIONS ON INTERNATIONAL TRADE AND THE LOWERING OF CUSTOMS BARRIERS ' ' , CANNOT BE INTERPRETED AS PROHIBITING THE COMMUNITY FROM ENACTING , UPON PAIN OF COMMITTING AN INFRINGEMENT OF THE TREATY , ANY MEASURE LIABLE TO AFFECT TRADE WITH NON-MEMBER COUNTRIES EVEN WHERE THE ADOPTION OF SUCH A MEASURE IS REQUIRED , AS IN THIS CASE , BY THE RISK OF A SERIOUS DISTURBANCE WHICH MIGHT ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY AND WHERE THE MEASURE IS LEGALLY JUSTIFIED BY THE PROVISIONS OF COMMUNITY LAW .

45 LIKEWISE , THE ARGUMENT ADVANCED BY THE PLAINTIFF IN THE MAIN ACTION THAT THE PROTECTIVE MEASURES IN ISSUE ARE CONTRARY TO THE COMMITMENTS ENTERED INTO BY THE COMMUNITY UNDER GATT IS NOT CAPABLE IN THIS CASE OF PUTTING THE VALIDITY OF THOSE MEASURES IN QUESTION .

46 ACCORDING TO THE UNCONTESTED INFORMATION ON THIS MATTER SUPPLIED BY THE COMMISSION DURING THE ORAL PROCEDURE THE SPECIAL GATT GROUP CHARGED WITH EXAMINING THE CONFORMITY OF COMMUNITY MEASURES WITH THE GENERAL AGREEMENT FOUND THAT IN ADOPTING THE PROTECTIVE MEASURES IN ISSUE THE COMMISSION DID NOT INFRINGE EITHER ARTICLE I OR ARTICLE II OF THAT AGREEMENT . THE GROUP IN QUESTION CRITICIZED THE COMMUNITY ONLY FOR MAKING 1976 THE THIRD REFERENCE YEAR INSTEAD OF 1975 WHEN ADOPTING THE AFORESAID MEASURES . CRITICISM OF THAT KIND CANNOT BE REGARDED AS A FACTOR SUCH AS TO MAKE THE MEASURES IN QUESTION VOID . BESIDES , THE EXPLANATIONS GIVEN BY THE COMMISSION SHOW THAT THE TAKING INTO CONSIDERATION OF 1975 WOULD NOT HAVE SUBSTANTIALLY ALTERED THE IMPORT QUOTAS ALLOCATED TO CHILE WHICH WOULD HAVE GONE UP FROM 42 000 TONNES , CALCULATED ON THE BASIS OF 1976 , TO 42 600 TONNES .

( D ) BREACH OF THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION

47 THE COURT ' S ATTENTION HAS BEEN FURTHER DRAWN TO THE QUESTION WHETHER THE COMMISSION WAS IN BREACH OF THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION ON THE GROUND , IN PARTICULAR , THAT IT ADOPTED THE PROTECTIVE MEASURE IN ISSUE AT A LATE STAGE , AFTER THE IMPORTERS CONCERNED HAD ENTERED INTO SUPPLY AND AFFREIGHTMENT CONTRACTS , AND WITHOUT MAKING PROVISION FOR TRANSITIONAL MEASURES IN FAVOUR OF THOSE IMPORTERS .

48 ALTHOUGH , AS THE COURT HAS RECENTLY CONFIRMED IN ITS JUDGMENT OF 16 MAY 1979 IN CASE 84/78 TOMADINI ( 1979 ) ECR 1801 , THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION IS ONE OF THE FUNDAMENTAL PRINCIPLES OF THE COMMUNITY , NEVERTHELESS ' ' THE FIELD OF APPLICATION OF THIS PRINCIPLE CANNOT BE EXTENDED TO THE POINT OF GENERALLY PREVENTING NEW RULES FROM APPLYING TO THE FUTURE EFFECTS OF SITUATIONS WHICH AROSE UNDER THE EARLIER RULES IN THE ABSENCE OF OBLIGATIONS ENTERED INTO WITH THE PUBLIC AUTHORITIES ' ' . IN THE SAME JUDGMENT THE COURT WENT ON TO SAY THAT ' ' THIS IS PARTICULARLY TRUE IN A FIELD SUCH AS THE COMMON ORGANIZATION OF MARKETS , THE PURPOSE OF WHICH NECESSARILY INVOLVES CONSTANT ADJUSTMENT TO THE VARIATIONS OF THE ECONOMIC SITUATION IN THE VARIOUS AGRICULTURAL SECTORS ' ' .

49 THE VERY CIRCUMSTANCES WHICH JUSTIFY THE ADOPTION OF PROTECTIVE MEASURES WITHIN THE MEANING OF ARTICLE 3 ( 1 ) OF REGULATION NO 2707/72 UNDERLINE THE NEED FOR SUCH ADJUSTMENT ENABLING THE COMMON ORGANIZATION TO AVERT THE THREAT OF A SERIOUS DISTURBANCE LIKELY TO ENDANGER THE OBJECTIVES SET OUT IN ARTICLE 39 OF THE TREATY .

50 WHAT IS MORE , IN VIEW OF THE NEEDS WHICH THE TEMPORARY SUSPENSION OF IMPORTS MET , TRANSITIONAL MEASURES WHICH EXEMPTED CONTRACTS ALREADY ENTERED INTO FROM THE SUSPENSION OF IMPORTS WOULD HAVE ROBBED THE PROTECTIVE MEASURE OF ALL PRACTICAL EFFECT BY OPENING THE COMMUNITY MARKET IN DESSERT APPLES TO A VOLUME OF IMPORTS LIKELY TO JEOPARDIZE THAT MARKET .

( E ) BREACH OF THE PRINCIPLE OF NON-DISCRIMINATION

51 DURING THE PROCEEDINGS THE ISSUE WAS RAISED WHETHER REGULATION NO 797/79 AND NO 1152/79 OFFEND AGAINST THE PRINCIPLE OF NON-DISCRIMINATION ENUNCIATED IN THE FIELD OF THE COMMON AGRICULTURAL POLICY BY THE SECOND PARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY IN SO FAR AS THEY MAKE NO PROVISION FOR THE IMPORTS FOR WHICH THE PLAINTIFF IN THE MAIN ACTION HAD SOUGHT AN EXEMPTION FROM THE APPLICATION OF THE AFORESAID MEASURES .

52 AS HAS PREVIOUSLY BEEN OBSERVED , REGULATIONS NOS 797/79 AND 1152/79 ARE NOT INTENDED TO ALLOW A DEROGATION FROM THE PROTECTIVE MEASURES IN ISSUE AS REGARDS THE QUANTITIES OF DESSERT APPLES FROM CHILE ACCEPTED FOR IMPORT INTO THE COMMUNITY BUT ARE SOLELY DESIGNED TO ADJUST THEIR APPLICATION TO GOODS WHICH , AT THE TIME WHEN THOSE MEASURES ENTERED INTO FORCE , WERE ' ' IN TRANSIT ' ' WITHIN THE MEANING OF ARTICLE 3 ( 2 ) OF REGULATION NO 2707/72 .

53 IN THOSE CIRCUMSTANCES , THE FACT THAT THE COMMISSION TOOK INTO CONSIDERATION ONLY THE GOODS WHICH WERE ALREADY IN THE COURSE OF BEING TRANSPORTED BY SEA ON 12 APRIL 1979 AND EXCLUDED THOSE WHICH ON THAT DATE HAD NOT YET LEFT A CHILEAN PORT IS IN KEEPING WITH THE PROVISIONS OF ARTICLE 3 ( 2 ) OF REGULATION NO 2707/72 .

54 SINCE THE SITUATION OF GOODS WHICH HAD NOT YET LEFT A CHILEAN PORT WITH RESPECT TO ARTICLE 3 ( 2 ) OF REGULATION NO 2707/72 IS NOT COMPARABLE TO THE SITUATION OF GOODS ' ' IN TRANSIT ' ' , WITHIN THE MEANING OF ARTICLE 3 ( 3 ), THE FACT THAT THE ARRANGEMENTS UNDER THE CONTESTED REGULATIONS NO 797/79 AND NO 1152/79 WERE NOT EXTENDED TO SUCH A SITUATION CANNOT THEREFORE BE REGARDED AS CONSTITUTING DISCRIMINATION CONTRARY TO THE TREATY .

55 ON THE CONTRARY THE EXTENSION OF THOSE ARRANGEMENTS TO IMPORTS , LIMITED AS THEY WERE , FROM A COUNTRY WHICH HAD NOT ACCEPTED THE VOLUNTARY EXPORT RESTRAINT CLAUSE PROPOSED BY THE COMMISSION WOULD HAVE BEEN DISCRIMINATORY IN REGARD TO THE OTHER COUNTRIES IN THE SOUTHERN HEMISPHERE WHICH HAD ACCEPTED SUCH A CLAUSE AND WOULD HAVE ENDANGERED THE OBSERVANCE OF THE COMMITMENTS ASSUMED BY THOSE COUNTRIES .

56 FOR ALL THOSE REASONS THE ANSWER TO BE GIVEN TO THE NATIONAL COURT SHOULD BE THAT CONSIDERATION OF THE QUESTION RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF COMMISSION REGULATIONS NOS 687/79 , 797/79 AND 1152/79 .

THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,

THE COURT ,

IN ANSWER TO THE QUESTION REFERRED TO IT BY THE HESSISCHES FINANZGERICHT BY ORDER OF 24 MARCH 1980 , HEREBY RULES :

CONSIDERATION OF THE QUESTION RAISED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF COMMISSION REGULATIONS NOS 687/79 , 797/79 AND 1152/79 .