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A CARTEL ON THE LYSINE MARKET GIVES THE COURT OF FIRST INSTANCE AN OPPORTUNITY TO CLARIFY THE CRITERIA FOR FIXING THE AMOUNT OF FINES | «(Competition – Cartel – Lysine – Guidelines for calculating the amount of fines – Applicability – Seriousness and duration of the infringement – Turnover – Mitigating circumstances)» Summary of the Judgment 1.. Community law – Principles – Protection of legitimate expectations – Conditions – Protection against exercise by the Commission of its power to raise the level of fines penalising infringements of the competition rules – None (Council Regulation No 17) Community law – Principles – Protection of legitimate expectations – Conditions – Protection against exercise by the Commission of its power to raise the level of fines penalising infringements of the competition rules – None 2.. Community law – General principles of law – Non-retroactivity of criminal provisions – Scope – Fines imposed for infringements of the competition rules – Included – Infringement by reason of the application of the Guidelines for the calculation of fines to an infringement prior to their introduction – None (European Convention for the Protection of Human Rights and Fundamental Freedoms, Art. 7; Council Regulation No 17, Art. 15(2)) Community law – General principles of law – Non-retroactivity of criminal provisions – Scope – Fines imposed for infringements of the competition rules – Included – Infringement by reason of the application of the Guidelines for the calculation of fines to an infringement prior to their introduction – None 3.. Competition – Fines – Amount – Commission's margin of discretion – Possibility of increasing the fines in order to strengthen their deterrent effect (Council Regulation No 17, Art. 15) Competition – Fines – Amount – Commission's margin of discretion – Possibility of increasing the fines in order to strengthen their deterrent effect 4.. Competition – Fines – Amount – Determination thereof – Guidelines adopted by the Commission – Obligation on the Commission to comply with them (Council Regulation No 17, Art. 15(2)) Competition – Fines – Amount – Determination thereof – Guidelines adopted by the Commission – Obligation on the Commission to comply with them 5.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Taking into account of the total turnover of the undertaking concerned and the turnover achieved by sales of goods which were the subject-matter of the infringement – Limits (Council Regulation No 17, Art. 15(2)) Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Taking into account of the total turnover of the undertaking concerned and the turnover achieved by sales of goods which were the subject-matter of the infringement – Limits 6.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Measure of the effective capacity to cause damage on the relevant market – Relevance of the market share held by the undertaking concerned (Art. 81(1) EC; Council Regulation No 17, Art. 15(2)) Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Measure of the effective capacity to cause damage on the relevant market – Relevance of the market share held by the undertaking concerned 7.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Measure of the actual impact on competition of the infringing conduct of each undertaking – Relevance of the turnover achieved with the products forming the subject-matter of a restrictive practice (Art. 81(1) EC; Council Regulation No 17, Art. 15(2)) Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Measure of the actual impact on competition of the infringing conduct of each undertaking – Relevance of the turnover achieved with the products forming the subject-matter of a restrictive practice 8.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Mitigating circumstances – Passive or follow-my-leader role of the undertaking (Council Regulation No 17, Art. 15) Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Mitigating circumstances – Passive or follow-my-leader role of the undertaking 9.. Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Mitigating circumstances – Agreement not implemented in practice – Assessment at the level of the individual conduct of each undertaking (Council Regulation No 17, Art. 15) Competition – Fines – Amount – Determination thereof – Criteria – Seriousness of the infringements – Mitigating circumstances – Agreement not implemented in practice – Assessment at the level of the individual conduct of each undertaking 10.. Competition – Fines – Amount – Appropriateness – Review by the Court – Factors which may be taken into account by the Community judicature – Information not contained in the decision imposing the fine and not required in the statement of reasons – Included (Arts 229 EC, 230 EC and 253 EC; Council Regulation No 17, Art. 17) Competition – Fines – Amount – Appropriateness – Review by the Court – Factors which may be taken into account by the Community judicature – Information not contained in the decision imposing the fine and not required in the statement of reasons – Included 11.. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision imposing fines – Indication of the factors by which the Commission assessed the seriousness and duration of the infringement – Sufficient indication (Art. 253 EC; Council Regulation No 17, Art 15(2), second subpara.) Acts of the institutions – Statement of reasons – Obligation – Scope – Decision imposing fines – Indication of the factors by which the Commission assessed the seriousness and duration of the infringement – Sufficient indication 12.. Competition – Fines – Amount – Determination thereof – Method of calculation defined by guidelines laid down by the Commission – Application of percentages to the basic amount of the fine (Council Regulation No 17, Art. 15(2)) Competition – Fines – Amount – Determination thereof – Method of calculation defined by guidelines laid down by the Commission – Application of percentages to the basic amount of the fine JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)9 July 2003 (1)((Competition – Cartel – Lysine – Guidelines on the method of setting fines – Applicability – Gravity and duration of the infringement – Turnover – Mitigating circumstances))applicant, vdefendant, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber),having regard to the written procedure and further to the hearing on 24 April 2002,gives the followingFactsOn those grounds, THE COURT OF FIRST INSTANCE (Fourth Chamber)VilarasTiili Mengozzi H. Jung M. Vilaras RegistrarPresident 1 – Language of the case: English. Language of the case: English. | 1ead1-517253c-4bdf | EN |
RETIRED PERSONS HAVING CHOSEN TO RESIDE IN A MEMBER STATE OTHER THAN THEIR STATE OF ORIGIN MUST APPLY TO THE SICKNESS INSURANCE INSTITUTION WITH WHICH THEY ARE REGISTERED IN THEIR STATE OF RESIDENCE FOR PRIOR AUTHORISATION IN ORDER TO RECEIVE HEALTH CARE IN ANOTHER MEMBER STATE | «(Social security – Pensioners and members of their family residing in a Member State other than the State liable for payment of the pension – Medical costs incurred in the Member State liable for payment of the pension – Conditions for assumption of responsibility – Competent Member State and competent institution – Articles 21, 22, 28 and 31 of Regulation (EEC) No 1408/71)» Summary of the Judgment 1.. Social security for migrant workers – Sickness insurance – Pensioners and members of their family residing in a Member State other than the State liable for payment of the pension – Medical costs incurred in the Member State liable for payment of the pension – Assumption of responsibility by the Member State of residence – Conditions (Council Regulation No 1408/71, Art. 22(1)(c)(i), and Art. 28; Council Regulation No 574/72, Art. 29) Social security for migrant workers – Sickness insurance – Pensioners and members of their family residing in a Member State other than the State liable for payment of the pension – Medical costs incurred in the Member State liable for payment of the pension – Assumption of responsibility by the Member State of residence – Conditions 2.. Social security for migrant workers – Sickness insurance – Pensioners and members of their family residing in a Member State other than the State liable for payment of the pension – Institution competent to issue the prior authorisation necessary to go to another Member State in order to receive appropriate treatment there – Institution of the place of residence (Council Regulation No 1408/71, Art. 22(1)(c)(i) and Art. 28) Social security for migrant workers – Sickness insurance – Pensioners and members of their family residing in a Member State other than the State liable for payment of the pension – Institution competent to issue the prior authorisation necessary to go to another Member State in order to receive appropriate treatment there – Institution of the place of residence JUDGMENT OF THE COURT (Fifth Chamber)3 July 2003 (1) ((Social security – Pensioners and members of their family residing in a Member State other than the State liable for payment of the pension – Medical costs incurred in the Member State liable for payment of the pension – Conditions for assumption of responsibility – Competent Member State and competent institution – Articles 21, 22, 28 and 31 of Regulation (EEC) No 1408/71))andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: ─ Mr van der Duin, by F.T.I. Oey, advocaat, ─ the Netherlands Government, by H.G. Sevenster, acting as Agent, ─ the German Government, by W.-D. Plessing and M. Lumma, acting as Agents, ─ the Spanish Government, by N. Díaz Abad, acting as Agent, ─ the French Government, by G. de Bergues and C. Bergeot-Nunes, acting as Agents, ─ the United Kingdom Government, by R. Magrill, acting as Agent, assisted by C. Lewis, barrister, ─ Commission of the European Communities, by H. Michard and H.M.H. Speyart, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr van der Duin, represented by F.T.I. Oey, of Onderlinge Waarborgmaatschappij ANOZ Zorgverzekeringen UA, represented by E.G.J. Broekhuizen, acting as Agent, of the Netherlands Government, represented by C. Wissels, acting as Agent, of the Spanish Government, represented by N. Díaz Abad, of the United Kingdom Government, represented by C. Lewis, and of the Commission, represented by H.M.H. Speyart, at the hearing on 26 September 2002, after hearing the Opinion of the Advocate General at the sitting on 24 October 2002, gives the followingCommunity legal backgroundOn those grounds, THE COURT (Fifth Chamber),Wathelet TimmermansLa Pergola Jann von Bahr R. Grass M. Wathelet RegistrarPresident of the Fifth Chamber 1 – Language of the case: Dutch. Language of the case: Dutch. | ffef2-b00beb9-4349 | EN |
SWEDISH TAX RULES WHICH FAVOUR OCCUPATIONAL PENSION INSURANCE POLICIES TAKEN OUT WITH A SWEDISH INSURER OVER THOSE TAKEN OUT WITH AN INSURER IN ANOTHER MEMBER STATE ARE INCOMPATIBLE WITH COMMUNITY LAW | «(Occupational endowment pension insurance – Policy taken out with a company in another Member State – Difference in tax treatment – Compatibility with Article 49 EC)» Summary of the Judgment Freedom to provide services – Restrictions – Tax legislation – Difference in treatment for occupational pension insurance taken out in another Member State – Not permissible(Art. 49 EC)Freedom to provide services – Restrictions – Tax legislation – Difference in treatment for occupational pension insurance taken out in another Member State – Not permissibleJUDGMENT OF THE COURT (Fifth Chamber)26 June 2003 (1) ((Occupational endowment pension insurance – Policy taken out with a company in another Member State – Difference in tax treatment – Compatibility with Article 49 EC))andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: ─ Försäkringsaktiebolaget Skandia (publ) and Mr Ramstedt, by J.-M. Bexhed, chefsjurist, ─ the Swedish Government, by A. Kruse, acting as Agent, ─ the Danish Government, by J. Molde, acting as Agent, ─ the Italian Government, by I.M. Braguglia, acting as Agent, and G. Fiengo, avvocato dello Stato, ─ Commission of the European Communities, by C. Tufvesson and R. Lyal, acting as Agents, ─ the EFTA Surveillance Authority, by E. Wright and P.A. Bjørgan, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Försäkringsaktiebolaget Skandia (publ) and Mr Ramstedt, represented by J.-M. Bexhed, of the Riksskatteverket, represented by G. Bäck, acting as Agent, of the Swedish Government, represented by A. Kruse and K. Wistrand, acting as Agents, of the Commission, represented by C. Tufvesson and R. Lyal, and of the EFTA Surveillance Authority, represented by E. Wright and by P.A. Bjørgan, at the hearing on 30 January 2003, after hearing the Opinion of the Advocate General at the sitting on 3 April 2003, gives the followingNational legal backgroundOn those grounds, THE COURT (Fifth Chamber),Wathelet Timmermans La Pergola JannRosas R. Grass M. Wathelet RegistrarPresident of the Fifth Chamber 1 – Language of the case: Swedish. Language of the case: Swedish. | be808-3d950f6-4bda | EN |
THE COMMUNITY PRINCIPLES OF EQUIVALENCE AND EFFECTIVENESS REQUIRE THE INPS TO TAKE INTO CONSIDERATION THE PENSIONER'S GOOD FAITH AND DULY TO REVIEW ONCE A YEAR THE SITUATION OF EMIGRANT WORKERS IN RECEIPT OF A PENSION. | «(Social security – Old-age pensions – Recalculation – Recovery of sums paid though not due – Limitation – Law applicable – Detailed procedural rules – Concept)» Summary of the Judgment Social security for migrant workers – Old-age pension and life assurance – Benefits – Extinction of the right to a pension supplement granted under national legislation as a result of the person concerned receiving a pension awarded by the competent institution of another Member State – Recovery of the sums paid though not due – Application of national law – Limits – Observance of the principles of equivalence and effectiveness (Council Regulation No 1408/71, Arts 94, 95, 95a and 95b)Social security for migrant workers – Old-age pension and life assurance – Benefits – Extinction of the right to a pension supplement granted under national legislation as a result of the person concerned receiving a pension awarded by the competent institution of another Member State – Recovery of the sums paid though not due – Application of national law – Limits – Observance of the principles of equivalence and effectiveness JUDGMENT OF THE COURT (Fifth Chamber)19 June 2003 (1) ((Social security – Old-age pensions – Recalculation – Recovery of sums paid though not due – Limitation – Law applicable – Detailed procedural rules – Concept))andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: ─ Sante Pasquini, by R. Ciancaglini and M. Rossi, avvocati, ─ Istituto Nazionale della Previdenza Sociale (INPS), by A. Todaro, A. Riccio and N. Valente, avvocati, ─ the Italian Government, by U. Leanza, acting as Agent, assisted by M. Masella Ducci Teri, Avvocato dello Stato, ─ the Austrian Government, by C. Pesendorfer, acting as Agent, ─ the Portuguese Government, by L. Fernandes and S. Pizarro, acting as Agents, ─ the Commission of the European Communities, by H. Michard and A. Aresu, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr Pasquini, represented by M. Rossi, of the Istituto Nazionale della Previdenza Sociale (INPS), represented by A. Riccio, of the Italian Government, represented by A. Cingolo, Avvocato dello Stato, and of the Commission, represented by A. Aresu, at the hearing on 16 January 2003, after hearing the Opinion of the Advocate General at the sitting on 6 March 2003,gives the followingThe relevant provisionsOn those grounds, THE COURT (Fifth Chamber),WatheletTimmermans Edward JannRosas R. Grass M. Wathelet RegistrarPresident of the Fifth Chamber 1 – Language of the case: Italian. Language of the case: Italian. | 40f04-1c2c384-4089 | EN |
THE COURT OF JUSTICE DECLARES A VERY HIGH NATIONAL CHARGE ON THE REGISTRATION OF NEW MOTOR VEHICLES COMPATIBLE WITH THE EC TREATY. | «(Free movement of goods – Charge on the registration of new motor vehicles – Internal taxation – Measure having an effect equivalent to a quantitative restriction)» Summary of the Judgment Tax provisions – Internal taxation – Charge on the registration of new motor vehicles where there is no similar or competing domestic production – Examination in the light of Article 90 EC – Conditions – Compliance with that provision – Assessment of the charge on the basis of Article 28 EC et seq. – Excluded where there are no figures to show the free movement of goods is impeded(Arts 28 EC and 90 EC)Tax provisions – Internal taxation – Charge on the registration of new motor vehicles where there is no similar or competing domestic production – Examination in the light of Article 90 EC – Conditions – Compliance with that provision – Assessment of the charge on the basis of Article 28 EC et seq. – Excluded where there are no figures to show the free movement of goods is impededJUDGMENT OF THE COURT17 June 2003 (1) ((Free movement of goods – Charge on the registration of new motor vehicles – Internal taxation – Measure having an equivalent effect to a quantitative restriction))In Case C-383/01, andTHE COURT,,after considering the written observations submitted on behalf of: ─ De Danske Bilimportører, by K. Dyekjær-Hansen and T. Ryhl, advokaterne, ─ the Danish Government, by J. Molde, acting as Agent, and K. Hagel-Sørensen, advokat, ─ the Italian Government, by U. Leanza, acting as Agent, and M. Fiorilli, avvocato dello Stato, ─ the Finnish Government, by E. Bygglin, acting as Agent, ─ the Commission of the European Communities, by H.C. Støvlbæk, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of De Danske Bilimportører, represented by K. Dyekjær-Hansen, of the Danish Government, represented by J. Molde and K. Hagel-Sørensen, of the Finnish Government, represented by T. Pynnä, acting as Agent, and of the Commission, represented by H.C. Støvlbæk, at the hearing on 6 November 2002, after hearing the Opinion of the Advocate General at the sitting on 27 February 2003,gives the followingLegal backgroundOn those grounds, THE COURT,PuissochetWathelet Schintgen GulmannLa Pergola Jann SkourisMacken Colneric von BahrCunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Danish. Language of the case: Danish. | f1df1-e0b884f-458e | EN |
A NATIONAL AUTHORITY MAY NOT REJECT A CLAIM FOR PAYMENT BASED ON COMMUNITY LAW, AS INTERPRETED IN A JUDGMENT OF THE COURT OF JUSTICE, ON THE SOLE GROUND THAT SUCH CLAIM CALLS INTO QUESTION A PRIOR ADMINISTRATIVE DECISION. | «(Poultrymeat – Export refunds – Failure to refer a question for a preliminary ruling – Final administrative decision – Effect of a preliminary ruling given by the Court after that decision – Legal certainty – Primacy of Community law – Principle of cooperation – Article 10 EC)» Summary of the Judgment Member States – Obligations – Obligation of cooperation – Obligation on an administrative body to review a final administrative decision in order to take account of the interpretation of the relevant provision given in the meantime by the Court – Conditions (Arts 10 EC and 234(3) EC)Member States – Obligations – Obligation of cooperation – Obligation on an administrative body to review a final administrative decision in order to take account of the interpretation of the relevant provision given in the meantime by the Court – Conditions JUDGMENT OF THE COURT13 January 2004 (1) ((Poultrymeat – Export refunds – Failure to refer a question for a preliminary ruling – Final administrative decision – Effect of a preliminary ruling given by the Court after that decision – Legal certainty – Primacy of Community law – Principle of cooperation – Article 10 EC))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Kühne & Heitz NV, by A.J. Braakman, advocaat, ─ Productschap voor Pluimvee en Eieren, by C.M. den Hoed, Assistant Secretary General, ─ the Netherlands Government, by H.G. Sevenster, acting as Agent, ─ the French Government, by G. de Bergues and C. Vasak, acting as Agents, ─ the Commission of the European Communities, by T. van Rijn, acting as Agent, ─ the EFTA Surveillance Authority, by B. Eiríksdóttir, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of Kühne & Heitz NV, represented by A.J. Braakman, of the Netherlands Government, represented by H.G. Sevenster and J.G.M. van Bakel, acting as Agent, of the French Government, represented by R. Abraham and C. Isidoro, acting as Agents, of the Commission, represented by T. van Rijn, and of the EFTA Surveillance Authority, represented by B. Eiríksdóttir, at the hearing on 9 October 2002, after hearing the Opinion of the Advocate General at the sitting on 17 June 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues La Pergola PuissochetSchintgen Macken Colnericvon Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: Dutch. Language of the case: Dutch. | 30c02-6687937-40d9 | EN |
ACCORDING TO THE ADVOCATE GENERAL, THE COMMISSION DID NOT ALLOW SPAIN A REASONABLE PERIOD IN WHICH TO COMPLY WITH THE JUDGMENT OF THE COURT ON THE QUALITY OF BATHING WATERS | «(Failure of a Member State to fulfil obligations – Judgment of the Court establishing such failure – Non-compliance – Article 228 EC – Financial penalties – Penalty payment – Quality of bathing water – Directive 76/160/EEC)» Summary of the Judgment 1.. Actions for failure to fulfil obligations – Judgment of the Court establishing such failure – Period allowed for compliance (Art. 228 EC) Actions for failure to fulfil obligations – Judgment of the Court establishing such failure – Period allowed for compliance 2.. Actions for failure to fulfil obligations – Judgment of the Court establishing such failure – Breach of the obligation to comply with the judgment – Financial penalties – Periodic penalty payment – Determination of the amount – Criteria (Art. 228(2) EC) Actions for failure to fulfil obligations – Judgment of the Court establishing such failure – Breach of the obligation to comply with the judgment – Financial penalties – Periodic penalty payment – Determination of the amount – Criteria 3.. Actions for failure to fulfil obligations – Judgment of the Court establishing such failure – Breach of the obligation to comply with the judgment – Financial penalties – Periodic penalty payment – Determination of the amount – Failure to comply with Directive 76/160 concerning the quality of bathing water (Art. 228(2) EC) Actions for failure to fulfil obligations – Judgment of the Court establishing such failure – Breach of the obligation to comply with the judgment – Financial penalties – Periodic penalty payment – Determination of the amount – Failure to comply with Directive 76/160 concerning the quality of bathing water JUDGMENT OF THE COURT (Full Court)25 November 2003 (1) ((Failure of a Member State to fulfil obligations – Judgment of the Court establishing such failure – Non-compliance – Article 228 EC – Financial penalties – Penalty payment – Quality of bathing water – Directive 76/160/EEC))In Case C-278/01, applicant, vdefendant, THE COURT (Full Court),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 12 June 2003, gives the followingCommunity legislationOn those grounds, THE COURT (Full Court),SkourisTimmermans GulmannCunha Rodrigues Edward La PergolaPuissochet Schintgen MackenColneric von Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: Spanish. Language of the case: Spanish. | c3f8f-f680148-469b | EN |
THE FACT THAT THE AUSTRIAN AUTHORITIES DID NOT BAN A PEACEFUL DEMONSTRATION OF LIMITED DURATION ON THE BRENNER MOTORWAY IS NOT CONTRARY TO COMMUNITY LAW | «(Free movement of goods – Restriction resulting from actions of individuals – Obligations of the Member States – Decision not to prohibit a demonstration by environmental protesters which resulted in the complete closure of the Brenner motorway for almost 30 hours – Justification – Fundamental rights – Freedom of expression and freedom of assembly – Principle of proportionality)» Summary of the Judgment 1.. Free movement of goods – Trade barriers resulting from actions by private individuals – Obligations of the Member States – Adoption of measures to ensure the free movement of goods – Scope of the obligation – Acts affecting the flow of imports and exports and merely transit (EC Treaty, Art. 5 (now Art. 10 EC) and Arts 30 and 34 (now, after amendment, Arts 28 EC and 29 EC) Free movement of goods – Trade barriers resulting from actions by private individuals – Obligations of the Member States – Adoption of measures to ensure the free movement of goods – Scope of the obligation – Acts affecting the flow of imports and exports and merely transit 2.. Free movement of goods – Barriers to free movement by road between Member States resulting from the decision of a Member State not to prohibit a demonstration by protesters – Justification – Protection of the fundamental rights of the protesters – Need to balance the interests at stake – Principle of proportionality – Discretion of the national authorities – Limits (EC Treaty, Art. 5 (now Art. 10 EC) and Arts 30, 34 and 36 (now, after amendment, Arts 28 EC, 29 EC and 30 EC) Free movement of goods – Barriers to free movement by road between Member States resulting from the decision of a Member State not to prohibit a demonstration by protesters – Justification – Protection of the fundamental rights of the protesters – Need to balance the interests at stake – Principle of proportionality – Discretion of the national authorities – Limits JUDGMENT OF THE COURT12 June 2003 (1) ((Free movement of goods – Restriction resulting from actions of individuals – Obligations of the Member States – Decision not to prohibit a demonstration by environmental protesters which resulted in the complete closure of the Brenner motorway for almost 30 hours – Justification – Fundamental rights – Freedom of expression and freedom of assembly – Principle of proportionality)) andTHE COURT,,after considering the written observations submitted on behalf of: ─ Eugen Schmidberger, Internationale Transporte und Planzüge, by K.-H. Plankel, H. Mayrhofer and R. Schneider, Rechtsanwälte, ─ the Republic of Austria, by A. Riccabona, acting as Agent, ─ the Austrian Government, by H. Dossi, acting as Agent, ─ the Greek Government, by N. Dafniou and G. Karipsiadis, acting as Agents, ─ the Italian Government, by U. Leanza, acting as Agent, assisted by O. Fiumara, vice avvocato generale dello Stato, ─ the Netherlands Government, by M.A. Fierstra, acting as Agent, ─ the Commission of the European Communities, by J.C. Schieferer, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of Eugen Schmidberger, Internationale Transporte und Planzüge, represented by R. Schneider; the Republic of Austria, represented by A. Riccabona; the Austrian Government, represented by E. Riedl, acting as Agent; the Greek Government, represented by N. Dafniou and G. Karipsiadis; the Italian Government, represented by O. Fiumara; the Netherlands Government, represented by H.G. Sevenster, acting as Agent; the Finnish Government, represented by T. Pynnä, acting as Agent; and the Commission, represented by J.C. Schieferer and J. Grunwald, acting as Agent, at the hearing on 12 March 2002, after hearing the Opinion of the Advocate General at the sitting on 11 July 2002, gives the followingNational lawOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Wathelet SchintgenGulmann Edward JannSkouris Macken Colnericvon Bahr Cunha Rodrigues Rosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: German. Language of the case: German. | b20c7-68481f7-4224 | EN |
ADVOCATE GENERAL RUIZ-JARABO CONCLUDES THAT NATIONAL RULES WHICH, BY NOT ALLOWING TRANSSEXUALS TO MARRY, DENY THEM ENTITLEMENT TO A WIDOW'S OR WIDOWER'S PENSION ARE CONTRARY TO COMMUNITY LAW | «(Article 141 EC – Directive 75/117/EEC – Equal treatment for men and women – Transsexual partner not entitled to a survivor's pension payable solely to a surviving spouse – Discrimination on grounds of sex)» Summary of the Judgment Social policy – Men and women – Equal pay – National law preventing transsexuals who have undergone surgical gender reassignment from marrying – Not permissible – Right of their partners to nominate them as the beneficiary of a survivor's pension – To be determined by the national court(Art. 141 EC)Social policy – Men and women – Equal pay – National law preventing transsexuals who have undergone surgical gender reassignment from marrying – Not permissible – Right of their partners to nominate them as the beneficiary of a survivor's pension – To be determined by the national courtJUDGMENT OF THE COURT7 January 2004 (1) ((Article 141 EC – Directive 75/117/EEC – Equal treatment for men and women – Transsexual partner not entitled to a survivor's pension payable solely to a surviving spouse – Discrimination on grounds of sex))andTHE COURT,,after considering the written observations submitted on behalf of: ─ K.B., by C. Hockney and L. Cox QC, and by T. Eicke, Barrister, ─ the United Kingdom Government, by J.E. Collins, acting as Agent, and N. Paines QC, ─ the Commission of the European Communities, by N. Yerrel, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of K. B., represented by L. Cox and T. Eicke, of the United Kingdom Government, represented by J.E. Collins and N. Paines QC, and of the Commission, represented by J. Sack and L. Flynn, acting as Agents, at the hearing on 23 April 2002, after hearing the Opinion of the Advocate General at the sitting on 10 June 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisTimmermans Cunha Rodrigues RosasEdward Puissochet MackenColneric von Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: English. Language of the case: English. | 7233a-8af23f1-4416 | EN |
ADVOCATE GENERAL GEELHOED IS OF THE OPINION THAT ITALIAN PRACTICE AND CASE-LAW CONCERNING REPAYMENT OF CHARGES LEVIED IN BREACH OF COMMUNITY LAW IS NOT IN CONFORMITY WITH COMMUNITY LAW. | «(Failure of a Member State to fulfil obligations – Construction contrary to Community law of national legislation by case-law and administrative practice – Conditions for the recovery of sums paid though not due)» Summary of the Judgment 1.. Member States – Obligations – Failure to fulfil obligations – Liability – Extent – Constitutionally independent institutions (Art. 226 EC) Member States – Obligations – Failure to fulfil obligations – Liability – Extent – Constitutionally independent institutions 2.. Actions for failure to fulfil obligations – Examination of the merits by the Court – Assessment of the scope of the provisions impugned – Taking into account of the interpretation by the courts of the Member State in question – Criteria (Art. 226 EC) Actions for failure to fulfil obligations – Examination of the merits by the Court – Assessment of the scope of the provisions impugned – Taking into account of the interpretation by the courts of the Member State in question – Criteria 3.. Community law – Direct effect – National charges incompatible with Community law – Repayment – Arrangements – Application of national law – Maintenance by a Member State of legislation whose construction by case-law and administrative practice makes exercise of the right to repayment excessively difficult – Failure to fulfil obligations Community law – Direct effect – National charges incompatible with Community law – Repayment – Arrangements – Application of national law – Maintenance by a Member State of legislation whose construction by case-law and administrative practice makes exercise of the right to repayment excessively difficult – Failure to fulfil obligations JUDGMENT OF THE COURT (Full Court)9 December 2003 (1) ((Failure of a Member State to fulfil obligations – Construction contrary to Community law of national legislation by case-law and administrative practice – Conditions for the recovery of sums paid though not due))applicant, vdefendant, THE COURT (Full Court),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 3 June 2003, gives the followingNational lawOn those grounds, THE COURT (Full Court)SkourisJann Timmermans GulmannCunha Rodrigues Rosas EdwardLa Pergola Puissochet SchintgenMacken Colneric von Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: Italian. Language of the case: Italian. | 15682-a52fa2d-44ac | EN |
THE COURT OF JUSTICE ANNULS THE COMMISSION DECISION TO END THE BAN ON BOVINE PRODUCTS FROM PORTUGAL, INTRODUCED TO COMBAT BOVINE SPONGIFORM ENCEPHALOPATHY (BSE). | «(Agriculture – Animal health – Emergency measures to combat bovine spongiform encephalopathy – Mad cow disease – Decision to lift the ban on bovine products originating in Portugal)» Summary of the Judgment Agriculture – Approximation of laws concerning animal health – Veterinary and zootechnical checks in intra-Community trade in live animals and products of animal origin – Emergency measures to protect against bovine spongiform encephalopathy – Commission's obligation to carry out inspections before the ban on bovine products from Portugal was lifted – Decision setting the date for recommencement of exports of those products adopted without the verifications required having first been carried out – Breach of its obligation (Commission Decisions 2001/376, Arts 11, 21(b), (c) and (d), and 22(2) and 2001/577)Agriculture – Approximation of laws concerning animal health – Veterinary and zootechnical checks in intra-Community trade in live animals and products of animal origin – Emergency measures to protect against bovine spongiform encephalopathy – Commission's obligation to carry out inspections before the ban on bovine products from Portugal was lifted – Decision setting the date for recommencement of exports of those products adopted without the verifications required having first been carried out – Breach of its obligation JUDGMENT OF THE COURT (Fifth Chamber)22 May 2003 (1) ((Agriculture – Animal health – Emergency measures to combat bovine spongiform encephalopathy – Mad cow disease – Decision to lift the ban on bovine products originating in Portugal))applicant vdefendant, interveners, THE COURT (Fifth Chamber),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 30 January 2003,gives the followingLegal backgroundOn those grounds, THE COURT (Fifth Chamber)WatheletTimmermans La Pergola von BahrRosas R. Grass M. Wathelet RegistrarPresident of the Fifth Chamber 1 – Language of the case: French. Language of the case: French. | 66e1e-61fb795-4e49 | EN |
ADVOCATE GENERAL TIZZANO PROPOSES THAT THE COURT OF JUSTICE SHOULD DECLARE THAT THE APPLICATION OF A BILATERAL AGREEMENT BETWEEN A MEMBER STATE AND A THIRD COUNTRY WHICH ACCORDS ABSOLUTE PROTECTION TO A MERE GEOGRAPHICAL INDICATION IS PERMISSIBLE. | «(Protection of geographical indications and designations of origin – Bilateral convention between a Member State and a non-member country protecting indications of geographical source from that non-member country – Articles 28 EC and 30 EC – Regulation (EEC) No 2081/92 – Article 307 EC – Succession of States in respect of treaties)» Summary of the Judgment 1.. Agriculture – Uniform laws – Protection of geographical indications and designations of origin for agricultural products and foodstuffs – Matters covered by Regulation No 2081/92 – Provision of a bilateral agreement between a Member State and a non-member country protecting a simple and indirect indication of geographical origin – Not covered ( Council Regulation No 2081/92, Art. 2(2)(b)) Agriculture – Uniform laws – Protection of geographical indications and designations of origin for agricultural products and foodstuffs – Matters covered by Regulation No 2081/92 – Provision of a bilateral agreement between a Member State and a non-member country protecting a simple and indirect indication of geographical origin – Not covered 2.. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Provision of a bilateral agreement between a Member State and a non-member country protecting a simple and indirect indication of geographical origin – Justification – Condition – Lack of generic nature ( Arts 28 EC and 30 EC) Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Provision of a bilateral agreement between a Member State and a non-member country protecting a simple and indirect indication of geographical origin – Justification – Condition – Lack of generic nature 3.. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Provision of a bilateral agreement between a Member State and a non-member country protecting a name without direct or indirect connection to the country of geographical origin – Not permissible (Art. 28 EC) Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Provision of a bilateral agreement between a Member State and a non-member country protecting a name without direct or indirect connection to the country of geographical origin – Not permissible 4.. International agreements – Agreements concluded by Member States – Agreements predating the EC Treaty – Provision of bilateral agreements concluded between a Member State and a non-member country contrary to the Treaty – Application by the court of the Member State – Whether permissible – Obligation to eliminate any incompatibilities between a prior agreement and the Treaty (Art. 307, first and second paras, EC) International agreements – Agreements concluded by Member States – Agreements predating the EC Treaty – Provision of bilateral agreements concluded between a Member State and a non-member country contrary to the Treaty – Application by the court of the Member State – Whether permissible – Obligation to eliminate any incompatibilities between a prior agreement and the TreatyJUDGMENT OF THE COURT18 November 2003 (1) ((Protection of geographical indications and designations of origin – Bilateral convention between a Member State and a non-member country protecting indications of geographical source from that non-member country – Articles 28 EC and 30 EC – Regulation (EEC) No 2081/92 – Article 307 EC – Succession of States in respect of treaties)) In Case C-216/01, andTHE COURT,,after considering the written observations submitted on behalf of: ─ Budějovický Budvar, národní podnik, by S. Kommar, Rechtsanwalt, ─ Rudolf Ammersin GmbH, by C. Hauer, Rechtsanwalt, ─ the Austrian Government, by C. Pesendorfer, acting as Agent, ─ the German Government, by W.-D. Plessing and A. Dittrich, acting as Agents, ─ the French Government, by G. de Bergues and L. Bernheim, acting as Agents, ─ the Commission of the European Communities, by A.-M. Rouchaud, acting as Agent, and B. Wägenbaur, Rechtsanwalt, having regard to the Report for the Hearing,after hearing the oral observations of Budějovický Budvar, národní podnik, represented by S. Kommar; Rudolf Ammersin GmbH, represented by C. Hauer, D. Ohlgart and B. Goebel, Rechtsanwälte; and the Commission, represented by A.-M. Rouchaud and B. Wägenbaur, at the hearing on 19 November 2002, after hearing the Opinion of the Advocate General at the sitting on 22 May 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues Edward La PergolaPuissochet Schintgen Colnericvon Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: German. Language of the case: German. | 386a2-42a0043-4f16 | EN |
THE ADVOCATE GENERAL CONSIDERS THAT THE FIXING OF AMOUNTS PAID FOR CERTAIN MEDICINES BY GERMAN SICKNESS FUNDS IS, IN PRINCIPLE, CONTRARY TO COMPETITION LAW, BUT IS CAPABLE OF JUSTIFICATION. | AOK Bundesverband and OthersvIchthyol-Gesellschaft Cordes, Hermani & Co. and Others(References for a preliminary ruling from the Oberlandesgericht Düsseldorf and the Bundesgerichtshof)(Competition – Undertakings – Sickness funds – Agreements, decisions and concerted practices – Interpretation of Articles 81 EC, 82 EC and 86 EC – Decisions of groups of sickness funds determining maximum amounts paid in respect of medicinal products)Summary of the JudgmentCompetition – Community rules – Undertaking – Concept – Group of sickness funds determining maximum amounts paid in respect of medicinal products – Not included – Conditions(Art. 81 EC)The concept of an undertaking in Community competition law does not cover bodies entrusted with the management of statutory health insurance and old-age insurance schemes which pursue an exclusively social objective and do not engage in economic activity. That is so in the case of sickness funds which, even if the legislature has granted them some latitude in setting the contribution rate, in order to promote sound management, are compelled by law to offer to their members essentially identical obligatory benefits which do not depend on the amount of the contributions. Since the sickness funds therefore have no possibility of influence over those benefits, and are joined together in a type of community founded on the basis of solidarity which enables an equalisation of costs and risks between them, they are not in competition with one another or with private institutions as regards grant of the obligatory statutory benefits in respect of treatment or medicinal products which constitute their main function. When groups of those sickness funds determine, pursuant to an obligation imposed upon them by the legislature, fixed maximum amounts corresponding to the upper limit of the price of medicinal products whose cost is borne by sickness funds, they do not act as undertakings or associations of undertakings within the meaning of Article 81 EC, inasmuch as they do not pursue a specific interest separable from the exclusively social objective of the funds, but perform an obligation which is integrally connected with the activity of the funds within the framework of the statutory health insurance scheme. (see paras 47, 52-54, 56-57, 63-65, operative part)JUDGMENT OF THE COURT16 March 2004(1)andTHE COURT,,after considering the written observations submitted on behalf of: – the AOK Bundesverband, the Bundesverband der Betriebskrankenkassen (BKK), the Bundesverband der Innungskrankenkassen, the Bundesverband der landwirtschaftlichen Krankenkassen, the Verband der Angestelltenkrankenkassen eV, the Verband der Arbeiter-Ersatzkassen, the Bundesknappschaft and the See-Krankenkasse, by C. Quack, Rechtsanwalt (C-264/01 and C-306/01), and A. von Winterfeld, Rechtsanwalt (C-354/01 and C-355/01), – Ichthyol-Gesellschaft Cordes, Hermani & Co. and Mundipharma GmbH, by U. Doepner, Rechtsanwalt, – Gödecke GmbH and Intersan, Institut für pharmazeutische und klinische Forschung GmbH, by U. Reese, Rechtsanwalt, – the Commission of the European Communities, by W. Wils and S. Rating, acting as Agents, after hearing the oral observations of the AOK Bundesverband, the Bundesverband der Betriebskrankenkassen (BKK), the Bundesverband der Innungskrankenkassen, the Bundesverband der landwirtschaftlichen Krankenkassen, the Verband der Angestelltenkrankenkassen eV, the Verband der Arbeiter-Ersatzkassen, the Bundesknappschaft and the See-Krankenkasse, represented by C. Quack (C-264/01 and C-306/01) and A. von Winterfeld (C-354/01 and C-355/01); Ichthyol-Gesellschaft Cordes, Hermani & Co. and Mundipharma GmbH, represented by U. Doepner; Gödecke GmbH and Intersan, Institut für pharmazeutische und klinische Forschung GmbH, represented by U. Reese; the German Government, represented by W.-D. Plessing, acting as Agent; and the Commission, represented by S. Rating, at the hearing on 14 January 2003, after hearing the Opinion of the Advocate General at the sitting on 22 May 2003,gives the followingFactual and legal contextIs Article 81(1) EC to be interpreted as meaning that the leading associations of statutory sickness funds of a Member State are to be regarded as associations of undertakings or, where a leading association is also a direct provider of statutory sickness insurance, as undertakings within the meaning of Article 81(1) EC when they jointly determine the applicable level of uniform fixed amounts for medicinal products in the Member State, where such amounts constitute the highest price at which the statutory sickness funds, who are required to provide benefits in kind to insured persons, will purchase and pay for medicinal products and thereby limit their liability to insured persons? If the answer to the first question is in the affirmative: (a) are determinations of fixed amounts as described in question 1 above to be regarded as agreements (or decisions) of the leading associations of statutory sickness funds which restrict competition, in particular within the meaning of Article 81(1)(a) EC, and are prohibited by Article 81(1) EC? are determinations of fixed amounts as described in question 1 above to be regarded as agreements (or decisions) of the leading associations of statutory sickness funds which restrict competition, in particular within the meaning of Article 81(1)(a) EC, and are prohibited by Article 81(1) EC? (b) is question 2(a) to be answered in the affirmative at least where the object of the regulation concerning fixed amounts is, inter alia, to exploit all reserves of medicinal product manufacturers in terms of economy as regards sale price, and the application of the regulation concerning fixed amounts in the Member State so far has had the effect that, of the finished medicinal product packages offered on the market that fall within the regulation concerning fixed amounts, approximately 93% do not now exceed the amount fixed for them? is question 2(a) to be answered in the affirmative at least where the object of the regulation concerning fixed amounts is, inter alia, to exploit all reserves of medicinal product manufacturers in terms of economy as regards sale price, and the application of the regulation concerning fixed amounts in the Member State so far has had the effect that, of the finished medicinal product packages offered on the market that fall within the regulation concerning fixed amounts, approximately 93% do not now exceed the amount fixed for them? If the answer to either or both of the questions in question 2 above is in the affirmative:If the answer to question 3 is also in the affirmative: (a) what conditions must be set forth and proved by the leading associations of statutory sickness funds so that they may be exempted under Article 86(2) EC, first sentence, in relation to determinations of fixed amounts or what conditions must be set forth and proved by the leading associations of statutory sickness funds so that they may be exempted under Article 86(2) EC, first sentence, in relation to determinations of fixed amounts or (b) is the grant of an exemption under Article 86(2) EC, first sentence, precluded in any case by Article 86(2) EC, second sentence, owing to the effects the system of fixed amounts has on trade?’ is the grant of an exemption under Article 86(2) EC, first sentence, precluded in any case by Article 86(2) EC, second sentence, owing to the effects the system of fixed amounts has on trade?’ Are Articles 81 and 82 EC to be interpreted as precluding national rules under which national leading associations of statutory sickness insurance determine binding maximum amounts for all statutory sickness funds and compensatory sickness funds up to which the funds bear the costs of medicines, where the legislature defines the criteria by which the maximum amounts are to be calculated, providing in particular that the fixed amounts must ensure comprehensive and quality-assured treatment of insured persons as well as an adequate range of therapeutic alternatives, and the determination is subject to comprehensive review by the courts, which may be initiated by both insured persons and affected medicinal product manufacturers? If question 1 is answered in the affirmative:If question 1 is answered in the affirmative and question 2 in the negative:Are groups of sickness funds, such as the fund associations in question in the main proceedings, to be regarded as undertakings or associations of undertakings within the meaning of Article 81 EC when they determine fixed maximum amounts corresponding to the upper limit of the price of medicinal products whose cost is borne by sickness funds? If the first question is answered in the affirmative, do those groups infringe Article 81 EC when they adopt decisions intended to determine the amounts? If the second question is answered in the affirmative, does the derogation provided for in Article 86(2) EC apply to those decisions? If the Treaty competition rules are infringed, is there a right against such groups to an injunction remedying the situation and to compensation for the loss suffered? On those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues Rosas PuissochetSchintgen Macken Colnericvon BahrR. GrassV. SkourisRegistrarPresident 1 – Language of the case: German. Language of the case: German. | 0044a-f391e89-4317 | EN |
THE COURT CONFIRMS THE EXTENT OF PROTECTION CONFERRED BY COMMUNITY LEGISLATION ON GRANA PADANO CHEESE AND PARMA HAM | «(Protected designations of origin – Regulation (EEC) No 2081/92 – Regulation (EEC) No 1107/96 – Grana Padano freshly grated – Specification – Convention between two Member States – Condition that the cheese is grated and packaged in the region of production – Articles 29 EC and 30 EC – Justification – Whether the condition may be relied on against third parties – Legal certainty – Publicity)» Summary of the Judgment 1.. Free movement of goods – Quantitative restrictions of exports – Measures having equivalent effect – Convention between two Member States applying the condition that cheese covered by a designation of origin is grated and packaged in the region of production – Justification – Protection of industrial and commercial property – Measure that is necessary and proportionate and capable of upholding the reputation of the designation of origin (Arts 29 EC and 30 EC) Free movement of goods – Quantitative restrictions of exports – Measures having equivalent effect – Convention between two Member States applying the condition that cheese covered by a designation of origin is grated and packaged in the region of production – Justification – Protection of industrial and commercial property – Measure that is necessary and proportionate and capable of upholding the reputation of the designation of origin 2.. Agriculture – Uniform laws – Protection of geographical indications and designations of origin for agricultural products and foodstuffs – Use of a protected designation of origin subject to the condition that operations such as grating and packaging the product take place in the region of production – Whether permissible (Council Regulation No 2081/92) Agriculture – Uniform laws – Protection of geographical indications and designations of origin for agricultural products and foodstuffs – Use of a protected designation of origin subject to the condition that operations such as grating and packaging the product take place in the region of production – Whether permissible 3.. Free movement of goods – Quantitative restrictions of exports – Measures having equivalent effect – Use of the protected designation of origin Grana Padano subject, under a Community measure, to the condition that the product is grated and packaged in the region of production – Justification – Protection of industrial and commercial property – Measure that is necessary and proportionate and capable of upholding the reputation of the designation of origin – Whether condition may be relied on against economic operators – Not in the absence of adequate publicity – Exception (Arts 29 EC and 30 EC; Commission Regulation No 1107/96) Free movement of goods – Quantitative restrictions of exports – Measures having equivalent effect – Use of the protected designation of origin Grana Padano subject, under a Community measure, to the condition that the product is grated and packaged in the region of production – Justification – Protection of industrial and commercial property – Measure that is necessary and proportionate and capable of upholding the reputation of the designation of origin – Whether condition may be relied on against economic operators – Not in the absence of adequate publicity – Exception JUDGMENT OF THE COURT20 May 2003 (1) ((Protected designations of origin – Regulation (EEC) No 2081/92 – Regulation (EEC) No 1107/96 – Grana Padano freshly grated – Specification – Convention between two Member States – Condition that the cheese is grated and packaged in the region of production – Articles 29 EC and 30 EC – Justification – Whether the condition may be relied on against third parties – Legal certainty – Publicity))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Ravil SARL, by A. Lyon-Caen, F. Fabiani and F. Thiriez, avocats, ─ Bellon import SARL and Biraghi SpA, by M. Baffert and A. Baurand, avocats, and F. Giuggia, avvocato, ─ the French Government, by G. de Bergues and L. Bernheim, acting as Agents, ─ the Spanish Government, by R. Silva de Lapuerta, acting as Agent, ─ the Italian Government, by U. Leanza, acting as Agent, assisted by O. Fiumara, avvocato dello Stato, ─ the Commission of the European Communities, by H. van Lier and A.-M. Rouchaud, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Bellon import SARL and Biraghi SpA, the French Government, the Italian Government and the Commission at the hearing on 19 February 2002, after hearing the Opinion of the Advocate General at the sitting on 25 April 2002, gives the followingLegal backgroundOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Wathelet SchintgenTimmermans Gulmann EdwardJann Skouris MackenColneric von BahrCunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: French. Language of the case: French. | 0391c-02b96bf-481d | EN |
THE TRANSMISSION OF DATA ON THE SALARIES OF EMPLOYEES OF PUBLIC BODIES FOR PUBLICATION IN AN ANNUAL REPORT MAY BE COMPATIBLE WITH COMMUNITY LAW | «(Protection of individuals with regard to the processing of personal data – Directive 95/46/EC – Protection of private life – Disclosure of data on the income of employees of bodies subject to control by the Rechnungshof)» Summary of the Judgment 1.. Approximation of laws – Directive 95/46 – Scope – Determination in accordance with the subject-matter of the directive – Abolition of barriers to the functioning of the internal market (Directive 95/46 of the European Parliament and of the Council) Approximation of laws – Directive 95/46 – Scope – Determination in accordance with the subject-matter of the directive – Abolition of barriers to the functioning of the internal market 2.. Approximation of laws – Directive 95/46 – Interpretation in the light of fundamental rights (Directive 95/46 of the European Parliament and of the Council) Approximation of laws – Directive 95/46 – Interpretation in the light of fundamental rights 3.. Community law – Principles – Fundamental rights – Respect for private life – Interference within the meaning of Article 8 of the European Convention on Human Rights (European Convention on Human Rights, Art. 8) Community law – Principles – Fundamental rights – Respect for private life – Interference within the meaning of Article 8 of the European Convention on Human Rights 4.. Community law – Principles – Fundamental rights – Respect for private life – Restriction – National legislation requiring a State control body to collect and communicate, for purposes of publication, data on the income of persons employed by bodies subject to that control where the income exceeds a certain threshold – Justification under Article 8(2) of the European Convention on Human Rights – Objective of public interest – Management of public funds – Proportionality (European Convention on Human Rights, Art. 8(2)) Community law – Principles – Fundamental rights – Respect for private life – Restriction – National legislation requiring a State control body to collect and communicate, for purposes of publication, data on the income of persons employed by bodies subject to that control where the income exceeds a certain threshold – Justification under Article 8(2) of the European Convention on Human Rights – Objective of public interest – Management of public funds – Proportionality 5.. Approximation of laws – Directive 95/46 – National legislation requiring a State control body to collect and communicate, for purposes of publication, data on the income of persons employed by bodies subject to that control where the income exceeds a certain threshold – Permissible – Condition – Disclosure necessary with regard to the objective of proper management of public funds – Proportionality (Directive 95/46 of the European Parliament and of the Council, Arts 6(1)(c) and 7(c) and (e)) Approximation of laws – Directive 95/46 – National legislation requiring a State control body to collect and communicate, for purposes of publication, data on the income of persons employed by bodies subject to that control where the income exceeds a certain threshold – Permissible – Condition – Disclosure necessary with regard to the objective of proper management of public funds – Proportionality 6.. Acts of the institutions – Directives – Effect – Non-implementation by a Member State – Right of individuals to rely on the directive – Conditions (Art. 249, third para., EC; Directive 95/46 of the European Parliament and of the Council, Arts 6(1)(c) and 7(c) and (e)) Acts of the institutions – Directives – Effect – Non-implementation by a Member State – Right of individuals to rely on the directive – Conditions JUDGMENT OF THE COURT20 May 2003 (1) ((Protection of individuals with regard to the processing of personal data – Directive 95/46/EC – Protection of private life – Disclosure of data on the income of employees of bodies subject to control by the Rechnungshof))andTHE COURT,,after considering the written observations submitted on behalf of: ─ the Rechnungshof, by F. Fiedler, acting as Agent (C-465/00), ─ Österreichischer Rundfunk, by P. Zöchbauer, Rechtsanwalt (C-465/00), ─ Wirtschaftskammer Steiermark, by P. Mühlbacher and B. Rupp, acting as Agents (C-465/00), ─ Marktgemeinde Kaltenleutgeben, by F. Nistelberger, Rechtsanwalt (C-465/00), ─ Land Niederösterreich, by E. Pröll, C. Kleiser and L. Staudigl, acting as Agents (C-465/00), ─ Österreichische Nationalbank, by K. Liebscher and G. Tumpel-Gugerell, acting as Agents (C-465/00), ─ Stadt Wiener Neustadt, by H. Linhart, acting as Agent (C-465/00), ─ Austrian Airlines, Österreichische Luftverkehrs-AG, by H. Jarolim, Rechtsanwalt (C-465/00), ─ the Austrian Government, by H. Dossi, acting as Agent (C-465/00, C-138/01 and C-139/01), ─ the Danish Government, by J. Molde, acting as Agent (C-465/00), ─ the Italian Government, by U. Leanza, acting as Agent, assisted by D. Del Gaizo, avvocato dello Stato (C-465/00) and O. Fiumara, avvocato generale dello Stato (C-138/01 and C-139/01), ─ the Netherlands Government, by H.G. Sevenster, acting as Agent (C-465/00, C-138/01 and C-139/01), ─ the Finnish Government, by E. Bygglin, acting as Agent (C-465/00), ─ the Swedish Government, by A. Kruse, acting as Agent (C-465/00, C-138/01 and C-139/01), ─ the United Kingdom Government, by R. Magrill, acting as Agent, and J. Coppel, Barrister (C-465/00, C-138/01 and C-139/01), ─ the Commission of the European Communities, by U. Wölker and X. Lewis, acting as Agents (C-465/00, C-138/01 and C-139/01), having regard to the Report for the Hearing,after hearing the oral observations of Marktgemeinde Kaltenleutgeben, represented by F. Nistelberger; Land Niederösterreich, represented by C. Kleiser; Österreichische Nationalbank, represented by B. Gruber, Rechtsanwalt; Austrian Airlines, Österreichische Luftverkehrs-AG, represented by H. Jarolim; the Austrian Government, represented by W. Okresek, acting as Agent; the Italian Government, represented by M. Fiorilli, avvocato dello Stato; the Netherlands Government, represented by J. van Bakel, acting as Agent; the Finnish Government, represented by T. Pynnä, acting as Agent; the Swedish Government, represented by A. Kruse and B. Hernqvist, acting as Agent; and the Commission, represented by U. Wölker and C. Docksey, acting as Agent, at the hearing on 18 June 2002, after hearing the Opinion of the Advocate General at the sitting on 14 November 2002,gives the followingLegal contextOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Wathelet SchintgenGulmann Edward La PergolaJann Skouris MackenColneric von Bahr Cunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: German. Language of the case: German. | 3e146-6ea8189-4c1b | EN |
THE ADVOCATE GENERAL DELIVERS AN OPINION IN FAVOUR OF RECOGNISING A CLAIM FOR DAMAGES BASED ON INFRINGEMENT OF WTO LAW, WHERE THE COMMUNITY HAS FAILED TO IMPLEMENT A BINDING AWARD OF THE WTO DISPUTE SETTLEMENT BODY WITHIN THE PRESCRIBED PERIOD | «(Appeal – Directives 81/602/EEC, 88/146/EEC and 96/22/EC – Prohibition on the use of certain substances having a hormonal action – Prohibition on the importation from third countries of meat from farm animals to which those substances have been administered – Application for damages – Direct effect of the WTO Agreement and the agreements annexed thereto – Agreement on the Application of Sanitary and Phytosanitary Measures – Recommendations and rulings of the WTO Dispute Settlement Body)» Summary of the Judgment Non-contractual liability – Conditions – Unlawfulness – Damage – Causal link – Not possible to rely on the GATT rules in order to contest the lawfulness of a Community act – Exceptions – Community measure intended to implement a GATT rule or expressly and specifically referring thereto – Judicial review – Precluded before expiry of any reasonable period granted to the Community for compliance with the WTO rules(EC Treaty, Art. 178 (now Art. 235 EC) and Art. 215, second para. (now Art. 288, second para., EC)) Non-contractual liability – Conditions – Unlawfulness – Damage – Causal link – Not possible to rely on the GATT rules in order to contest the lawfulness of a Community act – Exceptions – Community measure intended to implement a GATT rule or expressly and specifically referring thereto – Judicial review – Precluded before expiry of any reasonable period granted to the Community for compliance with the WTO rulesJUDGMENT OF THE COURT (Full Court)30 September 2003 (1) ((Appeal – Directives 81/602/EEC, 88/146/EEC and 96/22/EC – Prohibition on the use of certain substances having a hormonal action – Prohibition on the importation from third countries of meat from farm animals to which those substances have been administered – Application for damages – Direct effect of the WTO Agreement and the agreements annexed thereto – Agreement on the Application of Sanitary and Phytosanitary Measures – Recommendations and rulings of the WTO Dispute Settlement Body))appellant, intervener at first instance, THE COURT (Full Court),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 15 May 2003,gives the followingLegal backgroundOn those grounds, THE COURT (Full Court), Rodríguez IglesiasPuissochet Wathelet SchintgenTimmermans Gulmann EdwardJann Skouris MackenColneric von Bahr Cunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: French. Language of the case: French.If a meeting of the DSB is not scheduled during this period, such a meeting of the DSB shall be held for this purpose.If the parties cannot agree on an arbitrator within ten days after referring the matter to arbitration, the arbitrator shall be appointed by the Director-General within ten days, after consulting the parties. The expression arbitrator shall be interpreted as referring either to an individual or a group. | a76c5-19af1b6-4946 | EN |
ACCORDING TO THE ADVOCATE GENERAL, GERMANY IS ENTITLED TO INTRODUCE LEGISLATION WORSENING THE WORKING CONDITIONS OF TURKISH DRIVERS ENGAGED IN THE TRANSPORT OF GOODS BETWEEN TURKEY AND GERMANY IF THE EMPLOYER IS ESTABLISHED IN TURKEY AND THE VEHICLE IS REGISTERED IN GERMANY | «(EEC-Turkey Association – Interpretation of Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 of the Association Council – Abolition of restrictions on freedom of movement for workers, on freedom of establishment and on freedom to provide services – Standstill clauses – Direct effect – Scope – Legislation of a Member State requiring a work permit in the international road haulage sector)» Summary of the Judgment 1.. International agreements – EEC-Turkey Association Agreement – Freedom of movement for persons – Freedom of establishment – Workers – Standstill rules in Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 of the Association Council – Direct effect (Additional Protocol to the EEC-Turkey Association Agreement, Art. 41(1); Decision No 1/80 of the EEC-Turkey Association Council, Art. 13) International agreements – EEC-Turkey Association Agreement – Freedom of movement for persons – Freedom of establishment – Workers – Standstill rules in Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 of the Association Council – Direct effect 2.. International agreements – EEC-Turkey Association Agreement – Freedom of movement for persons – Workers – Standstill rule in Article 13 of Decision No 1/80 of the Association Council – Condition for application – Legal residence in the host Member State (Decision No 1/80 of the EEC-Turkey Association Council, Art. 13) International agreements – EEC-Turkey Association Agreement – Freedom of movement for persons – Workers – Standstill rule in Article 13 of Decision No 1/80 of the Association Council – Condition for application – Legal residence in the host Member State 3.. International agreements – EEC-Turkey Association Agreement – Freedom of movement for persons – Freedom of establishment – Workers – Standstill rules in Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 of the Association Council – Scope (Additional Protocol to the EEC-Turkey Association Agreement, Art. 41(1); Decision No 1/80 of the EEC-Turkey Association Council, Art. 13) International agreements – EEC-Turkey Association Agreement – Freedom of movement for persons – Freedom of establishment – Workers – Standstill rules in Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 of the Association Council – Scope JUDGMENT OF THE COURT21 October 2003 (1) ((EEC-Turkey Association – Interpretation of Article 41(1) of the Additional Protocol and Article 13 of Decision No 1/80 – Abolition of restrictions on the freedom of movement for workers, on the freedom of establishment and on the freedom to provide services – Standstill clauses – Direct effect – Scope – Legislation of a Member State requiring a work permit in the international road haulage sector)) andTHE COURT,,after considering the written observations submitted on behalf of: ─ Mr Abatay and Others, by T. Helbing, Rechtsanwalt, ─ Mr Sahin, by R. Gutmann, Rechtsanwalt, ─ the German Government, by W.-D. Plessing and R. Stüwe, acting as Agents, ─ the French Government, by G. de Bergues and S. Pailler, acting as Agents, ─ the Netherlands Government, by H.G. Sevenster, acting as Agent, ─ the Commission of the European Communities, by D. Martin and H. Kreppel, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr Abatay and Others, of Mr Sahin, of the German Government and of the Commission at the hearing on 14 January 2001, after hearing the Opinion of the Advocate General at the sitting on 13 May 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues Rosas EdwardLa Pergola Puissochet SchintgenMacken Colneric von Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: German. Language of the case: German. | 428a9-524dbeb-4416 | EN |
THE COURT FINDS AGAINST THE SPANISH AND UNITED KINGDOM RULES REGULATING SPECIAL SHARES ("GOLDEN SHARES") | «(Failure of a Member State to fulfil obligations – Articles 43 EC and 56 EC – System of administrative approval relating to privatised undertakings)» Summary of the Judgment 1.. Free movement of capital – Restrictions – Obstacles resulting from privileges retained by the Member States in the management of privatised undertakings – Justification – System of property ownership – No justification (Arts 56 and 295 EC) Free movement of capital – Restrictions – Obstacles resulting from privileges retained by the Member States in the management of privatised undertakings – Justification – System of property ownership – No justification 2.. Free movement of capital – Restrictions – National rules laying down a system of prior administrative approval in respect of certain decisions by commercial undertakings – Not permissible – Justification based on grounds of public security – No justification (Arts 56 EC and 58(1)(b) EC) Free movement of capital – Restrictions – National rules laying down a system of prior administrative approval in respect of certain decisions by commercial undertakings – Not permissible – Justification based on grounds of public security – No justification JUDGMENT OF THE COURT13 May 2003 (1) ((Failure by a Member State to fulfil its obligations – Articles 43 EC and 56 EC – System of administrative approval relating to privatised undertakings))applicant, vdefendant, intervener, THE COURT,,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 6 February 2003,gives the followingLegal background to the proceedingsOn those grounds, THE COURTRodríguez Iglesias PuissochetWathelet Schintgen Gulmann Edward La PergolaJann Skouris Macken Colneric von BahrRosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Spanish. Language of the case: Spanish. | fffe1-5bfe997-4129 | EN |
THE HOLDER OF A COMMUNITY PLANT VARIETY RIGHT CAN ASK A FARMER TO PROVIDE INFORMATION IF THERE IS SOME INDICATION THAT THE FARMER HAS MADE USE OF THE "AGRICULTURAL EXEMPTION" | «(Plant varieties – System of protection – Article 14(3) of Regulation (EC) No 2100/94 and Article 8 of Regulation (EC) No 1768/95 – Use by farmers of the product of the harvest – Obligation to provide information to the holder of the Community right)» Summary of the Judgment Agriculture – Uniform laws – Protection of plant variety rights – Article 14(3) of Regulation No 2100/94 and Article 8 of Regulation No 1768/95 – Holder cannot require a farmer to provide the information specified in those provisions where there is no indication of use for propagation of a harvest obtained from seeds of a protected variety (Council Regulation No 2100/94, Art. 14(2) and (3); Commission Regulation No 1768/95, Art. 8)Agriculture – Uniform laws – Protection of plant variety rights – Article 14(3) of Regulation No 2100/94 and Article 8 of Regulation No 1768/95 – Holder cannot require a farmer to provide the information specified in those provisions where there is no indication of use for propagation of a harvest obtained from seeds of a protected variety JUDGMENT OF THE COURT (Fifth Chamber)10 April 2003 (1) ((Plant varieties – System of protection – Article 14(3) of Regulation (EC) No 2100/94 and Article 8 of Regulation (EC) No 1768/95 – Use by farmers of the product of the harvest – Obligation to provide information to the holder of the Community right))andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: ─ Mr Schulin, by H. Lessing and G. Scheller, Rechtsanwälte, ─ Saatgut-Treuhandverwaltungsgesellschaft mbH, by E. Krieger, Rechtsanwalt, ─ the Commission of the European Communities, by G. Braun and K. Fitch, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr Schulin, represented by M. Miersch, Rechtsanwalt, and R. Wilhelms, Patentanwalt, of Saatgut-Treuhandverwaltungsgesellschaft mbH, represented by E. Krieger and K. von Gierke, Rechtsanwalt, and of the Commission, represented by G. Braun, at the hearing on 21 February 2002, after hearing the Opinion of the Advocate General at the sitting on 21 March 2002, gives the followingLegal backgroundOn those grounds, THE COURT (Fifth Chamber),WatheletTimmermanns Edward von BahrRosas R. Grass M. Wathelet RegistrarPresident of the Fifth Chamber 1 – Language of the case: German. Language of the case: German. | 24e47-2699321-4e18 | EN |
FOR THE FIRST TIME, THE COURT OF JUSTICE IS REQUESTED TO ADJUDICATE ON THE ISSUE OF A MEMBER STATE'S LIABILITY FOR LOSS OR DAMAGE CAUSED TO INDIVIDUALS AS A RESULT OF A BREACH OF COMMUNITY LAW BY A SUPREME COURT | «(Equal treatment – Remuneration of university professors – Indirect discrimination – Length-of-service increment – Liability of a Member State for damage caused to individuals by infringements of Community law for which it is responsible – Infringements attributable to a national court)» Summary of the Judgment 1.. Community law – Rights conferred on individuals – Infringement by a Member State – Obligation to make good damage caused to individuals – Infringement attributable to a supreme court – No effect – Court competent to decide a case relating to such compensation – Application of national law Community law – Rights conferred on individuals – Infringement by a Member State – Obligation to make good damage caused to individuals – Infringement attributable to a supreme court – No effect – Court competent to decide a case relating to such compensation – Application of national law 2.. Community law – Rights conferred on individuals – Infringement by a Member State – Obligation to make good damage caused to individuals – Conditions in the event of infringement attributable to a supreme court – Manifest character of the infringement – Criteria Community law – Rights conferred on individuals – Infringement by a Member State – Obligation to make good damage caused to individuals – Conditions in the event of infringement attributable to a supreme court – Manifest character of the infringement – Criteria 3.. Freedom of movement for persons – Workers – Equal treatment – Remuneration of university professors – Indirect discrimination – Length-of-service increment which takes into account only the length of service in the universities of the Member State concerned – Not permissible – Whether justifiable – No justification (EC Treaty, Art. 48 (now, after amendment, Art. 39 EC); Council Regulation No 1612/68, Art. 7(1))Freedom of movement for persons – Workers – Equal treatment – Remuneration of university professors – Indirect discrimination – Length-of-service increment which takes into account only the length of service in the universities of the Member State concerned – Not permissible – Whether justifiable – No justification 4.. Community law – Infringement by a Member State – Obligation to make good damage caused to individuals – Infringement attributable to a supreme court – Particular circumstances – Lack of manifest character of the infringement Community law – Infringement by a Member State – Obligation to make good damage caused to individuals – Infringement attributable to a supreme court – Particular circumstances – Lack of manifest character of the infringement JUDGMENT OF THE COURT30 September 2003 (1) ((Equal treatment – Remuneration of university professors – Indirect discrimination – Length-of-service increment – Liability of a Member State for damage caused to individuals by infringements of Community law for which it is responsible – Infringements attributable to a national court))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Mr Köbler, by A. König, Rechtsanwalt, ─ the Republic of Austria, by M. Windisch, acting as Agent, ─ the Austrian Government, by H. Dossi, acting as Agent, ─ the German Government, by A. Dittrich and W.-D. Plessing, acting as Agents, ─ the French Government, by R. Abraham and G. de Bergues, and by C. Isidoro, acting as Agents, ─ the Netherlands Government, by H.G. Sevenster, acting as Agent, ─ the United Kingdom Government, by J.E. Collins, acting as Agent, and D. Andersen QC and M. Hoskins, Barrister, ─ the Commission of the European Communities, by J. Sack and H. Kreppel, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr Köbler, represented by A. König, the Austrian Government, represented by E. Riedl, acting as Agent, the German Government, represented by A. Dittrich, the French Government, represented by R. Abraham, the Netherlands Government, represented by H.G. Sevenster, the United Kingdom Government, represented by J.E. Collins, and by D. Andersen and M. Hoskins, and the Commission, represented by J. Sack and H. Kreppel, at the hearing on 8 October 2002, after hearing the Opinion of the Advocate General at the sitting on 8 April 2003, gives the followingLegal frameworkOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Wathelet SchintgenTimmermans Gulmann EdwardLa Pergola Jann SkourisMacken Colneric von BahrCunha Rodrigues Rosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: German. Language of the case: German. | 38d57-935113c-496a | EN |
THE COURT OF FIRST INSTANCE FOR THE MOST PART CONFIRMS THE COMMISSION’S DECISION APPROVING THE MERGER BETWEEN SEB AND MOULINEX. | «(Competition – Concentrations – Regulation (EEC) No 4064/89 – Action brought by a third party – Admissibility – Commitments in the course of the first phase of examination – Trade mark licence – Modification of commitments – Time-limits – Financial aid by the State – Nominal purchase price – Serious doubts as to the compatibility of the concentration with the common market – Absence of commitment on markets with serious competition problems)» Summary of the Judgment 1.. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Decision declaring a concentration compatible with the common market – Third-party undertaking which actively participated in the administrative procedure and which has the status of a potential competitor – Whether admissible (Art. 230, fourth para., EC) Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Decision declaring a concentration compatible with the common market – Third-party undertaking which actively participated in the administrative procedure and which has the status of a potential competitor – Whether admissible 2.. Competition – Concentrations – Administrative procedure – Commitments entered into by the undertakings concerned – Modifications notified after the time-limit – Account taken by the Commission of the modified commitments in order to find the concentration compatible with the common market – Whether permissible – Conditions (Commission Regulation No 447/98, Art. 18(1); Commission Notice on remedies acceptable under Regulations No 4064/89 and No 447/98, para. 37) Competition – Concentrations – Administrative procedure – Commitments entered into by the undertakings concerned – Modifications notified after the time-limit – Account taken by the Commission of the modified commitments in order to find the concentration compatible with the common market – Whether permissible – Conditions 3.. Competition – Concentrations – Investigation by the Commission – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common market – Nature of commitments allowing the Commission to refrain from initiating the Phase II procedure – Commitments excluding all serious doubts – Behavioural commitments – Whether included (Council Regulation No 4064/89, Art. 6(1); Commission Notice on remedies acceptable under Regulations No 4064/89 and No 447/98) Competition – Concentrations – Investigation by the Commission – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common market – Nature of commitments allowing the Commission to refrain from initiating the Phase II procedure – Commitments excluding all serious doubts – Behavioural commitments – Whether included 4.. Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible – Concentration between undertakings active on the markets for small electrical household appliances – Commitment to grant trade-mark licences – Remedy for competition problems raised by the concentration – Conditions (Council Regulation No 4064/89, Art. 8(2)) Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible – Concentration between undertakings active on the markets for small electrical household appliances – Commitment to grant trade-mark licences – Remedy for competition problems raised by the concentration – Conditions 5.. Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible – Concentration between undertakings active on the markets for small electrical household appliances – Commitment to grant trade-mark licences – Limited obligation to obtain supplies imposed on one licensee – Whether permissible – Conditions (Council Regulation No 4064/89, Art. 8(2)) Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible – Concentration between undertakings active on the markets for small electrical household appliances – Commitment to grant trade-mark licences – Limited obligation to obtain supplies imposed on one licensee – Whether permissible – Conditions 6.. Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Assessment criteria – Absence of a significant overlap between the parties to a concentration – Relevance – Limits (Council Regulation No 4064/89, Art. 2(2) and (3)) Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Assessment criteria – Absence of a significant overlap between the parties to a concentration – Relevance – Limits 7.. Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Assessment criteria – Presence of competitors – Relevance dependent on strength of competitors (Council Regulation No 4064/89, Art. 2(2) and (3)) Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Assessment criteria – Presence of competitors – Relevance dependent on strength of competitors 8.. Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Independent assessment of the various markets for the products concerned – Limits – Need to take account of the overall competition situation and the factors liable to strengthen the economic power of the entity arising from the concentration – Failure to establish the absence of serious risks in the case of a concentration of the turnover of the entity arising from the concentration on the sectors not dominated (Council Regulation No 4064/89, Art. 2(2) and (3)) Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Independent assessment of the various markets for the products concerned – Limits – Need to take account of the overall competition situation and the factors liable to strengthen the economic power of the entity arising from the concentration – Failure to establish the absence of serious risks in the case of a concentration of the turnover of the entity arising from the concentration on the sectors not dominated 9.. Procedure – Intervention – Plea in law not raised by the applicant – Inadmissible (EC Statute of the Court of Justice, Art. 37, third and fourth paras; Rules of Procedure of the Court of First Instance, Art. 116(3)) Procedure – Intervention – Plea in law not raised by the applicant – Inadmissible 10.. Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common market – Requirement of compatibility with Article 81 EC – Commitment to grant trade-mark licences containing a clause requiring the licensee to concentrate sales on the territory of a Member State – Whether permissible (Art. 81(1) and (3) EC; Council Regulation No 4064/89, Art. 2(1)) Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common market – Requirement of compatibility with Article 81 EC – Commitment to grant trade-mark licences containing a clause requiring the licensee to concentrate sales on the territory of a Member State – Whether permissible JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)3 April 2003 (1)((Competition – Concentrations – Regulation (EEC) No 4064/89 – Action brought by a third party – Admissibility – Commitments in the course of the first phase of examination – Trade mark licence – Modification of commitments – Time-limits – Financial aid by the State – Nominal purchase price – Serious doubts as to the compatibility of the concentration with the common market – Absence of commitment on markets with serious competition problems))applicant, intervener, vdefendant, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Third Chamber),having regard to the written procedure and further to the hearing on 9 October 2002,gives the followingRelevant legislationOn those grounds, THE COURT OF FIRST INSTANCE (Third Chamber)LenaertsAzizi Jaeger H. Jung K. Lenaerts RegistrarPresident 1 – Language of the case: French. Language of the case: French. | 60c5d-caca0e7-4333 | EN |
RELIANCE ON THE PRINCIPLE OF EQUAL TREATMENT IS NOT POSSIBLE WHERE DIFFERENCES IN PAY AS BETWEEN MEN AND WOMEN CANNOT BE ATTRIBUTED TO A SINGLE SOURCE | «(Principle of equal pay for men and women – Direct effect – Meaning of worker – Self-employed female lecturer undertaking work presumed to be of equal value to that which is undertaken in the same college by male lecturers who are employees, but under contract with a third company – Self-employed lecturers not eligible for membership of an occupational pension scheme)» Summary of the Judgment 1.. Social policy – Men and women – Equal pay – Article 141(1) EC – Scope – Workers of different sexes undertaking the same work or work of equal value – Differences identified in conditions of remuneration not attributable to a single source – Excluded(Art. 141(1) EC)Social policy – Men and women – Equal pay – Article 141(1) EC – Scope – Workers of different sexes undertaking the same work or work of equal value – Differences identified in conditions of remuneration not attributable to a single source – Excluded 2.. Social policy – Men and women – Equal pay – Article 141(1) EC – Scope – Workers of different sexes undertaking the same work or work of equal value – Differences identified in conditions of remuneration not attributable to a single source – Remuneration including the right to become a member of an occupational pension scheme – Excluded(Art. 141(1) EC)Social policy – Men and women – Equal pay – Article 141(1) EC – Scope – Workers of different sexes undertaking the same work or work of equal value – Differences identified in conditions of remuneration not attributable to a single source – Remuneration including the right to become a member of an occupational pension scheme – Excluded 3.. Social policy – Men and women – Equal pay – Article 141(1) EC – State legislation making membership of a pension scheme subject to the existence of a contract of employment – Occupational pension scheme with a much lower percentage of female than male members – Meaning of worker – Not permissible in the absence of objective justification(Art. 141(1) EC)Social policy – Men and women – Equal pay – Article 141(1) EC – State legislation making membership of a pension scheme subject to the existence of a contract of employment – Occupational pension scheme with a much lower percentage of female than male members – Meaning of worker – Not permissible in the absence of objective justification 4.. Social policy – Men and women – Equal pay – Article 141(1) EC – Scope – Unacceptability of State legislation – Enforceability against employers(Art. 141(1) EC)Social policy – Men and women – Equal pay – Article 141(1) EC – Scope – Unacceptability of State legislation – Enforceability against employersJUDGMENT OF THE COURT13 January 2004 (1) ((Principle of equal pay for men and women – Direct effect – Meaning of worker – Self-employed female lecturer undertaking work presumed to be of equal value to that which is undertaken in the same college by male lecturers who are employees, but under contract with a third company – Self-employed lecturers not eligible for membership of an occupational pension scheme)) andTHE COURT,,after considering the written observations submitted on behalf of: ─ Ms Allonby, by T. Gill, barrister, instructed by Michael Scott & Co., solicitors, ─ Education Lecturing Services, trading as Protocol Professional, by D. Pannick QC and P. Nicholls, barrister, instructed by KLegal, solicitors, ─ the United Kingdom Government, by G. Amodeo, acting as Agent, assisted by N. Paines QC and M. Hall, barrister, ─ the German Government, by W.-D. Plessing and R. Stüwe, acting as Agents, ─ the Commission of the European Communities, by J. Sack and N. Yerrel, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Ms Allonby, represented by T. Gill and R. Moretto, barrister, of Education Lecturing Services, trading as Protocol Professional, represented by Lord Lester of Herne Hill QC, of the United Kingdom Government, represented by P. Ormond, acting as Agent, assisted by N. Paines, and of the Commission, represented by N. Yerrel, at the hearing on 28 January 2003, after hearing the Opinion of the Advocate General at the sitting on 2 April 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues La Pergola PuissochetSchintgen Macken Colnericvon Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: English. Language of the case: English. | 89b9c-a0bbf7b-4aa4 | EN |
A NATIONAL PROVISION RESTRICTING RETROACTIVELY THE RIGHT OF A PERSON TO REIMBURSEMENT OF TAX FOUND TO BE INCOMPATIBLE WITH COMMUNITY LAW IS NOT PROHIBITED BY COMMUNITY LAW PROVIDED THAT IT COMPLIES WITH THE PRINCIPLES OF EFFECTIVENESS AND EQUIVALENCE | «(Indirect taxation – Duty on sales of alcoholic beverages – Incompatibility with Community law – Recovery of duty)» Summary of the Judgment 1.. Community law – Direct effect – National charges incompatible with Community law – Repayment – Introduction of a more restrictive procedural rule in anticipation of the potential effects of a judgment of the Court – Not permissible – Criterion – Measure specific to the duty which is the subject of the Court's judgment – To be assessed by the national court (EC Treaty, Art. 5 (now Art. 10 EC)) Community law – Direct effect – National charges incompatible with Community law – Repayment – Introduction of a more restrictive procedural rule in anticipation of the potential effects of a judgment of the Court – Not permissible – Criterion – Measure specific to the duty which is the subject of the Court's judgment – To be assessed by the national court 2.. Community law – Direct effect – National charges incompatible with Community law – Repayment – Refusal on the sole ground that the charge was passed on and independently of the degree of unjust enrichment – Not permissible Community law – Direct effect – National charges incompatible with Community law – Repayment – Refusal on the sole ground that the charge was passed on and independently of the degree of unjust enrichment – Not permissible 3.. Community law – Direct effect – National charges incompatible with Community law – Repayment – Procedure – Application of national law – Limits – Compliance with the principle of equivalence of Community law – National provision derogating from the rule of non-repayment where the charge was passed on for applicants able to rely on a precedent from a national constitutional court – Breach of the principle of equivalence – To be determined by the national court Community law – Direct effect – National charges incompatible with Community law – Repayment – Procedure – Application of national law – Limits – Compliance with the principle of equivalence of Community law – National provision derogating from the rule of non-repayment where the charge was passed on for applicants able to rely on a precedent from a national constitutional court – Breach of the principle of equivalence – To be determined by the national court 4.. Community law – Direct effect – National charges incompatible with Community law – Repayment – Procedure – Application of national law – Limits – Compliance with the principle of the effectiveness of Community law – Presumption of unjust enrichment solely because the charge was passed on – Not permissible Community law – Direct effect – National charges incompatible with Community law – Repayment – Procedure – Application of national law – Limits – Compliance with the principle of the effectiveness of Community law – Presumption of unjust enrichment solely because the charge was passed on – Not permissible JUDGMENT OF THE COURT (Fifth Chamber)2 October 2003 (1) ((Indirect taxation – Duty on sales of alcoholic beverages – Incompatibility with Community law – Recovery of duty))andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: ─ Mr Schlosser, by T. Jordis, Rechtsanwalt, ─ Beta-Leasing, by W. Arnold, Rechtsanwalt, ─ the Abgabenberufungskommission Wien, by K. Pauer, acting as Agent, ─ the Austrian Government, by H. Dossi, acting as Agent, ─ the Italian Government, by I.M. Braguglia, acting as Agent, with G. De Bellis, avvocato dello Stato, ─ the Commission of the European Communities, by E. Traversa and V. Kreuschitz, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Ms Rathgeber, represented by W. Ilgenfritz, Prozeßbevollmächtigter, of Mr Schlosser, represented by T. Jordis and G. Stefan, Rechtsanwalt, of Beta-Leasing GmbH, represented by W. Arnold, of the Abgabenberufungskommission Wien, represented by L. Pramer, Rechtsanwalt, of the Austrian Government, represented by H. Dossi, and of the Commission, represented by E. Traversa and V. Kreuschitz, at the hearing on 12 December 2002, after hearing the Opinion of the Advocate General at the sitting on 20 March 2003, gives the followingLegal frameworkOn those grounds, THE COURT (Fifth Chamber),WatheletTimmermans La Pergola Jannvon Bahr R. Grass M. Wathelet RegistrarPresident of the Fifth Chamber 1 – Language of the case: German. Language of the case: German. | 679a8-9353d4e-491a | EN |
THE COURT ANNULS THE COMMISSION'S DECISION REFUSING AUTHORISATION FOR DANISH PROVISIONS STRICTER THAN COMMUNITY PROVISIONS ON THE USE OF NITRATES AND NITRITES AS FOOD ADDITIVES. | «(Approximation of laws – Directive 95/2/EC – Use of sulphites, nitrites and nitrates as food additives – Protection of health – Stricter national provisions – Conditions of application of Article 95(4) EC – Principle of the right to be heard)» Summary of the Judgment 1.. Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Purpose (Art. 95(1), (4), (6) and (7) EC) Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Purpose 2.. Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Application of the principle of the right to be heard – Not applicable (Art. 95(4) and (6), second and third subparas) Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Application of the principle of the right to be heard – Not applicable 3.. Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Distinction between national provision existing prior to the harmonisation measure and those introduced subsequently – Conditions for the application of Article 95(4) EC – Obligation for the Member State seeking derogation to provide new scientific evidence – No such obligation – Conditions for the application for Article 95(5) EC – Obligation for the Member State seeking derogation to establish the need to introduce new national provisions on grounds of a problem specific to that Member State (Arts 30 EC and 95(4) and (5) EC) Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Distinction between national provision existing prior to the harmonisation measure and those introduced subsequently – Conditions for the application of Article 95(4) EC – Obligation for the Member State seeking derogation to provide new scientific evidence – No such obligation – Conditions for the application for Article 95(5) EC – Obligation for the Member State seeking derogation to establish the need to introduce new national provisions on grounds of a problem specific to that Member State 4.. Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Application to maintain existing national provisions – Possibility for a Member State seeking derogation to base its application on an assessment of the risk to public health different from that made by the Community legislature – Obligation to establish a level of health protection higher than that in the Community harmonisation measure – Obligation to comply with the principle of proportionality (Art. 95(4) and (7) EC) Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Application to maintain existing national provisions – Possibility for a Member State seeking derogation to base its application on an assessment of the risk to public health different from that made by the Community legislature – Obligation to establish a level of health protection higher than that in the Community harmonisation measure – Obligation to comply with the principle of proportionality 5.. Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Application to maintain existing national provisions – Assessment as regards the conditions laid down in Article 95(4) and (6) EC (Art. 95(4) and (6) EC) Approximation of laws – Article 95 EC – Approval procedure for derogating national provisions – Application to maintain existing national provisions – Assessment as regards the conditions laid down in Article 95(4) and (6) ECJUDGMENT OF THE COURT20 March 2003 (1) ((Approximation of laws – Directive 95/2/EC – Use of sulphites, nitrites and nitrates as food additives – Protection of health – Stricter national provisions – Conditions of application of Article 95(4) EC – Principle of the right to be heard))applicant, interveners, vdefendant, THE COURT,,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 30 May 2002,gives the followingLegal frameworkOn those grounds, THE COURTRodríguez Iglesias PuissochetWathelet SchintgenGulmannEdward La Pergola Jann SkourisMacken Colneric von BahrCunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Danish. Language of the case: Danish. | d1998-3ee958b-4def | EN |
THE ADVOCATE GENERAL CONSIDERS THAT NOVEL FOODS MAY BE PLACED ON THE MARKET UNDER A SIMPLIFIED PROCEDURE EVEN WHEN THEY CONTAIN TRACES OF TRANSGENIC PROTEIN, PROVIDED THEY ARE ABSOLUTELY SAFE IN TERMS OF HEALTH | «(Regulation (EC) No 258/97 – Novel foods – Placing on the market – Safety assessment – Simplified procedure – Substantial equivalence to existing foods – Foods produced from genetically modified maize – Presence of residues of transgenic protein – Measure by a Member State temporarily restricting or suspending the trade in or use of a novel food in its territory)» Summary of the Judgment 1.. Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Simplified procedure – Substantial equivalence to existing foods – Concept – Use of that procedure notwithstanding the presence of residues of transgenic protein in novel foods – Whether permissible – Limits – Potential risks to human health (Regulation No 258/97 of the European Parliament and of the Council, Art. 3(4), first subpara.)Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Simplified procedure – Substantial equivalence to existing foods – Concept – Use of that procedure notwithstanding the presence of residues of transgenic protein in novel foods – Whether permissible – Limits – Potential risks to human health 2.. Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Simplified procedure – Procedure not covered by consent, even tacit, by the Commission – Member States' right of recourse to the safeguard clause where use of that procedure is not warranted – Need for a preliminary challenge to such consent – Not required(Regulation No 258/97 of the European Parliament and of the Council, Art. 5 and Art. 12(1)) Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Simplified procedure – Procedure not covered by consent, even tacit, by the Commission – Member States' right of recourse to the safeguard clause where use of that procedure is not warranted – Need for a preliminary challenge to such consent – Not required 3.. Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Member States' right of recourse to the safeguard clause regardless of the procedure followed for placing on the market and its validity (Regulation No 258/97 of the European Parliament and of the Council, Art. 3(4), second subpara. and Arts 5, 12 and 13)Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Member States' right of recourse to the safeguard clause regardless of the procedure followed for placing on the market and its validity 4.. Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Use of the safeguard clause – Justification – Potential risks to human health – Burden of proof(Regulation No 258/97 of the European Parliament and of the Council, Arts 3(1) and 12)Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Use of the safeguard clause – Justification – Potential risks to human health – Burden of proof 5.. Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Simplified procedure – Condition of substantial equivalence – Detailed rules sufficient to ensure a high level of protection for human health and the environment – Compliance with the precautionary principle and the principle of proportionality – Validity (Arts 152(1) EC and 174(2) EC; Regulation No 258/97 of the European Parliament and of the Council, Art. 3(4), first subpara., and Art. 5) Approximation of laws – Novel foods and novel food ingredients – Placing on the market – Simplified procedure – Condition of substantial equivalence – Detailed rules sufficient to ensure a high level of protection for human health and the environment – Compliance with the precautionary principle and the principle of proportionality – Validity JUDGMENT OF THE COURT9 September 2003 (1) ((Regulation (EC) No 258/97 – Novel foods – Placing on the market – Safety assessment – Simplified procedure – Substantial equivalence to existing foods – Foods produced from genetically modified maize – Presence of residues of transgenic protein – Measure by a Member State temporarily restricting or suspending the trade in or use of a novel food in its territory))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Monsanto Agricoltura Italia SpA and Others, by E.A. Raffaelli, G.F. Ferrari and P. Todaro, avvocati, ─ the Italian Government, by I.M. Braguglia, acting as Agent, assisted by M. Fiorilli, avvocato dello Stato, ─ the Norwegian Government, by B. Ekeberg, acting as Agent, ─ the European Parliament, by C. Pennera and G. Ricci, acting as Agents, ─ the Council of the European Union, by A. Lo Monaco and F.P. Ruggeri Laderchi, acting as Agents, ─ the Commission of the European Communities, by M. Shotter and A. Aresu, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Monsanto Agricoltura Italia SpA and Others, the Italian Government, the Parliament, the Council and the Commission at the hearing on 24 September 2002, after hearing the Opinion of the Advocate General at the sitting on 13 March 2003,gives the followingLegal frameworkOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Timmermans GulmannEdward La Pergola JannSkouris von Bahr Cunha RodriguesRosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Italian. Language of the case: Italian. | 38d03-4cdc946-4dd4 | EN |
IN THE VIEW OF ADVOCATE GENERAL STIX-HACKL A NATIONAL MEASURE SUCH AS THE GERMAN PROHIBITION ON MAIL ORDER TRADE ) INCLUDING BY INTERNET ) IN MEDICINES REQUIRED TO BE SOLD THROUGH PHARMACIES, AND ON RELATED ADVERTISING, CAN ONLY BE JUSTIFIED UNDER THE FREE MOVEMENT OF GOODS RULES AS BEING FOR THE PROTECTION OF HEALTH AND LIFE OF HUMANS IN RESPECT OF MEDICINES THAT RE QUIRE AUTHORISATION BUT HAVE NOT BEEN AUTHORISED. | «(Articles 28 EC and 30 EC – Directives 92/28/EEC and 2000/31/EC – National legislation restricting internet sales of medicinal products for human use by pharmacies established in another Member State – Doctor's prescription required for supply – Prohibition on advertising the sale of medicinal products by mail order)» Summary of the Judgment 1.. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Definition – Prohibition on the sale by mail order of medicinal products the sale of which is restricted to pharmacies – Whether included – Justification limited to medicinal products subject to prescription – Reimportation of medicinal products into the Member State concerned – Not relevant( Arts 28 EC and 30 EC ) Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Definition – Prohibition on the sale by mail order of medicinal products the sale of which is restricted to pharmacies – Whether included – Justification limited to medicinal products subject to prescription – Reimportation of medicinal products into the Member State concerned – Not relevant 2.. Approximation of laws – Proprietary medicinal products – Advertising – Prohibition on advertising the sale by mail order of medicinal products the sale of which is restricted to pharmacies – Permissible only in respect of medicinal products subject to prescription( Directive 2001/83/EC of the European Parliament and of the Council, Art. 88 ) Approximation of laws – Proprietary medicinal products – Advertising – Prohibition on advertising the sale by mail order of medicinal products the sale of which is restricted to pharmacies – Permissible only in respect of medicinal products subject to prescriptionJUDGMENT OF THE COURT11 December 2003 (1) ((Articles 28 EC and 30 EC – Directives 92/28/EEC and 2000/31/EC – National legislation restricting internet sales of medicinal products for human use by pharmacies established in another Member State – Doctor's prescription required for supply – Prohibition on advertising the sale of medicinal products by mail order)) andTHE COURT,,after considering the written observations submitted on behalf of: ─ Deutscher Apothekerverband eV, by C. Dechamps, Rechtsanwalt, assisted by J. Schwarze, ─ 0800 DocMorris NV and J. Waterval, by Professor C. Koenig, ─ the German Government, by W.-D. Plessing and B. Muttelsee-Schön, acting as Agents, ─ the Greek Government, by F. Georgakopoulos, D. Kalogiros and E.-M. Mamouna, acting as Agents, ─ the French Government, by G. de Bergues and R. Loosli-Surrans, acting as Agents, ─ the Irish Government, by D.J. O'Hagan, acting as Agent, and N. Hyland, Barrister, ─ the Austrian Government, by C. Pesendorfer, acting as Agent, ─ the Commission of the European Communities, by J.-C. Schieferer, acting as Agent, assisted by M. Núñez Müller, Rechtsanwalt, having regard to the Report for the Hearing,after hearing the oral observations of Deutscher Apothekerverband eV, represented by C. Dechamps, assisted by J. Schwarze, 0800 DocMorris NV and J. Waterval, represented by C. Koenig, the German Government, represented by W.-D. Plessing, the Greek Government, represented by D. Kalogiros and M. Apessos, acting as Agent, the French Government, represented by R. Loosli-Surrans, and the Commission, represented by J.-C. Schieferer, at the hearing on 10 December 2002, after hearing the Opinion of the Advocate General at the sitting on 11 March 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues Rosas EdwardLa Pergola Puissochet SchintgenMacken Colneric von Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: German. Language of the case: German. | cd9c5-44de2be-451c | EN |
COMMUNITY LAW DOES NOT PRECLUDE THE OBLIGATION OF MILITARY SERVICE BEING IMPOSED ONLY ON MEN | «(Inapplicability of Community law to compulsory military service – Equal treatment of men and women – Article 2 of Directive 76/207/EEC – Compulsory military service in Germany limited to men only – Directive not applicable)» Summary of the Judgment 1.. Community law – Scope – National measures concerning the organisation of the armed forces – No general exception for measures taken for reasons of public security Community law – Scope – National measures concerning the organisation of the armed forces – No general exception for measures taken for reasons of public security 2.. Social policy – Men and women – Access to employment and working conditions – Equal treatment – Directive 76/207 – Scope – Access to posts in the armed forces – Included – Discretion of the Member States – Scope – Judicial review (Council Directive 76/207) Social policy – Men and women – Access to employment and working conditions – Equal treatment – Directive 76/207 – Scope – Access to posts in the armed forces – Included – Discretion of the Member States – Scope – Judicial review 3.. Community law – Scope – Member States' choices of military organisation for the defence of their territory or of their essential interests – Compulsory military service for men only – Excluded Community law – Scope – Member States' choices of military organisation for the defence of their territory or of their essential interests – Compulsory military service for men only – Excluded JUDGMENT OF THE COURT11 March 2003 (1) ((Inapplicability of Community law to compulsory military service – Equal treatment of men and women – Article 2 of Directive 76/207/EEC – Compulsory military service in Germany limited to men only – Directive not applicable))andTHE COURT,,after considering the written observations submitted on behalf of: ─ the Federal Republic of Germany and the German Government, in its capacity as a Member State and as a party to the main proceedings, by W.-D. Plessing and B. Muttelsee-Schön, acting as Agents, ─ the French Government, by R. Abraham, C. Bergeot-Nunes and C. Chevallier, acting as Agents, ─ the Finnish Government, by T. Pynnä, acting as Agent, ─ the Commission of the European Communities, by J. Sack and N. Yerrell, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr Dory, represented by W. Dory and C. Lenz, Rechtsanwälte; the German Government, represented by W.-D. Plessing, assisted by C. Tomuschat, Sachverständiger; the Finnish Government, represented by T. Pynnä; and the Commission, represented by J. Sack, at the hearing on 16 April 2002, after hearing the Opinion of the Advocate General at the sitting on 28 November 2002,gives the followingLegal backgroundOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Wathelet SchintgenTimmermans Gulmann EdwardJann Skouris MackenColneric von Bahr Cunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: German. Language of the case: German. | b3401-76a2404-43a4 | EN |
THE COURT OF FIRST INSTANCE ANNULS, ON GROUNDS OF INADEQUATE REASONING, THE EUROPEAN COMMISSION'S DECISION FINDING THAT THE TRANSFER OF THE WOHNUNGSBAUFÖRDERUNGSANSTALT TO WESTLB WAS UNLAWFUL STATE AID AMOUNTING TO DEM 1,579,700,000 | «(State aid – Commission's lack of competence – Infringement of the rights of the defence – Infringement of essential procedural requirements – Concept of aid – Infringement of Articles 87 EC and 295 EC – Market economy investor – Appropriate rate of return – Infringement of the obligation to state reasons)» Summary of the Judgment 1.. Commission – Management of current business – Scope – Supervisory function in matters of State aid – Included (Arts 87(1) EC and 211 EC) Commission – Management of current business – Scope – Supervisory function in matters of State aid – Included 2.. State aid – Administrative procedure – Commission's obligation to give notice to the parties concerned to submit their comments – Exclusion of those parties from rights of defence (Arts 88(2) EC and 253 EC) State aid – Administrative procedure – Commission's obligation to give notice to the parties concerned to submit their comments – Exclusion of those parties from rights of defence 3.. Actions for annulment – Pleas in law – Infringement of essential procedural requirements – Action against a Commission decision declaring State aid incompatible with the common market – Right of the beneficiary of the aid and the grantor thereof to plead infringement of the Member State's right to be heard (Arts 88(2) EC and 230, second para., EC) Actions for annulment – Pleas in law – Infringement of essential procedural requirements – Action against a Commission decision declaring State aid incompatible with the common market – Right of the beneficiary of the aid and the grantor thereof to plead infringement of the Member State's right to be heard 4.. Procedure – Intervention – Application in support of the form of order sought by one of the parties but relying on a different argument – Whether admissible (Statute of the Court of Justice, Art. 40, fourth para.) Procedure – Intervention – Application in support of the form of order sought by one of the parties but relying on a different argument – Whether admissible 5.. Acts of the institutions – Statement of reasons – Error of fact in an otherwise adequate statement of reasons – No bearing on the lawfulness of the decision (Art. 253 EC) Acts of the institutions – Statement of reasons – Error of fact in an otherwise adequate statement of reasons – No bearing on the lawfulness of the decision 6.. Community law – General principles of law – Right to proper administration – Diligent and impartial examination of the case Community law – General principles of law – Right to proper administration – Diligent and impartial examination of the case 7.. State aid – Definition – Grant of an advantage by a State through State resources (Art. 87(1) EC) State aid – Definition – Grant of an advantage by a State through State resources 8.. Competition – Application of the competition rules – Equal treatment of public and private undertakings – Rules governing public ownership – No effect – Possibility of derogations for undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly (Arts 86(1) and (2) EC, 87(1) EC and 295 EC) Competition – Application of the competition rules – Equal treatment of public and private undertakings – Rules governing public ownership – No effect – Possibility of derogations for undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly 9.. State aid – Definition – Assessment on the basis of the private investor criterion – Criterion applicable to measures favouring profitable undertakings (Art. 87(1) EC) State aid – Definition – Assessment on the basis of the private investor criterion – Criterion applicable to measures favouring profitable undertakings 10.. State aid – Definition – Financial aid granted to an undertaking by public authorities – Assessment criterion – Attractiveness to a private investor of a similar investment made on the same conditions (Art. 87(1) EC) State aid – Definition – Financial aid granted to an undertaking by public authorities – Assessment criterion – Attractiveness to a private investor of a similar investment made on the same conditions 11.. State aid – Definition – Private investor test – Assessment in the light of the average return on capital invested in the sector concerned – Whether permissible – Limits (Art. 87(1) EC) State aid – Definition – Private investor test – Assessment in the light of the average return on capital invested in the sector concerned – Whether permissible – Limits 12.. State aid – Definition – Application to public investors of the informed private investor test – Breach of the principle of equal treatment – None (Art. 87(1) EC) State aid – Definition – Application to public investors of the informed private investor test – Breach of the principle of equal treatment – None 13.. State aid – Definition – Application of the private investor test – Commission's power of assessment – Judicial review – Limits (Art. 87(1) EC) State aid – Definition – Application of the private investor test – Commission's power of assessment – Judicial review – Limits 14.. Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid – Description of the effect on competition and on trade between Member States (Arts 87(1) EC and 253 EC) Acts of the institutions – Statement of reasons – Obligation – Scope – Commission decision on State aid – Description of the effect on competition and on trade between Member States 15.. State aid – Effect on trade between Member States – Prejudicial to competition – Assessment criteria (Art. 87(1) EC) State aid – Effect on trade between Member States – Prejudicial to competition – Assessment criteria 16.. Acts of the institutions – Statement of reasons – Obligation – Scope – Choice of basic rate of return when applying the private investor principle (Art. 253 EC) Acts of the institutions – Statement of reasons – Obligation – Scope – Choice of basic rate of return when applying the private investor principle JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)6 March 2003 (1)((State aid – Commission's lack of competence – Infringement of the rights of the defence – Infringement of essential procedural requirements – Concept of aid – Infringement of Articles 87 EC and 295 EC – Market economy investor – Appropriate rate of return – Infringement of the obligation to state reasons))applicants, intervener, vdefendant, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber, Extended Composition),having regard to the written procedure and further to the hearing on 5 and 6 June 2002,gives the followingBackground to the disputeOn those grounds, THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)Moura RamosTiili Pirrung MengozziMeijH. Jung R.M. Moura Ramos RegistrarPresident 1 – Language of the case: German. Language of the case: German. | 5ce9b-3efb396-4536 | EN |
THE COURT OF FIRST INSTANCE DISMISSES THE ACTION BROUGHT BY FENIN AGAINST THE COMMISSION | «(Competition – Abuse of a dominant position – Public health service – Late payment of invoices – Complaint submitted by suppliers – Definition of undertaking)» Summary of the Judgment 1.. Competition – Community rules – Undertaking – Definition (Arts 81 EC and 82 EC) Competition – Community rules – Undertaking – Definition 2.. Competition – Community rules – Undertaking – Definition – Organisations responsible for managing national health systems – Not included – Conditions (Arts 81 EC and 82 EC) Competition – Community rules – Undertaking – Definition – Organisations responsible for managing national health systems – Not included – Conditions 3.. Competition – Administrative procedure – Examination of complaints – Examination only of the facts and points of law brought to the Commission's attention (Arts 81 EC and 82 EC; Council Regulation No 17(3)) Competition – Administrative procedure – Examination of complaints – Examination only of the facts and points of law brought to the Commission's attention 4.. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision applying competition rules (Art. 253 EC) Acts of the institutions – Statement of reasons – Obligation – Scope – Decision applying competition rules JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition)4 March 2003 (1)((Competition – Abuse of a dominant position – Public health service – Late payment of invoices – Complaint submitted by suppliers – Definition of undertaking))applicant, vdefendant, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber, Extended Composition),having regard to the written procedure and further to the hearing on 26 February 2002,gives the followingFacts and procedureOn those grounds, THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition)VesterdorfLenaerts Azizi ForwoodLegal H. Jung B. Vesterdorf RegistrarPresident 1 – Language of the case: Spanish. Language of the case: Spanish. | db2d3-3c7353a-4633 | EN |
A COMMUNITY NATIONAL WHO HAS MADE USE OF THE FREEDOM OF MOVEMENT CONFERRED ON WORKERS CAN, AFTER RETURNING TO HIS OWN COUNTRY, DERIVE A RIGHT FROM THIS FOR HIS SPOUSE TO SETTLE WITH HIM IN THAT COUNTRY IRRESPECTIVE OF THE SPOUSE'S NATIONALITY | «(Freedom of movement for workers – National of a non-Member State who is the spouse of a national of a Member State – Spouse under a prohibition on entering and remaining in that Member State – Temporary establishment of the couple in another Member State – Establishment with a view to acquisition by spouse of a right under Community law to enter and remain in the first Member State – Abuse)» Summary of the Judgment 1.. Freedom of movement for persons – Workers – Right of residence of family members – Right of residence of spouse who is a national of a non-Member State – Conditions – Lawful residence in the territory of a Member State (Council Regulation No 1612/68, Art. 10) Freedom of movement for persons – Workers – Right of residence of family members – Right of residence of spouse who is a national of a non-Member State – Conditions – Lawful residence in the territory of a Member State 2.. Freedom of movement for persons – Workers – Right of residence of family members – Right of residence of spouse who is a national of a non-Member State – Couple exercising right to freedom of movement then returning to the State of origin – Objectives pursued – Not relevant – Limits – Marriages of convenience to circumvent national rules on entry and residence in the case of nationals of non-Member States (Council Regulation No 1612/68, Art. 10) Freedom of movement for persons – Workers – Right of residence of family members – Right of residence of spouse who is a national of a non-Member State – Couple exercising right to freedom of movement then returning to the State of origin – Objectives pursued – Not relevant – Limits – Marriages of convenience to circumvent national rules on entry and residence in the case of nationals of non-Member States 3.. Freedom of movement for persons – Workers – Right of residence of family members – Right of residence of spouse who is a national of a non-Member State – Couple exercising right to freedom of movement then returning to the State of origin – Refusal of entry and residence in the absence of lawful residence in a Member State – Regard paid to the European Convention on Human Rights – Right to respect for family life (European Convention for the Protection of Human Rights and Fundamental Freedoms, Art. 8; Council Regulation No 1612/68, Art. 10) Freedom of movement for persons – Workers – Right of residence of family members – Right of residence of spouse who is a national of a non-Member State – Couple exercising right to freedom of movement then returning to the State of origin – Refusal of entry and residence in the absence of lawful residence in a Member State – Regard paid to the European Convention on Human Rights – Right to respect for family life JUDGMENT OF THE COURT23 September 2003 (1) ((Freedom of movement for workers – National of a non-Member State who is the spouse of a national of a Member State – Spouse under a prohibition on entering and remaining in that Member State – Temporary establishment of the couple in another Member State – Establishment with a view to acquisition by spouse of a right under Community law to enter and remain in the first Member State – Abuse)) andTHE COURT,,after considering the written observations submitted on behalf of: ─ Mr Akrich, by T. Eicke, Barrister, instructed by D. Flynn, of the Joint Council for the Welfare of Immigrants and D. Betts, Solicitor, ─ the United Kingdom Government, by J.E. Collins, acting as Agent, and E. Sharpston QC and T.R. Tam, Barrister, ─ the Greek Government, by I. Galani-Maragkoudaki and S. Vodina, acting as Agents, ─ the Commission of the European Communities, by C. O'Reilly, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of Mr H. Akrich, represented by T. Eicke, the United Kingdom Government, represented by J.E. Collins, and by E. Sharpston QC, and the Greek Government, represented by I. Galani-Maragkoudaki and E.-M. Mamouna, acting as Agents, and the Commission, represented by C. O'Reilly, at the hearing on 5 November 2002, after hearing the Opinion of the Advocate General at the sitting on 27 February 2003, gives the followingLegislationOn those grounds, THE COURT,Rodríguez Iglesias PuissochetWathelet SchintgenTimmermansEdward La PergolaJannMacken Colnericvon Bahr R. Grass G. C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: English. Language of the case: English. | 0edb6-ffcfee9-4fa0 | EN |
THE COURT OF JUSTICE CONSIDERS ITALIAN LEGISLATION FREEZING COMPULSORY MOTOR INSURANCE PREMIUMS TO BE CONTRARY TO COMMUNITY LAW | «(Failure of a Member State to fulfil obligations – Directive 92/49/EEC – Freedom to set premiums and abolition of prior or systematic controls over premiums and contracts – Gathering of information)» Summary of the Judgment Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Direct insurance other than life assurance – Directive 92/49 – Freedom to set premiums – Price-control system applicable to contracts of insurance covering third-party liability arising from the use of motor vehicles – Not permissible(Council Directive 92/49, Arts 6, 29 and 39)Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Direct insurance other than life assurance – Directive 92/49 – Freedom to set premiums – Price-control system applicable to contracts of insurance covering third-party liability arising from the use of motor vehicles – Not permissibleJUDGMENT OF THE COURT25 February 2003 (1) ((Failure by a Member State to fulfil obligations – Directive 92/49/EEC – Freedom to set premiums and abolition of prior or systematic controls over premiums and contracts – Gathering of information))applicant, vdefendant, THE COURT,,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 4 July 2002,gives the followingLegal backgroundOn those grounds, THE COURTRodríguez IglesiasPuissochetWatheletTimmermans EdwardJannMackenColneric von BahrCunha Rodrigues Rosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Italian. Language of the case: Italian. | 8a517-3c84781-4889 | EN |
THE COURT OF JUSTICE GIVES A FURTHER JUDGMENT ON MEDICAL TREATMENT ABROAD | «(Social security – Hospital treatment of a pensioner during a stay in a Member State other than the State in which he resides – Conditions for funding – Articles 31 and 36 of Regulation (EEC) No 1408/71 – Articles 31 and 93 of Regulation (EEC) No 574/72)» Summary of the Judgment 1.. Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of residence – Provisions applicable (Council Regulation No 1408/71, Arts 22(1)(a) and 31) Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of residence – Provisions applicable 2.. Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of residence – Entitlement to benefits in kind – Conditions (Council Regulation No 1408/71, Art. 31) Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of residence – Entitlement to benefits in kind – Conditions 3.. Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of Residence – Obligation of cooperation on the institution of the place of stay and that of the place of residence (Art. 10 EC; Council Regulation No 1408/71, Art. 84) Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of Residence – Obligation of cooperation on the institution of the place of stay and that of the place of residence 4.. Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of residence – Refusal wrongly interposed by the institution of the place of stay – Obligations resulting for the institution of the place of residence (Council Regulations No 1408/71, Art. 31, and No 574/72, Art. 31) Social security for migrant workers – Sickness insurance – Entitlement to benefits in the event of a stay outside the competent Member State – Pensioners staying outside their Member State of residence – Refusal wrongly interposed by the institution of the place of stay – Obligations resulting for the institution of the place of residence JUDGMENT OF THE COURT25 February 2003 (1) ((Social security – Hospital treatment of a pensioner during a stay in a Member State other than the State in which he resides – Conditions for funding – Articles 31 and 96 of Regulation (EEC) No 1408/71 – Articles 31 and 93 of Regulation (EEC) No 574/72))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Idryma Koinonikon Asfaliseon (IKA), by D.G. Anastassopoulos, acting as Agent, ─ the Greek Government, by S. Spyropoulos, I. Bakopoulos and I. Galani-Marangoudaki, acting as Agents, ─ the Belgian Government, by A. Snoecx, acting as Agent, ─ the Spanish Government, by N. Díaz Abad, acting as Agent, ─ the Irish Government, by D.J. O'Hagan, acting as Agent, assisted by A.M. Collins BL, ─ the Austrian Government, by H. Dossi, acting as Agent, ─ the United Kingdom Government, by R. Magrill, acting as Agent, and S. Moore, Barrister, ─ the Commission of the European Communities, by H. Michard and M. Panayotopoulos, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Idryma Koinonikon Asfaliseon (IKA), represented by D.G. Anastassopoulos; the Greek Government, represented by S. Spyropoulos and I. Bakopoulos; the Spanish Government, represented by N. Díaz Abad; the Irish Government, represented by A.M. Collins; the Netherlands Government, represented by H.G. Sevenster, acting as Agent; the Finnish Government, represented by T. Pynnä, acting as Agent; the United Kingdom Government, represented by D. Lloyd-Jones QC; and the Commission, represented by H. Michard and M. Patakia, acting as Agents, at the hearing on 10 September 2002, after hearing the Opinion of the Advocate General at the sitting on 15 October 2002, gives the followingLegal backgroundOn those grounds, THE COURT,Rodríguez IglesiasWathelet Schintgen TimmermansGulmann Edward La PergolaJann Skouris MackenColneric von BahrCunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Greek. Language of the case: Greek. | 8d51b-8a0156a-4953 | EN |
ADVOCATE GENERAL MISCHO PROPOSES THE ANNULMENT OF CERTAIN PROVISIONS OF THE "ECOPOINTS REGULATION" CONCERNING HEAVY GOODS VEHICLES TRANSITING THROUGH AUSTRIA | «(System of ecopoints for heavy goods vehicles transiting through Austria – Amendment by Regulation (EC) No 2012/2000 – Illegality)» Summary of the Judgment 1.. Actions for annulment – Plea calling into question the conduct of an institution other than the defendant institution – Whether admissible – Procedural status of an institution implicated in that way – Mere option to intervene(Art. 230 EC)Actions for annulment – Plea calling into question the conduct of an institution other than the defendant institution – Whether admissible – Procedural status of an institution implicated in that way – Mere option to intervene 2.. Accession of new Member States to the Communities – Protocols and annexes to acts of accession – Subject to the legal rules governing provisions of primary lawAccession of new Member States to the Communities – Protocols and annexes to acts of accession – Subject to the legal rules governing provisions of primary law 3.. Transport – Road transport – Special rules for the traffic of goods by road through Austria – System of ecopoints for heavy goods vehicles – Reduction in the number of ecopoints in the event of that the threshold for journeys is exceeded – Staggering of the reduction over several years – Invalid(Protocol No 9 to the 1994 Act of Accession, Art. 11(2)(c), and point 3 of Annex 5; Council Regulation No 2012/2000, Arts 1 and 2(1) and (4))Transport – Road transport – Special rules for the traffic of goods by road through Austria – System of ecopoints for heavy goods vehicles – Reduction in the number of ecopoints in the event of that the threshold for journeys is exceeded – Staggering of the reduction over several years – Invalid 4.. Transport – Road transport – Special rules for the traffic of goods by road through Austria – System of ecopoints for heavy goods vehicles – Reduction in the number of ecopoints in the event of that the threshold for journeys is exceeded – Proportional distribution between the Member States according to their contribution to exceeding the threshold – Whether permissible(Protocol No 9 to the 1994 Act of Accession, Arts 11(6) and 16)Transport – Road transport – Special rules for the traffic of goods by road through Austria – System of ecopoints for heavy goods vehicles – Reduction in the number of ecopoints in the event of that the threshold for journeys is exceeded – Proportional distribution between the Member States according to their contribution to exceeding the threshold – Whether permissible 5.. Transport – Road transport – Special rules for the traffic of goods by road through Austria – System of ecopoints for heavy goods vehicles – Reduction in the number of ecopoints in the event that the threshold for journeys is exceeded – Method of calculation laid down by Regulation No 2012/2000 – Whether valid – Method of calculation based on the average use of ecopoints – Not permissible(Protocol No 9 to the 1994 Act of Accession, points 2 and 3 of Annex 5; Council Regulation No 2012/2000)Transport – Road transport – Special rules for the traffic of goods by road through Austria – System of ecopoints for heavy goods vehicles – Reduction in the number of ecopoints in the event that the threshold for journeys is exceeded – Method of calculation laid down by Regulation No 2012/2000 – Whether valid – Method of calculation based on the average use of ecopoints – Not permissibleJUDGMENT OF THE COURT11 September 2003 (1) ((System of ecopoints for heavy goods vehicles transiting through Austria – Amendment by Regulation (EC) No 2012/2000 – Illegality))applicant, vdefendant, interveners, THE COURT,,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 13 February 2003,gives the followingFacts and legal backgroundOn those grounds, THE COURTRodríguez IglesiasPuissochet WatheletSchintgen Gulmann EdwardLa Pergola Jann SkourisMacken Colneric von BahrCunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: German. Language of the case: German. | e6aea-e161fa1-4024 | EN |
THE COURT OF JUSTICE GIVES ITS FIRST RULING ON THE INTERPRETATION OF THE CONVENTION IMPLEMENTING THE SCHENGEN AGREEMENT | «(Convention implementing the Schengen Agreement – Ne bis in idem principle – Scope – Decisions by which the Public Prosecutor definitively discontinues criminal proceedings, without the involvement of a court, once the accused has satisfied certain conditions)» Summary of the Judgment 1.. European Union – Police and judicial cooperation in criminal matters – Protocol integrating the Schengen acquis – Convention implementing the Schengen Agreement – Ne bis in idem principle – Scope – Decision of the Public Prosecutor definitively discontinuing criminal proceedings against an accused provided the accused fulfils certain obligations – Whether included (Convention implementing the Schengen Agreement, Arts 54, 55 and 58) European Union – Police and judicial cooperation in criminal matters – Protocol integrating the Schengen acquis – Convention implementing the Schengen Agreement – Ne bis in idem principle – Scope – Decision of the Public Prosecutor definitively discontinuing criminal proceedings against an accused provided the accused fulfils certain obligations – Whether included 2.. European Union – Police and judicial cooperation in criminal matters – Protocol integrating the Schengen acquis – Convention implementing the Schengen Agreement – Ne bis in idem principle – Application as regards a decision of the Public Prosecutor definitively discontinuing criminal proceedings against an accused provided the accused fulfils certain obligations – Scope limited to acts of public authorities, not affecting the victim's civil rights of action (Convention implementing the Schengen Agreement, Art. 54) European Union – Police and judicial cooperation in criminal matters – Protocol integrating the Schengen acquis – Convention implementing the Schengen Agreement – Ne bis in idem principle – Application as regards a decision of the Public Prosecutor definitively discontinuing criminal proceedings against an accused provided the accused fulfils certain obligations – Scope limited to acts of public authorities, not affecting the victim's civil rights of action JUDGMENT OF THE COURT11 February 2003 (1) ((Convention implementing the Schengen Agreement – Ne bis in idem principle – Scope – Decisions by which the Public Prosecutor definitively discontinues criminal proceedings, without the involvement of a court, once the accused has satisfied certain conditions)) THE COURT,,after considering the written observations submitted on behalf of: ─ Mr Gözütok, by N. Hack, Rechtsanwalt, (C-187/01), ─ the German Government, by W.-D. Plessing, acting as Agent (C-187/01 and C-385/01), ─ the Belgian Government, by A. Snoecx, acting as Agent (C-385/01), ─ the French Government, by R. Abraham, G. de Bergues and C. Isidoro, acting as Agents (C-187/01), ─ the Netherlands Government, by H. G. Sevenster, acting as Agent (C-187/01 and C-385/01), ─ the Commission of the European Communities, by W. Bogensberger and C. Ladenburger (C-187/01) and by W. Bogensberger and R. Troosters (C-385/01), acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Mr Gözütok, represented by N. Hack, of the German Government, represented by A. Dittrich, acting as Agent, of the Belgian Government, represented by A. Snoecx, J. Devadder and W. Detavernier, acting as Agents, of the French Government, represented by R. Abraham, of the Italian Government, represented by G. Aiello, avvocato dello Stato, of the Netherlands Government, represented by C. Wissels, acting as Agent, and of the Commission, represented by W. Bogensberger and R. Troosters, at the hearing on 9 July 2002, after hearing the Opinion of the Advocate General at the sitting on 19 September 2002,gives the followingLegal backgroundOn those grounds, THE COURT,Rodríguez IglesiasPuissochet Wathelet SchintgenTimmermans Gulmann La PergolaJann Skouris MackenColneric von Bahr Cunha Rodrigues R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Languages of the case: Germanand Dutch. Languages of the case: Germanand Dutch. | 179a4-996aa2d-4f21 | EN |
THE ADVOCATE GENERAL PROPOSES THAT THE COURT OF JUSTICE SHOULD DISMISS THE ACTION AGAINST SPAIN IN THE "GOLDEN SHARES" CASES AND UPHOLD THE ACTION AGAINST THE UNITED KINGDOM | «(Failure of a Member State to fulfil obligations – Articles 43 EC and 56 EC – System of administrative approval relating to privatised undertakings)» Summary of the Judgment 1.. Free movement of capital – Restrictions – Obstacles resulting from privileges retained by the Member States in the management of privatised undertakings – Justification – System of property ownership – No justification (Arts 56 and 295 EC) Free movement of capital – Restrictions – Obstacles resulting from privileges retained by the Member States in the management of privatised undertakings – Justification – System of property ownership – No justification 2.. Free movement of capital – Restrictions – National rules laying down a system of prior administrative approval in respect of certain decisions by commercial undertakings – Not permissible – Justification based on grounds of public security – No justification (Arts 56 EC and 58(1)(b) EC) Free movement of capital – Restrictions – National rules laying down a system of prior administrative approval in respect of certain decisions by commercial undertakings – Not permissible – Justification based on grounds of public security – No justification JUDGMENT OF THE COURT13 May 2003 (1) ((Failure by a Member State to fulfil its obligations – Articles 43 EC and 56 EC – System of administrative approval relating to privatised undertakings))applicant, vdefendant, intervener, THE COURT,,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 6 February 2003,gives the followingLegal background to the proceedingsOn those grounds, THE COURTRodríguez Iglesias PuissochetWathelet Schintgen Gulmann Edward La PergolaJann Skouris Macken Colneric von BahrRosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: Spanish. Language of the case: Spanish. | df421-fac6090-479d | EN |
PUBLIC WORKS CONTRACTS: A NATIONAL LAW MAY PROHIBIT A CHANGE IN THE COMPOSITION OF A CONSORTIUM AFTER SUBMISSION OF TENDERS | «(Public works contracts – Rules for participating – Group of contractors submitting a tender – Change in the composition of the group – Prohibition laid down in the contract documents – Compatibility with Community law – Review procedures)» Summary of the Judgment 1.. Approximation of laws – Procedures for the award of public works contracts – Directive 93/37 – Award of contracts – Groups of tenderers – National rules prohibiting a change in the composition of the group after submission of tenders – Whether permissible (Council Directive 93/37) Approximation of laws – Procedures for the award of public works contracts – Directive 93/37 – Award of contracts – Groups of tenderers – National rules prohibiting a change in the composition of the group after submission of tenders – Whether permissible 2.. Approximation of laws – Review procedures relating to the award of public supply and public works contracts – Directive 89/665 – Member States under an obligation to provide for review procedures – Groups of tenderers – Availability of review procedures (Council Directive 89/665) Approximation of laws – Review procedures relating to the award of public supply and public works contracts – Directive 89/665 – Member States under an obligation to provide for review procedures – Groups of tenderers – Availability of review procedures JUDGMENT OF THE COURT (Sixth Chamber)23 January 2003 (1) ((Public works contracts – Rules for participating – Group of contractors submitting a tender – Change in the composition of the group – Prohibition laid down in the contract documents – Compatibility with Community law – Review procedures))andTHE COURT (Sixth Chamber),,after considering the written observations submitted on behalf of: ─ Makedoniko Metro and Mikhaniki AE, by G. Karydis, A. Pliakos and N.I. Kampas, Dikigori, ─ the Greek Government, by V. Kyriazopoulos, C. Georgiadis and D. Tsangarakis, acting as Agents, ─ the Austrian Government, by M. Fruhmann, acting as Agent, ─ the Commission of the European Communities, by M. Nolin and P. Panayotopoulos, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Makedoniko Metro and Mikhaniki AE, represented by G. Karydis and A. Pliakos, of the Greek Government, represented by V. Kyriazopoulos, and of the Commission, represented by M. Nolin and M. Konstantinidis, acting as Agents, at the hearing on 6 June 2002, after hearing the Opinion of the Advocate General at the sitting on 11 July 2002,gives the followingLegal frameworkOn those grounds, THE COURT (Sixth Chamber),GulmannSkouris Macken ColnericCunha Rodrigues R. Grass J.-P. Puissochet RegistrarPresident of the Sixth Chamber 1 – Language of the case: Greek. Language of the case: Greek. | 1b839-1116091-4d20 | EN |
THE COURT OF JUSTICE CENSURES ITALY FOR HAVING ALLOWED ADVANTAGEOUS RATES FOR ADMISSION TO CULTURAL SITES UNDER MUNICIPAL OR DECENTRALISED CONTROL ONLY FOR ITALIAN NATIONALS AND PERSONS RESIDENT WITHIN THE TERRITORIES OF THE AUTHORITIES RUNNING THEM | «(Failure of a Member State to fulfil obligations – Freedom to provide services – Non-discrimination – Articles 12 EC and 49 EC – Admission to museums, monuments, galleries, archaeological digs, parks and gardens classified as public monuments – Preferential rates granted by local or decentralised State authorities)» Summary of the Judgment Community law – Principles – Equal treatment – Discrimination on grounds of nationality – Admission to museums, monuments, galleries, archaeological digs, parks and gardens classified as public monuments – Advantageous rates granted by local or decentralised State authorities only in favour of nationals and persons resident within the territory of those authorities who are aged over 60 or 65 years – Not permissible – Whether justifiable – No justification (Arts 12 and 49 EC)Community law – Principles – Equal treatment – Discrimination on grounds of nationality – Admission to museums, monuments, galleries, archaeological digs, parks and gardens classified as public monuments – Advantageous rates granted by local or decentralised State authorities only in favour of nationals and persons resident within the territory of those authorities who are aged over 60 or 65 years – Not permissible – Whether justifiable – No justification JUDGMENT OF THE COURT (Sixth Chamber)16 January 2003 (1) ((Failure to fulfil obligations – Free movement of services – Non-discrimination – Articles 12 EC and 49 EC – Admission to museums, monuments, galleries, archaeological digs, parks and gardens classified as public monuments – Preferential rates granted by local or decentralised State authorities))applicant, vdefendant, THE COURT (Sixth Chamber),,having regard to the report of the Judge-Rapporteur,after hearing the Opinion of the Advocate General at the sitting on 10 October 2002,gives the followingNational legislationOn those grounds, THE COURT (Sixth Chamber),PuissochetSchintgen Skouris ColnericCunha Rodrigues R. Grass J.-P. Puissochet RegistrarPresident of the Sixth Chamber 1 – Language of the case: Italian. Language of the case: Italian. | 6afb8-75e7e17-42b2 | EN |
SPAIN AND ITALY ARE FOUND TO HAVE WRONGLY PROHIBITED THE MARKETING UNDER THE NAME 'CHOCOLATE' OF PRODUCTS CONTAINING VEGETABLE FATS OTHER THAN COCOA BUTTER | «(Failure of a Member State to fulfil obligations – Free movement of goods – Directive 73/241/EEC – Cocoa and chocolate products containing fats other than cocoa butter – Products lawfully manufactured and marketed in the Member State of production under the sales name chocolate – Prohibition on marketing under that name in the Member State of marketing)» Summary of the Judgment Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation prohibiting the marketing as chocolate of cocoa and chocolate products containing fats other than cocoa butter and lawfully manufactured in the Member State of production – Not permissible – Whether justifiable – Protection of consumers – No justification (Art. 30 of the EC Treaty (now, after amendment, Art. 28 EC); Council Directive 73/241)Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation prohibiting the marketing as chocolate of cocoa and chocolate products containing fats other than cocoa butter and lawfully manufactured in the Member State of production – Not permissible – Whether justifiable – Protection of consumers – No justification JUDGMENT OF THE COURT (Sixth Chamber)16 January 2003 (1) ((Failure by a Member State to fulfil obligations – Free movement of goods – Directive 73/241/EEC – Cocoa and chocolate products containing fats other than cocoa butter – Products lawfully manufactured and marketed in the Member State of production under the sales name chocolate – Prohibition on marketing under that name in the Member State of marketing))applicant, vdefendant, THE COURT (Sixth Chamber),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 6 December 2001,gives the followingLegal frameworkOn those grounds, THE COURT (Sixth Chamber)PuissochetSchintgen Skouris ColnericCunha Rodrigues R. Grass J.-P. Puissochet RegistrarPresident of the Sixth Chamber 1 – Language of the case: Spanish. Language of the case: Spanish. | 0f695-54613e8-488d | EN |
THE COURT OF FIRST INSTANCE DISMISSES THE ACTIONS BROUGHT AGAINST THE COMMISSION'S DECISIONS TO BRING PROCEEDINGS AGAINST CIGARETTE MANUFACTURERS BEFORE AMERICAN COURTS | |
62000A0377
Judgment of the Court of First Instance (Second Chamber, extended composition) of 15 January 2003. - Philip Morris International, Inc and Others v Commission of the European Communities. - Decision to bring legal proceedings before a court in a non-Member State - Action for annulment - Concept of decision for the purposes of the fourth paragraph of Article 230 EC - Admissibility. - Joined cases T-377/00, T-379/00, T-380/00, T-260/01 and T-272/01.
European Court reports 2003 Page II-00001
Parties
In Joined Cases T-377/00, T-379/00, T-380/00, T-260/01 and T-272/01,Philip Morris International, Inc., established in Rye Brook, New York (United States), represented by É. Morgan de Rivery and J. Derenne, lawyers, with an address for service in Luxembourg,applicant in Cases T-377/00 and T-272/01,R.J. Reynolds Tobacco Holdings, Inc., established in Winston-Salem, North Carolina (United States),RJR Acquisition Corp., established in Wilmington, New Castle, Delaware (United States),R.J. Reynolds Tobacco Company, established in Jersey City, New Jersey (United States),R.J. Reynolds Tobacco International, Inc., established in Dover, Kent, Delaware (United States),represented by P. Lomas, Solicitor, and O. Brouwer, Lawyer, with an address for service in Luxembourg,applicants in Cases T-379/00 and T-260/01,Japan Tobacco, Inc., established in Tokyo (Japan), represented by P. Lomas, Solicitor, and O. Brouwer, Lawyer, with an address for service in Luxembourg,applicant in Case T-380/00,vCommission of the European Communities, represented initially by X. Lewis and C. Ladenburger and subsequently by C. Docksey and C. Ladenburger, acting as Agents, with an address for service in Luxembourg,defendant,supported byEuropean Parliament, represented by R. Passos and A. Baas, acting as Agents, with an address for service in Luxembourg,Kingdom of Spain, represented by R. Silva de Lapuerta, acting as Agent, with an address for service in Luxembourg,French Republic, represented by G. de Bergues, acting as Agent, with an address for service in Luxembourg,Italian Republic, represented by U. Leanza, acting as Agent, with an address for service in Luxembourg,Portuguese Republic, represented by L. Fernandes and Â. Cortesão de Seiça Neves, acting as Agents, with an address for service in Luxembourg,Republic of Finland, represented by T. Pynnä and E. Bygglin, acting as Agents, with an address for service in Luxembourg,interveners in Cases T-377/00, T-379/00, T-380/00, T-260/01 and T-272/01,Federal Republic of Germany, represented by W.-D. Plessing and M. Lumma, acting as Agents,Hellenic Republic, represented by V. Kontolaimos, acting as Agent, with an address for service in Luxembourg,interveners in Cases T-260/01 and T-272/01,Kingdom of the Netherlands, represented, in Cases T-260/01 and T-272/01, by H. Sevenster and, in Case T-379/00, by H. Sevenster and J. van Bakel, acting as Agents, with an address for service in Luxembourg,interveners in Cases T-379/00, T-260/01 and T-272/01,APPLICATIONS for annulment of two decisions by the Commission to commence legal proceedings against the applicants before a federal court in the United States of America,THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES(Second Chamber, Extended Composition),composed of: R.M. Moura Ramos, President, V. Tiili, J. Pirrung, P. Mengozzi and A.W.H. Meij, Judges,Registrar: J. Plingers, Administrator,having regard to the written procedure and further to the hearing on 26 June 2002,gives the followingJudgment
Grounds
1 As part of its efforts to combat the smuggling of cigarettes into the European Community, the Commission approved, on 19 July 2000, `the principle of a civil action, in the name of the Commission, against certain American cigarette manufacturers'. It also decided to inform the Permanent Representatives Committee (Coreper) through the appropriate channels, and empowered its President and the Commissioner responsible for the budget to instruct the Legal Service to take the necessary measures.2 On 3 November 2000, a civil action was brought by the European Community, represented by the Commission and `acting on its own behalf and on behalf of the Member States it has power to represent', against several companies belonging to the Philip Morris group (hereinafter `Philip Morris') and the Reynolds group (hereinafter `Reynolds'), and against the company Japan Tobacco Inc. before the United States District Court, Eastern District of New York, a federal court of the United States of America (hereinafter `the District Court').3 In that action (hereinafter `the first action'), the Community alleged involvement on the part of the applicants, which are tobacco companies, in a system of smuggling aimed at bringing cigarettes into the territory of the European Community and distributing them there. The Community was seeking in particular compensation for the loss resulting from the smuggling, consisting mainly in lost customs duties and value added tax (VAT) which would have been paid on legal imports, as well as injunctions aimed at having the alleged activities stopped.4 The Community based its claims on a federal law of the United States, the Racketeer Influenced and Corrupt Organisations Act 1970 (hereinafter `RICO'), as well as on certain common law doctrines, namely, common law fraud, public nuisance and unjust enrichment. RICO is aimed at combating organised crime, particularly by facilitating proceedings against economic operators when they engage in criminal activities. To that end, it provides for a right of action for civil parties. In order to encourage such civil proceedings, RICO provides that the plaintiff may be awarded damages corresponding to three times the loss actually incurred by him (`treble damages').5 By decision of 16 July 2001, the District Court dismissed the claims of the European Community.6 On 25 July 2001, the Commission approved `the principle of a new civil action in the US courts, jointly by the Community and at least one Member State, against the groups of cigarette manufacturers who had been defendants in the previous action'. It also empowered its President and the Commissioner responsible for the budget to instruct the Legal Service to take the necessary measures.7 On 6 August 2001, a fresh action was filed with the District Court against Philip Morris and Reynolds by the Commission, on behalf of the European Community and the Member States it was empowered to represent, and by 10 Member States, namely the Kingdom of Belgium, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic and the Republic of Finland, in their own name. In that action (hereinafter `the second action'), the Community no longer based its claims on RICO, but solely on the common law doctrines invoked in the first action. The Member States, however, based their claims both on RICO and on the common law doctrines invoked by the Community. In addition, the second action alleged economic and non-economic loss which the Community had not alleged in the first action, and introduced additional elements with respect to the doctrines of public nuisance and unjust enrichment.8 The Community did not appeal against the District Court's decision of 16 July 2001 referred to in paragraph 5 above. However, on 10 August 2001 it submitted to the American court a motion to vacate that judgment and to amend the complaint. That motion was dismissed by a decision of the District Court of 25 October 2001.9 On 9 January 2002, the Community, represented by the Commission, and the 10 Member States mentioned in paragraph 7 above filed a third action with the District Court against the applicant Japan Tobacco Inc. and other associated companies (hereinafter `the third action').10 On 19 February 2002, the District Court dismissed the second and third actions of the Community and the Member States, on the basis of the common law revenue rule, under which United States Courts refrain from enforcing the fiscal legislation of other States.11 On 20 March 2002, the Commission approved the principle of appealing against the judgment of the District Court. On 25 March 2002, an appeal was filed on behalf of the Community and the 10 Member States before the United States Court of Appeals for the Second Circuit.Procedure12 By applications lodged with the Registry of the Court of First Instance on 19 and 20 December 2000, the applicants brought Cases T-377/00, T-379/00 and T-380/00, seeking annulment of the decision by the Commission to bring the first action, and, in Cases T-379/00 and T-380/00, annulment of any decision by the Council relating thereto.13 By separate documents, lodged with the Registry of the Court of First Instance on 29 January 2001, the Council and the Commission raised objections of inadmissibility in each of the cases, pursuant to Article 114 of the Rules of Procedure of the Court of First Instance.14 On 7 June 2001, the Court decided to refer the three cases to a Chamber composed of five Judges (Second Chamber, Extended Composition).15 By order of 2 July 2001, the President of the Second Chamber (Extended Composition), after hearing the parties on this point, joined the three cases for the purposes of the written procedure, the oral procedure and judgment, pursuant to Article 50 of the Rules of Procedure.16 By order of 12 July 2001, the President of the Second Chamber (Extended Composition) granted the Kingdom of Spain, the French Republic, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland and the European Parliament leave to intervene in the joined cases in support of the forms of order sought by the Commission and the Council.17 On 27 July 2001, the Court of First Instance invited the parties to submit their observations on the decision of 16 July 2001 of the District Court. The applicants, the Commission, the Council, the Kingdom of Spain, the Italian Republic, the Portuguese Republic, the Republic of Finland and the Kingdom of the Netherlands submitted their observations within the period allowed.18 By applications lodged with the Registry of the Court of First Instance on 15 October 2001, Reynolds and Philip Morris brought Cases T-260/01 and T-272/01, in which they seek annulment of the decision to bring the second action.19 On 23 November 2001, the Commission forwarded to the Court of First Instance the decision of 25 October 2001 of the District Court, in which the motion to vacate the decision of 16 July 2001 was dismissed. It asked the Court of First Instance to give the parties the opportunity to submit their observations on the question of whether that decision had made the actions in Cases T-377/00, T-379/00 and T-380/00 devoid of purpose. The applicants, the Commission, and the Kingdom of Spain, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland and the European Parliament lodged their observations on whether there was still a need to give a decision in Cases T-377/00, T-379/00 and T-380/00 within the period allowed to them for that purpose.20 By separate documents lodged with the Registry of the Court of First Instance on 10 and 18 December 2001, the Commission raised an objection of inadmissibility pursuant to Article 114 of the Rules of Procedure in Cases T-260/01 and T-272/01.21 On 10 January 2002, the Court of First Instance decided to refer Cases T-260/01 and T-272/01 to a Chamber composed of five Judges (Second Chamber, Extended Composition).22 By order of 31 January 2002, the President of the Second Chamber (Extended Composition), after hearing the parties on this point, joined the five cases (T-377/00, T-379/00, T-380/00, T-260/01 and T-272/01) for the remainder of the written procedure, the oral procedure and judgment.23 By decision of 31 January 2002 of the Second Chamber (Extended Composition), the application by the applicant in Case T-272/01 to have the case dealt with under the expedited procedure was dismissed.24 On 6 February 2002, the applicants in Cases T-379/00 and T-380/00 withdrew their actions in so far as they were directed against the Council. By order of 21 March 2002, the President of the Second Chamber (Extended Composition) ordered that the two cases be removed from the register in so far as they were directed against the Council.25 By order of 22 March 2002, the President of the Second Chamber (Extended Composition) granted the European Parliament, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Kingdom of the Netherlands, the Portuguese Republic and the Republic of Finland leave to intervene in Cases T-260/01 and T-272/01 in support of the forms of order sought by the Commission.26 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Second Chamber, Extended Composition) decided to open the oral procedure without undertaking measures of inquiry. It did, however, put questions to the Commission, which replied within the prescribed period.27 The parties presented oral argument and answered questions put to them by the Court at the hearing on 26 June 2002.Forms of order sought28 The Commission and the interveners contend that the Court should:- dismiss the actions as inadmissible;- order the applicants to pay the costs.29 Philip Morris claims that the Court should:- reserve its decision on the objection of inadmissibility for the final judgment;- in the alternative, dismiss the objection of inadmissibility;- order the Commission to pay the costs.30 Reynolds and Japan Tobacco claim that the Court should:- reserve its decision on the objection of inadmissibility for the final judgment;- in any event, dismiss the objection of inadmissibility;- reserve its decision on costs.LawArguments of the parties31 The Commission's objections of inadmissibility are each founded on a single plea, to the effect that the contested acts are not open to challenge as contemplated in the fourth paragraph of Article 230 EC. In addition, some of the interveners argue that the applicants are not directly and individually concerned by the contested acts and that they have no interest in bringing proceedings.32 The arguments of the parties in respect of the plea raised by the Commission concern three aspects of the issue of admissibility of the present actions. Firstly, the parties discuss considerations relating to the nature of the Commission's decisions of 19 July 2000 and 25 July 2001 (hereinafter `the contested acts'). Secondly, they examine the different effects which those acts are liable to produce. Thirdly, they discuss certain considerations of a general nature put forward by the Commission to justify its position.The nature of the contested acts33 The Commission, supported by the interveners, states that a decision to bring an action before a court is not an act open to challenge as contemplated in the fourth paragraph of Article 230 EC.34 According to the Commission, there are analogies to be drawn between the contested acts and certain other acts which, according to the case-law, are not open to challenge.35 The Commission refers first to the judgment of the Court of Justice in Case C-191/95 Commission v Germany [1998] ECR I-5449, from which it deduces that a decision by the Commission to commence infringement proceedings under Article 226 EC before the Court of Justice is not an act open to challenge as contemplated in Article 230 EC.36 Second, the Commission, supported by the Kingdom of Spain, the Federal Republic of Germany and the Hellenic Republic, takes the view that the decisions to commence proceedings before the American court have all the characteristics of preparatory measures.37 Third, the Commission contends that the bringing of a civil action is a statement of a legal opinion which has no binding legal effects, and may be compared to the opinions which that institution may address to national authorities without binding them.38 The Parliament, the Federal Republic of Germany and the Hellenic Republic add that the contested acts fall within the scope of the internal organisation of the defendant institution.39 In response to a question from the Court, the Commission stated that the only acts open to challenge are those by which the institution itself changes the legal position in question, and not acts by which it asks a third party to take binding measures.40 The Commission, supported by the Federal Republic of Germany, also considers that the fact that in the present case there is no subsequent act by a Community institution which may be challenged by annulment proceedings cannot justify the use of a legal fiction to treat the contested acts as though they were definitive acts producing legal effects. It accepts that the principle of effective judicial protection is a fundamental right, but that principle does not mean that every act by an institution must be amenable to judicial review, including acts incapable of producing binding legal effects. The Commission, supported by the Federal Republic of Germany and the Italian Republic, adds that the applicants are sufficiently protected in the proceedings before the District Court by the guarantees under United States procedural law, including the right to invite the District Court to examine whether a plaintiff which has brought a case before it has entitlement to sue.41 The applicants emphasise, first of all, the extraordinary nature of the contested acts by which, in their submission, the Commission is seeking to circumvent the entire system of tax recovery in force, including the division of powers pertaining thereto between the Community and the Member States. They affirm that no sovereign body can recover taxes indirectly by means of an action for damages. They stress that they were never informed by the competent authorities of the Member States that they owed tax, and thus never had the opportunity to present their point of view on the matter before the actions were brought.42 The applicants maintain that the contested acts are challengeable in annulment proceedings because they produce legal effects, because they are final measures representing the definitive position of the institution and because they therefore have brought about a distinct change in their legal position. Reynolds further contends that, to determine whether an act is open to challenge, the test is not necessarily whether the act produces legal effects, but whether the act is intended to produce legal effects.43 The applicants take the view that the contested acts cannot be compared to a decision to initiate infringement proceedings under Article 226 EC, which was the situation in Case C-191/95 Commission v Germany, cited in paragraph 35 above. They argue that a decision to bring infringement proceedings constitutes a mere step in a Community law procedure whereby the Court of Justice, the only body competent in this connection, establishes a failure by a Member State to fulfil its obligations. Thus it does not affect the rights and obligations of the Member State concerned.44 The applicants argue that the contested acts cannot be termed preparatory acts. They maintain that the essential criterion for determining whether a measure has legal effects or is merely preparatory is whether the decision adopted constitutes the definitive settlement of the matter within the Community legal order or whether it is a measure whose purpose is to prepare the final decision, the illegality of which may be raised in proceedings brought against it. They stress that the present actions offer the only opportunity for the Community judicature to review whether the Commission has acted within its powers and in compliance with Community law in bringing the actions before the District Court.45 The applicants take the view that the bringing of a civil action before an American court cannot be treated as an expression of an opinion on the law by the Commission which may then be accepted or rejected by the court.46 Nor can the contested acts be treated as measures of internal organisation.47 In response to a question from the Court, the applicants stated that there was no difference between the Commission's adopting an act itself and asking a third party to do so.48 In the alternative, the applicants maintain that the contested acts lack even the appearance of legality, so that the Court must annul them even if they are only preparatory acts. The applicants refer to Case 60/81 IBM v Commission [1981] ECR 2639, and to Joined Cases T-10/92, T-11/92, T-12/92 and T-15/92 Cimenteries CBR and Others v Commission [1992] ECR II-2667, paragraph 49, which they maintain stand for the proposition that the Community judicature has jurisdiction to annul a preparatory act which is manifestly unlawful.The effects of the contested acts49 The Commission, supported by the interveners, considers that a distinction must be drawn between the procedural effects that an act may produce, which it terms consequences of fact, and binding legal effects. The Commission states that the effects pleaded by the applicants resulting from the bringing of the actions before the American court are merely consequences of fact which any defendant in Court proceedings must face. The Commission argues that they are not legal effects because the applicants are not compelled to alter their practices unless and until a court so orders.50 At the hearing, the Commission stated that the bringing of the actions before the District Court did not have the effect of precluding procedures for the recovery of taxes or the prosecution of fraud at Community level. Such procedures are under way and the Commission will participate in them to the extent allowed under national law. However, those procedures have a different purpose and involve different parties from the actions at issue here.51 The applicants maintain that the contested acts and the actual bringing of the actions before the District Court have produced various effects which, they claim, are of a legal nature. The applicants allege, first, certain effects within the Community legal order. Secondly, they cite certain effects flowing from the procedural law applicable before the American court seised of the cases.52 With respect to the legal effects of the contested acts in the Community legal order, the applicants argue, firstly, that through the contested acts the Commission adopted a definitive position on its competence to bring the actions before the District Court. They argue that a unilateral, independent decision of that nature, by which the Commission adds to the powers granted to it by the Treaty the power to bring legal proceedings before a court in a non-Member State, must be open to challenge, in keeping with the case-law of the Court of Justice (see Case C-366/88 France v Commission [1990] ECR I-3571). They stress that no act which is liable to affect the institutional balance provided for by the Treaties can escape judicial review. In support of this argument, they refer inter alia to Case C-327/91 France v Commission [1994] ECR I-3641, concerning the agreement between the Commission and the United States of America regarding the application of their competition laws, to Case C-170/96 Commission v Council [1998] ECR I-2763, concerning a joint action on airport transit arrangements, and to Case C-303/90 France v Commission [1991] ECR I-5315, concerning a code of conduct for financial control in the context of structural assistance.53 Second, the applicants submit that the contested acts have a binding legal effect because those acts expose them to civil proceedings before the courts of a non-Member State and thereby subject them to the rules of a different legal order. The legal actions in the United States expose them to heavier penalties than those provided for under the national law of the Member States.54 The applicants argue that the Commission, the guardian of the Treaty, is circumventing Community law procedures in order to obtain a result through proceedings in the United States which would be unavailable to it under Community law. They stress that they are not purporting to have a right not to be sued, but rather a constitutional right to have applied to them the procedures laid down by Community law.55 The applicants submit that the uncertainty surrounding the outcome of the proceedings in the United States does not preclude the view that the contested acts have a definitive legal effect because they force the applicants to conduct proceedings before the American courts and thus expose them to a risk to which they would not have been exposed under the Community legal system.56 They stress that a judgment of the District Court cannot be reviewed by the Community judicature and is not subject to the safeguards guaranteed under Community law to natural and legal persons accused of infringing Community law. In particular, the District Court is not bound by the principle of primacy of Community law over national law and could apply United States law rather than Community law in determining whether the Community was competent to bring an action before it.57 The applicants also argue that the Commission's decision to sue them before an American court has changed their legal position from a procedural standpoint. They rely inter alia on Joined Cases 8/66 to 11/66 Cimenteries CBR and Others v Commission [1967] ECR 75, and Case C-312/90 Spain v Commission [1992] ECR I-4117, where it was held that acts producing legal effects at a procedural level may be challenged. The applicants state that the contested acts ignore the procedures laid down by Community law for recovery of taxes and customs duties and for combating fraud. Under Community law, only the Member States would have been able to claim unpaid tax from the applicants. The only remedy available to the Commission is infringement proceedings against the Member States. Such proceedings would have guaranteed `that ... no arbitrary finding [would] be made against [the applicants]'. The applicants claim that the contested acts have deprived them of procedural safeguards under national law and of the benefit derived from the obligation of national courts to raise questions of Community law of their own motion. They state that the present case is liable to give rise to many difficult questions of Community law and stress the importance of the preliminary ruling procedure in resolving those issues. The contested acts have precluded the ability, or the obligation, to make a reference for a preliminary ruling. They add, however, that a detailed discussion of the procedures which have not been followed and of the safeguards which they would have provided goes to the substance of the case.58 In response to a question from the Court, Reynolds and Japan Tobacco stated that no proceedings had been brought against them by Member States. They submit that the principle non bis in idem would, in any event, prevent proceedings being brought against them simultaneously before the District Court and in a Member State.59 As regards legal effects resulting from United States law, the applicants argue, firstly, that the mere filing of a civil action before the American court does produce such effects, because they are thenceforth subject to the procedural rules applicable before that court. The applicants refer in particular to the obligation to respond to the suit, or risk judgment by default, and to set forth immediately at the start of the litigation all means of defence, or risk not being able to plead them subsequently. They refer to the necessity of engaging counsel, and to the resulting very high legal costs which will not be reimbursed under United States law even if they are successful. They also consider that a change in their legal position results from the fact that they must comply with the discovery rules applicable under United States civil procedure, which require them to disclose numerous matters which would be protected in proceedings in a Member State, and refer to the penalties which may be imposed on them if they refuse to cooperate. Accordingly, they submit that the filing of legal proceedings in the United States produces legal effects.60 The applicants argue that another legal effect of the filing of the proceedings before the American court is that the Community is legally bound by the terms of the complaints lodged with the American court.61 Secondly, the applicants argue that the Commission's action exposes them to penalties. They set out the likely consequences of application of RICO, in particular the risk of being ordered to pay damages corresponding to three times the loss actually incurred (`treble damages'). They also refer to the claim by the Community that they be ordered to pay punitive damages in so far as its actions are based on common law doctrines. They consider that the filing of the proceedings thus produces effects comparable to a decision to lift immunity under Article 15(6) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-62, p. 87), which was held to be open to challenge in Cimenteries CBR and Others v Commission, cited in paragraph 57 above. The applicants add that the actions accuse them of criminal conduct, and that United States law provides that the parties to a lawsuit enjoy immunity from defamation actions for statements made in those proceedings.62 Thirdly, the applicants consider that the contested decisions have produced legal effects because the American court has published the Commission's complaints on the internet. They are of the view that those effects are similar to those which flow from the decision considered by the Court of First Instance in Case T-353/94 Postbank v Commission [1996] ECR II-921.63 Lastly, they refer to the consequences that the filing of the legal proceedings may have on the disclosure requirements of quoted companies.General considerations pleaded by the Commission to justify its position64 The Commission submits that there are a number of reasons of a general nature justifying the view that a decision to apply to one court cannot be the subject of an action for annulment before another court.65 Firstly, the Commission, supported by the Italian Republic, states that this view is based on the principle that there is a fundamental right to apply to the court laid down by law and it is for the court seised to assess whether it has been seised properly.66 The Commission submits, secondly, that this view results in an important economy of procedure, because all the pleas and submissions in relation to the action brought, whether on substance, procedure or jurisdiction, are raised and concentrated before the court actually seised.67 The Commission states, thirdly, that, in the absence of a treaty or convention between the Community and the United States of America dealing with lis pendens, the view that it puts forward is the one most in keeping with the principle that disputes should not be split between different courts.68 The Italian Republic adds that the present actions seek to transfer to the Community judicature the decision as to the existence of the substantive right which is the subject of the proceedings in the United States. Thus, in its view, the present actions are to be equated with abuse of the right to judicial review of acts of the Community institutions.69 The applicants point out that the European Community is based on the rule of law and emphasise that, where the admissibility of an action is in issue, the Community judicature must be guided by the need to ensure that the parties involved are afforded sufficient legal protection. The need for effective judicial protection has been recognised inter alia in Case T-177/01 Jégo-Quéré v Commission [2002] ECR II-2365.70 The applicants dispute that the actions in question here are civil in nature. They argue that in the present case the Commission is acting as a public body. They deny that it is for the District Court to rule on whether it has been properly seised, arguing that the present case raises fundamental issues of public law on which the American court is not competent to rule. They take the view that the question of whether the Commission was entitled to bring the matter before the American court is not an issue of United States procedural law, but rather of public Community law, and may not necessarily be of concern to an American court.71 The applicants reject the second argument of the Commission, stating that the economy of procedure referred to can be envisaged only when the two courts seised are on an equal footing to rule on the matter in dispute. Pointing out that the present instance concerns judicial review of a foreign administrative act, the applicants consider that the two courts are not on an equal footing, since the American court is not competent to rule on that issue.72 In response to the third argument of the Commission, concerning lis pendens, the applicants maintain that the present proceedings and those before the District Court have a different subject-matter. They argue that the principle of lis pendens applies only when the first court seised has jurisdiction to rule on the issues raised. According to the applicants, the American court lacks jurisdiction to rule on the question as to the Commission's competence raised in the present proceedings. They refer in addition to the risk of an `amalgam of interpretations of Community law' if courts of non-Member States were to rule on questions of Community law. Reynolds and Japan Tobacco also refer to the judgment in Case 314/85 Foto-Frost [1987] ECR 4199, which, in the view of the applicants, reserves to the Community judicature the power to invalidate acts of Community institutions.73 Finally, the applicants add that the autonomy of Community law requires that all acts which undermine the coherence of Community law must be reviewable by the Court of Justice or the Court of First Instance.Findings of the Court74 Under the fourth paragraph of Article 230 EC, `[a]ny natural or legal person may [...] institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former'.75 The present actions are against, first, the decision by which the Commission approved, on 19 July 2000, `the principle of a civil action, in the name of the Commission, against certain American cigarette manufacturers' and, second, the decision of 25 July 2001, by which the Commission approved `the principle of a new civil action in the US courts, jointly by the Community and at least one Member State, against the groups of cigarette manufacturers who had been defendants in the previous action'.76 According to consistent case-law, in order to ascertain whether a measure whose annulment is sought is open to challenge, it is necessary to look to its substance; the form in which it is cast is, in principle, immaterial (IBM v Commission, cited in paragraph 48 above, paragraph 9, and Joined Cases C-213/88 and C-39/89 Luxembourg v Parliament [1991] ECR I-5643, paragraph 15; see also to this effect Case T-3/93 Air France v Commission [1994] ECR II-121, paragraphs 43 and 57).77 It is also settled case-law that only measures the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position are acts or decisions which may be the subject of an action for annulment (see, in particular, IBM v Commission, cited in paragraph 48 above, paragraph 9; order in Case C-117/91 Bosman v Commission [1991] ECR I-4837, paragraph 13; Air France v Commission, cited in the preceding paragraph, paragraph 43; order in Case T-175/96 Berthu v Commission [1997] ECR II-811, paragraph 19).78 Thus it should be examined whether the contested acts aimed at bringing proceedings before the District Court produce such legal effects.79 The commencement of legal proceedings is not without legal effects, but those effects concern principally the procedure before the court seised of the case. The commencement of proceedings constitutes an indispensable step for the purpose of obtaining a binding judgment but does not per se determine definitively the obligations of the parties to the case. That determination can result only from the judgment of the court. The decision to commence legal proceedings does not, therefore, in itself alter the legal position in question (see, concerning a decision by the Commission to bring an action under the second paragraph of Article 226 EC, Commission v Germany, cited in paragraph 35 above, paragraph 47). When it decides to commence proceedings, the Commission does not intend (itself) to change the legal position in question, but merely opens a procedure whose purpose is to achieve a change in that position through a judgment. In principle, therefore, such a decision by the institution cannot be considered to be a decision which is open to challenge.80 This reasoning holds true not only for actions brought by an institution before the Court of Justice, but also for proceedings it may commence before national courts. In both cases, it is not the institution which brings the case before the Community or national court but only that court which, by the decision which it is called upon to give, can alter the legal position underlying the case and determine definitively the rights and obligations of the parties.81 The consequences which may follow by operation of law from the commencement of judicial proceedings, such as interruption of the limitation period or the obligation to pay interest on the amount claimed, are not per se legal effects for the purposes of Article 230 EC, as interpreted in the case-law. Nor does the fact that the commencement of legal proceedings opens up the possibility for the court seised to take decisions capable of affecting the legal position of the parties constitute, as such, a change in the legal position of the party concerned which may be attributed to the party which brought the proceedings.82 As regards the applicants' argument that the issue is whether the contested acts are intended to produce legal effects and not whether they actually produce them, it should be noted that a decision to commence proceedings is not, in principle, intended to produce any effects other than those connected with the commencement of the proceedings. Although it is certainly true that a party bringing proceedings wishes to obtain judgment in its favour, it cannot be said that the decision to bring proceedings is intended to produce by itself the effects of the judgment.83 However, it must be examined whether, in view of the fact that the contested acts in the present case concern the commencement of proceedings not before the Court of Justice or a court of a Member State but before a court of a non-Member State, those acts have produced definitive legal effects beyond the effects necessarily flowing from the commencement of proceedings before any court and which bring about a distinct change in the legal position of the applicants.84 The applicants refer to certain effects which, they argue, the acts have produced in the Community legal order and to certain effects which the commencement of civil proceedings has produced under United States law.Effects of the contested acts in the Community legal order85 It is appropriate, first, to examine the applicants' argument that the contested acts have undermined the institutional balance and thereby produced legal effects on the division of powers for which the Treaty provides.86 The Court finds that, like any act of a Community institution, the contested acts carry an incidental implication that the institution in question has adopted a position as to its competence to adopt them. The adoption of such a position cannot, however, be viewed as a binding legal effect for the purposes of Article 230 EC, as interpreted in the case-law. Even if the position adopted is erroneous, it has no significance independent of the act adopted. If that were not so, recommendations and opinions would not be excluded from the category of acts which are open to challenge on the ground that they produce no legal effects, because those acts also imply adoption of a position as to the competence of their author. In addition, adoption of such a position, unlike an act designed to confer competence, such as the act giving rise to Case C-366/88 France v Commission, cited in paragraph 52 above, is not intended to alter the division of powers provided for by the Treaty.87 Likewise, it cannot be argued that the Commission's alleged lack of powers and any undermining of the institutional balance resulting therefrom are sufficient to give the contested acts binding legal effects. That type of reasoning would be tantamount to concluding that an act is open to challenge because it may be unlawful. It follows from the Court's case-law that the seriousness of the alleged infringement by the institution concerned or the extent of its adverse impact on the observance of fundamental rights cannot justify an exception to the absolute bars to proceedings laid down by the Treaty. Thus an alleged infringement of the institutional balance cannot give rise to an exception to the admissibility rules governing actions for annulment laid down by the Treaty (see, by analogy, the order in Case C-345/00 P FNAB and Others v Council [2001] ECR I-3811, paragraphs 39 to 42).88 The case-law relied on by the applicants does not cast doubt on this conclusion. Although it is true that the Court of Justice and the Court of First Instance have referred, in relation to preparatory acts, to the possibility of examining whether `in exceptional circumstances, where the measures concerned lack even the appearance of legality, a judicial review at an early stage ... may be considered compatible with the system of remedies provided for in the Treaty' (IBM v Commission, cited in paragraph 48 above, paragraph 23; see also Cimenteries CBR and Others v Commission, cited in paragraph 48 above, paragraph 49), the Community courts have never confirmed that it is possible, by way of exception, to carry out such review of preparatory acts or other acts which have no legal effects. Moreover, the decisions in which that possibility was mentioned were before the order in FNAB and Others v Council, cited in the preceding paragraph, in which the Court of Justice clearly ruled against making the admissibility of an action contingent on the seriousness of the infringements of Community law alleged.89 Nor can it be concluded from Commission v Council or from Case C-303/90 France v Commission, both cited in paragraph 52 above, that the Court broadened the concept of acts open to challenge to include acts which have no binding legal effects.90 Furthermore, the applicants' argument cannot succeed on the basis of Case C-327/91 France v Commission, cited in paragraph 52 above, in which the Court found that the act whereby the Commission intended to conclude an agreement with the United States of America concerning the application of competition law was open to challenge (see paragraphs 15 and 17 of the judgment). The applicants maintain that the act contested in that case was the decision empowering the Vice-President of the Commission to sign the agreement and argue that that decision is similar to the decisions challenged in the present case, which empowered the President and a Member of the Commission to take the measures necessary to bring cases before an American court. However, the effects flowing from a decision to confer certain powers on a person depend on the purpose of that conferment. In Case C-327/91 France v Commission, the agreement in question was, as evidenced by its wording, intended to produce legal effects, particularly by establishing reciprocal obligations on the Commission and American authorities to exchange information and engage in cooperation. In the present case, the powers conferred related only to bringing the cases before the District Court and thus produced no effects independent of the decisions to commence proceedings.91 It follows from the foregoing that the applicants' argument that the contested acts produced binding legal effects with regard to the Commission's powers and the institutional balance is unfounded.92 Second, it is necessary to examine the applicants' argument that the contested acts produced binding legal effects by ignoring procedures provided for under Community law and the law of the Member States governing the recovery of tax and customs duties and anti-fraud measures, by depriving the applicants of the legal safeguards they would have enjoyed under those procedures and by subjecting them to the rules of another legal order.93 It should be recalled, as a preliminary point, that the commencement of proceedings before a court does not per se alter the legal position of the parties to the case for the purposes of Article 230 EC, as interpreted in the case-law (see paragraph 79 above). This rule is true regardless of whether the proceedings are brought before the Community judicature, a court in a Member State, or even a court in a non-Member State, such as the United States. It is not affected by the fact that all courts are required to apply the procedural rules of their own legal order and the substantive rules determined in accordance with their own rules governing conflict of laws. Regardless of which rules are applicable, the resulting legal effects, whether they arise by operation of law or from the decisions of the court seised, cannot be attributed to the party who brought the proceedings.94 Consequently, neither the fact that the commencement of proceedings before the District Court results in that court's applying its own law, nor the fact that that law may differ in some respects from Community law or the law of the Member States, is sufficient in itself to bring about a distinct change in the legal position of the applicants.95 The applicants rightly point out that some procedural decisions may produce binding and definitive legal effects for the purposes of Article 230 EC, as interpreted in the case-law.96 They include decisions which, whilst being stages in an administrative procedure in progress, do not merely establish the conditions for the subsequent conduct of that procedure, but produce effects which go beyond the procedural framework and substantively alter the rights and obligations of the parties concerned.97 This is the case inter alia with decisions taken pursuant to Article 15(6) of Regulation No 17, altering rights by removing the immunity from fines enjoyed by undertakings pursuant to Article 15(5) of the Regulation by reason of notification of their agreements (Cimenteries CBR and Others v Commission, cited in paragraph 57 above), decisions requesting information under Article 11(5) of Regulation No 17 (Case T-46/92 Scottish Football Association v Commission [1994] ECR II-1039, paragraph 13), decisions refusing to consider that documents from an undertaking are covered by commercial confidentiality (Case 53/85 AKZO Chemie v Commission [1986] ECR 1965) and decisions initiating the procedure for examining State aid pursuant to Article 88(2) EC and provisionally classifying the aid as new aid, thus obliging the Member States to modify their behaviour regarding the aid (Spain v Commission, cited in paragraph 57 above, paragraphs 12 to 24; Case C-400/99 Italy v Commission [2001] ECR I-7303, paragraphs 55 to 63; Joined Cases T-195/01 and T-207/01 Government of Gibraltar v Commission [2002] ECR II-2309, paragraphs 68 to 86).98 Unlike the examples just given, the acts contested in the present case do not by themselves substantively alter the applicant's rights and obligations. In particular, the absence of a Community procedure for the recovery of taxes and customs duties cannot be likened to the immunity expressly conferred on the parties to a notified agreement pursuant to Article 15(5) of Regulation No 17. Moreover, although it may be true that the contested acts entail a provisional assessment by the Commission of the applicants' conduct under United States law, they are different from the decision to initiate the procedure for examining State aid because Community law does not provide that specific legal consequences are to ensue from that assessment. The commencement of proceedings before an American court does not, therefore, impose new obligations on the applicants and, as rightly pointed out by the Commission, does not oblige them to modify their practices.99 In addition, certain procedural decisions are actionable because they prejudice the procedural rights of the parties concerned (see, regarding a decision to suspend an administrative procedure under Regulation No 17 and to institute infringement proceedings, the judgment in Case T-16/91 Rendo and Others v Commission [1992] ECR II-2417, paragraphs 39 to 57, partly annulled, on other grounds, in Case C-19/93 P Rendo and Others v Commission [1995] ECR I-3319).100 In the present case, however, the applicants would not have enjoyed procedural rights in the infringement proceedings which, they maintain, the Commission should have instituted. Consequently, the commencement of proceedings before the District Court could not have deprived them of any rights in this regard. Case 110/76 Pretore di Cento v X [1977] ECR 851, on which the applicants rely, did not recognise any specific procedural rights for individuals. It merely ruled on the division of powers between the Community and the Member States for the recovery of taxes. In the absence of Community competence to recover the duties and taxes in question, there is equally no relevant procedure laid down by Community law conferring on the applicants safeguards which they would have been denied.101 Nor have the applicants shown that the contested acts affected their legal position in terms of the procedures for the recovery of taxes and customs duties existing in the Member States. It is true that they have stated in a general manner that the laws of the Member States contain rules which may limit or exclude their liability in this area and rules which grant them procedural guarantees. However, they have not submitted that specific procedures being pursued in a Member State have been disregarded or circumvented by the commencement of proceedings before the American court. In fact, in response to questions from the Court, the applicants indicated that, as far as they knew, no procedures for the recovery of sums due had been instituted against them in any of the Member States.102 Nor can the applicants' argument that no sovereign body may recover taxes indirectly by means of an action for damages establish that their procedural rights have been infringed. This is, moreover, an argument going to the merits of the case.103 Likewise, the applicants have not demonstrated specifically in what manner the contested acts have affected their legal position as regards anti-fraud procedures.104 It follows that the applicants have not established that the Commission, by the contested acts, disregarded or circumvented existing procedures governing recovery of taxes and customs duties or anti-fraud procedures within the Community legal order.105 The applicants have rightly pointed out that the proceedings before the District Court differ from those which might be instituted before the courts in the Member States in that there is no mechanism for a reference for a preliminary ruling pursuant to Article 234 EC. It is normal, however, in cases with elements of an international nature, that the court seised must apply foreign legal rules and that it does so within the context of its own procedural rules. Moreover, commencement of legal proceedings before any court necessarily entails application by the court of its own procedural rules. This cannot therefore be viewed as a legal effect for the purposes of Article 230 EC, as interpreted by the case-law. Additionally, whilst Article 234 EC enables courts in Member States to refer questions for a preliminary ruling and imposes on some of them an obligation to refer, it does not confer any right of referral on the litigants.106 It follows that the contested acts did not infringe the applicants' procedural rights.107 Therefore, the applicants' argument that the contested acts produced binding legal effects by subjecting them to another legal order or by bringing about a change in their legal position at the substantive or procedural level is unfounded.108 Accordingly, the contested acts do not produce binding legal effects in the Community legal order for the purposes of Article 230 EC, as interpreted in the case-law.Effects of commencement of the civil actions under United States law109 The applicants correctly point out that the commencement of the civil actions before the federal courts in the United States has numerous consequences for them, in terms of both the procedural law applicable and the substantive law relied on in those actions.110 As regards the procedural effects of the commencement of proceedings before the District Court, it is clear that the consequences relied on by the applicants are, to a large extent, no different from those which necessarily arise when any court is seised and are, to a certain extent, purely factual. This is particularly true of the fact that the applicants, in order to protect their interests, are obliged to defend themselves against the actions and that this entails high costs.111 Next, it cannot be denied that the federal courts in the United States can, by virtue of their procedural law, adopt decisions having binding effects for the parties to the case, obliging them in particular to disclose facts and documents.112 However, those effects result from the independent exercise of the powers with which those courts are vested under United States law. Consequently, it cannot be concluded that the contested acts per se have produced binding legal effects in this regard (see, by analogy, Case T-113/89 Nefarma and Bond van Groothandelaren in het Farmaceutische Bedrijf v Commission [1990] ECR II-797, paragraphs 95 and 96).113 For the same reasons, the Court rejects the applicants' argument that one legal effect of the filing of the proceedings before the American court is that the Community is legally bound by the terms of the complaints lodged with the American court, because it may impose penalties on the Community, even if the action is withdrawn, if it turns out that the action was abusive, frivolous or vexatious. Unreasonable or vexatious conduct on the part of a plaintiff which may be the subject of penalties imposed by an American court cannot be likened to the adoption of an act having binding effects by a Community institution.114 As regards the substantive effects of the commencement of proceedings before the District Court, the applicants rely, firstly, on the potential content of a judgment against them. However, the decision to commence proceedings before the District Court per se does not alter their legal position in this respect by exposing them to penalties which, were it not for that decision, could not be imposed. It merely sets in motion proceedings intended to establish their liability, the substantive existence of which is not determined by the filing of the action. While the contested acts may therefore have had the effect of informing the applicants that they were running a real risk of having penalties imposed on them by the American court, this is a mere consequence of fact and not a legal effect which the contested acts are intended to produce (see, by analogy, IBM v Commission, cited in paragraph 48 above, paragraph 19). Although the commencement of the proceedings is an indispensable procedural step for a definitive judgment on the applicants' conduct, it does not have a substantive effect on the legal position on which that court must rule.115 Turning next to the applicants' argument that the actions accuse them of criminal conduct, the Court finds that this involves a consequence of fact. The applicants also rely on the immunity which parties to a lawsuit enjoy from defamation actions for statements made in those proceedings. This, however, results solely from the American statutory provisions and is not, therefore, an effect of the contested acts which may be attributed to the Commission.116 The same is true of the publication by the District Court of the Commission's complaints on the internet. They were published by the court seised acting in the exercise of its own powers. It cannot therefore be likened to a decision by which the Commission lifts a prohibition imposed on undertakings who have received a document relating to a case pending before it, preventing them from using the document in national legal proceedings, such as that at issue in Case T-353/94 Postbank v Commission [1996] ECR II-921.117 Finally, the consequences that the filing of the legal proceedings may have on the disclosure requirements of quoted companies are also factual in nature.118 Accordingly, the effects of the filing of the civil actions under United States law relied on by the applicants cannot be held to be binding legal effects for the purposes of Article 230 EC, as interpreted in the case-law.119 The Court finds, therefore, that the contested acts are not acts which may be challenged under Article 230 EC. In those circumstances, it is not necessary to examine further the parties' arguments on whether the acts may be classified as preparatory measures, acts comparable to opinions or measures of internal organisation.The need for effective judicial protection120 The applicants stress that if the present actions were found to be inadmissible, they would have no legal means of challenging the contested acts. They submit that since the court seised of the case is in a non-Member State and there is no subsequent act of a Community institution, neither the Community courts nor the courts of the Member States can rule on the lawfulness of the Commission's conduct.121 In this connection, the Court of Justice has stated that access to justice is one of the constitutive elements of a Community based on the rule of law and is guaranteed in the legal order based on the EC Treaty in that the Treaty has established a complete system of legal remedies and procedures designed to permit the Court of Justice to review the legality of measures adopted by the institutions (Case 294/83 Les Verts v Parliament [1986] ECR 1339, paragraph 23). The Court of Justice uses the constitutional traditions common to the Member States and Articles 6 and 13 of the European Convention for the Protection of Human Rights and Fundamental Freedoms as a basis for the right to obtain an effective remedy before a competent court (Case 222/84 Johnston [1986] ECR 1651, paragraph 18).122 The right to an effective remedy for everyone whose rights and freedoms guaranteed by the law of the Union are violated has, moreover, been reaffirmed by Article 47 of the Charter of fundamental rights of the European Union, proclaimed on 7 December 2000 in Nice (OJ 2000 C 364, p. 1). Although this document does not have legally binding force, it does show the importance of the rights it sets out in the Community legal order.123 It must be stated that individuals are not denied access to justice because conduct lacking the features of a decision cannot be challenged by way of an action for annulment, since an action for non-contractual liability under Article 235 EC and the second paragraph of Article 288 EC is available if the conduct is of such a nature as to entail liability for the Community.124 Although it may seem desirable that individuals should have, in addition to the possibility of an action for damages, a remedy under which actions of the Community institutions liable to prejudice their interests but which do not amount to decisions may be prevented or brought to an end, it is clear that a remedy of that nature, which would necessarily involve the Community judicature issuing directions to the institutions, is not provided for by the Treaty. It is not for the Community judicature to usurp the function of the founding authority of the Community in order to change the system of legal remedies and procedures established by the Treaty (Joined Cases T-172/98 and T-175/98 to T-177/98 Salamander and Others v Parliament and Council [2000] ECR II-2487, paragraph 75).125 It follows from the foregoing that the applications must be dismissed as inadmissible.
Decision on costs
Costs126 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings.127 Since the applicants have been unsuccessful, they must be ordered jointly and severally to pay the costs of the Commission, as applied for by it.128 Under the first subparagraph of Article 87(4) of the Rules of Procedure, the Member States and the institutions which have intervened in the proceedings are to bear their own costs.
Operative part
On those grounds,THE COURT OF FIRST INSTANCE(Second Chamber, Extended Composition)hereby:1. Dismisses the applications as inadmissible;2. Orders the applicants to bear their own costs and, jointly and severally, the costs incurred by the Commission.3. Orders the interveners to bear their own costs.
| b9235-8943a78-4b27 | EN |
ADVOCATE GENERAL LÉGER TAKES THE VIEW THAT THE FINANCING OF PUBLIC SERVICES CONSTITUTES STATE AID FOR THE PURPOSES OF COMMUNITY LAW | «(Regulation (EEC) No 1191/69 – Operation of urban, suburban and regional scheduled transport services – Public subsidies – Concept of State aid – Compensation for discharging public service obligations)» Summary of the Judgment 1.. Transport – Action by the Member States concerning public service obligations – Regulation No 1191/69 – Derogation authorised for undertakings operating urban, suburban or regional scheduled transport services – Extent of the option available to Member States – Obligation to delimit clearly the use made of that option – Observance of legal certainty (Council Regulation No 1191/69, Art. 1(1), second subpara.) Transport – Action by the Member States concerning public service obligations – Regulation No 1191/69 – Derogation authorised for undertakings operating urban, suburban or regional scheduled transport services – Extent of the option available to Member States – Obligation to delimit clearly the use made of that option – Observance of legal certainty 2.. State aid – Effect on trade between Member States – Adverse effect on competition – Exclusion by the Commission of the transport sector from the de minimis rule(EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC); Commission Regulation No 69/2001; Commission Notice 96/C 68/06) State aid – Effect on trade between Member States – Adverse effect on competition – Exclusion by the Commission of the transport sector from the de minimis rule 3.. State aid – Definition – Measures intended to offset the cost of public service tasks assumed by an undertaking – Not included – Conditions – Clearly defined public service obligations – Establishment in an objective and transparent manner of the parameters used to calculate the compensation – Compensation limited to covering costs – Determination of the compensation, where the undertaking is not chosen by a public procurement procedure, on the basis of an analysis of the costs of a typical undertaking in the sector concerned (EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC)) State aid – Definition – Measures intended to offset the cost of public service tasks assumed by an undertaking – Not included – Conditions – Clearly defined public service obligations – Establishment in an objective and transparent manner of the parameters used to calculate the compensation – Compensation limited to covering costs – Determination of the compensation, where the undertaking is not chosen by a public procurement procedure, on the basis of an analysis of the costs of a typical undertaking in the sector concerned 4.. Transport – Aid for transport – Application of Article 77 of the Treaty (now Article 73 EC) – Limitation to cases covered by secondary Community legislation (EC Treaty, Art. 77 (now Art. 73 EC); Council Regulations Nos 1191/69 and 1107/70) Transport – Aid for transport – Application of Article 77 of the Treaty (now Article 73 EC) – Limitation to cases covered by secondary Community legislation JUDGMENT OF THE COURT24 July 2003 (1) ((Regulation (EEC) No 1191/69 – Operation of urban, suburban and regional scheduled transport services – Public subsidies – Concept of State aid – Compensation for discharging public service obligations))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Altmark Trans GmbH, by M. Ronellenfitsch, Rechtsanwalt, ─ Regierungspräsidium Magdeburg, by L.-H. Rode, acting as Agent, ─ Nahverkehrsgesellschaft Altmark GmbH, by C. Heinze, Rechtsanwalt, ─ the Commission of the European Communities, by M. Wolfcarius and D. Triantafyllou, acting as Agents, having regard to the Report for the Hearing,after hearing the oral observations of Altmark Trans GmbH, represented by M. Ronellenfitsch; Regierungspräsidium Magdeburg, represented by L.-H. Rode; Nahverkehrsgesellschaft Altmark GmbH, represented by C. Heinze; and the Commission, represented by M. Wolfcarius and D. Triantafyllou, at the hearing on 6 November 2001, after hearing the Opinion of the Advocate General at the sitting on 19 March 2002,having regard to the order reopening the oral procedure of 18 June 2002,after hearing the oral observations of Altmark Trans GmbH, represented by M. Ronellenfitsch; Regierungspräsidium Magdeburg, represented by S. Karnop, acting as Agent; Nahverkehrsgesellschaft Altmark GmbH, represented by C. Heinze; the German Government, represented by M. Lumma, acting as Agent; the Danish Government, represented by J. Molde, acting as Agent; the Spanish Government, represented by R. Silva de Lapuerta, acting as Agent; the French Government, represented by F. Million, acting as Agent; the Netherlands Government, represented by N.A.J. Bel, acting as Agent; the United Kingdom Government, represented by J.E. Collins, acting as Agent, and E. Sharpston QC; and the Commission, represented by D. Triantafyllou, at the hearing on 15 October 2002,after hearing the Opinion of the Advocate General at the sitting on 14 January 2003, gives the followingLegal contextOn those grounds, THE COURT,Rodríguez Iglesias PuissochetWathelet Schintgen TimmermansGulmann Edward La PergolaJann Skouris MackenColneric von BahrCunha RodriguesRosas R. Grass G.C. Rodríguez Iglesias RegistrarPresident 1 – Language of the case: German. Language of the case: German. | d2591-6bd2d51-4781 | EN |
ACCORDING TO ADVOCATE GENERAL JACOBS A PROHIBITION ON THE USE OF "TOCAI" TO DESIGNATE CERTAIN ITALIAN WINES ARISING FROM A 1993 AGREEMENT BETWEEN THE EC AND HUNGARY IS LAWFUL | Regione autonoma Friuli-Venezia Giulia andAgenzia regionale per lo sviluppo rurale (ERSA)vMinistero delle Politiche Agricole e Forestali(Reference for a preliminary ruling from the Tribunale amministrativo regionale del Lazio)(External relations – EC-Hungary Agreement on the reciprocal protection and control of wine names – Protection in the Community of a name relating to certain wines originating in Hungary – Geographical indication ‘Tokaj’ – Exchange of letters – Possibility of using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian wines, in particular quality wines produced in specified regions (‘quality wines psr’), during a transitional period expiring on 31 March 2007 – Exclusion of that possibility at the end of the transitional period – Validity – Legal basis – Article 133 EC – Principles of international law relating to treaties – Articles 22 to 24 of the TRIPs Agreement – Protection of fundamental rights – Right to property) Opinion of Advocate General Jacobs delivered on 16 December 2004 Judgment of the Court (Second Chamber), 12 May 2005 Summary of the Judgment1. International agreements — Agreements entered into by the Community — Conclusion — EC-Hungary Agreement on the reciprocal protection and control of wine names — Legal basis — Article 133 EC(Art. 133 EC; EC-Hungary Association Agreement; EC-Hungary Agreement on wines)2. International agreements — Agreements entered into by the Community — EC‑Hungary Agreement on the reciprocal protection and control of wine names — Rules governing geographical homonyms — Conditions for application — Name ‘Tocai’ for Italian wines and ‘Tokaj’ for Hungarian wines — Name ‘Tocai’ not a protected geographical indication — Exchange of letters prohibiting the use of that name — Infringement of those rules — None(EC-Hungary Agreement on wines, Art. 4(5))3. International agreements — Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) — Homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines — Right, recognised in the agreement, for producers who have used that name traditionally and in good faith to continue to use it — None(TRIPs Agreement, Arts 22 to 24)4. Community law — Principles — Fundamental rights — Right to property — Restrictions — Prohibition on use of the name ‘Tocai’ for Italian wines — None — Prohibition pursuing an aim of general interest(Protocol No 1 to the European Convention of Human Rights, Art. 1, first para.; EC‑Hungary Agreement on wines)1. The European Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, is not the legal basis of Decision 93/724 concerning the conclusion of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names. The appropriate legal basis for the conclusion by the Community alone of the latter agreement is Article 133 EC, as referred to in the preamble to Decision 93/724, an article which confers on the Community competence in the field of the common commercial policy. That agreement is part of those laid down in Article 63 of Regulation No 822/87 on the common organisation of the market in wine and its principal objective is to promote trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating in Hungary by guaranteeing those wines the same protection as that provided for in respect of quality wines produced in a specified region of Community origin and, on the other, the marketing in that country of wines originating in the Community. (see paras 70, 79-80, 83, operative part 1-2)2. The rules governing homonyms laid down in Article 4(5) of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names (EC-Hungary Agreement on wines) concern geographical indications protected by virtue of that agreement. Since the terms ‘Tocai friulano’ and ‘Tocai italico’, unlike the Hungarian wine names ‘Tokaj’ and ‘Tokaji’, do not appear in part A of the Annex to the EC-Hungary Agreement on wines and are the name of a vine or vine variety recognised in Italy as being suitable for the production of certain quality wines produced in a specified region, they cannot be classed as geographical indications within the meaning of that agreement. It follows that the prohibition of use of the name ‘Tocai’ in Italy after the expiry of the transitional period laid down in the EC-Hungary Agreement on wines, resulting from the exchange of letters concerning Article 4 of that agreement, is not contrary to the rules governing homonyms laid down in Article 4(5) of that agreement. It also follows that the Joint Declaration concerning Article 4(5) of the EC‑Hungary Agreement on wines, in so far as it states in the first paragraph that, in respect of Article 4(5)(a) of that agreement, the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality. (see paras 87-88, 90, 92, 98, 102, operative part 3-4)3. Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), set out in Annex 1 C to the Agreement establishing the World Trade Organisation, are to be interpreted as meaning that, in a case which concerns homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines made from it, those provisions, even though they do not prohibit the continued and similar use of such a name, also do not require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer. (see paras 110, 115, operative part 5)4. The right to property does not preclude the prohibition on use by the operators concerned in an autonomous Italian region of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines produced in a specified region at the end of a 13-year transitional period, resulting from the exchange of letters concerning the use of the word ‘Tocai’, annexed to the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names but not referred to in the latter. That prohibition, in so far as it does not exclude any reasonable method of marketing the Italian wines concerned, does not constitute a deprivation of possessions as referred to in the first paragraph of Article 1 of Protocol No 1 to the European Convention on Human Rights. In addition, even if it were shown that that restriction were to entail a restriction of the fundamental right to property, that restriction may be justified in so far as, by prohibiting the use of that name which is a homonym of the ‘Tokaj’ geographical indication of Hungarian wines, it pursues an aim of general interest, which is to promote trade between the Contracting Parties by facilitating on a reciprocal basis the marketing of wines which are described or presented using a geographical indication. (see paras 122, 127, 134, operative part 6)JUDGMENT OF THE COURT (Second Chamber)12 May 2005 (*) In Case C‑347/03,REFERENCE for a preliminary ruling under Article 234 EC from the Tribunale amministrativo regionale del Lazio (Italy), made by decision of 9 June 2003, received at the Court on 7 August 2003, in the proceedings Regione autonoma Friuli-Venezia Giulia and Agenzia regionale per lo sviluppo rurale (ERSA)Ministero delle Politiche Agricole e Forestali,third party:Regione Veneto,THE COURT (Second Chamber),composed of C.W.A. Timmermans (Rapporteur), President of the Chamber, R. Silva de Lapuerta, R. Schintgen, G. Arestis and J. Klučka, Judges, Advocate General: F.G. Jacobs,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 14 October 2004,after considering the observations submitted on behalf of:– Regione autonoma Friuli-Venezia Giulia and Agenzia regionale per lo sviluppo rurale (ERSA), by E. Bevilacqua and F. Capelli, avvocati, – the Italian Government, by I.M. Braguglia, acting as Agent, and M. Fiorilli, avvocato dello Stato,– the Hungarian Government, by J. Fazekas and M. Ficsor, acting as Agents,– the Council of the European Union, by F. Ruggeri Laderchi and F. Florindo Gijón, acting as Agents,– the Commission of the European Communities, by E. Righini et F. Dintilhac, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 16 December 2004,gives the followingJudgment1 The reference for a preliminary ruling concerns the validity and interpretation of Council Decision 93/724/EC of 23 November 1993 concerning the conclusion of an Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names (OJ 1993 L 337, p. 93, ‘the EC‑Hungary Agreement on wines’) and of Commission Regulation (EC) No 753/2002 of 29 April 2002 laying down certain rules for applying Council Regulation (EC) No 1493/1999 as regards the description, designation, presentation and protection of certain wine sector products (OJ 2002 L 118, p. 1). 2 That reference was made in proceedings between the Regione autonoma Friuli‑Venezia Giulia (Autonomous region of Friuli-Venezia Giulia) and the Agenzia regionale per lo sviluppo rurale (Regional Agency for Rural Development, ERSA) (together, ‘the Region and ERSA’) and the Ministero della Politiche Agricole e Forestali (Italian Ministry of Agricultural and Forestry Policy). 3 Those proceedings concern an application for annulment of the Ministerial Decree of 26 September 2002 laying down national conditions for the use, in derogation from Article 19(1)(c) of Regulation (EC) No 753/2002, of the names of vine varieties and their synonyms including a geographical indication, listed in Annex II to that regulation, which may appear on the labelling of Italian [quality wines produced in specified regions] and [typical geographical indications] (GURI No 247 of 21 October 2002, p. 3, ‘the Decree of 26 September 2002’), in so far as it precludes the use of the word ‘Tocai’ in the term ‘Tocai friulano’ or its synonym ‘Tocai italico’ for the description and presentation of certain Italian wines, in particular quality wines produced in specified regions (‘quality wines psr’), at the end of a transitional period expiring on 31 March 2007. Legal framework International law The Vienna Convention on the Law of Treaties4 Article 48(1) of the Vienna Convention on the Law of Treaties of 23 May 1969 provides:‘A State may invoke an error in a treaty as invalidating its consent to be bound by the treaty if the error relates to a fact or situation which was assumed by that State to exist at the time when the treaty was concluded and formed an essential basis of its consent to be bound by the treaty.’ 5 Under Article 59 of that Convention:‘1. A treaty shall be considered as terminated if all the parties to it conclude a later treaty relating to the same subject-matter and: (a) it appears from the later treaty or is otherwise established that the parties intended that the matter should be governed by that treaty; or (b) the provisions of the later treaty are so far incompatible with those of the earlier one that the two treaties are not capable of being applied at the same time. …’ The European Convention for the Protection of Human Rights and Fundamental Freedoms6 Article 1 of Protocol No 1 to the European Convention for the Protection of Human Rights and Fundamental Freedoms (‘the ECHR’) signed at Rome on 4 November 1950 provides: ‘Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.’ Law arising from the Agreement establishing the World Trade Organisation7 The Agreement on Trade-Related Aspects of Intellectual Property Rights (‘the TRIPs Agreement’), which is set out in Annex 1 C to the Agreement establishing the World Trade Organisation (‘the WTO Agreement’), was approved on behalf of the European Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994 (OJ 1994 L 336, p. 1). 8 Article 1 of the TRIPs Agreement, headed ‘Nature and Scope of Obligations’, provides in paragraph 2: ‘For the purposes of this Agreement, the term “intellectual property” refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II.’ 9 Articles 22 to 24 of that agreement are in Part II thereof, which deals with ‘Standards concerning the Availability, Scope and Use of Intellectual Property Rights’, and specifically in Section 3 of that part, relating to ‘Geographical Indications’. 10 Under Article 22 of that agreement, headed ‘Protection of Geographical Indications’: ‘1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin. …’ 11 Article 23 of the TRIPs Agreement, headed ‘Additional Protection for Geographical Indications for Wines and Spirits’, stipulates: ‘1. Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication in question … . … 3. In the case of homonymous geographical indications for wines, protection shall be accorded to each indication … Each Member shall determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled. 12 Article 24 of that agreement, headed ‘International Negotiations; Exceptions’, provides: ‘1. Members agree to enter into negotiations aimed at increasing the protection of individual geographical indications under Article 23. … 3. In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement. 4. Nothing in this Section shall require a Member to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either (a) for at least 10 years preceding 15 April 1994 or (b) in good faith preceding that date. 6. … Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the WTO Agreement. The EC-Hungary Association Agreement13 The Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concluded and approved on behalf of the Community by Decision 93/742/Euratom, ECSC, EC of the Council and the Commission of 13 December 1993 (OJ 1993 L 347, p. 1, ‘the EC-Hungary Association Agreement’), was signed in Brussels on 16 December 1991 and, in accordance with the second paragraph of Article 123, entered into force on 1 February 1994. 14 Pending the entry into force of the EC-Hungary Association Agreement, the Interim Agreement between the European Economic Community and the European Coal and Steel Community, of the one part, and the Republic of Hungary, of the other part, on trade and trade-related matters was concluded and approved on behalf of the Community by Council Decision 92/230/EEC of 25 February 1992 (OJ 1992 L 116, p. 1, ‘the EC-Hungary Interim Agreement’). That agreement was signed in Brussels on 16 December 1991 and entered into force on 25 February 1992. The EC-Hungary Agreement on wines15 The EC-Hungary Agreement on wines, signed at Brussels on 29 November 1993, was concluded and approved on behalf of the Community by Decision 93/724 and entered into force on 1 April 1994. 16 The first citation in the preamble to Decision 93/724 states: ‘Having regard to the Treaty establishing the European Community, and in particular Article [133] thereof’. 17 The first and third recitals in the preamble to that decision are worded as follows: ‘Whereas the Agreement negotiated between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names will help make measures to eliminate unfair competition in trade more effective, ensure a greater degree of consumer protection and promote trade in wine between the Contracting Parties; whereas it is therefore desirable to approve the said Agreement; Whereas, since the provisions of the Agreement are directly linked to measures covered by the common commercial and agricultural policy [in this case the Community rules in the wine sector], the said Agreement must be established at Community level’. 18 Under Article 1 of that decision: ‘The Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names, the Protocol, exchanges of letters and declarations annexed thereto are hereby approved on behalf of the Community. The text of the acts referred to in the first paragraph are attached to this Decision.’ 19 The first citation in the preamble to the EC-Hungary Agreement on wines states: ‘Having regard to the Europe Agreement establishing an association between the European Communities and their Member States and the Republic of Hungary, signed in Brussels on 16 December 1991’. 20 Article 1 of the EC-Hungary Agreement on wines stipulates: ‘The Contracting Parties agree, on the basis of reciprocity, to protect and control names of wines originating in the Community and in Hungary on the conditions provided for in this Agreement.’ 21 Article 2(2) of that agreement provides: ‘For the purposes of this Agreement, unless the contrary intention appears: – “geographical indication” shall mean an indication, including an “Appellation of origin”, which is recognised in the laws and regulations of a Contracting Party for the purpose of the description and presentation of a wine originating in the territory of a Contracting Party, or in a region or locality in that territory, where a given quality, reputation or other characteristic of the wine is essentially attributable to its geographical origin, 22 Under Article 4 of that agreement: ‘1. The following names are protected: (a) as regards wines originating in the Community:…– the geographical indications and traditional expressions referred to in the Annex;(b) as regards wines originating in Hungary: – the geographical indications and traditional expressions referred to in the Annex, as they appear in the Hungarian wine legislation, … 3. In the Community, the protected Hungarian names: – are reserved exclusively to the wines originating in Hungary to which they apply, and– may not be used otherwise than under the conditions provided for by the laws and regulations of Hungary.5. In the case of homonymous or identical geographical indications: (a) where two indications, protected by virtue of this Agreement, are homonymous or identical, protection shall be accorded to each indication, provided that: – the geographical name in question has been used traditionally and consistently to describe and present a wine produced in the geographical area to which it refers, – the wine is not falsely represented to consumers as originating in the territory of the other Contracting Party; In such cases, the Contracting Parties shall determine the practical conditions under which the homonymous or identical indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.’ 23 Part B (‘Wines originating in the Republic of Hungary’), section I (‘Geographical indications’), point 3.4 (‘Wine-growing region Tokaj-Hegyalja’) of the Annex to the EC-Hungary Agreement on wines, headed ‘List of protected names for wines referred to in Article 4’, includes the name ‘Tokaj’. Part A (‘Wines originating in the European Community’) of that annex does not include either of the terms ‘Tocai friulano’ or ‘Tocai italico’. 24 The exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names (OJ 1993 L 337, p. 169, ‘the exchange of letters on Tocai’), which is one of the acts referred to in the first paragraph of Article 1 of Decision 93/724, also entered into force on 1 April 1994. 25 After referring inter alia to Article 4(3) of the EC-Hungary Agreement on wines, the signatories of those letters confirm that: ‘1. For a transitional period of thirteen years from the entry into force of that Agreement, the application of the latter will not preclude the lawful use of the name “Tocai” to designate and present certain Italian quality wines psr under the following conditions. Without prejudice to particular Community provisions and, where applicable, any more restrictive national provisions, the wine must be: – obtained from the “Tocai friulano” vine variety; – produced from grapes totally harvested in the Italian regions Veneto and Friuli;– designated and presented solely by the name of the variety “Tocai friulano” or by its synonym “Tocai italico”, the two words making up those names appearing together without any intervening words, in characters of the same type and size on a single line and separate from the name of the geographical unit in which the wine originates. In addition, the size of the characters used for those words may not exceed that of the characters giving the name of that geographical unit; – marketed outside the territory of Hungary. 4. Without prejudice to the provisions referred to in point 3, the possibility of using the name “Tocai” in accordance with the conditions set out in point 1 will expire at the end of the transitional period referred to therein. 26 Under the Joint Declaration concerning Article 4(5) of the [EC-Hungary] Agreement [on wines] (OJ 1993 L 337, p. 171, ‘the Joint Declaration on homonymous indications’), which is also one of the acts referred to in the first paragraph of Article 1 of Decision 93/724: ‘In respect of Article 4(5)(a) the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions of this article could be applicable. Community legislation on the common organisation of the market in wine (‘the COM in wine’) The COM in wine in force at the time of the conclusion of the EC-Hungary Agreement on wines27 Under Article 63 of Council Regulation (EEC) No 822/87 of 16 March 1987 on the common organisation of the market in wine (OJ 1987 L 84, p. 1): ‘1. For the purposes of marketing within the Community, imported wines intended for direct human consumption and bearing a geographical ascription may, where reciprocal arrangements can be established, be controlled and protected as provided for in [Article 15 of Regulation No 823/87] in respect of quality wines psr. 2. Paragraph 1 shall be implemented by agreements with the relevant third countries to be negotiated and concluded in accordance with the procedure laid down in Article [133 EC]. 3. Detailed rules for the application of this article shall be adopted in accordance with the procedure laid down in Article 83.’ 28 Under Article 1(3) of Council Regulation (EEC) N 823/87 of 16 March 1987 laying down special provisions relating to quality wines produced in specified regions (OJ 1987 L 84, p. 59), as amended by Council Regulation (EEC) No 2043/89 of 19 June 1989 (OJ 1989 L 202, p. 1, ‘Regulation No 823/87’): ‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each of these quality wines psr, details of the national provisions governing the production and manufacture of these quality wines psr. The Commission shall have the said list published in the “C” series of the Official Journal of the European Communities.’ 29 Article 4(1) of Regulation No 823/87 provides: ‘Each Member State shall draw up a list of vine varieties suitable for producing each of the quality wines psr produced in its territory, … varieties [which] must belong to the recommended or authorised categories referred to in Article 13 of Regulation (EEC) No 822/87.’ 30 Under Article 15(4) of Regulation No 823/87: ‘… Without prejudice to the Community provisions concerning specific types of quality wine psr, Member States may … authorise the name of a specified region to be accompanied by details relating to the method of manufacture or the type of product or by the name of a vine variety or a synonym thereof. 31 The term ‘Tocai friulano’ appears in Title I of the Annex to Commission Regulation (EEC) No 3800/81 of 16 December 1981 determining the classification of vine varieties (OJ 1981 L 381, p. 1), in particular in Part V of sub-title I, as a vine variety recommended or authorised in certain Italian provinces. 32 Article 14(1) of Council Regulation (EEC) No 2392/89 of 24 July 1989 laying down general rules for the description and presentation of wines and grape musts (OJ 1989 L 232, p. 13) provides: ‘The name of a vine variety as referred to in Article 11(2)(n) to describe a quality wine psr may be used on the labelling only if: (a) that variety is on the list drawn up by the Member States pursuant to Article 4(1) of Regulation (EEC) No 823/87 designating the vine varieties which are suitable for producing each of the quality wines psr produced in their territory; (b) the name of the variety appears:– as one of the recommended or authorised varieties in the classification of vine varieties for the administrative unit concerned,– where appropriate, on a list of synonyms to be adopted; this list may provide that a given synonym may be used only to describe a quality wine psr produced in the areas of production in which such use is traditional and customary; (e) the name of that variety does not cause confusion with the name of a specified region or geographical unit used to describe another quality wine psr or an imported wine.’ 33 Article 26(1) of that regulation provides: ‘The description on the labelling of imported wines intended for direct human consumption, described by reference to a geographical area and appearing on a list to be adopted, shall include the following information: (a) the name of a geographical unit situated in the third country concerned, in accordance with the conditions laid down in Article 29; This list may include only imported wines for which, in each case, the conditions of production are recognised as being equivalent to those for a quality wine psr or for a table wine bearing an indication of geographical origin.’ 34 Article 11(2) of Commission Regulation (EEC) No 3201/90 of 16 October 1990 laying down detailed rules for the description and presentation of wines and grape musts (OJ 1990 L 309, p. 1) provides: ‘The list of imported wines described by reference to a geographical area referred to in Article 26(1) of Regulation (EEC) No 2392/89 is set out in Annex II hereto. The names on that list shall be shown in such a way that they are clearly distinguishable from other information on the label of the imported wine concerned, particularly with regard to the geographical names referred to in Article 26(2)(b) of Regulation (EEC) No 2392/89.’ 35 Hungarian wines bearing the name ‘Tokaj’ or ‘Tokaji’ are included under Title 11, point 5, of Annex II to Regulation No 3201/90, headed ‘List … of imported wines described by reference to a geographical area’. 36 Under Article 12(1) of that regulation: ‘The list of the synonyms of names of the vine varieties which may be used to describe table wines and quality wines psr in accordance with Articles 5(1)(b) and 14(1)(b) of Regulation (EEC) No 2392/89 is set out in Annex III hereto.’ 37 The variety ‘Tocai friulano’ and its synonym ‘Tocai italico’ are included in point 5 of Annex III, headed ‘List … of the synonyms of names of wine varieties that may be used to describe table wines and quality wines psr’. The COM in wine in force on the date of the main proceedings38 Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine (OJ 1999 L 179, p. 1) was rendered applicable from 1 August 2000. 39 Article 19(1) of that regulation provides: ‘Member States shall classify vine varieties for the production of wine. …’ 40 Rules relating to the description, designation and presentation of certain wine products and to the protection of certain particulars and terms are set out in Articles 47 to 53 and in Annexes VII and VIII of that regulation. 41 Article 50 of Regulation No 1493/1999 provides: ‘1. Member States shall take all necessary measures to enable interested parties to prevent, on the terms set out in Articles 23 and 24 of the [TRIPs] Agreement, the use in the Community of a geographical indication attached to the products referred to in Article 1(2)(b) for products not originating in the place indicated by the geographical indication in question … . 2. For the purposes of this article, “geographical indications” is taken to mean indications which identify a product as originating in the territory of a third country which is a member of the World Trade Organisation or in a region or locality within that territory, in cases where a certain quality, reputation or other given characteristic of the product may be attributed essentially to that geographical place of origin. 42 Under Article 52(1) of that regulation: ‘If a Member State uses the name of a specified region to designate a quality wine psr or, where appropriate, a wine intended for processing into such a quality wine psr, that name may not be used to designate products of the wine sector not produced in that region and/or products not designated by the name in accordance with the provisions of the relevant Community and national rules. … Without prejudice to the Community provisions concerning specific types of quality wine psr, Member States may, in the case of certain conditions of production which they shall determine, authorise the name of a specified region to be accompanied by details relating to the method of manufacture or the type or by the name of a vine variety or a synonym thereof. 43 Annex VII(A), points 1 and 2, of Regulation No 1493/1999 indicates that the labelling of quality wines psr and wines originating in third countries is to include certain compulsory references, including the sales description which is to consist, in the case of quality wines psr, of inter alia the name of the production area and, in the case of imported wines, of the word ‘wine’, which must be supplemented by the name of the country of origin, and, when they are designated with a geographical indication, by the name of the geographical area in question. 44 Annex VII(B), points 1 and 4, provides: ‘1. The labelling of the products obtained in the Community may be supplemented by the following particulars, under conditions to be determined: (b) in the case of table wines with geographical indication and quality wines psr:– the name of one or more vine varieties, 4. Member States of production may make certain particulars in paragraphs 1 and 2 compulsory, prohibit them or restrict their use in respect of wines produced in their territory.’ 45 Article 54(4) of Regulation No 1493/1999 provides: ‘Member States shall forward to the Commission the list of quality wines psr which they have recognised, stating, for each of these quality wines psr, details of the national provisions governing the production and manufacture of those quality wines psr.’ 46 Regulation No 1493/1999 was implemented by Regulation No 753/2002. 47 Article 19 of Regulation No 753/2002, headed ‘Indication of vine variety’, provides: ‘1. The names of the vine varieties used for the production of a table wine with a geographical indication or a quality wine psr or their synonyms may be given on the label of the wine concerned provided that: (c) the variety name or one of its synonyms does not include a geographical indication used to describe a quality wine psr, a table wine or an imported wine listed in the agreements concluded between the Community and third countries, and, where it is accompanied by another geographical term, is given on the label without that geographical term; 2. By way of derogation from paragraph 1(c): (a) the variety name or one of its synonyms that includes a geographical indication may be shown on the label of a wine with that geographical indication; (b) the variety names and their synonyms listed in Annex II may be used under the national and Community rules in force on the date of entry into force of this Regulation. 3. The Member States concerned shall notify the Commission, by 1 October 2002, of the measures referred to in point (b) of paragraph 2. The Commission shall take all appropriate steps to ensure that these measures are publicised.’ 48 Annex II to that regulation, headed ‘List of vine varieties and their synonyms that include a geographical indication and that may appear on the labelling of wines in accordance with Article 19(2)’, lists inter alia, in relation to Italy, the term ‘Tocai Friulano, Tocai Italico’. A footnote relating to that term states that ‘the name “Tocai friulano” and its synonym “Tocai italico” may be used during a transitional period until 31 March 2007’. 49 In that respect, that annex did not undergo any amendment as a result of the adoption of Commission Regulation (EC) No 1429/2004 of 9 August 2004 amending Regulation No 753/2002 (OJ 2004 L 263, p. 11). The Italian legislation50 Article 1(1) of the Decree of 26 September 2002 provides: ‘The national conditions for the use, by way of derogation from Article 19(1)(c) of Regulation (EC) No 753/2002, of names of vine varieties and their synonyms including a geographical indication which may appear on the labelling of [quality wines psr] and of Italian wines with a typical geographical indication are laid down in Annex I which forms an integral part of this Decree, in which for Italy the names of vine varieties and their synonyms including a geographical indication which are mentioned in Annex II to Regulation (EC) No 753/2002 are listed.’ 51 Annex I to the Decree of 26 September 2002 mentions inter alia, under the heading ‘Names of vine varieties or their synonyms’, ‘Tocai friulano or Tocai italico’, to which the following notice headed ‘Extent of the derogation (administrative territory and/or specific [quality wine psr] and/or [wines with typical geographical indication]’) relates: ‘For some [quality wines psr] of the regions Frioul-Venezia Giulia and Venezia for a transitional period ending on 31 March 2007 in accordance with the Agreement between the [European Union] and the Republic of Hungary.’ The facts in the main proceedings and the questions referred for a preliminary ruling52 In its decision, the referring court points out that the Region and ERSA criticise the unfairness arising from the fact that, of the 106 wine names to which the derogation from Article 19(1)(c) of Regulation No 753/2002 applies, only in the case of Tocai friulano or Tocai italico and the French name Tokay Pinot gris is that derogation limited in time. 53 That court then refers to the argument put forward by the Region and ERSA, intended to demonstrate the importance attached to the historical origins of the name Tocai friulano. 54 It is, they maintain, a vine variety which is native to the area of Collio goriziano (region of Friuli-Venezia Giulia) and has been grown there since ancient times. It is used for the production of a dry white wine which is not suitable for laying down. 55 The referring court notes that, in the light of those explanations, the Region and ERSA have submitted the following pleas in law: – misuse of powers on grounds of an insufficient statement of reasons and inconsistency arising from the fact that the Italian authorities applied to the Commission for a derogation unlimited in time, but subsequently approved the decree of 26 September 2002 with the temporal limitation for which it provides; – misuse of powers on grounds of manifest unfairness and breach of the principle of equal dignity of all Community citizens arising from the fact that the discrimination against the Italian wine producers is completely unjustified; – unlawfulness deriving from the unlawfulness of the EC-Hungary Agreement on wines, since the act on which the unlawful limitation is based, namely that agreement as approved by Decision 93/724, is itself unlawful in that: – the two homonymous products are completely different, the Hungarian wine being a sweet wine;– the two communities have used the same name since time immemorial;– it is legitimate to remedy the homonymity by adding the name of the region or vine variety in question; which is also possible under the EC-Hungary Agreement and the Madrid Agreement of 1891; – given that the Republic of Hungary is due to accede to the European Community, the EC-Hungary Agreement on wines, in order to remain valid, must be consistent with the principles contained in the WTO Agreement, in particular Articles 22 to 24 of the TRIPs Agreement, which govern misleading geographical indications; – the EC-Hungary Agreement on wines is contrary to principles of international law in that the limitation in time of use of the name in question arises from an exchange of letters (namely the exchange of letters on Tocai) and not from the text of the agreement, violates the principle of customary international law and is based on a false representation of reality so far as the homonymity in question is concerned; – breach of Article 1 of the Protocol to the ECHR and of Article 17 of the Charter of fundamental rights of the European Union proclaimed at Nice on 7 December 2000 (OJ 2000 C 364, p. 1,‘the Charter of fundamental rights’) in that it follows from those provisions that intellectual property is protected, that no one is to be deprived of his or her possessions except in the public interest, that the principles of proportionality and fair compensation must be observed and that restrictions of the right to property must in any event be effected in accordance with law. 56 The referring court further observes that, by the Decree of 26 September 2002, the national authorities merely transposed the provision of Regulation No 753/2002 and Annex II thereto limiting in time the use of the name ‘Tocai friulano’ and that those authorities have simply pointed out that that limitation arises from an agreement between the Community and the Republic of Hungary. 57 It is therefore plain, in that court’s view, that the harm alleged in the main action, namely the fact that the name Tocai friulano or Tocai italico cannot be used after 31 March 2007, arises directly from two sources of Community law, namely Decision 93/724 and Regulation No 753/2002. 58 In those circumstances, the Tribunale amministrativo regionale del Lazio, taking the view that the outcome of the main proceedings hinged on the answers to certain questions of Community law, decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘1. Can the Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, concluded on 16 December 1991 … , provide a proper and sufficient legal basis for conferring on the European Community power to conclude the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names of 29 November 1993 … , with particular reference to the provisions of Article 65(1), to Joint Declaration No 13 and to Annex XIII (points 3, 4 and 5) of the Europe Agreement of 1991 on the possible reservation of the sovereignty and jurisdiction of the Member States in the matter of national geographical names used with reference to food and wine and restraint of any transfer of jurisdiction or competence in that matter to the European Community? 2. In view of, inter alia, what is said in Opinion 1/94 of the Court of Justice of the European Communities concerning the exclusive competence of the European Community, should the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names … , which specifies the protection of geographical names which have intellectual and commercial property significance, be declared invalid and of no effect within the Community legal order because the agreement itself has not been ratified by the individual Member States of the European Community? 3. In the event that the Community Agreement of 1993 … is to be regarded as lawful and applicable in its entirety, should the prohibition of the use in Italy after 2007 of the name “Tocai”, which arises from the exchange of letters between the parties to the agreement, annexed to the agreement, be regarded as invalid and of no effect because it is inconsistent with the rules governing geographical homonyms established in the agreement itself (see Article 4(5) of and the Protocol to the Agreement)? 4. Should the second Joint Declaration annexed to the 1993 Agreement … , which implies that the Contracting Parties were unaware, at the time of their negotiations, of the existence of homonyms connected with European and Hungarian wines, be regarded as a clear misrepresentation of reality (given that the Italian and Hungarian names used to refer to “Tocai” wines have existed alongside each other for centuries, were officially recognised in 1948 in an agreement between Italy and Hungary and were recently brought within the scope of Community law) such as to render null and void that part of the 1993 Agreement which prohibits the use in Italy of the name Tocai, on the basis of Article 48 of the Vienna Convention on the Law of Treaties? 5. In the light of Article 59 of the Vienna Convention on the Law of Treaties, is the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPs Agreement) … , which was concluded within the context of the World Trade Organisation (WTO) and entered into force on 1 January 1996, thus after the Community Agreement of 1993 … entered into force, to be interpreted as meaning that its provisions governing homonyms in wine names apply in place of those of the Community Agreement of 1993 where there is inconsistency between the two, given that the parties to both agreements are the same? 6. In the case of two names that are homonyms and refer to wines produced in two different countries both party to the TRIPs Agreement (and both where the homonym relates to two geographical names used in both the countries party to TRIPs and where it relates to a geographical name in one country and the like name relates to a vine traditionally cultivated in another country party to TRIPs), must Articles 22 to 24 in [Part II, Section 3 of Annex 1 C] to the Agreement establishing the World Trade Organisation, which contains the TRIPs Agreement… , which entered into force on 1 January 1996, be interpreted as meaning that both the names may continue to be used provided that they have been used in the past by the respective producers either in good faith or for at least 10 years prior to 15 April 1994 (Article 24(4) [of the TRIPs Agreement] and each name clearly indicates the country or region or area of origin of the wine to which it refers in such a way as not to mislead consumers? 7 Does the right of ownership set out in Article 1 of Protocol No 1 to the European Convention on Human Rights and Fundamental Freedoms … and taken up in Article 17 of the Charter of fundamental rights of the European Union proclaimed in Nice on 7 [December] 2000 also cover intellectual property in the names of the places of origin of wines and the exploitation thereof, and, consequently, does the protection of that right preclude application of the agreement set out in the exchange of letters annexed to the Agreement between the European Community and the Republic of Hungary on reciprocal protection and control of wine names … , but not included in the body of that agreement, under which wine producers of the Friuli region will not be permitted to use the name “Tocai friulano”, particularly in view of the total lack of any compensation to the wine producers of the Friuli region thus dispossessed, the lack of any general public interest justifying their dispossession and the disregard for the principle of proportionality? 8. In the event that it is held that the Community provisions contained in the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names … and/or the exchange of letters annexed thereto are unlawful to the extent described in the preceding questions, must the provisions of Regulation … No 753/2002, under which use of the name “Tocai friulano” is to be prohibited after 31 March 2007 (Article 19(2)), be regarded as invalid or in any event of no effect?’ 59 By application of 11 March 2005, received at the Court Registry on 15 March 2005, the Region and ERSA requested the Court to allow all the parties involved in this case to submit observations on certain new facts set out in that application before the Court gives judgment. Those new facts concern the imminent conclusion by the Community of new agreements with Australia and the United States which, under Article 24(6) of the TRIPs Agreement, would allow producers in those countries to continue using the name ‘Tokay’ on their national markets and on third-country markets. 60 In that regard, it should be recalled that the Court may of its own motion, on a proposal from the Advocate General or at the request of the parties, order that the oral procedure be reopened, in accordance with Article 61 of the Rules of Procedure, if it considers that it lacks sufficient information, or that the case must be dealt with on the basis of an argument which has not been debated between the parties (see, inter alia, Case C‑299/99 Philips [2002] ECR I‑5475, paragraph 20). 61 The Court considers that there is no need in this case to order the reopening of the oral procedure, which was closed on 16 December 2004, since it has before it all the material necessary for it to answer the questions raised in the main proceedings. 62 The application of the Region and ERSA must therefore be rejected. The questions referred for a preliminary ruling The first question63 By its first question, the referring court seeks in essence to ascertain whether the EC-Hungary Association Agreement provided an appropriate legal basis for the adoption of Decision 93/724 by which the Community concluded the EC-Hungary Agreement on wines. 64 That question is founded on the premiss that the legal basis conferring on the Community power to conclude the EC-Hungary Agreement on wines is the EC‑Hungary Association Agreement. That premiss apparently derives from the reference, in the first citation in the preamble to the EC-Hungary Agreement on wines, to the EC-Hungary Association Agreement. 65 However, as the Council and the Commission correctly pointed out, that premiss cannot be accepted.66 The purpose of the reference to the EC-Hungary Association Agreement is to place the EC-Hungary Agreement on wines in its political context. It must not be construed as identifying the provisions of Community law on the basis of which the Community concluded the latter agreement. 67 The legal basis conferring on the Community power to conclude the EC-Hungary Agreement on wines is however mentioned in the first citation in the preamble to Decision 93/724 by which that agreement was concluded and approved on behalf of the Community. 68 It is clear from that citation that the legal basis in question is Article 133 EC, which confers on the Community competence in the field of the common commercial policy. 69 The question as to whether the legal basis thus adopted by the Council is appropriate is the subject‑matter of the second question referred for a preliminary ruling and will therefore be examined in the context of that question. 70 In the light of the foregoing, the answer to the first question must be that the EC‑Hungary Association Agreement is not the legal basis of Decision 93/724 by which the EC-Hungary Agreement on wines was concluded. The second question71 By its second question, the referring court seeks in essence to ascertain whether Article 133 EC, which confers on the Community exclusive competence in the field of the common commercial policy, is an appropriate legal basis for the conclusion by the Community alone of the EC-Hungary Agreement on wines, in view of the fact that that agreement contains rules governing the protection of geographical names which have intellectual and commercial property significance. 72 According to the settled case-law of the Court, the choice of the legal basis for a Community measure must rest on objective factors which are amenable to judicial review, including in particular the aim and the content of the measure (see, inter alia, Case C-336/00 Huber [2002] ECR I-7699, paragraph 30). 73 It follows from the first citation in the preamble to Decision 93/724 that the Council specifically chose Article 133 EC as the legal basis for the conclusion of the EC-Hungary Agreement on wines. 74 It is also apparent from the third recital in the preamble to that decision that, since the provisions of the Agreement were directly linked to measures covered by the common commercial and agricultural policy, in this instance the Community legislation on wine, the Council took the view that the Agreement had to be established at Community level. 75 According to the case-law of the Court, a Community act falls within the exclusive competence in the field of the common commercial policy provided for in Article 133 EC only if it relates specifically to international trade in that it is essentially intended to promote, facilitate or govern trade and has direct and immediate effects on trade in the products concerned (see Opinion 1/94 [1994] ECR I-5267, paragraph 57, Opinion 2/00 [2001] ECR I-9713, paragraph 40, and Case C-281/01 Commission v Council [2002] ECR I-12049, paragraphs 40 and 41). 76 In particular, in this case, the question arises as to whether the EC-Hungary Agreement on wines falls within the Community’s exclusive competence in the field of the common commercial policy or whether, as the Region and ERSA and the Italian Government maintain, it forms part of the protection of intellectual property rights, a field in which the Community and the Member States are jointly competent. 77 In that regard, it is appropriate to recall the Community legislation which was applicable ratione temporis, namely the COM in wine in force when the EC‑Hungary Agreement on wines was concluded. 78 Article 63 of Regulation No 822/87 provides that, for the purposes of marketing within the Community, imported wines intended for direct human consumption and bearing a geographical ascription may, where reciprocal arrangements can be established, be controlled and protected as provided for in respect of quality wines psr and that that provision is to be implemented by agreements with the relevant third countries to be negotiated and concluded in accordance with the procedure laid down in Article 133 EC. 79 The EC-Hungary Agreement on wines is clearly an agreement referred to in Article 63 of Regulation No 822/87. 80 The principal objective of such agreements is to promote trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating in the third countries concerned by guaranteeing those wines the same protection as that provided for in respect of quality wines psr of Community origin and, on the other, the marketing in those third countries of wines originating in the Community. 81 Those agreements guarantee, in particular, reciprocal protection for certain geographical indications mentioned on the labelling used to market the wines concerned in the Community and in the third country concerned. They are therefore an instrument directly affecting trade in wines (see, to that effect, Commission v Council, cited above, paragraph 40). 82 In the light of those considerations, it must be concluded that such agreements satisfy the criteria which, according to the case‑law cited in paragraph 75 of the present judgment, must be fulfilled in order for a Community measure to fall within the scope of the exclusive competence in the field of the common commercial policy provided for in Article 133 EC. 83 It follows that the answer to the second question must be that Article 133 EC, as referred to in the preamble to Decision 93/724, is an appropriate legal basis for the conclusion by the Community alone of the EC-Hungary Agreement on wines. The third question84 By its third question, the referring court seeks in essence to ascertain whether, in the event that the EC-Hungary Agreement on wines is to be regarded as lawful and applicable in its entirety, the prohibition of the use of the name ‘Tocai’ in Italy after 31 March 2007 which arises from the exchange of letters on Tocai is invalid and of no effect because it is inconsistent with the rules governing homonyms laid down in Article 4(5) of that agreement. 85 This question must be understood by reference to the argument of the Region and ERSA to the effect that there is a contradiction between the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement on wines and the prohibition arising from the exchange of letters on using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of the transitional period expiring on 31 March 1997. 86 That contradiction arises from the fact that, in the exchange of letters on Tocai, priority was given to the Hungarian name ‘Tokaj’ to the detriment of the Italian homonym ‘Tocai’, whereas the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement, the main agreement, from which an act annexed thereto, such as the exchange of letters on Tocai, may not derogate, are based on a rule guaranteeing the coexistence of both names provided that they are not likely to give rise to confusion. 87 In that regard, it must be pointed out that such a conflict can exist only if each of the names deemed to be homonymous within the meaning of Article 4(5) of the EC-Hungary Agreement constitutes a geographical indication protected by virtue of that agreement. 88 It follows from Article 4(1)(a) of that agreement that, as regards wines originating in the Community, the geographical indications protected by virtue of that agreement are listed in the Annex thereto, in part A, headed ‘Wines originating in the Community’. 89 Unlike the Hungarian name ‘Tokaj’, which appears in part B of that annex, which mentions the geographical indications relating to wines originating in the Republic of Hungary which are protected under Article 4(1)(b) of the EC-Hungary Agreement on wines, the terms ‘Tocai friulano’ and ‘Tocai italico’ do not appear in part A of that annex, which concerns wines originating in the Community. 90 In addition and in any event, the latter names cannot be classed as geographical indications within the meaning of the EC-Hungary Agreement on wines. 91 Under Article 2(2) of that agreement, a ‘geographical indication’ is ‘an indication, including an “Appellation of origin”, which is recognised in the laws and regulations of a Contracting Party for the purpose of the description and presentation of a wine originating in its territory, or in a region or locality in that territory, where a given quality, reputation or other characteristic of the wine is essentially attributable to its geographical origin’. 92 Under the relevant legislation in force in the Community on the date when the EC-Hungary Agreement on wines was concluded, the names ‘Tocai friulano’ and ‘Tocai italico’ were not a geographical indication but the name of a vine or vine variety recognised in Italy as being suitable for the production of certain quality wines psr produced in that Member State. 93 It is common ground that the term ‘Tocai friulano’ appeared in Title I of the Annex to Regulation No 3800/81 as a vine variety recommended, and even authorised, in certain Italian provinces, and in point 5 of Annex III to Regulation No 3201/90 as a synonym of the vine variety ‘Tocai italico’ which could be used to describe certain Italian quality wines psr. 94 By contrast, the Hungarian wines known as ‘Tokaj’ or ‘Tokaji’ appeared in point 5 of Title 11 of Annex II to Regulation No 3201/90 under the heading ‘List … of imported wines described by reference to a geographical area’. 95 The Region and ERSA and the Italian Government maintain that the Community legislation provided and still provides that, in Italy, for the purpose of describing and presenting certain Italian quality wines psr, if certain conditions laid down in specifications are complied with, the geographical indications concerned, such as ‘Collio goriziano’, ‘Collio’, ‘Isonzo del Friuli’ and ‘Isonzo’, may be combined with an indication of the vine variety ‘Tocai friulano’ or its synonym ‘Tocai italico’ from which the wines are made. 96 However, no evidence produced before the Court indicates that the choice thus made by that Member State to allow such a combination has led to the wording resulting from that combination constituting a geographical indication in such a way that the terms ‘Tocai friulano’ and ‘Tocai italico’ which form part of it no longer denote a vine variety but a geographical indication. 97 It is, on the contrary, apparent from the reference to the terms ‘Tocai friulano’ and ‘Tocai italico’ in Annex II to Regulation No 753/2002 that, even in the Community legislation applicable at the time of the main proceedings, those terms still related to a vine variety which could, under Article 19(2)(b) and (3) of that regulation, be used on the label of the Italian quality wines psr concerned. They are therefore not the name of a vine variety or one of its synonyms that includes a geographical indication for the purposes of Article 19(2)(a) of that regulation. 98 In the light of the foregoing, the answer to the third question must be that the prohibition of use of the name ‘Tocai’ in Italy after 31 March 2007 resulting from the exchange of letters on Tocai is not contrary to the rules governing homonyms laid down in Article 4(5) of the EC-Hungary Agreement on wines. The fourth question99 By its fourth question, the referring court seeks in essence to ascertain whether the Joint Declaration on homonyms, in so far as it states in the first paragraph that in respect of Article 4(5)(a) of the EC‑Hungary Agreement on wines the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is a clear misrepresentation of reality, invalidating, under Article 48 of the Vienna Convention on the Law of Treaties, that agreement in so far as it prohibits the use of the name ‘Tocai’ in Italy after 31 March 2007. 100 This question must be understood in the light of the argument of the Region and ERSA that a number of factors showed beyond doubt the erroneous nature of the Joint Declaration on homonyms, since the Commission and the Republic of Hungary could not have been unaware of the existence of homonymity between the names ‘Tocai’ referring to an Italian dry wine and ‘Tokaj’ referring to a Hungarian dessert wine. 101 However, as paragraphs 88 to 97 of the present judgment make clear, the Italian name ‘Tocai friulano’ and its synonym ‘Tocai italico’ are not a protected geographical indication within the meaning of the EC-Hungary Agreement on wines, so that the provisions of Article 4(5)(a) of that agreement concerning homonyms do not apply for the purpose of resolving a possible case of homonymity or identity between that name and the Hungarian name ‘Tokaj’ which, as was held in paragraph 89 of the present judgment, is a geographical indication protected by virtue of the same agreement. 102 Consequently, the answer to the fourth question must be that the Joint Declaration on homonyms, in so far as it states in the first paragraph that in respect of Article 4(5)(a) of the EC-Hungary Agreement on wines the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality. The sixth question103 By its sixth question, which must be answered before the fifth, the referring court asks in essence whether Articles 22 to 24 of the TRIPs Agreement are to be interpreted as meaning that, in the case of homonymity between geographical names or between a geographical indication and a name including the name of a vine variety, each of the names may continue to be used in the future provided that it has been used in the past by the respective producers either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer. 104 The Region and ERSA and the Italian Government maintain that Articles 22 to 24 of the TRIPs Agreement require the Community, as a member of the WTO, to protect each of the homonymous geographical indications, including in the case of homonymity between a geographical indication and the name of a vine variety, and that, consequently, those articles preclude removal of the protection from the name ‘Tocai friulano’. 105 That argument cannot be accepted in view of the actual wording of the relevant provisions of those articles of the TRIPs Agreement.106 In the first place, Article 23(3) of the TRIPs Agreement stipulates inter alia that, in the case of homonymous geographical indications for wines, protection is to be accorded to each indication and that each WTO Member is to determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled. 107 Under Article 22(1) of the TRIPs Agreement, ‘geographical indications’ means indications which identify a good as originating in the territory of a Member of the WTO, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin. 108 As has already been held in paragraphs 88 to 97 of the present judgment, unlike the Hungarian name ‘Tokaj’, the Italian names ‘Tocai friulano’ and ‘Tocai italico’ relate to the name of a vine or vine variety but are not a geographical indication within the meaning of the EC-Hungary Agreement on wines. In view of the fact that the meaning of ‘geographical indication’ as defined in the latter agreement is in essence the same as that adopted in Article 22(1) of the TRIPs Agreement, the same finding is dictated in the context of the TRIPs Agreement. 109 Consequently, Article 23(3) of the TRIPs Agreement is not applicable in the main proceedings since that case does not concern homonymity between two geographical indications. 110 In the second place, Article 24(4) of the TRIPs Agreement provides that nothing in Section 3 of that agreement is to require a Member of the WTO to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either for at least 10 years prior to 15 April 1994 or in good faith prior to that date. 111 It follows clearly from that provision that, although the Community is not required to prohibit continued and similar use of a particular geographical indication of another Member of the WTO identifying wines or spirits by a national or domiciliary of a Member State in the territory of a Member State, as referred to in Article 24(4) of the TRIPs Agreement, that provision does not preclude such a prohibition. 112 In other words, Article 24(4) of the TRIPs Agreement must be interpreted as establishing, under the conditions which it lays down, a right and not an obligation to grant protection to any homonym. 113 As regards, in the third place, Article 24(6) of the TRIPs Agreement, that provision permits inter alia the Community, as a Member of the WTO, to apply the provisions of that agreement in respect of a geographical indication of any other Member of the WTO with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of a Member State as of the date of entry into force of the WTO Agreement. 114 That provision therefore also establishes a right and not an obligation for the Community to grant protection to a Community grape or vine variety if that variety is the homonym of a geographical indication relating to a wine originating in a third country. 115 In those circumstances, the answer to the sixth question must be that Articles 22 to 24 of the TRIPs Agreement are to be interpreted as meaning that, in a case such as that in the main proceedings, which concerns homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines made from it, those provisions do not require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer. 116 In the light of that answer, there is no longer any need to answer the fifth question since it was asked on the assumption that the EC-Hungary Agreement on wines, in so far as it has the effect of precluding use of the word ‘Tocai’ for the description and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, is incompatible with the provisions of Articles 22 to 24 of the TRIPs Agreement since the latter require that, where there is homonymity, each of the names may continue to be used in the future. 117 It follows from the answer given to the sixth question that that assumption does not apply in the main proceedings, which concern homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines. The seventh question118 By its seventh question, the referring court seeks in essence to ascertain whether the right to property set out in Article 1 of Protocol No 1 to the ECHR and incorporated in Article 17 of the Charter of fundamental rights includes intellectual property in designations of origin of wines and its exercise and, if so, whether protection of the latter precludes the operators concerned in the autonomous region of Friuli-Venezia Giulia from being deprived of the possibility of using the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, as arises from the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines but not from the body of that agreement, particularly in view of the lack of any form of compensation for the dispossessed wine producers of Friuli, the lack of any general interest justifying that dispossession and the disregard for the principle of proportionality. 119 According to settled case-law, the right to property is one of the general principles of Community law. However, it is not absolute but must be viewed in relation to its social function. Consequently, the exercise of the right to property may be restricted, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute in relation to the aim pursued a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed (see, to that effect, inter alia, Case C-306/93 SMW Winzersekt [1994] ECR I-5555, paragraph 22, and Joined Cases C-37/02 and C-38/02 Di Lenardo and Dilexport [2004] ECR I‑0000, paragraph 82 and the case-law cited). 120 In order to determine the scope of the fundamental right to property, a general principle of Community law, account must be taken inter alia of Article 1 of Protocol No 1 to the ECHR establishing that right. 121 It is therefore necessary to examine whether the prohibition of the use of the word ‘Tocai’ for the description and presentation of certain Italian quality wines psr from 1 April 2007, resulting from the exchange of letters on Tocai, constitutes disproportionate and intolerable interference, impairing the very substance of the fundamental right to property of the economic operators concerned. 122 That prohibition, in so far as it does not exclude any reasonable method of marketing the Italian wines concerned, does not constitute a deprivation of possessions as referred to in the first paragraph of Article 1 of Protocol No 1 to the ECHR. 123 Consequently, the lack of any compensation for the dispossessed wine producers of Friuli, to which attention is drawn by the referring court, does not in itself constitute a circumstance demonstrating incompatibility between the prohibition at issue in the main proceedings and the right to property. 124 In addition, without there being any need to determine whether that measure, as a measure controlling the use of property, constitutes interference with the right to respect for property which may fall within the scope of the second paragraph of Article 1 of Protocol No 1 to the ECHR and therefore entail a restriction of the fundamental right to property, it must be stated that a restriction of that right, if established, may be justified. 125 The case-law of the European Court of Human Rights shows that, in order to be justified, a measure controlling the use of property must comply with the principle of lawfulness and pursue a legitimate aim by means reasonably proportionate to that aim (see, inter alia, Eur. Court HR, Jokela v Finland judgment of 21 May 2002, Reports of Judgments and Decisions 2002-IV, § 48). 126 As regards, first, the lawfulness of the prohibition at issue in the main proceedings, it is common ground that the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines expressly imposes that prohibition and that, by Decision 93/724, that act was approved on behalf of the Community. It is therefore a measure introduced by a lawful provision adopted, as was observed in paragraphs 77 to 81 of the present judgment, in the context of the COM in wine in force at the time of the conclusion of that agreement. 127 With regard, next, to the aim of general interest pursued by the measure at issue in the main proceedings, it has already been observed, in paragraphs 80 and 81 of the present judgment, that the EC-Hungary Agreement on wines, of which that measure forms part, seeks to implement a policy within the framework of the COM in wine, the main objective of which is to promote trade between the Contracting Parties by facilitating on a reciprocal basis, on the one hand, the marketing of wines originating in third countries which are described or presented using a geographical indication, by guaranteeing the same protection for those wines as that provided for in respect of quality wines psr of Community origin, and, on the other, the marketing in those third countries of wines originating in the Community. 128 It is clear from inter alia the third and fifth recitals in the preamble to Regulation No 2392/89 that the objective of the Community rules on the description and presentation of wines is to reconcile the need to provide the final consumer with clear and accurate information on the products concerned with the need to protect producers on their territory against distortions of competition. 129 The objective thus pursued by the measure at issue in the main proceedings is a legitimate aim of general interest (see SMW Winzersekt, cited above, paragraph 25). 130 Finally, it is necessary to examine whether that measure is proportionate to the aim of general interest referred to.131 In a case concerning a Community measure adopted within the framework of the COM in wine, prohibiting, on the expiry of a transitional period of five years, the use of the term ‘méthode champenoise’ for wines not entitled to the registered designation ‘Champagne’, the Court recalled that, according to settled case‑law, the Community legislature has a broad discretion in matters concerning the common agricultural policy, which corresponds to the political responsibilities given to it by Articles 34 EC and 37 EC, and that the lawfulness of a measure adopted in that sphere can be affected only if the measure is manifestly inappropriate, having regard to the objective which the competent institution is seeking to pursue (see SMW Winzersekt, cited above, paragraph 21). 132 It is important to note in this regard that, at the end of the transitional period, the Italian quality wines psr in question will be able to continue to be produced from the vine variety ‘Tocai friulano’ and to be marketed under their respective geographical names, although without the addition of the name of the vine variety from which they are produced. 133 In this case, the proportionality of the measure at issue in the main proceedings cannot be disputed since a transitional period of 13 years was provided for in the exchange of letters on Tocai and, as the Commission observed at the hearing, alternative terms are available to replace the name ‘Tocai friulano’ and its synonym ‘Tocai italico’, namely, inter alia, ‘Trebbianello’ and ‘Sauvignonasse’. 134 In those circumstances, the answer to the seventh question must be that the right to property does not preclude the prohibition on use by the operators concerned in the autonomous region of Friuli-Venezia Giulia of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines psr at the end of a transitional period expiring on 31 March 2007, resulting from the exchange of letters on Tocai annexed to the EC-Hungary Agreement on wines but not referred to in the latter. The eighth question135 By its eighth question, the referring court seeks to ascertain whether, in the event that it is held that the EC-Hungary Agreement on wines and/or the exchange of letters on Tocai are unlawful to the extent described in the preceding questions, the provisions of Article 19(2) of Regulation No 753/2002, which abolish the use of the name ‘Tocai friulano’ after 31 March 2007, are invalid or in any event of no effect. 136 Since this question is asked only in the event that examination of the first seven questions referred for a preliminary ruling shows the EC-Hungary Agreement on wines and/or the exchange of letters on Tocai to be unlawful to the extent described in those questions, and since it follows from the answers given to those questions by the present judgment that that is not the case, there is no need to answer it. 137 It should also be pointed out that, in principle, it is for the referring court alone to define the scope of the questions which it finds necessary to refer to the Court for a preliminary ruling. 138 It follows, as the Commission rightly observed at the hearing, that certain questions, raised inter alia at the hearing by the Region and ERSA and by the Italian Government with regard to the eighth question referred for a preliminary ruling, that is to say, those seeking to ascertain whether the validity of the EC-Hungary Agreement on wines is affected as the result of an alleged breach of the duty to state reasons, or even of the principle of proportionality and of the principle of equal treatment as enshrined in Article 34(2) EC, cannot be examined by the Court since they clearly exceed the scope of the eighth question as worded by the referring court. Costs139 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Second Chamber) hereby rules:1. The European Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, is not the legal basis of Council Decision 93/724/EC of 23 November 1993 concerning the conclusion of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names.2. Article 133 EC, as referred to in the preamble to Decision 93/724, is an appropriate legal basis for the conclusion by the Community alone of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names.3. The prohibition of use of the name ‘Tocai’ in Italy after 31 March 2007 resulting from the exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names is not contrary to the rules governing homonyms laid down in Article 4(5) of that agreement.4. The Joint Declaration concerning Article 4(5) of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names, in so far as it states in the first paragraph that in respect of Article 4(5)(a) of that agreement the Contracting Parties noted that at the time of the negotiations they were not aware of any specific case to which the provisions referred to could be applicable, is not a clear misrepresentation of reality.5. Articles 22 to 24 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1 C to the Agreement establishing the World Trade Organisation, approved on behalf of the Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994, are to be interpreted as meaning that, in a case such as that in the main proceedings, which concerns homonymity between a geographical indication of a third country and a name including the name of a vine variety used for the description and presentation of certain Community wines made from it, those provisions do not require that that name may continue to be used in the future notwithstanding the twofold circumstance that it has been used in the past by the producers concerned either in good faith or for at least 10 years prior to 15 April 1994 and that it clearly identifies the country, region or area of origin of the protected wine in such a way as not to mislead the consumer.6. The right to property does not preclude the prohibition on use by the operators concerned in the autonomous region of Friuli‑Venezia Giulia (Italy) of the word ‘Tocai’ in the term ‘Tocai friulano’ or ‘Tocai italico’ for the description and presentation of certain Italian quality wines produced in specified regions at the end of a transitional period expiring on 31 March 2007, resulting from the exchange of letters concerning Article 4 of the Agreement between the European Community and the Republic of Hungary on the reciprocal protection and control of wine names annexed to that agreement but not referred to in the latter.[Signatures]* Language of the case: Italian. | 0195b-47b5084-4bb6 | EN |
ACCORDING TO ADVOCATE GENERAL POIARES MADURO, THE CALL FOR APPLICATIONS ISSUED BY EUROJUST FOR THE POST OF LIBRARIAN/ARCHIVIST SHOULD BE ANNULLED SINCE NO LINK WAS ESTABLISHED BETWEEN THE PROPOSED DUTIES AND THE REQUIREMENT OF SUBMITTING THE APPLICATION IN ENGLISH | Kingdom of SpainvEurojust(Action for annulment under Article 230 EC – Action brought by a Member State challenging calls for applications, issued by Eurojust, for positions as members of the temporary staff – No jurisdiction of the Court – Inadmissible) Opinion of Advocate General Poiares Maduro delivered on 16 December 2004 Judgment of the Court (Grand Chamber), 15 March 2005. Summary of the Judgment1. Procedure – Legal basis of an action – Choice for the applicant and not the Community judicature – Admissibility assessed in the light of the applicant’s choice2. Actions for annulment – Challengeable acts – Action brought by a Member State against a call for applications, issued by Eurojust, for positions as members of the temporary staff – Excluded – Requirement for judicial review – Rules(Article 230 EC; Article 35 EU, 41 EU, 46(b) EU; Statute of the Court, Arts 40 and 56; Staff Regulations of Officials, Art. 91; Council Decision 2002/187, Art. 30)1. In judicial proceedings, it is for the applicant to choose the legal basis of its action and not for the Community judicature itself to choose the most appropriate legal basis. It follows that, where the applicant brings its action under a particular provision, while leaving to the discretion of the Court the choice of the most appropriate legal basis to examine that action, the admissibility of that action must be examined in the light of that provision. (see para. 35)2. A call for applications, issued by Eurojust, for positions as members of the temporary staff is not capable of being the subject of an action for annulment under Article 230 EC. Such a call is not included in the list of acts the legality of which the Court may review under that article. Moreover, Article 41 EU does not provide that Article 230 EC is to apply to the provisions on police and judicial cooperation in criminal matters in Title VI of the EU Treaty, the jurisdiction of the Court in such matters being defined in Article 35 EU, to which Article 46(b) EU refers. Such a call for applications is not, however, exempt from judicial review, for, as is clear from Article 30 of Decision 2002/187, setting up Eurojust with a view to reinforcing the fight against serious crime, Eurojust staff are to be subject to the rules and regulations applicable to officials and other servants of the European Communities. It follows that the main parties concerned, namely the candidates for the various positions in the contested calls for applications, have access to the Community Courts under the conditions laid down in Article 91 of the Staff Regulations of Officials. In the event of such an action, Member States would be entitled to intervene in the proceedings in accordance with Article 40 of the Statute of the Court of Justice and could, where appropriate, as is clear from the second and third paragraphs of Article 56 of that Statute, appeal against the judgment of the Court of First Instance. (see paras 36-38, 40-43)JUDGMENT OF THE COURT (Grand Chamber)15 March 2005(1)applicant,defendant,THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 16 December 2004,gives the followingLawadopt decisions for any other purpose consistent with the objectives of this title, excluding any approximation of the laws and regulations of the Member States. These decisions shall be binding and shall not entail direct effect; the Council, acting by a qualified majority, shall adopt measures necessary to implement those decisions at the level of the Union; provisions of Title VI, under the conditions provided for by Article 35; …’.‘1. The engagement of temporary staff shall be directed to securing for the institution the services of persons of the highest standard of ability, efficiency and integrity, recruited on the broadest possible geographical basis from among nationals of Member States of the Communities. …2. A member of the temporary staff may be engaged only on condition that:he produces evidence of a thorough knowledge of one of the languages of the Communities and of a satisfactory knowledge of another language of the Communities to the extent necessary for the performance of his duties.’ for the position of Data-protection Officer (OJ 2003 C 34 A, p. 1), ‘excellent knowledge of English and French. Ability to work in other European Community languages would be an asset’; for the position of Accounting Officer (OJ 2003 C 34 A, p. 4), ‘thorough knowledge of one official language of the European Union and a satisfactory knowledge of another language of the Union, including a satisfactory knowledge of English’; for the position of IT‑informatics expert (webmaster) of the European judicial network (OJ 2003 C 34 A, p. 6), ‘a good knowledge of English is essential. Capacity to communicate in at least two other official languages of the European Communities, including French, will definitely be considered an asset’; for the position of Legal Officer (OJ 2003 C 34 A, p. 11), ‘excellent knowledge of English and French. Ability to work in other European Community languages would be an asset’; for the position of Librarian/Archivist (OJ 2003 C 34 A, p. 13), no particular requirements;for the position of Press Officer (OJ 2003 C 34 A, p. 16), ‘capacity to communicate in at least English and French. Knowledge of other official languages of the European Communities will be an asset’; for the position of Secretary to the General Administration (OJ 2003 C 34 A, p. 18), ‘a thorough knowledge of English and French. A satisfactory knowledge of other Community languages would definitely be considered an asset’. Declares that the application is inadmissible;Orders the Kingdom of Spain to pay the costs;Orders the Republic of Finland to bear its own costs. 1 – Language of the case: Spanish. Language of the case: Spanish. | 2de05-7e08ab4-4a73 | EN |
THE COURT OF FIRST INSTANCE RULES FOR THE FIRST TIME ON THE TRADE BARRIERS REGULATION ("TBR") | Fédération des industries condimentaires de France (FICF) and OthersvCommission of the European Communities(Common commercial policy – World Trade Organisation (WTO) – Regulation (EC) No 3286/94 – Obstacles to trade – Prepared mustard – Termination of the examination procedure in relation to obstacles to trade – Community interest)Judgment of the Court of First Instance (First Chamber, Extended Composition), 14 December 2004 Summary of the Judgment1. Common commercial policy – Defence against obstacles to trade – Complaint by an association of undertakings under international trade rules – Commission decision to terminate the examination procedure – Judicial review (Council Regulation No 3286/94, Art. 4)2. Common commercial policy – Defence against obstacles to trade – Exercise of a right of action by the Community – Conditions – Cumulative conditions (Council Regulation No 3286/94, Arts 2(1) and (4), and 4(2))3. Common commercial policy – Defence against obstacles to trade – Exercise of a right of action by the Community – Conditions – Obstacle to trade – Scope 4. Common commercial policy – Defence against obstacles to trade – Exercise of a right of action by the Community – Conditions – Adverse trade effects – Scope 5. Common commercial policy – Defence against obstacles to trade – Exercise of a right of action by the Community – Conditions – Community interest – Discretion of the Commission – Assessment of complex economic situations – Judicial review – Limits (Council Regulation No 3286/94)6. Common commercial policy – Defence against obstacles to trade – Exercise of a right of action by the Community – Conditions – Community interest – Discretion of the Commission – Assessment undertaken when the examination procedure is initiated – No impact on the assessment undertaken on termination of the procedure 7. Common commercial policy – Defence against obstacles to trade – Exercise of a right of action by the Community – Conditions – Need for adverse trade effects concerning the complainant notwithstanding the existence of a general interest on the Community’s part – Discretion of the Commission (Council Regulation No 3286/94, Art. 11(1))8. Acts of the institutions – Statement of reasons – Obligation – Scope – Decision terminating an examination procedure in relation to obstacles to trade(Art. 253 EC; Council Regulation No 3286/94, Art. 11(1))9. Common commercial policy – Defence against obstacles to trade – Examination procedure – Duty of the institutions to provide information – Scope (Council Regulation No 3286/94, Art. 8(4))10. Common commercial policy – Defence against obstacles to trade – Examination procedure – Period for submitting the report in cases of ‘straightforward or normal’ examination – Extension in cases of ‘complex’ examination – Purely indicative period – Exceeded – Whether permissible – Condition – Reasonable time (Council Regulation No 3286/94, Art. 8(8))11. Common commercial policy – Defence against obstacles to trade – Examination procedure – Period for taking a decision terminating the procedure after the opinion of the Advisory Committee was obtained – Discretion of the Commission – Limit – Reasonable time 1. Article 4 of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organisation (WTO) is intended to permit, in particular, any association acting in the name of one or more Community undertakings to rely on the right to avail itself of international trade rules laid down in a multilateral or plurilateral trade agreement in the complaint which it lodges with the Commission, subject to the conditions laid down in the regulation, and to avail itself of the procedural safeguards laid down in the regulation. Seen together, those safeguards show that a complainant under Article 4 of the regulation has the right to submit for review by the Court any decision of the Commission terminating an examination procedure initiated as a result of his complaint. (see para. 41)2. Under Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, exercise of a right of action by the Community under international trade rules against an obstacle to trade adopted or maintained by a third country and having an effect on the market of that country requires as a minimum that three cumulative conditions be satisfied, namely the existence of an obstacle to trade, as defined in the regulation, the presence of adverse trade effects which result from that obstacle and the need to take action in the interests of the Community. Where, upon the conclusion of an examination procedure initiated under Regulation No 3286/94, the Commission finds that one of those conditions is not satisfied, the Community institutions are entitled to form the view that such an action should not be proceeded with. (see para. 48)3. The two elements of the definition of an obstacle to trade within the meaning of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, that is to say ‘any trade practice adopted or maintained by a third country’ and ‘right of action’ cannot be artificially separated. For there to be an obstacle to trade which may be relied upon for the purposes of the application of the regulation, there must be a right of action under international trade rules. A different interpretation would mean that any trade practice adopted or maintained by a third country could be considered to be an obstacle to trade, even where no right of action existed under those rules. (see paras 49, 53)4. The definition of ‘adverse trade effects’ set out in Article 2(4) of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules shows that it sought to retain a causal link between the actual (‘causes’) or potential (‘threatens to cause’) adverse trade effects and the obstacle to trade, as identified in the particular circumstances of each case, within the meaning of Regulation No 3286/94. That interpretation is supported by the seventh recital in the preamble to the regulation, which states that the mechanism established by the regulation aims to allow Community institutions to react to obstacles to trade adopted or maintained by third countries ‘which cause’ adverse trade effects, and by Article 4(2) of the regulation, relating to the content of a complaint, which states that the latter must contain sufficient evidence of the existence of the obstacles to trade ‘resulting therefrom’. In addition, for the purposes of Regulation No 3286/94 the adverse trade consequences must also have a material impact on the economy of the Community or of a region of the Community, or on a sector of economic activity therein. (see para. 65)5. Where proceedings are brought before the Community judicature for the annulment of a Commission decision terminating, on the ground of the absence of a Community interest, an examination procedure relating to obstacles to trade interest initiated under Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, judicial review of the appraisal of complex economic situations, which the question whether the interests of the Community require that action be taken involves, must be limited to verifying that the relevant procedural rules have been complied with, that the facts on which the choice is based have been accurately stated and that there has not been a manifest error of assessment of those facts or a misuse of powers. The scope of judicial review also includes verifying the absence of errors of law. (see para. 94)6. The assessment of the interests of the Community undertaken when the examination procedure laid down under Regulation 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules is initiated, is, by definition, of a preparatory nature. It cannot therefore be compared with the assessment which must be undertaken subsequently, that is to say on termination of the examination procedure, when deciding whether action is necessary in the interests of the Community. A different interpretation would mean that, when the Commission decides to initiate an examination procedure, it is automatically obliged, when the decision as to whether the Community should act is taken, to assume that such action is necessary, provided that the other legal conditions for the application of Regulation No 3286/94, namely the existence of an obstacle to trade and the existence of adverse trade effects arising from it, are satisfied, thereby depriving the Commission of its power of discretion. (see paras 97-98)7. The Commission does not fail to have regard to Article 11(1) of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules by requiring that any action by the Community be linked to the facts and legal bases underlying the examination procedure and, though faced with a general and long-term interest in acting in the future against potential breaches which might result from the practice of ‘selective sanctions’ adopted by a non-member State, by deciding to terminate the examination procedure. (see para. 120)8. It is clear from Article 11(1) of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules that the statement of reasons in a decision terminating an examination procedure under the regulation may be restricted to a note of the principal findings set out in the examination report, referring to that report, and that it is not necessary, given the circumstances in which that decision is taken, that it record the whole of the factual and legal background to that report. (see para. 132)9. Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules provides the complainants and the exporters and importers concerned, as well as the representatives of the country or countries concerned, with a right to information, subject to the conditions laid down in Article 8(4)(a) and (b), which must reflect, inter alia, the obligation of the Community institutions to respect commercial confidentiality. Those persons may ask to be kept informed of the principal facts and considerations resulting from the examination procedure. However, there is no provision of Regulation No 3286/94 requiring the Commission to send the examination report in draft to the persons referred to in Article 8(4) of the regulation before its submission to the Advisory Committee so as to enable those persons to inform the Commission of any observations they might have to make, nor to inform those persons on its own initiative of the principal facts and considerations resulting from the examination procedure. On the contrary, under Article 8(4)(a) and (b) of Regulation No 3286/94 the persons referred to in that provision are required to make an application for information to the Commission. The fact that the right to be informed of the principal facts and considerations resulting from the examination procedure is subject to the – sole – condition that the applicants submit their request to the Commission does not, on its own, prejudice the defence of their interests, particularly as that request is not required to comply with any particular formalities. (see paras 173, 175-176, 178)10. Whist failure to comply with a mandatory time-limit will result in the nullity of every act adopted after the expiry of the time-limit, failure to comply with a time‑limit that is purely indicative does not, as a matter of principle, mean that an act adopted after its expiry falls to be annulled. The period of five months laid down for the presentation of the report of the examination laid down by Article 8(8) of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules is indicative. The period of seven months referred to in that article merely represents, in the case of a ‘complex’ examination, the extension of the initial period of five months laid down for an examination which is ‘straightforward or normal’. It follows that, inasmuch as the period for sending the examination report is purely indicative in the case of an examination which is ‘straightforward or normal’, the position should not differ in the case of an examination which is ‘complex’, since all that is involved is an extension of the initial period. However, the Commission ought not to delay the submission of the examination report beyond a period which is reasonable, as that might delay the adoption of the decision to terminate the examination procedure. (see paras 187-190)11. The silence of Regulation No 3286/94 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules on the question whether a decision to terminate an examination procedure must ensue following the consultation with the committee referred to in Article 7 of the regulation can be interpreted as reflecting the desire of the Community legislature to provide the Commission with a certain discretion as regards the date on which such a decision needs to be adopted, having regard to all the circumstances of each case, in particular any steps which the Commission envisages may be taken against the authorities of the non-Member State in question before an examination procedure is terminated. Nevertheless, the recognition of such a discretion does not mean that the Commission may delay the adoption of a decision taken under Article 11(1) of Regulation No 3286/94 beyond a reasonable time, which falls to be assessed with regard to the particular circumstances of each case. Such a limit aims to ensure compliance with the duty of diligence and the principle of sound administration which are binding on the Commission. (see paras 198-199)JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition)14 December 2004 (*) In Case T-317/02,Fédération des industries condimentaires de France (FICF), established in Paris (France), Confédération générale des producteurs de lait de brebis and des industriels de Roquefort, established in Millau (France), Comité économique agricole régional ‘fruits et légumes de la région Bretagne’ (Cerafel), established in Morlaix (France), Comité national interprofessionnel des palmipèdes à foie gras (CIFOG), established in Paris (France), represented by O. Prost and M.-J. Jacquot, lawyers,applicants,Commission of the European Communities, represented by P.-J. Kuijper and G. Boudot, acting as Agents, with an address for service in Luxembourg, defendant,ACTION for annulment of Commission Decision 2002/604/EC of 9 July 2002 terminating the examination procedures concerning obstacles to trade, within the meaning of Council Regulation (EC) No 3286/94, consisting of trade practices maintained by the United States of America in relation to imports of prepared mustard (OJ 2002 L 195, p. 72), THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber, Extended Composition),composed of B. Vesterdorf, President, P. Mengozzi, M.E. Martins Ribeiro, F. Dehousse and I. Labucka, Judges,Registrar: H. Jung,having regard to the written procedure and further to the hearing on 14 September 2004,gives the followingJudgment Legal framework1 Article 1 of Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organisation (WTO) (OJ 1994 L 349, p. 71), as amended by Council Regulation (EC) No 356/95 of 20 February 1995 (OJ 1995 L 41, p. 3) (‘Regulation No 3286/94’), provides: ‘This Regulation establishes Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under international trade rules, in particular those established under the auspices of the World Trade Organisation which, subject to compliance with existing international obligations and procedures, are aimed at: …(b) responding to obstacles to trade that have an effect on the market of a third country, with a view to removing the adverse trade effects resulting therefrom. These procedures shall be applied in particular to the initiation and subsequent conduct and termination of international dispute settlement procedures in the area of common commercial policy.’ 2 Article 2 of Regulation No 3286/94 states:‘1. For the purposes of this Regulation, “obstacles to trade” shall be any trade practice adopted or maintained by a third country in respect of which international trade rules establish a right of action. Such a right of action exists when international trade rules either prohibit a practice outright, or give another party affected by the practice a right to seek elimination of the effect of the practice in question. 2. For the purposes of this Regulation and subject to paragraph 8, “the Community’s rights” shall be those international trade rights of which it may avail itself under international trade rules. In this context, “international trade rules” are primarily those established under the auspices of the WTO and laid down in the Annexes to the WTO Agreement, but they can also be those laid down in any other agreement to which the Community is a party and which sets out rules applicable to trade between the Community and third countries. 4. For the purposes of this Regulation, “adverse trade effects” shall be those which an obstacle to trade causes or threatens to cause, in respect of a product or service, to Community enterprises on the market of any third country, and which have a material impact on the economy of the Community or of a region of the Community, or on a sector of economic activity therein. The fact that the complainant suffers from such adverse effects shall not be considered sufficient to justify, on its own, that the Community institutions proceed with any action. …’3 Article 4 of Regulation No 3286/94 provides:‘1. Any Community enterprise, or any association, having or not legal personality, acting on behalf of one or more Community enterprises, which considers that such Community enterprises have suffered adverse trade effects as a result of obstacles to trade that have an effect on the market of a third country may lodge a written complaint. Such complaint, however, shall only be admissible if the obstacle to trade alleged therein is the subject of a right of action established under international trade rules laid down in a multilateral or plurilateral trade agreement. 2. The complaint must contain sufficient evidence of the existence of the obstacles to trade and of the adverse trade effects resulting therefrom. Evidence of adverse trade effects must be given on the basis of the illustrative list of factors indicated in Article 10, where applicable.’ 4 Article 5 of Regulation No 3286/94, headed ‘Complaint procedures’, reads as follows:‘1. The complaint shall be submitted to the Commission, which shall send a copy thereof to the Member States.2. The complaint may be withdrawn, in which case the procedure may be terminated unless such termination would not be in the interests of the Community. 3. Where it becomes apparent after consultation that the complaint does not provide sufficient evidence to justify initiating an investigation, then the complainant shall be so informed. 4. The Commission shall take a decision as soon as possible on the opening of a Community examination procedure following any complaint made in accordance with Articles 3 or 4; the decision shall normally be taken within 45 days of the lodging of the complaint; this period may be suspended at the request, or with the agreement, of the complainant, in order to allow the provision of complementary information which may be needed to fully assess the validity of the complainant’s case.’ 5 Article 7(1) of Regulation No 3286/94 states:‘For the purpose of consultations pursuant to this Regulation, an Advisory Committee, hereinafter referred to as “the Committee”, is hereby set up and shall consist of representatives of each Member State, with a representative of the Commission as chairman.’ 6 Article 8 of Regulation No 3286/94 provides:‘1. Where, after consultation, it is apparent to the Commission that there is sufficient evidence to justify initiating an examination procedure and that it is necessary in the interest of the Community, the Commission shall act as follows: (a) it shall announce the initiation of an examination procedure in the Official Journal of the European Communities; such announcement shall indicate the product or service and countries concerned, give a summary of the information received, and provide that all relevant information is to be communicated to the Commission; it shall state the period within which interested parties may apply to be heard orally by the Commission in accordance with paragraph 5; (b) it shall officially notify the representatives of the country or countries which are the subject of the procedure, with whom, where appropriate, consultations may be held; (c) it shall conduct the examination at Community level, acting in cooperation with the Member States.4. (a) The complainants and the exporters and importers concerned, as well as the representatives of the country or countries concerned, may inspect all information made available to the Commission except for internal documents for the use of the Commission and the administrations, provided that such information is relevant to the protection of their interests and not confidential within the meaning of Article 9 and that it is used by the Commission in its examination procedure. The persons concerned shall address a reasoned request in writing to the Commission, indicating the information required. (b) The complainants and the exporters and importers concerned and the representatives of the country or countries concerned may ask to be informed of the principal facts and considerations resulting from the examination procedure. 5. The Commission may hear the parties concerned. It shall hear them if they have, within the period prescribed in the notice published in the Official Journal of the European Communities, made a written request for a hearing showing that they are a party primarily concerned by the result of the procedure. 8. When it has concluded its examination the Commission shall report to the Committee. The report should normally be presented within five months of the announcement of initiation of the procedure, unless the complexity of the examination is such that the Commission extends the period to seven months.’ 7 Article 10 of Regulation No 3286/94, which relates to evidence, states:‘…4. Where adverse trade effects are alleged, the Commission shall examine the impact of such adverse effects on the economy of the Community or of a region of the Community, or on a sector of economic activity therein. To this effect, the Commission may take into account, where relevant, factors of the type listed in paragraphs 1 and 2. Adverse trade effects may arise, inter alia, in situations in which trade flows concerning a product or service are prevented, impeded or diverted as a result of any obstacle to trade, or from situations in which obstacles to trade have materially affected the supply or inputs (e. g. parts and components or raw materials) to Community enterprises. Where a threat of adverse trade effects is alleged, the Commission shall also examine whether it is clearly foreseeable that a particular situation is likely to develop into actual adverse trade effects. 5. The Commission shall also, in examining evidence of adverse trade effects, have regard to the provisions, principles or practice which govern the right of action under relevant international rules referred to in Article 2(1). 8 Article 11(1) of Regulation No 3286/94 states:‘When it is found as a result of the examination procedure that the interests of the Community do not require any action to be taken, the procedure shall be terminated in accordance with Article 14.’ 9 Article 12 of Regulation No 3286/94 provides:‘1. Where it is found (as a result of the examination procedure, unless the factual and legal situation is such that an examination procedure may not be required) that action is necessary in the interests of the Community in order to ensure the exercise of the Community’s rights under international trade rules, with a view to removing … the adverse trade effects resulting from obstacles to trade adopted or maintained by third countries, the appropriate measures shall be determined in accordance with the procedure set out in Article 13. 10 Article 14 of Regulation No 3286/94 states:‘1. Should reference be made to the procedure provided for in this article, the matter shall be brought before the Committee by its chairman. 2. The Commission representative shall submit to the Committee a draft of the decision to be taken. The Committee shall discuss the matter within a period to be fixed by the chairman, depending on the urgency of the matter. 3. The Commission shall adopt a decision which it shall communicate to the Member States and which shall apply after a period of ten days if during this period no Member State has referred the matter to the Council. 4. The Council may, at the request of a Member State and acting by a qualified majority, revise the Commission’s decision.5. The Commission’s decision shall apply after a period of 30 days if the Council has not given a ruling within this period, calculated from the day on which the matter was referred to the Council.’ Background11 Between 1981 and 1996, the Council adopted several directives against the use of certain substances having a hormonal action in animal feedstuffs, in order, in particular, to protect human health. 12 The United States of America (‘the United States’) brought dispute settlement proceedings before the tribunals of the WTO in which they challenged the compliance of the Community provisions with the rules of the WTO. 13 On 18 August 1997, a panel declared the Community provisions to be contrary to the WTO rules. 14 On 16 January 1998, the Appellate Body adopted a report confirming that decision.15 Following the adoption of that report by the Dispute Settlement Body (‘the DSB’) on 13 February 1998, the date by which Community legislation was required to be brought into compliance with the WTO rules was set by arbitral award at 13 May 1999. 16 As the European Community had not amended its legislation within the prescribed period the United States sought authorisation from the DSB on 3 June 1999 to suspend tariff concessions under Article 22(2) of the Understanding on Rules and Procedures governing the Settlement of Disputes (‘the Understanding’) annexed to the Agreement establishing the WTO, to the extent of USD 202 million per year. At the same time, the United States produced a list of products to which a suspension of tariff concessions might be applied, including prepared mustard. 17 Following an arbitral award of 12 July 1999 on the total amount of the tariff concessions to be suspended, the WTO authorised the United States on 26 July 1999 to suspend those concessions to the extent of USD 116.8 million per year and to impose additional customs duties of 100% on a number of products coming from the Member States of the European Community, including prepared mustard. However, the United States decided not to apply the suspension to products from the United Kingdom. 18 On 7 June 2001, the Fédération des industries condimentaires de France (‘the FICF’ or ‘the complainant’), which comprises the principal French producers of prepared mustard, lodged a complaint with the European Commission under Article 4 of Regulation No 3286/94. 19 That complaint stated in particular that the selective application of the US retaliatory measures was contrary to Article 22 of the Understanding, as the measures suspending the tariff concessions authorised by the WTO could only be applied to the ‘Member concerned’, previously found to be in breach, in the present case the European Community as a whole, and not purely to certain Member States. The complaint also stated that the obstacle to trade created by the United States caused adverse trade effects within the meaning of Regulation No 3286/94 in relation to exports of prepared mustard by members of the FICF and that it was in the interests of the Community to initiate a complaint procedure under Regulation No 3286/94 in relation to the measures taken by the United States. 20 In the light of the evidence produced by the complainant, the Commission published on 1 August 2001 a notice of initiation of an examination procedure under Article 8 of Regulation No 3286/94 concerning an obstacle to trade consisting of trade practices maintained by the United States in relation to the imports of prepared mustard (OJ 2001 C 215, p. 2). 21 Point 2 of that notice stated that ‘the examination which the Commission is initiating may also cover other products which appear to be affected in a similar way to prepared mustard and in particular those in respect of which interested parties that make themselves known within [a period of 30 days following the publication of the notice] provide evidence that the alleged practices are applicable’. 22 Several trade organisations made themselves known to the Commission within the prescribed period, including the Comité national interprofessionnel des palmipèdes à foie gras, the Confédération générale des producteurs de lait de brebis et des industriels de Roquefort and the Comité économique agricole régional ‘fruits et légumes de la région Bretagne’. Following those indications of interest, the Commission decided, under point 2 of the notice of initiation, to extend the procedure to foie gras, Roquefort and shallots. 23 On 6 March 2002, upon completion of its examination, the Commission informed the committee referred to in Article 7 of Regulation No 3286/94 of the findings of its enquiry, and then supplied it with a copy of the report of its examination on 27 March 2002. That report proposed that the procedure be terminated. 24 On 23 April 2002, the Commission sent a non-confidential version of the examination report to FICF’s adviser. In its letter, the Commission stated that the committee referred to in Article 7 of Regulation No 3286/94 had approved the proposal to terminate the procedure and that a decision to that effect would therefore shortly be published in the Official Journal of the European Communities. 25 By letter of 17 May 2002, one of the FICF’s advisers wrote to acknowledge receipt of the examination report. In that letter, he expressed surprise at the time taken by the Commission to send him that report and to adopt the decision in the matter. Noting the statement made by the Commission in its letter of 23 April 2002 that a decision would shortly be adopted, the FICF’s adviser concluded that the Commission was not offering the complainant the right of reply, a practice which he considered contravened the right to a fair hearing. 26 In its reply to that letter of 4 June 2002, the Commission stated that it had fully complied with Regulation No 3286/94, in particular Article 8(4) and (8). In that regard, the Commission maintained that the complainant had never submitted a request to it under Article 8(4) of Regulation No 3286/94. The Commission also pointed out to the complainant that the latter had regularly been informed of the evolution of the case and that it was aware of the outcome of the examination procedure well before the date of the official communication of the examination report. 27 On 6 June 2002, the Comité économique agricole régional ‘fruits et légumes de la région Bretagne’ sent a letter to the Commission in which it first expressed surprise that it had not received the examination report directly, but had received it through its advisers. It next expressed its disagreement with the statement that the examination procedure was to be terminated and lastly stated that the announcement that the decision to terminate the examination procedure was shortly to be adopted did not allow it to exercise its right of reply to the conclusions set out in the examination report. 28 On 7 June 2002, the Confédération générale des producteurs de lait de brebis et des industriels de Roquefort sent a letter to the Commission which was largely identical to that sent by the Comité économique agricole régional ‘fruits et légumes de la région Bretagne’. 29 By letters of 14 June 2002, the Commission sent a non-confidential version of the examination report to the Confédération générale des producteurs de lait de brebis et des industriels de Roquefort and the Comité économique agricole régional ‘fruits et légumes de la région Bretagne’, reminding them that those trade organisations had intervened in the examination procedure only as interested parties and that this was why the Commission had not felt obliged to send copies of the examination report, which, moreover, was a public document, to them directly. In its letters, the Commission also stated that it had, in any event, complied with Article 8(8) of Regulation No 3286/94, that the advisers to both organisations had been kept regularly informed of the evolution of the case and that they were aware of the outcome of the examination procedure well before the date on which the official report of the examination procedure was communicated. The Commission stated lastly that the decision to terminate the procedure would be adopted shortly. 30 On 9 July 2002, the Commission adopted Decision 2002/604/EC terminating the examination procedures concerning obstacles to trade, within the meaning of Regulation No 3286/94, consisting of trade practices maintained by the United States of America in relation to imports of prepared mustard (OJ 2002 L 195, p. 72) (‘the contested decision’). The contested decision was published in the Official Journal of the European Communities on 27 July 2002. 31 In recital (6) to the contested decision, the Commission stated:‘The examination procedure led to the conclusion that the alleged adverse trade effects do not appear to stem from the obstacle to trade claimed in the complaint, i.e. the [US] practice of applying withdrawal of concessions selectively against some but not all the Member States (selective sanctioning). In fact, the investigation did not provide any evidence of the fact that making the suspension of concessions also applicable to the United Kingdom would result in greater export opportunities for the complainant for prepared mustard to the [US] market. Therefore, no adverse trade effect, as defined in the Regulation, can be attributed to the obstacle to trade claimed by the complaint, other than the trade effects resulting from the suspension of concessions which are authorised and lawfully applied by the United States of America under the WTO Agreement. Therefore, in accordance with Article 11 [of Regulation No 3286/94], the examination procedure has demonstrated that the interests of the Community do not require that a specific action be taken against the alleged obstacle to trade under the Regulation.’ 32 In the sole article of the contested decision, the Commission accordingly decided to terminate the examination procedure initiated on 1 August 2001. Procedure and forms of order sought33 By application lodged at the Court Registry on 16 October 2002, the FICF, the Confédération générale des producteurs de lait de brebis et des industriels de Roquefort, the Comité national interprofessionnel des palmipèdes à foie gras and the Comité économique agricole régional ‘fruits et légumes de la région Bretagne’ (‘the applicants’) brought the present action. 34 Pursuant to Article 14 of the Rules of Procedure of the Court of First Instance, and on the proposal of the First Chamber, the Court decided, after hearing the parties in accordance with Article 51 of those Rules, to refer the case to a Chamber sitting in extended composition. 35 Upon hearing the report of the Judge-Rapporteur, the Court (First Chamber, Extended Composition) decided to open the oral procedure and, by way of measures of organisation of procedure, requested the parties to reply to certain questions and to produce certain documents. 36 The parties presented oral argument and their replies to the Court’s questions at the hearing on 14 September 2004.37 The applicants claim that the Court should:– annul the contested decision;– order the Commission to pay the costs.38 The Commission claims that the Court should:– dismiss the action;– order the applicants to pay the costs. Admissibility39 Without raising a plea of inadmissibility in relation to the present action, the Commission has nevertheless restricted its written pleadings to the position of the FICF, which is the only organisation to have lodged a complaint with the Commission under Article 4 of Regulation No 3286/94, to the exclusion of the other trade organisations which intervened in the examination procedure as interested parties. 40 It must be observed in that regard that the applicants have brought one and the same action, and that it is settled case-law that, where one and the same application is involved, a finding of admissibility in relation to one applicant means that there is no need to consider whether the other applicants are entitled to bring proceedings, since it is sufficient that at least one of the applicants fulfils the conditions laid down in Article 230 EC (see, to that effect, Case C-313/90 CIRFS and Others v Commission [1993] ECR I-1125, paragraph 31; Case T-12/93 CCE de Vittel and Others v Commission [1995] ECR II‑1247, paragraph 44; and Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94 European Night Services and Others v Commission [1998] ECR II‑3141, paragraph 61). 41 Article 4 of Regulation No 3286/94 is intended to permit, in particular, any association acting in the name of one or more Community undertakings (‘enterprises’), such as, in the present case, the FICF acting in the name of French producers of prepared mustard, to rely on the right to avail itself of international trade rules laid down in a multilateral or plurilateral trade agreement in the complaint which it lodges with the Commission, subject to the conditions laid down in the regulation, and to avail itself of the procedural safeguards laid down in the regulation. Seen together, those safeguards show that a complainant under Article 4 of Regulation No 3286/94 has the right to submit for review by the Court any decision of the Commission terminating an examination procedure initiated as a result of his complaint. 42 It follows that the FICF, which lodged a complaint with the Commission under Article 4 of Regulation No 3286/94, may bring proceedings to challenge the contested decision before the Court and accordingly that, as one and the same action is involved, there is no need to consider whether the other applicants are entitled to bring proceedings. Substance43 The applicants raise eight pleas in law in support of their application. The first plea alleges breach of Article 2(1) of Regulation No 3286/94; the second plea is based on breach of Article 2(4) of Regulation No 3286/94; the third plea alleges breach of Article 10(5) of Regulation No 3286/94; the fourth plea alleges breach of Article 11(1) of Regulation No 3286/94; the fifth plea alleges failure to state reasons in the contested decision; the sixth plea alleges manifest errors of assessment of the facts and breach of Article 2(4) and Article 11(1) of Regulation No 3286/94; the seventh plea alleges breach of the right to a fair hearing; lastly, the eight plea is based on breach of Article 8(8) of Regulation No 3286/94 and of the Commission’s duty to exercise due diligence. The first plea, alleging breach of Article 2(1) of Regulation No 3286/94 Arguments of the parties44 According to the applicants, the definition of an ‘obstacle to trade’ under Article 2(1) of Regulation No 3286/94 is based on two clearly identifiable and indissociable elements, namely a substantive element (‘any trade practice adopted or maintained by a third country’) and an ‘illegality element’ (‘a right of action’ conferred on the European Community). In the applicants’ opinion, the contested decision has restricted that definition to the illegality element alone, that is to say the ‘selective’ application by the United States of the suspension of tariff concessions. According to the applicants, the Commission’s approach not only contravenes Article 2(1) of Regulation No 3286/94, but also misinterprets the scope of the complaint lodged by the FICF and the notice of initiation of the examination procedure. Contrary to what the Commission appears to maintain, the measures suspending the tariff concessions taken by the United States cannot be divided between the measures authorised by the DSB and applied by the United States, on the one hand, and, on the other, the obstacle to trade alleged by the complainant, namely the selective application of those measures. According to the applicants, it is not because the WTO has authorised the adoption of retaliatory measures that the application of those measures is ‘lawful’, as the Commission considers it to be. 45 The Commission notes, first, that the object of Regulation No 3286/94 is to establish Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s rights under the WTO rules. It is with that in mind that Article 2(1) of Regulation No 3286/94 defines an obstacle to trade as being any trade practice adopted or maintained by a third country in respect of which international trade rules establish a right of action. 46 The Commission next disputes the interpretation of Article 2(1) of Regulation No 3286/94 adopted by the applicants. According to the Commission, it is not sufficient that an obstacle to trade exist for a dispute settlement procedure to be initiated. It is necessary above all that the existence of adverse trade effects be established. For the purposes of the application of Regulation No 3286/94, the concept of an obstacle to trade cannot therefore be separated from that of ‘adverse trade effects’. In other words, in the Commission’s opinion, for there to be an ‘obstacle to trade’ within the meaning of Regulation No 3286/94, it is necessary for undertakings to show that they are suffering ‘adverse trade effects’ within the meaning of Article 2(4) of Regulation No 3286/94. A contrary interpretation would have the effect of conferring on Community undertakings a real actio popularis. 47 According to the Commission, it is that approach to the concept of ‘obstacle to trade’ which was applied in the present case, both in the examination report and at the time of the adoption of the contested decision. Such an approach is thus not unfamiliar to the applicants. The Commission refers in that regard to the contested decision, which provides that the investigation was not able to show that the complainant had suffered adverse trade effects as a result of the decision of the United States to apply the suspension of trade concessions selectively, other than the trade effects resulting from that suspension which were ‘authorised and lawfully applied by the United States of America under the WTO Agreement’. The Commission concludes, first, that the US measures were adopted in compliance with the principles laid down by the WTO and, secondly, that, as the complainant was unable to show any adverse trade effect, there is, contrary to what the applicants claim, no ‘obstacle to trade’ within the meaning of Regulation No 3286/94. Findings of the Court48 It must be observed as a preliminary point that, under Regulation No 3286/94, exercise of the right of action by the Community under international trade rules against an obstacle to trade adopted or maintained by a third country and having an effect on the market of that country requires as a minimum that three cumulative conditions be satisfied, namely the existence of an obstacle to trade, as defined in the regulation, the presence of adverse trade effects which result from that obstacle and the need to take action in the interests of the Community. Where, upon the conclusion of an examination procedure initiated under Regulation No 3286/94, the Commission finds that one of those conditions is not satisfied, the Community institutions are entitled to form the view that such an action should not be proceeded with. 49 As regards the concept of an obstacle to trade, it should be noted that Article 2(1) of Regulation No 3286/94 provides:‘For the purposes of this Regulation, “obstacles to trade” shall be any trade practice adopted or maintained by a third country in respect of which international trade rules establish a right of action. Such a right of action exists when international trade rules either prohibit a practice outright, or give another party affected by the practice a right to seek elimination of the effect of the practice in question.’ 50 In the present case, it is not disputed that the Commission formed the view, in the contested decision, that the FICF was objecting to an obstacle to trade constituted by the suspension of tariff concessions by the United States against exporters of prepared mustard in the Member States of the Community, other than those in the United Kingdom, a sanction which the contested decision termed ‘selective’. 51 The applicants maintain that in adopting that approach the Commission failed to have regard to the definition of obstacle to trade in Article 2(1) of Regulation No 3286/94, in so far as it had regard in the present case only to the ‘illegality’ element of that definition. 52 That argument cannot be accepted.53 First of all, the elements of the definition of an obstacle to trade within the meaning of Regulation No 3286/94 cannot be artificially separated, as the applicants suggest. For there to be an obstacle to trade which may be relied upon for the purposes of the application of Regulation No 3286/94, there must be a right of action under international trade rules. That interpretation arises in particular from the reference in the first paragraph of Article 1 of the regulation to ‘compliance with existing international obligations and procedures’. It is supported by the seventh recital in the preamble to Regulation No 3286/94, which states that ‘[the] mechanism [instituted by the regulation] aims to provide procedural means to request that the Community institutions react to obstacles to trade adopted or maintained by third countries … , provided that a right of action exists, in respect of such obstacles, under applicable international trade rules’. A different interpretation would mean that any trade practice adopted or maintained by a third country could be considered to be an obstacle to trade, even where no right of action existed under international trade rules. 54 As regards, next, the applicants’ argument that the Commission’s interpretation fails to have regard to the scope of the complaint lodged by the FICF with the Commission, contrary to what the applicants maintained before the Court, the complainant did not allege that the US measures suspending the tariff concessions, to the extent of USD 116.8 million, in relation to certain products from the Community fell within the definition of ‘obstacle to trade’. The complaint accepted that those measures had been authorised by the WTO on 26 July 1999. By contrast, in its arguments in relation to whether the measures adopted by the United States constituted an ‘obstacle to trade’ within the meaning of Regulation No 3286/94 (point IV of the complaint), the complainant took the view that there was a breach of the rules of the WTO in that ‘the United States could not lawfully choose to apply retaliatory measures to certain members of the European Union and not to others’ (point IV.1, p. 8 of the complaint) and that ‘the selective application of retaliatory measures by the United States call[ed] into question the fixing by the arbitrators of a level of suspension of the concessions’ (point IV.2, p. 11 of the complaint). Furthermore, it accepted that ‘the conclusions and recommendations of the panel and the Appellate Body referred to the “European Communities” [and that] the United States were accordingly obliged to apply their measures to the “European Communities” and were not entitled to make any distinction between the Member States, all of which applied the contested Community measures’ (p. 13 of the complaint). Lastly, it stated that ‘the attitude of the United States had the effect of distorting the Community element of the trade policy provided for under the Treaty’ in that the retaliatory measures related only to 14 of the 15 Member States (p. 14 of the complaint). 55 It follows that the obstacle to trade which the complaint attacks consisted only in the selective application of the US measures suspending the tariff concessions, and that the Commission did not misinterpret the scope of the complaint. Furthermore, in the present case, having regard to the definition of an obstacle to trade set out in paragraph 53 above, the obstacle to trade under Regulation No 3286/94 could consist only in the selective application of the US measures suspending the tariff concessions. As it is only obstacles to trade in relation to which a right of action under international trade rules exists which fall within the scope of Regulation No 3286/94, a procedure under that regulation could not be initiated in relation to the US measures suspending tariff concessions which had been authorised by the WTO, in that, as a matter of principle, no Community right of action under international trade rules existed in relation to those measures. That is why point 4 of the notice of initiation of the examination procedure, referred to at paragraph 20 above, stated that the obstacle to trade alleged in the complaint was constituted by the maintaining of ‘trade measures … against several Member States rather than the whole of the Community’ and the FICF considered, without the correctness of that view being challenged before the Court, that ‘the practice of seeking measures against all the Member States, which are subsequently applied only in relation to some of them, failed to reflect the predictability which the dispute settlement system requires’. Moreover, it should also be noted that point 1.4 of the examination report drawn up by the Commission, headed ‘The obstacle to trade’, stated: ‘… it is important to note that the obstacle to trade at issue in this investigation does not consist in the US suspension of the concessions following the Hormones case, but in the way in which this suspension has been enforced by the United States. Accordingly, the complainant does not question the US right under the WTO DSU to suspend the above-mentioned concessions, but only its right to suspend them with regard to only several Community Member States, by excluding others.’ 56 Contrary to what the applicants maintain, in stating that the obstacle to trade identified in the complaint consisted in the selective application of the US measures to Member States of the Community recitals (3) and (6) to the contested decision are consistent both with the definition of ‘obstacle to trade’ set out in Article 2(1) of Regulation No 3286/94 and with the definition arising from the complaint in the present case, which was followed in the notice of initiation of the procedure and the examination report. 57 It follows from all the above considerations that, contrary to what the applicants maintain, the Commission did not restrict itself in the present case only to the ‘illegality’ element of the definition of an obstacle to trade, but took account of all the essential and indissociable elements of the concept of an obstacle to trade, as defined in Article 2(1) of Regulation No 3286/94. 58 In those circumstances, the first plea is rejected. The second plea, alleging breach of Article 2(4) of Regulation No 3286/9459 The applicants consider that the restrictive approach to the concept of an obstacle to trade adopted in the contested decision also and necessarily entails an incorrect analysis of the ‘adverse trade effects’ under Article 2(4) of Regulation No 3286/94, which contravenes that provision. According to the applicants, the Commission should have analysed the adverse trade effects of the unlawful imposition, from July 1999, of additional customs duties of 100% ad valorem, contested by the applicants, and not solely the effects of the factor which rendered the measures unlawful, namely the selective application of those measures. 60 The applicants consider, moreover, that the contested decision is also vitiated by a manifest error in the assessment of the data contained in the examination report. The finding of the Commission in the contested decision that that report ‘did not provide any evidence of the fact that making the suspension of [tariff] concessions also applicable to the United Kingdom would result in greater export opportunities for the complainant for prepared mustard to the [US] market’ is contradicted by a reading of the statistics relating to the reduction in imports of mustard from the Member States other than the United Kingdom in conjunction with the statistics relating to the increase in imports from the latter Member State, which are set out in the examination report. 61 The Commission replies that it correctly assessed the nature of the trade effects resulting from the suspension of the tariff concessions adopted by the United States in relation to prepared mustard. 62 The Commission argues that the conclusions of the examination report did not show any relationship of ‘communicating vessels’ between the reduction in exports by the complainant to the United States, on the one hand, and a substantial and long-term increase in exports from the United Kingdom, on the other. According to the Commission, the statistics contained in the examination report show that the decision of the United States to exclude products from the United Kingdom from the suspension of tariff concessions did not benefit exports of mustard from the United Kingdom to the United States and did not produce adverse trade effects in relation to the complainant. Only if the examination procedure had been able to show that the selective nature of the measures gave rise to lasting and material consequences in the European market for prepared mustard would adverse trade effects, within the meaning of Regulation No 3286/94, have arisen in relation to the complainant. However, the Commission also points out that Article 2(4) of Regulation No 3286/94 sets out a precise definition of ‘adverse trade effects’ when it refers to the effects of obstacles to trade which have a material impact on the economy of the Community or of a region of the Community, or a sector of economic activity therein. According to the Commission, the fact that the ‘complainant suffered adverse trade effects is not considered to be sufficient to justify, on its own, that the Community institutions proceed with any action’. 63 Ultimately, according to the Commission, the contested decision did indeed show that the examination had been unable to prove that the selective nature of the US retaliatory measures resulted in adverse trade effects meeting the criteria laid down in Regulation No 3286/94. 64 As a preliminary point, it should be noted that Article 2(4) of Regulation No 3286/94 states:‘“adverse trade effects” shall be those which an obstacle to trade causes or threatens to cause, in respect of a product or service, to Community enterprises on the market of any third country, and which have a material impact on the economy of the Community or of a region of the Community, or on a sector of economic activity therein. The fact that the complainant suffers from such adverse effects shall not be considered sufficient to justify, on its own, that the Community institutions proceed with any action.’ 65 That definition shows that Regulation No 3286/94 sought to retain a causal link between the actual (‘causes’) or potential (‘threatens to cause’) adverse trade effects and the obstacle to trade, as identified in the particular circumstances of each case, within the meaning of Regulation No 3286/94. That interpretation is supported by the seventh recital in the preamble to Regulation No 3286/94, which states that the mechanism established by the regulation aims to allow Community institutions to react to obstacles to trade adopted or maintained by third countries ‘which cause’ adverse trade effects, and by Article 4(2) of the regulation, relating to the content of a complaint, which states that the latter must contain sufficient evidence of the existence of the obstacles to trade ‘resulting therefrom’. In addition, for the purposes of Regulation No 3286/94 the adverse trade consequences must also have a material impact on the economy of the Community or of a region of the Community, or on a sector of economic activity therein. 66 In that regard, with respect to the applicants’ argument that the Commission should not have restricted its analysis of the adverse trade effects to those resulting from the selective application of the suspension of tariff concessions, the Court considers that, having regard to the reply to the first plea above and the causal link there must be between an ‘obstacle to trade’ and ‘adverse trade effects’ within the meaning of Regulation No 3286/94, it must be rejected. As the ‘obstacle to trade’, within the meaning of Regulation No 3286/94, which is the subject of the complaint in the present case is constituted by the selective application of the suspension of tariff concessions in relation to exports of prepared mustard to the United States, the Commission was obliged to restrict its analysis of the ‘adverse trade effects’ to those having a causal link with that obstacle. 67 That being so, it must be established whether, as the applicants contend, the Commission made a manifest error in its assessment of the statistics set out in the examination report when it concluded in recital (6) to the contested decision that ‘the investigation did not provide any evidence of the fact that making the application of the suspension of [tariff] concessions also applicable to the United Kingdom would result in greater export opportunities for the complainant for prepared mustard to the [US] market’. 68 In that regard, it should be pointed out first of all that there is a difference between the wording of the French version of the passage quoted above from recital (6) to the contested decision and that of the great majority of the other language versions of that text. Unlike the French text, which uses the adverb ‘davantage’ (more), the great majority of the other language versions refer to ‘greater’ or ‘greater opportunities for export’. That applies for example to the versions of the passage in English (‘… would result in greater export opportunities …’), German (‘… für den Antragsteller zu besseren Ausfuhrmöglichkeiten …’), Danish (‘… at klageren ville få større muligheder for at eksportere …’), Spanish (‘… traería consigo majores oportunidades para el denunciante de exportar …’), Finnish (‘… valituksen tekijän … viennin mahdollisuuksien laajenemiseen …’), Italian (‘… comporterebbe per il denunziante maggiori opportunità di esportazione …’), Portuguese (‘… se traduziria, par o autor da denúncia, em maiores oportunidades de exportação ...’) and Swedish (‘... bättre utsiker för den klagande att exportera …’). 69 The idea which the different language versions of the passage quoted seek to express, which is relevant to the consideration of the alleged manifest error of assessment, reflects, first, a less direct correlation than that suggested by the French version through the use of the word ‘davantage’ between the reduction in exports of prepared mustard to the United States from 14 Member States of the Community and the increase in exports of that product to the United States from the United Kingdom and, secondly, an impact over a period of time on the level of exports of prepared mustard to the United States. 70 Next, the applicants do not dispute the statistics set out in the examination report relating to exports of prepared mustard to the United States from either the Member States of the Community other than the United Kingdom, or the latter Member State alone. Nor do they challenge the methods used in the report to determine the adverse trade effects caused by the obstacle to trade, such as that identified in point 1.4 of the examination report and referred to in paragraph 55 above. 71 That being so, it follows both from the statistics recorded in the examination report and from the analysis made there that the conclusion reached by the Commission in recital (6) to the contested decision is not manifestly erroneous. 72 Between the average level of exports for the period from 1996 to 1998 and for the year 2000, the increase in exports of prepared mustard to the United States from the United Kingdom, in terms of both value and volume, was extremely small in size and proportion in comparison with exports from other Member States of the Community. Therefore, even if exporters from Member States other than the United Kingdom would themselves have benefited from that increase if the retaliatory measures taken by the United States extended to prepared mustard from the United Kingdom – which the applicants have failed to show – those exporters would not have been able to enjoy greater export opportunities. 73 Furthermore, it is clear from the information used by the Commission during the examination procedure that the US importers of prepared mustard sought out alternative suppliers established outside the Community, and that those suppliers benefited considerably from the suspension of the tariff concessions by the authorities to the detriment of prepared mustard from the Member States. 74 Consequently, the second plea must be rejected. The third plea, alleging breach of Article 10(5) of Regulation No 3286/9475 The applicants claim as a preliminary point that the French version of Article 10(5) of Regulation No 3286/94 contains a punctuation error. Referring to the ‘corrected version’ [French text only] of that provision, the applicants are of the view that Article 10(5) of Regulation No 3286/94 requires that the Commission take account, in its examination of the adverse trade effects, of provisions, principles or practices which govern the right of action under relevant international trade rules. According to the applicants, although the Commission assessed the compatibility of the US measures with respect to the WTO rules when the examination report was prepared, it did not carry out a similar analysis in the contested decision, thereby contravening Article 10(5) of Regulation No 3286/94 in the present case. Furthermore, in the applicants’ opinion, the contested decision is also vitiated by a failure to state reasons, inasmuch as the Commission has not explained why the legal analysis of the obstacle to trade complained of, which it undertook in the examination report, does not appear in the contested decision. 76 Without denying that the French version of Article 10(5) of Regulation No 3286/94 contains the error highlighted by the applicants, the Commission submits that this plea is not well founded. 77 The French version of Article 10(5) of Regulation No 3286/94 provides that ‘la Commission tient compte aussi, dans son examen, des éléments de preuve concernant les effets commerciaux défavorables, des dispositions, principes ou pratiques qui régissent le droit d’engager une action au titre des règles de commerce internationales applicables évoquées à l’article 2, paragraphe 1’. 78 In that regard, as the applicants rightly submit in their written pleadings, without being challenged on the point by the Commission, that version contains an error of syntax in that it includes a comma after the word ‘examen’. Both the structure of Article 10(5) of Regulation No 3286/94, which would require the insertion of the coordinating conjunction ‘et’ after the adjective ‘défavorables’ if that comma were correct, and the position of that paragraph within the article in question, which relates to the ‘examen des éléments de preuve’, lead to the conclusion that the comma which appears after the word ‘examen’ should not be there. Furthermore, the other language versions of Article 10(5) of Regulation No 3286/94, adopting that line of reasoning, refer to ‘examining evidence of adverse trade effects’. 79 Article 10(5) of Regulation No 3286/94 should therefore be read as follows: ‘the Commission shall also, in examining evidence of adverse trade effects, have regard to the provisions, principles or practice which govern the right of action under relevant international rules referred to in Article 2(1)’. 80 However, the applicants are misinterpreting Article 10(5) of Regulation No 3286/94 when they maintain that it required the Commission to assess in the contested decision the compatibility of the obstacle to trade complained of with the provisions of agreements adopted in relation to the WTO. 81 In the light of what was stated by way of a preliminary point in paragraph 48 above, in so far as the Commission rightly held in the present case that the quantitative evidence analysed in its examination report did not warrant a conclusion that there were adverse trade effects within the meaning of Regulation No 3286/94, it was not obliged to take into account the provisions, principles or practices which govern the right of action under international trade rules. 82 As regards the claim that the contested decision was vitiated by a failure to state reasons, the Commission rightly held that there were no adverse trade effects within the meaning of Regulation No 3286/94, so it was not required either to examine the additional factors mentioned at Article 10(5) of the regulation, or to include reasons in the contested decision in that regard. 83 The third plea is accordingly rejected. The fourth plea, alleging breach of Article 11(1) of Regulation No 3286/94 84 The applicants submit that the contested decision confused the ‘interests of the Community’, referred to in Article 11(1) of Regulation No 3286/94, with the interests of the complainant. In the applicants’ opinion, such an approach not only contravenes that provision, but in this case also disregards the fact that other parties intervened during the examination procedure and that when the initiation of that procedure was announced on 1 August 2001 the Commission recognised the interest of the Community in ‘tackling the US practices which can represent a systemic threat to the role of the Community in the WTO and severely affect the cohesion and solidarity of the [Community], since any exclusion of a Member State from suspension of trade concessions inevitably implies an increased burden for the others’. 85 In addition, the applicants take the view that the remarks made by the Commission in the procedure before the Court to the effect that an analysis of the interests of the complainant is a condition precedent to an analysis of the interests of the Community are not compatible with the contested decision inasmuch as, in order to terminate the examination procedure, the Commission relied on the absence of any Community interest and not the absence of any interest on the complainant’s part. In any event, the applicants consider that the recognition by the Commission in the written procedure of the distinction between the interests of the complainant and those of the Community supports their claim that in this case the contested decision infringed Article 11(4) of Regulation No 3286/94. 86 The Commission maintains that Regulation No 3286/94 does not define the concept of ‘interests of the Community’ and that it has a wide discretion in that regard. Nevertheless, it claims, having regard to the general scheme of Regulation No 3286/94 that concept has a very precise role to play, which is to prevent an action being proceeded with on principle or in abstracto. In other words, the Commission considers that a complainant cannot rely on Regulation No 3286/94 to urge the Community to take action on principle in defence of the general interests of the Community, if it has not itself suffered adverse trade effects. As, in the present case, the complainant has not suffered such effects other than those which the retaliatory measures could (lawfully) give rise to, the condition precedent to the examination of the Community interest in taking action was not satisfied. Furthermore, the conclusions of the examination report clearly show that the applicants had no interest in the measures being uniformly applied in relation to all the Member States of the Community. 87 In its rejoinder, the Commission also states that it took account of all the interests at issue, including those of the undertakings which intervened during the examination procedure, as is shown by the examination report, the conclusions of which were fully taken account of in the contested decision. In any event, the selective nature of the US measures principally affect prepared mustard, since, in the present case, only that product was exported by the United Kingdom, with Roquefort, foie gras and shallots accordingly being excluded. 88 In short, the Commission considers that it correctly took the view that, in the light of the conclusions of the examination report, it was not in the interests of the Community to continue the procedure. – Preliminary remarks89 Regulation No 3286/94 provides no definition of the ‘interests of the Community’, any more than it states the rules governing the examination of those interests. However, a number of provisions of Regulation No 3286/94 refer to that expression. 90 Article 8(1) of Regulation No 3286/94 thus states that the Commission is to initiate an examination procedure ‘where, after consultation, it is apparent to [it] that there is sufficient evidence to justify initiating an examination procedure and that it is necessary in the interest of the Community’. 91 In addition, Article 11(1) of Regulation No 3286/94 provides that ‘when it is found as a result of the examination procedure that the interests of the Community do not require any action to be taken, the procedure shall be terminated in accordance with Article 14’. 92 Moreover, Article 12(1) of Regulation No 3286/94 states that ‘where it is found (as a result of the examination procedure, unless the factual and legal situation is such that an examination procedure may not be required) that action is necessary in the interests of the Community in order to ensure the exercise of the Community’s rights under international trade rules, with a view to removing … the adverse trade effects resulting from obstacles to trade adopted or maintained by third countries, the appropriate measures shall be determined’. 93 Those provisions must be read in the light of the 15th recital in the preamble to Regulation No 3286/94, which states that ‘it is incumbent on the Commission … to act in respect of obstacles to trade adopted or maintained by third countries, within the framework of the Community’s international rights and obligations, only when the interests of the Community call for intervention, and … when assessing such interests, the Commission … should give due consideration to the views [of] all interested parties in the proceedings’. 94 The question whether the interests of the Community require that action be taken involves appraisal of complex economic situations and judicial review of such an appraisal must be limited to verifying that the relevant procedural rules have been complied with, that the facts on which the choice is based have been accurately stated and that there has not been a manifest error of assessment of those facts or a misuse of powers (see, to that effect, Case C-179/87 Sharp Corporation v Council [1992] ECR I-1635, paragraph 58, and Case T-2/95 Industrie des poudres sphériques v Council [1998] ECR II-3939, paragraph 292). Where proceedings are brought before the Community judicature for the annulment of a Commission decision terminating an examination procedure relating to obstacles to trade for reasons relating to the absence of a Community interest under Regulation No 3286/94, the scope of judicial review includes verifying the absence of errors of law (see, by way of analogy, Case T-132/01 Euroalliages and Others v Commission [2003] ECR II-2359, paragraph 49). That restriction on judicial review in the context of the examination of anti-dumping measures applies a fortiori to proceedings having a much wider scope and which may, depending on the circumstances, result in an international complaint being brought. 95 It is in the light of those considerations that it should be determined whether, as the applicants maintain, first, the interest of the Community in taking action against an obstacle to trade which is the subject of a complaint has already been definitively examined and determined when the notice of initiation of the examination procedure is published and, secondly, whether the Commission has assimilated or reduced the interests of the Community to the individual interests of the complainant, without taking account of the interests of the other interested parties. – The assessment of the interests of the Community when the notice of initiation of the examination procedure is published96 At point 6 of the notice of initiation of the examination procedure, the Commission stated:‘There is a Community interest in tackling the US practices which can represent a systemic threat to the role of the Community in the WTO and severely affect the cohesion and solidarity of the [Community], since any exclusion of a Member State from suspension of trade concessions inevitably implies an increased burden for the others. Therefore, it is considered to be in the Community’s interest to initiate an examination procedure.’ 97 Generally speaking, it may be considered that the assessment of the interests of the Community carried out when the examination procedure is initiated, is, by definition, of a preparatory nature. It cannot therefore be compared with the assessment which must be carried out subsequently, that is to say on termination of the examination procedure, when deciding whether action is necessary in the interests of the Community. 98 A different interpretation would mean that, when the Commission decides to initiate an examination procedure, it is automatically obliged, when the decision as to whether the Community should act is taken, to assume that such action is necessary, provided that the other legal conditions for the application of Regulation No 3286/94, namely the existence of an obstacle to trade and the existence of adverse trade effects arising from it, are satisfied, thereby depriving the Commission of its power of discretion. 99 In the present case, the general terms in which point 6 of the notice of initiation of the examination procedure is expressed could not be interpreted as meaning that the Commission had abandoned all right to decide, on termination of the examination procedure, whether or not the interests of the Community required that action be taken in the case in question. It is sufficient to hold that point 6 of the notice of initiation merely found that it was in the interests of the Community to ‘initiate an examination procedure’. 100 The applicants’ first argument must accordingly be rejected.– The assimilation or reduction of the Community’s interests to the individual interests of the complainant and the failure to take account of the interests of the other interested parties 101 The argument in question is based essentially on the following two complaints, namely, first, failure to take account of the interests of the interested parties other than the complainant and, secondly, the assimilation or reduction by the Commission of the interests of the Community to those of the complainant. 102 With respect to the first complaint, the contested decision does not refer in any way whatsoever to those parties. 103 However, that does not constitute a breach of Article 11(1) of Regulation No 3286/94 in the present case. 104 As a reading of paragraph 91 in conjunction with paragraph 93 above makes clear, Article 11(1) of Regulation No 3286/94, interpreted in the light of the 15th recital in the preamble to the regulation, ensures that when the interests of the Community are assessed under the examination procedure the opinions expressed by all the interested parties in the procedure are taken into account. It follows that the assessment of the interests of the Community requires an evaluation of the interests of the various interested parties and of the general interest, in particular at the stage of the examination procedure (see, by way of analogy, Euroalliages and Others v Commission). 105 It is common ground in the present case that, following the publication of the notice of initiation of the examination procedure, the interested parties informed the Commission of their interest in being associated with the procedure initiated by the complainant against the obstacle to trade complained of, as regards their respective products. As with the analysis carried out in relation to exports of prepared mustard to the United States, the examination report assessed in relation to the products of the interested parties whether the obstacle to trade complained of resulted in adverse trade effects. Following that assessment, as with the conclusions drawn by the examination report in relation to the complainant’s position, the report stated that the selective measures imposed by the United States did not give rise to the trade effects suffered by the interested parties, which, moreover, were not subject to competition on the US market by exports of products from the United Kingdom. Lastly, when analysing the interests of the Community, the examination report stated at point 4, in particular, that ‘as noted above, a WTO dispute is not likely to eliminate or reduce the economic problems faced by the complainants’. Although this passage from point 4 of the examination report erroneously refers to all the parties as the complainants, it shows that the interest of the interested parties in the procedure was taken into account when the Community’s interests were considered at the stage of the examination report. 106 Furthermore, at no stage of the written procedure did the applicants suggest that the interested parties had interests different from those of the complainant which were not taken into account by the Commission in the examination procedure. 107 When questioned by the Court on this point at the hearing, the applicants stated that the interested parties had no interest in seeking to have the US retaliatory measures extended to the United Kingdom, since it was clear that Roquefort, foie gras and shallots were not produced by the United Kingdom, but that, by contrast, they had an interest in the selective application of those measures being the subject of a complaint by the Community before the tribunals of the WTO, which, were the United States to be found in breach of its obligations, would, the applicants claim, mean that their products would be removed from the list approved by the WTO. However, even on the assumption that such an interest was different to that of the complainant, the Commission took such arguments into account in its examination, by noting the hypothetical nature of the possibility raised by the applicants, particularly as it is the United States authorities alone that have the power to draw up the list of products subject to suspension of the tariff concessions. That interest was thus indeed taken into account by the Commission. 108 Accordingly, the fact that the contested decision does not mention the interested parties which are applicants in the present case, other than the complainant, cannot, on its own, be interpreted as a failure to have regard to Article 11(1) of Regulation No 3286/94, read in the light of the 15th recital in the preamble to the regulation. 109 The complaint relative to the failure to take account of the interests of the interested parties other than the complainant must accordingly be rejected. 110 As regards the complaint relating to the alleged assimilation of the interests of the Community to those of the complainant, reference should first be made to recitals (6) and (7) to the contested decision. 111 In recital (6), the Commission, having stated that ‘in fact, the investigation did not provide any evidence of the fact that making the suspension of [tariff] concessions also applicable to the United Kingdom would result in greater export opportunities for the complainant for prepared mustard to the [US] market’ and then that ‘therefore, no adverse trade effect, as defined in the regulation, can be attributed to the obstacle to trade claimed by the complaint’, concluded that ‘therefore, in accordance with Article 11 [of Regulation No 3286/94], the examination procedure has demonstrated that the interests of the Community do not require that a specific action be taken against the alleged obstacle to trade’. 112 In recital (7), the Commission concluded that ‘the examination procedure did not provide sufficient evidence that the interests of the Community require a specific action to be taken under the Regulation’ and that ‘the examination procedure should therefore be terminated’. 113 The use of the conjunction ‘therefore’ in the last sentence of recital (6) shows that, in the Commission’s opinion, the fact that the interests of the Community did not require that action be taken is, at least indirectly, the result of the finding that the complainant had no interest in the suspension of the tariff concessions being extended to the United Kingdom, inasmuch as it suffered no adverse trade effects as a result of the selective application of the US measures. 114 The requirement that the interest of the complainant should first be established before a Community interest may itself exist was, moreover, confirmed by the Commission in its written pleadings. It defended the idea that Regulation No 3286/94 cannot be used by a complainant to urge the Community to take action on principle in defence of the general interest of the Community, without itself having suffered adverse trade effects. 115 Accordingly, contrary to what the applicants claim, the arguments set out by the Commission in the written pleadings before the Court are not incompatible with the reasons for the contested decision. 116 Reference should next be made to the relevant passages of the examination report. At point 4 of the examination report (headed ‘Community Interest’), the Commission stated: ‘The findings of the investigation have demonstrated that there are no adverse trade effects to the applicant that are caused by the alleged obstacle to trade in this case. This finding already deprives the procedure of one basic condition for pursuing this action further under the [regulation]. None the less, the Commission has evaluated whether there are other courses of action that the Community could take to address the potential violations and trade effects identified in this report.’ 117 It went on to observe:‘… a WTO dispute is not likely to eliminate or reduce the economic problems faced by the complainants. On the other hand, the legal and political significance of the US practice could hardly be underestimated. Indeed, the US appear to have adopted the practice of “selective sanctioning” as a trade “weapon” in order to undermine the internal cohesion of the EC and thus influence its relations with its major trade partner. In sum, the Commission is of the view that the broader and long-term Community interests would require an action aimed at avoiding that the US practice of suspending concessions only to some EC Member States and not to others (i.e. “selective sanctioning”) takes place in the future. In this perspective, the Commission will pursue the discussions for a mutually satisfactory solution on the Hormones case and will discuss with the US authorities the systemic issues raised in this report.’ 118 At point 6 of the examination report, headed ‘Envisaged course of action’, the Commission, having noted the three conditions required for Community action to be proceeded with (that is to say (a) that a Community right exist under international trade rules, (b) that there be adverse trade effects caused by the alleged obstacle to trade and (c) that the action be necessary in the interests of the Community), stated that ‘on the basis of the above analysis and conclusions, notably as regards the absence of adverse trade effects, it is suggested to terminate the [examination] procedure in this case’ and that ‘the most appropriate way to deal with the problems faced by the complainant would be to continue the talks with the US authorities aimed at finding a mutually satisfactory solution in the Hormones case’. 119 The examination procedure did not exclude the possibility of a long-term Community interest in taking action in the future against the potential breaches analysed in the examination report; by contrast, inasmuch as WTO proceedings could not eliminate or reduce the economic problems faced by the complainants, it was proposed to terminate the examination procedure, in particular because of the absence of adverse trade effects within the meaning of Regulation No 3286/94. 120 The Commission does not fail to have regard to Article 11(1) of Regulation No 3286/94 by requiring that any action by the Community be linked to the facts and legal bases underlying the examination procedure and, though faced with a general and long-term interest in acting in the future against potential breaches which might result from the practice of ‘selective sanctions’ adopted by the United States, such as those identified in the examination report, by deciding to terminate the examination procedure. 121 Article 11(1) of Regulation No 3286/94 must be read in the light of the sixth recital in the preamble to the regulation, which states that the legal mechanism established by Regulation No 3286/94 should ‘ensure that the decision to invoke the Community’s rights under international trade rules is taken on the basis of accurate factual information and legal analysis’. Accordingly, if the outcome of an examination procedure is that the matters of fact and law which gave rise to that procedure do not suffice to form the basis of any decision to invoke the rights of the Community, in particular because of the absence of one of the legal conditions precedent to the application of Regulation No 3286/94, in the present case that of the absence of adverse trade effects resulting from the alleged obstacle to trade, the Commission is entitled to hold that the conditions required by Regulation No 3286/94 have not been satisfied. 122 That interpretation is also supported by Article 12(1) of Regulation No 3286/94, which states that ‘where it is found (as a result of the examination procedure, unless the factual and legal situation is such that an examination procedure may not be required) that action is necessary in the interests of the Community in order to ensure the exercise of the Community’s rights under international trade rules, with a view to removing the … adverse trade effects resulting from obstacles to trade adopted or maintained by third countries, the appropriate measures shall be determined’. It is clear from the wording of Article 12(1) of Regulation No 3286/94 that the Community action must seek the cessation of adverse trade effects caused by an obstacle to trade and, accordingly, that that action cannot be initiated if it does not allow that objective to be addressed. In other words, Article 12(1) of Regulation No 3286/94 does not enable the regulation to be relied on by a complainant to urge the Community to take action in defence of the general interests of the Community, if the complainant has not itself suffered adverse trade effects. In any event, even if it has, it is not sufficient to hold that such an adverse trade effect exists for the Community to be required to act under Regulation No 3286/94, as the Commission has a wide discretion when assessing the commercial interests of the Community, seen as a whole. 123 In the present case, the fact that the Commission considered it to be relevant, for the sake of completeness, to assess in the examination procedure whether a more general and long-term Community interest might exist cannot mean that the Commission was obliged to conclude that the examination procedure should result in action in the interests of the Community. Such an approach may be appropriate in particular because of the need to respond to all the arguments raised by the complainant and/or the interested parties and reflects compliance with the principle of sound administration. It cannot, however, be used against the Commission in order to show that it infringed Article 11(1) of Regulation No 3286/94. 124 Accordingly, contrary to what the applicants maintain, the Commission did not restrict the interests of the Community to those of the complainant, nor did it fail to have regard to Article 11(1) of Regulation No 3286/94. 125 For all those reasons, the fourth plea must be rejected in its entirety. The fifth plea, alleging failure to state reasons in the contested decision126 This plea is divided into two parts, the first alleging failure to state reasons as regards the analysis of the obstacle to trade and the second failure to state reasons as regards the Community interest in proceeding to act. The first part of the fifth plea, based on failure to state reasons as regards the analysis of the obstacle to trade– Arguments of the parties127 The applicants consider that the Commission contravened the obligation to state reasons under Article 253 EC by failing to undertake in the contested decision a legal analysis of the obstacle to trade complained of. 128 The Commission notes the principles established by the case-law as regards the giving of reasons for the acts of Community institutions. It argues that in the present case the statement of reasons in the decision satisfied all the requirements laid down by that case-law. In summarising the essential elements of the conclusions of the examination report, expressly referred to in recital (6) to the contested decision, the Commission fully satisfied the obligation to state reasons incumbent upon it, particularly as the examination report was prepared at the end of an adversarial procedure during which the applicants had the opportunity to state their position. The applicants were thus able to be aware of the justifications for the measure adopted and the Community judicature is in a position to exercise its power of review. – Findings of the Court129 According to settled case-law, the statement of reasons required by Article 253 EC must disclose in a clear and unequivocal fashion the reasoning followed by the Community institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and thus enable them to defend their rights and to enable the Community Court to exercise its power of review (Case 203/85 Nicolet Instrument [1986] ECR 2049, paragraph 10; Case 240/84 NTN Toyo Bearing and Others v Council [1987] ECR 1809, paragraph 31; Case 255/84 Nachi Fujikoshi v Council [1987] ECR 1861, paragraph 39; and Case C-76/00 P Petrotub and Republica v Council [2003] ECR I-79, paragraph 81). Furthermore, the requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, inter alia, Case C-367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63; and Petrotub and Republica v Council, paragraph 81). Consequently, if the contested measure clearly discloses the essential objective pursued by the institution, it would be pointless to require a specific statement of reasons for each of the technical choices made by the institution (Case C-122/94 Commission v Council [1996] ECR I-881, paragraph 29). 130 In the present case, it must be held that the Commission identified in the contested decision, first, the obstacle to trade complained of, which ‘was constituted by the [US] decision to apply the suspension of trade concessions imposed on prepared mustard, following the Hormones Case, only to exports originating in certain Community Member States (the United Kingdom is excluded)’ (recital (3) to the contested decision). Secondly, in recital (6) to the contested decision, the Commission stated that ‘the examination procedure led to the conclusion that the alleged adverse trade effects do not appear to stem from the obstacle to trade claimed in the complaint, i.e. the [US] practice of applying withdrawal of concessions selectively against some but not all the Member States (selective sanctioning)’. 131 In the circumstances of the present case, such statements satisfy the requirements of Article 253 EC. 132 First of all, Article 11(1) of Regulation No 3286/94 provides that ‘when it is found as a result of the examination procedure that the interests of the Community do not require any action to be taken, the procedure shall be terminated’. It follows from that provision that the statement of reasons in a decision terminating an examination procedure may be restricted to a note of the principal findings set out in the examination report, referring to that report, and that it is not necessary, given the circumstances in which that decision is taken, that it record the whole of the factual and legal background to that report. 133 Next, it is to be noted that the examination report is, in its non‑confidential version, a public document and that in this case it was sent to the applicants before the contested decision was adopted. The applicants were thus in a position to be sufficiently aware of the reasons for the contested decision and, in particular, the reason why, although the examination report had highlighted certain areas in which the obstacle to trade complained of was incompatible with the rules of the WTO agreements, a legal analysis of the obstacle to trade in the contested decision was unnecessary, given the absence of a causal link between that obstacle and the adverse trade effects under Regulation No 3286/94. 134 Lastly, the consideration of the first and second pleas undertaken by the Court in paragraphs 48 to 58 and 64 to 74 above has shown that exercise of the power of judicial review was not obstructed. 135 The first part of the fifth plea must accordingly be rejected. The second part of the fifth plea, based on failure to state reasons as regards the Community interest in proceeding to act 136 The applicants maintain, first, that, as the Commission adopted its position in relation to the interests of the Community by reference only to the interests of the complainant, the contested decision neither allows the interested parties which intervened during the examination procedure, which are themselves applicants in the present case, to know the reasons underlying the contested decision, nor allows the Court to exercise its power of review. 137 Secondly, the applicants maintain that the Commission failed to respond to all the arguments raised in the complaint relating to the Community interest in proceeding to act. First, the applicants point out that the contested decision is silent as regards the interest of the Community, referred to in the examination report, in not having the United States damage the unity of the common commercial policy by practising ‘selective’ sanctions, applying only to a certain number of Member States. Secondly, the applicants point out that the complaint stated that the possibility could not be excluded that, as a result of action taken by the Community, the United States would, at the same time as extending their retaliatory measures to all Member States of the Community, remove prepared mustard from the list of products subject to those measures. According to the applicants, since the suspension of tariff concessions could not exceed USD 116.8 million per year, the United States would have been obliged to remove certain products from the list, including, possibly, prepared mustard. While the applicants accept that that point was addressed in the examination report, they nevertheless maintain that the contested decision makes no reference to it, which represents, in their opinion, a failure to state reasons. Thirdly, the applicants criticise the Commission for failing to respond in the contested decision to the argument raised in the complaint that the Community had just as much an interest in initiating a procedure in the present case as it had in entering into discussions with the United States pursuant to Article 306 of the United States Trade Act 1974. Fourthly and lastly, the applicants criticise the Commission for failing to respond in the contested decision to the argument which was none the less addressed in the examination report, that a finding of breach against the United States before the WTO would enable them to seek recovery of the customs duties that had been wrongly imposed. 138 The Commission refers to its arguments set out in relation to the first part of this plea for all of the above complaints.139 As mentioned at paragraph 129 above, it is not necessary for the statement of reasons in a decision to go into all the relevant facts and points of law, provided that the persons concerned are able to ascertain the reasons for the measure to enable them to defend their rights and to enable the Community Court to exercise its power of review, having regard in particular to the legal and factual background to that decision. 140 As regards the applicants’ first argument, that the contested decision did not allow the interested parties which intervened during the examination procedure to know the reasons underlying the contested decision, the Court considers that it must be rejected. 141 It is true that the Commission only referred to prepared mustard in adopting the contested decision. 142 Nevertheless, in the context of the contested decision that did not prevent all the applicants from knowing the reasons underlying the Commission’s decision to terminate the examination procedure, in which all the interested parties had been involved. It is clear from the examination report, which was sent to the applicants prior to the adoption of the contested decision, that the findings in the report applied at least as much to their products as to those of the complainant. Furthermore, the examination highlighted the fact that the products of the interested parties were not subject to any competition from identical products from the United Kingdom on the US market, as those products were not exported there and, as a result, that the obstacle to trade complained of caused them no adverse trade effects under Regulation No 3286/94. 143 Lastly, even if the Commission should, in order to comply with the principle of sound administration, have provided clearer information as regards the status of the organisations other than the complainant which intervened during the examination procedure, the lack of any reference to the products of those organisations in the statement of reasons for the contested decision does not hinder the exercise of the Court’s power of judicial review when regard is had to the circumstances in which that decision was taken. 144 With respect to the second argument and the last three complaints referred to in paragraph 137 above, the applicants accept that the examination report analysed and rejected all the complaints they rely on. As regards stating reasons, the Commission was not required to address in the statement of reasons for the decision all the matters of fact and law raised by the applicants, any more than it was required to record all the technical choices made by it, so long as the fundamental elements of the institution’s approach are clearly recorded in the contested decision. The failure of the contested decision to refer to the last three complaints relied on by the applicants could, therefore, be understood in the context of the present case as confirming the position set out in the examination report, which was sent to the applicants prior to the adoption of the contested decision and to which the latter expressly referred. Moreover, the absence of any reference in the statement of reasons for the contested decision to hypothetical points underlying the three complaints raised by the applicants does not prevent review of the lawfulness of the contested decision. Those three complaints must therefore be rejected. 145 As regards the complaint alleging the absence of reasoning in the contested decision in relation to the systemic interest which the Community has in defending the unity of the common commercial policy, this too must be rejected. It is clear from the examination report, as was noted in relation to the fourth plea above, that while the unity of the common commercial policy was indeed considered to be a general and long-term Community interest, Community action was not, in the present case, considered necessary on that ground, particularly in the light of the absence of one of the legal conditions precedent to the application of Regulation No 3286/94. Accordingly, in the circumstances of the present case, the applicants were in a position to know why the Community was not minded to act in the present case and the statement of reasons for the contested decision, albeit laconic, also satisfies the requirement that the Court be able to exercise its power of review. 146 In those circumstances, the second part of this plea must be rejected, as must the fifth plea in its entirety. The sixth plea, alleging manifest errors in the assessment of the facts and breach of Article 2(4) and Article 11(1) of Regulation No 3286/94 147 This plea is divided into two parts. The first part is based on a manifest error of assessment on the Commission’s part in relation to the possibility of removal of the applicants’ products from the list of goods subject to the US customs surcharge. The second part is based on a manifest error of assessment in relation to the restitution of the customs surcharge that was wrongly paid. The first part of the sixth plea, based on a manifest error of assessment on the Commission’s part in relation to the possibility of removal of the applicants’ products from the list of goods subject to the US customs surcharge 148 The applicants state that, should the Court reject their second complaint raised under the second part of the fifth plea, alleging failure to state reasons, it would in any event be appropriate to hold that in its examination report the Commission made a manifest error in the assessment of the facts and contravened Article 2(4) and Article 11(1) of Regulation No 3286/94. 149 According to the applicants, it is clear that, had the United Kingdom been included in the list of States subject to the suspension of the US tariff concessions, ‘minor’ products from the other Member States, such as those of the applicants, might have been excluded from the scope of the US measures, by reason of the maximum limit on the tariff concessions that could be suspended, set by the arbitral award of the WTO tribunals. The relevance of such an approach was, moreover, recognised by the Commission in its notice of initiation of the examination procedure. The Commission should accordingly have given greater consideration to the possibility that the applicants’ products might be excluded from the list drawn up by the US authorities. The applicants maintain that uncertainty as to the success of a dispute settlement procedure should not have prevented Community action when it was possible. That was the position in the present case. 150 While the Commission takes the view that it has already replied to that plea in its observations relative to the preceding pleas, it nevertheless maintains that the contested decision at no time exceeded the limits on the exercise of its discretionary powers, as established by the case-law, as to the choice of the methods necessary for the realisation of the common commercial policy and the examination of complex economic situations. 151 In the present case, the Commission considers that there was no manifest error in its assessment of the facts, as described in the examination report, either as regards the absence of adverse trade effects or as regards the absence of a Community interest in pursuing the procedure. That applies in particular to the applicants’ speculations as to the removal of prepared mustard from the list of US measures. 152 It should be pointed out first of all that, having concluded that there was no causal link between the obstacle to trade which was the subject of the FICF’s complaint and the adverse trade effects, the Commission considered in the examination report the argument raised in the complaint that, were the Community to be successful before the WTO tribunals, the suspension of tariff concessions by the United States would have to be extended to the United Kingdom, thereby inevitably causing the United States to amend the list of relevant products, since otherwise the total amount of the suspension would exceed the amount authorised by the WTO (USD 116.8 million). According to the applicants, prepared mustard and the other products covered by the examination procedure might therefore be removed from the list of products submitted by the US authorities to the DSB. 153 Next, it should be noted that the Commission gave the following reply to that argument in the examination report (point 2.5, p. 32): ‘However, first of all, the outcome of a WTO case would be far from certain, given the lack of precedents on the questions at issue. Moreover, the composition of the list with products on which the 100% duty is applicable is the responsibility of the US authorities. There is no guarantee (it could even be considered as highly improbable) that the US authorities would remove the complainant’s products from the list. Besides, extending the measure to Roquefort, foie gras or shallots originating in the UK would not have any effect at all on the status quo as those products are not exported by the UK.’ 154 The Court considers that the analysis set out in the examination report in order to reply to the argument raised by the complainant and the interested parties is not vitiated by a manifest error of assessment. 155 First of all, as was highlighted in the examination report and as the Commission stated at the hearing, even were the Commission to have brought successful proceedings before the WTO tribunals, any resulting amendment to the list of products subject to the suspension of tariff concessions by the United States would be a matter for the US authorities. In that regard, it should be noted that in the arbitral award of 12 July 1999 (WT/DS26/ARB), referred to at paragraph 17 above and confirmed by the DSB, the arbitrators clearly stated that, by reason of Article 22 of the Understanding, they had no power to determine the definitive list of products which could be subject to the suspension of tariff concessions. The applicants have neither claimed, nor, more fundamentally, demonstrated that a power of that nature could be available to the Community. 156 The Court notes next that the inclusion of products from the United Kingdom in the US list does not in any way mean that the applicants’ products would have been removed from that list. It is equally possible and reasonable to imagine that other products or sub‑categories of products of the tariff nomenclature could be removed from the list, while at the same time complying with the maximum amount of USD 116.8 million authorised by the DSB. 157 Lastly, the applicants provide no evidence to support the existence of a manifest error of assessment, but simply criticise the Commission for failing to envisage the possibility that their products would be removed. Apart from the fact that that claim is not correct, since the examination report replied to the objection raised in the FICF’s complaint, while rejecting it at the same time, the analysis carried out in the examination report cannot, on any basis, constitute a manifest error of assessment on the Commission’s part, having regard to the hypothetical nature of the situation envisaged by the applicants. 158 The first part of this plea must therefore be rejected. The second part of the sixth plea, based on manifest error of assessment in relation to the restitution of the customs surcharge that was wrongly paid 159 As regards the possibility of claiming restitution of the customs duties charged by the US authorities pending the possibility of a finding of fault against the United States at the WTO, the applicants first of all express surprise that in rejecting that argument, which was raised in the complaint, on the ground that the US legislation did not give direct effect to the WTO agreements and thus excluded actions brought by individuals on the basis of those agreements, the Commission expressed a view on the interpretation of foreign legislation, thereby exceeding its powers. Next, the applicants contend that the US legislation does not preclude individuals from bringing administrative claims for the repayment of customs duties that have been wrongly charged. The applicants rely in that regard on the panel report of 15 July 2002 on Article 129(C)(1) of the United States Uruguay Round Agreements Act, which confirms that the US authorities may take account of recommendations issued by the WTO tribunals. Accordingly, the applicants consider that, contrary to what the Commission concluded in its examination report, reimbursement of the customs duties charged by the US authorities would be possible. 160 The Commission essentially refers to the position it set out in relation to the first part of this plea.161 The premiss on which this part relies is based on the assumption that, following a decision which might be reached by the WTO tribunals in favour of the Community, the United States would extend the suspension of the tariff concessions to all the Member States, with the result that the applicants’ products were removed from the US list, with that removal itself meaning that the applicants could seek restitution of the customs surcharges paid to the US authorities until that point. 162 To the extent that that assumption is founded on matters rejected by the Court in the first part of this plea, it is without foundation. 163 Furthermore, without it being necessary to decide the question of the interpretation of the US legislation and practices adopted by the Commission, it should be noted that the examination report also rejected the approach of the complainant and the interested parties on the ground that the WTO dispute settlement procedure is based on the principle enshrined in Article 19(1) of the Understanding that the GATT rules of 1994 will be complied with in the future. As that approach was not disputed by the applicants, it must be held that, even if there was an error of assessment as to the possibility of seeking reimbursement of the customs duties that were wrongly charged, that error did not, in any event, affect the legality of the contested decision. First, the error did not alter the absence of any causal link between the obstacle to trade complained of and the adverse trade effects recorded in the contested decision; secondly, it did not affect the assessment of such interest as the Community might have in proceeding with an action before the WTO, as the object of such an action would not be, and could not be, the retroactive reimbursement of customs duties paid to the authorities of a non-Member State by Community undertakings the products of which are subject to a measure suspending tariff concessions by that State. 164 The second part of the sixth plea must accordingly be rejected, as must the sixth plea in its entirety. The seventh plea, alleging breach of the right to a fair hearing 165 Under this plea, the applicants complain that the Commission failed to allow them to state prior to adoption of the contested decision their position in relation to the factual and legal matters contained in the examination report. 166 They note that, at the same time as the Commission sent them the examination report, it stated that the contested decision would shortly be adopted. According to the applicants, that shows that the contested decision was already taken at the time the examination report was sent, and, accordingly, that the Commission would give them no opportunity to state their position in relation to the matters contained in that report. That was confirmed by the Commission in its letter of 4 June 2002, addressed to the applicants’ advisers. Although, as the applicants accept, the complainant was informed of the outcome of the examination procedure and there is no provision of Regulation No 3286/94 which requires the provision of information to the other interested parties before the end of the examination procedure, they consider that the fundamental principle of the right to a fair hearing, as established in particular in anti-dumping cases, required the Commission to permit them to reply to the arguments set out in the examination report. The fact that the applicants had maintained ‘contact’ with the Commission services does not affect that conclusion, as the applicants maintain that at no time before the adoption of the contested decision could they have been aware of the precise legal and factual position of the Commission. 167 The Commission replies that all of those arguments are irrelevant. It argues that the obligations arising under Article 8 of Regulation No 3286/94 were fully complied with in the present case. If the applicants had the opportunity to submit their observations during the examination procedure, the fact that, as the applicants mention, they were unable to avail themselves of a ‘right of reply’ before the contested decision was adopted arises from the application of Article 8 of Regulation No 3286/94. 168 Moreover, citing the case-law which has been developed on anti-dumping, the Commission explains that it is necessary for the undertakings affected to be able to make known their views on the accuracy and relevance of the facts and circumstances alleged and on the evidence presented. Applying that case-law to the present case, the Commission considers that it has respected the applicants’ right to a fair hearing. Furthermore, contrary to what the applicants claim, the complainant would have had ample time to communicate its observations between the date on which the examination report was sent to it, namely 23 April 2002, and the date on which the contested decision was adopted, namely 9 July 2002. 169 In addition, the Commission states that the applicants have not sought to plead the illegality of Article 8 of Regulation No 3286/94 on the ground of breach of the fundamental principle of the right to a fair hearing. 170 It must be noted first of all that it is a fundamental principle of Community law that the right to a fair hearing must be respected (see, inter alia, Case 85/87 Dow Benelux v Commission [1989] ECR 3137, paragraph 25; Case C-49/88 Al-Jubail Fertilizer v Council [1991] ECR I-3187, paragraph 15; and Joined Cases T-159/94 and T-160/94 Ajinomoto and NutraSweet v Council [1997] ECR II-2461, paragraph 81). 171 Furthermore, the general scheme of Regulation No 3286/94 indicates that an examination procedure and any action in the interests of the Community that may be adopted at the end of it are directed only at a non-Member State which has adopted or maintained an obstacle to trade. An undertaking which is a complainant under Regulation No 3286/94 can thus rely on the right to a fair hearing only under the conditions set out in the regulation, unless those conditions are themselves considered to be contrary to the general principle which they intend to express. 172 It should be noted in that regard that Article 8(4)(a) of Regulation No 3286/94 states that ‘the complainants and the exporters and importers concerned, as well as the representatives of the country or countries concerned, may inspect all information made available to the Commission except for internal documents for the use of the Commission and the administrations, provided that such information is relevant to the protection of their interests and not confidential within the meaning of Article 9 and that it is used by the Commission in its examination procedure’ and that ‘the persons concerned shall address a reasoned request in writing to the Commission, indicating the information required’. In addition, Article 8(4)(b) provides that ‘the complainants and the exporters and importers concerned and the representatives of the country or countries concerned may ask to be informed of the principal facts and considerations resulting from the examination procedure’. Article 8(8) of Regulation No 3286/94 requires the Commission to report to the committee referred to in Article 7 of the regulation once it has concluded its examination. 173 It follows from those provisions that Regulation No 3286/94 provides the complainants and the exporters and importers concerned, as well as the representatives of the country or countries concerned, with a right to information, subject to the conditions laid down in Article 8(4)(a) and (b), which must reflect, inter alia, the requirements of commercial confidentiality. Those persons may ask to be kept informed of the principal facts and considerations resulting from the examination procedure. 174 It is common ground in this case that the non-confidential version of the examination report was sent to the applicants after the opinion of the Advisory Committee was obtained and before the contested decision was adopted. The applicants could have stated their position at that time. However, they considered that, inasmuch as the Commission informed them at the same time that the contested decision would be adopted shortly, the Commission’s position was already decided upon when the report was sent. They therefore inferred that any observations that they might have to make would have no influence on the Commission’s position. The applicants are thus essentially maintaining that the Commission should have sent them the examination report in draft so as to enable them properly to formulate observations before it was sent to the Advisory Committee, or at the very least should have informed them on its own initiative of the principal facts and considerations resulting from the examination procedure. 175 However, there is no provision of Regulation No 3286/94 requiring the Commission to send the examination report in draft to the persons referred to in Article 8(4) of Regulation No 3286/94 before its submission to the Advisory Committee so as to enable those persons to inform the Commission of any observations they might have to make, nor to inform those persons on its own initiative of the principal facts and considerations resulting from the examination procedure. 176 On the contrary, under Article 8(4)(a) and (b) of Regulation No 3286/94 the persons referred to in that provision are required to make an application for information to the Commission. As regards the information used in the examination procedure (referred to in subparagraph (a)) that request must be made in writing to the Commission and must be reasoned and indicate the information required. Where the request relates to the principal facts and considerations resulting from the examination procedure (referred to in subparagraph (b)), the regulation lays down no form and no special conditions with which that request must comply. 177 In the present case, the applicants have never claimed to have sent the Commission a request for information under Article 8(4) of Regulation No 3286/94 before the adoption of the examination report. Furthermore, as the Commission has rightly pointed out, the applicants have not sought to plead the illegality of the provisions of Article 8(4) of Regulation No 3286/94. 178 The applicants have also accepted in their written pleadings that they were kept informed of the evolution and policy of the examination procedure, that they were able to state their position orally as to what they considered its outcome should be and that they were informed, before the adoption of the examination report, that the Commission considered that in the circumstances there was no adverse trade effect under Regulation No 3286/94. It is thus clear that the applicants were given the opportunity to state their position on the evolution and policy of the examination procedure and, at the very least, on one of its principal components and to defend their interests. It is true that the applicants have submitted in their application that that information was too general to represent observance of their procedural rights. However, the documents before the Court do not show that the applicants had requested the Commission prior to the end of the examination procedure to provide that information, in writing where appropriate, particularly as regards the principal facts and considerations, including legal ones, resulting from the examination procedure, as Article 8(4) of Regulation No 3286/94 required. It was at that point that, the Commission being under a duty to respond diligently to the request for information, the applicants would have been in a position properly to state their position in relation to the material contained in the Commission’s reply. Inasmuch as the applicants have never claimed to have submitted such a request, they cannot criticise the Commission in the present action for failing to allow them to present their observations on the factual and legal considerations resulting from the examination procedure. Moreover, the fact that the right to be informed of the principal facts and considerations resulting from the examination procedure is subject to the – sole – condition that the applicants submit their request to the Commission does not, on its own, prejudice the defence of their interests, particularly as that request is not required to comply with any particular formalities. 179 Furthermore, it is clear from the examination report that the Commission considered the various arguments set out in the complaint and replied to them. It also considered the position of products other than prepared mustard allegedly affected by the US measures in a similar way, in response to the participation of the interested parties in the examination procedure, which, as is clear from the examination report, and is not disputed by the applicants, cooperated in that procedure. 180 For all those reasons, the seventh plea must be rejected. The eighth plea, alleging breach of Article 8(8) of Regulation No 3286/94 and failure of the Commission to comply with the duty to exercise due diligence181 This plea is in two parts. The first alleges failure to observe the time-limit laid down by Article 8(8) of Regulation No 3286/94. The second alleges failure by the Commission to exercise due diligence as regards the period between the end of the period of consultation with the committee referred to in Article 7 of Regulation No 3286/94 and the adoption of the contested decision. The first part of the eighth plea, alleging failure to observe the time-limit laid down by Article 8(8) of Regulation No 3286/94 182 The applicants note that, under Article 8(8) of Regulation No 3286/94, the Commission is normally to submit the examination report to the committee referred to in Article 7 of the regulation within five months of the notice of initiation of the procedure, unless the complexity of the examination is such that the Commission extends the period to seven months. According to the applicants, the period of seven months cannot be extended and the provision is there to ensure that the complainants are given a swift reply as regards the outcome of the application to the Commission. In so far as, in the present case, the Commission in fact considered that the complexity of the examination required the period to be extended to seven months and the Committee did not receive the examination report until 27 March 2002, or seven months and 27 days after the initiation of the procedure, the applicants are of the view that the Commission contravened Article 8(8) of Regulation No 3286/94. 183 The Commission considers that the time taken to complete the procedure is not unreasonable, having regard to the complexity of the subject-matter of the contested decision and to its concern to consider all the arguments of the various interveners before terminating the procedure. The Commission also states that it undertook the procedure at issue in a spirit of good faith and kept all the parties concerned informed. 184 It should be remembered as a preliminary point that Article 8(8) of Regulation No 3286/94 states:‘When it has concluded its examination the Commission shall report to the Committee. The report should normally be presented within five months of the announcement of initiation of the procedure, unless the complexity of the examination is such that the Commission extends the period to seven months.’ 185 In the present case, the applicants do not deny that the examination undertaken by the Commission was complex and required that the period be extended to seven months. It is also common ground that the examination report was sent to the committee referred to in Article 7 of Regulation No 3286/94 seven months and 27 days after the initiation of the examination procedure. The time-limit of seven months laid down in Article 8(8) of Regulation No 3286/94 was thus exceeded. 186 However, it must be determined whether such a failure to comply with the time-limit laid down in Article 8(8) of Regulation No 3286/94 can have the result that the contested decision should be annulled. 187 While failure to comply with a mandatory time-limit will result in the nullity of every act adopted after the expiry of the time-limit, failure to comply with a time-limit that is purely indicative does not, as a matter of principle, mean that an act adopted after its expiry falls to be annulled (see, by way of analogy, Joined Cases T-163/94 and T-165/94 NTN Corporation and Koyo Seiko v Council [1995] ECR II-1381, paragraph 119, and the case-law cited there). 188 Next, as regards the nature of the period referred to in Article 8(8) of Regulation No 3286/94, it must be held that the use of the conditional and of the adverb ‘normally’ in the second sentence of that provision supports the view that the period of five months allowed for the submission of the examination report is indicative (see, by way of analogy, NTN Corporation and Koyo Seiko v Council, paragraph 119). 189 The Court is of the view that the fact that the Commission considers that the complexity of the examination required that the period for the submission of the examination report be extended to seven months has no effect on nature of the period. The period of seven months which Article 8(8) of Regulation No 3286/94 refers to merely represents, in the case of a ‘complex’ examination, the extension of the initial period of five months laid down for an examination which is ‘straightforward or normal’. The end of the second sentence of Article 8(8) of Regulation No 3286/94 indicates that it is a question of ‘extend[ing] the period to seven months’. That wording is also used in the other language versions of Regulation No 3286/94. It follows that, inasmuch as the period for sending the examination report is purely indicative in the case of an examination which is ‘straightforward or normal’, the position should not differ in the case of an examination which is ‘complex’, since all that is involved is an extension of the initial period. 190 That point made, the Court is of the view that the Commission ought not to delay the submission of the examination report beyond a period which is reasonable (see, by way of analogy, NTN Corporation and Koyo Seiko v Council), as that might delay the adoption of the decision to terminate the examination procedure. 191 However, in the present case, the fact that the indicative time-limit of seven months provided for in Article 8(8) of Regulation No 3286/94 was exceeded by 27 days does not amount to failure to comply with a reasonable time-limit. 192 The first part of the eighth plea must accordingly be rejected. The second part of the eighth plea, alleging failure by the Commission to exercise due diligence as regards the period between the end of the period of consultation with the committee referred to in Article 7 of Regulation No 3286/94 and the adoption of the contested decision 193 The applicants submit that the Commission failed in its duty to exercise due diligence, which required it to adopt the contested decision more quickly than was the case, following consultation with the committee referred to in Article 7 of Regulation No 3286/94. According to the applicants, the contested decision was not adopted until three months after the end of the consultation period. Having regard to the importance of the procedure laid down in Regulation No 3286/94 for the undertakings concerned and the already very long period that had elapsed between the announcement of the initiation of the examination procedure and the submission of the examination report to the Committee, the applicants consider that the Commission failed in its duty of diligence. 194 The Commission replies that it acted with all possible diligence in a case having important consequences.195 By virtue of Article 7(4) of Regulation No 3286/94, the Advisory Committee has eight working days within which to respond to the examination report submitted by the Commission under Article 8(8) of the regulation. 196 Article 11(1) of Regulation No 3286/94 states that a Commission decision terminating an examination procedure must be adopted in accordance with the procedure laid down in Article 14 of the regulation. Article 14(2) provides that ‘the Commission representative shall submit to the Committee a draft of the decision to be taken’ and that ‘the Committee shall discuss the matter within a period to be fixed by the chairman, depending on the urgency of the matter’. Article 14(3) of Regulation No 3286/94 states that ‘the Commission shall adopt a decision which it shall communicate to the Member States and which shall apply after a period of ten days if during this period no Member State has referred the matter to the Council’. 197 It follows that Regulation No 3286/94 does not specify any time-limit for the Commission’s submission of a draft decision to the Advisory Committee following the period of consultation on the examination report, nor does it specify the period which is to elapse between the point when the Advisory Committee has considered the draft decision and the time the Commission reaches a decision. Accordingly, the regulation does not lay down any period within which a decision to terminate an examination procedure, such as the contested decision in this case, must ensue following the consultation with the committee referred to in Article 7 of Regulation No 3286/94. 198 The silence of Regulation No 3286/94 on that point can be interpreted as reflecting the desire of the Community legislature to provide the Commission with a certain discretion as regards the date on which a decision terminating an examination procedure needs to be adopted, having regard to all the circumstances of each case, in particular any steps which the Commission envisages may be taken against the authorities of the non-Member State in question before an examination procedure is terminated. 199 Nevertheless, the recognition of such a discretion does not mean that the Commission may delay the adoption of a decision taken under Article 11(1) of Regulation No 3286/94 beyond a reasonable time, which falls to be assessed with regard to the particular circumstances of each case. Such a limit aims to ensure, as the applicants have submitted, compliance with the duty of diligence and the principle of sound administration which are binding on the Commission. 200 In the present case, two months and 24 days elapsed between the end of the procedure for consultation with the Committee, on 15 April 2002, and the adoption of the contested decision on 9 July 2002. Such a period is not unreasonable, having regard in particular to the obligation imposed on the Commission to undertake internal consultation with its various services on the draft decision, the duty imposed by Article 14 of Regulation No 3286/94 to consult with Member States with regard to the decision, and the duty to allow sufficient time for the decision to be translated into all the official languages of the Community. 201 It follows that the second part of this plea must be rejected, as must the eighth plea in its entirety.202 In those circumstances, the action must be dismissed in its entirety. Costs203 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful, they must be ordered to pay the costs, as applied for by the Commission. On those grounds,THE COURT OF FIRST INSTANCE (First Chamber, Extended Composition)hereby:1. Dismisses the action;2. Orders the applicants to pay the costs.B. Vesterdorf P. Mengozzi M.E. Martins Ribeiro F. Dehousse I. Labucka Delivered in open court in Luxembourg on 14 December 2004.H. Jung B. VesterdorfRegistrar PresidentTable of contentsLegal frameworkBackgroundProcedure and forms of order soughtAdmissibilitySubstanceThe first plea, alleging breach of Article 2(1) of Regulation No 3286/94Arguments of the partiesFindings of the CourtThe second plea, alleging breach of Article 2(4) of Regulation No 3286/94The third plea, alleging breach of Article 10(5) of Regulation No 3286/94The fourth plea, alleging breach of Article 11(1) of Regulation No 3286/94– Preliminary remarks– The assessment of the interests of the Community when the notice of initiation of the examination procedure is published– The assimilation or reduction of the Community’s interests to the individual interests of the complainant and the failure to take account of the interests of the other interested parties The fifth plea, alleging failure to state reasons in the contested decisionThe first part of the fifth plea, based on failure to state reasons as regards the analysis of the obstacle to trade– Arguments of the parties– Findings of the CourtThe second part of the fifth plea, based on failure to state reasons as regards the Community interest in proceeding to actThe sixth plea, alleging manifest errors in the assessment of the facts and breach of Article 2(4) and Article 11(1) of Regulation No 3286/94 The first part of the sixth plea, based on a manifest error of assessment on the Commission’s part in relation to the possibility of removal of the applicants’ products from the list of goods subject to the US customs surcharge The second part of the sixth plea, based on manifest error of assessment in relation to the restitution of the customs surcharge that was wrongly paid The seventh plea, alleging breach of the right to a fair hearingThe eighth plea, alleging breach of Article 8(8) of Regulation No 3286/94 and failure of the Commission to comply with the duty to exercise due diligence The first part of the eighth plea, alleging failure to observe the time-limit laid down by Article 8(8) of Regulation No 3286/94The second part of the eighth plea, alleging failure by the Commission to exercise due diligence as regards the period between the end of the period of consultation with the committee referred to in Article 7 of Regulation No 3286/94 and the adoption of the contested decision Costs* Language of the case: French. | a9644-2b37a82-416a | EN |
THE COURT DECLARES THE PROHIBITION ON TOBACCO PRODUCTS FOR ORAL USE TO BE VALID | Arnold André GmbH & Co. KGvLandrat des Kreises Herford(Reference for a preliminary ruling from the Verwaltungsgericht Minden)(Directive 2001/37/EC – Manufacture, presentation and sale of tobacco products – Article 8 – Prohibition of placing on the market of tobacco products for oral use – Validity)Summary of the Judgment1. Approximation of laws – Manufacture, presentation and sale of tobacco products – Directive 2001/37 – Legal basis – Article 95 EC – Improvement of the conditions for the functioning of the internal market – Prohibition of marketing tobacco products for oral use – Included(Art. 95 EC; European Parliament and Council Directive 2001/37, Art. 8)2. Approximation of laws – Manufacture, presentation and sale of tobacco products – Directive 2001/37 – Harmonising measures – Prohibition of marketing tobacco products for oral use – No breach of the principle of proportionality(European Parliament and Council Directive 2001/37, Art. 8)3. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – Directive 2001/37 concerning the manufacture, presentation and sale of tobacco products – Prohibition of marketing tobacco products for oral use – Justification – Protection of public health(Arts 28 EC, 29 EC and 30 EC; European Parliament and Council Directive 2001/37, Art. 8)4. Acts of the institutions – Statement of reasons – Obligation – Extent – Directive 2001/37 concerning the manufacture, presentation and sale of tobacco products – Provision prohibiting the marketing of tobacco products for oral use(Art. 253 EC)5. Approximation of laws – Manufacture, presentation and sale of tobacco products – Directive 2001/37 – Harmonising measures – Prohibition of marketing tobacco products for oral use – No breach of the principle of non-discrimination1. The prohibition of the marketing of tobacco products for oral use in Article 8 of Directive 2001/37 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products could be adopted on the basis of Article 95 EC. That provision authorises the Community legislature to intervene by adopting appropriate measures, in compliance with Article 95(3) EC and with the legal principles mentioned in the Treaty or identified in the case-law, in particular the principle of proportionality. Having regard to the public’s growing awareness of the dangers to health of the consumption of tobacco products, it is likely that obstacles to the free movement of those products would arise by reason of the adoption by the Member States of new rules reflecting that development and intended more effectively to discourage consumption of those products. (see paras 34, 40, 43)2. To satisfy its obligation to take as a base a high level of protection in health matters, in accordance with Article 95(3) EC, the Community legislature was able, without exceeding the limits of its discretion in the matter, to consider that a prohibition of the marketing of tobacco products for oral use such as that laid down in Article 8 of Directive 2001/37 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products was necessary. No other measures aimed at imposing technical standards on manufacturers in order to reduce the harmful effects of the product, or at regulating the labelling of packagings of the product and its conditions of sale, in particular to minors, would have the same preventive effect in terms of the protection of health, inasmuch as they would let a product which is in any event harmful gain a place in the market. (see paras 54-55)3. Even if the prohibition of marketing tobacco products for oral use under Article 8 of Directive 2001/37 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products constitutes a restriction referred to in Articles 28 EC and 29 EC, it is justified on grounds of the protection of human health, and cannot therefore be regarded as having been adopted in breach of the provisions of those articles. (see para. 59)4. Since Directive 2001/37 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products specifies, in the 28th recital in its preamble, that Directive 89/622 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the labelling of tobacco products prohibited the sale in the Member States of certain types of tobacco for oral use and that Article 151 of the Act concerning the conditions of accession of the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded granted the Kingdom of Sweden a derogation from the provisions of the latter directive, it does not appear that the confirmation of that prohibition in Article 8 of Directive 2001/37 required that directive to specify other relevant points of fact and law in order to satisfy the obligation to state reasons under Article 253 EC. (see para. 66)5. Although tobacco products for oral use, as defined in Article 2 of Directive 2001/37 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products, are not fundamentally different in their composition or indeed their destination from tobacco products intended to be chewed, they were not in the same situation as those products at the time of adoption of the directive. Tobacco products for oral use were new to the markets of the Member States referred to in the prohibition of marketing in Article 8 of the directive. That particular situation thus authorised a difference in treatment of those products, and it cannot validly be argued that there was a breach of the principle of non-discrimination. (see para. 69)JUDGMENT OF THE COURT (Grand Chamber)14 December 2004(1) THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 7 September 2004,gives the followingLegal backgroundThe prohibition in Article 8a of Directive 89/622/EEC, as amended …, concerning the placing on the market of the product defined in Article 2(4) of [the] Directive … shall not apply [in the Kingdom of Sweden …], with the exception of the prohibition to place this product on the market in a form resembling a food product. [The Kingdom of Sweden] shall take all measures necessary to ensure that the product referred to in paragraph (a) is not placed on the market in the Member States for which Directives 89/622/EEC and 92/41/EEC are fully applicable. …’“tobacco products” means products for the purposes of smoking, sniffing, sucking or chewing, inasmuch as they are, even partly, made of tobacco, whether genetically modified or not; …“tobacco for oral use” means all products for oral use, except those intended to be smoked or chewed, made wholly or partly of tobacco, in powder or in particulate form or in any combination of those forms, particularly those presented in sachet portions or porous sachets, or in a form resembling a food product; to grant it leave to submit written observations following the Opinion of the Advocate General;in the alternative, to order the oral procedure to be reopened, pursuant to Article 61 of the Rules of Procedure. 1 – Language of the case: German. Language of the case: German. | ef172-0f6c1a5-481a | EN |
THE DEPOSIT AND RETURN OBLIGATIONS INTRODUCED IN GERMANY FOR NON-REUSABLE DRINKS PACKAGING, WHILST CONTRIBUTING TO ACHIEVING ONE OF THE GENERAL OBJECTIVES OF ENVIRONMENTAL PROTECTION POLICY, HINDER THE FREE MOVEMENT OF GOODS IF PRODUCERS DO NOT HAVE A REASONABLE TRANSITIONAL PERIOD AND A GUARANTEE THAT THE NEW SYSTEM WILL BE OPERATIONAL WHEN THE OLD SYSTEM CEASES TO EXIST | Commission of the European CommunitiesvFederal Republic of Germany(Environment – Free movement of goods – Packaging and packaging waste – Directive 94/62/EC – Exploitation and marketing of natural mineral waters – Directive 80/777/EEC – Deposit and return obligations for non-reusable packaging that depend on the overall percentage of reusable packaging)Summary of the Judgment1. Environment – Waste – Packaging and packaging waste – Directive 94/62 – Power granted to the Member States to encourage systems for the reuse of packaging –Directive not containing specific criteria concerning the organisation of those systems – Assessment of the systems in light of the Treaty provisions relating to the free movement of goods(Arts 28 EC and 30 EC; European Parliament and Council Directive 94/62, Art. 5)2. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National rules replacing a global packaging-waste collection system with a deposit and return system – Not permissible – Justification – Protection of the environment – Condition – Observance of the principle of proportionality(Arts 28 EC and 30 EC)1. Article 5 of Directive 94/62 on packaging and packaging waste, which grants the Member States the power to encourage, in conformity with the Treaty, systems for the reuse of packaging that can be reused in an environmentally sound manner, formulates that power in general terms and does not specify the criteria to be taken into account by the Member States which exercise it. Accordingly, given that the directive does not regulate, as regards Member States disposed to exercise that power, the organisation of systems encouraging reusable packaging, such systems can be assessed on the basis of the Treaty provisions relating to the free movement of goods. (see paras 41, 43, 45, 50)2. A Member State which, as regards non-reusable packaging, replaces a global packaging-collection system with a deposit and return system, obliging producers to alter certain information on their packaging and causing additional costs for every producer and distributor, without affording them a transitional period sufficient to enable them to adapt to the requirements of the new system, fails to fulfil its obligations under Article 5 of Directive 94/62 on packaging and packaging waste in conjunction with Article 28 EC. Such national rules capable of hindering intra-Community trade may be justified by overriding requirements relating to protection of the environment only if the means which they employ are suitable for the purpose of attaining the desired objectives and do not go beyond what is necessary for that purpose. (see paras 59, 62, 68, 75, 78-79, operative part)JUDGMENT OF THE COURT (Grand Chamber)14 December 2004(1) applicant,interveners,defendant,THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 6 May 2004,gives the followingLegal contextthe transport of natural mineral water in containers other than those authorised for distribution to the ultimate consumer is prohibited.’ the return and/or collection of used packaging and/or packaging waste from the consumer, other final user, or from the waste stream in order to channel it to the most appropriate waste management alternatives; the reuse or recovery including recycling of the packaging and/or packaging waste collected,Declares that, by establishing, through Paragraphs 8(1) and 9(2) of the Verordnung über die Vermeidung und Verwertung von Verpackungsabfällen (Regulation on the Avoidance and Recovery of Packaging Waste), a system seeking the re-use of packaging for products which, under Council Directive 80/777/EEC of 15 July 1980 on the approximation of the laws of the Member States relating to the exploitation and marketing of natural mineral waters, must be bottled at source, the Federal Republic of Germany has failed to fulfil its obligations under Article 5 of European Parliament and Council Directive 94/62/EC of 20 December 1994 on packaging and packaging waste in conjunction with Article 28 EC; Orders the Federal Republic of Germany to pay the costs;Orders the French Republic and the United Kingdom of Great Britain and Northern Ireland to bear their own costs. 1 – Language of the case: German. Language of the case: German. | 4b0b0-664d302-41f7 | EN |
ADVOCATE GENERAL GEELHOED MAINTAINS HIS OPINION THAT THE COURT MAY IMPOSE A LUMP SUM FINE ON A MEMBER STATE FOR A PERSISTENT AND STRUCTURAL INFRINGEMENT OF COMMUNITY LAW | 12 July 2005 (*) (Failure of a Member State to fulfil obligations – Fisheries – Control obligations placed on the Member States – Judgment of the Court establishing a breach of obligations – Non-compliance – Article 228 EC – Payment of a lump sum – Imposition of a penalty payment)In Case C-304/02,ACTION under Article 228 EC for failure to fulfil obligations, brought on 27 August 2002,Commission of the European Communities, represented by M. Nolin, H. van Lier and T. van Rijn, acting as Agents, with an address for service in Luxembourg, applicant,vFrench Republic, represented by G. de Bergues and A. Colomb, acting as Agents, defendant,THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann (Rapporteur) and C.W.A. Timmermans, Presidents of Chambers, C. Gulmann, J.‑P. Puissochet, R. Schintgen, N. Colneric, S. von Bahr and J.N. Cunha Rodrigues, Judges, Advocate General: L.A. Geelhoed, Registrar: M. Múgica Arzamendi, Principal Administrator, subsequently M.‑F. Contet, Principal Administrator, and H. von Holstein, Deputy Registrar, having regard to the written procedure and further to the hearing on 3 March 2004,after hearing the Opinion of the Advocate General at the sitting on 29 April 2004,having regard to the order of 16 June 2004 reopening the oral procedure and further to the hearing on 5 October 2004,after hearing the oral observations of:– the Commission, represented by G. Marenco, C. Ladenburger and T. van Rijn, acting as Agents,– the French Republic, represented by R. Abraham, G. de Bergues and A. Colomb, acting as Agents,– the Kingdom of Belgium, represented by J. Devadder, acting as Agent,– the Czech Republic, represented by T. Boček, acting as Agent,– the Kingdom of Denmark, represented by A.R. Jacobsen and J. Molde, acting as Agents,– the Federal Republic of Germany, represented by W.D. Plessing, acting as Agent,– the Hellenic Republic, represented by A. Samoni and E.M. Mamouna, acting as Agents,– the Kingdom of Spain, represented by N. Diaz Abad, acting as Agent,– Ireland, represented by D. O’Donnell and P. Mc Cann, acting as Agents,– the Italian Republic, represented by I.M. Braguglia, acting as Agent,– the Republic of Cyprus, represented by D. Lissandrou and E. Papageorgiou, acting as Agents,– the Republic of Hungary, represented by R. Somssich and A. Muller, acting as Agents,– the Kingdom of the Netherlands, represented by J. van Bakel, acting as Agent,– the Republic of Austria, represented by E. Riedl, Rechtsanwalt,– the Republic of Poland, represented by T. Nowakowski, acting as Agent,– the Portuguese Republic, represented by L. Fernandes, acting as Agent,– the Republic of Finland, represented by T. Pynnä, acting as Agent,– the United Kingdom of Great Britain and Northern Ireland, represented by D. Anderson QC,after hearing the Opinion of the Advocate General at the sitting on 18 November 2004,gives the followingJudgment1 By its application, the Commission of the European Communities requests the Court to:– declare that, by failing to take the necessary measures to comply with the judgment of 11 June 1991 in Case C-64/88 Commission v France [1991] ECR I-2727, the French Republic has failed to fulfil its obligations under Article 228 EC; – order the French Republic to pay to the Commission, into the account ‘European Community own resources’, a penalty payment in the sum of EUR 316 500 for each day of delay in implementing the measures necessary to comply with the judgment in Case C-64/88 Commission v France, cited above, from delivery of the present judgment until the judgment in Case C‑64/88 Commission v France has been complied with; – order the French Republic to pay the costs. Community legislation Rules regarding controls 2 The Council has established certain control measures for fishing activities by vessels of the Member States. Those measures have been successively set out in Council Regulation (EEC) No 2057/82 of 29 June 1982 establishing certain control measures for fishing activities by vessels of the Member States (OJ 1982 L 220, p. 1), in Council Regulation (EEC) No 2241/87 of 23 July 1987 establishing certain control measures for fishing activities (OJ 1987 L 207, p. 1) which repealed and replaced Regulation No 2057/82, and in Council Regulation (EEC) No 2847/93 of 12 October 1993 establishing a control system applicable to the common fisheries policy (OJ 1993 L 261, p. 1) which repealed and replaced Regulation No 2241/87 on 1 January 1994. 3 The control measures set out in those regulations are essentially identical.4 Article 1(1) and (2) of Regulation No 2847/93 provides:‘1. In order to ensure compliance with the rules of the common fisheries policy, a Community system is hereby established including in particular provisions for the technical monitoring of: – conservation and resource management measures,– structural measures,– [measures] concerning the common organisation of the market,as well as certain provisions relating to the effectiveness of sanctions to be applied in cases where the abovementioned measures are not observed. 2. To this end, each Member State shall adopt, in accordance with Community rules, appropriate measures to ensure the effectiveness of the system. It shall place sufficient means at the disposal of its competent authorities to enable them to perform their tasks of inspection and control as laid down in this Regulation.’ 5 Article 2(1) of Regulation No 2847/93 states:‘In order to ensure compliance with all the rules in force concerning conservation and control measures, each Member State shall, within its territory and within maritime waters subject to its sovereignty or jurisdiction, monitor fishing activity and related activities. It shall inspect fishing vessels and investigate all activities thus enabling verification of the implementation of this Regulation, including the activities of landing, selling, transporting and storing fish and recording landings and sales.’ 6 Article 31(1) and (2) of Regulation No 2847/93 provides:‘1. Member States shall ensure that the appropriate measures be taken, including of administrative action or criminal proceedings in conformity with their national law, against the natural or legal persons responsible where common fisheries policy have [sic] not been respected, in particular following a monitoring or inspection carried out pursuant to this Regulation. 2. The proceedings initiated pursuant to paragraph 1 shall be capable, in accordance with the relevant provisions of national law, of effectively depriving those responsible of the economic benefit of the infringements or of producing results proportionate to the seriousness of such infringements, effectively discouraging further offences of the same kind.’ Technical rules7 The technical measures for the conservation of fishery resources which are envisaged by the rules regarding controls have been set out inter alia in Council Regulation (EEC) No 171/83 of 25 January 1983 (OJ 1983 L 24, p. 14), repealed and replaced by Council Regulation (EEC) No 3094/86 of 7 October 1986 (OJ 1986 L 288, p. 1), itself repealed and replaced with effect from 1 July 1997 by Council Regulation (EC) No 894/97 of 29 April 1997 (OJ 1997 L 132, p. 1), in turn partially repealed and replaced with effect from 1 January 2000 by Council Regulation (EC) No 850/98 of 30 March 1998 for the conservation of fishery resources through technical measures for the protection of juveniles of marine organisms (OJ 1998 L 125, p. 1). 8 The technical measures laid down by those regulations are essentially identical.9 The measures concern, inter alia, the minimum mesh size for nets, the prohibition on attaching to nets certain devices by means of which the mesh is obstructed or diminished, and the prohibition on offering for sale fish of less than the minimum size (‘undersized fish’) except for catches representing only a limited percentage of the overall catch (‘by-catches’). The judgment in Case C-64/88 Commission v France10 In the judgment in Case C-64/88 Commission v France, the Court declared: ‘by failing to carry out between 1984 and 1987 controls ensuring compliance with technical Community measures for the conservation of fishery resources, laid down by [Regulation No 171/83] and by [Regulation No 3094/86], the French Republic has failed to fulfil its obligations under Article 1 of [Regulation No 2057/82] and under Article 1 of [Regulation No 2241/87]’. 11 In that judgment, the Court upheld five complaints against the French Republic:– inadequate controls in relation to the minimum mesh size for nets (paragraphs 12 to 15 of the judgment);– inadequate controls in relation to the attachment to nets of devices prohibited by the Community rules (paragraphs 16 and 17 of the judgment); – failure to fulfil control obligations in relation to by-catches (paragraphs 18 and 19 of the judgment);– failure to fulfil control obligations so far as concerns compliance with the technical measures of conservation prohibiting the sale of undersized fish (paragraphs 20 to 23 of the judgment); – failure to fulfil the obligation to take action in respect of infringements (paragraph 24 of the judgment). Pre-litigation procedure12 By letter of 8 November 1991, the Commission requested the French authorities to inform it of the measures taken to comply with the judgment in Case C-64/88 Commission v France. On 22 January 1992 the French authorities replied that they ‘[intended] to do their utmost to comply with the [Community] provisions’. 13 In the course of a number of visits to French ports the Commission inspectors found that the situation had improved, but noted that the French authorities’ controls were inadequate in several respects. 14 After requesting the French Republic to submit its observations, on 17 April 1996 the Commission issued a reasoned opinion in which it stated that the judgment in Case C-64/88 Commission v France had not been complied with in the following respects: – failure to comply with the Community rules in the measuring of the minimum mesh size of nets;– inadequate controls, enabling undersized fish to be offered for sale;– laxness on the part of the French authorities in taking action in respect of infringements.15 Pointing out that financial penalties could be imposed for failure to comply with a judgment of the Court, the Commission set a time-limit of two months for the French Republic to take all the measures necessary in order to comply with the judgment in Case C-64/88 Commission v France. 16 In the course of an exchange of correspondence between the French authorities and Commission staff, the former kept the Commission informed of the measures that it had taken and was continuing to implement to strengthen controls. 17 At the same time, inspection visits were made to French ports. On the basis of reports drawn up after visiting Lorient, Guilvinec and Concarneau from 24 to 28 August 1996, Guilvinec, Concarneau and Lorient from 22 to 26 September 1997, Marennes-Oléron, Arcachon and Bayonne from 13 to 17 October 1997, south Brittany and Aquitaine from 30 March to 4 April 1998, Douarnenez and Lorient from 15 to 19 March 1999 and Lorient, Bénodet, Loctudy, Guilvinec, Lesconil and Saint-Guénolé from 13 to 23 July 1999, the Commission staff reached the conclusion that two problems remained, namely inadequate controls enabling undersized fish to be offered for sale and the laxness on the part of the French authorities in taking action in respect of infringements. 18 The inspectors’ reports prompted the Commission to issue a supplementary reasoned opinion on 6 June 2000, in which it stated that the judgment in Case C‑64/88 Commission v France had not been complied with as regards the two matters mentioned above. The Commission indicated that, in this context, it regarded as ‘particularly serious the fact that public documents relating to sales by auction officially use the code “00” in clear breach of Council Regulation (EC) No 2406/96 of 26 November 1996 laying down common marketing standards for certain fishery products’ (OJ 1996 L 334, p. 1). It pointed out that financial penalties could be imposed. 19 In their response of 1 August 2000, the French authorities essentially contended that since the last inspection report national fisheries control had undergone significant change. An internal reorganisation had taken place, with the establishment of a fisheries control ‘unit’, which subsequently became a fisheries control ‘task force’, and the means of control had been strengthened, including the provision of patrol boats and of a system for the on-screen surveillance of vessels’ positions and the circulation of instructions for the use of control staff. 20 On an inspection visit from 18 to 28 June 2001 to the communes Guilvinec, Lesconil, Saint-Guénolé and Loctudy, the Commission’s inspectors recorded poor controls, the presence of undersized fish and the offering for sale of those fish under the code ‘00’. 21 By letter of 16 October 2001, the French authorities sent to the Commission a copy of an instruction addressed to the regional and departmental maritime directorates, enjoining them to put an end to use of the code ‘00’ by 31 December 2001 and to apply from that date the statutory penalties to economic operators not complying with the instruction. The French authorities referred to an increase since 1998 in the number of proceedings for infringement of the rules on minimum sizes and to the deterrent effect of the penalties imposed. They also informed the Commission of the adoption in 2001 of a general fisheries control plan, which laid down priorities, including implementation of a hake recovery plan and strict control of compliance with minimum sizes. 22 Taking the view that the French Republic still had not complied with the judgment in Case C-64/88 Commission v France, the Commission brought the present action. Procedure before the Court23 In answer to a question asked by the Court with a view to the hearing on 3 March 2004, the Commission informed the Court that, since the present action was brought, its staff had made three further inspection visits (from 11 to 16 May 2003 to Sète and Port-Vendres, from 19 to 20 June 2003 to Loctudy, Lesconil, Saint-Guénolé and Guilvinec, and from 14 to 22 July 2003 to Port-la-Nouvelle, Sète, Le Grau-du-Roi, Carro, Sanary‑sur-Mer and Toulon). According to the Commission, it is apparent from the mission reports on those visits that the number of cases of undersized fish being offered for sale had decreased in Brittany but problems remained on the Mediterranean coast with regard to bluefin tuna, and that inspections on landing were infrequent. 24 The Commission explained that, in order to assess the effectiveness of the measures taken by the French authorities, it would need to have the reports and sets of statistics relating to implementation of the various measures for the general organisation of fisheries control to which the French Government had referred. 25 After being requested by the Court to indicate the number of inspections at sea and on land which the French authorities had carried out since the bringing of the present action with a view to ensuring compliance with the rules relating to the minimum size of fish, the number of infringements recorded and the action taken by the courts in respect of those infringements, on 30 January 2004 the French Government lodged fresh statistics. They show that the number of inspections, findings of infringement and convictions was lower in 2003 than in 2002. 26 The French Government stated that the decrease in inspections at sea was due to the mobilisation of French vessels to fight the pollution caused by the shipwrecking of the oil tanker Prestige and that inspections on land had decreased because the discipline of fishermen had improved. It explained that the decrease in the number of convictions was due to the effects of Law No 2002-1062 of 6 August 2002 granting an amnesty (JORF No 185 of 9 August 2002, p. 13647), while pointing out that the average amount of the fines imposed had increased. The breach of obligations alleged The geographical area at issue27 It should be noted as a preliminary point that the declaration made in the operative part of the judgment in Case C-64/88 Commission v France that the French Republic had failed to carry out controls ensuring compliance with technical Community measures for the conservation of fishery resources, laid down by Regulations Nos 171/83 and 3094/86, only concerned, as is apparent from the delimitation set out in Article 1(1) of those regulations, the taking and landing of fishery resources occurring in certain areas of the north-east Atlantic. 28 As submitted by the French Government and explained by the Commission at the hearing on 3 March 2004, the present action thus relates only to the situation in those areas. The reference date29 The Commission sent the first reasoned opinion to the French Republic on 14 April 1996 and, subsequently, a supplementary reasoned opinion on 6 June 2000. 30 It follows that the reference date for assessing the alleged breach of obligations is the date upon which the period laid down in the supplementary reasoned opinion of 6 June 2000 expired, that is to say two months after notification of that opinion (Case C-474/99 Commission v Spain [2002] ECR I‑5293, paragraph 27, and Case C-33/01 Commission v Greece [2002] ECR I‑5447, paragraph 13). 31 Since the Commission has claimed that the Court should impose a penalty payment on the French Republic, it should also be ascertained whether the alleged breach of obligations has continued up to the Court’s examination of the facts. The extent of the obligations on the Member States under the common fisheries policy32 Article 1 of Regulation No 2847/93, which constitutes a specific embodiment, in the field of fisheries, of the obligations imposed on the Member States by Article 10 EC, provides that the Member States are to adopt appropriate measures to ensure the effectiveness of the Community system for conservation and management of fishery resources. 33 Regulation No 2847/93 imposes in this regard a joint responsibility on Member States (see, in relation to Regulation No 2241/87, Case C-9/89 Commission v Spain [1990] ECR I-1383, paragraph 10). This joint responsibility means that when a Member State fails to fulfil its obligations, it prejudices the interests of the other Member States and of their economic operators. 34 It is imperative that the Member States fulfil the obligations incumbent on them under the Community rules in order to ensure the protection of fishing grounds, the conservation of the biological resources of the sea and their exploitation on a sustainable basis in appropriate economic and social conditions (see, in relation to failure to comply with the quota system for the fishing years 1991 to 1996, Joined Cases C-418/00 and C-419/00 Commission v France [2002] ECR I-3969, paragraph 57). 35 To this end, Article 2 of Regulation No 2847/93, which repeats the obligations laid down by Article 1(1) of Regulation No 2241/87, obliges the Member States to monitor fishing activity and related activities. It requires them to inspect fishing vessels and investigate all activities, including the activities of landing, selling, transporting and storing fish and recording landings and sales. 36 Article 31 of Regulation No 2847/93, which takes up the obligations laid down in Article 1(2) of Regulations Nos 2057/82 and 2241/87, requires the Member States to take action in respect of recorded infringements. It states that the proceedings initiated must be capable of effectively depriving those responsible of the economic benefit of the infringements or of producing results proportionate to the seriousness of such infringements, effectively discouraging further offences of the same kind. 37 Regulation No 2847/93 thus provides specific indications as to the content of the measures which must be taken by the Member States and which must seek to ensure that fishery operations are conducted properly with the objective of both preventing any breaches and punishing such breaches. That objective means that the measures implemented must be effective, proportionate and a deterrent. As the Advocate General has observed in point 39 of his Opinion of 29 April 2004, there must be a serious risk, for persons engaging in fishing activity and related activities, that in the event of infringement of the rules of the common fisheries policy, they will be detected and have sufficiently severe penalties imposed on them. 38 It is in light of those considerations that the question whether the French Republic has taken all the necessary measures to comply with the judgment in Case C‑64/88 Commission v France should be examined. The first complaint: inadequate controls Arguments of the parties39 The Commission maintains that it is clear from the findings made by its inspectors that the French authorities’ controls regarding compliance with the Community provisions on the minimum size of fish are still deficient. 40 The increase in the number of inspections to which the French Government refers cannot modify those findings since only inspections at sea are involved. The control plans adopted by the French Government in 2001 and 2002 are not, in themselves, capable of bringing the alleged breach of obligations to an end. Implementation of those plans involves the prior setting of objectives, which are necessary in order to be able to assess the effectiveness and operability of the plans. Moreover, the plans must actually be implemented, which the visits made to French ports since the plans were established have not demonstrated. 41 The French Government observes, first of all, that the inspection reports upon which the Commission relies were never made known to the French authorities, which were not in a position to respond to the statements that they contain. Furthermore, those reports are founded on mere suppositions. 42 It also submits that since delivery of the judgment in Case C-64/88 Commission v France it has been constantly strengthening its control mechanisms. This strengthening has taken the form of an increase in the number of inspections at sea and the adoption, in 2001, of a general control plan, supplemented, in 2002, by a ‘minimum catch sizes’ control plan. With regard to the effectiveness of those measures, it points out that it has been possible to record no marketing of undersized fish on several inspection visits made by Commission inspectors. 43 Finally, in the French Government’s submission, the Commission merely asserts that the measures taken by it are inappropriate without indicating the measures capable of bringing the alleged breach of obligations to an end. Findings of the Court44 Like the procedure laid down in Article 226 EC (see, in relation to failure to comply with the quota system for the fishing years 1988 and 1990, Case C‑333/99 Commission v France [2001] ECR I-1025, paragraph 33), the procedure laid down in Article 228 EC is based on the objective finding that a Member State has failed to fulfil its obligations. 45 In the present instance, the Commission has adduced in support of its complaint mission reports drawn up by its inspectors.46 The French Government’s line of argument, put forward at the stage of its rejoinder, that the reports to which the Commission referred in its application cannot be used as evidence that the breach of obligations has persisted on the ground that they were never made known to the French authorities, cannot be upheld. 47 It can be seen from the reports adduced by the Commission that all the reports subsequent to 1998, which have been put in evidence in their entirety or in the form of extensive extracts, refer to accounts of meetings in the course of which the competent national authorities were informed of the results of the inspection visits and were therefore able to present their observations on the findings of the Commission’s inspectors. While this reference is not found in the earlier reports, put in evidence in the form of extracts limited to the findings of fact made by the inspectors, it is sufficient to point out that in its letter of 1 August 2000, sent to the Commission in response to the supplementary reasoned opinion of 6 June 2000, the French Government set out its observations on the content of those reports without putting in issue the circumstances of their disclosure to the French authorities. 48 That being so, it should be examined whether the information contained in the mission reports adduced by the Commission is such as to establish an objective finding that a breach by the French Republic of its control obligations has persisted. 49 As regards the situation on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000, it is apparent from the reports to which the Commission referred in that opinion (see paragraph 17 of this judgment) that the inspectors were able to record the presence of undersized fish, on each of the six visits that they made. They were able to record, in particular, that there was a market for undersized hake, offered for sale under the name ‘merluchons’ or ‘friture de merluchons’ (small hake) and, in breach of the marketing standards laid down by Regulation No 2406/96, under the code ‘00’. 50 On five of those six visits, the landing and offering for sale of the undersized fish took place without monitoring by the competent national authorities. As the French Government acknowledged in its response of 1 August 2000 to the supplementary reasoned opinion of 6 June 2000, the persons whom the inspectors were able to meet ‘did not fall within the classes of officers empowered to find infringements of the fishery rules and were not attached to the maritime authorities’. On the sixth visit, the inspectors recorded that undersized fish had been landed and offered for sale in the presence of national authorities empowered to find infringements of the fishery rules. However, those authorities refrained from taking action against the offenders. 51 This evidence enables it to be found that, in the absence of effective action by the competent national authorities, a practice of offering undersized fish for sale persisted which was sufficiently constant and widespread to prejudice seriously, by reason of its cumulative effect, the objectives of the Community system for conservation and management of fishery resources. 52 Moreover, the similarity and recurrence of the situations recorded in all the reports enable it to be held that those instances can only have resulted from structural inadequacy of the measures implemented by the French authorities and, consequently, from a failure on their part to fulfil the obligation imposed on them by the Community rules to carry out controls that are effective, proportionate and a deterrent (see, to this effect, Case C-333/99 Commission v France, cited above, paragraph 35). 53 It must therefore be found that, on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000, the French Republic, by failing to carry out controls of fishing activities in accordance with the requirements laid down by the Community provisions, had not taken all the necessary measures to comply with the judgment in Case C-64/88 Commission v France and was accordingly failing to fulfil its obligations under Article 228 EC. 54 As regards the situation on the date of examination of the facts by the Court, the information available shows that significant deficiencies persisted. 55 On the visit made to Brittany in June 2001 (see paragraph 20 of this judgment), the Commission inspectors were once again able to record the presence of undersized fish. A decrease in the number of cases of such fish being offered for sale was recorded on a subsequent visit to the same area in June 2003 (see paragraph 23 of the present judgment). However, that fact is not decisive in light of the concurring findings, set out in the reports drawn up at the time of those two visits, concerning the ineffectiveness of the controls on land. 56 Where the Commission has adduced sufficient evidence to show that the breach of obligations has persisted, it is for the Member State concerned to challenge in substance and in detail the information produced and its consequences (see, to this effect, Case 272/86 Commission v Greece [1988] ECR 4875, paragraph 21, and Case C-365/97 Commission v Italy [1999] ECR I-7773, paragraphs 84 to 87). 57 In this connection, it is to be noted that the information concerning the increase in inspections in pursuance of the plans adopted in 2001 and 2002, on which the French Government relied in its defence, conflicts with the information supplied by it in answer to the Court’s questions (see paragraph 26 of this judgment), according to which the number of inspections at sea and on land was lower in 2003 than in 2002. 58 Even if divergent information of that kind can, as the French Government contends, be regarded as showing an improvement in the situation, the fact remains that the efforts made cannot excuse the failures that occurred (Case C‑333/99 Commission v France, paragraph 36). 59 In this connection, the French Government’s argument that the decrease in inspections is justified by the improved discipline of fishermen cannot be upheld either. 60 As the French Government has itself pointed out in its defence, actions designed to change behaviour and mentality involve a long process. It must therefore be considered that the structural deficiency, extending over a period of more than 10 years, of the controls designed to ensure compliance with the rules relating to the minimum size of fish resulted in behaviour on the part of the economic operators concerned that it will be possible to correct only after action over a lengthy period. 61 Accordingly, in light of the detailed evidence submitted by the Commission, the information adduced by the French Government is not sufficiently substantial to demonstrate that the measures which it has implemented regarding the control of fishing activities display the efficacy necessary to meet its obligation to ensure the effectiveness of the Community system for conservation and management of fishery resources (see paragraphs 37 and 38 of the present judgment). 62 It must therefore be found that, on the date upon which the Court examined the facts which were presented to it, the French Republic, by failing to carry out controls of fishing activities in accordance with the requirements laid down by the Community provisions, had not taken all the necessary measures to comply with the judgment in Case C-64/88 Commission v France and was accordingly failing to fulfil its obligations under Article 228 EC. The second complaint: inadequacy of action taken63 The Commission contends that the proceedings brought by the French authorities for infringement of the Community provisions concerning the minimum size of fish are insufficient. Generally, the inadequacy of the controls is reflected in the number of proceedings. Furthermore, it is apparent from the information provided by the French Government that, even when infringements are recorded, action is not systematically taken. 64 The Commission observes that the statistics submitted by the French Government before the period laid down in the supplementary reasoned opinion of 6 June 2000 expired are too general in that they concern the whole of France and do not specify the nature of the infringements in respect of which proceedings were brought. 65 The information provided subsequently cannot be taken as showing that the French authorities apply a policy of deterrent penalties so far as concerns infringements of the rules relating to the minimum size of fish. The Commission points out that, for 2001, the French Government notified, pursuant to Council Regulation (EC) No 1447/1999 of 24 June 1999 establishing a list of types of behaviour which seriously infringe the rules of the common fisheries policy (OJ 1999 L 167, p. 5) and Commission Regulation (EC) No 2740/1999 of 21 December 1999 laying down detailed rules for the application of Regulation No 1447/1999 (OJ 1999 L 328, p. 62), 73 cases of infringement of the rules relating to the minimum size of fish. However, only eight cases, that is to say 11%, resulted in imposition of a fine. 66 While the Commission acknowledges that the circular of the Minister for Justice of 16 October 2002, to which the French Government refers, constitutes an appropriate measure, it considers nevertheless that the way in which the circular will be applied should be checked. In this connection, it observes that the latest figures notified by the French Government for 2003 show a reduction in the number of convictions. 67 The French Government contends that since 1991 the number of infringements in respect of which proceedings have been brought, and the sentences, have been constantly increasing. It stresses, however, that a purely statistical examination of the number of infringements in respect of which proceedings are brought cannot, by itself, give an account of the effectiveness of a control system since it rests on the entirely unproven presupposition that the number of infringements is stable. 68 The French Government refers to a circular which the Minister for Justice addressed on 16 October 2002 to the Principal State Prosecutors at the cours d’appel (Courts of Appeal) of Rennes, Poitiers, Bordeaux and Pau, recommending that proceedings be systematically brought in respect of infringements and that deterrent penalties be demanded. It acknowledges, however, that the circular could not have full effect in 2002 or 2003 because of Law No 2002-1062, which granted an amnesty in respect of infringements committed before 17 May 2002 in so far as the fine did not exceed EUR 750. 69 The obligation on the Member States to make sure that penalties which are effective, proportionate and a deterrent are imposed for infringements of Community rules is of fundamental importance in the field of fisheries. If the competent authorities of a Member State were systematically to refrain from taking action against the persons responsible for such infringements, both the conservation and management of fishery resources and the uniform application of the common fisheries policy would be jeopardised (see, in relation to failure to comply with the quota system for the fishing years 1991 and 1992, Case C-52/95 Commission v France [1995] ECR I-4443, paragraph 35). 70 So far as concerns, in this instance, the situation on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000, it is sufficient to recall the findings made in paragraphs 49 to 52 of the present judgment. Since it has been established that infringements which the national authorities could have found to exist were not recorded and since reports were not drawn up in respect of offenders, it is clear that those authorities failed to fulfil the obligation to take action, which the Community rules impose on them (see, to this effect, Case C‑64/88 Commission v France, paragraph 24). 71 As regards the situation on the date upon which the Court examined the facts, reference should be made to the findings in paragraphs 54 to 61 of the present judgment, according to which significant deficiencies in the controls persisted. In light of those findings, the increase in the number of infringements in respect of which proceedings were brought, to which the French Government has referred, cannot be considered sufficient. As the French Government has observed, a purely statistical examination of the number of infringements in respect of which proceedings are brought cannot, by itself, give an account of the effectiveness of a control system. 72 Furthermore, as the Commission has pointed out, it is clear from the information provided by the French Government that proceedings are not brought in respect of all the infringements that are recorded. It is also apparent that deterrent penalties are not imposed in respect of all the infringements in respect of which proceedings are brought. The fact that numerous fisheries infringements were eligible to benefit from Law No 2002-1062 attests that, in all those cases, fines of less than EUR 750 were imposed. 73 Accordingly, in light of the detailed evidence submitted by the Commission, the information adduced by the French Government is not sufficiently substantial to demonstrate that the measures which it has implemented so far as concerns the taking of action in respect of infringements of the fisheries rules display the efficacy, proportionality and deterrence necessary to meet its obligation to ensure the effectiveness of the Community system for conservation and management of fishery resources (see paragraphs 37 and 38 of the present judgment). 74 It must therefore be found that, both on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000 and on the date upon which the Court examined the facts which were presented to it, the French Republic, by failing to ensure that action was taken in respect of infringements of the rules governing fishing activities in accordance with the requirements laid down by the Community provisions, had not taken all the necessary measures to comply with the judgment in Case C-64/88 Commission v France and was accordingly failing to fulfil its obligations under Article 228 EC. Financial penalties for the breach of obligations75 To punish the failure to comply with the judgment in Case C-64/88 Commission v France, the Commission suggested that the Court should impose a daily penalty payment on the French Republic from delivery of the present judgment until the day on which the breach of obligations is brought to an end. In light of the particular features of the breach that has been established, the Court considers that it should examine in addition whether imposition of a lump sum could constitute an appropriate measure. The possibility of imposing both a penalty payment and a lump sum Arguments of the parties and submissions made to the Court76 When invited to give their views on whether, in proceedings brought under Article 228(2) EC, the Court may, where it finds that the Member State concerned has not complied with the Court’s judgment, impose both a lump sum and a penalty payment on it, the Commission and the Danish, Netherlands, Finnish and United Kingdom Governments answered in the affirmative. 77 Their reasoning is based, essentially, on the fact that those two measures are complementary, in that each of them respectively seeks to achieve a deterrent effect. A combination of those measures should be regarded as one and the same means of achieving the objective laid down by Article 228 EC, that is to say not only to induce the Member State concerned to comply with the initial judgment but also, from a wider viewpoint, to reduce the possibility of similar infringements being committed again. 78 The French, Belgian, Czech, German, Greek, Spanish, Irish, Italian, Cypriot, Hungarian, Austrian, Polish and Portuguese Governments have put forward a contrary view. 79 They rely on the wording of Article 228(2) EC and on the use of the conjunction ‘or’, to which they accord a disjunctive sense, and on the objective of this provision. The provision is not punitive in nature, since Article 228(2) EC does not seek to punish the defaulting Member State, but only to induce it to comply with a judgment establishing a breach of obligations. It is not possible to distinguish several periods of a breach of obligations; only its entire duration is to be taken into consideration. The imposition of more than one financial penalty is contrary to the principle prohibiting the same conduct from being punished twice. Furthermore, in the absence of Commission guidelines concerning the applicable criteria for calculating a lump sum, imposition of such a sum by the Court would conflict with the principles of legal certainty and transparency. It would also compromise equal treatment between Member States, since such a measure was not envisaged in the judgments in Case C-387/97 Commission v Greece [2000] ECR I-5047 and Case C-278/01 Commission v Spain [2003] ECR I‑14141. 80 The procedure laid down in Article 228(2) EC has the objective of inducing a defaulting Member State to comply with a judgment establishing a breach of obligations and thereby of ensuring that Community law is in fact applied. The measures provided for by that provision, namely a lump sum and a penalty payment, are both intended to achieve this objective. 81 Application of each of those measures depends on their respective ability to meet the objective pursued according to the circumstances of the case. While the imposition of a penalty payment seems particularly suited to inducing a Member State to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist, the imposition of a lump sum is based more on assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period since the judgment which initially established it. 82 That being so, recourse to both types of penalty provided for in Article 228(2) EC is not precluded, in particular where the breach of obligations both has continued for a long period and is inclined to persist. 83 This interpretation cannot be countered by reference to the use in Article 228(2) EC of the conjunction ‘or’ to link the financial penalties capable of being imposed. As the Commission and the Danish, Netherlands, Finnish and United Kingdom Governments have submitted, that conjunction may, linguistically, have an alternative or a cumulative sense and must therefore be read in the context in which it is used. In light of the objective pursued by Article 228 EC, the conjunction ‘or’ in Article 228(2) EC must be understood as being used in a cumulative sense. 84 The objection raised, in particular by the German, Greek, Hungarian, Austrian and Polish Governments, that imposition of both a penalty payment and a lump sum, taking into consideration the same period of breach twice, would infringe the principle non bis in idem must also be rejected. Since each penalty has its own function, it is to be determined in such a way as to fulfil that function. It follows that, where the Court imposes a penalty payment and a lump sum simultaneously, the duration of the breach is taken into consideration as one of a number of criteria, in order to determine the appropriate level of coercion and deterrence. 85 The argument, relied on by the Belgian Government in particular, that, in the absence of guidelines adopted by the Commission for calculating a lump sum, imposition of a lump sum would conflict with the principles of legal certainty and transparency cannot be upheld either. While such guidelines do help to ensure that the Commission acts in a manner which is transparent, foreseeable and consistent with legal certainty (see, in relation to the guidelines concerning calculation of penalty payments, Case C-387/97 Commission v Greece, cited above, paragraph 87), the fact remains that exercise of the power conferred on the Court by Article 228(2) EC is not subject to the condition that the Commission adopts such rules, which, in any event, cannot bind the Court (Case C-387/97 Commission v Greece, paragraph 89, and Case C-278/01 Commission v Spain, cited above, paragraph 41). 86 As to the objection, raised by the French Government, that imposition of both a penalty payment and a lump sum in the present case would compromise equal treatment since it was not envisaged in the judgments in Case C-387/97 Commission v Greece and Case C-278/01 Commission v Spain, it is for the Court, in each case, to assess in light of its circumstances the financial penalties to be imposed. Accordingly, the fact that both measures were not imposed in the cases decided previously cannot in itself constitute an obstacle to the imposition of both in a subsequent case, if, having regard to the nature, seriousness and persistence of the breach of obligations established, that appears appropriate. The Court’s discretion as to the financial penalties that can be imposed87 The Commission and the Czech, Hungarian and Finnish Governments have answered in the affirmative the question whether the Court may, where appropriate, depart from the Commission’s suggestions and impose a lump sum on a Member State although the Commission did not suggest this. In their submission, the Court has a discretion in the matter, which extends to determining the penalty considered to be the most appropriate, irrespective of the Commission’s suggestions in this regard. 88 The French, Belgian, Danish, German, Greek, Spanish, Irish, Italian, Netherlands, Austrian, Polish and Portuguese Governments take an opposing view. They put forward substantive and procedural arguments. With regard to substance, they submit that exercise by the Court of such a discretion would infringe the principles of legal certainty, predictability, transparency and equal treatment. The German Government adds that the Court in any event lacks the political legitimacy necessary to exercise such a power in a field where assessments of political expediency play a considerable role. At the procedural level, the aforementioned governments stress that so extensive a power is incompatible with the general principle of civil procedure common to all the Member States that courts cannot go beyond the parties’ claims, and dwell upon the need for an interpartes procedure enabling the Member State concerned to exercise its rights of defence. 89 With regard to the arguments derived from the principles of legal certainty, predictability, transparency and equal treatment, reference should be made to the findings made in paragraphs 85 and 86 of this judgment. 90 So far as concerns the German Government’s argument as to the Court’s lack of political legitimacy to impose a financial penalty not suggested by the Commission, the various stages involved in the procedure laid down in Article 228(2) EC should be distinguished. Once the Commission has exercised its discretion as to the initiation of infringement proceedings (see, inter alia, in relation to Article 226 EC, the judgment in Case C-74/02 Commission v Germany [2003] ECR I‑9877, paragraph 17, and the judgment of 21 October 2004 in Case C-477/03 Commission v Germany, not published in the ECR, paragraph 11), the question of whether or not the Member State concerned has complied with a previous judgment of the Court is subjected to a judicial procedure in which political considerations are irrelevant. It is in performance of its judicial function that the Court assesses the extent to which the situation prevailing in the Member State in question complies with the initial judgment and, where appropriate, assesses the seriousness of a persisting breach of obligations. It follows that, as the Advocate General has observed in point 24 of his Opinion of 18 November 2004, the appropriateness of imposing a financial penalty and the choice of the penalty most suited to the circumstances of the case can be appraised only in the light of the findings made by the Court in the judgment to be delivered under Article 228(2) EC and therefore fall outside the political sphere. 91 The argument that, in departing from or going beyond the Commission’s suggestions, the Court infringes a general principle of procedural law which prohibits courts from going beyond the parties’ claims is not well founded either. The procedure provided for in Article 228(2) EC is a special judicial procedure, peculiar to Community law, which cannot be equated with a civil procedure. The order imposing a penalty payment and/or a lump sum is not intended to compensate for damage caused by the Member State concerned, but to place it under economic pressure which induces it to put an end to the breach established. The financial penalties imposed must therefore be decided upon according to the degree of persuasion needed in order for the Member State in question to alter its conduct. 92 As regards the rights of defence that the Member State concerned must be able to exercise, which have been dwelt upon by the French, Belgian, Netherlands, Austrian and Finnish Governments, the procedure laid down in Article 228(2) EC must, as the Advocate General has observed in point 11 of his Opinion of 18 November 2004, be regarded as a special judicial procedure for the enforcement of judgments, in other words as a method of enforcement. It is in this context, therefore, that the procedural guarantees which must be available to the Member State in question are to be assessed. 93 It follows that, once it has been found in interpartes proceedings that a breach of Community law persists, the rights of defence which are to be accorded to the defaulting Member State so far as concerns the financial penalties envisaged must take account of the objective pursued, namely securing and guaranteeing that the law is again complied with. 94 In the present case, so far as concerns the truth with regard to the conduct liable to give rise to the imposition of financial penalties, the French Republic had the opportunity to defend itself throughout a pre-litigation procedure which lasted nearly nine years and gave rise to two reasoned opinions, and, in the present proceedings, in the course of the written procedure and at the hearing of 3 March 2004. That examination of the facts led the Court to find that a breach by the French Republic of its obligations persisted (see paragraph 74 of the present judgment). 95 The Commission which, in the two reasoned opinions, had drawn the risk of financial penalties to the attention of the French Republic (see paragraphs 15 and 18 of the present judgment), indicated to the Court the criteria (see paragraph 98 of the present judgment) capable of being taken into consideration when determining the financial penalties intended to exert sufficient economic pressure on the French Republic to prompt it to put an end to its breach of obligations as rapidly as possible, and the respective weightings to be given to those criteria. The French Republic set out its views on the criteria in the written procedure and at the hearing on 3 March 2004. 96 By order of 16 June 2004, the Court requested the parties to give their views on whether, where the Court finds that a Member State has not taken the necessary measures to comply with a previous judgment and the Commission has requested the Court to impose a penalty payment on that State, the Court may impose on the Member State a lump sum or, as the case may be, a lump sum and a penalty payment. The parties stated their views at the hearing on 5 October 2004. 97 It follows that the French Republic has been able to make its submissions on all the matters of law and of fact necessary for establishing that the breach of obligations alleged against it has persisted and for deciding upon the seriousness of the breach and the measures which may be adopted in order to bring it to an end. On the basis of those matters, which have been the subject of inter partes proceedings, it is for the Court to determine, according to the degree of persuasion and deterrence which appears to it to be required, the financial penalties appropriate for making sure that the judgment in Case C-64/88 Commission v France is complied with as rapidly as possible and preventing similar infringements of Community law from recurring. The financial penalties appropriate in the present case Imposition of a penalty payment98 On the basis of the method of calculation which it has set out in its communication 97/C 63/02 of 28 February 1997 on the method of calculating the penalty payments provided for pursuant to Article [228] of the EC Treaty (OJ 1997 C 63, p. 2), the Commission suggested that the Court should impose on the French Republic a penalty payment of EUR 316 500 for each day of delay by way of penalty for non-compliance with the judgment in Case C-64/88 Commission v France, from the date of delivery of the judgment in the present case until the day on which the judgment in Case C-64/88 Commission v France has been complied with. 99 The Commission considers that an order imposing a penalty payment is the most appropriate instrument for putting an end as soon as possible to the infringement which has been established and that, in the present case, a penalty payment of EUR 316 500 for each day of delay fits the seriousness and duration of the infringement, due regard being had to the need to make the penalty effective. That sum is calculated by multiplying a uniform basic amount of EUR 500 by a coefficient of 10 (on a scale of 1 to 20) for the seriousness of the infringement, by a coefficient of 3 (on a scale of 1 to 3) for the duration of the infringement and by a coefficient of 21.1 (based on the gross domestic product of the Member State in question and the weighting of votes in the Council of the European Union), which is deemed to reflect the ability to pay of the Member State concerned. 100 The French Government submits that there is no reason to impose a penalty payment because it has brought the breach of obligations to an end and, in the alternative, that the amount of the penalty payment requested is disproportionate. 101 It points out that, so far as the seriousness of the infringement is concerned, in Case C-387/97 Commission v Greece the Commission suggested a coefficient of 6, although the breach of obligations compromised public health and no measure had been taken with a view to complying with the previous judgment, two factors which are absent here. Accordingly, the coefficient of 10 suggested by the Commission in the present case is not acceptable. 102 The French Government also maintains that the measures required to comply with the judgment in Case C-64/88 Commission v France were unable to produce immediate effects. Given the inevitable time-lag between the adoption of the measures and their impact becoming perceptible, the Court cannot take into account the whole of the period passing between delivery of the first judgment and that of the forthcoming judgment. 103 As to those submissions, while it is clear that a penalty payment is likely to encourage the defaulting Member State to put an end as soon as possible to the breach that has been established (Case C-278/01 Commission v Spain, paragraph 42), it should be remembered that the Commission’s suggestions cannot bind the Court and are only a useful point of reference (Case C-387/97 Commission v Greece, paragraph 89). In exercising its discretion, it is for the Court to set the penalty payment so that it is appropriate to the circumstances and proportionate both to the breach that has been established and to the ability to pay of the Member State concerned (see, to this effect, Case C-387/97 Commission v Greece, paragraph 90, and Case C-278/01 Commission v Spain, paragraph 41). 104 In that light, and as the Commission has suggested in its communication of 28 February 1997, the basic criteria which must be taken into account in order to ensure that penalty payments have coercive force and Community law is applied uniformly and effectively are, in principle, the duration of the infringement, its degree of seriousness and the ability of the Member State to pay. In applying those criteria, regard should be had in particular to the effects of failure to comply on private and public interests and to the urgency of getting the Member State concerned to fulfil its obligations (Case C-387/97 Commission v Greece, paragraph 92). 105 As regards the seriousness of the infringement and, in particular, the effects of failure to comply on private and public interests, it is to be remembered that one of the key elements of the common fisheries policy consists in rational and responsible exploitation of aquatic resources on a sustainable basis, in appropriate economic and social conditions. In this context, the protection of juvenile fish proves decisive for reestablishing stocks. Failure to comply with the technical measures of conservation prescribed by the common policy, in particular the requirements regarding the minimum size of fish, therefore constitutes a serious threat to the maintenance of certain species and certain fishing grounds and jeopardises pursuit of the fundamental objective of the common fisheries policy. 106 Since the administrative measures adopted by the French authorities have not been implemented in an effective manner, they cannot reduce the seriousness of the breach established. 107 Having regard to those factors, the coefficient of 10 (on a scale of 1 to 20) is therefore an appropriate reflection of the degree of seriousness of the infringement. 108 As regards the duration of the infringement, suffice it to state that it is considerable, even if the starting date be that on which the Treaty on European Union entered into force and not the date on which the judgment in Case C-64/88 Commission v France was delivered (see, to this effect, Case C-387/97 Commission v Greece, paragraph 98). Accordingly, the coefficient of 3 (on a scale of 1 to 3) suggested by the Commission appears appropriate. 109 The Commission’s suggestion of multiplying a basic amount by a coefficient of 21.1 based on the gross domestic product of the French Republic and on the number of votes which it has in the Council is an appropriate way of reflecting that Member State’s ability to pay, while keeping the variation between Member States within a reasonable range (see Case C-387/97 Commission v Greece, paragraph 88, and Case C-278/01 Commission v Spain, paragraph 59). 110 Multiplying the basic amount of EUR 500 by the coefficients of 21.1 (for ability to pay), 10 (for the seriousness of the infringement) and 3 (for the duration of the infringement) gives a sum of EUR 316 500 per day. 111 As regards the frequency of the penalty payment, account should, however, be taken of the fact that the French authorities have adopted administrative measures which could serve as a framework for implementation of the measures required to comply with the judgment in Case C-64/88 Commission v France. Nevertheless, it is not possible for the necessary adjustments to previous practices to be instantaneous or their impact to be perceived immediately. It follows that any finding that the infringement has come to an end could be made only after a period allowing an overall assessment to be made of the results obtained. 112 Having regard to those considerations, the penalty payment must be imposed not on a daily basis, but on a half-yearly basis. 113 In light of all of the foregoing, the French Republic should be ordered to pay to the Commission, into the account ‘European Community own resources’, a penalty payment of 182.5 x EUR 316 500, that is to say of EUR 57 761 250, for each period of six months from delivery of the present judgment at the end of which the judgment in Case C-64/88 Commission v France has not yet been fully complied with. Imposition of a lump sum114 In a situation such as that which is the subject of the present judgment, in light of the fact that the breach of obligations has persisted for a long period since the judgment which initially established it and of the public and private interests at issue, it is essential to order payment of a lump sum (see paragraph 81 of the present judgment). 115 The specific circumstances of the case are fairly assessed by setting the amount of the lump sum which the French Republic will have to pay at EUR 20 000 000. 116 The French Republic should therefore be ordered to pay to the Commission, into the account ‘European Community own resources’, a lump sum of EUR 20 000 000. Costs117 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the French Republic has been unsuccessful, the latter must be ordered to pay the costs. On those grounds, the Court (Grand Chamber) hereby:1. Declares that:– by failing to carry out controls of fishing activities in accordance with the requirements laid down by the Community provisions, and– by failing to ensure that action is taken in respect of infringements of the rules governing fishing activities in accordance with the requirements laid down by the Community provisions,the French Republic has not implemented all the necessary measures to comply with the judgment of 11 June 1991 in Case C-64/88 Commission v France and has accordingly failed to fulfil its obligations under Article 228 EC;2. Orders the French Republic to pay to the Commission of the European Communities, into the account ‘European Community own resources’, a penalty payment of EUR 57 761 250 for each period of six months from delivery of the present judgment at the end of which the judgment in Case C-64/88 Commission v France has not yet been fully complied with;3. Orders the French Republic to pay to the Commission of the European Communities, into the account ‘European Community own resources’, a lump sum of EUR 20 000 000;4. Orders the French Republic to pay the costs.[Signatures]* Language of the case: French. | abcd6-8905547-44ae | EN |
THE USE OF A TRADE NAME WHICH IS IDENTICAL OR SIMILAR TO A TRADE MARK MAY INFRINGE THE EXCLUSIVE RIGHTS CONFERRED BY THE TRADE MARK | Anheuser-Busch Inc.vBudĕjovický Budvar, národní podnik(Reference for a preliminary ruling from the Korkein oikeus)(Agreement establishing the World Trade Organisation – Articles 2(1), 16(1) and 70 of the TRIPs Agreement – Trade marks – Scope of the proprietor’s exclusive right to the trade mark – Alleged use of the sign as a trade name)Summary of the judgment1. Reference for a preliminary ruling – Jurisdiction of the Court – Interpretation of an international agreement concluded by the Community and the Member States under joint competence and having a bearing on the application by national courts of Community provisions – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)(Art. 234 EC; TRIPs Agreement)2. International agreements – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) – Application ratione temporis – Application to a conflict between a trade mark and a sign arising before the date of application of that agreement and continuing after that date(TRIPs Agreement, Art. 70(1))3. International agreements – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) – Direct effect – None – Obligations of the national courts – Trade mark law – Application of national law in the light of the wording and purpose of the relevant provisions of both Directive 89/104 and the TRIPs Agreement(TRIPs Agreement; Council Directive 89/104)4. International agreements – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) – Trade mark law – Exclusive right of the proprietor of the trade mark to prevent a third party from using a sign – Exceptions – Sign which is identical or similar to the trade mark indicating a trade name – Condition – Use of the sign in accordance with honest practices in industrial or commercial matters(TRIPs Agreement, Arts 16(1) and 17)5. International agreements – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) – Trade mark law – Trade name in conflict with a trade mark – Trade name right which arose prior to the trade mark – Use of the trade name unable to be prohibited by the proprietor of the trade mark(TRIPs Agreement, Art. 16(1))1. Since the Community is a party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), as set out in Annex 1C to the Agreement establishing the World Trade Organisation, it is under an obligation to interpret its trade-mark legislation, as far as possible, in the light of the wording and purpose of that agreement. It follows that the Court has jurisdiction to interpret a provision of the TRIPs Agreement for the purpose of responding to the needs of the judicial authorities of the Member States where they are called upon to apply their national rules with a view to ordering measures for the protection of rights created by Community legislation which fall within the scope of that agreement. (see paras 41-42)2. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), as set out in Annex 1C to the Agreement establishing the World Trade Organisation, approved on behalf of the European Community, as regards matters within its competence, by Decision 94/800, applies in the event of a conflict between a trade mark and a sign alleged to infringe that trade mark where that conflict arose before the date of application of the TRIPS Agreement but continued beyond that date. In particular, the effect of Article 70(1) of that Agreement, which provides that the latter does not create obligations in respect of acts which occurred before its date of application for Members, is that the Agreement applies to situations which continue after that date. (see paras 49, 53, operative part 1)3. The provisions of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs Agreement), as set out in Annex 1C to the Agreement establishing the World Trade Organisation, are not such as to create rights upon which individuals may rely directly before the courts by virtue of Community law. However, when called upon to apply national rules with a view to ordering measures for the protection of rights in a field in which the TRIPs Agreement applies and in which the Community has already legislated, as is the case with the field of trade marks, the national courts are required under Community law to do so, as far as possible, in the light of the wording and purpose of the relevant Community provisions of both First Directive 89/104 relating to trade marks and the TRIPs Agreement. (see paras 54-55, 57)4. A trade name may constitute a sign within the meaning of the first sentence of Article 16(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), set out in Annex 1C to the Agreement establishing the World Trade Organisation. That provision is intended to confer on the proprietor of a trade mark the exclusive right to prevent a third party from using a sign if the use in question prejudices or is liable to prejudice the functions of the trade mark, in particular its essential function of guaranteeing consumers the origin of the goods. The exceptions to the rights conferred by a trade mark provided for in Article 17 of the TRIPs Agreement are intended, inter alia, to enable a third party to use a sign identical or similar to a trade mark to indicate his trade name, provided that such use is in accordance with honest practices in industrial or commercial matters. (see para. 85, operative part 2)5. A trade name, which is not registered or established by use in the Member State where the mark with which it is alleged to conflict is registered and in which protection against the trade name in question is sought may be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), as set out in Annex 1C to the Agreement establishing the World Trade Organisation, if the proprietor of the trade name has a right falling within the substantive and temporal scope of that agreement which arose prior to the trade mark and which entitles him to use a sign identical or similar to that trade mark. It follows that the use of that trade name cannot be prohibited by virtue of the exclusive right conferred by the trade mark on its proprietor under the first sentence of Article 16(1) of the said Agreement. (see paras 89, 100, operative part 3)JUDGMENT OF THE COURT (Grand Chamber)16 November 2004(1) (Agreement establishing the World Trade Organisation – Articles 2(1), 16(1) and 70 of the TRIPs Agreement – Trade marks – Scope of the proprietor's exclusive right to the trade mark – Alleged use of the sign as a trade name)THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 29 June 2004,gives the followingLegal backgroundThe registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; (b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark. any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark. (a) affixing the sign to the goods or to the packaging thereof; affixing the sign to the goods or to the packaging thereof; (a) his own name or address; his own name or address; … …If the conflict between a trade mark and a sign alleged to infringe it is situated at a point in time before the entry into force of the TRIPs Agreement, do the provisions of the TRIPs Agreement apply to the question of which right has the earlier legal basis, when the alleged infringement of the trade mark is said to continue after the date on which the TRIPs Agreement became applicable in the Community and the Member States? If the answer to Question 1 is affirmative: (a) Can the trade name of an undertaking also act as a sign for goods or services within the meaning of the first sentence of Article 16(1) of the TRIPs Agreement? Can the trade name of an undertaking also act as a sign for goods or services within the meaning of the first sentence of Article 16(1) of the TRIPs Agreement? (b) If the answer to Question 2(a) is affirmative, on what conditions may a trade name be regarded as a sign for goods or services within the meaning of the first sentence of Article 16(1) of the TRIPs Agreement? If the answer to Question 2(a) is affirmative, on what conditions may a trade name be regarded as a sign for goods or services within the meaning of the first sentence of Article 16(1) of the TRIPs Agreement? If the answer to Question 2(a) is affirmative: (a) How is the reference in the third sentence of Article 16(1) of the TRIPs Agreement to existing prior rights to be interpreted? May the right to a trade name also be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of the TRIPs Agreement? How is the reference in the third sentence of Article 16(1) of the TRIPs Agreement to existing prior rights to be interpreted? May the right to a trade name also be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of the TRIPs Agreement? (b) If the answer to Question 3(a) is affirmative, how is the said reference in the third sentence of Article 16(1) of the TRIPs Agreement to existing prior rights to be interpreted in the case of a trade name which is not registered or established by use in the State in which the trade mark is registered and in which protection is sought for the trade mark against the trade name in question, having regard to the obligation under Article 8 of the Paris Convention to afford protection to a trade name regardless of whether it is registered and to the fact that the Permanent Appellate Body of the WTO has regarded the reference in Article 2(1) of the TRIPs Agreement to Article 8 of the Paris Convention as meaning that WTO members are obliged under the TRIPs Agreement to protect trade names in accordance with the latter article? When assessing, in such a case, whether a trade name has a legal basis prior to a trade mark for the purposes of the third sentence of Article 16(1) of the TRIPs Agreement, may it thus be considered as decisive: If the answer to Question 3(a) is affirmative, how is the said reference in the third sentence of Article 16(1) of the TRIPs Agreement to existing prior rights to be interpreted in the case of a trade name which is not registered or established by use in the State in which the trade mark is registered and in which protection is sought for the trade mark against the trade name in question, having regard to the obligation under Article 8 of the Paris Convention to afford protection to a trade name regardless of whether it is registered and to the fact that the Permanent Appellate Body of the WTO has regarded the reference in Article 2(1) of the TRIPs Agreement to Article 8 of the Paris Convention as meaning that WTO members are obliged under the TRIPs Agreement to protect trade names in accordance with the latter article? When assessing, in such a case, whether a trade name has a legal basis prior to a trade mark for the purposes of the third sentence of Article 16(1) of the TRIPs Agreement, may it thus be considered as decisive: (i) whether the trade name was well known at least to some extent among the relevant trade circles in the State in which the trade mark is registered and in which protection is sought for it, before the point in time at which registration of the trade mark was applied for in the State in question; or whether the trade name was well known at least to some extent among the relevant trade circles in the State in which the trade mark is registered and in which protection is sought for it, before the point in time at which registration of the trade mark was applied for in the State in question; or (ii) whether the trade name was used in commerce directed to the State in which the trade mark is registered and in which protection is sought for it, before the point in time at which registration of the trade mark was applied for in the State in question; or whether the trade name was used in commerce directed to the State in which the trade mark is registered and in which protection is sought for it, before the point in time at which registration of the trade mark was applied for in the State in question; or (iii) what other factor may decide whether the trade name is to be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of the TRIPs Agreement?’ what other factor may decide whether the trade name is to be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of the TRIPs Agreement?’ a trade name may constitute a sign within the meaning of the first sentence of Article 16(1) of the TRIPs Agreement. That provision is intended to confer on the proprietor of a trade mark the exclusive right to prevent a third party from using such a sign if the use in question prejudices or is liable to prejudice the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods; the exceptions provided for in Article 17 of the TRIPs Agreement are intended, inter alia, to enable a third party to use a sign which is identical or similar to a trade mark to indicate his trade name, provided that such use is in accordance with honest practices in industrial or commercial matters. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement), as set out in Annex 1 C to the Agreement establishing the World Trade Organisation, approved on behalf of the European Community, as regards matters within its competence, by Council Decision 94/800/EC of 22 December 1994, applies in the event of a conflict between a trade mark and a sign alleged to infringe that trade mark where that conflict arose before the date of application of the TRIPs Agreement but continued beyond that date. A trade name may constitute a sign within the meaning of the first sentence of Article 16(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement). That provision is intended to confer on the proprietor of a trade mark the exclusive right to prevent a third party from using such a sign if the use in question prejudices or is liable to prejudice the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods. A trade name which is not registered or established by use in the Member State in which the trade mark is registered and in which protection against the trade name in question is sought may be regarded as an existing prior right within the meaning of the third sentence of Article 16(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) if the proprietor of the trade name has a right falling within the substantive and temporal scope of that agreement which arose prior to the trade mark with which it is alleged to conflict and which entitles him to use a sign identical or similar to that trade mark. 1 – Language of the case: Finnish. Language of the case: Finnish. | 1f14a-548aadb-4da7 | EN |
Advocate General Geelhoed suggests that following the introduction of eu citizenship, Assistance with maintenance costs for students attending university courses in the form of loans or grants falls within the scope no longer outside the scope of the of the ec treaty | The Queen, on the application of Dany BidarvLondon Borough of Ealing and Secretary of State for Education and Skills(Reference for a preliminary ruling from the High Court of Justice of England and Wales, Queen’s Bench Division (Administrative Court)) (Citizenship of the Union – Articles 12 EC and 18 EC – Assistance for students in the form of subsidised loans – Provision limiting the grant of such loans to students settled in national territory)Opinion of Advocate General Geelhoed delivered on 11 November 2004 Judgment of the Court (Grand Chamber), 15 March 2005 Summary of the Judgment1. EC Treaty – Scope of application for the purposes of the prohibition of any discrimination on grounds of nationality – Assistance provided to students to cover their maintenance costs – Included – National legislation reserving the grant of such assistance to students settled in the national territory – Not possible for students who are nationals of other Member States to be regarded as settled – Not permissible(Art. 12 EC)2. Preliminary rulings – Interpretation – Temporal effect of interpretative judgments – Retroactive effect – Limits imposed by the Court – Conditions – Significance for the Member State concerned of the financial consequences of a judgment – Not decisive(Art. 234 EC)1. Assistance, whether in the form of subsidised loans or of grants, provided to students lawfully resident in the host Member State to cover their maintenance costs falls within the scope of application of the Treaty for the purposes of the prohibition of discrimination laid down in the first paragraph of Article 12 EC. That provision must be interpreted as precluding national legislation which grants students the right to such assistance only if they are settled in the host Member State, while excluding a national of another Member State from obtaining, as a student, the status of settled person, even if that national is lawfully resident and has received a substantial part of his secondary education in the host Member State and has consequently established a real link with the society of that State. It is indeed legitimate for a Member State to grant such assistance only to students who have demonstrated a certain degree of integration into the society of that State. It cannot, however, require the students concerned to establish a link with its employment market. On the other hand, the existence of a certain degree of integration may be regarded as established by a finding that the student in question has resided in the host Member State for a certain length of time. However, by precluding any possibility of a national of another Member State obtaining settled status as a student, that legislation makes it impossible for such a national, whatever his actual degree of integration, to enjoy the right to assistance, and consequently prevents him from being able to pursue his studies under the same conditions as a national of that State who is in the same situation. (see paras 48, 57-59, 61-63, operative part 1, 2)2. The interpretation the Court gives to a rule of Community law is limited to clarifying and defining the meaning and scope of that rule as it ought to have been understood and applied from the time of its coming into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships arising and established before the judgment ruling on the request for interpretation, provided that in other respects the conditions enabling an action relating to the application of that rule to be brought before the courts having jurisdiction are satisfied. It is only exceptionally that the Court may, in application of the general principle of legal certainty inherent in the Community legal order, be moved to restrict the possibility for any person concerned of relying on a provision it has interpreted with a view to calling in question legal relationships established in good faith. The financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effect of the ruling. (see paras 66-68, operative part 3)JUDGMENT OF THE COURT (Grand Chamber)15 March 2005(1)THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 11 November 2004,gives the followingLegal backgrounddeveloping the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States, encouraging mobility of students and teachers, by encouraging inter alia, the academic recognition of diplomas and periods of study, promoting cooperation between educational establishments,developing exchanges of information and experience on issues common to the education systems of the Member States,encouraging the development of youth exchanges and of exchanges of socio-educational instructors,encouraging the development of distance education.acting in accordance with the procedure referred to in Article 251, after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt incentive measures, excluding any harmonisation of the laws and regulations of the Member States, acting by a qualified majority on a proposal from the Commission, shall adopt recommendations.’he is ordinarily resident in England and Wales on the first day of the first academic year of the course;he has been ordinarily resident throughout the three-year period preceding that day in the United Kingdom and Islands; andhis residence in the United Kingdom and Islands has not during any part of that three-year period been wholly or mainly for the purpose of receiving full-time education. Whether, given the decisions of the Court of Justice of the European Communities in … Lair … and … Brown … and developments in the law of the European Union, including the adoption of Article 18 EC and developments in relation to the competence of the European Union in the field of education, assistance with maintenance costs for students attending university courses, such assistance being given by way of either (a) subsidised loans or (b) grants, continues to fall outside the scope of the application of the EC Treaty for the purposes of Article 12 EC and the prohibition on discrimination on grounds of nationality? If either part of question 1 is answered in the negative, and if assistance with maintenance costs for students in the form of grants or loans [does] now fall within the scope of Article 12 EC, what criteria should the national court apply in determining whether the conditions governing eligibility for such assistance are based on objectively justifiable considerations not dependent on nationality? If either part of question 1 is answered in the negative, whether Article 12 EC may be relied upon to claim entitlement to assistance with maintenance costs from a date prior to the date of the judgment of the Court of Justice in the present case and, if [not], whether an exception should be made for those who initiated legal proceedings before that date?’ Assistance, whether in the form of subsidised loans or of grants, provided to students lawfully resident in the host Member State to cover their maintenance costs falls within the scope of application of the EC Treaty for the purposes of the prohibition of discrimination laid down in the first paragraph of Article 12 EC. The first paragraph of Article 12 EC must be interpreted as precluding national legislation which grants students the right to assistance covering their maintenance costs only if they are settled in the host Member State, while precluding a national of another Member State from obtaining the status of settled person as a student even if that national is lawfully resident and has received a substantial part of his secondary education in the host Member State and has consequently established a genuine link with the society of that State. There is no need to limit the temporal effects of the present judgment. 1 – Language of the case: English. Language of the case: English. | ead34-28b8e6a-4bb8 | EN |
THE APPEALS AGAINST THE DECISIONS OF THE COURT OF FIRST INSTANCE CONCERNING THE FISCAL AID GRANTED TO DEMESA AND RAMONDÍN ARE DISMISSED | Daewoo Electronics Manufacturing España SA (Demesa) and Territorio Histórico de Álava – Diputacíon Foral de ÁlavavCommission of the European Communities(Appeal – State aid – Tax measures – Legitimate expectations – New pleas in law)Summary of the Judgment1. State aid – Recovery of unlawful aid – Aid granted in breach of the rules on the implementation of Article 93 of the Treaty (now Article 88 EC) – Possible legitimate expectation on the part of recipients – Protection – Conditions and limits(EC Treaty, Art. 93(3) (now Art. 88(3) EC))2. Appeal – Grounds of appeal – Plea in law submitted for the first time in the appeal – Inadmissible(Statute of the Court of Justice, Art. 58)1. In view of the mandatory nature of the review of State aid by the Commission under Article 93 of the Treaty (now Article 88 EC), undertakings to which aid has been granted may not, in principle, entertain a legitimate expectation that the aid is lawful unless it has been granted in compliance with the procedure laid down in that article and a diligent businessman should normally be able to determine whether that procedure has been followed. In particular, where aid is paid without prior notification to the Commission, so that it is unlawful under Article 93(3) of the Treaty, the recipient of the aid cannot have at that time a legitimate expectation that its grant is lawful. (see paras 44-45)2. To allow a party to put forward for the first time before the Court of Justice a plea in law which it has not raised before the Court of First Instance would be to allow it to bring before the Court, whose jurisdiction in appeals is limited, a case of wider ambit than that which came before the Court of First Instance. In an appeal the Court’s jurisdiction is thus confined to review of the findings of law on the pleas argued before the Court of First Instance. (see para. 59)JUDGMENT OF THE COURT (Second Chamber)11 November 2004(1) appellant in Case C-183/02 P,appellant in Case C-187/02 P,intervener in the appeal,defendant at first instance,interveners at first instance,THE COURT (Second Chamber),,after hearing the Opinion of the Advocate General at the sitting on 6 May 2004,gives the followingLegal frameworkdismissed the applications of the Territorio Histórico de Álava and of Demesa in so far as they sought annulment of the contested decision in respect of the tax credit of 45%; declared the applications of the Comunidad Autónoma del País Vasco and of Gasteizko Industria Lurra SA inadmissible in so far as they sought annulment in the same terms; ordered the parties to bear their own costs.set aside the judgment under appeal;give judgment itself in the matter and annul Articles 1(d) and 2 of the contested decision;in the alternative, refer the case back to the Court of First Instance;order the Commission to pay the costs of the proceedings at first instance and those of the proceedings on appeal.give judgment itself in the matter and annul the contested decision in so far as it concerns the tax credit of 45%;set aside the judgment under appeal in part, in so far as it finds that the tax credit of 45% constitutes State aid;order the Commission to pay the costs of the proceedings. dismiss the appeal;order the appellant to pay the costs.incorrect categorisation of the impugned fiscal measure as State aid incompatible with the common market;failure to state the grounds of the judgment under appeal on that point;an error of law on the part of the Court of First Instance in so far as it held that the impugned measure was not existing aid; an error of law on the part of the Court of First Instance in so far as it held that the principle of protection of legitimate expectations was not applicable. incorrect categorisation of the impugned tax measure as State aid incompatible with the common market;an error of law on the part of the Court of First Instance in so far as it did not find that the Commission had misused its powers; failure to state the grounds of the judgment under appeal on that point.maintaining in part the first and second grounds of appeal alleging, respectively, incorrect categorisation of the impugned tax measure as State aid incompatible with the common market and failure to state the grounds of the judgment under appeal on that point; maintaining the fifth and sixth grounds of appeal alleging, respectively, misuse of powers and failure to state the grounds of the judgment under appeal on that point; withdrawing its other grounds of appeal.had stated that the aid in question included a tax credit of 20% in respect of investments (Part I);had considered that, for the purpose of applying the derogation provided for in Article 92(3)(c) of the Treaty, the conditions laid down in the Community guidelines of 19 August 1992 on State aid for small and medium-sized enterprises (OJ 1992 C 213, p. 2), which, after defining in point 2.2 the components of the category of small and medium-sized enterprises, stated, at point 4.1, fifth paragraph, that the Commission had decided to allow investment aid only up to the levels of 15% of the investment for small enterprises and 7.5% of the investment for other enterprises in the same category, were not satisfied (Part V); had ordered the Spanish authorities to ensure that the aid was granted, inter alia, in accordance with the conditions laid down in the Community guidelines on State aid for small and medium-sized enterprises (Article 1(4)). the impugned tax measure is excluded as such from the scope of the law on State aid;Article 92 of the Treaty has applied to the provisions of tax law only since the conclusions of the Ecofin Council meeting on 1 December 1997 concerning tax policy and the Commission notice of 10 December 1998 on the application of the State aid rules to measures relating to direct business taxation. to referring, at paragraph 84 of the judgment in Joined Cases T-92/00 and T‑103/00 Diputación Foral de Álava and Others v Commission [2002] ECR II-1385), relating to aid granted to another undertaking, to the case-law according to which a decision may amount to a misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken with the sole, or at least the decisive, aim of achieving purposes other than those stated; to declaring that the existence of a de facto harmonisation brought about by the contested decision had not been demonstrated.Joins Cases C-183/02 P and C-187/02 P for the purposes of the judgment;Dismisses the appeals;Orders the appellants, in addition to bearing their own costs, to pay those incurred by the Commission of the European Communities;Orders the Comunidad Autónoma del País Vasco to bear its own costs. 1 – Language of the case: Spanish. Language of the case: Spanish. | 4aa8e-562cc38-41fd | EN |
THE COURT OF FIRST INSTANCE HAS DISMISSED STORCK'S ACTIONS AGAINST OHIM'S DECISIONS NOT TO REGISTER TWO MARKS CONCERNING THE "WERTHER'S ORIGINAL" SWEET AS COMMUNITY TRADE MARKS | 10 November 2004 ( *1 )In Case T-396/02, August Storck KG, established in Berlin, represented by H. Wrage-Molkenthin, T. Reher, A. Heise and I. Rohr, lawyers, with an address for service in Luxembourg,applicant,v Office for Harmonisation in the Internal Market (Trade marks and Designs) (OHIM), represented by B. Müller and G. Schneider, acting as Agents,defendant,ACTION for annulment of the decision of the Fourth Board of Appeal of OHIM of 14 October 2002 (Case R 187/2001-4), refusing registration of a three-dimensional mark comprised of the shape of a light-brown sweet,THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber),composed of: H. Legal, President, V. Tiili and M. Vilaras, Judges,Registrar: B. Pastor, Deputy Registrar,having regard to the application lodged at the Court Registry on 27 December 2002,having regard to the response lodged at the Court Registry on 14 April 2003,following the hearing on 16 June 2004,gives the followingJudgmentBackground to the dispute1On 30 March 1998 the applicant filed an application for a Community trade mark at the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) under Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended.2The mark in respect of which registration was sought is a three-dimensional shape representing a light-brown sweet, reproduced below:3The goods in respect of which registration of the trade mark was sought are in Class 30 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as amended, and correspond to the following description: ‘Confectionery’.4By decision of 25 January 2001 the examiner refused the application on the ground that the mark applied for was devoid of any distinctive character within the meaning of Article 7(1)(b) of Regulation No 40/94. Moreover, he found that the mark in question had not become distinctive in consequence of the use which had been made of it.5On 14 February 2001 the applicant filed a notice of appeal against the examiner's decision at OHIM under Article 59 of Regulation No 40/94. By that appeal, the applicant sought the partial amendment of the examiner's decision and the registration of the mark in respect of ‘confectionery, namely caramel sweets’. In its written statement of 14 May 2001 setting out the grounds of the appeal, the applicant by contrast sought annulment of the examiner's decision in its entirety and, in the alternative, stated that ‘the list of goods in respect of which registration of the mark was sought [should] be limited to “caramel sweets” if registration of the mark [were] refused on the ground of lack of distinctive character ... both inherent [to the mark] and acquired through use of the mark in respect of confectionery.’6By decision of 14 October 2002 (‘the contested decision’), notified to the applicant by fax on 18 October 2002 and by registered letter of 31 October 2002, the Fourth Board of Appeal of OHIM dismissed the appeal on the ground that the mark applied for was devoid of any distinctive character within the meaning of Article 7(1)(b) of Regulation No 40/94 and furthermore could not be registered under Article 7(3) of that regulation.7The Board of Appeal essentially found that the combination of the shape and colour of the mark applied for did not intrinsically provide any indication of the origin of the product in question, namely confectionery. Moreover, it considered that the evidence adduced by the applicant did not prove that the mark applied for had become distinctive in consequence of the use that had been made of that mark, in respect in particular of caramel sweets.Procedure and forms of order sought by the parties8By letter lodged at the Registry of the Court on 21 May 2003, the applicant applied, pursuant to Article 135(2) of the Rules of Procedure of the Court of First Instance, for permission to lodge a reply. The President of the Fourth Chamber of the Court of First Instance refused to grant that permission.9The applicant claims that the Court should:—annul the contested decision;order OHIM to pay the costs.10OHIM contends that the Court should:dismiss the action;order the applicant to pay the costs.Subject-matter of the disputeArguments of the parties11Without referring expressly to the subject-matter of the present dispute, the applicant criticises the contested decision by pointing out that, following the restriction which it claims to have made to the list of goods covered by the trade mark application by the alternative submissions made in its written statement of 14 May 2001, the only relevant market in the present case is the specific market for ‘caramel sweets’ and not that for ‘sweets in general’.12OHIM submits that given the purpose of the application, which sought the registration of the mark in question in respect of ‘confectionery’, and the contradictory nature of the relief sought by the applicant in its appeal to the Board of Appeal and in the written statement setting out the grounds of that appeal (see paragraph 5 above), the Board of Appeal was right to interpret the contradictory wording of the applicants submissions as a challenge to the examiner's decision in its entirety. Further, as the examiner rejected the application in respect of ‘confectionery’ in general and not in respect of ‘confectionery, namely caramel sweets’ or ‘caramel sweets’, the applicant could not restrict the scope of its action to that subject-matter since the examiner's decision in that respect was ‘indivisible’.13Furthermore, according to OHIM, the restriction of the list of goods as proposed by the applicant in the alternative in its written statement of 14 May 2001 has no bearing on the proceedings. The applicant cannot restrict its list of goods in the alternative should it fail to obtain the primary relief it seeks (Case T-219/00 Ellos v OHIM (ELLOS) [2002] ECR II-753).14Consequently, OHIM submits that the subject-matter of the dispute before the Board of Appeal was the rejection of the applicant's application for a trade mark in respect of confectionery (Class 30) and that the subject-matter of the dispute in the present proceedings is the contested decision, issued by the Board of Appeal, which correctly reviewed the rejection of the trade mark application.Findings of the Court15It is clear from Articles 57 to 61 of Regulation No 40/94 that an appeal lies from decisions of the examiners to the Board of Appeal and that any party to proceedings resulting in a decision of the examiner may appeal against that decision if the decision adversely affects that party. Under Rule 48(1) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Regulation No 40/94 (OJ 1995 L 303, p. 1), the notice of appeal is to contain certain information including ‘a statement identifying the decision which is contested and the extent to which amendment or cancellation of the decision is requested’.16In the present case, it is not in dispute that the examiner rejected the applicant's trade mark application in respect of all goods covered by it, namely ‘confectionery’ within Class 30. The applicant restricted the scope of its appeal brought before the Board of Appeal on 14 February 2001 by not challenging the refusal of its trade mark application in respect of ‘confectionery, namely caramel sweets’. It thus sought partial amendment of the examiner's decision and registration of its mark in respect of ‘confectionery, namely caramel sweets’. However, in its written statement of 14 May 2001 setting out the grounds of its appeal, the applicant sought, as its primary relief, annulment of the examiner's decision in its entirety and it stated in the alternative that the list of goods covered by the mark sought should be restricted to ‘caramel sweets’ alone if registration of the mark were refused on grounds of lack of distinctive character, whether inherent to the mark or acquired in consequence of its use, in respect of ‘confectionery’. According to the applicant, it is quite simply impossible to deny that the shape of the mark proposed for registration has acquired a sufficiently distinctive character through its use in respect of caramel sweets.17The Board of Appeal found in paragraph 6 of the contested decision that the primary relief sought on appeal was the amendment of the examiner's decision and the publication of the trade mark in respect of ‘confectionery’ without restriction on the ground that the mark applied for is distinctive within the meaning of Article 7(1)(b) of Regulation No 40/94 and, in the alternative, registration of the mark, in particular in respect of ‘caramels’, on the ground that the mark has become distinctive through use. After examining the arguments advanced on appeal, the Board of Appeal dismissed it in its entirety as unfounded.18In the form of order sought and in certain passages of its application to the Court, the applicant seeks annulment of the contested decision in its entirety. However, in other passages in the application (see, in particular, paragraphs 20, 21 and 30), the applicant states that, in the light of the restriction of the list of goods which it had envisaged in its written statement of 14 May 2001, the only goods now covered by its application are caramel sweets. Accordingly, the Board of Appeal erred in failing to distinguish between the market for caramel sweets and that for sweets in general in assessing the distinctive character of the mark.19It should be noted in this regard that, under Article 44(1) of Regulation No 40/94, the applicant may at any time withdraw his Community trade mark application or restrict the list of goods or services contained therein. Thus, the power to restrict the list of goods or services is vested solely in the applicant for the Community trade mark, who may, at any time, apply to OHIM for that purpose. In that context, the withdrawal, in whole or part, of an application for a Community trade mark or the restriction of the list of goods or services contained therein must be made expressly and unconditionally (see, to that effect, ELLOS, paragraphs 60 and 61).20In the present case, it is only in the alternative that the applicant suggested the restriction of the list of goods covered by the trade mark application to ‘caramel sweets’, that is, only if the Board of Appeal were minded to reject that application in respect of all the goods covered by it (i.e., ‘confectionery’). The applicant has not therefore restricted the list of products expressly and unconditionally and so the restriction in question cannot be taken into account (see, to that effect, ELLOS, paragraph 62).21Furthermore, according to the case-law, a restriction of the list of goods or services specified in a Community trade mark application must be made in accordance with certain detailed rules, upon request for amendment of the application in accordance with Article 44 of Regulation No 40/94 and Rule 13 of Regulation No 2868/95 (Case T-194/01 Unilever v OHIM (Ovoid tablet) [2003] ECR II-383, paragraph 13, and Case T-286/02 Oriental Kitchen v OHIM — Mou Dybfrost (KIAP MOU) [2003] ECR II-4953, paragraph 30).22However, those detailed rules have not been complied with in the present case since, in its written statement of 14 May 2001, the applicant merely claimed in the alternative a restriction of the goods in question without submitting an application for amendment of the trade mark application, in accordance with those provisions.23In those circumstances, the present action must be interpreted as seeking the annulment of the contested decision for infringement of Article 7(l)(b) of Regulation No 40/94 in respect of all goods covered by the mark applied for (that is, ‘confectionery’) and for infringement of Article 7(3) of that regulation, in respect of those goods, and, in particular, caramels.Admissibility of the evidence adduced for the first time before the Court24The documents annexed to the application which had not been analysed by the Board of Appeal, namely the results of a survey carried out by interview in 1997 in Germany concerning the shape of the ‘Werther's Echte’ sweet, adduced for the first time before the Court, cannot be taken into account given that the purpose of actions before the Court is to review the legality of decisions of the Boards of Appeal of OHIM within the meaning of Article 63 of Regulation No 40/94. In those circumstances, since the function of the Court is not to reexamine the facts in the light of documents submitted for the first time before it, those documents must be excluded from consideration, without there being any need to examine their probative value (Case T-10/03 Koubi v OHIM — Flabesa (CONFORFLEX) [2004] ECR II-719, paragraph 52, and Case T-399/02 Eurocermex v OHIM (Shape of a beetbottle) [2004] ECR II-1391, paragraph 52, and the case-law cited).Merits25In support of its action the applicant puts forward two pleas in law alleging an infringement of Article 7(1)(b) and Article 7(3) respectively of Regulation No 40/94.The first plea in law, alleging infringement of Article 7(1)(b) of Regulation No 40/9426The applicant submits that, contrary to the finding of the Board of Appeal, the mark applied for does possess the necessary minimum degree of distinctive character within the meaning of Article 7(1)(b) of Regulation No 40/94.27It submits first in that regard that the Board of Appeal erred in adopting the wrong definition of the relevant market. As the applicant envisaged a restriction of the list of goods covered by the trade mark application, the only relevant market in the present case is the specific market for ‘caramel sweets’ and not that for ‘sweets in general’. The submarket for caramels is distinct from that for other sweets. The choice of one type of sweet (for example, jellified, fruit or chocolate sweets) )) or another (for example, ‘strongly’ flavoured sweets like those with a high menthol content) is based on the different needs and tastes of consumers. It follows that a caramel sweet cannot be treated in the same way as any other sweet. Those different characteristics which the consumer takes into account in deciding what to buy have repercussions on the shape of the various sweets. Consequently, the Board of Appeal and the Court can draw conclusions as to the existence of a common shape of caramel sweets only after distinguishing the consumers buying that type of sweet.28Next the applicant claims that by its specific and unique combination of shape and colour the mark applied for readily enables the applicant's sweets to be distinguished from those of other manufacturers. It submits in this regard that that mark is more than a combination of non-protectable features. The basic shape of the mark applied for is not a circle but an ellipse with a flat lower surface, rounded sides and a surface characterised by a circular hollow in the middle. It is therefore an unusual shape on the market for caramel sweets and very sophisticated in comparison with other sweet shapes (round, rectangular, square, ingot or with no particular shape). Moreover, the shape in question has no function and is neither dictated by overriding technical reasons nor usual.29OHIM challenges the applicant's argument and submits that the mark applied for is devoid of distinctive character within the meaning of Article 7(l)(b) of Regulation No 40/94, even if it were in fact possible to restrict the subject-matter of the dispute to caramels.30Pursuant to Article 4 of Regulation No 40/94, a Community trade mark may consist of the shape of goods or of their packaging, provided that they are capable of distinguishing the goods of one undertaking from those of other undertakings. Moreover, under Article 7(1)(b) of that regulation, registration is to be refused for ‘trade marks which are devoid of any distinctive character’. Article 7(2) of that regulation states that ‘[paragraph 1 shall apply notwithstanding that the grounds of non-registrability obtain in only part of the Community’.31It must first of all be borne in mind that, according to the case-law, the trade marks covered by Article 7(1)(b) of Regulation No 40/94 are in particular those which, from the point of view of the relevant public, are commonly used, in trade, for the presentation of the goods or services concerned or in connection with which there exist, at the very least, specific indicia from which it may be concluded that they are capable of being used in that manner. Moreover, the signs referred to in Article 7(1)(b) are incapable of performing the essential function of a trade mark, namely that of identifying the origin of the goods or services, thus enabling the consumer who acquired them to repeat the experience, if it proves to be positive, or to avoid it, if it proves to be negative, on the occasion of a subsequent acquisition (Ovoid tablet, paragraph 39, Joined Cases T-324/01 and T-110/02 Axions and Belce v OHIM (Brown cigar shape and gold ingot shape) [2003] ECR II-1897, paragraph 29, Case T-305/02 Nestlé Waters France v OHIM (Shape of a bottle) [2003] ECR II-5207, paragraph 28, and Shape of a beer bottle, paragraph 18).32Accordingly, the distinctiveness of a mark may be assessed only, first, in relation to the goods or services for which registration of the sign has been requested and, second, in relation to the perception which the relevant public has of it (see, by analogy, Joined Cases C-53/01 to C-55/01 Linde and Others [2003] ECR I-3161, paragraph 41, Case C-218/01 Henkel [2004] ECR I-1725, paragraph 50, CaseC-363/99 Koninklijke KPN Nederland [2004] ECR I-1619, paragraph 34, Joined Cases C-456/01 P and C-457/01 P Henkel v OHIM [2004] ECR I-5089, paragraph 35, Joined Cases C-468/01 P to C-472/01 P Procter & Gamble v OHIM [2004] ECR I-5141, paragraph 33, Joined Cases C-473/01 P and C-474/01 P Procter & Gamble v OHIM [2004] ECR I-5173, paragraph 33, Ovoid tablet, paragraph 40, Brown cigar shape and gold ingot shape, paragraph 30, and Shape of a bottle, paragraph 29).33In the case of the first of the above assessments, it should be noted that the sign claimed consists of the appearance of the product itself, that is, the representation of an oval-shaped sweet, light brown in colour, characterised by rounded sides, a circular depression in the centre and a flat lower surface.34As regards the relevant public, the Board of Appeal rightly noted that the goods in respect of which registration of the mark was sought in the present case, namely confectionery, ‘are intended for a potentially unlimited number of customers of all age groups’ and are ‘mass food products, since the relevant public is ... all consumers’ (paragraph 11 of the contested decision). The distinctive character of the mark applied for must be assessed in the light of the presumed expectations of an average consumer, who is reasonably well-informed and reasonably observant and circumspect (see, by analogy, Linde and Others, paragraph 41, Koninklijke KPN Nederland, paragraph 34, Henkel v OHIM, paragraph 35, Joined Cases C-468/01 P to C-472/01 P Procter & Gamble v OHIM, paragraph 33, and Joined Cases C-473/01 P and C-474/01 P Procter & Gamble v OHIM, paragraph 33, Ovoid tablet, paragraph 42, Brown cigar shape and gold ingot shape, paragraph 31 and Shape of a bottle, paragraph 33).35Second, it should be noted that, according to the case-law, the criteria for assessing the distinctive character of three-dimensional trade marks consisting of the appearance of the product itself are no different from those to be applied to other categories of trade mark (see, by analogy, Case C-299/99 Philips [2002] ECR I-5475, paragraph 48, Linde and Others, paragraphs 42 and 46, Ovoid tablet, paragraph 44, Brown cigar shape and gold ingot shape, paragraph 32, Shape of a bottle, paragraph 35, and Shape of a beer bottle, paragraph 22).36Nevertheless, when those criteria are applied, account must be taken of the fact that the perception of the relevant public is not necessarily the same in relation to a three-dimensional mark consisting of the appearance of the product itself as it is in relation to a word mark, a figurative mark or a three-dimensional mark not consisting of that appearance. Whilst the public is used to recognising the latter marks instantly as signs identifying the product, this is not necessarily so where the sign is indistinguishable from the appearance of the product itself (see by analogy Linde and Others, paragraph 48, Case C-104/01 Libertel [2003] ECR I-3793, paragraph 65, Henkel, paragraph 52, Henkel v OHIM, paragraph 38, Joined Cases C-468/01 P to C-472/01 P Procter & Gamble v OHIM, paragraph 36, and Joined Cases C-473/01 P and C-474/01 P Procter & Gamble v OHIM, paragraph 36, Ovoid tablet, paragraph 45, and Shape of a beer bottle, paragraph 23).37It is also settled case-law that the way in which the relevant public, in this case the average consumer, perceives a trade mark is influenced by that person's level of attention, which is likely to vary according to the category of goods or services in question (Ovoid tablet, paragraph 42, and Shape of a bottle, paragraph 34).38In those circumstances, in order to ascertain whether the combination of the shape and colour of the product in question may be perceived by members of the public as an indication of origin, the overall impression produced by that combination must be analysed. That is not incompatible with an examination of each of the product's individual features in turn (Case T-337/99 Henkel v OHIM (Red and while round tablet) [2001] ECR II-2597, paragraph 49, and Ovoid tablet, paragraph 54), namely the shape and colour claimed.39In the present case, the Board of Appeal rightly found that in the case of mass consumer goods such as those in issue in the present case, ‘the consumer will not pay much attention to the shape and colour of confectionery’ and that accordingly ‘it is unlikely that the choice of the average consumer will be determined by the shape of the sweet’ (paragraph 12 of the contested decision).40Furthermore, the Board of Appeal showed to the requisite legal standard that the characteristics of the shape of that mark, taken alone or combined with each other, were not distinctive. It found, first, in that regard, that, ‘almost round, the shape in question which calls to mind a circle ... is a basic geometric shape’ and that the average consumer is ‘accustomed to confectionery products, including sweets, which are round (circular, oval, elliptical or cylindrical)’. Next, as regards the rounded upper sides of the sweet, it found that ‘sweets have rounded sides regardless of their configuration’ for functional reasons. Lastly, as regards the circular depression in the middle of the sweet and its flat lower surface, the Board of Appeal found that ‘those features do not substantially alter the overall impression given by the shape’ and that accordingly ‘it is unlikely that the relevant consumer will pay such attention to those two characteristics that he will perceive them as indicating a particular commercial origin’ (paragraph 13 of the contested decision).41As for the colour of the relevant product, namely brown or various shades thereof, the Board of Appeal also noted that it was a ‘common colour for sweets’ (paragraph 13 of the contested decision). It must be found that the relevant public is accustomed to find that colour in confectionery.42It follows that the three-dimensional shape in respect of which registration was sought is a basic geometric shape which comes naturally to the mind of the consumer of mass consumption goods like sweets.43In those circumstances, the applicant's argument based on the allegedly considerable differences between the shape and colour of the mark applied for and those of other confectionery products must be rejected.44In the light of the foregoing it must be found that the three-dimensional mark applied for consists of a combination of presentational features which come naturally to mind and which are typical of the goods in question. The shape in question is not markedly different from various basic shapes for the goods in question which are commonly used in trade, but is a variation of those shapes. Since the alleged differences are not readily perceptible, it follows that the shape in question cannot be sufficiently distinguished from other shapes commonly used for sweets and it will not enable the relevant public immediately and with certainty to distinguish the applicant's sweets from those of another commercial origin.45Accordingly, the mark applied for does not enable the average consumer who is reasonably well-informed and reasonably observant and circumspect to identify the products concerned and distinguish them from those of another commercial origin. Therefore, it is devoid of distinctive character when compared with those goods.46Consequently, the first plea in law, alleging infringement of Article 7(1)(b) of Regulation No 40/94, must be rejected as unfounded.The second plea in law, alleging infringement of Article 7(3) of Regulation No 40/9447The applicant considers that the mark applied for must in any event be registered on the ground that it has become distinctive through use in the market for caramels. The use of the mark is clear from the high turnover it generates, the advertising expenses incurred in promoting it and the results of various surveys concerning awareness of the mark which the applicant adduced before OHIM.48The applicant asserts that, on the confectionery market, the use not only of the name of a product but also its shape as an indication of origin is a common practice. It points out that it is for that reason that on the packaging, specifically on the bags bearing the words ‘Werther's Original’ (‘Werther's Echte’), the mark applied for is always deliberately represented together with its particularly characteristic features, namely a hollow with an impression in the centre of the sweet and its rounded sides. That use cannot be treated as merely to an illustration of the content of the package without any indication of origin. Since three-dimensional marks have a dual function, namely the representation of the mark and the product, it is impossible clearly to distinguish between the two since the mark always corresponds to the product. However, the Board of Appeal failed to take account of the mark's dual function in the present case.49Lastly, the fact of seeing and reading on the packaging other marks and descriptions of the product has no bearing on the representation, as a mark, of the shape of the product. It is quite possible to use several marks simultaneously side by side for a product and especially so for products which are only identified by the three-dimensional mark. The public recognises a three-dimensional mark independently of the information about the product. Consequently, the Board of Appeal's analysis of the representation of the mark is not convincing.50OHIM refers to the assessment criteria laid down by the case-law for determining whether a mark has become distinctive through use and submits that the mark applied for cannot be registered under Article 7(3) of Regulation No 40/94.51According to OHIM, the examiner and the Board of Appeal were right to conclude that the evidence submitted by the applicant failed to demonstrate that the mark applied for had become distinctive through use in respect of caramels.52First, the turnover figures adduced by the applicant for the 1994 to 1998 period do not enable a finding to be made as to market share and are therefore inadequate. In the case of mass consumption goods such as those in the present case, the decisive factor is the market share and not simply the sales figures, which do not suffice to show that the mark is known.53Second, the advertising costs of DEM 27729000 incurred by the applicant in 1998 in respect of the ‘Werther's Original’ sweet in several Member States of the European Union are not probative either. From the table concerning the expenditure on the promotion of the sweet in question for the 1994 to 1998 period, produced by the applicant in support of that allegation, it is impossible to determine what the expenses it mentions were incurred for, whether for the ‘Werther's Original’ sign, for the shape of the sweet or for another sign.54Lastly, the surveys carried out in seven Member States of the European Union and in Norway refer to the ‘WERTHER'S’, ‘Werther's Original’ or ‘W.O.’ signs and contain no reference to the shape in question. Accordingly, no evidence has been adduced to show that the applicant has succeeded in making the public aware of the shape of the sweet in question. Furthermore, it is not sufficient to prove use of a certain product shape in order for Article 7(3) of Regulation No 40/94 to apply but it is necessary above all to show that the circumstances of that use are such that the shape in question has the character of a mark (Philips, paragraph 65).55Under Article 7(3) of Regulation No 40/94, the absolute grounds for refusal laid down in Article 7(1)(b) to (d) of that regulation do not preclude registration of a mark if, in relation to the goods or services for which registration is requested, it has become distinctive in consequence of the use which has been made of it. In the circumstances referred to in Article 7(3) of Regulation No 40/94, the fact that the sign which constitutes the mark in question is actually perceived by the relevant section of the public as an indication of the commercial origin of a product or service is the result of the economic effort made by the trade mark applicant. That fact justifies putting aside the public-interest considerations underlying Article 7(1)(b) to (d), which require that the marks referred to in those provisions may be freely used by all in order to avoid conceding an unjustified competitive advantage to a single trader (Shape of a beer bottle, paragraph 41).56First, it is clear from the case-law that the acquisition of distinctiveness through use of a mark requires that at least a significant proportion of the relevant section of the public identifies the products or services as originating from a particular undertaking because of the mark. However, the circumstances in which the condition as to the acquisition of distinctiveness through use may be regarded as satisfied cannot be shown to exist solely by reference to general, abstract data, such as specific percentages (see, by analogy, Joined Cases C-108/97 and C-109/97 Windsurfing Chiemsee [1999] ECR I-2779, paragraph 52, and Philips, paragraphs 61 and 62, and Shape of a beer bottle, paragraph 42).57Second, in order to have the registration of a trade mark accepted under Article 7(3) of Regulation No 40/94, the distinctive character acquired through the use of that trade mark must be demonstrated in the part of the European Union where it was devoid of any such character under Article 7(1)(b) to (d) of that regulation (CaseT-91/99 Ford Motor v OHIM (OPTIONS) [2000] ECR II-1925, paragraph 27, and Shape of a beer bottle, paragraphs 43 and 47).58Third, in assessing, in a particular case, whether a mark has become distinctive through use, account must be taken of factors such as, inter alia: the market share held by the mark, how intensive, geographically widespread and longstanding use of the mark has been, the amount invested by the undertaking in promoting the mark, the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking and statements from chambers of commerce and industry or other trade and professional associations. If, on the basis of those factors, the relevant class of persons, or at least a significant proportion thereof, identify goods as originating from a particular undertaking because of the trade mark, it must be concluded that the requirement for registering the mark laid down in Article 7(3) of Regulation No 40/94 is satisfied (Windsurfing Chiemsee, paragraphs 51 and 52; Philips, paragraphs 60 and 61, and Shape of a beer bottle, paragraph 44).59Fourth, according to the case-law, the distinctiveness of a mark, including that acquired through use, must also be assessed in relation to the goods or services in respect of which registration is applied for and in the light of the presumed perception of an average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect (see, to that effect, Philips, paragraphs 59 and 63).60It is in the light of those considerations that it is necessary to examine whether, in the present case, the Board of Appeal erred in law in rejecting the applicant's argument that the mark applied for should have been registered under Article 7(3) of Regulation No 40/94.61First, the applicant's arguments based on the sales figures and high cost of advertising to promote the ‘Werther's Original’ (‘Werther's Echte’) caramel sweet do not show that the mark applied for has become distinctive in consequence of the use which has been made of it.62Whilst the Board of Appeal accepted that the turnover and the data in respect of the advertising costs showed that the type of sweet in question was widespread on the market, it nevertheless considered that that data did not constitute evidence, which was essential, that the sign applied for was used as a three-dimensional mark to designate the applicant's sweets (paragraph 16 of the contested decision).63In paragraphs 17 to 21 of the contested decision, the Board of Appeal substantiated its finding as follows:‘17.The applicant produced samples of its plastic bags used as packaging for its sweets and submitted that the shape reproduced on those bags constitutes a “primary reference point” for the consumer. The applicant takes the view that that use is evidence that the shape is the subject of the advertising as the mark of the product and that it is in that way that it will be perceived by the consumer. The Board of Appeal finds itself compelled to refute that point of view since there is a discrepancy between the applicant's statements and the overall appearance of the sweets on the packet.18.Whilst it is in fact true that the brown shaped sweets appear on the packaging as the applicant produces them, it is nevertheless necessary to consider the purpose of that representation. It cannot be an abstract assessment. On the contrary, it must consider the probable way in which the average consumer perceives the representation of the sweets as it appears on the packaging.19.Faced with a packet of the applicant's sweets, the consumer in question notices first the name “Werther's Original” which, written in large print, occupies almost half of the packet and is surrounded by further details such as a small oval sign bearing the name “Storck” and the stylised picture of a small village below which may be read “Traditional Werther's Quality”. The lower half of the packet shows a colour photo representing about 15 sweets piled up and their caption: “The classic candy made with real butter and fresh cream”.20.According to the applicant's statements that illustration corresponds to the three-dimensional mark in respect of which registration was sought. The Board of Appeal challenges the merits of that position. The way in which the sweets are represented on the packet is not in accordance with the traditional way in which marks are represented on goods. It seems that the purpose of that representation is (instead) to illustrate the contents of the packet. Contrary to the applicant's submissions the packet does not show a shape but a realistic picture of a pile of unwrapped sweets. It should be noted that that representation is not intended to emphasise the characteristics which the applicant considers to confer a distinctive character on the mark (the central depression, the smooth lower surface and the rounded sides). It is for that reason that the Board of Appeal considers that there is a discrepancy between the way in which the sweets are represented on the packet and the submission that that representation is a three-dimensional mark and is perceived as such by the average consumer. The assessment of the Board of Appeal leads it to conclude that it is likely that the consumer will see the picture of the sweets solely as an illustration of the contents of the packet. The illustration of packaging in an attractive way to show the appearance of the product and serving suggestions is a common practice in the food industry, including the confectionery industry. It is dictated more by marketing considerations than by the need to identify products by means of marks. The Board of Appeal accordingly considers that the picture does not fulfil the function of a mark, but serves solely to illustrate the product. The caption accompanying the picture, namely: “The classic candy made with real butter and fresh cream”, further confirms that this will be the probable perception of a reasonably observant sweet-buyer. The caption and picture complement each other: the wording describes the nature of the sweets and the picture shows them. The Board of Appeal concedes that a product may bear several marks at the same time. That does not preclude its finding, based on the appearance of the packets used as packaging for the applicant's sweets, that the representation of the sweets on those packets is not in keeping with the representation of a mark.21.From the foregoing considerations, it must be concluded that the turnover and the figures relating to the advertising costs in fact prove that “Werther's” sweets are sold on the market, but not that their shape was used as a mark ...’64There is no reason to call in question the foregoing considerations. The advertising material produced by the applicant contains no evidence relating to the use of the mark in the form applied for. In all of the pictures produced, the representation of the shape and colours applied for is accompanied by word and figurative marks. Accordingly, that material cannot amount to evidence that the relevant section of the public perceives the mark applied for, in itself and independently of the word and figurative marks with which it is accompanied in the advertising and at the point of sale, as indicating the commercial origin of the products and services in question (see, to that effect, Shape of a beer bottle, paragraph 51).65Furthermore, it should be noted that the applicant itself states in the application that the sweet in question is not sold loose but in a packet in which each sweet is further individually wrapped. It follows that in making the decision to purchase, the average consumer is not in a position directly to see the shape of the sweet in question enabling that person to attribute to that shape the function of indicating its origin.66The same conclusion applies, second, to the surveys submitted by the applicant for consideration by the Board of Appeal, to show that the mark applied for had become distinctive through use. It is clear from the final part of paragraph 21 of the contested decision that awareness of the sweet sold by the applicant as a mark was established, not on the basis of the shape in question, but on the basis of the name ‘Werther's’.67It follows from the foregoing considerations that the Board of Appeal did not err in law in finding that the applicant had not shown that the mark applied for had become distinctive in consequence of the use which had been made of it, either in respect of caramel sweets or confectionery in general.68Consequently, the second plea in law must also be rejected and the action as a whole dismissed.Costs69Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party's pleadings. Since the applicant has been unsuccessful and the defendant has asked for costs, the applicant must be ordered to pay the costs.On those grounds,THE COURT OF FIRST INSTANCE (Fourth Chamber)hereby:1.Dismisses the action;2.Orders the applicant to pay the costs.LegalTiiliVilarasDelivered in open court in Luxembourg on 10 November 2004.H. JungRegistrarH. LegalPresident( *1 ) Language of the case: German. | a60f6-c33f2da-41d3 | EN |
NEITHER THE OBTAINING, VERIFICATION NOR PRESENTATION OF THE CONTENTS OF A FOOTBALL FIXTURE LIST OR A SCHEDULE OF HORSE RACES CONSTITUTE SUBSTANTIAL INVESTMENT GIVING RISE TO PROTECTION AGAINST THE USE OF THE DATA BY THIRD PARTIES | Fixtures Marketing LtdvOy Veikkaus Ab(Reference for a preliminary ruling from the Vantaan käräjäoikeus)(Directive 96/9/EC – Legal protection of databases – Sui generis right – Definition of investment in the obtaining, verification or presentation of the contents of a database – Football fixture lists – Betting)Summary of the judgment Approximation of laws – Legal protection of databases – Directive 96/9 – Definition of investment in the obtaining, verification or presentation of the contents of a database – Resources used to draw up a football fixtures list – Not included (Directive of the European Parliament and of the Council 96/9, Art. 7(1))The expression ‘investment in … the obtaining … of the contents’ of a database in Article 7(1) of Directive 96/9 on the legal protection of databases must be understood to refer to investment in the creation of that database. It thus refers to the resources used to seek out existing materials and collect them in the database but does not cover the resources used for the creation of materials which make up the contents of a database. In the context of drawing up a fixture list for the purpose of organising football league fixtures, the resources used to establish the dates, times and the team pairings for the various matches in the league do not constitute such investment. Moreover, finding the data which make up such a list does not require any particular effort on the part of the professional leagues, which participate directly in the creation of those data. Nor should the resources used for the verification or presentation of the data making up the list be considered to represent substantial investment independent of the investment in the creation of those data. (see paras 33-34, 41-42, 44-46, 49, operative part)JUDGMENT OF THE COURT (Grand Chamber)9 November 2004(1) THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 8 June 2004,gives the followingLegal background “extraction” shall mean the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form; “re-utilisation” shall mean any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission. The first sale of a copy of a database within the Community by the rightholder or with his consent shall exhaust the right to control resale of that copy within the Community. Public lending is not an act of extraction or re-utilisation. of lists, tables, programmes or other similar works in which a large quantity of data is combined, orof a database, the obtaining, verification or presentation of which required substantial input,May the requirement in Article 7(1) of the directive for a link between the investment and the making of the database be interpreted in the sense that the “obtaining” referred to in Article 7(1) and the investment directed at it refers, in the present case, to investment which is directed at the determination of the dates of the matches and the match pairings themselves and, when the criteria for granting protection are appraised, does the drawing up of the fixture list include investment which is not relevant? Is the object of the directive to provide protection in such a way that persons other than the authors of the fixture list may not, without authorisation, use the data in that fixture list for betting or other commercial purposes? For the purposes of the directive, does the use by Veikkaus relate to a substantial part, evaluated qualitatively and/or quantitatively, of the database, having regard to the fact that, of the data in the fixture list, on each occasion only data necessary for one week is used in the weekly pools coupons, and the fact that the data relating to the matches is obtained and verified from sources other than the maker of the database continuously throughout the season?’ 1 – Language of the case: Finnish. Language of the case: Finnish. | 79231-5ced8e1-4bf8 | EN |
REFUSAL BY A DOMINANT PHARMACEUTICAL UNDERTAKING TO MEET ALL ORDERS OF ITS CUSTOMERS SO AS TO RESTRICT PARALLEL TRADE DOES NOT AUTOMATICALLY CONSTITUTE AN ABUSE OF A DOMINANT POSITION | Synetairismos Farmakopoion Aitolias & Akarnanias (Syfait) and OthersvGlaxoSmithKline plcandGlaxoSmithKline AEVE, formerly Glaxowellcome AEVE(Reference for a preliminary ruling from the Epitropi Antagonismou)(Admissibility — Meaning of court or tribunal of a Member State — Abuse of a dominant position — Refusal to supply pharmaceutical products to wholesalers — Parallel trade)Opinion of Advocate General Jacobs delivered on 28 October 2004 Judgment of the Court (Grand Chamber), 31 May 2005 Summary of the JudgmentQuestions referred for a preliminary ruling — Reference to the Court — National court or tribunal for the purposes of Article 234 EC — Meaning — ‘Epitropi Antagonismou’ (Greek Competition Commission) — Excluded(Art. 234 EC)In order to determine whether a body making a reference is a court or tribunal for the purposes of Article 234 EC, which is a question governed by Community law alone, the Court takes account of a number of factors, such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent. In addition, a body may refer a question to the Court only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature. The Epitropi Antagonismou (Greek Competition Commission) does not satisfy those criteria. First of all, it is subject to the supervision of the Minister for Development, which implies that that minister is empowered, within certain limits, to review the lawfulness of its decisions. Next, even though its members enjoy personal and operational independence, there are no particular safeguards in respect of their dismissal or the termination of their appointment, which does not appear to constitute an effective safeguard against undue intervention or pressure from the executive on those members. In addition, its President is responsible for the coordination and general policy of its secretariat and is the supervisor of the personnel of that secretariat, with the result that, by virtue of the operational link between the Epitropi Antagonismou, a decision-making body, and its secretariat, a fact-finding body on the basis of whose proposal it adopts decisions, the Epitropi Antagonismou is not a clearly distinct third party in relation to the State body which, by virtue of its role, may be akin to a party in the course of competition proceedings. Finally, a competition authority such as the Epitropi Antagonismou is required to work in close cooperation with the Commission and may, pursuant to Article 11(6) of Regulation No 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, be relieved of its competence by a decision of the Commission, with the consequence that the proceedings initiated before it will not lead to a decision of a judicial nature. (see paras 29-37)JUDGMENT OF THE COURT (Grand Chamber)31 May 2005 (*) (Admissibility – Meaning of court or tribunal of a Member State – Abuse of a dominant position – Refusal to supply pharmaceutical products to wholesalers – Parallel trade)In Case C-53/03,REFERENCE under Article 234 EC for a preliminary ruling, by the Epitropi Antagonismou (Greece), by decision of 22 January 2003, received at the Court on 5 February 2003, in the proceedings Synetairismos Farmakopoion Aitolias & Akarnanias (Syfait) and Others,Panellinios syllogos farmakapothikarion,Interfarm – A. Agelakos & Sia OE and Others,K.P. Marinopoulos Anonymos Etairia emporias kai dianomis farmakeftikon proïonton and Others,GlaxoSmithKline plc,GlaxoSmithKline AEVE, formerly Glaxowellcome AEVE, THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas and R. Silva de Lapuerta, Presidents of Chambers, C. Gulmann (Rapporteur), R. Schintgen, N. Colneric and S. von Bahr, Judges Advocate General: F.G. Jacobs,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 18 May 2004,after considering the observations submitted on behalf of:– Synetairismos Farmakopoion Aitolias & Akarnanias (Syfait) and Others, by P. Kaponis and S. Orfanoudakis, dikigoroi,– Panellinios syllogos farmakapothikarion and K.P. Marinopoulos Anonymos Etairia emporias kai dianomis farmakeftikon proïonton and Others, by L. Roumanias and G. Papaïoannou, dikigoroi, and W. Rehmann, Rechtsanwalt, – Farmakeftikos Syndesmos Anonymi Emporiki Etairia, by D. Chatzinikolis, dikigoros,– Interfarm A. Agelakos & Sia OE and Others, by G. Mastorakos, dikigoros,– GlaxoSmithKline plc and GlaxoSmithKline AEVE, by D. Kyriakis, dikigoros, I. Forrester QC and A. Schulz, Rechtsanwalt,– the Swedish Government, by A. Kruse, acting as Agent,– the Commission of the European Communities, by T. Christoforou and F. Castillo de la Torre, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 28 October 2004,gives the followingJudgment1 This request for a preliminary ruling concerns the interpretation of Article 82 EC.2 The request was made in proceedings before the Epitropi Antagonismou (the Greek Competition Commission), between the complainants, Synetairismos Farmakopoion Aitolias & Akarnanias (Syfait) and Others (‘Syfait and Others’), Panellinios syllogos farmakapothikarion (‘PSF’), Interfarm – A. Agelakos & Sia OE and Others (‘Interfarm and Others’) and K.P. Marinopoulos Anonymos Etairia emporias kai dianomis farmakeftikon proïonton and Others (‘Marinopoulos and Others’), and GlaxoSmithKline plc (‘GSK plc’), a United Kingdom company, and its subsidiary incorporated under Greek law, GlaxoSmithKline AEVE, formerly Glaxowellcome AEVE (‘GSK AEVE’), concerning the latter two companies’ refusal to meet orders for certain pharmaceutical products on the Greek market. Law Community law3 Article 82 EC provides:‘Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in:(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; (b) limiting production, markets or technical development to the prejudice of consumers; (c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.’ National law4 Article 2 of Law No 703/1977 on the control of monopolies and oligopolies and the protection of free competition (FEK (Official Gazette) A’ 278), as amended by Law No 2941/2001 (FEK A’ 201, hereafter ‘Law No 703/1977’), essentially corresponds to Article 82 EC. The dispute in the main proceedings and the questions referred for a preliminary ruling5 Syfait and Others are associations of pharmacists established in Greece whose main activity is the operation of a joint wholesale repository for pharmaceutical products, which they purchase from various pharmaceutical companies in order to ensure the supply of their members. 6 PSF is an association of wholesalers of pharmaceutical products established in Greece, which defends the interests of its members. 7 Interfarm and Others are wholesalers of pharmaceutical products established in Greece. Marinopoulos and Others are distributors of pharmaceutical products operating in Greece. 8 GSK AEVE is established in Greece and is wholly owned by GSK plc, a manufacturer of pharmaceutical products established in the United Kingdom resulting from the merger in 2000 of Glaxowellcome plc and SmithKline Beecham. 9 GSK AEVE imports and distributes numerous proprietary medicinal products including Imigran, Lamictal and Serevent. Those are newly created medicines resulting from research and technology and are classified as prescription medicines. 10 The members of Syfait and Others, and of PSF, and Interfarm and Others and Marinopoulos and Others buy those medicines, amongst others, in all forms from GSK AEVE and then distribute them on the national market and abroad. 11 Until November 2000, GSK AEVE met all orders which it received. A large proportion of the supplies corresponding to those orders was re-exported to other Member States, especially to the United Kingdom because of the much lower price of Imigran, Lamictal and Serevent in Greece. 12 From early November 2000, invoking significant shortages on the Greek market, which it attributed to re-exports by third parties, GSK AEVE changed its system of distribution in Greece and stopped meeting the orders of the complainants in the main proceedings and of third parties, stating that it would supply hospitals and pharmacies directly. 13 In February 2001, considering that the supply of medicinal products had to some extent been normalised, and that the stocks of hospitals and pharmacies had been rebuilt, GSK AEVE replaced the previous sales system with another system of distribution. 14 The complainants in the main proceedings brought before the Epitropi Antagonismou the question of GSK AEVE’s marketing of Imigran, Lamictal and Serevent on the Greek market under successive systems of distribution since November 2000. They alleged that that company had not met in full the orders it had received and that such conduct is an abuse of a dominant position within the meaning of Article 2 of Law No 703/1977 and Article 82 EC. 15 By Decision No 193/111 of 3 August 2001 ordering interim measures, the Epitropi Antagonismou temporarily required GSK AEVE, pending adoption of the decision in the main proceedings, to meet the orders for the three medicinal products in question. GSK AEVE applied to the Diikitiko Efetio Athinon (Administrative Appeal Court, Athens) for an order suspending that decision, but it was confirmed on 10 January 2002 and was still in force at the date of the referring decision. 16 The Epitropi Antagonismou states that GSK AEVE complied with the interim measures prescribed by Decision No 193/111 at least to the extent that that company was supplied by GSK plc. That supply exceeded the consumption needs of the domestic market. The evidence provided to the Epitropi Antagonismou by GSK AEVE shows, however, that orders were considerably higher than that level, in particular in September 2001, so that not all orders could be met. 17 In the referring decision, the Epitropi Antagonismou states that GSK AEVE and GSK plc comply with the circular adopted on 27 November 2001 by the Ethnikos Organismos Farmakon (National Organisation for Medicines), which provides that all participants in the distribution of prescribed medicines ‘must supply to the domestic market quantities at least equal to current prescription levels … plus an amount (25%) to cover any emergencies and changes of circumstance’. 18 Furthermore, on 5 December 2001, GSK AEVE applied to the Epitropi Antagonismou for negative clearance under Article 11 of Law No 703/1977 in respect of its refusal to cover more than 125% of Greek demand. 19 Faced simultaneously with that application by GSK AEVE for negative clearance and the complaints from Syfait and Others, PSF, Interfarm and Others and Marinopoulos and Others against GSK AEVE and GSK plc, the Epitropi Antagonismou asks to what extent the refusal by the latter two companies to meet in full the orders placed by the complainants constitutes an abuse of a dominant position within the meaning of Article 82 EC. If it is not an abuse, the Epitropi Antagonismou states that it will be in a position to consider whether the conditions for the grant of the negative clearance sought by GSK AEVE are satisfied. 20 In those circumstances, the Epitropi Antagonismou decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘1. Where the refusal of an undertaking holding a dominant position to meet fully the orders sent to it by pharmaceutical wholesalers is due to its intention to limit their export activity and, thereby, the harm caused to it by parallel trade, does the refusal constitute per se an abuse within the meaning of Article 82 EC? Is the answer to that question affected by the fact that the parallel trade is particularly profitable for the wholesalers because of the different prices, resulting from State intervention, in the Member States of the European Union, that is to say by the fact that pure conditions of competition do not prevail in the pharmaceuticals market, but a regime which is governed to a large extent by State intervention? Is it ultimately the duty of a national competition authority to apply Community competition rules in the same way to markets which function competitively and those in which competition is distorted by State intervention? 2. If the Court holds that limitation of parallel trade, for the reasons set out above, does not constitute an abusive practice in every case where it is engaged in by an undertaking holding a dominant position, how is possible abuse to be assessed? In particular:(a) Do the percentage by which normal domestic consumption is exceeded and/or the loss suffered by an undertaking holding a dominant position compared with its total turnover and total profits constitute appropriate criteria? If so, how are the level of that percentage and the level of that loss determined (the latter as a percentage of turnover and total profits), above which the conduct in question may be abusive? (b) Is an approach entailing the balancing of interests appropriate, and, if so, what are the interests to be compared? In particular:(i) is the answer affected by the fact that the ultimate consumer/patient derives limited financial advantage from the parallel trade? and (ii) is account to be taken, and to what extent, of the interests of social insurance bodies in cheaper medicinal products?(c) What other criteria and approaches are considered appropriate in the present case?’ The jurisdiction of the Court21 As a preliminary point, it is necessary to ascertain whether the Epitropi Antagonismou is a court or tribunal within the meaning of Article 234 EC and whether the Court therefore has jurisdiction to make a ruling on the questions referred to it. The national law governing the Epitropi Antagonismou22 Article 8(1) of Law No 703/1977 provides:‘An Epitropi Antagonismou shall be established which shall operate as an independent authority. Its members shall enjoy personal and operational independence and shall be bound in the exercise of their duties only by the law and their conscience. The Epitropi Antagonismou shall be administratively and economically autonomous subject to the supervision of the Ministry for … [Development].’ 23 The Epitropi Antagonismou has nine members appointed pursuant to Article 8(3) of Law No 703/1977. Four members and their deputies are chosen by the minister from lists of three persons which are submitted by each of four professional bodies. The other members include a member of the government legal service or a judge of the highest rank, two academics, one a lawyer and the other an economist, and two persons of acknowledged repute with experience of economic law and competition policy. According to Article 8(5) of Law No 703/1977, the members of the Epitropi Antagonismou and their deputies are appointed by the Minister for Development for a term of three years. 24 Article 8(6) of the same law provides:‘The president of the Epitropi Antagonismou and his deputy shall be appointed by the Minister [for Development] from amongst the members of the [Epitropi Antagonismou]… The president of the Epitropi Antagonismou shall be a member of the national civil service and shall exclusively perform that task for the duration of his term of office …’ 25 Article 8(7) of Law No 703/1977 provides:‘During their term of office, the President and the members shall not carry on, whether for remuneration or otherwise, any other public function or professional activity, whether or not in-house, which is incompatible with the role and duties of a member of the Epitropi Antagonismou.’ 26 As regards relations between the Epitropi Antagonismou and its secretariat, Article 8C(1)(b) of the same law provides: ‘The President shall coordinate and direct the secretariat of the [Epitropi Antagonismou].’27 Article 8C(1)(d) of the same law provides:‘The President is the immediate superior of the personnel of the secretariat of the Epitropi Antagonismou and shall exercise disciplinary power over them.’ 28 According to Article 8C(3), the President of the Epitropi Antagonismou may authorise the Director General or the directors of the secretariat of the Epitropi Antagonismou to exercise some of his powers. The Director General is to be appointed for three years, and the appointment is renewable by decision of the Minister for Development subject to the assent of the Epitropi Antagonismou, as laid down by the second sentence of Article 8D(1) of Law No 703/1977. Findings of the Court29 According to settled case-law, in order to determine whether a body making a reference is a court or tribunal for the purposes of Article 234 EC, which is a question governed by Community law alone, the Court takes account of a number of factors, such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent (see, in particular, Case C‑54/96 Dorsch Consult [1997] ECR I-4961, paragraph 23, Joined Cases C-110/98 to C-147/98 Gabalfrisa and Others [2000] ECR I-1577, paragraph 33, Case C-195/98 Österreichischer Gewerkschaftsbund [2000] ECR I‑10497, paragraph 24, and Case C-516/99 Schmid [2002] ECR I-4573, paragraph 34). Moreover, a national court may refer a question to the Court only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature (see, in particular, Case C‑134/97 Victoria Film [1998] ECR I-7023, paragraph 14, and Österreichischer Gewerkschaftsbund, paragraph 25). 30 It should be noted, first of all, in this regard that the Epitropi Antagonismou is subject to the supervision of the Minister for Development. Such supervision implies that that minister is empowered, within certain limits, to review the lawfulness of the decisions adopted by the Epitropi Antagonismou. 31 Next, whilst it is true that the members of the Epitropi Antagonismou enjoy personal and operational independence and are bound in the exercise of their duties only by the law and their conscience within the meaning of Law No 703/1977, it nevertheless remains that there are no particular safeguards in respect of their dismissal or the termination of their appointment. That system does not appear to constitute an effective safeguard against undue intervention or pressure from the executive on the members of the Epitropi Antagonismou (see, to that effect, Case C-103/97 Köllensperger and Atzwanger [1999] ECR I-551, paragraph 21). 32 It should also be noted that under Article 8C(1)(b) and (d) of Law No 703/1977, the President of the Epitropi Antagonismou is responsible for the coordination and general policy of the secretariat, is the immediate superior of the personnel of that secretariat and exercises disciplinary power over them. 33 It should be noted in this regard that the Tribunales Económico-Administrativos (Economic and Administrative Courts) (Spain) were found by the Court, in paragraphs 39 and 40 of the Gabalfrisa judgment, to be third parties in relation to the departments of the tax authority responsible for the management, clearance and recovery of VAT, particularly given the separation of functions between them. However, in so far as there is an operational link between the Epitropi Antagonismou, a decision-making body, and its secretariat, a fact-finding body on the basis of whose proposal it adopts decisions, the Epitropi Antagonismou is not a clearly distinct third party in relation to the State body which, by virtue of its role, may be akin to a party in the course of competition proceedings. 34 Lastly, it should be noted that a competition authority such as the Epitropi Antagonismou is required to work in close cooperation with the Commission of the European Communities and may, pursuant to Article 11(6) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ 2003 L 1, p. 1), be relieved of its competence by a decision of the Commission. It should moreover be noted in this context that Article 11(6) of Regulation No 1/2003 essentially maintains the rule in Article 9(3) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition, 1959-1962 p. 87), that the competition authorities of the Member States are automatically relieved of their competence where the Commission initiates its own proceedings (see in that connection the 17th recital in the preamble to Regulation No 1/2003). 35 A body may refer a question to the Court only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature (see Victoria Film, paragraph 14, and Österreichischer Gewerkschaftsbund, paragraph 25). 36 Whenever the Commission relieves a national competition authority such as the Epitropi Antagonismou of its competence, the proceedings initiated before that authority will not lead to a decision of a judicial nature. 37 It follows from the factors examined, considered as a whole, that the Epitropi Antagonismou is not a court or tribunal within the meaning of Article 234 EC. 38 Accordingly, the Court has no jurisdiction to answer the questions referred by the Epitropi Antagonismou. Costs39 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the Epitropi Antagonismou, the decision on costs is a matter for that body. The costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) hereby rules:The Court of Justice of the European Communities has no jurisdiction to answer the questions referred by the Epitropi Antagonismou by decision of 22 January 2003.[Signatures]* Language of the case: Greek. | 3a0a2-0876f8c-4340 | EN |
A YOUNG CHILD WHO IS A NATIONAL OF A MEMBER STATE IS ENTITLED TO RESIDE IN ANOTHER MEMBER STATE IF HE OR SHE IS COVERED BY SICKNESS INSURANCE AND HAS SUFFICIENT RESOURCES | Kunqian Catherine Zhu and Man Lavette ChenvSecretary of State for the Home Department(Reference for a preliminary ruling from the Immigration Appellate Authority)(Right of residence – Child with the nationality of one Member State but residing in another Member State – Parents nationals of a non-member country – Mother’s right to reside in the other Member State)Summary of the JudgmentCitizenship of the European Union – Right to move and reside freely in the territory of the Member States – Directive 90/364 – Minor who is a national of a Member State, is covered by sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor and who is that minor’s primary carer – Right of residence, both for the minor and for the parent, in another Member State – Conditions for the minor to gain nationality – Not relevant(Art. 18 EC; Council Directive 90/364)Article 18 EC and Council Directive 90/364 on the right of residence confer on a young minor who is a national of a Member State, is covered by appropriate sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor not to become a burden on the public finances of the host Member State, a right to reside for an indefinite period in that State. In such circumstances, those same provisions allow a parent who is that minor’s primary carer to reside with the child in the host Member State. In that respect, the condition concerning the sufficiency of resources laid down in Directive 90/364 cannot be interpreted as meaning that the minor must possess those resources personally and may not use for that purpose those of a family member. Such an interpretation would add to that condition a requirement as to the origin of the resources which, not being necessary for the attainment of the objective pursued, namely the protection of the public finances of the Member States, would constitute a disproportionate interference with the exercise of the fundamental right of freedom of movement and of residence upheld by Article 18 EC. In addition, the application of the Community provisions at issue cannot be refused to the persons concerned on the ground that the parent who is the primary carer has created, by means of a stay in a Member State, a situation in which the child expected would be able to acquire the nationality of another Member State in order thereafter to secure for the child and for him or herself a long-term right to reside. Under international law, it is for each Member State, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality and it is not permissible for a Member State to restrict the effects of the grant of the nationality of another Member State by imposing an additional condition for recognition of that nationality with a view to the exercise of the fundamental freedoms provided for in the Treaty. (see paras 33, 36-37, 39, 47, operative part)JUDGMENT OF THE COURT (sitting as a full Court )19 October 2004(1) (Right of residence – Child with the nationality of one Member State but residing in another Member State – Parents nationals of a non-member country – Mother's right to reside in the other Member State)THE COURT (sitting as a full Court ),,after hearing the Opinion of the Advocate General at the sitting on 18 May 2004,gives the followingLegal backgroundThe Member States shall, acting as provided in this Directive, abolish restrictions on the movement and residence of: (a) nationals of a Member State who are established or who wish to establish themselves in another Member State in order to pursue activities as self-employed persons, or who wish to provide services in that State; nationals of a Member State who are established or who wish to establish themselves in another Member State in order to pursue activities as self-employed persons, or who wish to provide services in that State; (b) nationals of Member States wishing to go to another Member State as recipients of services; nationals of Member States wishing to go to another Member State as recipients of services; (c) the spouse and the children under 21 years of age of such nationals, irrespective of their nationality; the spouse and the children under 21 years of age of such nationals, irrespective of their nationality; (d) the relatives in the ascending and descending lines of such nationals and of the spouse of such nationals, which relatives are dependent on them, irrespective of their nationality. the relatives in the ascending and descending lines of such nationals and of the spouse of such nationals, which relatives are dependent on them, irrespective of their nationality. Member States shall favour the admission of any other member of the family of a national referred to in paragraph 1(a) or (b) or of the spouse of that national, which member is dependent on that national or spouse of that national or who in the country of origin was living under the same roof.’ his or her spouse and their descendants who are dependants;dependent relatives in the ascending line of the holder of the right of residence and his or her spouse.’confer the right on the First Appellant, who is a minor and a citizen of the Union, to enter and reside in the host Member State? and if so, does it consequently confer the right on the Second Appellant, a third country national who is the First Appellant’s mother and primary carer, to reside with the First Appellant (i) as her dependent relative, or (ii) because she lived with the First Appellant in her country of origin, or (iii) on any other special basis? In circumstances like those of the main proceedings, Article 18 EC and Council Directive 90/364/EEC of 28 June 1990 on the right of residence confer on a young minor who is a national of a Member State, is covered by appropriate sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor not to become a burden on the public finances of the host Member State, a right to reside for an indefinite period in that State. In such circumstances, those same provisions allow a parent who is that minor’s primary carer to reside with the child in the host Member State. SkourisJannTimmermansRosasSilva de LapuertaLenaertsGulmannSchintgenColnericvon BahrCunha RodriguesRegistrarPresidentR. GrassV. Skouris 1 – Language of the case: English. Language of the case: English. | 6cec9-6aadee9-4db7 | EN |
THE PRESIDENT OF THE COURT OF FIRST INSTANCE HOLDS IN PROCEEDINGS FOR INTERIM MEASURES THAT, PRIMA FACIE, THE APPLICATION FOR ANNULMENT OF THE FORWARDING TO THE NATIONAL JUDICIAL AUTHORITIES OF INFORMATION HELD BY OLAF AND THE APPLICATION FOR COMPENSATION IN RESPECT OF DAMAGE ALLEGEDLY SUFFERED CANNOT BE UPHELD | Hans-Martin TillackvCommission of the European Communities(Investigation by the European Anti-Fraud Office (OLAF) into the publication of confidential information – Suspicions of bribery and breach of professional secrecy – Communication to national judicial authorities of information relating to situations liable to lead to criminal proceedings – Search of the home and office of a journalist – Action for annulment – Admissibility – Action for damages – Causal link – Sufficiently serious breach) Judgment of the Court of First Instance (Fourth Chamber), 4 October 2006 Summary of the Judgment1. Actions for annulment – Actionable measures – Meaning – Measures producing binding legal effects (Art. 230 EC; European Parliament and Council Regulation No 1073/1999, Art. 10(2))2. Actions for damages – Autonomy in relation to action for annulment and action for failure to act(Arts 230, fourth para., EC, 235 EC and 288, second para., EC)3. Non-contractual liability – Conditions – Sufficiently serious breach of Community law(Art. 288, second para., EC)1. Measures the legal effects of which are binding on and capable of affecting the interests of the applicant by bringing about a distinct change in his legal position are acts or decisions which may be the subject of an action for annulment in terms of Article 230 EC. Such is not the case for an act by which the European Anti-Fraud Office (OLAF), on the basis of Article 10(2) of Regulation No 1073/1999 concerning investigations conducted by OLAF, forwards to the national judicial authorities information concerning suspicions of breach of professional secrecy and bribery. That Article 10(2) merely provides for the forwarding of information to national judicial authorities, which remain free, in the context of their own powers, to assess the content and significance of that information and, thus, the action to be taken if necessary. Consequently, the possible initiation of legal proceedings following the forwarding of information by OLAF, and the subsequent legal acts, are the sole and entire responsibility of the national authorities. That freedom of the national judicial authorities is not called into question by the duty to cooperate in good faith which implies that, when OLAF forwards them information pursuant to Article 10(2) of Regulation No 1073/1999, the national judicial authorities have to examine that information carefully and draw the appropriate consequences from it in order to comply with Community law. Such a duty of careful examination does not, however, require an interpretation to the effect that the forwarded information in dispute has binding effect, in the sense that the national authorities are obliged to take specific measures, since such an interpretation would alter the division of tasks and responsibilities as prescribed for the implementation of Regulation No 1073/1999. (see paras 67-68, 70, 72)2. The action to establish liability is an autonomous form of action, with a particular purpose to fulfil within the system of legal remedies and subject to conditions of use dictated by its specific purpose. Although actions for annulment and for failure to act seek a declaration that a legally binding measure is unlawful or that such a measure has not been taken, an action to establish liability seeks compensation for damage resulting from a measure or from unlawful conduct, attributable to a Community institution or body. Thus, individuals who, by reasons of the conditions as to admissibility laid down under the fourth paragraph of Article 230 EC, cannot contest directly certain Community acts or measures, none the less have the opportunity of putting in issue conduct lacking the features of a decision, which accordingly cannot be challenged by way of an action for annulment, by bringing an action for non‑contractual liability under Article 235 EC and the second paragraph of Article 288 EC, where such conduct is of such a nature as to entail liability for the Community. (see paras 97-98)3. The non-contractual liability of the Community for the unlawful acts of its bodies, for the purposes of the second paragraph of Article 288 EC, depends on fulfilment of a set of conditions, namely: the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between that conduct and the damage complained of. As regards the first of those conditions, it is required that there be a sufficiently serious breach of a rule of law intended to confer rights in individuals. In that regard, the principle of sound administration does not, in itself, confer rights upon individuals, except where it constitutes the expression of specific rights such as the right to have affairs handled impartially, fairly and within a reasonable time, the right to be heard, the right to have access to files, or the obligation to give reasons for decisions, for the purposes of Article 41 of the Charter of fundamental rights of the European Union. Moreover, the classification of the conduct of a Community institution as an ‘act of maladministration’ by the European Ombudsman does not mean, in itself, that that conduct constitutes a sufficiently serious breach of a rule of law. In the institution of the Ombudsman, the Treaty has given citizens of the Union, and more particularly officials and other servants of the Community, an alternative remedy to that of an action before the Community Courts in order to protect their interests. That alternative non-judicial remedy meets specific criteria and does not necessarily have the same objective as judicial proceedings. (see paras 116-117, 127-128)JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)4 October 2006 (*) In Case T-193/04, Hans-Martin Tillack, residing in Brussels (Belgium), represented by I. Forrester QC, T. Bosly, C. Arhold, N. Flandin, J. Herrlinger and J. Siaens, lawyers, applicant,supported byInternational Federation of Journalists (IFJ), established in Brussels (Belgium), represented by A. Bartosch and T. Grupp, lawyers, intervener,Commission of the European Communities, represented by C. Docksey and C. Ladenburger, acting as Agents, defendant,APPLICATION, first, for the annulment of the act by which, on 11 February 2004, the European Anti-Fraud Office (OLAF) forwarded to the German and Belgian judicial authorities information concerning suspicions of breach of professional secrecy and bribery and, second, for damages in compensation for non-material injury suffered by the applicant as a result of the forwarding of that information and of the publication of press releases by OLAF, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fourth Chamber), composed of H. Legal, President, P. Lindh and V. Vadapalas, Judges,Registrar: J. Plingers, Administrator,having regard to the written procedure and further to the hearing on 11 May 2006,gives the followingJudgment Legal framework 1 The European Anti-Fraud Office (OLAF), established by Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999 (OJ 1999 L 136, p. 20), is responsible in particular for carrying out internal administrative investigations intended to investigate serious facts, linked to the performance of professional activities, which may constitute a breach of obligations by officials and servants of the Communities likely to lead to disciplinary and, in appropriate cases, criminal proceedings. 2 Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by OLAF (OJ 1999 L 136, p. 1) governs the inspections, checks and other measures undertaken by employees of OLAF in the performance of their duties. 3 Recital 13 in the preamble to Regulation No 1073/1999 states that:‘… it is for the competent national authorities or the institutions, bodies, offices or agencies, as the case may be, to decide what action should be taken on completed investigations on the basis of the report drawn up by [OLAF]; … it should nevertheless be incumbent upon the Director of [OLAF] to forward directly to the judicial authorities of the Member State concerned information acquired by [OLAF] in the course of internal investigations concerning situations liable to result in criminal proceedings.’ 4 Article 6 of Regulation No 1073/1999, headed ‘Investigations procedure’, provides, at paragraph 6, that ‘the Member States shall ensure that their competent authorities, in conformity with national provisions, give the necessary support to enable [OLAF] employees to fulfil their task’. 5 Article 9 of Regulation No 1073/1999, headed ‘Investigation report and action taken following investigations’, states the following at paragraph 2: ‘… Reports drawn up on that basis shall constitute admissible evidence in administrative or judicial proceedings of the Member State in which their use proves necessary, in the same way and under the same conditions as administrative reports drawn up by national administrative inspectors. …’ 6 Article 10 of Regulation No 1073/1999, entitled ‘Forwarding of information by [OLAF]’, provides at paragraph 2:‘… the Director of [OLAF] shall forward to the judicial authorities of the Member State concerned the information obtained by [OLAF] during internal investigations into matters liable to result in criminal proceedings. …’ Facts giving rise to the dispute7 The applicant is a journalist employed by the German magazine Stern.8 By memorandum of 31 August 2001, Mr van Buitenen, an official of the Commission of the European Communities, notified the existence of possible irregularities in a number of the Commission’s services (‘the van Buitenen memorandum’). A copy of that document was received by OLAF on 5 September 2001. 9 On 23 October 2001, the Director of OLAF instructed the Magistrates, Judicial advice and Follow-up Unit to investigate the allegations made in the van Buitenen memorandum and asked for recommendations as to further proceedings to be taken in relation to them. 10 On 31 January 2002, the Magistrates, Judicial advice and Follow-up Unit issued a confidential internal note, containing 12 proposals and recommendations, including the opening of investigations into some of the allegations referred to in the memorandum. On the basis of that document, the unit drew up an abridged note of 14 February 2002, which was also confidential. 11 The applicant was the author of two articles published in Stern on 28 February and 7 March 2002 respectively, in which he described irregularities within the European institutions. Those articles were based on the van Buitenen memorandum and the OLAF note of 31 January 2002. 12 On 12 March 2002, OLAF, suspecting that its confidential notes of 31 January and 14 February 2002 had been unlawfully disclosed, opened an internal investigation to identify the Community officials or servants who were the source of the leak. 13 On 22 March 2002, the Director of the OLAF Operations, Strategy and Information Services Directorate sent a note to the Director of OLAF to inform him that, according to a trustworthy source, the applicant had handed over EUR 8 000 to an OLAF official for a number of documents related to the van Buitenen case. On the same day, the OLAF spokesman told the Director of OLAF that he had met Mr G., the Commission spokesman dealing with budget and anti-fraud matters, and that the latter had claimed to have been informed by a journalist from Stern that the applicant had paid a member of OLAF in order to obtain documents. 14 On 27 March 2002, OLAF published a press release, headed ‘Internal investigation concerning a leak of confidential information’, which was worded as follows: ‘… Following an apparent leak of confidential information included in a report prepared within OLAF, [OLAF] has decided, in accordance with Article 5(1) of Regulation … No 1073/1999, to open an internal investigation. According to information received by [OLAF], a journalist has received a number of documents relating to the so-called “van Buitenen affair”. It is not excluded that payment may have been made to somebody within OLAF (or possibly another EU institution) for these documents. … [OLAF] always respects the highest ethical standards. It conducts its investigations in full independence. It would however point out that the bribery or payment of officials to provide official information is illegal in Belgium, and the information obtained by OLAF in the course of its investigations is protected by the relevant provisions of Belgian law. If following the internal investigation illegal activity is indicated, it is the intention of [OLAF] that the perpetrators be prosecuted in accordance with the applicable disciplinary and criminal provisions …’ 15 In reply, Stern published a press release on 28 March 2002, in which it, first, confirmed that it was in possession of the van Buitenen memorandum and, secondly, emphasised that it had not paid an official of the European Communities for providing documents connected with the case. That press release also mentions the applicant’s name and address. Stern also wrote to the Chairman of the OLAF Supervisory Committee on 3 April 2002 to object to OLAF’s allegations. 16 On 4 April 2002, the magazine European Voice stated that, according to an OLAF spokesman, OLAF had ‘prima facie evidence’ that ‘a payment might have been made’ and was treating the matter seriously. 17 At a meeting of 9 and 10 April 2002, the OLAF Supervisory Committee asked to be informed of the grounds for suspecting payment in this case. 18 On 11 April 2002, OLAF’s spokesman sent an email to a number of OLAF officials stating the following:‘… the only facts of which we can be certain for the moment are: that a confidential OLAF document has found its way into the hands of the press (which should not have happened), [and that] there have been rumours or speculation around OLAF and around the … Commission that these documents have been paid for (with even an indication of the price paid). It is unacceptable that confidential information from OLAF has been obtained by the press and that this information may have been obtained by means of the corruption of a public servant [and that] allegations, “rumours” or “speculation” of the sort which [OLAF], as an investigative body, has had to endure, remain unverified …’. 19 On 22 October 2002, the applicant lodged a complaint (1840/2002/GG) with the European Ombudsman regarding OLAF’s press release of 27 March 2002. 20 On 9 December 2002, the OLAF investigators formally heard Mr G. He indicated that according to one of his former colleagues from Stern, whose name he refused to reveal, the applicant had received DEM 8 000 or EUR 8 000 to obtain information concerning the Commission or possibly OLAF. 21 On 18 June 2003, in his draft recommendation regarding the applicant’s complaint, the Ombudsman stated that by making allegations of bribery without a factual basis which was both sufficient and available for public scrutiny, OLAF had gone beyond what was proportionate to the purpose pursued by its action, and that that constituted an instance of maladministration. He recommended that OLAF withdraw the published allegations of bribery, which might be understood as referring to the applicant. 22 Following that draft recommendation, OLAF issued a press release on 30 September 2003, entitled ‘OLAF clarification regarding an apparent leak of information’, drafted as follows: ‘On 27 March 2002, … OLAF published a press release in which it announced that an internal investigation had been opened in accordance with Regulation … No 1073/1999 regarding an apparent leak of confidential information included in a report prepared within [OLAF]. That press release stated that, according to information received by [OLAF], a journalist had received a number of documents relating to the so-called “van Buitenen affair”, and that it was not excluded that payment might have been made to somebody within OLAF (or possibly another EU institution) for these documents. OLAF’s enquiries have not yet been completed, but to date, [OLAF] has not obtained proof that such a payment was made.’23 On 12 November 2003, the applicant published an article on Stern’s website criticising the work of OLAF’s Director. 24 In his final decision of 20 November 2003, the Ombudsman reaffirmed, in relation to complaint 1840/2002/GG, that OLAF had committed an act of maladministration and was of the opinion that OLAF, which had accepted his draft recommendation, had not implemented it adequately. In those circumstances, he took the view that a critical remark on his part could constitute adequate reparation for the complainant. 25 Mr G., who had left the Commission in July 2003, had a further hearing before OLAF’s investigators on 6 January 2004. First, he confirmed the points covered at the first hearing and, second, disclosed the name of the person who had given him the information. 26 On 20 and 21 January 2004, at a meeting of the OLAF Supervisory Committee, the director informed the committee of the ‘developments of an ongoing case’ and stated that they involved confidential contacts with national judicial authorities. The minute of the meeting recorded that the members of the committee agreed ‘in the light of the particular circumstances of the case to receive deferred information thereon … , it being declared that OLAF should, at the appropriate time, provide adequate information to the institution concerned’. 27 On 11 February 2004, OLAF forwarded information concerning suspicions of breach of professional secrecy and bribery to the judicial authorities in Brussels (Belgium) and Hamburg (Germany), referring to Article 10(2) of Regulation No 1073/1999. 28 On the basis of the information sent, both the Belgian and German judicial authorities opened investigations into alleged corruption and, in the case of the Belgian judicial authorities, for breach of professional secrecy. 29 On 19 March 2004, on the instructions of the investigating judge responsible for the case, the Belgian police carried out a search at the applicant’s home and office and seized or sealed professional documents and personal belongings. 30 The applicant brought proceedings to challenge that seizure before the Belgian courts. Following those proceedings the Belgian Cour de cassation (Court of Cassation) rejected his appeal on the merits on 1 December 2004. 31 On 15 April 2004, the applicant wrote to the Director of OLAF to complain about the procedure and to request access to the investigation file concerning him. 32 On 7 May 2004, a copy of the letter sent to the Belgian judicial authorities on 11 February 2004, from which all confidential material had been deleted, was sent to the President of the OLAF Supervisory Committee. At the end of May 2004, the applicant also obtained a copy of that letter. 33 On 12 May 2005, the Ombudsman issued a special report to the European Parliament concerning complaint 2485/2004/GG, brought by the applicant. According to that report, OLAF should acknowledge that it had made incorrect and misleading statements in its submissions to the Ombudsman in the investigation into complaint 1840/2002/GG. The European Ombudsman also proposed that the Parliament adopt that recommendation as a resolution. Procedure and forms of order sought 34 By application lodged at the Registry of the Court of First Instance on 1 June 2004, the applicant brought the present action. 35 By separate document registered at the Registry of the Court of First Instance on 4 June 2004, the applicant requested essentially, first, the suspension of the operation of all measures to be adopted in the context of the alleged complaint lodged by OLAF with the Belgian and German judicial authorities on 11 February 2004 and, secondly, an order that OLAF should refrain from obtaining, inspecting, investigating and hearing the contents of all documents and information in the possession of the Belgian judicial authorities as a result of the search carried out at the applicant’s home and office on 19 March 2004. 36 By document lodged at the Registry of the Court of First Instance on 17 June 2004, the International Federation of Journalists (‘the IFJ’) lodged an application to intervene in support of the forms of order sought by the applicant. 37 By order of the President of the Court of First Instance in Case T‑193/04 R Tillack v Commission [2004] ECR II-3575, the President of the Court of First Instance rejected the application for interim measures and reserved costs. 38 By application lodged at the Registry of the Court of Justice on 24 December 2004, the applicant brought an appeal against that order in Tillack v Commission. 39 By order of 26 January 2005, the President of the Fourth Chamber of the Court of First Instance granted the IFJ leave to intervene in the present proceedings. The intervener lodged its statement in intervention and the other parties replied within the prescribed periods. 40 By order of 19 April 2005 in Case C-521/04 P(R) Tillack v Commission [2005] ECR I-3103, the President of the Court of Justice dismissed the appeal in that case and the applicant was ordered to pay the costs. 41 Upon hearing the report of the Judge-Rapporteur, the Court (Fourth Chamber) decided to open the oral procedure. 42 The parties presented oral argument and answered the questions put by the Court at the hearing on 11 May 2006. 43 The applicant claims that the Court should:– annul the decision of OLAF to forward to the German and Belgian judicial authorities the ‘complaint’ of 11 February 2004;– order the Commission to award him damages in an amount to be fixed by the Court, together with interest at a rate to be fixed by the Court; – take such other or further action as justice may require;– order the Commission to pay the costs.44 The Commission contends that the Court should:– dismiss the action for annulment and the action for damages as inadmissible;– in the alternative, dismiss those actions as unfounded;– order the applicant to pay the costs.45 The IFJ submits that the Court should annul the decision of OLAF of 11 February 2004 to ‘forward the complaints’ to the German and Belgian judicial authorities. Law Admissibility of the pleas seeking annulment of the act by which OLAF forwarded information to the German and Belgian judicial authorities Arguments of the parties 46 Without raising a formal plea of inadmissibility, the Commission contends that the application for annulment is manifestly inadmissible, in the absence of any challengeable act for the purposes of the fourth paragraph of Article 230 EC. 47 Referring to the order of the Court of First Instance in Case T‑215/02 Gómez-Reino v Commission [2003] ECR-SC I-A-345 and ECR II-1685, paragraphs 50 and 51, the Commission submits that the act by which OLAF forwarded information to the Belgian and German judicial authorities, in accordance with the obligation laid down in Article 10(2) of Regulation No 1073/1999, represents a preparatory act which, in itself, does not change the legal position of the applicant. It is for the national judicial authorities alone to decide what is to be done with the information forwarded and to decide, in accordance with their national law, whether or not to initiate a judicial inquiry, to carry out investigative measures and to commence criminal proceedings. Thereafter, the national court is competent to decide whether the person concerned is guilty or not. 48 The Commission also submits that, in the judgment in Joined Cases T-377/00, T‑379/00, T-380/00, T-260/01 and T-272/01 Philip Morris and Others v Commission [2003] ECR II-1, the Court of First Instance held that the Commission’s decision to file a civil complaint before a court in the United States was not open to challenge by way of an action under the fourth paragraph of Article 230 EC, since that complaint did not of itself alter the legal position of the defendant. The Commission argues that that decision must apply a fortiori in the present case, where OLAF has neither filed a complaint nor brought proceedings, but has merely forwarded factual information which may or may not prompt the competent authorities to initiate proceedings to which neither OLAF nor the Commission would normally be a party. 49 In addition, the duty of cooperation, laid down in Article 10 EC, has no binding legal effect on the national legal authorities or the applicant. Article 6(6) of Regulation No 1073/1999 does not apply to acts taken in the course of national criminal investigations carried out by judicial authorities of the Member States after having received information from OLAF. Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities (OJ 1996 L 292, p. 2) also has no bearing on the present case. 50 Furthermore, the applicant did enjoy effective judicial protection. First, as the Belgian search warrant is the only measure affecting the applicant’s freedom of speech, judicial protection against that measure must be provided by the Belgian courts. Secondly, even where a national search warrant is issued on the basis of information forwarded by OLAF, national legal remedies also provide legal protection to the complainant, although recourse may be had to Article 234 EC when the claimant argues before the national court that OLAF has infringed Community law in its investigative procedure. Thirdly, the fact that the transmission of information under Article 10(2) of Regulation No 1073/1999 cannot be challenged by way of an action for annulment does not mean that an action for non-contractual liability before the Community Courts is precluded a priori. 51 Lastly, the Commission states that any exception made to the rules on the admissibility of an action under Article 230 EC would have serious adverse consequences for the efficiency, confidentiality and independence of OLAF’s investigations. It maintains that even if the Belgian courts had rejected as inadmissible any plea of infringement of essential procedural requirements by OLAF, the present action for annulment would still not be admissible. Case C‑167/02 P Rothley and Others v Parliament [2004] ECR I-3149 does not lead to a different conclusion. 52 The applicant contends that his action for annulment, brought under Article 230 EC, is admissible. 53 He maintains, first, that OLAF’s ‘complaint’ produced legal effects because the national authorities went on to initiate an investigation. Article 10 EC and Regulation No 1073/1999, particularly Article 6(6) thereof, require the Member States to cooperate with OLAF. 54 Next, the applicant’s interests would not be adequately protected if he were forced to wait until the Belgian authorities took a final decision before being able to challenge OLAF’s ‘complaint’. More generally, journalists and their informants would be deterred from revealing information regarding the Community institutions if they were exposed to the risk that the ‘complaints’ lodged by OLAF might lead to criminal proceedings. The annulment of the contested measure would also help to re-establish the applicant’s reputation, which has been greatly damaged by OLAF’s continuing false allegations. 55 According to the applicant, a challenge to the ‘complaint’ is the only effective way of preventing the illegal exploitation of the information gathered by the Belgian authorities during the search, which might make it possible to identify the applicant’s sources. OLAF may become a civil party in the Belgian criminal proceedings and thereby obtain access to the documents seized. Moreover, the annulment of the ‘complaint’ is itself capable of having legal consequences, in particular by preventing a repetition by the Commission of such a practice. 56 As regards the order in Gómez-Reino v Commission, the applicant takes the view that the circumstances which gave rise to that case were very different from those which have arisen in these proceedings. 57 In addition, Regulation No 1073/1999 and Regulation No 2185/96 confer special powers on OLAF, which is developing close cooperation with the national investigation bodies. 58 In response to the Commission’s argument that OLAF never requested the German or Belgian judicial authorities to take any specific action, the applicant considers that it is incorrect. First, in the ‘complaint’ sent to the Belgian authorities, OLAF recommended swift action in view of the applicant’s alleged impending move to Washington (United States). Next, the OLAF investigators had already contacted the national officials on 13 and 16 January 2004, in order to coordinate the investigation measures. Lastly, OLAF asked the national authorities to search the applicant’s home and office in order to obtain evidence for its internal investigation, as is confirmed by a statement made by the Chairman of OLAF’s Supervisory Committee to the House of Lords Select Committee on the European Union (United Kingdom) on 19 May 2004. The investigating judge therefore did not act in complete independence, but did what OLAF asked. 59 The applicant also contends that the national authorities cannot but have full confidence in the accuracy of OLAF’s investigation reports, which may be used as evidence in court pursuant to Article 9(2) of Regulation No 1073/1999. Breach of professional secrecy by an official of the European Communities is not an offence under Belgian law. Therefore, OLAF was able to become a civil party only because of the privileged relationship it has with the Belgian authorities, which were prepared to act on the ‘complaint’. 60 It follows from the above that OLAF’s ‘complaint’ is not comparable to the Commission’s decision to bring civil proceedings in the case which gave rise to the judgment in Philip Morris International and Others v Commission, where the Commission’s situation was identical to that of an ordinary citizen. The context in which the order in Case T-29/03 Comunidad Autónoma de Andalucía v Commission [2004] ECR II-2923 was made was different to that in this case, in that it concerned the final report in an external investigation procedure. Furthermore, the Court took into account the fact that the Spanish prosecutor had stopped the proceedings in the meantime, so that the report could no longer have any adverse legal effects. 61 Lastly, referring to Rothley and Others v Parliament, the applicant takes the view that Article 230 EC must be applied in the light of the right to effective judicial protection. In the present case, no other legal remedy is available to him to challenge OLAF’s behaviour. It is not possible for him to request a national court to make a reference for a preliminary ruling, since the unlawfulness of OLAF’s conduct does not determine that of the measures taken by the national judicial authorities. Only the Community Courts are competent to judge OLAF and not the national courts or, in the final instance, the European Court of Human Rights. Accordingly, national proceedings do not provide for effective judicial review. It is unacceptable that, in a case where the freedom of the press is at stake, the sole remedy available to the applicant is an application for damages before the Court of First Instance. 62 The IFJ submits that the application is admissible since the ‘complaints’ sent to the German and Belgian judicial authorities constitute decisions for the purposes of the fourth paragraph of Article 230 EC. The action for annulment is not directed against the search carried out by the Belgian authorities but against a decision of OLAF intended to have legal effects as against the applicant. 63 Unlike the case which gave rise to the order in Gómez-Reino v Commission, this case concerns a ‘complaint’ having direct legal consequences for the applicant, and not mere preparatory measures. 64 Referring to Case 180/87 Hamill v Commission [1988] ECR 6141, the IFJ notes that even mere information supplied to national judicial authorities can be the subject of judicial review by the Community Courts. 65 Lastly, the IFJ argues that the action for annulment is also admissible by virtue of the right to effective judicial protection. Article 230 EC must be interpreted in the spirit of a Community based on the rule of law, in order that the applicant may obtain judicial protection against OLAF’s conduct. In that regard, the Belgian courts are not in a position to verify, on a case-by-case basis and exhaustively and thoroughly, whether the acts of the Community institutions are in conformity with Community law. Findings of the Court66 In the present case, the action for annulment is brought against the act by which OLAF, on the basis of Article 10(2) of Regulation No 1073/1999, forwarded the German and Belgium judicial authorities information concerning suspicions of breach of professional secrecy and bribery involving the applicant. 67 According to settled case-law, measures the legal effects of which are binding on and capable of affecting the interests of the applicant by bringing about a distinct change in his legal position are acts or decisions which may be the subject of an action for annulment in terms of Article 230 EC (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Case T-309/03 Camós Grau v Commission [2006] ECR II-0000, paragraph 47). 68 However, in the present case, the contested act does not bring about a distinct change in the applicant’s legal position. 69 It is clear from the provisions of Regulation No 1073/1999, in particular from the 13th recital in the preamble and Article 9, that findings of OLAF set out in a final report do not lead automatically to the initiation of judicial or disciplinary proceedings, since the competent authorities are free to decide what action to take pursuant to a final report and are accordingly the only authorities having the power to adopt decisions capable of affecting the legal position of those persons in relation to which the report recommended that such proceedings be instigated (order in Comunidad Autónoma de Andalucía v Commission, paragraph 37, and Camós Grau v Commission, paragraph 51). 70 Equally, Article 10(2) of Regulation No 1073/1999 merely provides for the forwarding of information to national judicial authorities, which remain free, in the context of their own powers, to assess the content and significance of that information and, thus, the action to be taken if necessary. Consequently, the possible initiation of legal proceedings following the forwarding of information by OLAF, and the subsequent legal acts, are the sole and entire responsibility of the national authorities. 71 None of the arguments raised by the applicant and the intervener calls that finding into question. 72 First, the duty to cooperate in good faith entails an obligation on the Member States to take all the measures necessary to guarantee the application and effectiveness of Community law and imposes on Member States and the Community institutions mutual duties to cooperate in good faith (Case C-275/00 First and Franex [2002] ECR I-10943, paragraph 49, and Case C-344/01 Germany v Commission [2004] ECR I-2081, paragraph 79). That duty implies that, when OLAF forwards them information pursuant to Article 10(2) of Regulation No 1073/1999, the national judicial authorities have to examine that information carefully and draw the appropriate consequences from it in order to comply with Community law, if necessary by initiating legal proceedings if they consider such action justified. Such a duty of careful examination does not, however, require an interpretation of that provision to the effect that the forwarded information in dispute has binding effect, in the sense that the national authorities are obliged to take specific measures, since such an interpretation would alter the division of tasks and responsibilities as prescribed for the implementation of Regulation No 1073/1999 (order in Case C-521/04 P(R) Tillack v Commission, paragraph 33). 73 In addition, Article 6(6) of Regulation No 1073/1999, which concerns investigations carried out by OLAF, and Regulation No 2185/96 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities relate to OLAF’s and the Commission’s own powers of investigation. Even if the mutual duty to cooperate in good faith, which is expected of the Member States when exercising their own powers of investigation, implies that the competent national authorities support actions brought in the name of the Community, it bears no relation to the other prerogatives which those authorities have, in particular judicial ones, and does not interfere with their powers. 74 Second, as regards the applicant’s argument that OLAF could become a civil party in the Belgian criminal proceedings in order to obtain access to the documents seized at the applicant’s home and office, it must be pointed out that, even if use were made of that possibility, it would have no effect on whether the act by which OLAF forwards information to national judicial authorities is challengeable or not. 75 Third, Hamill v Commission, which concerns an action for damages and not an action for annulment, in no way states that a forwarding of information by OLAF pursuant to Article 10(2) of Regulation No 1073/1999 would have binding legal effect of a nature so as to affect the applicant’s interests. 76 Fourth, the facts put forward by the applicant, which, in his view, prove that the Belgian judicial authorities did not act in complete independence, but did what OLAF asked, cannot be upheld. 77 In relation, first, to the statement made by the Chairman of the OLAF Supervisory Committee to the House of Lords Select Committee on the European Union on 19 May 2004, the applicant does not provide any form of information enabling the content of that statement to be verified and it cannot, therefore, be taken into consideration. 78 As regards, second, the interim report appended to the letter sent to the Belgian judicial authorities, points 2.2 and 2.3 thereof are respectively worded as follows: ‘As already discussed with the public prosecution service in Hamburg … on 13 January 2004 and with the public prosecution service in Brussels … on 16 January 2004, the transmission of information to the two judicial authorities proves necessary in order to start proceedings which are independent but coordinated; …Swift action is desirable in view of the fact that, according to our information, Mr Tillack will leave Brussels in March this year to become the Stern correspondent in Washington … . With his departure from Brussels, important evidence could disappear for good.’ 79 However, in relation to point 2.2 of the interim report, the applicant does not challenge the Commission’s statement that the contact made between OLAF and the national public prosecution services was related to purely formal issues such as to find out to whom the information should be sent exactly. As regards point 2.3, although OLAF effectively expressed its wish to deal with the case at issue as quickly as possible, that wish is in no way binding on the Belgian judicial authorities. It is not comparable to a request to the Belgian authorities to initiate legal proceedings or to adopt any other measure. Moreover, Article 10(2) of Regulation No 1073/1999 concerning the forwarding of information obtained in the course of investigations, which is sent to the competent national authorities, merely provides for the forwarding of that information to national authorities, which are charged, when exercising their own powers, with deciding what action is to be taken in respect thereof. 80 Finally, the argument alleging the lack of effective judicial protection is irrelevant. That argument is not, in itself, sufficient to justify the admissibility of an action (orders in Case T-247/04 Aseprofar and Edifa v Commission [2005] ECR II-0000, paragraph 59, and Joined Cases T‑236/04 and T-241/04 EEB and Stichting Natuur en Milieu v Commission [2005] ECR II-0000, paragraph 68). Moreover, it is apparent from the case-file and the oral arguments during the hearing that the applicant brought an action before the Belgian courts, and then before the European Court of Human Rights, against measures taken by the Belgian judicial authorities in response to the forwarding of information by OLAF on 11 February 2004. In addition, the applicant also had the opportunity to request the national courts, which have no jurisdiction themselves to declare that the act by which OLAF forwarded information to the Belgian judicial authorities is invalid (see to that effect Case 314/85 Foto-Frost [1987] ECR 4199, paragraph 20), to make a preliminary reference to the Court of Justice in that regard. 81 It follows from the above that, since the forwarding of information pursuant to Article 10(2) of Regulation No 1073/1999 is not, in the present case, a legally binding measure, it cannot be regarded as a measure capable of changing the applicant’s legal position. 82 Consequently, the claim for annulment of the act by which, on 11 February 2004, OLAF forwarded information to the German and Belgian Judicial authorities is inadmissible. Admissibility of the claim for compensation for the alleged damageAdmissibility – Arguments of the parties 83 The Commission argues that the action for damages contains two distinct claims. They cover compensation for the harm allegedly caused, first, by OLAF’s ‘complaint’ and, second, by the OLAF press releases of March 2002 and September 2003 and other public statements made by it. 84 That application is, according to the Commission, inadmissible in its entirety, since it fails to satisfy the conditions laid down by Article 44(1)(c) of the Rules of Procedure of the Court of First Instance. 85 Furthermore, the claim for damages relating to OLAF’s ‘complaint’ is inadmissible as that application for damages is closely linked to an action for annulment which has itself been declared inadmissible. 86 The applicant contends, first of all, that the claim for damages in relation to OLAF’s ‘complaint’ is admissible. He states that OLAF’s misconduct cannot escape judicial review. 87 He next contests the argument that an action for damages is inadmissible if the cause of the damage was itself the subject of an inadmissible action for annulment. 88 Finally, he considers that the application meets the requirements of the Rules of Procedure for the admissibility of an action and is clear enough to enable the defendant to prepare its defence. It describes OLAF’s unlawful conduct, the damage suffered and the reasons for which there is a causal link between the unlawful conduct and the damage. – Findings of the Court 89 According to settled case-law, under the first paragraph of Article 21 of the Statute of the Court of Justice, which is applicable to proceedings before the Court of First Instance by virtue of the first paragraph of Article 53 of that Statute, as well as under Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, all applications are to state the subject-matter of the proceedings and to include a summary of the pleas raised. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the application, if necessary without any further information. In order to guarantee legal certainty and the sound administration of justice it is necessary, in order for an action to be admissible, that the essential matters of law and fact relied on should be stated, at least in summary form, coherently and intelligibly in the application itself (Case T-38/96 Guérin automobiles v Commission [1997] ECR II-1223, paragraph 41, and Case T-157/01 Danske Busvognmænd v Commission [2004] ECR II-917, paragraph 45). 90 In order to satisfy those requirements, an application seeking compensation for damage allegedly caused by a Community institution must contain information making it possible to identify the conduct alleged against the institution, the reasons for which the applicant considers there is a causal link between the conduct and the damage it claims to have suffered, and the nature and extent of that damage (Case T-387/94 Asia Motor France and Others v Commission [1996] ECR II-961, paragraph 107, and Joined Cases T-215/01, T-220/01 and T-221/01 Calberson GE v Commission [2004] ECR II-587, paragraph 176). 91 In the present case, it must first be pointed out that the claim in the application seeking damages for the harm allegedly suffered is very brief. It does, however, make it possible to identify two instances of alleged misconduct of OLAF, which the applicant claims caused him harm. The first is OLAF’s ‘complaint’ to the Belgian judicial authorities. The second is constituted by OLAF’s press releases of 27 March 2002 and 30 September 2003, the statements of the OLAF spokesman which were published in the European Voice magazine of 4 April 2002, and the statements of the Director of OLAF on Stern TV on 24 March 2004. 92 Next, it is apparent from the application that the harm which the applicant claims to have suffered as a result of the various alleged instances of misconduct by OLAF consists of detriment to his professional reputation and standing in professional circles. The application also makes it possible to identify the extent of the harm allegedly caused by OLAF. 93 Finally, the applicant mentions the existence of a causal link between the alleged harm and the various instances of misconduct of which OLAF is accused. 94 In addition, it is apparent from the arguments developed by the Commission on the well-foundedness of the action that it was properly able to prepare its defence in respect of the conditions for bringing an action for non-contractual liability of the Community. 95 It is thus necessary to dismiss the Commission’s claim that the application does not satisfy the requirements of Article 44(1)(c) of the Rules of Procedure. 96 In relation to the claim for damages regarding OLAF’s ‘complaint’, the Commission also submits that that claim is inadmissible since it is closely linked to an action for annulment which itself is inadmissible. 97 In that regard, the action to establish liability is an autonomous form of action, with a particular purpose to fulfil within the system of legal remedies and subject to conditions of use dictated by its specific purpose. Although actions for annulment and for failure to act seek a declaration that a legally binding measure is unlawful or that such a measure has not been taken, an action to establish liability seeks compensation for damage resulting from a measure or from unlawful conduct, attributable to a Community institution or body (Case C‑234/02 P Médiateur v Lamberts [2004] ECR I‑2803, paragraph 59, and the case-law cited). 98 Thus, individuals who, by reasons of the conditions as to admissibility laid down under the fourth paragraph of Article 230 EC, cannot contest directly certain Community acts or measures, none the less have the opportunity of putting in issue conduct lacking the features of a decision, which accordingly cannot be challenged by way of an action for annulment, by bringing an action for non-contractual liability under Article 235 EC and the second paragraph of Article 288 EC, where such conduct is of such a nature as to entail liability for the Community (Phillip Morris International and Others v Commission, paragraph 123, and Camós Grau v Commission, paragraph 78). 99 Therefore, the admissibility of the action for damages brought by the applicant seeking compensation for the non-material harm which he allegedly suffered as a result of the misconduct which OLAF is accused of must be considered independently of the action for annulment. 100 It follows from the above that the applicant’s claims seeking damages for the harm which he allegedly suffered as a result of OLAF’s alleged misconduct are admissible. Substance 101 The applicant considers that the unlawful administrative acts consist, first of all, of the ‘complaint’ which OLAF made to the Belgian judicial authorities. That complaint was unlawful because it infringed several procedural requirements and the fundamental right of freedom of the press. The applicant also refers to the OLAF press releases of March 2002 and September 2003. In that regard, the Ombudsman stated that the press release of March 2002, based on rumours, was a clear act of maladministration and infringed the principle of proportionality. As such, that press release must be viewed as an unlawful administrative act. The press release of September 2003 was also an act of maladministration and infringed the principle of proportionality by repeating the allegations made in the press release of March 2002. Lastly, the applicant refers to the statements of the OLAF spokesman, as published in the European Voice magazine of 4 April 2002, and to those of the Director of OLAF on Stern TV on 24 March 2004. They are capable of damaging the applicant’s reputation and, being based on mere rumours, also infringe the principle of sound administration. 102 The applicant also submits that OLAF overstepped the discretion which it enjoys. In view of the seriousness of the misconduct, OLAF’s conduct must be regarded as a sufficiently serious breach of a rule of Community law. 103 The applicant claims to have suffered significant non-material damage in the form of harm to his professional reputation and standing in professional circles. First, it is much more difficult to gain information from the sources which he makes use of in order to practise his profession. Secondly, sales of his articles to magazines and newspapers are seriously impeded. OLAF’s actions have thus seriously damaged the applicant’s career prospects. In addition, the existence of non-material damage is particularly apparent where false accusations lead to criminal investigations, searches and seizures, as in the present case. He asks the Court to fix the exact amount of pecuniary compensation, with the objective of both compensating him and acting as a deterrent to the Commission. The applicant provisionally proposes the sum of EUR 250 000. 104 As regards the causal link, the applicant claims that the damage to his reputation was caused by OLAF’s press releases and subsequent announcements, culminating in OLAF’s complaint to the Belgian judicial authorities, which led to the search of his home and office. OLAF’s investigators provided the judicial authorities with guidance and, in the complaint, gave them misleading information as to the urgency of the need for action. The fact that the Belgian authorities may have acted negligently does not compromise the merits of the application. 105 With respect to OLAF’s press releases and other public statements, the applicant points out that OLAF rarely publishes press releases announcing the opening of an investigation. Furthermore, everybody interested in the matter identified the applicant at once as the journalist who had bribed a Community official. Moreover, the facts as they are known today are even more serious than those investigated by the Ombudsman in 2003. In fact, OLAF misinformed the Ombudsman by alleging that it had received information from reliable sources, including Members of the European Parliament, while its only source was Mr G. 106 In his reply, the applicant points out that the public allegations by OLAF not only constitute an act of maladministration but also an infringement of the principles of sound administration, the presumption of innocence and the right to a fair trial. The publication of press releases about ongoing investigations constitutes a breach of Article 8 of Regulation No 1073/1999, since information forwarded or obtained in the course of internal investigations is subject to professional secrecy. 107 The Commission argues that both claims for damages are unfounded.108 As regards, first, the claim for compensation relating to the forwarding of information to the Belgian and German judicial authorities, it argues that OLAF did not infringe any rule of law. Furthermore, the applicant has failed to establish the existence of a sufficiently serious breach of the limits imposed on OLAF’s discretion. 109 As to the existence of the damage claimed, the application provides no concrete information as to the applicant’s particular professional situation. The applicant is an employee of Stern magazine and his reputation has not suffered as a result of the search and seizure undertaken by the Belgian authorities. 110 Most importantly, the applicant has failed to establish any causal link between the forwarding of information by OLAF and the harm he claims to have suffered. Two sovereign and discretionary acts of the Belgian authorities break any causal link: the initiation of criminal investigations; and the search and seizure. Only the latter constitute the direct and determining cause of the damage claimed. Had the search, which falls within the discretionary power of the national authorities, not taken place, the anonymity of the applicant’s informants would not have been put at any risk. If the applicant considers that he has suffered harm as a result of the search, his remedy is to sue the Belgian State for such damages. 111 As regards, second, the claim for compensation relating to the press releases and other public statements, the Commission maintains that OLAF did not contravene any rule of law affecting the applicant and, in particular, his reputation. In particular, the press release of 27 March 2002 does not refer to the name of any journalist or newspaper. It was only in a press release issued by Stern on 28 March 2002 that that magazine claimed to have exclusive possession of the documents disclosed and that the name of the journalist was revealed. Furthermore, the press release of 27 March 2002 described the main object of the investigation in the most neutral way possible. There was nothing untrue or disproportionate in it. To argue that OLAF’s spokesman went too far is tantamount to denying OLAF any right at all to issue a press release confirming that an investigation has been initiated and indicating its subject-matter. In the alternative, the Commission submits that there was no manifest and grave transgression by OLAF of the limits imposed on its discretion in the way it conducts its relations with the media. 112 The Commission also claims that there is, in any event, no causal link between the press release of 27 March 2002 and any harm to the applicant’s reputation. Even on the assumption that, on its being issued, OLAF’s press release could have been understood by the public as referring to the applicant, Stern’s press release published the next day broke any causal link. 113 Lastly, as regards the findings of the Ombudsman, the Commission claims that the factual basis on which he made his recommendation in 2003 is different from that on which the Commission relies before the Court in these proceedings. In addition, the identification by the Ombudsman of an instance of maladministration does not amount to a judicial determination of a breach of the applicant’s rights by the Commission. In particular, the Ombudsman did not address the question whether OLAF had committed a sufficiently serious breach of a rule of law. Furthermore, the Ombudsman applied rules on the burden of proof which were different from those governing actions for non-contractual liability under Article 235 EC and the second paragraph of Article 288 EC. The Ombudsman and the Community Courts apply different criteria and methods of scrutiny, reflecting their quite different nature and function. 114 The IFJ argues that OLAF manifestly overstepped the limits of its discretion in forwarding information to the German and Belgian judicial authorities on the basis of nothing more than rumours and speculation. Such a discretion should have been exercised by having regard in particular to the provisions of Regulation No 1073/1999 and the rights and freedoms of those concerned. 115 The intervener considers that OLAF has contravened the freedom of the press, the right to respect for private life, the EC Treaty, the European Convention for the Protection of Human Rights and Fundamental Freedoms, Regulation No 1073/1999 and certain rules of procedure. 116 It is settled case-law that the non-contractual liability of the Community for the unlawful acts of its bodies, for the purposes of the second paragraph of Article 288 EC, depends on fulfilment of a set of conditions, namely: the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between that conduct and the damaged complained of (Case 26/81 Oleifici Mediterranei v EEC [1982] ECR 3057, paragraph 16; Case T-175/94 International Procurement Services v Commission [1996] ECR II‑729, paragraph 44; Case T-336/94 Efisol v Commission [1996] ECR II-1343, paragraph 30; and Case T-267/94 Oleifici Italiani v Commission [1997] ECR II-1239, paragraph 20). 117 As regards the first of those conditions, the case-law requires there to be a sufficiently serious breach of a rule of law intended to confer rights on individuals (Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291, paragraph 42). As regards the requirement that the breach must be sufficiently serious, the decisive test for determining whether that requirement is met is whether the Community institution concerned has manifestly and gravely disregarded the limits on its discretion. Where that institution has only a considerably reduced or even no discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach (Case C‑132/00 P Commission v Camar and Tico [2002] ECR I‑11355, paragraph 54, and Joined Cases T‑198/95, T‑171/96, T‑230/97, T‑174/98 and T‑225/99 Comafrica and Dole Fresh Fruit Europe v Commission [2001] ECR II‑1975, paragraph 134). 118 In relation to the condition concerning the causal link, the Community may be held responsible only for damage which is a sufficiently direct consequence of the misconduct of the institution concerned (Joined Cases 64/76 and 113/76, 167/78 and 239/78, 27/79, 28/79 and 45/79 Dumortier Frères and Others v Council [1979] ECR 3091, paragraph 21, and Case T‑333/01 Meyer v Commission [2003] ECR II‑117, paragraph 32). By contrast, it is not the responsibility of the Community to compensate for every harmful consequence, even one remote from the conduct of its bodies (see, to that effect, Dumortier Frères and Others v Council, paragraph 21). 119 If one of those conditions is not satisfied the action must be dismissed in its entirety without its being necessary to examine the other conditions (Case C‑146/91 KYDEP v Council and Commission [1994] ECR I‑4199, paragraphs 19 and 81, and Case T‑170/00 Förde-Reederei v Council and Commission [2002] ECR II‑515, paragraph 37). 120 It is in the light of that case-law that it needs to be assessed whether the various arguments raised by the applicant are well founded. 121 As a preliminary point, the protection of family life, the freedom of the press, the principle of the presumption of innocence and the right to a fair trial, which are fundamental rights, confer rights on individuals which are enforced by the Community Courts. In that regard, the applicant alleges two instances of misconduct of OLAF which, being distinct from one another, must be examined separately. 122 First, as regards the application for damages for the harm allegedly suffered as a result of OLAF’s ‘complaint’, it has been found that it was the task of the judicial authorities to decide what action should be taken in respect of the information forwarded by OLAF on the basis of Article 10(2) of Regulation No 1073/1999, even though that forwarding of information is in no way binding upon them (see paragraph 70 above). Consequently, the conduct of the national judicial authorities, which decided, in the context of their own prerogatives, to initiate legal proceedings and then to carry out investigations, caused the harm allegedly suffered by the applicant. 123 In addition, the applicant does not explain how forwarding information, which is confidential in nature and in respect of which a breach of confidentiality is not alleged, to national judicial authorities could harm his professional reputation and standing in professional circles. 124 It follows that the applicant has not established the existence of a sufficiently direct causal link between the forwarding of the information by OLAF to the Belgian judicial authorities pursuant to Article 10(2) of Regulation No 1073/1999 and the damage claimed. 125 The condition requiring a causal link between the damage alleged and OLAF’s conduct in order for the Community to incur non-contractual liability not having been satisfied in this case, the action for damages relating to OLAF’s ‘complaint’ must be dismissed without it being necessary to examine the other conditions governing that liability. 126 Second, as regards the application for damages to make good the damage allegedly resulting from OLAF’s press releases, the applicant refers to the draft recommendation of the Ombudsman of 10 June 2003 and the latter’s recommendation of 20 November 2003, holding that there had been maladministration, and infers that the press release of 27 March 2002 constitutes ‘as such’, an ‘unlawful administrative act’ and that the press release of 30 September 2003 represents a new instance of maladministration, which, by reiterating the allegations made in the earlier press release, also infringes the principle of proportionality. 127 In that regard, first, the principle of sound administration, which is the only principle alleged to have been breached in this context, does not, in itself, confer rights upon individuals (Case T‑196/99 Area Cova and Others v Council and Commission [2001] ECR II‑3597, paragraph 43), except where it constitutes the expression of specific rights such as the right to have affairs handled impartially, fairly and within a reasonable time, the right to be heard, the right to have access to files, or the obligation to give reasons for decisions, for the purposes of Article 41 of the Charter of fundamental rights of the European Union, proclaimed on 7 December 2000 in Nice (OJ 2000 C 364, p. 1), which is not the case here. 128 For the sake of completeness, the classification as an ‘act of maladministration’ by the Ombudsman does not mean, in itself, that OLAF’s conduct constitutes a sufficiently serious breach of a rule of law within the meaning of the case-law. In the institution of the Ombudsman, the Treaty has given citizens of the Union, and more particularly officials and other servants of the Community, an alternative remedy to that of an action before the Community Courts in order to protect their interests. That alternative non-judicial remedy meets specific criteria and does not necessarily have the same objective as judicial proceedings (Case T-209/00 Lamberts v Ombudsman [2002] ECR II-2203, paragraph 65). 129 Also, in view of the autonomy granted to OLAF by Regulation No 1073/1999 and of the general objective of press releases of providing information to the public, OLAF enjoys discretion as regards the appropriateness and content of its press releases in respect of its investigatory activities. 130 In addition, it is apparent from an examination of the wording of the press release of 27 March 2002 that the only passage which could possibly be deemed prejudicial is worded as follows: ‘According to information received by [OLAF], a journalist has received a number of documents relating to the so-called “van Buitenen affair”. It is not inconceivable that payment may have been made to somebody within OLAF (or possibly another EU institution) for these documents. …’ 131 Even supposing that those with knowledge of the case could make the connection with the applicant, those allegations, formulated in a hypothetical way, without indicating the applicant’s name or the name of the magazine for which he worked, do not constitute a manifest and grave disregard, by OLAF, of the limits of its discretion. Furthermore, it was Stern itself which, in its press release of 28 March 2002, cited the applicant’s name. The applicant’s identity, in relation to OLAF’s investigations, was thus not revealed by OLAF but by his employer Stern magazine. Therefore, the damage that the applicant allegedly suffered to his professional reputation and standing in professional circles, in respect of that publication, cannot be attributed to OLAF. Consequently, the press release in dispute does not amount to a sufficiently serious breach of Community law by OLAF. 132 For its part, OLAF’s press release of 30 September 2003, which was published following the European Ombudsman’s draft recommendation of 18 June 2003, seeks to tone down the allegations contained in the press release of 27 March 2002. It thus states: ‘… OLAF’s enquiries have not yet been completed, but to date, [OLAF] has not obtained proof that such a payment was made.’ Therefore, that press release does not constitute a sufficiently serious breach of a rule of law any more than the previous one. 133 The same conclusion must be drawn in relation to the statement of the OLAF spokesman which was cited in the European Voice magazine of 4 April 2002, according to which OLAF ‘had prima facie evidence that a payment might have been made’, since the cautiousness of the words used does not establish the existence of a sufficiently serious breach of Community law. As for the statement of the Director of OLAF on Stern TV on 24 March 2004, the applicant does not provide any means of verifying its content. 134 Moreover, the applicant does not develop any legal arguments in his application which make it possible to assess how exactly the publication of the press releases and other public statements by OLAF could be classified as a ‘sufficiently serious breach’ of a rule of law. 135 It follows from the above that the applicant has failed to show the existence of a sufficiently serious breach of Community law attributable to OLAF capable of causing him harm. Therefore, his claim for damages in relation to the press releases and OLAF’s other public statements must be dismissed without its being necessary to assess whether the applicant has actually suffered the damage alleged and the extent of that damage. 136 Consequently, the action for damages must be dismissed in its entirety. The request for the production of documents137 The applicant requests the Court to order the Commission to provide a complete copy of the ‘complaints’ forwarded by OLAF to the German and Belgian judicial authorities. 138 In that regard, during the proceedings before the Court, the Commission produced the letters addressed to the German and Belgian judicial authorities on 11 February 2004, in an unexpurgated version. 139 Therefore, there is no need to adjudicate on that request, which has become devoid of purpose. 140 It follows from all the foregoing that the action must be dismissed in its entirety. Costs141 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, and the Commission has applied for costs, the applicant must pay the costs incurred by the Commission, including those relating to the interlocutory proceedings, in addition to its own costs. 142 Under the third subparagraph of Article 87(4) of the Rules of Procedure, the IFJ, which has intervened in these proceedings, is to bear its own costs. On those grounds,THE COURT OF FIRST INSTANCE (Fourth Chamber)hereby:1. Dismisses the action; 2. Declares it unnecessary to give judgment on the request for the production of documents; 3. Orders the applicant to pay his own costs and the costs incurred by the Commission, including those relating to the interlocutory proceedings; 4. Orders the International Federation of Journalists to bear its own costs. Legal Lindh VadapalasDelivered in open court in Luxembourg on 4 October 2006.Registrar PresidentE. Coulon H. Legal* Language of the case: English. | 272ed-3396d7c-451c | EN |
COMMUNITY LAW DOES NOT PRECLUDE THE PROHIBITION IMPOSED IN GERMANY ON THE COMMERCIAL EXPLOITATION OF GAMES SIMULATING HOMICIDAL ACTS | Omega Spielhallen- und Automatenaufstellungs-GmbHvOberbürgermeisterin der Bundesstadt Bonn(Reference for a preliminary ruling from the Bundesverwaltungsgericht)(Freedom to provide services – Free movement of goods – Restrictions – Public policy – Human dignity – Protection of fundamental values laid down by the national constitution – ‘Playing at killing’)Summary of the Judgment1. Freedom to provide services – Restrictions – Justification on grounds of public policy – Need for and proportionality of the measures – Existence of different systems of protection in other Member States – Not relevant(Arts 46 EC and 49 EC)2. Freedom to provide services – Restrictions – National legislation prohibiting the commercial exploitation of games simulating acts of homicide – Justification – Protection of public policy – Respect for human dignity as a general principle of law1. Whilst measures which restrict the freedom to provide services may be justified on public policy grounds only if they are necessary for the protection of the interests which they are intended to guarantee and only in so far as those objectives cannot be attained by less restrictive measures, it is not indispensable in that respect for the restrictive measure issued by the authorities of a Member State to correspond to a conception shared by all Member States as regards the precise way in which the fundamental right or legitimate interest in question is to be protected. Thus the need for, and proportionality of, the provisions adopted are not excluded merely because one Member State has chosen a system of protection different from that adopted by another State. (see paras 36-38)2. Community law does not preclude an economic activity consisting of the commercial exploitation of games simulating acts of homicide from being made subject to a national prohibition measure adopted on grounds of protecting public policy by reason of the fact that that activity is an affront to human dignity. That measure cannot be regarded as one imposing an unjustified restriction on the freedom to provide services. In the first place, the protection of fundamental rights, it being stated that the Community legal order undeniably strives to ensure respect for human dignity as a general principle of law, constitutes a legitimate interest capable in principle of justifying a restriction on the obligations imposed by Community law, even by virtue of a fundamental freedom guaranteed by the Treaty such as the freedom to provide services. Secondly, the measure in question corresponds to the level of protection of human dignity which the national constitution intended to ensure in the territory of the Member State concerned and does not go beyond what is necessary to achieve the objective pursued. (see paras 34-35, 39-41, operative part)JUDGMENT OF THE COURT (First Chamber)14 October 2004(1) (Freedom to provide services – Free movement of goods – Restrictions – Public policy – Human dignity – Protection of fundamental values laid down in the national constitution – ‘Playing at killing’)THE COURT (First Chamber),,after hearing the Opinion of the Advocate General at the sitting on 18 March 2004,gives the followingFacts, main proceedings and question referred 1 – Language of the case: German. Language of the case: German. | 37da5-749d427-4d00 | EN |
ADVOCATE GENERAL KOKOTT CONSIDERS THAT A MORE LENIENT CRIMINAL LAW ADOPTED AFTER THE EVENT MUST NOT BE APPLIED IN SO FAR AS IT IS CONTRARY TO COMMUNITY LAW | Criminal proceedingsagainstSilvio Berlusconi and Others(References for preliminary rulings from the Tribunale di Milano and the Corte d’appello di Lecce)(Company law – Article 5 of the EEC Treaty (subsequently Article 5 of the EC Treaty, in turn Article 10 EC) and Article 54(3)(g) of the EEC Treaty (subsequently Article 54(3)(g) of the EC Treaty, in turn, after amendment, Article 44(2)(g) EC) – First Directive 68/151/EEC, Fourth Directive 78/660/EEC and Seventh Directive 83/349/EEC – Annual accounts – Principle of a true and fair view – Penalties provided for in cases of false information on companies (false accounting) – Article 6 of First Directive 68/151 – Requirement that penalties for breaches of Community law be appropriate) Opinion of Advocate General Kokott delivered on 14 October 2004 Judgment of the Court (Grand Chamber), 3 May 2005 Summary of the Judgment1. Freedom of movement for persons — Freedom of establishment — Companies — Directive 68/151 — Annual accounts — Penalties to be provided for in the event of failure to disclose — Concept of ‘failure to disclose’ — Disclosure of accounts that do not comply with Fourth Directive 78/660 — Included — Disclosure of accounts that do not comply with Seventh Directive 83/349 — Excluded(Council Directive 68/151, Art. 6, Council Directives 78/660 and 83/349)2. Community law — Principles — Principle of retroactive application of a more lenient penalty — Principle featuring among the general principles of Community law — Compliance by national courts when applying national legislation implementing Community law3. Freedom of movement for persons — Freedom of establishment — Companies — Directive 68/151 — Annual accounts — Penalties to be provided for in the event of failure to disclose — Capacity of the directive to be relied upon against accused persons in the context of criminal proceedings — Limits(Council Directive 68/151, Art. 6)1. The system of penalties, in the event of failure to disclose annual accounts, provided for under Article 6 of First Directive 68/151 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, must be understood as covering not only the case of the absence of any disclosure but also the case of the disclosure of annual accounts which have not been drawn up in accordance with the rules prescribed by Fourth Directive 78/660 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies in regard to the content of such accounts. Article 6 of the First Directive cannot, by contrast, be treated as applying in the case of non-compliance with the obligations relating to consolidated accounts, as set out by Seventh Directive 83/349 on consolidated accounts, to which the First Directive makes no reference whatsoever. (see paras 56, 60)2. The principle of the retroactive application of the more lenient penalty forms part of the general principles of Community law which national courts must respect when applying the national legislation adopted for the purpose of implementing Community law. (see para. 69)3. The requirement that penalties, in the event of failure to disclose annual accounts, be appropriate, imposed by Article 6 of First Directive 68/151 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community, cannot be relied on as such against accused persons by the authorities of a Member State within the context of criminal proceedings for the purpose of assessing whether criminal provisions that are more favourable to accused persons and entered into force after the offences in question had been committed are compatible with that provision in the case where their incompatibility could have the effect of setting aside application of the system of more lenient penalties provided for by those provisions. A directive cannot, of itself and independently of national legislation adopted by a Member State for its implementation, have the effect of determining or increasing the criminal liability of those accused persons. (see paras 75, 78, operative part)JUDGMENT OF THE COURT (Grand Chamber)3 May 2005 (*) (Company law – Article 5 of the EEC Treaty (subsequently Article 5 of the EC Treaty, in turn Article 10 EC) and Article 54(3)(g) of the EEC Treaty (subsequently Article 54(3)(g) of the EC Treaty, in turn, after amendment, Article 44(2)(g) EC) – First Directive 68/151/EEC, Fourth Directive 78/660/EEC and Seventh Directive 83/349/EEC – Annual accounts – Principle of a true and fair view – Penalties provided for in cases of false information on companies (false accounting) – Article 6 of First Directive 68/151 – Requirement that penalties for breaches of Community law be appropriate) In Joined Cases C-387/02, C-391/02 and C-403/02,REFERENCES for preliminary rulings under Article 234 EC from the Tribunale di Milano (Cases C-387/02 and C‑403/02) and from the Corte d’appello di Lecce (Case C-391/02) (Italy), made by decisions of 26 October 2002, 29 October 2002 and 7 October 2002, received at the Court on 28 October 2002, 12 November 2002 and 8 November 2002 respectively, in the criminal proceedings against Silvio Berlusconi (C-387/02), Sergio Adelchi (C-391/02), Marcello Dell’Utri and Others (C-403/02), THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann, C.W.A. Timmermans (Rapporteur), A. Rosas and A. Borg Barthet, Presidents of Chambers, J.-P. Puissochet, R. Schintgen, N. Colneric, S. von Bahr, M. Ilešič, J. Malenovský, U. Lõhmus and E. Levits, Judges, Advocate General: J. Kokott,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 13 July 2004,after considering the observations submitted on behalf of:– Mr Berlusconi, by G. Pecorella and N. Ghedini, avvocati,– Mr Adelchi, by P. Corleto, avvocato,– Mr Dell’Utri, by G. Roberti and P. Siniscalchi, avvocati,– the Procura della Repubblica, by G. Colombo, G. Giannuzzi, E. Cillo and I. Boccassini, acting as Agents,– the Italian Government, by I.M. Braguglia, acting as Agent, and O. Fiumara, avvocato dello Stato,– the Commission of the European Communities, by V. Di Bucci and C. Schmidt, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 14 October 2004,gives the followingJudgment1 The references for preliminary rulings relate to the interpretation of First Council Directive 68/151/EEC of 9 March 1968 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community (OJ, English Special Edition 1968 (I), p. 41) (‘the First Companies Directive’), in particular Article 6 thereof, of Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies (OJ 1978 L 222, p. 11) (‘the Fourth Companies Directive’), in particular Article 2 thereof, and of Seventh Council Directive 83/349/EEC of 13 June 1983 based on Article 54(3)(g) of the Treaty on consolidated accounts (OJ 1983 L 193, p. 1) (‘the Seventh Companies Directive’), in particular Article 16 thereof, as well as Article 5 of the EEC Treaty (subsequently Article 5 of the EC Treaty, which in turn became Article 10 EC) and Article 54(3)(g) of the EEC Treaty (subsequently Article 54(3)(g) of the EC Treaty, which in turn became, after amendment, Article 44(2)(g) EC). 2 Those requests have been submitted against the background of criminal proceedings which have been brought against Mr Berlusconi (Case C‑387/02), Mr Adelchi (Case C-391/02) and Mr Dell’Utri and Others (Case C‑403/02), alleging breach of the provisions governing false information on companies (false accounting) set out in the Codice civile (‘the Italian Civil Code’). The legal framework The Community rules3 Under Article 54(3)(g) of the Treaty, the Council of the European Union and the Commission of the European Communities are required to work for the abolition of restrictions on freedom of establishment by coordinating to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms within the meaning of the second paragraph of Article 58 of the EEC Treaty (subsequently the second paragraph of Article 58 of the EC Treaty, which itself became the second paragraph of Article 48 EC) with a view to making such safeguards equivalent throughout the Community. 4 A number of directives have accordingly been adopted by the Council on that basis, in particular the following directives referred to in the disputes in the main proceedings. 5 According to Article 1, the First Companies Directive applies to companies having a share capital, that is to say, in the case of Italy, to the following corporate forms: the società per azioni (public limited company) (‘the SpA’), the società in accomandita per azioni (limited partnership), and the società a responsabilità limitata (private limited company) (‘the Srl’). 6 The First Companies Directive sets out three measures designed to protect third parties dealing with those companies: the establishment of a file containing certain mandatory information, maintained for each company in the commercial register covering a given area; harmonisation of the national rules relating to the validity of obligations entered into on behalf of a company (including companies in the process of being formed) and the ability to hold the company liable for those obligations; and the establishment of an exhaustive list of cases of nullity of companies. 7 Article 2 of the First Companies Directive provides as follows:‘1. Member States shall take the measures required to ensure compulsory disclosure by companies of at least the following documents and particulars: …(f) The balance sheet and the profit and loss account for each financial year. The document containing the balance sheet shall give particulars of the persons who are required by law to certify it. However, in respect of the Gesellschaft mit beschränkter Haftung, société de personnes à responsabilité limitée, personenvennootschap met beperkte aansprakelijkheid, société à responsabilité limitée and società a responsabilità limitata under German, Belgian, French, Italian or Luxembourg law, referred to in Article 1, and the besloten naamloze vennootschap under Netherlands law, the compulsory application of this provision shall be postponed until the date of implementation of a Directive concerning coordination of the contents of balance sheets and of profit and loss accounts and concerning exemption of such of those companies whose balance sheet total is less than specified in the Directive from the obligation to make disclosure, in full or in part, of the said documents. The Council will adopt such a Directive within two years following the adoption of the present Directive; …’8 Paragraphs 1 and 2 of Article 3 of the First Companies Directive provide:‘1. In each Member State a file shall be opened in a central register, commercial register or companies register, for each of the companies registered therein. 2. All documents and particulars which must be disclosed in pursuance of Article 2 shall be kept in the file or entered in the register; the subject-matter of the entries in the register must in every case appear in the file.’ 9 Article 6 of the First Companies Directive provides:‘Member States shall provide for appropriate penalties in case of:– failure to disclose the balance sheet and profit and loss account as required by Article 2(1)(f);10 The Fourth Companies Directive, which, in regard to Italy, applies to the same forms of companies as those covered by the First Companies Directive and cited in paragraph 5 of this judgment, harmonises national provisions relating to the establishment, content, structure and publication of the annual accounts of companies. 11 Article 2 of the Fourth Companies Directive provides as follows:‘1. The annual accounts shall comprise the balance sheet, the profit and loss account and the notes on the accounts. These documents shall constitute a composite whole. 2. They shall be drawn up clearly and in accordance with the provisions of this Directive. 3. The annual accounts shall give a true and fair view of the company’s assets, liabilities, financial position and profit or loss. 4. Where the application of the provisions of this Directive would not be sufficient to give a true and fair view within the meaning of paragraph 3, additional information must be given. 5. Where in exceptional cases the application of a provision of this Directive is incompatible with the obligation laid down in paragraph 3, that provision must be departed from in order to give a true and fair view within the meaning of paragraph 3. Any such departure must be disclosed in the notes on the accounts together with an explanation of the reasons for it and a statement of its effect on the assets, liabilities, financial position and profit or loss. The Member States may define the exceptional cases in question and lay down the relevant special rules. 6. The Member States may authorise or require the disclosure in the annual accounts of other information as well as that which must be disclosed in accordance with this Directive.’ 12 Article 11 of the Fourth Companies Directive provides that Member States may permit companies which do not exceed certain limits in relation to the balance sheet total, net turnover and number of employees to draw up abridged balance sheets. Article 12 of that directive sets out further details in that regard. 13 Article 47(1) of the Fourth Companies Directive, which features in Section 10 thereof, entitled ‘Publication’, is worded as follows: ‘The annual accounts, duly approved, and the annual report, together with the opinion submitted by the person responsible for auditing the accounts, shall be published as laid down by the laws of each Member State in accordance with Article 3 of Directive 68/151/EEC. …’ 14 Article 51 of the Fourth Companies Directive, which is contained in Section 11 thereof, entitled ‘Auditing’, provides as follows:‘1. (a) Companies must have their annual accounts audited by one or more persons authorised by national law to audit accounts. (b) The person or persons responsible for auditing the accounts must also verify that the annual report is consistent with the annual accounts for the same financial year. 2. The Member States may relieve the companies referred to in Article 11 from the obligation imposed by paragraph 1. Article 12 shall apply. 3. Where the exemption provided for in paragraph 2 is granted the Member States shall introduce appropriate sanctions into their laws for cases in which the annual accounts or the annual reports of such companies are not drawn up in accordance with the requirements of this Directive.’ 15 The Seventh Companies Directive, which, in regard to Italy, applies to the same forms of companies as those which are covered by the First and Fourth Companies Directives and have been mentioned in paragraphs 5 and 10 of this judgment, sets out measures for the coordination of national provisions relating to the consolidated accounts of companies with share capital. 16 Paragraphs 2 to 6 of Article 16 of the Seventh Companies Directive essentially set out, in regard to consolidated accounts, the same provisions as those of Article 2(2) to (6) of the Fourth Companies Directive in regard to annual accounts, as cited in paragraph 11 of this judgment. 17 Paragraphs 1, 4 and 6 of Article 38, featuring in Section 5 of the Seventh Companies Directive, entitled ‘The publication of consolidated accounts’, provide as follows: ‘1. Consolidated accounts, duly approved, and the consolidated annual report, together with the opinion submitted by the person responsible for auditing the consolidated accounts, shall be published for the undertaking which drew up the consolidated accounts as laid down by the laws of the Member State which govern it in accordance with Article 3 of Directive 68/151/EEC. 4. However, where the undertaking which drew up the consolidated accounts is not established as one of the types of company listed in Article 4 and is not required by its national law to publish the documents referred to in paragraph 1 in the same manner as prescribed in Article 3 of Directive 68/151/EEC, it must at least make them available to the public at its head office. … 6. The Member States shall provide for appropriate sanctions for failure to comply with the publication obligations imposed in this Article.’ National legislation Company law18 Legislative Decree No 61 of the President of the Republic of 11 April 2002 regulating criminal and administrative offences in respect of commercial companies, in accordance with Article 11 of Law No 366 of 3 October 2001 (GURI No 88 of 15 April 2002, p. 4) (‘Legislative Decree No 61/2002), which came into force on 16 April 2002, replaced Title XI of Book V of the Italian Civil Code by a new Title XI, entitled ‘Criminal provisions in respect of companies or groups of companies’. 19 That legislative decree was introduced in the context of the reform of Italian company law carried out by a series of legislative decrees adopted on the basis of the authorisation provided for by Law No 366 of 3 October 2001 (GURI No 234 of 8 October 2001). 20 Article 2621 of the Italian Civil Code, entitled ‘False notification and unlawful distribution of profits or dividends’, as worded in the version prior to the entry into force of Legislative Decree No 61/2002 (‘the former Article 2621 of the Italian Civil Code’), provided: ‘Unless the act constitutes a more serious offence, the following persons shall be liable to imprisonment for a term of one to five years and to a fine of EUR 1 032 to EUR 10 329: (1) organisers, founding members, administrators, directors, auditors and receivers who, in reports, balance sheets or other company documents, fraudulently make untrue statements of substantive fact as to the constitution or economic position of the company or conceal in full or in part facts relating thereto; 21 Legislative Decree No 61/2002, inter alia, introduced into Articles 2621 and 2622 of the Italian Civil Code new criminal provisions penalising the submission of false information on a company, an offence also referred to as ‘false accounting’ (hereinafter, as appropriate, ‘the new Article 2621 of the Italian Civil Code’, ‘the new Article 2622 of the Italian Civil Code’, or ‘the new Articles 2621 and 2622 of the Italian Civil Code’), which provide as follows: ‘Article 2621 (False information on a company)Save as otherwise provided in Article 2622, managers, directors, auditors and receivers who, with the intention of deceiving members or the public and with the aim of securing for themselves or others an unjust profit, make statements of substantive fact which are untrue in the company’s balance sheets, report or other company documents provided for by law which are intended for members or for the public, even if such facts are the subject of valuations, or who omit information, the communication of which is prescribed by law, concerning the economic position, assets, liabilities or financial position of the company or the group to which that company belongs, in a manner which is capable of giving those to whom that information is addressed a false impression of that position, shall be liable to imprisonment for a term of up to one year and six months. The same criminal liability shall also extend to cases where the information concerns assets held or administered by the company on behalf of third parties. Criminal liability shall be excluded in any event where the false statements do not distort to an appreciable extent the representation of the assets, liabilities, economic position or financial position of the company or the group to which that company belongs. Criminal liability shall also be excluded where the false statements or omissions distort the pre-tax financial results for the year by no more than 5% or distort the net assets by no more than 1%. Such acts shall not be punishable in any circumstances where they are the result of estimates which, viewed individually, do not differ from the true values by more than 10%. Article 2622 (False information on a company detrimental to members or creditors)Managers, directors, auditors and receivers who, with the intention of deceiving members or the public and with the aim of securing for themselves or others an unjust profit, make statements of substantive fact which are untrue in the company’s balance sheets, report or other company documents provided for by law which are intended for members or for the public, even if such facts are the subject of valuations, or who omit information, the communication of which is prescribed by law, concerning the economic position, assets, liabilities or financial position of the company or the group to which that company belongs, in a manner which is capable of giving those to whom that information is addressed a false impression of that position and thereby occasion financial loss to members or creditors, shall, on complaint by the injured party, be liable to imprisonment for a term of between six months and three years. Proceedings shall likewise be initiated on complaint where the act constitutes a separate, more serious offence detrimental to the assets of persons other than members or creditors, unless it has been committed to the detriment of the State, other public institutions or the European Communities. In the case of companies subject to the provisions of Part IV, Title III, Section II, of Legislative Decree No 58 of 24 February 1998, the penalty for the acts provided for in the first paragraph shall be one to four years’ imprisonment and a prosecution in respect of the offence may be brought ex officio. Criminal liability for the acts provided for in the first and third paragraphs of this article shall extend to cases where the information concerns assets held or administered by the company on behalf of third parties. Criminal liability for the acts provided for in the first and third paragraphs shall be excluded where the false statements or omissions do not distort to an appreciable extent the representation of the economic position, assets, liabilities or financial position of the company or the group to which the company belongs. Criminal liability shall in any event be excluded where the false statements or omissions distort the pre-tax financial results for the year by no more than 5% or distort the net assets by no more than 1%. Such acts shall not be punishable in any circumstances where they are the result of estimates which, viewed individually, do not differ from the true values by more than 10%.’ General criminal law22 Under paragraphs 2 to 4 of Article 2 of the Codice penale (‘the Italian Criminal Code’), entitled ‘Succession of criminal legislation’: ‘No person may be punished, under later legislation, for an act which was not a criminal offence when carried out; if a person is found guilty, the punishment shall not be implemented and there shall be no criminal consequences. If the legislation in force when the offence was committed and the later legislation differ, the legislation which is to apply shall be that which is more favourable in its provisions to the accused person, unless a final and irreversible judgment has been delivered in the case. The provisions of the preceding paragraphs shall not apply to derogating or temporary legislation.’23 Under Article 39 of the Italian Criminal Code, offences consist essentially of indictable offences and summary offences, the former attracting, in accordance with Article 17 of that code, certain types of more serious penalties than summary offences. 24 Under Article 158(1) of the Italian Criminal Code, limitation periods start to run from the time of commission of the offences and not from the time at which they were discovered. 25 It follows, further, from Articles 157 and 160 of the Italian Criminal Code that the limitation periods are from three years to four and a half years maximum for summary offences such as those provided for under the new Article 2621 of the Italian Civil Code and from five years to seven and a half years maximum for indictable offences such as those set out in the former Article 2621 of the Italian Civil Code and those provided for under the new Article 2622 of that code. Article 160 of the Italian Criminal Code lays down the maximum duration of limitation periods in the event of interruption thereof. The disputes in the main proceedings and the questions referred for preliminary ruling26 According to the decisions for reference, in the three sets of criminal proceedings in the main cases, the offences which the accused are alleged to have committed were carried out while the former Article 2621 of the Italian Civil Code was in force, and thus prior to the entry into force of Legislative Decree No 61/2002 and the new Articles 2621 and 2622 of that code. 27 In Case C-387/02, the guidice per le indagini preliminari (judge responsible for preliminary investigations) of the Tribunale di Milano (Milan District Court) referred, by decision of 26 November 1999, the case against Mr Berlusconi to the First Criminal Chamber of that court. The charge brought against the accused was that he had, between 1986 and 1989, drawn up false documents relating to the annual accounts of the company Fininvest SpA and of other companies in the group of that name in his capacity as chairman of Fininvest and reference shareholder in the companies belonging to that group. Those false documents, it was claimed, had made it possible to increase hidden reserves earmarked for the financing of certain allegedly unlawful transactions. 28 According to the decision for reference in Case C-403/02, proceedings are at present pending against Messrs Dell’Utri, Luzi and Comincioli before the Fourth Criminal Chamber of the Tribunale di Milano in respect of the preparation of false balance sheets up to 1993. 29 Case C-391/02 has its origin in the appeal brought by Mr Adelchi against the judgment handed down on 9 January 2001 by the Tribunale di Lecce (Lecce District Court) finding him guilty of publishing false documentation in respect of the companies Nuova Adelchi Srl and Calzaturificio Adelchi Srl, of which he was the sole manager. Those acts, which had been committed in 1992 and 1993, related to allegedly fictitious export and import customs transactions and to the issuing, by those companies, of invoices that were alleged to be false. The inevitable result was to indicate in the balance sheets of those companies costs which were higher than the real costs and purely notional receipts, and, consequently, a turnover that diverged from the true turnover. 30 Following the entry into force of Legislative Decree No 61/2002, the accused parties in those three sets of proceedings argued that the new Articles 2621 and 2622 of the Italian Civil Code ought to be applied to them. 31 The national courts making the references point out that the effect of applying those new provisions would be that a criminal prosecution in respect of the acts, initially charged as constituting the indictable offence referred to in the former Article 2621 of the Italian Civil Code, could no longer be brought for the following reasons. 32 First, if proceedings may, in principle, be brought ex officio against acts, and thus in the absence of a complaint, by the public prosecuting authorities on the basis of the new Article 2621 of the Italian Civil Code, that offence would from that point on be a summary offence and consequently subject to a maximum limitation period of four and a half years and would no longer be the indictable offence, having a maximum limitation period of seven and a half years, which was set out in the former Article 2621 of the Italian Civil Code. In the cases in the main proceedings, the offence referred to in the new Article 2621 of the Italian Civil Code is, according to those national courts, absolutely time-barred. 33 Second, according to those courts, that change in the classification of the offence also means that the related offences, such as criminal conspiracy, money laundering or unlawful receipt of funds, may no longer give rise to criminal prosecutions as those offences are linked to the prior existence of an indictable offence and not to that of a summary offence. 34 Third, if, in regard to the indictable offence set out in the new Article 2622 of the Italian Civil Code, the acts in issue in the main proceedings were not yet time-barred, they could not give rise to prosecutions under that article in the absence of a complaint from a member or a creditor who regarded himself as having been adversely affected by the false documentation, the lodging of a complaint being in fact a necessary precondition for the bringing of proceedings under that provision if, in any event, as has been pointed out in the criminal proceedings in issue in the main cases, the false documentation related to companies that are not quoted on the stock exchange. 35 Finally, those courts point out that prosecutions brought in respect of the acts in question might also come up against the thresholds laid down, in identical terms, in the new Articles 2621, third and fourth paragraphs, and 2622, fifth and sixth paragraphs, of the Italian Civil Code, which exclude any penalty for false accounting which has no significant effect and is of minimal importance, that is to say, false accounting which, inter alia, results only in a variation either of the pre-tax financial results for a period of not more than 5%, or a variation of the net assets of not more than 1%. 36 In the light of those considerations, the national courts making the references, in the same way as the public prosecuting authorities, take the view that the proceedings in the present cases raise questions as to whether or not the penalties provided for under the new Articles 2621 and 2622 of the Italian Civil Code are appropriate when considered in the light of, either, Article 6 of the First Companies Directive, as interpreted by the Court in, inter alia, Case C‑97/96 Daihatsu Deutschland [1997] ECR I-6843, or Article 5 of the Treaty, from which, according to case-law which has been well established since Case 68/88 Commission v Greece [1989] ECR 2965, paragraphs 23 and 24, it follows that penalties for infringements of provisions of Community law must be effective, proportionate and dissuasive. 37 It was in those circumstances that, in Case C-387/02, the Tribunale di Milano decided to stay proceedings and to refer to the Court for a preliminary ruling a number of questions, which, in the light of the grounds given for the decision to refer, may be understood in the following terms: (1) Does Article 6 of the First Companies Directive concern not only cases of failure to publish information relating to companies but also cases in which false information on companies is published? (2) Is compliance with the requirement of effectiveness, proportionality and dissuasiveness which penalties for infringement of Community provisions must satisfy to be assessed in regard to the nature or type of penalty considered in the abstract, or rather in regard to its application in practice having regard to the structural characteristics of the legal system within which it takes effect? (3) Are the principles set out in the Fourth and Seventh Companies Directives to be interpreted as precluding national legislation setting thresholds below which inaccurate statements in annual accounts and annual reports relating to public limited companies, limited partnerships and private limited companies are not punishable? 38 In Case C-391/02, the Corte d’appello di Lecce (Lecce Appeal Court) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) With reference to the duty of each Member State to adopt “appropriate penalties” for the infringements established by Directives 65/151 and 78/660, must the directives themselves and in particular the combined provisions of Article 44(2)(g) EC, Articles 2(1)(f) and 6 of Directive 68/151 and Article 2(2), (3) and (4) of Directive 78/660, as consolidated by Directives 83/349 and 90/605, be interpreted as meaning that that legislation precludes a law of a Member State which, in amending the system of penalties already in force in respect of company law offences concerning the infringement of the obligations imposed in order to safeguard the principle of public and accurate information on companies, lays down a system of sanctions which in the specific instance is not informed by the criteria of effectiveness, proportionality and dissuasiveness of the sanctions imposed in order to ensure that that principle is upheld? (2) Must those directives and, in particular, Article 44(2)(g) EC, Articles 2(1)(f) and 6 of Directive 68/151 and Article 2(2), (3) and (4) of Directive 78/660, as consolidated by Directives 83/349 and 90/605, be interpreted as meaning that that legislation precludes a law of a Member State which does not make it a punishable offence for companies to infringe obligations concerning disclosure and the provision of accurate information on certain company documents (including the balance sheet and the profit and loss account) where the disclosure of false company accounts or the failure to provide information result in a distortion of the financial results for a given period, or a distortion in the net assets, which does not exceed a certain percentage threshold? (3) Must those directives and, in particular, Article 44(2)(g) EC, Articles 2(1)(f) and 6 of Directive 68/151 and Article 2(2), (3) and (4) of Directive 78/660, as consolidated by Directives 83/349 and 90/605, be interpreted as meaning that that legislation precludes a law of a Member State which does not make it a punishable offence for companies to infringe obligations concerning disclosure and the provision of accurate information where statements are made which, although aimed at deceiving members or the public with a view to securing an unjust profit, are the consequence of estimated valuations which, taken individually, depart from actual values to an extent not greater than a certain threshold? (4) Irrespective of progressive limits or thresholds, must those directives and, in particular, Article 44(2)(g) EC, Articles 2(1)(f) and 6 of Directive 68/151 and Article 2(2), (3) and (4) of Directive 78/660, as consolidated by Directives 83/349 and 90/605, be interpreted as meaning that that legislation precludes a law of a Member State which does not make it a punishable offence for companies to infringe obligations concerning disclosure and the provision of accurate information where the false statements or the fraudulent omissions and, thus, the disclosures and statements which do not give a true and fair view of the company’s assets and liabilities and financial position do not distort “to an appreciable extent” the company’s assets, liabilities and financial position (even though it is for the national legislature to define the concept of “appreciable distortion”)? (5) Must those directives and, in particular, Article 44(2)(g) EC, Articles 2(1)(f) and 6 of Directive 68/151 and Article 2(2), (3) and (4) of Directive 78/660, as consolidated by Directives 83/349 and 90/605, be interpreted as meaning that that legislation precludes a law of a Member State which, in response to an infringement by companies of those obligations concerning disclosure and the provision of accurate information imposed on them in order to safeguard “the interests of both members and third parties”, allows only members and creditors to seek imposition of a penalty, thereby excluding third parties from any general and effective protection? (6) Must those directives and, in particular, Article 44(2)(g) EC, Articles 2(1)(f) and 6 of Directive 68/151 and Article 2(2), (3) and (4) of Directive 78/660, as consolidated by Directives 83/349 and 90/605, be interpreted as meaning that that legislation precludes a law of a Member State which, in response to the infringement by companies of those obligations concerning disclosure and the provision of accurate information imposed on them in order to safeguard “the interests of both members and third parties”, provides for prosecutory machinery and a system of sanctions which are markedly differentiated, whereby the possibility of the imposition of a punishment upon complaint being made, together with more serious and effective penalties, is reserved solely for infringements occasioning loss to members and creditors?’ 39 In Case C-403/02, the Tribunale di Milano decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) May Article 6 of Directive 68/151 be understood as requiring Member States to establish appropriate penalties not only for non-disclosure by commercial companies of balance sheets and profit and loss accounts but also for false disclosure of such documents, of other company documents addressed to members or to the public, or of any information on a company’s assets and liabilities, and economic and financial situation which the company is required to provide in relation to itself or to the group of which it forms part? (2) Must the concept of the “appropriateness” of the penalty, for the purposes of Article 5 of the EEC Treaty, be understood in terms to be specifically assessed within the legislative scope (both criminal and procedural) of the Member States as requiring a penalty which is “efficacious, effective and genuinely dissuasive”? (3) Do the combined provisions of the new Articles 2621 and 2622 of the Civil Code, as amended by Legislative Decree No [61/2002], satisfy those criteria: in particular, can Article 2621 of the Civil Code, which summarily punishes by a term of imprisonment of one year and six months offences in connection with false information in balance sheets not occasioning financial loss or occasioning loss but in respect of which no prosecution may be brought under Article 2622 of the Civil Code owing to the absence of a complaint, be described as “effectively dissuasive” and “genuinely appropriate”? Finally, is it appropriate, in terms not least of the specific protection of the collective interest in the “transparency” of the corporate market, and the possibility that that interest may assume a Community dimension, to provide in respect of offences under Article 2622(1) of the Civil Code (those committed in regard to companies not listed on the stock exchange) that proceedings may only be brought upon a complaint by members of the company concerned or its creditors?’ 40 By order of the President of the Court of 20 January 2003, Cases C‑387/02, C‑391/02 and C‑403/02 were joined for the purposes of the written and oral procedure and for the judgment. The questions referred for preliminary ruling Observations submitted to the Court41 Mr Berlusconi and Mr Dell’Utri challenge the admissibility of the questions referred for preliminary ruling in Cases C-387/02 and C‑403/02. The Italian Government also expresses doubts in that regard. 42 The questions referred, they argue, seek to circumvent application of the new Articles 2621 and 2622 of the Italian Civil Code in such a way as to enable criminal proceedings to be brought on the basis of the former Article 2621 of the Italian Civil Code, a provision which is significantly less favourable to the accused. 43 Even assuming, they argue, that the new Articles 2621 and 2622 of the Italian Civil Code prove to be incompatible with the First or the Fourth Companies Directive, the accused cannot, in the absence of any applicable penal provision of national law, be prosecuted and have a different and more onerous penalty imposed on them on the basis of those directives. 44 They submit that it follows from the Court’s case-law that a directive cannot, by itself, give rise to obligations on the part of an individual and for that reason cannot be relied on as such against that individual. Nor can a directive have the effect, by itself and independently of any domestic legislation of a Member State adopted for its application, of determining or increasing the criminal liability of those who infringe its provisions. 45 The reply sought from the Court, they continue, is irrelevant for the purposes of resolving the disputes pending before the courts which have made the references inasmuch as the former Article 2621 of the Italian Civil Code cannot in any event be applied in the cases in the main proceedings. 46 Mr Berlusconi and Mr Dell’Utri contend that the principle of the retroactive application to an accused person of more favourable criminal legislation, a fundamental right which, in the same way as the principle of legality, of which it constitutes an important aspect, forms part of the Community legal order, precludes such an outcome. 47 The Commission, by contrast, argues that the questions submitted for preliminary ruling are admissible.48 The admissibility of those questions, it submits, is not affected by any possible application of the principle of legality in the event that the reply to be given by the Court might give rise to incompatibility of the new Articles 2621 and 2622 of the Italian Civil Code with Community law, with the possible consequence that proceedings may be brought on the basis of the former Article 2621 of that code, which is less favourable to the accused. 49 It is, the Commission argues, important to point out that, at the time when the acts giving rise to the criminal proceedings against the accused in the cases in the main proceedings were confirmed, prosecutions could have been brought in respect of those acts, that is to say, on the basis of the former Article 2621 of the Italian Civil Code, and that it was only later that national provisions were adopted which were more favourable to the accused, but the compatibility of which with Community law has been questioned in some regards, with the result that the national court might, if appropriate, be obliged to set aside the application of those national provisions. 50 In such a situation, the Commission continues, it would not be the Community legislation which determines or increases criminal liability. The case would involve simply maintaining the effects of the national legislation in force at the time of the acts and in conformity with Community law, by refraining from the application of later legislation which is more favourable but contrary to Community law. 51 The principle of the primacy of Community law, the Commission argues, precludes the application of new national provisions, which are more favourable to an accused person, to acts which pre-date those provisions if it should turn out that those provisions do not punish in an appropriate manner an infringement of the rules of Community law and are, for that reason, incompatible with Community law, as interpreted by the Court. Findings of the Court52 By the questions which they have referred, the national courts which have made the references are essentially seeking to ascertain whether, by reason of certain of their provisions, the new Articles 2621 and 2622 of the Italian Civil Code are compatible with the requirement imposed by Community law that penalties for infringement of Community law provisions be appropriate (see paragraph 36 of this judgment). The Community law requirement that penalties be appropriate53 As a first step, it is necessary to examine whether the requirement that the penalties for offences relating to false accounting, such as those set out in the new Articles 2621 and 2622 of the Italian Civil Code, be appropriate is imposed in Article 6 of the First Companies Directive or follows from Article 5 of the Treaty, which, in accordance with established case-law cited in paragraph 36 of this judgment, means that penalties for infringements of provisions of Community law must be effective, proportionate and dissuasive. 54 It must be stated in this regard that penalties for offences resulting from false accounting, such as the penalties provided for in the new Articles 2621 and 2622 of the Italian Civil Code, are designed to punish serious infringements of the fundamental principle, compliance with which constitutes the core objective of the Fourth Companies Directive, which follows from the fourth recital in the preamble and from Article 2(3) and (5) of that directive, that annual accounts of companies coming within the scope of that directive must give a true and fair view of the company’s assets and liabilities, financial position and profit or loss (see, in this regard, Case C-306/99 BIAO [2003] ECR I-1, paragraph 72 and the case-law there cited). 55 This finding may, moreover, be transposed to the Seventh Companies Directive, Article 16(3) and (5) of which essentially sets out, in regard to consolidated accounts, the same provisions as those contained in Article 2(3) and (5) of the Fourth Companies Directive with regard to the annual accounts. 56 Concerning the system of penalties provided for under Article 6 of the First Companies Directive, the wording of that provision in itself indicates that that system is to be understood as covering not only the case of the absence of any disclosure of annual accounts but also the case of the disclosure of annual accounts which have not been drawn up in accordance with the rules prescribed by the Fourth Companies Directive in regard to the content of such accounts. 57 Article 6 of the Fourth Companies Directive is not limited to imposing an obligation on Member States to provide for appropriate penalties in the case of failure to disclose the balance sheet and the profit and loss account, setting down as it does a similar obligation in respect of a failure to disclose those documents in the manner required by Article 2(1)(f) of the First Companies Directive. The latter provision refers expressly to the prospective harmonisation of the rules relating to the content of the annual accounts which was brought about by the Fourth Companies Directive. 58 It follows from the purpose of the Fourth Companies Directive, which supplements, for the same types of companies, the obligations laid down by the First Companies Directive, and in the absence in that directive of general rules on penalties, that, with the exception of the cases covered by the specific exemption contained in Article 51(3) of the Fourth Companies Directive, the Community legislature did intend to extend the system of penalties referred to in Article 6 of the First Companies Directive to cover infringements of the obligations contained in the Fourth Companies Directive and, in particular, the failure to publish annual accounts which, in respect of their content, satisfy the rules laid down in that regard. 59 By contrast, the Seventh Companies Directive does provide for such a general rule in Article 38(6). It cannot be disputed that that rule also covers the publication of consolidated accounts which have not been drawn up in accordance with the rules laid down in that directive. 60 This difference in content between the Fourth and Seventh Companies Directives may be explained by the fact that Article 2(1)(f) of the First Companies Directive makes no reference whatsoever to consolidated accounts. Article 6 of the First Companies Directive cannot therefore be treated as applying in the case of non-compliance with the obligations relating to consolidated accounts. 61 An interpretation of Article 6 of the First Companies Directive to the effect that it also covers the failure to publish annual accounts drawn up in accordance with the rules laid down in regard to the content thereof is, moreover, confirmed by the context and objectives of the directives in question. 62 As the Advocate General has stressed in points 72 to 75 of her Opinion, it is necessary in this regard to have particular consideration for the fundamental role played by publication of the annual accounts of companies having share capital and a fortiori of the annual accounts drawn up in accordance with the harmonised rules relating to their content, with a view to protecting the interests of third parties, an objective which is stressed in clear terms in the preambles to both the First and the Fourth Companies Directives. 63 It follows that the requirement that penalties, such as those provided for under the new Articles 2621 and 2622 of the Italian Civil Code for offences resulting from false accounting, be appropriate is laid down in Article 6 of the First Companies Directive. 64 The fact none the less remains that, in order to clarify the scope of the requirement that the penalties set out in Article 6 of the First Companies Directive be appropriate, account may usefully be taken of the Court’s established case-law on Article 5 of the Treaty, which sets out a similar requirement. 65 According to that case-law, while the choice of penalties remains within their discretion, Member States must ensure in particular that infringements of Community law are penalised under conditions, both procedural and substantive, which are analogous to those applicable to infringements of national law of a similar nature and importance and which, in any event, make the penalty effective, proportionate and dissuasive (see, inter alia, Commission v Greece, cited above, paragraphs 23 and 24; Case C-326/88 Hansen [1990] ECR I‑2911, paragraph 17; Case C-167/01 Inspire Art [2003] ECR I-10155, paragraph 62; and Case C-230/01 Penycoed [2004] ECR I-0000, paragraph 36 and the case-law cited therein). The principle of the retroactive application of the more lenient penalty66 Setting aside the applicability of Article 6 of the First Companies Directive to the failure to publish annual accounts, it should be noted that, under Article 2 of the Italian Criminal Code, which sets out the principle that the more lenient penalty should be applied retroactively, the new Articles 2621 and 2622 of the Italian Civil Code ought to be applied even if they entered into force only after the commission of the acts underlying the prosecutions brought in the cases in the main proceedings. 67 It must be pointed out in this regard that, according to settled case-law, fundamental rights form an integral part of the general principles of law, the observance of which the Court ensures. For that purpose, the Court draws inspiration from the constitutional traditions common to the Member States and from the guidelines supplied by international treaties for the protection of human rights on which the Member States have collaborated or to which they are signatories (see, inter alia, Case C‑112/00 Schmidberger [2003] ECR I‑5659, paragraph 71 and the case-law there cited, and Joined Cases C‑20/00 and C‑64/00 Booker Aquaculture and Hydro Seafood [2003] ECR I‑7411, paragraph 65 and the case-law there cited). 68 The principle of the retroactive application of the more lenient penalty forms part of the constitutional traditions common to the Member States. 69 It follows that this principle must be regarded as forming part of the general principles of Community law which national courts must respect when applying the national legislation adopted for the purpose of implementing Community law and, more particularly in the present cases, the directives on company law. The ability to rely on the First Companies Directive70 The question none the less arises as to whether the principle of the retroactive application of the more lenient penalty applies in the case in which that penalty is at variance with other rules of Community law. 71 It is, however, unnecessary to resolve that question for the purpose of the disputes in the main proceedings as the Community rule in issue is contained in a directive on which the law-enforcement authorities have relied against individuals within the context of criminal proceedings. 72 Admittedly, should the national courts which made the references conclude, on the basis of the replies to be given by the Court, that the new Articles 2621 and 2622 of the Italian Civil Code do not, by reason of certain of their provisions, satisfy the Community law requirement that penalties be appropriate, it would follow, according to the Court’s well-established case-law, that the national courts which made the references would be required to set aside, under their own authority, those new articles without having to request or await the prior repeal of those articles by way of legislation or any other constitutional procedure (see, inter alia, Case 106/77 Simmenthal [1978] ECR 629, paragraphs 21 and 24; Joined Cases C‑13/91 and C‑113/91 Debus [1992] ECR I‑3617, paragraph 32; and Joined Cases C‑10/97 to C‑22/97 IN. CO .GE’90 and Others [1998] ECR I‑6307, paragraph 20). 73 The Court has, however, also consistently ruled that a directive cannot of itself impose obligations on an individual and cannot therefore be relied on as such against that individual (see, inter alia, Joined Cases C‑397/01 to C‑403/01 Pfeiffer and Others [2004] ECR I‑0000, paragraph 108 and the case-law there cited). 74 In the specific context of a situation in which a directive is relied on against an individual by the authorities of a Member State within the context of criminal proceedings, the Court has ruled that a directive cannot, of itself and independently of a national law adopted by a Member State for its implementation, have the effect of determining or aggravating the liability in criminal law of persons who act in contravention of the provisions of that directive (see, inter alia, Case 80/86 Kolpinghuis Nijmegen [1987] ECR 3969, paragraph 13, and Case C‑60/02 X [2004] ECR I-0000, paragraph 61 and the case-law there cited). 75 In the situation in the present cases, reliance on Article 6 of the First Companies Directive for the purpose of assessing whether the new Articles 2621 and 2622 of the Italian Civil Code are compatible with that provision could have the effect of setting aside application of the system of more lenient penalties provided for by those articles. 76 It is clear from the decisions for referral that, if the new Articles 2621 and 2622 of the Italian Civil Code were to remain unapplied by reason of their incompatibility with Article 6 of the First Companies Directive, the result could be to render applicable a manifestly more severe criminal penalty, such as that provided for under the former Article 2621 of that code, which was in force at the time when the acts resulting in the prosecutions brought in the cases in the main proceedings were committed. 77 A consequence of that kind would be contrary to the limits which flow from the essential nature of any directive, which, as follows from the case-law cited in paragraphs 73 and 74 of this judgment, preclude a directive from having the effect of determining or increasing the liability in criminal law of accused persons. 78 In the light of all of the foregoing, the answer to the questions referred for preliminary ruling must be that, in a situation such as that in issue in the main proceedings, the First Companies Directive cannot be relied on as such against accused persons by the authorities of a Member State within the context of criminal proceedings, in view of the fact that a directive cannot, of itself and independently of national legislation adopted by a Member State for its implementation, have the effect of determining or increasing the criminal liability of those accused persons. Costs79 Since these proceedings are, for the parties to the main proceedings, a step in the actions pending before the national courts, the decisions on costs are a matter for those courts. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) rules as follows:In a situation such as that in issue in the main proceedings, First Council Directive 68/151/EEC of 9 March 1968 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community, cannot be relied on as such against accused persons by the authorities of a Member State within the context of criminal proceedings, in view of the fact that a directive cannot, of itself and independently of national legislation adopted by a Member State for its implementation, have the effect of determining or increasing the criminal liability of those accused persons.[Signatures]* Language of the cases: Italian. | 07e34-79831d9-4f28 | EN |
NONE OF THE DIRECTIVES ON BANKING LAW CONFERS ON INDIVIDUALS THE RIGHT TO REQUIRE THE BANKING SUPERVISORY BODY TO ADOPT APPROPRIATE SUPERVISORY MEASURES OR TO CLAIM THAT THAT BODY OR THE STATE CONCERNED IS LIABLE IN THE EVENT OF DEFECTIVE SUPERVISION, IF THEY ARE ENSURED THE COMPENSATION PRESCRIBED BY THE DIRECTIVE ON DEPOSIT-GUARANTEE SCHEMES | Peter Paul and OthersvBundesrepublik Deutschland(Reference for a preliminary ruling from the Bundesgerichtshof)(Credit institutions – Deposit-guarantee schemes – Directive 94/19/EC – Directives 77/780/EEC, 89/299/EEC and 89/646/EEC – Supervisory measures by the competent authority for the purposes of protecting depositors – Liability of the supervisory authorities for losses resulting from defective supervision)Summary of the Judgment1. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Credit institutions – Deposit-guarantee schemes – National rules limiting the functions of the national supervisory authority to the public interest and precluding compensation for damage resulting from defective supervision – Compliance with Directive 94/19 – Condition – Compensation of depositors under the conditions prescribed in the directive (European Parliament and Council Directive 94/19, Art. 3(2) to (5))2. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Credit institutions – Supervision of credit institutions – National rules limiting the functions of the national supervisory authority to the public interest and precluding compensation for damage resulting from defective supervision – Compliance with Directives 77/780, 89/299 and 89/646(Council Directives 77/780, 89/299 and 89/646)1. If the compensation of depositors prescribed by Directive 94/19 on deposit-guarantee schemes is ensured, Article 3(2) to (5) of that directive cannot be interpreted as precluding a national rule to the effect that the functions of the national authority responsible for supervising credit institutions are to be fulfilled only in the public interest, which under national law precludes individuals from claiming compensation for damage resulting from defective supervision on the part of that authority. The purpose of those provisions is to guarantee to depositors that the credit institution in which they make their deposits belongs to a deposit-guarantee scheme, in order to ensure protection of their right to compensation in the event that their deposits are unavailable, in accordance with the rules laid down in that directive, and they thus relate only to the introduction and proper functioning of the deposit-guarantee scheme as provided for by the directive. On the other hand, and if that compensation is ensured, those provisions do not confer on depositors a right to have the competent authorities take supervisory measures in their interest. (see paras 29-30, 32, operative part 1)2. First Directive 77/780 on the coordination of the laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions, Directive 89/299 on the own funds of credit institutions and Second Directive 89/646 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions do not preclude a national rule to the effect that the functions of the national authority responsible for supervising credit institutions are to be fulfilled only in the public interest, which under national law precludes individuals from claiming compensation for damage resulting from defective supervision on the part of that authority. Although the directives in question impose on the national authorities a number of supervisory obligations vis-à-vis credit institutions, it does not necessarily follow from that, or from the fact that the objectives pursued by those directives also include the protection of depositors, that those directives seek to confer rights on depositors in the event that their deposits are unavailable as a result of defective supervision on the part of the competent national authorities. (see paras 39-40, 47, operative part 2)JUDGMENT OF THE COURT (sitting as a full Court )12 October 2004(1)THE COURT (sitting as a full Court ),,after hearing the Opinion of the Advocate General at the sitting on 25 November 2003,gives the followingLegal backgroundIf the compensation of depositors prescribed by Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes is ensured, Article 3(2) to (5) of that directive cannot be interpreted as precluding a national rule to the effect that the functions of the national authority responsible for supervising credit institutions are to be fulfilled only in the public interest, which under national law precludes individuals from claiming compensation for damage resulting from defective supervision on the part of that authority. First Council Directive 77/780/EEC of 12 December 1977 on the coordination of the laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions, Council Directive 89/299/EEC of 17 April 1989 on the own funds of credit institutions and Second Council Directive 89/646/EEC of 15 December 1989 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions and amending Directive 77/780 do not preclude a national rule to the effect that the functions of the national authority responsible for supervising credit institutions are to be fulfilled only in the public interest, which under national law precludes individuals from claiming compensation for damage resulting from defective supervision on the part of that authority. 1 – Language of the case: German. Language of the case: German. | 989b6-1029f20-4607 | EN |
THE COURT RULES AGAINST THE FRENCH LEGISLATION PROHIBITING THE PAYMENT OF INTEREST ON "SIGHT" ACCOUNTS | CaixaBank FrancevMinistère de l’Économie, des Finances and de l’Industrie(Reference for a preliminary ruling from the Conseil d’État (France))(Freedom of establishment – Credit institutions – National legislation prohibiting the payment of remuneration on sight accounts)Summary of the JudgmentFreedom of movement for persons – Freedom of establishment – Credit institutions – National legislation prohibiting the payment of remuneration on sight accounts – Not permitted – Justification – None(Art. 43 EC)Article 43 EC precludes legislation of a Member State which prohibits a credit institution which is a subsidiary of a company from another Member State from remunerating sight accounts in euros opened by residents of the former Member State. Such a prohibition, which constitutes for companies from other Member States a serious obstacle to the pursuit of their activities via a subsidiary, affecting their access to the market, is to be regarded as a restriction within the meaning of Article 43 EC. That restriction cannot be justified by overriding requirements of the public interest, relating to the protection of consumers or the encouragement of medium and long-term saving, since it goes beyond what is necessary to attain those objectives. (see paras 12, 17, 21, 23-24, operative part)JUDGMENT OF THE COURT (Grand Chamber)5 October 2004(1) againstTHE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 25 March 2004,gives the followingThe national legal backgroundAs Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 is silent on the point, does the prohibition by a Member State of banking institutions duly established in its territory from remunerating sight accounts and other repayable funds constitute an obstacle to freedom of establishment? If the answer to the first question is in the affirmative, what kind of reasons of the public interest might in an appropriate case be relied on to justify such an obstacle?’ 1 – Language of the case: French. Language of the case: French. | 3d1bd-e8e9977-4e49 | EN |
THE RATE OF EXCISE DUTY ON OUZO DOES COMPLY WITH COMMUNITY LAW | Commission of the European CommunitiesvHellenic Republic(Failure of a Member State to fulfil obligations – Infringement of the first paragraph of Article 90 EC – Excise duty on alcohol and alcoholic beverages – Application to ouzo of a lower rate than that applied to other alcoholic beverages – Compliance of that rate with a directive which was not challenged within the time-limit laid down in Article 230 EC)Summary of the Judgment1. Acts of the institutions – Presumed lawful – Legally non-existent acts – Concept(Art. 249 EC)2. Tax provisions – Harmonisation of laws – Excise duty – Directive 92/83 – Alcohol and alcoholic beverages – Reduced rate of excise duty applied to certain products – Absence of any infringement of Community law(Council Directive 92/83, Art. 23)1. Measures of the Community institutions are in principle presumed to be lawful and accordingly produce legal effects until such time as they are withdrawn, annulled in an action for annulment or declared invalid following a reference for a preliminary ruling or a plea of illegality. By way of exception to that principle, measures tainted by an irregularity whose gravity is so obvious that it cannot be tolerated by the Community legal order must be treated as having no legal effect, even provisional, that is to say they must be regarded as legally non-existent. The purpose of this exception is to maintain a balance between two fundamental, but sometimes conflicting, requirements with which a legal order must comply, namely stability of legal relations and respect for legality. The gravity of the consequences attaching to a finding that a measure of a Community institution is non-existent means that, for reasons of legal certainty, such a finding is to be reserved for quite extreme situations. (see paras 18-20)2. Article 23 of Directive 92/83 on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages allows a reduced rate of excise duty to be applied to certain types of product. A Member State which has done no more than maintain in force national rules adopted on the basis of that provision and which comply with that provision, which produces legal effects that are presumed to be lawful, has not failed to fulfil its obligations under Community law. (see paras 23-25)JUDGMENT OF THE COURT (sitting as a full Court )5 October 2004(1) (Failure of a Member State to fulfil obligations – Infringement of the first paragraph of Article 90 EC – Excise duty on alcohol and alcoholic beverages – Application to ouzo of a rate lower than that applied to other alcoholic beverages – Compliance of that rate with a directive which was not challenged within the time-limit laid down in Article 230 EC)applicant,intervener,defendant,THE COURT (sitting as a full Court ),,after hearing the Opinion of the Advocate General at the sitting on 15 January 2004,gives the followingLegal backgroundall products with an actual alcoholic strength by volume exceeding 1.2% volume which fall within CN codes 2207 and 2208, even when those products form part of a product which falls within another chapter of the CN, products of CN codes 2204, 2205 and 2206 which have an actual alcoholic strength by volume exceeding 22% vol., potable spirits containing products, whether in solution or not.’the Hellenic Republic, in respect of those aniseed flavoured spirit drinks defined in Regulation (EEC) No 1576/89 which are colourless and have a sugar content of 50 grams or less per litre, and in which at least 20% of the alcoholic strength of the final product is composed of alcohol flavoured by distillation in traditional discontinuous copper stills with a capacity of 1 000 litres or less.’ Dismisses the action;Orders the Commission of the European Communities to pay the costs;Orders the United Kingdom of Great Britain and Northern Ireland to bear its own costs. 1 – Language of the case: Greek. Language of the case: Greek. | 3f1de-b668107-4de4 | EN |
MAXIMUM WEEKLY WORKING TIME, INCLUDING DUTY TIME, CANNOT EXCEED 48 HOURS FOR RESCUE WORKERS IN AN EMERGENCY MEDICAL RESCUE SERVICE | Bernhard Pfeiffer and OthersvDeutsches Rotes Kreuz, Kreisverband Waldshut eV(Reference for a preliminary ruling from the Arbeitsgericht Lörrach)(Social policy – Protection of the health and safety of workers – Directive 93/104/EC – Scope – Emergency workers in attendance in ambulances in the framework of an emergency service run by the German Red Cross – Definition of ‘road transport’ – Maximum weekly working time – Principle – Direct effect – Derogation – Conditions)Summary of the Judgment1. Social policy – Protection of the health and safety of workers – Directive 89/391 on the introduction of measures to encourage improvements in the safety and health of workers at work – Directive 93/104 concerning certain aspects of the organisation of working time – Scope – Activity of emergency workers – Included – Activity not forming part of civil protection services or road transport excluded from such scope(Council Directives 89/391, Art. 2, and 93/104, Art. 1(3))2. Social policy – Protection of the health and safety of workers – Directive 93/104 concerning certain aspects of the organisation of working time – Maximum weekly working time – Derogation – Worker’s consent – Employment contract referring to a collective agreement permitting the extension of that time – Insufficient(Council Directive 93/104, Art. 18(1)(b)(i))3. Social policy – Protection of the health and safety of workers – Directive 93/104 concerning certain aspects of the organisation of working time – Activity of emergency workers – National legislation permitting the extension of the maximum weekly working time by means of a collective or works agreement – Not permissible(Council Directive 93/104, Art. 6(2))4. Social policy – Protection of the health and safety of workers – Directive 93/104 concerning certain aspects of the organisation of working time – Article 6(2) – Direct effect – Powers and duties of the national court – Non-application of national provisions permitting the extension of the maximum weekly working time set by that article1. Article 2 of Directive 89/391 on the introduction of measures to encourage improvements in the safety and health of workers at work and Article 1(3) of Directive 93/104 concerning certain aspects of the organisation of working time must be construed as meaning that the activity of emergency workers, carried out in the framework of an emergency medical service, falls within the scope of those directives. In that regard, that activity does not come within the exclusion in the first subparagraph of Article 2(2) of Directive 89/391 relating to certain specific activities within the public service. That exclusion was adopted purely for the purpose of ensuring the proper operation of services essential for the protection of public health, safety and order in cases the gravity and scale of which are exceptional and a characteristic of which is the fact that, by their nature, they do not lend themselves to planning as regards the working time of teams of emergency workers. Likewise, the activity of emergency workers, even if it includes, at least in part, using a vehicle and accompanying a patient on his journey to hospital, cannot be regarded as ‘road transport’ and therefore must be excluded from the scope of Article 1(3) of Directive 93/104. (see paras 55, 63, 72, 74, operative part 1)2. The first indent of Article 18(1)(b)(i) of Directive 93/104 concerning certain aspects of the organisation of working time, which confers the right not to apply Article 6 of that directive containing the rule as to the maximum weekly working time, is to be construed as requiring consent to be expressly and freely given by each worker individually if the 48-hour maximum period of weekly working time, as laid down in Article 6 of that directive, is to be validly extended. In that connection, it is not sufficient that the relevant worker’s employment contract refers to a collective agreement which permits such an extension, since it is by no means certain that, when he entered into such a contract, the worker concerned knew of the restriction of the rights conferred on him by Directive 93/104. (see paras 85-86, operative part 2)3. Article 6(2) of Directive 93/104 concerning certain aspects of the organisation of working time must be interpreted as precluding legislation in a Member State the effect of which, as regards periods of duty time completed by emergency workers in the framework of an emergency medical service, is to permit, including by means of a collective agreement or works agreement based on such an agreement, the 48-hour maximum period of weekly working time laid down by that provision to be exceeded. First, it follows both from the wording of Article 6(2) of Directive 93/104 and from the purpose and scheme of that directive, that the 48-hour upper limit on weekly working time constitutes a rule of Community social law of particular importance from which every worker must benefit, since it is a minimum requirement necessary to ensure protection of his safety and health, so that national legislation which authorises weekly working time in excess of 48 hours, including periods of duty time, is not compatible with the requirements of Article 6(2) of the directive. Second, periods of duty time completed by emergency workers must be taken into account in their totality in the calculation of maximum daily and weekly working time, regardless of the fact that they necessarily include periods of inactivity of varying length between calls. (see paras 94-95, 100-101, 120, operative part 3)4. Article 6(2) of Directive 93/104 concerning certain aspects of the organisation of working time fulfils all the conditions necessary for it to have direct effect, since it imposes on Member States in unequivocal terms a precise obligation as to the result to be achieved, which is not coupled with any condition regarding application of the rule laid down by it, which provides for a 48-hour maximum as regards average weekly working time. The fact that the directive leaves the Member States a degree of latitude to adopt rules in order to implement Article 6, and that it permits them to derogate from it, do not alter the precise and unconditional nature of Article 6(2). Accordingly, when hearing a case between individuals, a national court, which is required, when applying the provisions of domestic law adopted for the purpose of transposing obligations laid down by a directive, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by it, must do whatever lies within its jurisdiction to ensure that the maximum period of weekly working time, which is set at 48 hours by the said Article 6(2), is not exceeded. (see paras 104-106, 119-120, operative part 3)JUDGMENT OF THE COURT (Grand Chamber)5 October 2004(1)THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 6 May 2003,after hearing the Opinion of the Advocate General at the sitting on 27 April 2004,gives the followingLegal framework This Directive applies to: “working time” shall mean any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice; “rest period” shall mean any period which is not working time; the average working time for each 7-day period, including overtime, does not exceed 48 hours.’ managing executives or other persons with autonomous decision-taking powers; family workers; orworkers officiating at religious ceremonies in churches and religious communities.in the case of activities involving the need for continuity of service or production, particularly; (a) to extend working time beyond 10 hours per day, even without offset, where working time regularly includes significant periods of duty time (“Arbeitsbereitschaft”), to extend working time beyond 10 hours per day, even without offset, where working time regularly includes significant periods of duty time (“Arbeitsbereitschaft”), (b) to determine a different period of offset, to determine a different period of offset, (c) to extend working time to 10 hours per day, without offset, for a maximum period of 60 days per year, to extend working time to 10 hours per day, without offset, for a maximum period of 60 days per year,Normal working time, exclusive of breaks, shall be on average 39 hours (from 1 April 1990 38 and a half hours) per week. As a general rule, the average weekly working time shall be calculated on the basis of a period of 26 weeks. (a) to 10 hours per day (49 hours per week on average) if it regularly includes duty time (“Arbeitsbereitschaft”) of at least 2 hours per day on average: to 10 hours per day (49 hours per week on average) if it regularly includes duty time (“Arbeitsbereitschaft”) of at least 2 hours per day on average: (b) to 11 hours per day (54 hours per week on average) if it regularly includes duty time (“Arbeitsbereitschaft”) of at least 3 hours per day on average, to 11 hours per day (54 hours per week on average) if it regularly includes duty time (“Arbeitsbereitschaft”) of at least 3 hours per day on average, (c) to 12 hours per day (60 hours per week on average) if the employee must merely be present at the work-place in order to carry out his duties should the need arise. to 12 hours per day (60 hours per week on average) if the employee must merely be present at the work-place in order to carry out his duties should the need arise. The employee shall be required, if so directed by his employer, to remain outside normal working hours in a particular place selected by the employer, from where he may be called to work if the need arises (on-call time, “Bereitschaftsdienst”). The employer may require such on-call service only when some work is expected but, on the basis of experience, work-free time will predominate. Article 6(2) of Directive 93/104 must be interpreted, in circumstances such as those in the main proceedings, as precluding legislation in a Member State the effect of which, as regards periods of duty time (‘Arbeitsbereitschaft’) completed by emergency workers in the framework of the emergency medical service of a body such as the Deutsches Rotes Kreuz, is to permit, including by means of a collective agreement or works agreement based on such an agreement, the 48-hour maximum period of weekly working time laid down by that provision to be exceeded; the provision fulfils all the conditions necessary for it to have direct effect;when hearing a case between individuals, the national court is required, when applying the provisions of domestic law adopted for the purpose of transposing obligations laid down by a directive, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive. In the main proceedings, the national court must thus do whatever lies within its jurisdiction to ensure that the maximum period of weekly working time, which is set at 48 hours by Article 6(2) of Directive 93/104, is not exceeded. b) On a proper construction, the concept of ‘road transport’ in Article 1(3) of Directive 93/104 does not encompass the activity of an emergency medical service, even though the latter includes using a vehicle and accompanying a patient on the journey to hospital. b) On a proper construction, the concept of ‘road transport’ in Article 1(3) of Directive 93/104 does not encompass the activity of an emergency medical service, even though the latter includes using a vehicle and accompanying a patient on the journey to hospital. 1 – Language of the case: German. Language of the case: German. | a71ec-f5ed555-4ce0 | EN |
ACCORDING TO ADVOCATE GENERAL LÉGER, CONSUMERS CANNOT RELY ON THE DIRECTIVE ON DOOR-STEP SELLING TO CANCEL CONTRACTS FOR THE SALE OF IMMOVABLE PROPERTY | Elisabeth Schulte and Wolfgang SchultevDeutsche Bausparkasse Badenia AG(Reference for a preliminary ruling from the Landgericht Bochum)(Consumer protection – Doorstep selling – Purchase of immovable property – Investment financed by a secured loan – Right of cancellation – Effects of cancellation)Opinion of Advocate General Léger delivered on 28 September 2004 Judgment of the Court (Grand Chamber), 25 October 2005 Summary of the Judgment1. Approximation of laws – Consumer protection – Article 95(3) EC – Provision which cannot be relied on directly as a basis for obligations which are binding on a Member State (Art. 95(3) EC)2. Approximation of laws – Consumer protection in the case of contracts negotiated away from business premises – Directive 85/577 – Scope – Contracts for the sale of immovable property which are a component of an investment scheme financed by a loan – Not included (Council Directive 85/577, Art. 3(2)(a))3. Approximation of laws – Consumer protection in the case of contracts negotiated away from business premises – Directive 85/577 – Loan agreement serving to finance the purchase of immovable property – Cancellation – Effects – Obligation to repay immediately with interest – Whether permissible (Council Directive 85/577, Arts 4, 5 and 7)1. Article 95(3) EC, which provides that the Commission, in its proposals envisaged in paragraph 1 of that article concerning consumer protection, is to take as a base a high level of protection, and that, within their respective powers, the European Parliament and the Council of the European Union are also to seek to achieve that objective, is directed at the various institutions, which each have their role in the legislative process. That provision cannot, therefore, be relied on directly as a basis for obligations which are binding on a Member State. At the most the provision could be used as an aid to interpretation of the Directive. (see paras 59, 61)2. Article 3(2)(a) of Council Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises must be interpreted as excluding from the scope of the Directive contracts for the sale of immovable property even where they are merely a component of an investment scheme financed by a loan for which the negotiations prior to the conclusion of the contract were held in a doorstep-selling situation, both as regards the contract for the purchase of the immovable property and the loan agreement serving solely to finance that purchase. (see para. 81, operative part 1)3. Although, under Article 7 of Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises, it is for the Member States to legislate as regards the legal effects of cancellation of the contract by the consumer, that power must be exercised in accordance with Community law and, in particular, the rules of the Directive interpreted in the light of its objective and in such a way as to ensure that it is fully effective. In that regard, in the case of a loan agreement serving to finance the purchase of immovable property, the Directive does not preclude: - national rules which limit the effect of cancellation of the loan agreement to the avoidance of that agreement, even in the case of investment schemes in which the loan would not have been granted at all without the acquisition of the immovable property; - a requirement that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof; - a requirement that the amount of the loan must be paid back immediately;- national legislation which provides for an obligation on the consumer, in the event of cancellation of a secured credit agreement, not only to repay the amounts received under the agreement but also to pay to the lender interest at the market rate. However, in a situation where, if the bank had complied with its obligation to inform the consumer of his right of cancellation, the consumer would have been able to avoid exposure to the risks inherent in investments, Article 4 of the Directive requires Member States to ensure that their legislation protects consumers who have been unable to avoid exposure to such risks, by adopting suitable measures to allow them to avoid bearing the consequences of the materialisation of those risks. (see paras 69, 81, 88-89, 93, 103, operative part 2-3)JUDGMENT OF THE COURT (Grand Chamber)25 October 2005 (*) In Case C-350/03,REFERENCE for a preliminary ruling under Article 234 EC, from the Landgericht Bochum (Germany), made by decision of 29 July 2003, received at the Court on 8 August 2003, in the proceedings Elisabeth Schulte,Wolfgang SchulteDeutsche Bausparkasse Badenia AG,THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann and A. Rosas, Presidents of Chambers, C. Gulmann (Rapporteur), R. Schintgen, N. Colneric, S. von Bahr, R. Silva de Lapuerta and K. Lenaerts, Judges, Advocate General: P. Léger,Registrar: M.-F. Contet, Principal Administrator,having regard to the written procedure and further to the hearing on 15 June 2004,after considering the observations submitted on behalf of:– Mr and Mrs Schulte, by M. Koch and M. Beckmann, Rechtsanwälte,– Deutsche Bausparkasse Badenia AG, by M. Pap and N. Gross, Rechtsanwälte,– the German Government, by W.-D. Plessing, A. Dittrich and P.-C. Müller-Graff, acting as Agents,– the French Government, by R. Loosli-Surrans, acting as Agent,– the Italian Government, by I.M. Braguglia, acting as Agent, assisted by A. Cingolo, avvocato dello Stato,– the Commission of the European Communities, by J. Sack and J.-P. Keppenne, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 28 September 2004,gives the followingJudgment1 The reference for a preliminary ruling concerns the interpretation of Article 95(3) EC and Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises (OJ 1985 L 372, p. 31, ‘the Directive’), in particular Articles 3(2), 4, 5 and 7 thereof. 2 The reference was made in proceedings brought by Mr and Mrs Schulte against Deutsche Bausparkasse Badenia AG (‘the Bank’), concerning the effects of the cancellation, under the applicable national law on doorstep selling, of the secured credit agreement concluded between the Bank and Mr and Mrs Schulte. Legal context The Community legislation3 The Directive is intended to provide consumers in the Member States with a minimum of protection in the area of doorstep selling, in order to protect them from the risks arising on the conclusion of a contract away from the business premises of the trader. The fourth and fifth recitals of the preamble to the Directive read: ‘… the special feature of contracts concluded away from the business premises of the trader is that as a rule it is the trader who initiates the contract negotiations, for which the consumer is unprepared or which he does not expect; … the consumer is often unable to compare the quality and price of the offer with other offers; … … the consumer should be given a right of cancellation over a period of at least seven days in order to enable him to assess the obligations arising under the contract’. 4 Article 1(1) of the Directive provides:‘This Directive shall apply to contracts under which a trader supplies goods or services to a consumer and which are concluded:…– during a visit by a trader:to the consumer’s home or to that of another consumer;where the visit does not take place at the express request of the consumer’.5 Article 3(2) of the Directive provides:‘This Directive shall not apply to:(a) contracts for the construction, sale and rental of immovable property or contracts concerning other rights relating to immovable property. …’6 Article 4 of the Directive provides:‘In the case of transactions within the scope of Article 1, traders shall be required to give consumers written notice of their right of cancellation within the period laid down in Article 5, together with the name and address of a person against whom that right may be exercised. Such notice shall be dated and shall state particulars enabling the contract to be identified. It shall be given to the consumer:(a) in the case of Article 1, at the time of conclusion of the contract;...Member States shall ensure that their national legislation lays down appropriate consumer protection measures in cases where the information referred to in this Article is not supplied.’ 7 Article 5 of the Directive provides:‘1. The consumer shall have the right to renounce the effects of his undertaking by sending notice within a period of not less than seven days from receipt by the consumer of the notice referred to in Article 4, in accordance with the procedure laid down by national law. 2. The giving of the notice shall have the effect of releasing the consumer from any obligations under the cancelled contract.’8 Article 7 of the Directive provides: ‘If the consumer exercises his right of renunciation, the legal effects of such renunciation shall be governed by national laws, particularly regarding the reimbursement of payments for goods or services provided and the return of goods received.’ 9 Article 8 of the Directive provides that it ‘shall not prevent Member States from adopting or maintaining more favourable provisions to protect consumers in the field which it covers’. The case-law of the Court10 In its judgment in Case C-481/99 Heininger [2001] ECR I-9945, the Court interpreted three aspects of the Directive. 11 First, it held that the Directive applied to secured credit agreements, that is to say, credit agreements for financing the purchase of immovable property. In paragraph 32 of that judgment, it held that, whilst an agreement of the type in question is linked to a right relating to immovable property, in that the loan must be secured by a charge on immovable property, that feature is not sufficient for the agreement to be regarded as concerning a right relating to immovable property for the purposes of Article 3(2)(a) of the Directive. 12 It concluded that a consumer who has entered into a secured credit agreement in a doorstep-selling situation has a right of cancellation under Article 5 of the Directive. It pointed out, in paragraph 35 of that judgment, that the effects of a cancellation of that agreement in accordance with the Directive on the contract for the purchase of the immovable property and on the provision of security in the form of a charge on it fall to be governed by national law. 13 Finally, the Court observed that the minimum period of seven days allowed for cancellation must be calculated from the time the consumer receives the notice concerning his right of cancellation from the trader. In paragraph 48 of the judgment in Heininger it held that the doorstep-selling directive precludes the national legislature from imposing a time-limit of one year from the conclusion of the contract within which the right of cancellation provided for in Article 5 of that Directive may be exercised, where the consumer has not received the information specified in Article 4. The national legislation14 The Directive was transposed into German law by the Gesetz über den Widerruf von Haustürgeschäften und ähnlichen Geschäften (Law on the cancellation of doorstep transactions and analogous transactions) of 16 January 1986 (BGBl. 1986 I, p. 122, the ‘HWiG’). 15 In the version applicable at the material time, Paragraph 1(1) of the HWiG provides:‘Where the customer was induced to make a declaration of intention to conclude a contract for a service for valuable consideration:1. by oral negotiations at his place of work or in a private home,that declaration of intention takes effect only if the customer does not give written notice revoking it within a period of one week’. 16 Paragraph 3 of the HWiG provides:‘(1) In the event of cancellation, each contracting party shall return to the other whatever it has received. Damage to or loss of the object or any other matter preventing the return of the object shall not preclude cancellation. If the customer is liable for the damage, loss or other matter preventing return, he shall pay the difference in value or the value of the object to the other contracting party. (2) Where the customer has not been informed pursuant to Article 2 and has not otherwise been made aware of his right of cancellation, he shall be held liable for the damage, loss or other matter preventing return only if he has not exercised the care he usually exercises with his own possessions. (3) For the right to use or apply goods and for the other services supplied up to the date of cancellation, the value of such right or services must be paid; loss of value as a result of normal use of goods or other services shall be disregarded. (4) The customer may demand compensation from the other party for necessary expenditure on the goods.’17 The German legislature transposed Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (OJ 1987 L 42, p. 48) by adopting the Verbraucherkreditgesetz (law on consumer credit) of 17 December 1990 (BGBl. 1990 I, p. 2840, the ‘VerbrKrG’). That law, in its original version, was in force at the material time and until 30 September 2000. 18 Paragraph 9 of the VerbrKrG provides:‘1. A purchase agreement constitutes a transaction linked with the credit agreement if the credit serves to finance the purchase price and both agreements are to be regarded as a single economic unit. In particular, a single economic unit shall be presumed where the lender relies on the seller’s cooperation in the preparation or conclusion of the credit agreement. 2. The consumer’s declaration of intention to conclude the linked purchase agreement shall be valid only if the consumer does not revoke … his declaration of intention to conclude the credit agreement. The notice concerning the right of cancellation … must state that, in the event of cancellation, the purchase agreement linked with the credit agreement will not be valid either … If the net amount of the credit has already been paid to the seller, the lender shall, in relation to the consumer and with regard to the legal effects of cancellation, be subrogated to the seller’s rights and obligations arising from the purchase agreement … …’.19 Paragraph 3(2) of the VerbrKrG provides:‘Nor shall: …2. Paragraphs 4(1)(3)(1)(b), 7, 9 and 11 to 13 apply to credit agreements in which credit is subject to the giving of security by way of a charge on immovable property and is granted on the usual terms for credits secured by a charge on immovable property and the intermediate financing of the same …’. The main proceedings20 According to the order for reference, since the end of the 1980s, the Bank has financed the purchase of old apartments. These properties are generally blocks of flats constructed as social housing in the 1960s and 1970s which were purchased by Allgemeine Wohnungsvermögens AG, partly renovated and then offered for sale. Heinen & Biege GmbH (‘Heinen & Biege’), which acts as an intermediary in providing property and financial services, handled the marketing of the properties and arranged finance. 21 In the context of this marketing scheme, Mr and Mrs Schulte were contacted in February 1992 by a representative of Heinen & Biege who offered them an investment involving the purchase of property financed by a loan. The property was to be occupied by third parties and, for tax reasons, the purchase was to be financed entirely by a loan. 22 On 28 April 1992 Mr and Mrs Schulte purchased an apartment for DEM 90 519. The purchase agreement was signed before a notary, in accordance with the relevant German legislation. 23 Solely in order to finance the purchase, on 7 April 1992 Mr and Mrs Schulte took out a loan of DEM 105 000 from the Bank, secured by a charge on the property for the same amount which was created by a notarised deed of 8 May 1992. In the deed the Mr and Mrs Schulte also undertook personal liability for the payment of the amount of the charge and agreed to the possibility of the immediate enforcement of the loan agreement against their entire assets. At the Bank’s request, they also had to join a pool for rental income, which was supposed to ensure the equal distribution of all the rental income from the whole of the property complex. 24 Finally, the purchasers entered into two ‘real estate savings’ agreements with the Bank, each covering half of the amount borrowed. It was agreed that the loan would be redeemed only with the maturity of the first real estate savings agreement. The loan agreement contained no information regarding the right of cancellation within the meaning of the HWiG. 25 Once all the agreements had been concluded and the securities required by the loan agreement had been provided, the Bank paid the amount of DEM 101 850.00 directly to the company selling the immovable property, in accordance with written instructions from Mr and Mrs Schulte. 26 As Mr and Mrs Schulte failed to meet their monthly repayment obligations under the loan agreement, the Bank terminated the agreement, demanded immediate repayment of the loan and, in the absence of any payment, sought to enforce payment on the basis of the notarised deed of 8 May 1992. 27 In November 2002 Mr and Mrs Schulte cancelled the loan agreement on the basis of Paragraph 1 of the HWiG and instituted proceedings against the enforcement before the Landgericht Bochum. 28 They submitted before that court that in February 1992 they were contacted at home by a representative of Heinen & Biege who presented a tax-saving scheme to them and that subsequently three consultations were held within a short period, also at their home, during which, in addition to the property, they were offered complete financing, which was in the event solely that provided by the Bank. They were specifically informed that, under the chosen financing scheme, the property would be financed by the associated tax advantages and the rental income. Both the loan agreement and the real estate savings agreement were then signed at their home. 29 They consider that the Bank must take responsibility for the doorstep-selling situation, since it has worked closely with the company acting as intermediary for many years, and the entire negotiation phase of the contracts was conducted on behalf of the Bank. 30 Mr and Mrs Schulte also submitted that the purchase contract and the loan agreement must be regarded as a single economic unit and that they are therefore merely required to retransfer ownership of the property pursuant to the fourth sentence of Paragraph 9(2) of the VerbrKrG which applies in any event by analogy. 31 The Bank disputed that the loan agreement was negotiated in a doorstep-selling situation. Even if that were the case, it could not be held liable in law for this situation since the sales representative was an employee of the intermediary sales company whose role in the conclusion of the loan agreement was restricted to filling in the forms and the transmission of information. 32 Moreover, the Bank took the view that it is irrelevant whether or not Mr and Mrs Schulte have a right of cancellation under the HWiG since, even if it is assumed that the cancellation declared pursuant to Paragraph 1 of the HWiG is effective, they are required to repay the amount of the loan paid out, or the net amount of credit and compensation for use of the funds at the contractually agreed rates of interest or at least the normal market rates. In the alternative, the Bank counterclaimed that the plaintiffs should be ordered to repay the loan proceeds paid out in the sum of DEM 101 850.00 with interest at the statutory rate. The questions referred for a preliminary ruling33 The Landgericht Bochum observes that, in national law, the cancellation of a secured credit agreement results in the avoidance of the contract, so that, under Paragraph 3 of the HWiG, each party must return to the other whatever it has received and must pay for the use of what was supplied up to the date of cancellation. It adds that the Bundesgerichtshof has consistently held that a loan is deemed to have been ‘received’ by a borrower even if the amount of the loan has not been paid to that borrower but directly to a third party on his instructions. 34 It follows that, in the event of the cancellation of a secured credit agreement, Paragraph 3(1) and (3) of the HWiG gives the lending Bank a right to repayment of the net amount of credit paid with interest at the market rate. 35 The Landgericht Bochum explains that the dispute in the main proceedings turns essentially on the question whether, once Mr and Mrs Schulte have exercised their right to cancel the secured credit agreement, the Bank can invoke an entitlement to immediate repayment of the loan in full under Paragraph 3(1) of the HWiG, as interpreted by the Bundesgerichtshof. It considers that this consequence is harsh for the consumer and that other interpretations could be envisaged in national law. 36 In particular, the secured credit agreement and the property purchase contract could be regarded as a single economic unit within the meaning of Paragraph 9(2) of the VerbrKrG so that, once the secured credit agreement was cancelled, the borrower would no longer be bound by the property purchase contract and the Bank would be subrogated to the seller’s rights and obligations under the fourth sentence of that provision. Therefore the consumer would no longer have to repay the amount of the loan to the Bank, but only to transfer ownership of the property financed by the loan and pay for the use made of it to date. Another approach, which would not even require recourse to Paragraph 9(2) of the VerbrKrG, would be to recognise the loan agreement and the purchase contract as constituting a single economic unit, in which case, the cancellation of one agreement would entail the avoidance of the other, given that the protective purpose of the cancellation provisions requires that the borrower should not have to bear the burden of repaying the loan. 37 However, the Landgericht Bochum points out that, according to the settled case-law of the Bundesgerichtshof, upheld by the judgment in Heininger, Paragraph 9 of the VerbrKrG does not apply to secured credit agreements by virtue of Paragraph 3(2) of the VerbrKrG. Under that case-law, the secured credit agreement and the purchase of immovable property financed by the loan are not deemed to be linked agreements constituting a single economic unit. Consequently, the cancellation of the secured credit agreement does not affect the validity of the purchase contract for immovable property financed by that credit agreement. 38 The Landgericht Bochum raises the question whether a national provision such as Paragraph 3 of the HWiG, as interpreted by the Bundesgerichtshof, is compatible with Community law, as the legal consequences of that interpretation of the provision do not seem consistent with the protective purpose of the right of cancellation. 39 It observes in that regard that the repayment obligation resulting from that interpretation entails that a consumer who concluded a loan agreement without being notified of his right of cancellation and now exercises that right — which, according to the judgment in Heininger, is temporally unlimited — is in a worse economic position than if the loan agreement subsisted. As its enforcement could result in the bankruptcy of the consumer, the obligation to repay immediately and in full might deter consumers from exercising their right of cancellation under Article 5 of the Directive. 40 Against that background, the Landgericht Bochum decided to stay proceedings and refer the following questions to the Court for a preliminary ruling: ‘1. Does Article 3(2)(a) of [the Directive] also apply to contracts for the purchase of immovable property which must be regarded as merely a component of a credit-financed capital investment scheme and where the contract negotiations conducted up to the conclusion of the contract were held in a doorstep-selling situation, as defined in Paragraph 1 of the [HGWiG], both as regards the contract for the purchase of the immovable property and the loan agreement serving solely to finance that purchase? 2. Are the requirements of a high level of protection in the field of consumer protection (Article 95(3) EC) and the effectiveness of consumer protection safeguarded by [the Directive] satisfied by a national legal system or the interpretation thereof which limits merely to the reversal of the loan agreement the legal effects of the revocation of the declaration of intent to enter into a loan agreement, even in connection with such capital investment schemes in which the loan would not have been granted at all without the acquisition of the immovable property? 3. Does a national rule on the legal effects of cancelling a loan agreement to the effect that the cancelling consumer must pay back the loan proceeds to the financing bank, even though according to the scheme drawn up for the capital investment the loan serves solely to finance the immovable property and is paid directly to the vendor of the immovable property, go far enough to fulfil the protective purpose of the rule on cancellation laid down in Article 5(2) of [the Directive]? 4. Where legal effect of cancellation, under national law, results in the consumer being required, after declaring cancellation, immediately to pay back the loan proceeds which, in accordance with the scheme drawn up for the capital investment, have thus far not been redeemed at all, plus interest thereon at the normal market rate, is this effect contrary to the requirement of a high level of protection in the field of consumer protection (Article 95(3) EC) and to the principle of the effectiveness of consumer protection enshrined in [the Directive]’? The questions Admissibility41 The questions referred are based on the premiss that the credit contract at issue in the main proceedings was concluded in a doorstep-selling situation. 42 The Bank has doubts about the admissibility of the questions referred, as the Langericht Bochum has not, it argues, ruled as to whether the credit agreement was concluded in a doorstep-selling situation. The Bank submits that, until that question is resolved, the questions referred are of a hypothetical nature. 43 As to those submissions, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. However, the Court has held that it has no jurisdiction to give a preliminary ruling on a question submitted by a national court where it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual facts of the main action or its purpose or where the problem is hypothetical (Case C-415/93 Bosman [1995] ECR I-4921, paragraphs 59 and 61). 44 The referring court observes that, if Mr and Mrs Schulte were to be required to repay immediately and in full the amount of the loan with interest, it might not have to tackle the question whether the Bank had validly terminated the loan agreement or whether Mr and Mrs Schulte had validly cancelled their declaration of intention to conclude the loan agreement pursuant to the HWiG. In both cases, Mr and Mrs Schulte were bound to repay the amount of the loan immediately and in full. 45 Accordingly, it is not possible to assert that the questions referred are manifestly hypothetical or bear no relation to the actual facts of the main action or its purpose. Merits Preliminary observations – The investment at issue in the main proceedings46 The investment which Mr and Mrs Schulte made has the following characteristics in particular.47 An intermediary put forward a proposal that the couple purchase an apartment which was offered for sale by a company which had purchased and renovated a large number of apartments in order to resell them. 48 For tax reasons, the purchase of that apartment was to be fully financed by a loan.49 The intermediary’s proposal was that the purchase price and the transaction costs would be financed by a loan from the bank secured by means of a charge, and Mr and Mrs Schulte were to be personally liable for the debt. 50 Mr and Mrs Schulte undertook to join a pool for rental receipts from the apartments in the residential complex which was intended to ensure an even distribution of the rental receipts. 51 The investment in the apartment, financed entirely by the loan, was supposed not to require any expenditure by Mr and Mrs Schulte, as the loan was supposed to be repaid by means of the rental receipts in conjunction with certain tax advantages. 52 It was not disputed before the Court that such investments entail not only the risk of an over valuation of the apartment at the time of purchase, but also the risks that the anticipated rental receipts fail to materialise and that expectations concerning the development of property prices prove mistaken. 53 It appears that, in the case of Mr and Mrs Schulte, those two risks materialised.54 In the case in the main proceedings, following the judgment in Heininger, Mr and Mrs Schulte cancelled the loan agreement pursuant to the HWiG, believing that that would release them from all their obligations towards the Bank. – The scope of the questions referred for a preliminary ruling55 The referring court states that, under the national legislation applicable at the material time, although, on cancellation, a borrower is released from all his obligations arising from the loan agreement, he must repay the loan immediately and in full with interest. That court points out that, under the applicable national legislation, as interpreted by the Bundesgerichtshof, it is irrelevant that the loan was paid directly to the vendor of the apartment by the Bank and it is not possible, in circumstances such as those of this case, to regard the loan agreement and the purchase contract as contracts forming a single economic unit. 56 It is not really in dispute before the Court – and the Bundesgerichtshof has confirmed in its case-law (judgment of 12 November 2002, BGHZ 152, 331) – that, in those circumstances, in German law, there is generally little or no financial advantage to be gained from cancellation of a loan agreement. The consumer would be in the same position as he would have been if it had not been cancelled, or even in a worse position in that he would have to pay what was owed immediately rather than in instalments as provided for by the contract. 57 It is in the light of that finding that the referring court raises the question whether, in providing that cancellation of a loan agreement concluded in a doorstep-selling situation has such legal effects, German law is consistent with Community law. 58 The first two questions referred concern the effect of cancellation on the purchase contract and the last two questions concern the effect of cancellation on the loan agreement. – The applicable Community law59 In the second and fourth questions, the referring court refers to Article 95(3) EC which provides that the Commission, in its proposals envisaged in paragraph 1 of that Article concerning consumer protection, is to take as a base a high level of protection, and that, within their respective powers, the European Parliament and the Council of the European Union are also to seek to achieve that objective. 60 It must be observed, first of all, that that provision, which was inserted in the EC Treaty in 1986 by the Single European Act, was not applicable at the time the Directive was adopted in 1985. 61 Moreover, even if it were applicable, that provision is directed at the various institutions, which each have their role in the legislative process, and cannot, therefore, be relied on directly as a basis for obligations which are binding on a Member State. At the most the provision could be used as an aid to interpretation of the Directive. 62 Accordingly, the relevant rules of Community law for answering the questions referred are those of the Directive.63 First, it must be borne in mind that, according to its Article 8, the Directive is not to prevent Member States from adopting or maintaining more favourable provisions to protect consumers in the field which it covers. 64 Next, according to its Article 1, the Directive applies to any contract concluded between traders and consumers, apart from certain contracts exhaustively listed in Article 3(2) of the Directive, notably contracts for the sale of immovable property. 65 Finally, the protection conferred on a consumer who has concluded a contract in a doorstep-selling situation consists, specifically, under Article 5(1) of the Directive, in the option the consumer has to cancel the contract within seven days of being informed by the trader of his right to cancel, the trader being bound by an obligation to provide that information under the first paragraph of Article 4 of the Directive. 66 That is what the Court observed in paragraph 38 of its judgment in Heininger, pointing out, first, that the Directive is designed to protect consumers against the risks arising from the conclusion of contracts away from the trader’s premises and, second, that the protection of the consumer is assured by the introduction of a right of cancellation. 67 As regards the effects of cancellation, Article 5(2) of the Directive provides that the cancellation is to release the consumer from any obligations under the cancelled contract and Article 7 of the Directive provides that the legal effects of such cancellation are to be governed by national laws. 68 In paragraph 35 of the judgment in Heininger the Court referred to the latter of those provisions, adding that although a credit agreement falls within the scope of the doorstep-selling directive, the effects of a cancellation of that agreement in accordance with the directive on the contract for the purchase of the immovable property and on the provision of security in the form of a charge on it fall to be governed by national law. 69 Although it is thus for the Member States to legislate as regards the legal effects of cancellation, that power must be exercised in accordance with Community law and, in particular, the rules of the Directive interpreted in the light of its objective and in such a way as to ensure that it is fully effective. In fulfilling their obligations under a Directive the Member States are to take all the measures necessary to ensure that the directive is fully effective, in accordance with the objective it pursues (Case C-336/97 Commission v Italy [1999] ECR I-3771, paragraph 19, and Case C-324/01 Commission v Belgium [2002] ECR I-11197, paragraph 18). 70 It must be added that the Court has held that a directive cannot of itself impose obligations on an individual and cannot therefore be relied upon as such against an individual (Case C‑91/92 Faccini Dori [1994] ECR I-3325, paragraph 20, and Joined Cases C‑397/01 to C‑403/01 Pfeiffer and Others [2004] ECR I-8835, paragraph 108). 71 However, when hearing a case between individuals, the national court is required, when applying the provisions of domestic law adopted for the purpose of transposing obligations laid down by a directive, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive (see Pfeiffer and Others, cited above, paragraph 120). The first and second questions, concerning the effect of cancellation of the loan agreement on the purchase contract 72 By its first question, the referring court seeks an interpretation of Article 3(2) of the Directive, which excludes from the scope of the Directive, inter alia, contracts for the sale of immovable property. It asks whether that exclusion also covers contracts for the purchase of immovable property which must be regarded as merely a component of an investment scheme financed by a loan for which the negotiations prior to the conclusion of the contract were held in a doorstep-selling situation, both as regards the contract for the purchase of the immovable property and the loan agreement serving solely to finance that purchase. 73 By its second question, the referring court asks essentially whether the Directive precludes national rules which limit the effect of cancellation of the loan agreement to the avoidance of that agreement, even in the case of investment schemes in which the loan would not have been granted at all without the acquisition of the immovable property. 74 According to the order for reference, that court referred those two questions on the basis of its view that in circumstances such as those of the main proceedings, the two contracts could constitute contracts forming a single economic unit, so that the cancellation of the loan agreement could affect the validity of the purchase contract and, as a result of his cancellation of the first contract, the borrower could no longer be bound by the second. 75 In that connection, it must first be found that the Directive expressly and unequivocally excludes contracts for the sale of immovable property from its scope. 76 While other Community directives intended to protect the interests of consumers, inter alia Directive 87/102, contain rules concerning connected contracts, the Directive contains no rule of that type and provides no basis for an assumption that such rules are implied. 77 In some of the observations submitted to the Court, inter alia those of the French Government, it is stated that it follows from the judgment in Case C-423/97 Travel Vac [1999] ECR I-2195 that the Directive applies to a doorstep-selling situation which results in the conclusion of a contract for sale of immovable property, which is an integral part of a larger group of contracts also including a loan agreement secured by a charge, a real estate savings agreement and a contract for the administration of the property, where those contracts must be construed as a contract for the provision of services whose value is higher than that of the immovable property. 78 That view cannot be upheld. The timeshare contract at issue in Travel Vac, which was held not to fall within the exclusion provided for by Article 3(2) of the Directive, is not comparable to the contracts at issue in the main proceedings, if only because that judgment concerned a single contract for property rights and services in which the latter were predominant, whereas, in the case in the main proceedings, there were two legally separate transactions with different purposes. 79 Moreover, the Court has already pointed out, in paragraph 35 of its judgment in Heininger, that the effects of a cancellation of a secured credit agreement in accordance with the directive on the contract for the purchase of the immovable property and on the provision of security in the form of a charge on it fall to be governed by national law. 80 Accordingly, while the Directive does not preclude national law from providing, where the two contracts form a single economic unit, that the cancellation of the secured credit agreement has an effect on the validity of the contract for sale of the immovable property, it does not require such an effect in a case such as that described by the referring court. 81 The answer to the first two questions should therefore be that:– Article 3(2)(a) of the Directive must be interpreted as excluding from the scope of the Directive contracts for the sale of immovable property even where they are merely a component of an investment scheme financed by a loan for which the negotiations prior to the conclusion of the contract were held in a doorstep-selling situation, both as regards the contract for the purchase of the immovable property and the loan agreement serving solely to finance that purchase; – the Directive does not preclude national rules which limit the effect of cancellation of the loan contract to the avoidance of that agreement, even in the case of investment schemes in which the loan would not have been granted at all without the acquisition of the immovable property. The third and fourth questions, on the effect of cancellation on the loan contract 82 First, the referring court asks whether the Directive, and Article 5(2) thereof in particular, precludes a national rule to the effect that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof. 83 In the view of Mr and Mrs Schulte and the Italian Government, such an obligation is not consistent with the protective purpose of Article 5(2) of the Directive. Mr and Mrs Schulte submit that, in the case of a transaction forming a single economic unit which was artificially split into a purchase transaction and a financing transaction, the right of cancellation conferred by the Directive is ineffective if the cancellation of the transaction is restricted to only one of the transactions, that is to say the loan agreement. In their view, because of the overall nature of the transaction, the consumer never received the money loaned himself nor did he have any influence over the payment of the money. In such a case, it would be contrary to the principle of effectiveness if the consumer had to repay to the Bank the amount of a loan of which he had never received payment himself. 84 In that regard, suffice it to observe, as the Bank, the German Government and the Commission did, that the two facts mentioned in this question – that is that the loan was solely for the purpose of purchasing immovable property and was paid directly to the seller – reflect a widely followed practice. 85 Moreover, contrary to the contentions of Mr and Mrs Schulte, the amount borrowed cannot be considered not to have been received by the borrower when it was paid directly by the lending Bank to the seller of the immovable property, where, as in the case in the main proceedings, the Bank acted on the instructions of the consumers, who, in consideration of the payment of the amount borrowed, were able to acquire title to immovable property. 86 Accordingly, even if the loan serves solely to finance the purchase of immovable property and is paid directly to the seller, the Directive does not preclude a requirement that the consumer repay the amount of the loan. 87 Second, the referring court asks whether, in a situation such as that in the main proceedings, the Directive precludes a requirement that the amount of the loan be repaid immediately. 88 In that regard, it must be borne in mind that, as the Bank, the German Government and the Commission pointed out, under Article 5(2) of the Directive, the giving of notice of cancellation has the effect of releasing the consumer from any obligations under the cancelled contract. Such cancellation of the obligations of the consumer entails, for the consumer and for the lender, the restoration of the status quo ante. 89 Accordingly, the Directive does not preclude an obligation on the consumer to repay to the lender immediately the amount he borrowed, in the event of cancellation of a secured credit agreement. 90 Third, the referring court seeks to know whether, in a situation such as that in the main proceedings, the Directive precludes national legislation which provides for an obligation on the consumer, in the event of cancellation of the contract, not only to repay the amounts received under the contract but also to pay to the lender interest at the market rate. 91 In the view of Mr and Mrs Schulte, such legislation is contrary to the principle of effective consumer protection laid down by the Directive. In the view of the Bank and the German Government, even when account is taken of the effectiveness of the consumer protection which it guarantees, the Directive contains no requirement which would preclude such national legislation. 92 In that regard, it must be observed that the exercise of the right of cancellation provided for by Article 5(1) of the Directive, in the case of a loan agreement, has the effect under Article 5(2) of releasing the consumer from any obligations under the cancelled agreement, which implies the restoration of the status quo ante. 93 Accordingly, the Directive does not preclude national legislation which provides for an obligation on the consumer, in the event of cancellation of a secured credit agreement, not only to repay the amounts received under the contract but also to pay to the lender interest at the market rate. The requirements under the Directive in the event of failure to comply with the obligation to inform the consumer of his right of cancellation 94 Although the Directive does not generally preclude the application of national rules under which a consumer who cancels a credit agreement must immediately repay the loan in full with interest at the market rate in circumstances in which the trader has complied with the obligation to inform the consumer incumbent on him under Article 4 of the Directive, the same is not necessarily true where the trader has not complied with that obligation. 95 In that connection, it must be observed that under the third paragraph of Article 4 of the Directive, Member States are to ensure that their national legislation lays down appropriate consumer protection measures in cases where the information referred to in this article is not supplied 96 It must be observed that, if the referring court takes the view that the cancellation was valid, the fact that the Bank did not inform Mr and Mrs Schulte of their right of cancellation and that they cancelled the credit agreement after several years is relevant for the assessment of the dispute in the main proceedings. 97 If the Bank had informed Mr and Mrs Schulte of their right of cancellation under the HWiG at the correct time, they would have had seven days to change their minds about concluding the loan agreement. If they had chosen then to cancel it, it is common ground that, given the link between the loan agreement and the purchase contract, the latter would not have been concluded. 98 In a situation where the Bank has not complied with the obligation to inform the consumer incumbent on it under Article 4 of the Directive, if the consumer must repay the loan under German law as construed in the case-law of the Bundesgerichtshof, he bears the risks entailed by financial investments such as those at issue in the main proceedings, as described in paragraph 52 of this judgment. 99 However, in a situation such as that in the main proceedings, the consumer could have avoided exposure to those risks if he had been informed in time of his right of cancellation. 100 In those circumstances, the Directive requires Member States to adopt appropriate measures so that the consumer does not have to bear the consequences of the materialisation of those risks. The Member States must therefore ensure that, in those circumstances, a bank which has not complied with its obligation to inform the consumer bears the consequences of the materialisation of those risks so that the obligation to protect consumers is safeguarded. 101 Accordingly, in a situation where, if the Bank had informed the consumer of his right of cancellation, the consumer would have been able to avoid exposure to the risks inherent in investments such as those at issue in the main proceedings, Article 4 requires Member States to ensure that their legislation protects consumers who have been unable to avoid exposure to such risks, by adopting suitable measures to allow them to avoid bearing the consequences of the materialisation of those risks. 102 As observed in paragraph 71 of this judgment, the national courts are required to interpret national legislation, so far as possible, in order to achieve the outcome described in paragraph 101 of this judgment. 103 In the light of the foregoing, the answer to the third and fourth questions must be that the Directive does not preclude:– a requirement that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof; – a requirement that the amount of the loan must be paid back immediately;– national legislation which provides for an obligation on the consumer, in the event of cancellation of a secured credit agreement, not only to repay the amounts received under the agreement but also to pay to the lender interest at the market rate. However, in a situation where, if the Bank had complied with it obligation to inform the consumer of his right of cancellation, the consumer would have been able to avoid exposure to the risks inherent in investments such as those at issue in the main proceedings, Article 4 of the Directive requires Member States to ensure that their legislation protects consumers who have been unable to avoid exposure to such risks, by adopting suitable measures to allow them to avoid bearing the consequences of the materialisation of those risks. Costs104 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) hereby rules:1. Article 3(2)(a) of Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises must be interpreted as excluding from the scope of the Directive contracts for the sale of immovable property even where they are merely a component of an investment scheme financed by a loan for which the negotiations prior to the conclusion of the contract were held in a doorstep-selling situation, both as regards the contract for the purchase of the immovable property and the loan agreement serving solely to finance that purchase.2. Directive 85/577 does not preclude national rules which limit the effect of cancellation of the loan agreement to the avoidance of that agreement, even in the case of investment schemes in which the loan would not have been granted at all without the acquisition of the immovable property.3. Directive 85/577 does not preclude:– a requirement that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof;However, in a situation where, if the Bank had complied with it obligation to inform the consumer of his right of cancellation, the consumer would have been able to avoid exposure to the risks inherent in investments such as those at issue in the main proceedings, Article 4 of Directive 85/577 requires Member States to ensure that their legislation protects consumers who have been unable to avoid exposure to such risks, by adopting suitable measures to allow them to avoid bearing the consequences of the materialisation of those risks. [Signatures]* Language of the case: German. | 1acf8-71ed49e-4dd3 | EN |
ELEMENTS OF A TRADE MARK EACH OF WHICH IS DEVOID OF ANY DISTINCTIVE CHARACTER MAY, WHEN COMBINED, HAVE SUCH DISTINCTIVE CHARACTER | SAT.1 SatellitenFernsehen GmbHvOffice for Harmonisation in the Internal Market (Trade marks and Designs) (OHIM)(Appeals – Community trade mark – Absolute grounds for refusal to register – Article 7(1)(b) and (c) of Regulation (EC) No 40/94 – ‘Sat.2’)Summary of the Judgment1. Community trade mark – Definition and acquisition of the Community trade mark – Absolute grounds for refusal – Separate examination of the different grounds for refusal – Interpretation of the grounds for refusal in the light of the general interest underlying each of them (Council Regulation No 40/94, Art. 7(1))2. Community trade mark – Definition and acquisition of the Community trade mark – Absolute grounds for refusal – Lack of distinctive character of the sign – Public interest underlying Article 7(1)(b) of Regulation No 40/94 – Scope(Council Regulation No 40/94, Art. 7(1)(b))3. Community trade mark – Definition and acquisition of the Community trade mark – Absolute grounds for refusal – Lack of distinctive character of the sign – Word mark consisting of several features – Taking into account of the overall perception of the combination by the relevant public4. Community trade mark – Definition and acquisition of the Community trade mark – Absolute grounds for refusal – Lack of distinctive character of the sign – Insufficiency of the finding of the absence of a specific level of linguistic or artistic creativity or imaginativeness to deny the distinctiveness of the sign – Trade mark not being descriptive of the goods and services covered – Obligation for the Office to set out the reasons for the lack of distinctive character (Council Regulation No 40/94, Art. 7(1)(b) and (c))5. Community trade mark – Definition and acquisition of the Community trade mark – Absolute grounds for refusal – Trade marks devoid of any distinctive character – ‘Sat.2’1. Each of the grounds for refusal to register listed in Article 7(1) of Regulation No 40/94 on the Community trade mark is independent of the others and requires separate examination. Moreover, it is appropriate to interpret those grounds for refusal in the light of the general interest which underlies each of them. The general interest to be taken into consideration when examining each of those grounds for refusal may or even must reflect different considerations according to the ground for refusal in question. (see para. 25)2. The public interest underlying Article 7(1)(b) of Regulation No 40/94 on the Community trade mark, concerning the ground for refusal based on the lack of distinctive character of a mark, is aimed at the need not to restrict unduly the availability of that trade mark for the other operators who offer for sale goods or services of the same type as those in respect of which registration is sought. Furthermore, in view of the extent of the protection afforded to a trade mark by the regulation, the public interest underlying that provision is, manifestly, indissociable from the essential function of a trade mark, which is to guarantee the identity of the origin of the marked product to the consumer or end-user by enabling him, without any possibility of confusion, to distinguish the product or service from others which have another origin. By contrast, a criterion which is not the yardstick against which Article 7(1)(b) should be judged is the criterion according to which trade marks which are capable of being commonly used, in trade, for the presentation of the goods or services in question may not be registered, which is a criterion that is relevant in the context of Article 7(1)(c). Furthermore, taking the view that the provision of Article 7(1)(b) pursues an aim which is in the public interest, which requires that the signs they refer to may be freely used by all, involved deviating from taking into account the public-interest criterion referred to above. (see paras 23, 26-27, 36)3. When assessing the distinctive character of a trade mark within the meaning of Article 7(1)(b) of Regulation No 40/94 on the Community trade mark, and where a trade mark comprising words or a word and a digit is involved, the distinctiveness of each of those terms or elements may be assessed, in part, in relation to each of those words or figures taken separately but must, in any event, depend on an appraisal of the whole which they comprise. Indeed, the mere fact that each of those elements, considered separately, is devoid of distinctive character does not mean that their combination cannot present a distinctive character. It would be wrong to interpret that provision by assessing the distinctive character of a phrase composed of several elements essentially by means of a separate analysis of each of its elements, and by taking as a basis, for that purpose, the presumption that elements individually devoid of distinctive character cannot, on being combined, present such a character rather than the overall perception of that term by the average consumer, and by examining the impression as a whole produced by the term only secondarily, refusing to give any relevance to aspects such as the existence of an element of imaginativeness, which ought to be taken into account in such an analysis. (see paras 28-29, 35)4. Registration of a sign as a Community trade mark is not subject to a finding of a specific level of linguistic or artistic creativity or imaginativeness on the part of the proprietor of the trade mark. It suffices that the trade mark should enable the relevant public to identify the origin of the goods or services protected thereby and to distinguish them from those of other undertakings. Where a trade mark which does not fall foul of the ground of refusal laid down in Article 7(1)(c) of Regulation No 40/94 is none the less devoid of distinctive character within the meaning of Article 7(1)(b) thereof, the Office for Harmonisation in the Internal Market (Trade marks and Designs) must also set out the reasons why it considers that that trade mark is devoid of distinctive character. In that regard, the frequent use of trade marks consisting of a word and a number in a given sector indicates that that type of combination cannot be considered to be devoid, in principle, of distinctive character. (see paras 41-42, 44)5. Although the way in which the term ‘SAT.2’, for which registration as a Community trade mark is applied for, for the following services in Classes 38 and 41 of the Nice Agreement - Class 38: ‘Wireless or hard-wire networked broadcast of radio and television transmissions/programmes; broadcasting of film, television, radio, video text and teletext programmes or transmissions; arranging and allocating of user passwords for users of various communication networks; telecommunications; gathering, delivering and transmitting messages, press reports (including using electronic means and/or by computer); transmission of sound and images by means of satellites; broadcasting Pay TV including video on demand, including for others on a digital platform; services relating to telecommunications; providing information to others; dissemination of information via wireless or cable networks; on-line services and transmissions, namely transfer of information and messages including E-mail; operation of networks for the transfer of messages, images, text, speech and data; broadcasting of teleshopping programmes’; - Class 41: ‘Production, reproduction, showing and rental of films, videos and other television programmes; organisation and conducting of shows, quizzes and musical events and conducting competitions in the entertainment and sporting field, including for recordings or being live broadcasts on radio or television; production of television and radio advertising broadcasts including associated prize game broadcasts; production of film, television, radio, teletext and videotext programmes or transmissions, radio and television entertainment; recording, transmission, storing, processing and reproduction of sound and images; organising radio and television broadcasts/programmes; production of teleshopping programmes’; is made up is not unusual, in particular as regards the perception which the average consumer may have of services falling within the communications industry, and the juxtaposition of a verbal element such as ‘SAT’ with a digit such as ‘2’, separated by a ‘.’ does not reflect a particularly high degree of inventiveness, those facts are not sufficient to establish that such a word is devoid of distinctive character within the meaning of Article 7(1)(b) of Regulation No 40/94. (see para. 40)JUDGMENT OF THE COURT (Second Chamber)16 September 2004(1) appellant,defendant at first instance,THE COURT (Second Chamber),,after hearing the Opinion of the Advocate General at the sitting on 11 March 2004,gives the followingThe legal frameworksigns which do not conform to the requirements of Article 4; trade marks which are devoid of any distinctive character; trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service; …indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of the goods or of rendering of the service, or other characteristics of the goods or service; Sets aside the judgment of the Court of First Instance of the European Communities of 2 July 2002 in Case T-323/00 SAT.1 v OHIM (SAT.2) [2002] ECR II-2839 inasmuch as the Court of First Instance found that the Second Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) had not infringed Article 7(1)(b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark by refusing, by its decision of 2 August 2000 (Case R 312/1999-2), to register as a Community trade mark the term ‘SAT.2’ in respect of services which, in the registration application, are connected with satellite broadcasting, that is to say the services referred to in paragraph 3 of the contested judgment to which the Court of First Instance does not refer in paragraph 42 of the contested judgment; Annuls the decision of 2 August 2000 of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs); Orders the Office for Harmonisation in the Internal Market (Trade Marks and Designs) to pay the costs incurred in these proceedings and in those before the Court of First Instance. 1 – Language of the case: German. Language of the case: German. | 7108f-a791a85-45ba | EN |
THE COURT STATES WHICH ROUNDING RULES APPLY TO MONETARY AMOUNTS AND TARIFFS FOR GOODS AND SERVICES IN CONNECTION WITH THE INTRODUCTION OF THE EURO | Verbraucher-Zentrale Hamburg eVvO2 (Germany) GmbH & Co. OHG(Reference for a preliminary ruling from the Landgericht München I)(Economic and monetary policy – Regulation (EC) No 1103/97 – Introduction of the euro – Conversion of national currency units to the euro unit – Rounding of monetary amounts to be paid or accounted for after conversion – Contract concluded in the telecommunications sector – Meaning of ‘monetary amounts to be paid or accounted for’ – Per-minute tariffs for telephone calls)Summary of the JudgmentEconomic and monetary policy – Introduction of the euro – Regulation No 1103/97 – Rule prescribing the rounding of monetary amounts to be paid or accounted for after conversion – Application to a telephone tariff – Excluded – Rounding of the tariff applied by a national operator – Whether permissible – Conditions(Council Regulation No 1103/97, Art. 5)Regulation No 1103/97 on certain provisions relating to the introduction of the euro, first, was intended to ensure compliance with the principle of continuity of contract, so that the transition to the euro took place without affecting obligations already entered into by citizens and firms, and, secondly, shares the objective that the transition to the euro should be neutral. It sets only minimum rules in relation to the rounding of certain amounts and leaves it to national authorities to maintain or adopt rules which are more conducive to achieving that objective. It follows that the first sentence of Article 5 of that regulation, prescribing the rounding up or down to the nearest cent of monetary amounts to be paid or accounted for must not be broadly interpreted. It therefore does not cover a tariff fixed by a national operator such as the per-minute price (of a telephone call, consisting of an amount which is not actually invoiced to, or paid by, the consumer and it is not entered as such in any accounting document or statement of account. In that respect, the fact that the tariff relates to a particular multiple of the unit on the basis of which the final amount of the invoice is calculated or that for the consumer the tariff represents the decisive factor as regards the price of the goods or services does not affect that finding. Nevertheless, the same regulation does not preclude the rounding to the nearest cent of amounts (such as that tariff), provided that that rounding practice is consistent with the principle of continuity of contract and with the objective that the transition to the euro should be neutral; in other words, provided that the practice does not affect contractual obligations entered into by economic agents, including consumers, and that it does not have a real impact on the price actually to be paid. (see paras 31-32, 34, 36, 40-43, 57, operative part 1-2)JUDGMENT OF THE COURT (Grand Chamber)14 September 2004(1) THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 25 March 2004,gives the followingCommunity legislationIs the first sentence of Article 5 of Regulation No 1103/97 to be understood as meaning that, in a private-law contractual relationship, only the final amount of the invoice, or an individual amount detailed on the invoice, may or must be rounded, or does a contractually agreed unit price/tariff (in this case a per-minute price) constitute a monetary amount to be paid or accounted for within the meaning of that provision? In determining whether a tariff is a monetary amount to be paid or accounted for within the meaning of Article 5 of Regulation No 1103/97, is it decisive whether the tariff relates to a particular multiple (in this case six) of a unit on the basis of which the final amount of the invoice is ascertained (in this case a 10-second unit), or whether it is the tariff as perceived by consumers that is the decisive factor for the purposes of the invoice? Is Regulation No 1103/97 (and in particular Article 5) to be understood as constituting an exhaustive rule whereby sums other than monetary amounts to be paid or accounted for (if any) may not be rounded in the manner described in Article 5, in other words, must they either continue to be displayed in the former national currency, or be quoted in the exact amount produced on conversion?’ A tariff, such as the per-minute price at issue in the main proceedings, does not constitute a monetary amount to be paid or accounted for within the meaning of the first sentence of Article 5 of Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro and thus is not to be rounded in every case to the nearest cent. The fact that the tariff relates to a particular multiple of the unit on the basis of which the final amount of the invoice is calculated or that for the consumer the tariff represents the decisive factor as regards the price of the goods or services does not affect that finding; Regulation No 1103/97 must be interpreted as not precluding the rounding to the nearest cent of amounts other than those which are to be paid or accounted for, provided that that rounding practice is consistent with the principle of continuity of contracts safeguarded by Article 3 of the regulation and with the objective pursued by the regulation that the transition to the euro should be neutral; in other words, provided that the rounding practice does not affect contractual obligations entered into by economic agents, including consumers, and that it does not have a real impact on the price actually to be paid. 1 – Language of the case: German. Language of the case: German. | 736cc-403d573-4c19 | EN |
THE COURT OF JUSTICE DOES NOT DECLARE UNLAWFUL THE BONUS-MALUS SYSTEMS ESTABLISHED IN FRANCE AND LUXEMBOURG FOR MOTOR-VEHICLE INSURANCE CONTRACTS | Commission of the European CommunitiesvGrand Duchy of Luxembourg(Insurance – Third non-life insurance directive – Bonus-malus system)Summary of the JudgmentFreedom of movement for persons – Freedom of establishment – Freedom to provide services – Direct insurance other than life assurance – Directive 92/49 – Freedom to set rates – Bonus-malus system not resulting in the direct setting of premium rates by the State – Permissible(Council Directive 92/49)A bonus-malus system applicable to motor insurance contracts which, while having effects on changes in the amount of premiums, does not, however, result in the direct setting of premium rates by the State since insurance undertakings remain free to set the amount of the basic premium cannot be equated with a system of approving premium rates that is contrary to the principle of freedom to set rates laid down by Directive 92/49 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239 and 88/357. Full harmonisation in the field of non-life insurance rates precluding any national measure liable to have effects on rates cannot be presumed in the absence of a clearly expressed intention to this effect on the part of the Community legislature. (see paras 23-24)JUDGMENT OF THE COURT (Grand Chamber)7 September 2004(1)applicant,defendant,THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 30 March 2004,gives the followingLegal contextto frustrate application to the contract of the bonus/malus scale as set out in Articles 7 and 8 below.’ Dismisses the action;Orders the Commission of the European Communities to pay the costs. 1 – Language of the case: French. Language of the case: French. | ce4c1-ab59262-498f | EN |
IN THIS JUDGMENT THE COURT OF JUSTICE CLARIFIES THE POWERS OF THE COMMISSION AND THE COUNCIL RELATING TO THE EXCESSIVE DEFICIT PROCEDURE | Commission of the European CommunitiesvCouncil of the European Union(Action for annulment – Article 104 EC – Regulation (EC) No 1467/97 – Stability and Growth Pact – Excessive government deficits – Council decisions under Article 104(8) and (9) EC – Required majority not achieved – Decisions not adopted – Action challenging ‘decisions not to adopt the formal instruments contained in the Commission’s recommendations’ – Inadmissible – Action challenging ‘Council conclusions’)Summary of the Judgment1. Actions for annulment – Actionable measures – Failure of the Council to adopt a decision following a recommendation from the Commission – Required majority not achieved – Inadmissible(Arts 104(8) and (9) EC and 230 EC)2. Actions for annulment – Actionable measures – Measures having binding legal effects – Council conclusions holding excessive deficit procedures in abeyance and modifying the Commission’s recommendations – Admissible(Arts 104(7) and (9) EC and 230 EC)3. Economic and monetary policy – Excessive deficit procedure – Council’s discretion – Limits(Art. 104 EC; Council Regulation No 1467/97)4. Economic and monetary policy – Excessive deficit procedure – Council decision holding the procedure in abeyance – Effects – Restriction of the Council’s powers conferred by Article 104(9) EC – Unlawful(Art. 104(7) and (9) EC; Council Regulation No 1467/97, Art. 9)5. Economic and monetary policy – Excessive deficit procedure – Commission’s right of initiative – Modification of recommendations previously adopted by the Council – Conditions – Fresh recommendation from the Commission – Compliance with the voting rules required by Article 104(7) EC(Art. 104(7), (9) and (13) EC)1. Failure by the Council to adopt acts provided for in Article 104(8) and (9) EC that are recommended by the Commission cannot be regarded as giving rise to acts open to challenge for the purposes of Article 230 EC. Where the Commission recommends to the Council that it adopt decisions under Article 104(8) and (9) EC and the required majority is not achieved within the Council, no decision is taken for the purposes of that provision. (see paras 29, 31, 34)2. The Council’s conclusions – under which it agreed to hold the excessive deficit procedure in abeyance for the time being and declared itself ready to take a decision under Article 104(9) EC if it were to appear that the Member State concerned was not complying with the commitments which it had entered into, set out in the conclusions – are designed to have legal effects, at the very least inasmuch as they hold the ongoing excessive deficit procedure in abeyance and in reality modify the recommendations previously adopted by the Council under Article 104(7) EC. The Council thus renders any decision to be taken under Article 104(9) EC conditional on an assessment which will no longer have the content of the recommendations adopted under Article 104(7) EC as its frame of reference, but the unilateral commitments of the Member State concerned. (see paras 46, 48, 50)3. It follows from the wording and broad logic of the system, established by the Treaty, governing the excessive deficit procedure that the Council cannot break free from the rules laid down by Article 104 EC and those which it set for itself in Regulation No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure. Thus, it cannot have recourse to an alternative procedure, for example in order to adopt a measure which would not be the very decision envisaged at a given stage of the excessive deficit procedure or which would be adopted in conditions different from those required by the applicable provisions. (see para. 81)4. By its conclusions, which state that it ‘agrees to hold the Excessive Deficit Procedure for [the Member State concerned] in abeyance ...’ and ‘stands ready to take a decision under Article 104(9) EC, on the basis of the Commission Recommendation, should [that Member State] fail to act in accordance with the commitments set out in these conclusions …’, the Council does not simply record that the excessive deficit procedure is de facto held in abeyance because it has not been possible to adopt a decision recommended by the Commission, an inability which could be remedied at any time. Such a decision to hold the procedure in abeyance infringes Article 104 EC and Article 9 of Regulation No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure. In so far as those conclusions make holding the procedure in abeyance conditional upon compliance by the Member State concerned with its commitments, they restrict the Council’s power to give notice under Article 104(9) EC on the basis of the Commission’s earlier recommendation, so long as the commitments are considered to be complied with. In so doing, the conclusions provide, in addition, that the Council’s assessment for the purposes of a decision to give notice, that is to say for the purposes of pursuing the excessive deficit procedure, will no longer have as its frame of reference the content of the recommendations already made under Article 104(7) EC to the Member State concerned, but unilateral commitments of that Member State. (see paras 87-89)5. Where the Council has adopted recommendations under Article 104(7) EC, it cannot subsequently modify them without a fresh recommendation from the Commission since the latter has a right of initiative in the excessive deficit procedure. In accordance with Article 104(13) EC, recommendations under Article 104(7) EC may be adopted only on a recommendation from the Commission. A decision to adopt Council recommendations different from those adopted previously under Article 104(7) EC is unlawful where it is taken, first, without the recommendations having been preceded by Commission recommendations seeking the adoption of Council recommendations on the basis of that provision and, second, in accordance with the voting rules prescribed for Council decisions under Article 104(9) EC, that is to say with only Member States in the euro area taking part in the vote. (see paras 91-92, 94-96)JUDGMENT OF THE COURT (Full Court)13 July 2004(1)applicant,defendant,THE COURT (Full Court),,after hearing the Advocate General,gives the followingdecisions not to adopt, in respect of the French Republic and the Federal Republic of Germany, the formal instruments contained in Commission recommendations pursuant to Article 104(8) and (9) EC, and conclusions adopted in respect of each of those two Member States, entitled ‘Council conclusions on assessing the actions taken by [the French Republic and the Federal Republic of Germany respectively] in response to recommendations of the Council according to Article 104(7) of the Treaty establishing the European Community and considering further measures for deficit reduction in order to remedy the situation of excessive deficit’ (‘the Council’s conclusions’), in so far as those conclusions involve holding the excessive deficit procedure in abeyance, recourse to an instrument not envisaged by the Treaty and modification of the recommendations decided on by the Council under Article 104(7) EC. Legal contextto require the Member State concerned to publish additional information, to be specified by the Council, before issuing bonds and securities, to invite the European Investment Bank to reconsider its lending policy towards the Member State concerned,to require the Member State concerned to make a non-interest-bearing deposit of an appropriate size with the Community until the excessive deficit has, in the view of the Council, been corrected, to impose fines of an appropriate size.is committed to a rigorous and timely implementation of all elements of the Stability and Growth Pact in its competence; it will take the necessary decisions under Article [99] and Article [104] as is practicable; …is invited always to impose sanctions if a participating Member State fails to take the necessary steps to bring the excessive deficit situation to an end as recommended by the Council; is invited always to state in writing the reasons which justify a decision not to act if at any stage of the excessive deficit or surveillance of budgetary positions procedures the Council did not act on a Commission recommendation and, in such a case, to make public the votes cast by each Member State.’ if the Member State concerned acts in compliance with recommendations made in accordance with Article [104(7)],if the participating Member State concerned acts in compliance with notices given in accordance with Article [104(9)].In the light of the recommendations and the commitments by [the Member State concerned] set out above, the Council decided not to act, at this point in time, on the basis of the Commission Recommendation for a Council decision under Article 104(9). The Council agrees to hold the Excessive Deficit Procedure for [the Member State concerned] in abeyance for the time being. The Council stands ready to take a decision under Article 104(9), on the basis of the Commission Recommendation, should [the Member State concerned] fail to act in accordance with the commitments set out in these conclusions as it would emerge from the assessment based on paragraph 7 below.’ annul, first, the decisions of the Council not to adopt the formal instruments contained in the Commission’s recommendations pursuant to Article 104(8) and (9) EC and, second, the Council’s conclusions in so far as they involve holding the excessive deficit procedure in abeyance, recourse to an instrument not envisaged by the Treaty and modification of the recommendations decided on by the Council under Article 104(7) EC; order the Council to pay the costs. declare the action inadmissible;in the alternative, dismiss it;order the Commission to pay the costs. making clear that the excessive deficit procedures had not been brought to a close, but were simply held in abeyance following the failure to adopt the decisions recommended by the Commission; noting the measures which the French Republic and the Federal Republic of Germany undertook to take and the objectives which they undertook to attain; reaffirming the preparedness of the Council to act, in the future, under Article 104(9) EC should the Member States concerned not comply with their commitments; making clear the Council’s attachment to the principles and rules of the Stability and Growth Pact.On those grounds,THE COURTDeclares the action of the Commission of the European Communities inadmissible in so far as it seeks annulment of the failure of the Council of the European Union to adopt the formal instruments contained in the Commission’s recommendations pursuant to Article 104(8) and (9) EC; Annuls the Council’s conclusions of 25 November 2003 adopted in respect of the French Republic and the Federal Republic of Germany respectively, in so far as they contain a decision to hold the excessive deficit procedure in abeyance and a decision modifying the recommendations previously adopted by the Council under Article 104(7) EC; Orders the parties to bear their own costs.SkourisJannTimmermansRosasGulmannPuissochetCunha RodriguesSchintgenMackenColnericvon BahrSilva de LapuertaLenaertsR. GrassV. SkourisRegistrarPresident 1 – Language of the case: French. Language of the case: French. | 16586-bca7e0a-492d | EN |
THE FRENCH BAN ON INDIRECT TELEVISION ADVERTISING FOR ALCOHOLIC BEVERAGES IS COMPATIBLE WITH COMMUNITY LAW | Commission of the European CommunitiesvFrench Republic(Failure of a Member State to fulfil obligations – Article 59 of the EC Treaty (now, after amendment, Article 49 EC) – Television broadcasting – Advertising – National measure prohibiting television advertising for alcoholic beverages marketed in that State, in the case of indirect television advertising resulting from the appearance on screen of hoardings visible during the retransmission of certain sporting events – ‘Loi Evin’) Summary of the JudgmentFreedom to provide services – Restrictions – Prohibition on the advertising of alcoholic beverages during the television broadcast of sporting events – Justified on the grounds of public health(EC Treaty, Arts 56(1) and 59 (now, after amendment, Arts 46(1) EC and 49 EC))By making television broadcasting in a Member State by French television channels of sporting events taking place in other Member States conditional on the prior removal of advertising for alcoholic beverages, the Member State concerned has not failed to fulfil its obligations under Article 59 of the EC Treaty (now, after amendment, Article 49 EC). It is true that such rules on television advertising constitute a restriction on freedom to provide services within the meaning of Article 59 of the Treaty. They entail a restriction on freedom to provide advertising services in so far as the owners of the advertising hoardings must refuse, as a preventive measure, any advertising for alcoholic beverages if the sporting event is likely to be retransmitted in the Member State concerned. They also impede the provision of broadcasting services for television programmes, since broadcasters in that Member State must refuse all retransmission of sporting events in which hoardings bearing advertising for alcoholic beverages marketed in that State may be visible, and the organisers of sporting events taking place abroad cannot sell the retransmission rights to those broadcasters if the transmission of the television programmes of such events is likely to contain indirect television advertising for those alcoholic beverages. However, such rules on television advertising pursue an objective relating to the protection of public health within the meaning of Article 56(1) of the Treaty (now, after amendment, Article 46(1) EC) since the measures restricting the advertising of alcoholic beverages in order to combat alcohol abuse reflect public health concerns. Furthermore, such rules are appropriate to ensure that aim and they do not go beyond what is necessary to achieve such an objective. They limit the situations in which hoardings advertising alcoholic beverages may be seen on television and are therefore likely to restrict the broadcasting of such advertising, thus reducing the occasions on which television viewers might be encouraged to consume alcoholic beverages. (see paras 26, 30-31)JUDGMENT OF THE COURT (Grand Chamber)13 July 2004(1)(Failure by a Member State to fulfil its obligations – Article 59 of the EC Treaty (now, after amendment, Article 49 EC) – Television broadcasting – Advertising – National measure prohibiting television advertising for alcoholic beverages marketed in that State, in the case of indirect television advertising resulting from the appearance on screen of hoardings visible during the retransmission of certain sporting events – ‘Loi Evin’) applicant,intervener,defendant,THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 11 March 2004,gives the followingLegal backgroundOn those grounds,THE COURT (Grand Chamber)Dismisses the action;Orders the Commission of the European Communities to pay the costs;Orders the United Kingdom of Great Britain and Northern Ireland to bear its own costs.SkourisJannRosasGulmannPuissochetCunha RodriguesSchintgenvon BahrSilva de LapuertaR. GrassV. SkourisRegistrarPresident 1 – Language of the case: French. Language of the case: French. | 79788-8fceb3b-4f2c | EN |
THE PRESIDENT OF THE COURT OF FIRST INSTANCE HAS REJECTED THE AZORES' REQUEST FOR INTERIM MEASURES TO SUSPEND THE NEWLY ESTABLISHED FISHERY REGIME FOR THE WATERS AROUND THE AZORES | Judgment of the Court of First Instance (Third Chamber) of 1 July 2008 – Região autónoma dos Açores v Council(Case T-37/04)Action for annulment – Regulation (EC) No 1954/2003 – Fisheries – Management of the fishing effort – Community fishing areas and resources – Action brought by a regional body – Persons individually concerned – Inadmissibility1. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them (Art. 230, fourth para., EC; Council Regulation No 1954/2003) (see paras 33-38)2. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them (Arts 230, fourth para., EC and 299(2) EC; Council Regulation No 1954/2003) (see paras 53-56)3. European Communities – Judicial review of the legality of the acts of the institutions – Measures of general scope – Need for natural or legal persons to have recourse to a plea of illegality or a reference for a preliminary ruling on validity (Arts 230, fourth para., EC, 234 EC and 241 EC; European Parliament and Council Regulation No 1367/2006; Council Regulation No 1954/2003) (see paras 92-93)Re: ACTION seeking partial annulment of Council Regulation (EC) No 1954/2003 of 4 November 2003 on the management of the fishing effort relating to certain Community fishing areas and resources and modifying Regulation (EEC) No 2847/93 and repealing Regulations (EC) No 685/95 and (EC) No 2027/95 (OJ 2003 L 289, p. 1). Operative partThe Court: 1. Dismisses the action as inadmissible; 1. Dismisses the action as inadmissible; 2. Orders Região autónoma dos Açores to bear its own costs and pay those of the Council, including those incurred in the interim proceedings; 2. Orders Região autónoma dos Açores to bear its own costs and pay those of the Council, including those incurred in the interim proceedings; 3. Orders the Kingdom of Spain and the Commission to bear their own costs, including those incurred in the interim proceedings; 3. Orders the Kingdom of Spain and the Commission to bear their own costs, including those incurred in the interim proceedings; 4. Orders Seas at Risk VZW and WWF – World Wide Fund for Nature to bear their own costs, including those incurred in the interim proceedings; 4. Orders Seas at Risk VZW and WWF – World Wide Fund for Nature to bear their own costs, including those incurred in the interim proceedings; 5. Orders Stichting Greenpeace Council to bear its own costs incurred in the present proceedings; 5. Orders Stichting Greenpeace Council to bear its own costs incurred in the present proceedings; 6. Orders Porto de Abrigo – Organização de Produtores da Pesca CRL and GÊ-Questa – Associação de Defesa do Ambiente to bear their own costs incurred in the interim proceedings. 6. Orders Porto de Abrigo – Organização de Produtores da Pesca CRL and GÊ-Questa – Associação de Defesa do Ambiente to bear their own costs incurred in the interim proceedings. | a586a-e71b8c3-42f4 | EN |
THE COURT OF JUSTICE ANNULS THE DECISION OF THE COUNCIL AUTHORISING PORTUGAL TO GRANT AID TO PORTUGUESE PIG FARMERS WHO WERE BENEFICIARIES OF UNLAWFUL AID GRANTED IN 1994 AND 1998 AND DECLARED INCOMPATIBLE WITH THE COMMON MARKET BY THE COMMISSION | Commission of the European CommunitiesvCouncil of the European Union(Aid granted by the Portuguese Government to pig farmers – Aid intended to allow the repayment of aid declared incompatible with the common market – Council decision declaring such aid compatible with the common market – Illegality – Third subparagraph of Article 88(2) EC)Summary of the JudgmentState aid – Power of the Council to authorise aid by way of derogation in view of exceptional circumstances – Conditions for exercise – Application to the Council by the Member State concerned before a decision by the Commission declaring the aid incompatible with the common market and taking of a decision within a period of three months – Limit – Thwarting of a previous decision by the Commission(Arts 87 EC, 88 EC and 89 EC)The intention of the EC Treaty, in providing through Article 88 EC for aid to be kept under constant review and supervised by the Commission, is that the finding that aid may be incompatible with the common market is to be arrived at, subject to review by the Community judicature, by means of an appropriate procedure which it is the Commission’s responsibility to set in motion. Articles 87 EC and 88 EC thus reserve a central role for the Commission in determining whether aid is incompatible. As is clear from its very wording, the third subparagraph of Article 88(2) EC covers an exceptional case. In fact, the Council, acting unanimously, ‘on application by a Member State’, may decide that aid which that State is granting or intends to grant must be regarded as compatible with the common market ‘in derogation from the provisions of Article 87 or from the regulations provided for in Article 89’, if such a decision is justified by ‘exceptional circumstances’. The power conferred upon the Council by the third subparagraph of Article 88(2) EC being therefore clearly exceptional in character, the further provisions in the third and fourth subparagraphs of Article 88(2), whereby, on the one hand, application to the Council by a Member State suspends examination in progress at the Commission for a period of three months, and, on the other, in the absence of a decision by the Council within that period, the Commission is to give a ruling, undeniably indicate that, where that period has expired, the Council is no longer competent to adopt a decision under that third subparagraph in relation to the aid concerned. The taking of decisions the operative parts of which might prove contradictory is thereby avoided. Consequently, if the Member State concerned has made no application to the Council under the third subparagraph of Article 88(2) EC before the Commission declares the aid in question incompatible with the common market and thereby closes the procedure referred to in the first subparagraph of Article 88(2), the Council is no longer authorised to exercise the exceptional power conferred upon it by the third subparagraph in order to declare such aid compatible with the common market. Nor can the Council thwart the effectiveness of such a decision by declaring compatible with the common market, in accordance with that provision, an aid designed to compensate the beneficiaries of the unlawful aid declared incompatible with the common market for the repayments they are required to make pursuant to that decision. (see paras 29-33, 45)JUDGMENT OF THE COURT (Full Court)29 June 2004(1)(Aid granted by the Portuguese Government to pig farmers – Aid intended to allow the repayment of aid declared incompatible with the common market – Council decision declaring such aid compatible with the common market – Illegality – Third subparagraph of Article 88(2) EC)applicant,defendant,andTHE COURT (Full Court),,gives the followingLegal backgroundIn its decisions of 25 November 1999 and 4 October 2000, the Commission held that the measures in question were not compatible with the common market. Pursuant to those decisions, the Portuguese authorities initiated a procedure to recover the aid granted. However, refunding the aid granted threatens the economic viability of not a few beneficiaries and would have extremely damaging social effects in certain regions because 50% of the pig herd is concentrated in less than 5% of the territory. Exceptional circumstances therefore exist, making it possible to consider such aid, by way of derogation and to the extent strictly necessary to remedy the imbalance which has arisen, to be compatible with the common market on the terms specified in this Decision.’ On those grounds,THE COURTAnnuls Council Decision 2002/114 /EC of 21 January 2002 authorising the Government of Portugal to grant aid to Portuguese pig farmers who were beneficiaries of the measures granted in 1994 and 1998; Orders the Council of the European Union to pay the costs;Orders the Portuguese Republic and the French Republic to bear their own costs.SkourisJannTimmermansRosasGulmannPuissochetCunha RodriguesLa PergolaSchintgenMackenColnericvon BahrLenaertsRegistrarPresidentR. GrassV. Skouris 1 – Language of the case: French. Language of the case: French. | c5921-6d9ee14-48d6 | EN |
ACCORDING TO ADVOCATE GENERAL STIX-HACKL, THE MAKER OF A DATABASE HAS A RIGHT TO PROTECTION UNDER THE DATABASE DIRECTIVE EVEN WHERE THAT DATABASE WAS CREATED PRIMARILY FOR THE PURPOSE OF ORGANISING FOOTBALL FIXTURES OR HORSERACING | Fixtures Marketing LtdvOy Veikkaus Ab(Reference for a preliminary ruling from the Vantaan käräjäoikeus)(Directive 96/9/EC – Legal protection of databases – Sui generis right – Definition of investment in the obtaining, verification or presentation of the contents of a database – Football fixture lists – Betting)Summary of the judgment Approximation of laws – Legal protection of databases – Directive 96/9 – Definition of investment in the obtaining, verification or presentation of the contents of a database – Resources used to draw up a football fixtures list – Not included (Directive of the European Parliament and of the Council 96/9, Art. 7(1))The expression ‘investment in … the obtaining … of the contents’ of a database in Article 7(1) of Directive 96/9 on the legal protection of databases must be understood to refer to investment in the creation of that database. It thus refers to the resources used to seek out existing materials and collect them in the database but does not cover the resources used for the creation of materials which make up the contents of a database. In the context of drawing up a fixture list for the purpose of organising football league fixtures, the resources used to establish the dates, times and the team pairings for the various matches in the league do not constitute such investment. Moreover, finding the data which make up such a list does not require any particular effort on the part of the professional leagues, which participate directly in the creation of those data. Nor should the resources used for the verification or presentation of the data making up the list be considered to represent substantial investment independent of the investment in the creation of those data. (see paras 33-34, 41-42, 44-46, 49, operative part)JUDGMENT OF THE COURT (Grand Chamber)9 November 2004(1) THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 8 June 2004,gives the followingLegal background “extraction” shall mean the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form; “re-utilisation” shall mean any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission. The first sale of a copy of a database within the Community by the rightholder or with his consent shall exhaust the right to control resale of that copy within the Community. Public lending is not an act of extraction or re-utilisation. of lists, tables, programmes or other similar works in which a large quantity of data is combined, orof a database, the obtaining, verification or presentation of which required substantial input,May the requirement in Article 7(1) of the directive for a link between the investment and the making of the database be interpreted in the sense that the “obtaining” referred to in Article 7(1) and the investment directed at it refers, in the present case, to investment which is directed at the determination of the dates of the matches and the match pairings themselves and, when the criteria for granting protection are appraised, does the drawing up of the fixture list include investment which is not relevant? Is the object of the directive to provide protection in such a way that persons other than the authors of the fixture list may not, without authorisation, use the data in that fixture list for betting or other commercial purposes? For the purposes of the directive, does the use by Veikkaus relate to a substantial part, evaluated qualitatively and/or quantitatively, of the database, having regard to the fact that, of the data in the fixture list, on each occasion only data necessary for one week is used in the weekly pools coupons, and the fact that the data relating to the matches is obtained and verified from sources other than the maker of the database continuously throughout the season?’ 1 – Language of the case: Finnish. Language of the case: Finnish. | e64d7-59f3ca9-4991 | EN |
FOR THE FIRST TIME, THE COURT HAS BEEN REQUESTED TO RULE ON THE QUESTION OF THE APLICATION OF THE COMMON SYSTEM OF VAT TO SOCIÉTÉS D'INVESTISSMENT À CAPITAL VARIABLE (OPEN-ENDED INVESTMENT COMPANIES) (SICAV) | Banque Bruxelles Lambert SA (BBL)vÉtat belge(Reference for a preliminary ruling from the Tribunal de première instance de Bruxelles) (Sixth VAT Directive – Articles 4 and 9(2)(e) – Concept of taxable person – Place where services are supplied – SICAV)Summary of the Judgment1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Economic activity within the meaning of Article 4 of the Sixth Directive – Collective investment in transferable securities of capital raised from the public – Included(Council Directive 77/388, Art. 4(2))2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable persons – Definition – Open-ended investment companies (SICAVs) which have as their sole object the collective investment in transferable securities of capital raised from the public – Included – Place where services are provided to such bodies established in a Member State other than that of the supplier of the services – Place where the bodies have established their business (Council Directive 77/388, Arts 4 and 9(2)(e))1. The activity consisting in the collective investment in transferable securities of capital raised from the public, for a fee, which goes beyond the compass of the simple acquisition and the mere sale of securities and which aims to produce income on a continuing basis, constitutes an economic activity within the meaning of Article 4(2) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes. (see paras 42-43)2. Open-ended investment companies (SICAVs) which have as their sole object the collective investment in transferable securities of capital raised from the public in accordance with Directive 85/611 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) are taxable persons within the meaning of Article 4 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes so that, where services referred to in Article 9(2)(e) of that directive are supplied to such SICAVs which are established in a Member State other than that of the supplier of the services, the place where those services are provided is the place where the SICAVs have established their business. (see para. 48, operative part)JUDGMENT OF THE COURT (First Chamber)21 October 2004(1) THE COURT (First Chamber),,after hearing the Opinion of the Advocate General at the sitting on 18 May 2004,gives the followingLegal frameworkthe place where the following services are supplied when performed for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment to which the service is supplied or, in the absence of such a place, the place where he has his permanent address or usually resides: services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, as well as data processing and the supplying of information, banking, financial and insurance transactions including reinsurance, with the exception of the hire of safes’. transactions, including negotiation, excluding management and safekeeping, in shares, interests in companies or associations, debentures and other securities ...; management of special investment funds as defined by Member States.’the sole object of which is the collective investment in transferable securities of capital raised from the public and which operate on the principle of risk-spreading, the units of which are, at the request of holders, re-purchased or redeemed, directly or indirectly, out of those undertakings’ assets. …’ work of an intellectual nature supplied in the ordinary course of business by legal and other consultants, accountants, engineers, consultancy bureaux and other suppliers carrying on similar activities as well as data processing and the supplying of information, …; banking, financial and insurance transactions, including reinsurance, with the exception of the hire of safes’.assist the SICAV in the management of its assets, by ensuring that any advice given by it was strictly in accordance with the general management guidelines and investment policy adopted by the SICAV; provide to those responsible for the day-to-day management of the SICAV all documentation, information and oral or written advice they might deem necessary in order to carry out their duties; assist the SICAV in the acquisition, subscription, transfer and disposal of shares, bonds and all other negotiable securities and in relation to currency or treasury operations. Are sociétés d’investissement à capital variable (open-ended investment companies) (SICAVs) established in a Member State which have as their sole object the collective investment in transferable securities of capital raised from the public in accordance with Council Directive 85/611 of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) taxable persons for value-added-tax purposes within the meaning of Article 4 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, so that, where services referred to in Article 9(2)(e) of that directive are supplied to those SICAVs, the place where those services are deemed to be supplied is the place where the SICAVs have established their seat? If the answer to that question is in the negative, the resolution of the case entails determining what types of services provided to SICAVs may benefit from the exemption under Article 13B(d)(6) of the Sixth Directive: is it necessary in that context to distinguish between services which comprise the giving of assistance and management advice, on the one hand, and management services in the strict sense, on the other, the latter being said to differ from the former in that they imply a power on the manager’s part to take decisions relating to the administration and disposal of the assets under management?’ 1 – Language of the case: French. Language of the case: French. | 30f69-65e03af-4964 | EN |
ACCORDING TO FIRST ADVOCATE GENERAL TIZZANO, A YOUNG CHILD WHO IS A NATIONAL OF A MEMBER STATE IS ENTITLED TO RESIDE IN ANOTHER MEMBER STATE PROVIDED THAT HE OR SHE IS COVERED BY SICKNESS INSURANCE AND HAS SUFFICIENT RESOURCES | Kunqian Catherine Zhu and Man Lavette ChenvSecretary of State for the Home Department(Reference for a preliminary ruling from the Immigration Appellate Authority)(Right of residence – Child with the nationality of one Member State but residing in another Member State – Parents nationals of a non-member country – Mother’s right to reside in the other Member State)Summary of the JudgmentCitizenship of the European Union – Right to move and reside freely in the territory of the Member States – Directive 90/364 – Minor who is a national of a Member State, is covered by sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor and who is that minor’s primary carer – Right of residence, both for the minor and for the parent, in another Member State – Conditions for the minor to gain nationality – Not relevant(Art. 18 EC; Council Directive 90/364)Article 18 EC and Council Directive 90/364 on the right of residence confer on a young minor who is a national of a Member State, is covered by appropriate sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor not to become a burden on the public finances of the host Member State, a right to reside for an indefinite period in that State. In such circumstances, those same provisions allow a parent who is that minor’s primary carer to reside with the child in the host Member State. In that respect, the condition concerning the sufficiency of resources laid down in Directive 90/364 cannot be interpreted as meaning that the minor must possess those resources personally and may not use for that purpose those of a family member. Such an interpretation would add to that condition a requirement as to the origin of the resources which, not being necessary for the attainment of the objective pursued, namely the protection of the public finances of the Member States, would constitute a disproportionate interference with the exercise of the fundamental right of freedom of movement and of residence upheld by Article 18 EC. In addition, the application of the Community provisions at issue cannot be refused to the persons concerned on the ground that the parent who is the primary carer has created, by means of a stay in a Member State, a situation in which the child expected would be able to acquire the nationality of another Member State in order thereafter to secure for the child and for him or herself a long-term right to reside. Under international law, it is for each Member State, having due regard to Community law, to lay down the conditions for the acquisition and loss of nationality and it is not permissible for a Member State to restrict the effects of the grant of the nationality of another Member State by imposing an additional condition for recognition of that nationality with a view to the exercise of the fundamental freedoms provided for in the Treaty. (see paras 33, 36-37, 39, 47, operative part)JUDGMENT OF THE COURT (sitting as a full Court )19 October 2004(1) (Right of residence – Child with the nationality of one Member State but residing in another Member State – Parents nationals of a non-member country – Mother's right to reside in the other Member State)THE COURT (sitting as a full Court ),,after hearing the Opinion of the Advocate General at the sitting on 18 May 2004,gives the followingLegal backgroundThe Member States shall, acting as provided in this Directive, abolish restrictions on the movement and residence of: (a) nationals of a Member State who are established or who wish to establish themselves in another Member State in order to pursue activities as self-employed persons, or who wish to provide services in that State; nationals of a Member State who are established or who wish to establish themselves in another Member State in order to pursue activities as self-employed persons, or who wish to provide services in that State; (b) nationals of Member States wishing to go to another Member State as recipients of services; nationals of Member States wishing to go to another Member State as recipients of services; (c) the spouse and the children under 21 years of age of such nationals, irrespective of their nationality; the spouse and the children under 21 years of age of such nationals, irrespective of their nationality; (d) the relatives in the ascending and descending lines of such nationals and of the spouse of such nationals, which relatives are dependent on them, irrespective of their nationality. the relatives in the ascending and descending lines of such nationals and of the spouse of such nationals, which relatives are dependent on them, irrespective of their nationality. Member States shall favour the admission of any other member of the family of a national referred to in paragraph 1(a) or (b) or of the spouse of that national, which member is dependent on that national or spouse of that national or who in the country of origin was living under the same roof.’ his or her spouse and their descendants who are dependants;dependent relatives in the ascending line of the holder of the right of residence and his or her spouse.’confer the right on the First Appellant, who is a minor and a citizen of the Union, to enter and reside in the host Member State? and if so, does it consequently confer the right on the Second Appellant, a third country national who is the First Appellant’s mother and primary carer, to reside with the First Appellant (i) as her dependent relative, or (ii) because she lived with the First Appellant in her country of origin, or (iii) on any other special basis? In circumstances like those of the main proceedings, Article 18 EC and Council Directive 90/364/EEC of 28 June 1990 on the right of residence confer on a young minor who is a national of a Member State, is covered by appropriate sickness insurance and is in the care of a parent who is a third-country national having sufficient resources for that minor not to become a burden on the public finances of the host Member State, a right to reside for an indefinite period in that State. In such circumstances, those same provisions allow a parent who is that minor’s primary carer to reside with the child in the host Member State. SkourisJannTimmermansRosasSilva de LapuertaLenaertsGulmannSchintgenColnericvon BahrCunha RodriguesRegistrarPresidentR. GrassV. Skouris 1 – Language of the case: English. Language of the case: English. | db6d4-8117b55-44a8 | EN |
Tokai Carbon, SGL Carbon, Nippon Carbon, Showa Denko, GrafTech International, SEC Corporation and C/G Group v Commission of the European Communities | Tokai Carbon Co. Ltd and OthersvCommission of the European Communities(Competition – Cartel – Graphite electrodes market – Price-fixing and market-sharing – Calculation of fines – Concurrent sanctions – Guidelines on the method of setting fines – Applicability – Gravity and duration of the infringement – Aggravating circumstances – Attenuating circumstances – Ability to pay – Cooperation during the administrative procedure – Arrangements for payment)Judgment of the Court of First Instance (Second Chamber), 29 April 2004 Summary of the Judgment1. Competition – Administrative procedure – Respect for the rights of the defence – Access to the file – Obligation to make the entire file available – Limits – Documents containing business secrets and internal documents – Exception – Communication of internal documents in exceptional circumstances(Arts 81(1) EC and 82 EC; Council Regulation No 17)2. Competition – Administrative procedure – Respect for the rights of the defence – Statement of objections – Production of further evidence after the statement of objections has been sent – Admissibility – Conditions(Council Regulation No 17, Art. 19(1))3. Competition – Administrative procedure – Hearings – Obligation for the hearing officer to draw up a final report on respect for the right to be heard – Scope(Commission Decision 2001/462, Arts 15 and 16)4. Actions for annulment – Pleas – Challenge to the facts held by a decision penalising infringement of the competition rules – Admissibility – Condition – No admission of those facts during the administrative procedure(Art. 230 EC)5. Competition – Fines – Amount – Reduction in return for cooperation consisting in not contesting the reality of certain facts – Challenge to those facts before the Court of First Instance – Possibility that the Court, in the exercise of its unlimited jurisdiction, may increase the amount of the fine(Council Regulation No 17, Art. 15)6. Competition – Fines – Community penalties and penalties imposed by the authorities of a Member State or a non-member State for infringement of national competition law – Infringement of the principle ‘non bis in idem’ – None – Concurrent sanctions – Admissible – Obligation on the Commission to take account, when determining the amount of the fine, of the penalty imposed in a Member State on the basis of the same facts – Obligation not transposable to the case of a penalty imposed in a non-member State(Charter of Fundamental Rights of the European Union, Art. 50; Protocol No 7 to the European Convention on Human Rights, Art. 4; Council Regulation No 17, Art. 15)7. Competition – Fines – Amount – Determination – Possibility of increasing the fines in order to strengthen their deterrent effect – Obligation to take into account, in that regard, the fines already imposed in a non-member State – None(Arts 81(1) EC and 82 EC; EEA Agreement, Art. 53(1); Council Regulation No 17, Art. 15(2))8. Community law – Principles – Protection of legitimate expectations – Conditions – Assurances given by the Director-General responsible for competition matters concerning the setting of the amount of the fine – Excluded owing to the exclusive competence of the College of Commissioners(Internal rules of the Commission, Art. 1)9. Competition – Fines – Amount – Commission’s discretion – Unlimited jurisdiction of the Court of First Instance – Possibility, in that context, to take into consideration additional information which is not mentioned in the decision imposing the fine(Art. 229 EC; Council Regulation No 17, Art. 17)10. Competition – Fines – Amount – Determination – Legal framework – Article 15(2) of Regulation No 17 – Introduction by the Commission of guidelines which are innovative by reference to its previous practice in taking decisions – Breach of the principles of non-retroactivity and legal certainty – None(Council Regulation No 17, Art. 15(2); Commission Communication 98/C 9/03)11. Competition – Community rules – Infringements – Fines – Amount – Determination – Criteria – Increase in the general level of fines – Admissibility – Conditions(Council Regulation No 17, Art. 15(1) and (2))12. Competition – Fines – Amount – Determination – Turnover to be taken into consideration in calculating the fine – Commission’s discretion while respecting the limit set down in Article 15(2) of Regulation No 1713. Competition – Fines – Amount – Determination – Criteria – Taking into account of worldwide turnover from the goods forming the subject-matter of the infringement – Admissibility – Limits14. Competition – Fines – Amount – Determination – Criteria – Assessment of the gravity of an infringement by reference to its impact – Account to be taken of the effects of the whole of the infringement and not of the individual conduct of the undertakings participating in the cartel(Council Regulation No 17, Art. 15; Commission Communication 98/C 9/03, point 1.A)15. Competition – Fines – Amount – Determination – Division of an overall amount between different groups of undertakings – Admissibility – Conditions(Council Regulation No 17, Art. 15(2))16. Competition – Fines – Amount – Determination – Calculation method set out in the Commission’s guidelines – Commission decision to apply that method in a particular case – Consequences – Obligation to state reasons for any departure17. Competition – Fines – Decision imposing fines – Obligation to state reasons – Scope – Statement of the factors by which the Commission assessed the gravity and duration of the infringement – Sufficient statement(Art. 253 EC; Council Regulation No 17, Art. 15(2))18. Competition – Community rules – Infringements – Attribution – Legal person responsible for the operation of the undertaking at the time of the infringement(Art. 81(1) EC)19. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringements – Respective roles of the undertakings involved20. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringements – Attenuating circumstances – Passive or ‘follow-my-leader’ role of the undertaking(Council Regulation No 17, Art. 15; Commission Communication 98/C 9/03)21. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringements – Attenuating circumstances – Whether Commission obliged to adhere to its previous decision-making practice – No such obligation – Setting-up by an undertaking of a competition compliance programme – Poor financial situation of the sector in which an undertaking operates(Art. 81(1) EC; Council Regulation No 17, Art. 15)22. Competition – Fines – Amount – Limit fixed by Article 15(2) of Regulation No 17 – Implementing procedures23. Competition – Fines – Amount – Determination – Criteria – Financial situation of the undertaking concerned – May be taken into consideration – Whether the Commission is obliged to adhere to its previous decision-making practice – No such obligation24. Competition – Administrative procedure – Request for information – Rights of the defence – Absolute right of silence – None – Right to refuse to provide answers that imply admission of an infringement(Council Regulation No 17, Art. 11(5))25. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine in return for cooperation by the undertaking involved – Cooperation in the context of the reply to a request for information – Taken into account(Council Regulation No 17, Art. 15(2); Commission Communication 96/C 207/04)26. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine in return for cooperation by the undertaking involved – Concept of ‘evidence’27. Competition – Fines – Amount – Determination – Criteria – Reduction of the fine in return for cooperation by the undertaking involved – Information on the existence of a disloyal Commission official – Taken into account28. Competition – Fines – Commission’s discretion – Scope – Power to determine the arrangements for payment of the fines – Imposition of default interest1. In order to allow the undertakings concerned to defend themselves effectively against the objections raised against them in the statement of objections, the Commission is required to make available to them the entire investigation file, except for documents containing business secrets of other undertakings, other confidential information and internal documents of the Commission. As regards the latter, a restriction on access to them is justified by the need to ensure the proper functioning of the Commission when it deals with infringements of the Treaty competition rules; internal documents can be made available only if the exceptional circumstances of the case so require, on the basis of serious evidence which it is for the party concerned to provide, both before the Community Court and in the administrative procedure conducted by the Commission. (see paras 38, 40)2. The statement of objections must allow those concerned to have effective knowledge of the conduct in respect of which they are accused by the Commission, that requirement being met when the final decision does not find that the undertakings concerned have committed infringements different from those referred to in the statement of objections and establishes only facts on which the persons concerned have had the opportunity to explain themselves. However, there is no provision that prevents the Commission from sending to the parties concerned after the statement of objections fresh documents which it considers support its argument, subject to giving the undertakings the necessary time to submit their views on the subject. (see paras 45, 47)3. Under Articles 15 and 16(1) of Decision 2001/462 on the terms of reference of hearing officers in certain competition proceedings, the hearing officer is to prepare a final report on the respect of the right to be heard, which also considers whether the draft decision deals only with objections in respect of which the parties have been afforded the opportunity of making known their views and which is to be attached to the draft decision submitted to the Commission, in order to ensure that, when it reaches a decision, the Commission is fully apprised of ‘all relevant information’ as regards the course of the procedure and respect of the right to be heard. It follows that the hearing officer is not responsible for collecting all the objections of a procedural nature put forward by the parties concerned during the administrative procedure. He is required to communicate to the College of Commissioners only the objections relevant to the assessment of the lawfulness of the conduct of the administrative procedure. (see paras 52-53)4. Where an undertaking involved in an infringement of the competition rules does not expressly acknowledge the facts, the Commission must prove the facts and the undertaking is free to put forward, in the procedure before the Court, any plea in its defence which it deems appropriate. On the other hand, that is not the case where the undertaking expressly, clearly and specifically acknowledges the facts: where it explicitly admits during the administrative procedure the substantive truth of the facts which the Commission alleges against it in the statement of objections, those facts must thereafter be regarded as established and the undertaking estopped in principle from disputing them during the procedure before the Court. (see para. 108)5. The Court of First Instance cannot be prohibited, in any circumstances, in the exercise of its unlimited jurisdiction, from increasing the amount of the fine imposed on an undertaking which, after having the benefit of a reduction in its fine in return for not having disputed the substantive truth of the facts established by the Commission during the administrative procedure, calls in question the veracity of those facts for the first time before the Court of First Instance. (see para. 113)6. The principle ne bis in idem, also enshrined in Article 4 of Protocol No 7 to the European Convention on Human Rights, is a general principle of Community law upheld by the Community judicature. In the field of Community competition law, the principle precludes an undertaking from being sanctioned by the Commission or made the defendant to proceedings brought by the Commission a second time in respect of anti-competitive conduct for which it has already been penalised or of which it has been exonerated by a previous decision of the Commission that is no longer amenable to challenge. None the less, the possibility of concurrent sanctions, one a Community sanction, the other a national one, resulting from two sets of parallel proceedings, each pursuing distinct ends, is acceptable because of the special system of sharing jurisdiction between the Community and the Member States with regard to cartels. However, a general requirement of natural justice demands that, in determining the amount of a fine, the Commission must take account of any penalties that have already been borne by the undertaking in question in respect of the same conduct where these were imposed for infringement of the law relating to cartels of a Member State and where, consequently, the infringement was committed within the Community. That possibility of concurrent sanctions is justified where the national and Community proceedings pursue different ends. In those circumstances, the principle ne bis in idem cannot, a fortiori, apply in the case of procedures conducted and penalties imposed by the Commission on the one hand and the authorities of non-member States on the other which clearly did not pursue the same ends. The aim of the first was to preserve undistorted competition within the European Union or the European Economic Area, whereas the aim of the second was to protect the market of a non-member State. The application of the principle ne bis in idem is subject not only to the infringements and the persons sanctioned being the same, but also to the unity of the legal right being protected. That conclusion is supported by the scope of the principle that a second penalty may not be imposed for the same offence, as laid down in Article 4 of Protocol No 7 to the European Convention on Human Rights. It is clear from the wording of Article 4 that the intended effect of the principle is solely to prevent the courts of any given State from trying or punishing an offence for which the person concerned has already been acquitted or convicted in that same State. On the other hand, the principle ne bis in idem does not preclude a person from being tried or punished more than once in two or more different States for the same conduct. It is true that Article 50 of the Charter of Fundamental Rights of the European Union provides that no one may be tried or punished again in criminal proceedings for an offence of which he has already been finally acquitted or convicted within the Union in accordance with the law. However, that charter is clearly intended to apply only within the territory of the Union and the scope of the right laid down in Article 50 is expressly limited to cases where the first acquittal or conviction was handed down within the Union. (see paras 130-135, 137)7. The Commission’s power to impose fines on undertakings which, intentionally or negligently, infringe the provisions of Article 81(1) EC or Article 82 EC is one of the means conferred on the Commission to enable it to carry out the task of supervision entrusted to it by Community law. That task includes the duty to pursue a general policy designed to apply, in competition matters, the principles laid down by the Treaty and to guide the conduct of undertakings in the light of those principles. It follows that the Commission has power to decide the level of fines so as to reinforce their deterrent effect where infringements of a given type, although established as being unlawful at the outset of Community competition policy, are still relatively frequent on account of the profit that certain of the undertakings concerned are able to derive from them. The objective of deterrence which the Commission is entitled to pursue when setting fines is intended to ensure that undertakings comply with the competition rules laid down in the Treaty when conducting their activities within the Community or the European Economic Area (EEA). Consequently, the deterrent effect of a fine imposed for infringement of the Community competition rules cannot be assessed by reference solely to the particular situation of the undertaking sanctioned or by reference to whether it has complied with the competition rules in non-member States outside the EEA. It is therefore permissible for the Commission to impose on an undertaking a fine of a sufficiently deterrent level within the limits laid down in Article 15(2) of Regulation No 17, without being required to take account for the purpose of determining those limits of the sanction imposed on that undertaking in non-member States. (see paras 144-145, 147-148)8. The principle of protection of its legitimate expectations extends to any individual in a situation where the Community authorities have caused him to entertain legitimate expectations, it being understood that no one may plead infringement of that principle unless he has been given precise, unconditional and consistent assurances, from authorised, reliable sources, by the administration. In that regard, an undertaking cannot reasonably expect that a decision adopted by the College of Commissioners, in accordance with the principle of collegiality established in Article 1 of the Rules of Procedure of the Commission of 29 November 2000, imposing a fine on it in order to sanction its participation in a cartel active on a worldwide scale would be delegated, as a ‘management or administrative measure’ within the meaning of Article 14 of those Rules of Procedure, to the Director-General competent for competition matters. It follows that a Director-General cannot have provided an undertaking with ‘precise assurances from [an] authorised, reliable source’ as regards the imputation of the sanctions imposed on it in a non-member State, as his powers are limited to submitting proposals to the College which the College is at liberty to accept or reject. (see paras 152-153)9. Although the Commission has a discretion when determining the amount of each fine, and is not required to apply a precise mathematical formula, the Court none the less has, pursuant to Article 17 of Regulation No 17, unlimited jurisdiction within the meaning of Article 229 EC in actions brought against the decisions whereby the Commission has fixed a fine and may therefore cancel, reduce or increase the fine imposed. In that context, its assessment of the appropriateness of the fine may, independently of any manifest errors of assessment made by the Commission, justify the production and taking into account of additional information which is not mentioned in the Commission decision. (see para. 165)10. The change which the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty made by reference to the Commission’s previous administrative practice does not constitute an alteration of the legal framework determining the level of fines which can be imposed that is contrary to the principles of non-retroactivity of legislation and legal certainty. First, the Commission’s previous practice does not itself serve as a legal framework for the fines imposed in competition matters, since that framework is defined solely in Regulation No 17. Second, having regard to the wide discretion which Regulation No 17 leaves the Commission, the fact that the latter introduces a new method of calculating fines, which may lead to an increase in the general level of fines but which does not go beyond the legal framework of sanctions as defined in Article 15(2) of Regulation No 17, cannot be regarded as an aggravation, with retroactive effect, of the fines as provided for in that provision. (see paras 190-191)11. The fact that in the past the Commission imposed fines of a certain level for certain types of infringement does not mean that it is estopped from raising that level within the limits indicated in Regulation No 17 if that is necessary to ensure the implementation of Community competition policy and to strengthen the deterrent effect. The proper application of the Community competition rules requires, on the contrary, that the Commission may at any time adjust the level of fines to the needs of that policy. (see paras 192, 216)12. As regards the setting of the amount of fines in competition cases, the only express reference to turnover in Article 15(2) of Regulation No 17 concerns the upper limit that a fine cannot exceed, and that that limit is taken to refer to worldwide turnover. Provided that it remains within that limit, the Commission may in principle choose which turnover to take in terms of territory and products in order to determine the fine, without being obliged to adhere precisely to the worldwide turnover or turnover in the geographic market or the relevant product market. Last, although the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty do not provide that fines are to be calculated according to a specific turnover, they do not preclude such a figure from being taken into account, provided that the choice made by the Commission is not vitiated by a manifest error of assessment. (see para. 195)13. The fact that the Commission has the power to impose sanctions only within the European Economic Area (EEA) does not preclude it from taking into consideration worldwide turnover derived from sales of the relevant product in order to evaluate the economic capacity of the members of the cartel to harm competition within the EEA, on the understanding that, whatever turnover is taken, disproportionate importance must not be ascribed to it by comparison with the other elements of assessment. (see paras 200-201)14. Where the Commission relies on the impact of the infringement in order to assess its gravity, in accordance with point 1.A, first and second paragraphs, of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, the effects to be taken into account in that regard are those resulting from the entire infringement in which all the undertakings participated, so that consideration of the individual conduct or figures particular to each undertaking is not relevant in that regard. (see para. 203)15. As regards the setting of the amount of fines for infringement of the competition rules, the Commission’s approach of dividing the members of a cartel into several categories, with the consequence that a flat-rate starting amount was fixed for all the undertakings in the same category, although such an approach ignores the differences in size between undertakings in the same category, cannot in principle be condemned. The Commission is not required, when determining fines, to ensure, where fines are imposed on a number of undertakings involved in the same infringement, that the final amounts of the fines reflect any distinction between the undertakings concerned in terms of their overall turnover. However, such a division by categories must comply with the principle of equal treatment, according to which it is prohibited to treat similar situations differently and different situations in the same way, unless such treatment is objectively justified. Furthermore, the amount of the fine must at least be proportionate in relation to the factors taken into account in the assessment of the gravity of the infringement. It follows that, where the Commission divides the undertakings concerned into categories for the purpose of setting the amount of the fines, the thresholds for each of the categories thus identified must be coherent and objectively justified. (see paras 217, 219-220)16. Where the Commission decides, for the purpose of setting the amount of the fines to be imposed on economic operators which have infringed the competition rules, to apply the differentiation method laid down in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, it is required to adhere to them, and must set out expressly its reasons should it depart from those Guidelines in any particular regard. Accordingly, while the Commission may take a multitude of factors into consideration in determining the final amount of a fine and is not required to apply mathematical formulae when doing so, it must, where it deemed it appropriate and equitable to have recourse, at a certain stage of that exercise, to mathematical calculations, apply its own method in a manner which is correct, coherent and, in particular, non-discriminatory. Once it has voluntarily chosen to apply such an arithmetical method, it is bound by the rules inherent therein, unless it provides express reasons for not doing so, in regard to all members of the same cartel. (see paras 231-232, 352)17. The statement of reasons on which an individual decision is based must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Community Court to exercise its power of review. The assessment of the requirement to state reasons depends on the circumstances of each case. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to the wording of the measure but also to the context in which the measure was adopted. In that regard, the Commission fulfils its obligation to state reasons when it indicates, in a decision imposing sanctions for infringement of the Community competition rules, the factors which enabled it to measure the gravity of the offence, without being required to set out a more detailed account or the figures relating to the method of calculating the fine. (see paras 250, 252)18. The rule that it falls, in principle, to the natural or legal person managing the undertaking in question when the infringement was committed to answer for that infringement, even if, when the decision finding the infringement was adopted, another person had assumed responsibility for operating the undertaking, must be interpreted as meaning that an undertaking – that is to say, an economic unit consisting of personal, tangible and intangible elements – is directed by the organs provided for in its articles of association and that any decision imposing a fine on it may be addressed to the management as provided for in the undertaking’s articles of association (management board, management committee, chairman, manager, etc.), even though the financial consequences of the fine are ultimately borne by its owners. That rule would not be observed if the Commission, faced with unlawful conduct on the part of an undertaking, were always required to ascertain who is the owner exercising a decisive influence on the undertaking and were allowed to impose a sanction only on that owner. (see paras 280-281)19. Where an infringement has been committed by a number of undertakings, it is necessary, in determining the amount of the fines, to establish their respective roles in the infringement throughout the duration of their participation in it. It follows, in particular, that the role of ‘ringleader’ played by one or more undertakings in a cartel must be taken into account for the purposes of calculating the amount of the fine, in so far as the undertakings which played such a role must therefore bear special responsibility in comparison with the other undertakings. (see para. 301)20. According to the third indent of point 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, an ‘exclusively passive or “follow-my-leader” role’ played by an undertaking in the infringement may, if established, constitute an attenuating circumstance. In that regard, the factors capable of revealing the passive role of an undertaking within a cartel may include the significantly more sporadic nature of its participation in the meetings by comparison with the ordinary members of the cartel, and also the existence of express declarations to that effect made by representatives of other undertakings which participated in the infringement. In any event, it is necessary to take account of all the relevant circumstances in each particular case. (see paras 330-331)21. Where it is required to set the amount of the fines to be imposed on the members of an anti-competitive cartel, the Commission is not required, when taking attenuating circumstances into account, to adhere to its previous practice in taking decisions. It is therefore under no obligation, even if it has done so in the past, to take into account as an attenuating circumstance the fact that an undertaking has set up a competition compliance programme or the fact that the sector in which an undertaking operates is in a poor financial situation. (see paras 343, 345)22. The maximum limit of 10% referred to in Article 15(2) of Regulation No 17 which is not to be exceeded by the amount of a fine imposed on an undertaking for infringement of the competition rules refers to the total turnover of the undertaking concerned, which alone gives an indication of that undertaking’s size and influence on the market. It is only the fine ultimately imposed that must be reduced to that limit, in accordance with Article 15 of Regulation No 17; that provision does not prohibit the Commission from referring, during its calculation, to an intermediate amount higher than that limit, provided that the amount of the fine eventually imposed does not exceed it. (see para. 367)23. In a competition matter, the Commission is not required when determining the amount of the fine to take account of an undertaking’s financial losses since recognition of such an obligation would have the effect of conferring an unfair competitive advantage on the undertakings least well adapted to the conditions of the market. The fact that the Commission has found in previous decisions that it was appropriate to take account of the financial difficulties of a given undertaking does not mean that it is obliged to do so in a subsequent decision. Furthermore, the fact that a measure taken by a Community authority leads to the insolvency or liquidation of a given undertaking is not prohibited as such by Community law. (see paras 370, 372, 484)24. An absolute right to silence cannot be recognised to an undertaking to which a decision requiring information within the meaning of Article 11(5) of Regulation No 17 is addressed. To acknowledge the existence of such a right would be to go beyond what is necessary in order to preserve the rights of defence of undertakings, and would constitute an unjustified hindrance to the Commission’s performance of its duty to ensure that the rules on competition within the common market are observed. A right to silence can be recognised only to the extent that the undertaking concerned would be compelled to provide answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to establish. In order to ensure the effectiveness of Article 11 of Regulation No 17, the Commission is therefore entitled to compel the undertakings to provide all necessary information concerning such facts as may be known to them and to disclose to the Commission, if necessary, such documents relating thereto as are in their possession, even if the latter may be used to establish the existence of anti-competitive conduct. This power of the Commission to obtain information does not fall foul of either Article 6(1) and (2) of the European Convention on Human Rights or the case-law of the European Court of Human Rights. In any event, the mere fact of being obliged to answer purely factual questions put by the Commission and to comply with its requests for the production of documents already in existence cannot constitute a breach of the fundamental principle of respect for the rights of defence or impair the right to fair legal process, which offer, in the field of competition law, protection equivalent to that guaranteed by Article 6 of the European Convention on Human Rights. There is nothing to prevent the addressee of a request for information from showing, whether later during the administrative procedure or in proceedings before the Community Courts, that the facts set out in his replies or the documents produced by him have a different meaning from that ascribed to them by the Commission. (see paras 402-404, 406)25. The fact that a request for information was sent to an undertaking under Article 11(1) of Regulation No 17 cannot minimise the cooperation provided by that undertaking under point D, paragraph 2, first indent, of the Notice on the non-imposition or reduction of fines in cartel cases. (see para. 410)26. Oral information provided to the Commission by an undertaking may constitute valid evidence for the purposes of the first indent of point D(2) of the Notice on the non-imposition or reduction of fines in cartel cases. That provision states that not only ‘documents’ but also ‘information’ may serve as ‘evidence’ which materially contributes to establishing the existence of the infringement. It follows that the information need not necessarily be provided in documentary form. Furthermore, the practical utility of purely oral information is indisputable when it allows the Commission, for example, to find direct evidence of the infringement or when, owing to its precision, it encourages the Commission to continue an investigation which, not having sufficient evidence available at that time, it would have abandoned without that information. (see paras 430-431)27. A reduction in the fine may be granted in respect of any cooperation which enabled the Commission to establish the existence of an infringement more easily and, where relevant, to bring it to an end. While it is true that the Notice on the non-imposition or reduction of fines in cartel cases provides, in point 3, only for a reduction ‘in the fine which would have been imposed upon [the undertakings cooperating with the Commission]’, it does not require that each individual item of information must relate to an infringement of competition law in respect of which a separate sanction may be imposed. In order to be able to benefit from that notice, it is sufficient that, by revealing its involvement in an infringement, the undertaking minded to cooperate exposes itself to sanctions, while whether the various items of information may be taken into consideration for the purposes of a possible reduction in the fine depends on how useful they are to the Commission in its task of establishing the existence of the infringement and putting an end to it. In that last regard, where a disloyal Commission official is in a position to sabotage its mission by supporting the members of an illegal cartel and may thus considerably complicate the investigation carried out by the Commission, for example by destroying or manipulating evidence, by informing the members of the cartel of a forthcoming unannounced investigation and by revealing the entire investigation strategy drawn up by the Commission, information about the existence of such an official must, in principle, be regarded as being capable of making it easier for the Commission to carry out its task of establishing an infringement and putting an end to it. Such information is particularly useful when it is provided at the beginning of the investigation opened by the Commission into possible anti-competitive conduct. (see paras 435-436)28. The power conferred on the Commission by Article 15(2) of Regulation No 17 covers the power to determine the date on which the fines are payable and that on which default interest begins to accrue, the power to set the rate of such interest and to determine the detailed arrangements for implementing its decision by requiring, where appropriate, the provision of a bank guarantee covering the principal amount of the fines imposed plus interest. If the Commission had no such power, the advantage which undertakings might be able to derive from late payment of fines would weaken the effect of penalties imposed by the Commission when carrying out its task of ensuring that the rules on competition are applied. Thus, the charging of default interest on fines is justified by the need to ensure that the Treaty is not rendered ineffective by practices applied unilaterally by undertakings which delay paying fines imposed on them and to ensure that those undertakings do not enjoy an advantage over those which pay their fines within the period laid down. (see paras 475-476)JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)29 April 2004(1)applicants, defendant, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber),gives the followingFacts and procedureprices for graphite electrodes should be set on a global basis;decisions on each company’s pricing had to be taken by the Chairman/General Manager only;the ‘home producer’ was to establish the market price in its home area and the other producers would ‘follow’ it;for ‘non-home’ markets, i.e. markets where there was no ‘home’ producer, prices would be decided by consensus;non-home producers should not compete aggressively and would withdraw from the other producers’ home markets;there was to be no expansion of capacity (the Japanese were supposed to reduce their capacity);there should be no transfer of technology outside the circle of producers participating in the cartel.annul Article 3 (and, in so far as necessary, Article 4) of the Decision in so far as it imposes a fine of EUR 24.5 million on Tokai, or, in the alternative, substantially reduce that fine; order the Commission to pay the costs.annul the Decision in so far as it concerns SGL;in the alternative, reduce the fine as appropriate;annul Article 1 of the Decision in so far as it finds that Nippon participated in an infringement of Article 81 EC and Article 53(1) EEA between May 1992 and March 1993; annul Article 3 of the Decision in so far as it imposes a fine of EUR 12.2 million on Nippon;in the alternative, substantially reduce the fine;annul Article 3(d) of the Decision;in the alternative, reduce the fine to EUR 2.95 million or to such other amount as the Court may deem reasonable;request the Commission, pursuant to Article 65(b) of the Rules of Procedure, to produce all the documents showing how the fine was calculated; order such measures of enquiry as appear necessary;annul Article 3 of the Decision in so far as it imposes a fine on the applicant, or, in the alternative, reduce the fine;annul Article 4 of the Decision in so far as it applies to UCAR, or, in the alternative, modify the terms of payment applicable to the fine payable in accordance with the terms and conditions set out in Annex 50 to the application; annul the July letter, or, in the alternative, modify the conditions set out therein in accordance with the conditions set out in Annex 50 to the application; annul the August letter, or, in the alternative, modify the conditions set out therein in accordance with the conditions set out in Annex 50 to the application; order any other measure which justice may require;annul Article 3 of the Decision in so far as it imposes a fine of EUR 12.2 million on SEC;annul the Decision in so far as it imposes a fine on C/G;in the alternative, reduce the fine;dismiss the actions as unfounded;order the applicants to pay the costs.increase the fines;that the participants in the first ‘Top Guy’ meeting held in London on 21 May 1992 were SGL, UCAR, Mitsubishi, SDK and Tokai, ‘the latter also representing the interests of Nippon and SEC’, and that the basic principles of the cartel were fixed at that meeting; that that meeting was followed almost immediately by a ‘Working Level’ meeting in Zurich on 25 May 1992, attended by all the addressees of the statement of objections, including Nippon, and at which the world graphite electrodes market was reviewed region by region (Far East; Middle East and Africa; Western Europe; Eastern Europe; Latin America and North America) and market shares were allocated; that Nippon and SEC cannot claim that they did not attend the meeting of 21 May 1992, since they were both represented by Tokai and were themselves present at the first ‘Working Level’ meeting only four days later; that a second ‘Working Level’ meeting took place in Lugano on 19 September 1992 ‘with the Japanese producers’ at which the minimum prices for the European market were communicated to those producers and volumes and quotas were set for each region. the nature of the infringement (market-sharing and price-fixing in a significant sector of the industry), taking the view that this was a very serious infringement of Article 81(1) EC and Article 53(1) of the EEA Agreement; the actual impact of the infringement on the graphite electrodes market in the EEA, taking the view that prices were not only agreed but also announced and implemented and observing that prices applied (in particular price increases) largely followed those agreed by the cartel over a period of six years; the size of the relevant geographic market, taking the view that the cartel covered the whole of the common market and, following its creation, the whole of the EEA. before a statement of objections is sent, an enterprise provides the Commission with information, documents or other evidence which materially contribute to establishing the existence of the infringements; after receiving a statement of objections, an enterprise informs the Commission that it does not substantially contest the facts on which the Commission bases its allegations’ (paragraph 2). the fine imposed on SGL is reduced to EUR 69.114 million;the fine imposed on UCAR is reduced to EUR 42.05 million;the fine imposed on Tokai is reduced to EUR 12.276 million;the fine imposed on SDK is reduced to EUR 10.44 million;the fine imposed on C/G is reduced to EUR 6.48 million;the fine imposed on Nippon is reduced to EUR 6.2744 million;the fine imposed on SEC is reduced to EUR 6.138 million.On those grounds, THE COURT OF FIRST INSTANCE (Second Chamber)In Case T-236/01 Tokai Carbon v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 12 276 000; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 12 276 000; – dismisses the remainder of the application; dismisses the remainder of the application; – orders each party to bear one half of its own costs and to pay one half of the costs incurred by the opposing party. orders each party to bear one half of its own costs and to pay one half of the costs incurred by the opposing party.In Case T-239/01 SGL Carbon v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 69 114 000; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 69 114 000; – orders the applicant to bear seven eighths of its own costs and to pay seven eighths of the costs incurred by the Commission and the Commission to bear one eighth of its own costs and to pay one eighth of the costs incurred by the applicant. orders the applicant to bear seven eighths of its own costs and to pay seven eighths of the costs incurred by the Commission and the Commission to bear one eighth of its own costs and to pay one eighth of the costs incurred by the applicant. In Case T-244/01 NipponCarbon v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 6 274 400; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 6 274 400;In Case T-245/01 Showa Denko v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 10 440 000; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 10 440 000; – orders the applicant to bear three fifths of its own costs and to pay three fifths of the costs incurred by the Commission and the Commission to bear two fifths of its own costs and to pay two fifths of the costs incurred by the applicant. orders the applicant to bear three fifths of its own costs and to pay three fifths of the costs incurred by the Commission and the Commission to bear two fifths of its own costs and to pay two fifths of the costs incurred by the applicant. In Case T-246/01 GrafTech International, formerly UCAR International v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 42 050 000; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 42 050 000; – orders the applicant to bear four fifths of its own costs and to pay four fifths of the costs incurred by the Commission and the Commission to bear one fifth of its own costs and to pay one fifth of the costs incurred by the applicant. orders the applicant to bear four fifths of its own costs and to pay four fifths of the costs incurred by the Commission and the Commission to bear one fifth of its own costs and to pay one fifth of the costs incurred by the applicant. In Case T-251/01 SECCorporation v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 6 138 000; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 6 138 000;In Case T-252/01 TheCarbide/GraphiteGroup v Commission: – sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 6 480 000; sets the amount of the fine imposed on the applicant by Article 3 of Decision 2002/271 at EUR 6 480 000;ForwoodPirrung Meij H. JungJ. PirrungRegistrarPresident Table des matières 1 – Languages of the case: German and English. Languages of the case: German and English.Confidential information omitted. | c2621-52c9624-41f2 | EN |
ADVOCATE GENERAL GEELHOED PROPOSES THAT, FOR THE FIRST TIME, THE COURT IMPOSE A LUMP SUM FINE ON A MEMBER STATE FOR A PERSISTENT AND STRUCTURAL INFRINGEMENT OF COMMUNITY LAW | 12 July 2005 (*) (Failure of a Member State to fulfil obligations – Fisheries – Control obligations placed on the Member States – Judgment of the Court establishing a breach of obligations – Non-compliance – Article 228 EC – Payment of a lump sum – Imposition of a penalty payment)In Case C-304/02,ACTION under Article 228 EC for failure to fulfil obligations, brought on 27 August 2002,Commission of the European Communities, represented by M. Nolin, H. van Lier and T. van Rijn, acting as Agents, with an address for service in Luxembourg, applicant,vFrench Republic, represented by G. de Bergues and A. Colomb, acting as Agents, defendant,THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann (Rapporteur) and C.W.A. Timmermans, Presidents of Chambers, C. Gulmann, J.‑P. Puissochet, R. Schintgen, N. Colneric, S. von Bahr and J.N. Cunha Rodrigues, Judges, Advocate General: L.A. Geelhoed, Registrar: M. Múgica Arzamendi, Principal Administrator, subsequently M.‑F. Contet, Principal Administrator, and H. von Holstein, Deputy Registrar, having regard to the written procedure and further to the hearing on 3 March 2004,after hearing the Opinion of the Advocate General at the sitting on 29 April 2004,having regard to the order of 16 June 2004 reopening the oral procedure and further to the hearing on 5 October 2004,after hearing the oral observations of:– the Commission, represented by G. Marenco, C. Ladenburger and T. van Rijn, acting as Agents,– the French Republic, represented by R. Abraham, G. de Bergues and A. Colomb, acting as Agents,– the Kingdom of Belgium, represented by J. Devadder, acting as Agent,– the Czech Republic, represented by T. Boček, acting as Agent,– the Kingdom of Denmark, represented by A.R. Jacobsen and J. Molde, acting as Agents,– the Federal Republic of Germany, represented by W.D. Plessing, acting as Agent,– the Hellenic Republic, represented by A. Samoni and E.M. Mamouna, acting as Agents,– the Kingdom of Spain, represented by N. Diaz Abad, acting as Agent,– Ireland, represented by D. O’Donnell and P. Mc Cann, acting as Agents,– the Italian Republic, represented by I.M. Braguglia, acting as Agent,– the Republic of Cyprus, represented by D. Lissandrou and E. Papageorgiou, acting as Agents,– the Republic of Hungary, represented by R. Somssich and A. Muller, acting as Agents,– the Kingdom of the Netherlands, represented by J. van Bakel, acting as Agent,– the Republic of Austria, represented by E. Riedl, Rechtsanwalt,– the Republic of Poland, represented by T. Nowakowski, acting as Agent,– the Portuguese Republic, represented by L. Fernandes, acting as Agent,– the Republic of Finland, represented by T. Pynnä, acting as Agent,– the United Kingdom of Great Britain and Northern Ireland, represented by D. Anderson QC,after hearing the Opinion of the Advocate General at the sitting on 18 November 2004,gives the followingJudgment1 By its application, the Commission of the European Communities requests the Court to:– declare that, by failing to take the necessary measures to comply with the judgment of 11 June 1991 in Case C-64/88 Commission v France [1991] ECR I-2727, the French Republic has failed to fulfil its obligations under Article 228 EC; – order the French Republic to pay to the Commission, into the account ‘European Community own resources’, a penalty payment in the sum of EUR 316 500 for each day of delay in implementing the measures necessary to comply with the judgment in Case C-64/88 Commission v France, cited above, from delivery of the present judgment until the judgment in Case C‑64/88 Commission v France has been complied with; – order the French Republic to pay the costs. Community legislation Rules regarding controls 2 The Council has established certain control measures for fishing activities by vessels of the Member States. Those measures have been successively set out in Council Regulation (EEC) No 2057/82 of 29 June 1982 establishing certain control measures for fishing activities by vessels of the Member States (OJ 1982 L 220, p. 1), in Council Regulation (EEC) No 2241/87 of 23 July 1987 establishing certain control measures for fishing activities (OJ 1987 L 207, p. 1) which repealed and replaced Regulation No 2057/82, and in Council Regulation (EEC) No 2847/93 of 12 October 1993 establishing a control system applicable to the common fisheries policy (OJ 1993 L 261, p. 1) which repealed and replaced Regulation No 2241/87 on 1 January 1994. 3 The control measures set out in those regulations are essentially identical.4 Article 1(1) and (2) of Regulation No 2847/93 provides:‘1. In order to ensure compliance with the rules of the common fisheries policy, a Community system is hereby established including in particular provisions for the technical monitoring of: – conservation and resource management measures,– structural measures,– [measures] concerning the common organisation of the market,as well as certain provisions relating to the effectiveness of sanctions to be applied in cases where the abovementioned measures are not observed. 2. To this end, each Member State shall adopt, in accordance with Community rules, appropriate measures to ensure the effectiveness of the system. It shall place sufficient means at the disposal of its competent authorities to enable them to perform their tasks of inspection and control as laid down in this Regulation.’ 5 Article 2(1) of Regulation No 2847/93 states:‘In order to ensure compliance with all the rules in force concerning conservation and control measures, each Member State shall, within its territory and within maritime waters subject to its sovereignty or jurisdiction, monitor fishing activity and related activities. It shall inspect fishing vessels and investigate all activities thus enabling verification of the implementation of this Regulation, including the activities of landing, selling, transporting and storing fish and recording landings and sales.’ 6 Article 31(1) and (2) of Regulation No 2847/93 provides:‘1. Member States shall ensure that the appropriate measures be taken, including of administrative action or criminal proceedings in conformity with their national law, against the natural or legal persons responsible where common fisheries policy have [sic] not been respected, in particular following a monitoring or inspection carried out pursuant to this Regulation. 2. The proceedings initiated pursuant to paragraph 1 shall be capable, in accordance with the relevant provisions of national law, of effectively depriving those responsible of the economic benefit of the infringements or of producing results proportionate to the seriousness of such infringements, effectively discouraging further offences of the same kind.’ Technical rules7 The technical measures for the conservation of fishery resources which are envisaged by the rules regarding controls have been set out inter alia in Council Regulation (EEC) No 171/83 of 25 January 1983 (OJ 1983 L 24, p. 14), repealed and replaced by Council Regulation (EEC) No 3094/86 of 7 October 1986 (OJ 1986 L 288, p. 1), itself repealed and replaced with effect from 1 July 1997 by Council Regulation (EC) No 894/97 of 29 April 1997 (OJ 1997 L 132, p. 1), in turn partially repealed and replaced with effect from 1 January 2000 by Council Regulation (EC) No 850/98 of 30 March 1998 for the conservation of fishery resources through technical measures for the protection of juveniles of marine organisms (OJ 1998 L 125, p. 1). 8 The technical measures laid down by those regulations are essentially identical.9 The measures concern, inter alia, the minimum mesh size for nets, the prohibition on attaching to nets certain devices by means of which the mesh is obstructed or diminished, and the prohibition on offering for sale fish of less than the minimum size (‘undersized fish’) except for catches representing only a limited percentage of the overall catch (‘by-catches’). The judgment in Case C-64/88 Commission v France10 In the judgment in Case C-64/88 Commission v France, the Court declared: ‘by failing to carry out between 1984 and 1987 controls ensuring compliance with technical Community measures for the conservation of fishery resources, laid down by [Regulation No 171/83] and by [Regulation No 3094/86], the French Republic has failed to fulfil its obligations under Article 1 of [Regulation No 2057/82] and under Article 1 of [Regulation No 2241/87]’. 11 In that judgment, the Court upheld five complaints against the French Republic:– inadequate controls in relation to the minimum mesh size for nets (paragraphs 12 to 15 of the judgment);– inadequate controls in relation to the attachment to nets of devices prohibited by the Community rules (paragraphs 16 and 17 of the judgment); – failure to fulfil control obligations in relation to by-catches (paragraphs 18 and 19 of the judgment);– failure to fulfil control obligations so far as concerns compliance with the technical measures of conservation prohibiting the sale of undersized fish (paragraphs 20 to 23 of the judgment); – failure to fulfil the obligation to take action in respect of infringements (paragraph 24 of the judgment). Pre-litigation procedure12 By letter of 8 November 1991, the Commission requested the French authorities to inform it of the measures taken to comply with the judgment in Case C-64/88 Commission v France. On 22 January 1992 the French authorities replied that they ‘[intended] to do their utmost to comply with the [Community] provisions’. 13 In the course of a number of visits to French ports the Commission inspectors found that the situation had improved, but noted that the French authorities’ controls were inadequate in several respects. 14 After requesting the French Republic to submit its observations, on 17 April 1996 the Commission issued a reasoned opinion in which it stated that the judgment in Case C-64/88 Commission v France had not been complied with in the following respects: – failure to comply with the Community rules in the measuring of the minimum mesh size of nets;– inadequate controls, enabling undersized fish to be offered for sale;– laxness on the part of the French authorities in taking action in respect of infringements.15 Pointing out that financial penalties could be imposed for failure to comply with a judgment of the Court, the Commission set a time-limit of two months for the French Republic to take all the measures necessary in order to comply with the judgment in Case C-64/88 Commission v France. 16 In the course of an exchange of correspondence between the French authorities and Commission staff, the former kept the Commission informed of the measures that it had taken and was continuing to implement to strengthen controls. 17 At the same time, inspection visits were made to French ports. On the basis of reports drawn up after visiting Lorient, Guilvinec and Concarneau from 24 to 28 August 1996, Guilvinec, Concarneau and Lorient from 22 to 26 September 1997, Marennes-Oléron, Arcachon and Bayonne from 13 to 17 October 1997, south Brittany and Aquitaine from 30 March to 4 April 1998, Douarnenez and Lorient from 15 to 19 March 1999 and Lorient, Bénodet, Loctudy, Guilvinec, Lesconil and Saint-Guénolé from 13 to 23 July 1999, the Commission staff reached the conclusion that two problems remained, namely inadequate controls enabling undersized fish to be offered for sale and the laxness on the part of the French authorities in taking action in respect of infringements. 18 The inspectors’ reports prompted the Commission to issue a supplementary reasoned opinion on 6 June 2000, in which it stated that the judgment in Case C‑64/88 Commission v France had not been complied with as regards the two matters mentioned above. The Commission indicated that, in this context, it regarded as ‘particularly serious the fact that public documents relating to sales by auction officially use the code “00” in clear breach of Council Regulation (EC) No 2406/96 of 26 November 1996 laying down common marketing standards for certain fishery products’ (OJ 1996 L 334, p. 1). It pointed out that financial penalties could be imposed. 19 In their response of 1 August 2000, the French authorities essentially contended that since the last inspection report national fisheries control had undergone significant change. An internal reorganisation had taken place, with the establishment of a fisheries control ‘unit’, which subsequently became a fisheries control ‘task force’, and the means of control had been strengthened, including the provision of patrol boats and of a system for the on-screen surveillance of vessels’ positions and the circulation of instructions for the use of control staff. 20 On an inspection visit from 18 to 28 June 2001 to the communes Guilvinec, Lesconil, Saint-Guénolé and Loctudy, the Commission’s inspectors recorded poor controls, the presence of undersized fish and the offering for sale of those fish under the code ‘00’. 21 By letter of 16 October 2001, the French authorities sent to the Commission a copy of an instruction addressed to the regional and departmental maritime directorates, enjoining them to put an end to use of the code ‘00’ by 31 December 2001 and to apply from that date the statutory penalties to economic operators not complying with the instruction. The French authorities referred to an increase since 1998 in the number of proceedings for infringement of the rules on minimum sizes and to the deterrent effect of the penalties imposed. They also informed the Commission of the adoption in 2001 of a general fisheries control plan, which laid down priorities, including implementation of a hake recovery plan and strict control of compliance with minimum sizes. 22 Taking the view that the French Republic still had not complied with the judgment in Case C-64/88 Commission v France, the Commission brought the present action. Procedure before the Court23 In answer to a question asked by the Court with a view to the hearing on 3 March 2004, the Commission informed the Court that, since the present action was brought, its staff had made three further inspection visits (from 11 to 16 May 2003 to Sète and Port-Vendres, from 19 to 20 June 2003 to Loctudy, Lesconil, Saint-Guénolé and Guilvinec, and from 14 to 22 July 2003 to Port-la-Nouvelle, Sète, Le Grau-du-Roi, Carro, Sanary‑sur-Mer and Toulon). According to the Commission, it is apparent from the mission reports on those visits that the number of cases of undersized fish being offered for sale had decreased in Brittany but problems remained on the Mediterranean coast with regard to bluefin tuna, and that inspections on landing were infrequent. 24 The Commission explained that, in order to assess the effectiveness of the measures taken by the French authorities, it would need to have the reports and sets of statistics relating to implementation of the various measures for the general organisation of fisheries control to which the French Government had referred. 25 After being requested by the Court to indicate the number of inspections at sea and on land which the French authorities had carried out since the bringing of the present action with a view to ensuring compliance with the rules relating to the minimum size of fish, the number of infringements recorded and the action taken by the courts in respect of those infringements, on 30 January 2004 the French Government lodged fresh statistics. They show that the number of inspections, findings of infringement and convictions was lower in 2003 than in 2002. 26 The French Government stated that the decrease in inspections at sea was due to the mobilisation of French vessels to fight the pollution caused by the shipwrecking of the oil tanker Prestige and that inspections on land had decreased because the discipline of fishermen had improved. It explained that the decrease in the number of convictions was due to the effects of Law No 2002-1062 of 6 August 2002 granting an amnesty (JORF No 185 of 9 August 2002, p. 13647), while pointing out that the average amount of the fines imposed had increased. The breach of obligations alleged The geographical area at issue27 It should be noted as a preliminary point that the declaration made in the operative part of the judgment in Case C-64/88 Commission v France that the French Republic had failed to carry out controls ensuring compliance with technical Community measures for the conservation of fishery resources, laid down by Regulations Nos 171/83 and 3094/86, only concerned, as is apparent from the delimitation set out in Article 1(1) of those regulations, the taking and landing of fishery resources occurring in certain areas of the north-east Atlantic. 28 As submitted by the French Government and explained by the Commission at the hearing on 3 March 2004, the present action thus relates only to the situation in those areas. The reference date29 The Commission sent the first reasoned opinion to the French Republic on 14 April 1996 and, subsequently, a supplementary reasoned opinion on 6 June 2000. 30 It follows that the reference date for assessing the alleged breach of obligations is the date upon which the period laid down in the supplementary reasoned opinion of 6 June 2000 expired, that is to say two months after notification of that opinion (Case C-474/99 Commission v Spain [2002] ECR I‑5293, paragraph 27, and Case C-33/01 Commission v Greece [2002] ECR I‑5447, paragraph 13). 31 Since the Commission has claimed that the Court should impose a penalty payment on the French Republic, it should also be ascertained whether the alleged breach of obligations has continued up to the Court’s examination of the facts. The extent of the obligations on the Member States under the common fisheries policy32 Article 1 of Regulation No 2847/93, which constitutes a specific embodiment, in the field of fisheries, of the obligations imposed on the Member States by Article 10 EC, provides that the Member States are to adopt appropriate measures to ensure the effectiveness of the Community system for conservation and management of fishery resources. 33 Regulation No 2847/93 imposes in this regard a joint responsibility on Member States (see, in relation to Regulation No 2241/87, Case C-9/89 Commission v Spain [1990] ECR I-1383, paragraph 10). This joint responsibility means that when a Member State fails to fulfil its obligations, it prejudices the interests of the other Member States and of their economic operators. 34 It is imperative that the Member States fulfil the obligations incumbent on them under the Community rules in order to ensure the protection of fishing grounds, the conservation of the biological resources of the sea and their exploitation on a sustainable basis in appropriate economic and social conditions (see, in relation to failure to comply with the quota system for the fishing years 1991 to 1996, Joined Cases C-418/00 and C-419/00 Commission v France [2002] ECR I-3969, paragraph 57). 35 To this end, Article 2 of Regulation No 2847/93, which repeats the obligations laid down by Article 1(1) of Regulation No 2241/87, obliges the Member States to monitor fishing activity and related activities. It requires them to inspect fishing vessels and investigate all activities, including the activities of landing, selling, transporting and storing fish and recording landings and sales. 36 Article 31 of Regulation No 2847/93, which takes up the obligations laid down in Article 1(2) of Regulations Nos 2057/82 and 2241/87, requires the Member States to take action in respect of recorded infringements. It states that the proceedings initiated must be capable of effectively depriving those responsible of the economic benefit of the infringements or of producing results proportionate to the seriousness of such infringements, effectively discouraging further offences of the same kind. 37 Regulation No 2847/93 thus provides specific indications as to the content of the measures which must be taken by the Member States and which must seek to ensure that fishery operations are conducted properly with the objective of both preventing any breaches and punishing such breaches. That objective means that the measures implemented must be effective, proportionate and a deterrent. As the Advocate General has observed in point 39 of his Opinion of 29 April 2004, there must be a serious risk, for persons engaging in fishing activity and related activities, that in the event of infringement of the rules of the common fisheries policy, they will be detected and have sufficiently severe penalties imposed on them. 38 It is in light of those considerations that the question whether the French Republic has taken all the necessary measures to comply with the judgment in Case C‑64/88 Commission v France should be examined. The first complaint: inadequate controls Arguments of the parties39 The Commission maintains that it is clear from the findings made by its inspectors that the French authorities’ controls regarding compliance with the Community provisions on the minimum size of fish are still deficient. 40 The increase in the number of inspections to which the French Government refers cannot modify those findings since only inspections at sea are involved. The control plans adopted by the French Government in 2001 and 2002 are not, in themselves, capable of bringing the alleged breach of obligations to an end. Implementation of those plans involves the prior setting of objectives, which are necessary in order to be able to assess the effectiveness and operability of the plans. Moreover, the plans must actually be implemented, which the visits made to French ports since the plans were established have not demonstrated. 41 The French Government observes, first of all, that the inspection reports upon which the Commission relies were never made known to the French authorities, which were not in a position to respond to the statements that they contain. Furthermore, those reports are founded on mere suppositions. 42 It also submits that since delivery of the judgment in Case C-64/88 Commission v France it has been constantly strengthening its control mechanisms. This strengthening has taken the form of an increase in the number of inspections at sea and the adoption, in 2001, of a general control plan, supplemented, in 2002, by a ‘minimum catch sizes’ control plan. With regard to the effectiveness of those measures, it points out that it has been possible to record no marketing of undersized fish on several inspection visits made by Commission inspectors. 43 Finally, in the French Government’s submission, the Commission merely asserts that the measures taken by it are inappropriate without indicating the measures capable of bringing the alleged breach of obligations to an end. Findings of the Court44 Like the procedure laid down in Article 226 EC (see, in relation to failure to comply with the quota system for the fishing years 1988 and 1990, Case C‑333/99 Commission v France [2001] ECR I-1025, paragraph 33), the procedure laid down in Article 228 EC is based on the objective finding that a Member State has failed to fulfil its obligations. 45 In the present instance, the Commission has adduced in support of its complaint mission reports drawn up by its inspectors.46 The French Government’s line of argument, put forward at the stage of its rejoinder, that the reports to which the Commission referred in its application cannot be used as evidence that the breach of obligations has persisted on the ground that they were never made known to the French authorities, cannot be upheld. 47 It can be seen from the reports adduced by the Commission that all the reports subsequent to 1998, which have been put in evidence in their entirety or in the form of extensive extracts, refer to accounts of meetings in the course of which the competent national authorities were informed of the results of the inspection visits and were therefore able to present their observations on the findings of the Commission’s inspectors. While this reference is not found in the earlier reports, put in evidence in the form of extracts limited to the findings of fact made by the inspectors, it is sufficient to point out that in its letter of 1 August 2000, sent to the Commission in response to the supplementary reasoned opinion of 6 June 2000, the French Government set out its observations on the content of those reports without putting in issue the circumstances of their disclosure to the French authorities. 48 That being so, it should be examined whether the information contained in the mission reports adduced by the Commission is such as to establish an objective finding that a breach by the French Republic of its control obligations has persisted. 49 As regards the situation on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000, it is apparent from the reports to which the Commission referred in that opinion (see paragraph 17 of this judgment) that the inspectors were able to record the presence of undersized fish, on each of the six visits that they made. They were able to record, in particular, that there was a market for undersized hake, offered for sale under the name ‘merluchons’ or ‘friture de merluchons’ (small hake) and, in breach of the marketing standards laid down by Regulation No 2406/96, under the code ‘00’. 50 On five of those six visits, the landing and offering for sale of the undersized fish took place without monitoring by the competent national authorities. As the French Government acknowledged in its response of 1 August 2000 to the supplementary reasoned opinion of 6 June 2000, the persons whom the inspectors were able to meet ‘did not fall within the classes of officers empowered to find infringements of the fishery rules and were not attached to the maritime authorities’. On the sixth visit, the inspectors recorded that undersized fish had been landed and offered for sale in the presence of national authorities empowered to find infringements of the fishery rules. However, those authorities refrained from taking action against the offenders. 51 This evidence enables it to be found that, in the absence of effective action by the competent national authorities, a practice of offering undersized fish for sale persisted which was sufficiently constant and widespread to prejudice seriously, by reason of its cumulative effect, the objectives of the Community system for conservation and management of fishery resources. 52 Moreover, the similarity and recurrence of the situations recorded in all the reports enable it to be held that those instances can only have resulted from structural inadequacy of the measures implemented by the French authorities and, consequently, from a failure on their part to fulfil the obligation imposed on them by the Community rules to carry out controls that are effective, proportionate and a deterrent (see, to this effect, Case C-333/99 Commission v France, cited above, paragraph 35). 53 It must therefore be found that, on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000, the French Republic, by failing to carry out controls of fishing activities in accordance with the requirements laid down by the Community provisions, had not taken all the necessary measures to comply with the judgment in Case C-64/88 Commission v France and was accordingly failing to fulfil its obligations under Article 228 EC. 54 As regards the situation on the date of examination of the facts by the Court, the information available shows that significant deficiencies persisted. 55 On the visit made to Brittany in June 2001 (see paragraph 20 of this judgment), the Commission inspectors were once again able to record the presence of undersized fish. A decrease in the number of cases of such fish being offered for sale was recorded on a subsequent visit to the same area in June 2003 (see paragraph 23 of the present judgment). However, that fact is not decisive in light of the concurring findings, set out in the reports drawn up at the time of those two visits, concerning the ineffectiveness of the controls on land. 56 Where the Commission has adduced sufficient evidence to show that the breach of obligations has persisted, it is for the Member State concerned to challenge in substance and in detail the information produced and its consequences (see, to this effect, Case 272/86 Commission v Greece [1988] ECR 4875, paragraph 21, and Case C-365/97 Commission v Italy [1999] ECR I-7773, paragraphs 84 to 87). 57 In this connection, it is to be noted that the information concerning the increase in inspections in pursuance of the plans adopted in 2001 and 2002, on which the French Government relied in its defence, conflicts with the information supplied by it in answer to the Court’s questions (see paragraph 26 of this judgment), according to which the number of inspections at sea and on land was lower in 2003 than in 2002. 58 Even if divergent information of that kind can, as the French Government contends, be regarded as showing an improvement in the situation, the fact remains that the efforts made cannot excuse the failures that occurred (Case C‑333/99 Commission v France, paragraph 36). 59 In this connection, the French Government’s argument that the decrease in inspections is justified by the improved discipline of fishermen cannot be upheld either. 60 As the French Government has itself pointed out in its defence, actions designed to change behaviour and mentality involve a long process. It must therefore be considered that the structural deficiency, extending over a period of more than 10 years, of the controls designed to ensure compliance with the rules relating to the minimum size of fish resulted in behaviour on the part of the economic operators concerned that it will be possible to correct only after action over a lengthy period. 61 Accordingly, in light of the detailed evidence submitted by the Commission, the information adduced by the French Government is not sufficiently substantial to demonstrate that the measures which it has implemented regarding the control of fishing activities display the efficacy necessary to meet its obligation to ensure the effectiveness of the Community system for conservation and management of fishery resources (see paragraphs 37 and 38 of the present judgment). 62 It must therefore be found that, on the date upon which the Court examined the facts which were presented to it, the French Republic, by failing to carry out controls of fishing activities in accordance with the requirements laid down by the Community provisions, had not taken all the necessary measures to comply with the judgment in Case C-64/88 Commission v France and was accordingly failing to fulfil its obligations under Article 228 EC. The second complaint: inadequacy of action taken63 The Commission contends that the proceedings brought by the French authorities for infringement of the Community provisions concerning the minimum size of fish are insufficient. Generally, the inadequacy of the controls is reflected in the number of proceedings. Furthermore, it is apparent from the information provided by the French Government that, even when infringements are recorded, action is not systematically taken. 64 The Commission observes that the statistics submitted by the French Government before the period laid down in the supplementary reasoned opinion of 6 June 2000 expired are too general in that they concern the whole of France and do not specify the nature of the infringements in respect of which proceedings were brought. 65 The information provided subsequently cannot be taken as showing that the French authorities apply a policy of deterrent penalties so far as concerns infringements of the rules relating to the minimum size of fish. The Commission points out that, for 2001, the French Government notified, pursuant to Council Regulation (EC) No 1447/1999 of 24 June 1999 establishing a list of types of behaviour which seriously infringe the rules of the common fisheries policy (OJ 1999 L 167, p. 5) and Commission Regulation (EC) No 2740/1999 of 21 December 1999 laying down detailed rules for the application of Regulation No 1447/1999 (OJ 1999 L 328, p. 62), 73 cases of infringement of the rules relating to the minimum size of fish. However, only eight cases, that is to say 11%, resulted in imposition of a fine. 66 While the Commission acknowledges that the circular of the Minister for Justice of 16 October 2002, to which the French Government refers, constitutes an appropriate measure, it considers nevertheless that the way in which the circular will be applied should be checked. In this connection, it observes that the latest figures notified by the French Government for 2003 show a reduction in the number of convictions. 67 The French Government contends that since 1991 the number of infringements in respect of which proceedings have been brought, and the sentences, have been constantly increasing. It stresses, however, that a purely statistical examination of the number of infringements in respect of which proceedings are brought cannot, by itself, give an account of the effectiveness of a control system since it rests on the entirely unproven presupposition that the number of infringements is stable. 68 The French Government refers to a circular which the Minister for Justice addressed on 16 October 2002 to the Principal State Prosecutors at the cours d’appel (Courts of Appeal) of Rennes, Poitiers, Bordeaux and Pau, recommending that proceedings be systematically brought in respect of infringements and that deterrent penalties be demanded. It acknowledges, however, that the circular could not have full effect in 2002 or 2003 because of Law No 2002-1062, which granted an amnesty in respect of infringements committed before 17 May 2002 in so far as the fine did not exceed EUR 750. 69 The obligation on the Member States to make sure that penalties which are effective, proportionate and a deterrent are imposed for infringements of Community rules is of fundamental importance in the field of fisheries. If the competent authorities of a Member State were systematically to refrain from taking action against the persons responsible for such infringements, both the conservation and management of fishery resources and the uniform application of the common fisheries policy would be jeopardised (see, in relation to failure to comply with the quota system for the fishing years 1991 and 1992, Case C-52/95 Commission v France [1995] ECR I-4443, paragraph 35). 70 So far as concerns, in this instance, the situation on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000, it is sufficient to recall the findings made in paragraphs 49 to 52 of the present judgment. Since it has been established that infringements which the national authorities could have found to exist were not recorded and since reports were not drawn up in respect of offenders, it is clear that those authorities failed to fulfil the obligation to take action, which the Community rules impose on them (see, to this effect, Case C‑64/88 Commission v France, paragraph 24). 71 As regards the situation on the date upon which the Court examined the facts, reference should be made to the findings in paragraphs 54 to 61 of the present judgment, according to which significant deficiencies in the controls persisted. In light of those findings, the increase in the number of infringements in respect of which proceedings were brought, to which the French Government has referred, cannot be considered sufficient. As the French Government has observed, a purely statistical examination of the number of infringements in respect of which proceedings are brought cannot, by itself, give an account of the effectiveness of a control system. 72 Furthermore, as the Commission has pointed out, it is clear from the information provided by the French Government that proceedings are not brought in respect of all the infringements that are recorded. It is also apparent that deterrent penalties are not imposed in respect of all the infringements in respect of which proceedings are brought. The fact that numerous fisheries infringements were eligible to benefit from Law No 2002-1062 attests that, in all those cases, fines of less than EUR 750 were imposed. 73 Accordingly, in light of the detailed evidence submitted by the Commission, the information adduced by the French Government is not sufficiently substantial to demonstrate that the measures which it has implemented so far as concerns the taking of action in respect of infringements of the fisheries rules display the efficacy, proportionality and deterrence necessary to meet its obligation to ensure the effectiveness of the Community system for conservation and management of fishery resources (see paragraphs 37 and 38 of the present judgment). 74 It must therefore be found that, both on expiry of the period laid down in the supplementary reasoned opinion of 6 June 2000 and on the date upon which the Court examined the facts which were presented to it, the French Republic, by failing to ensure that action was taken in respect of infringements of the rules governing fishing activities in accordance with the requirements laid down by the Community provisions, had not taken all the necessary measures to comply with the judgment in Case C-64/88 Commission v France and was accordingly failing to fulfil its obligations under Article 228 EC. Financial penalties for the breach of obligations75 To punish the failure to comply with the judgment in Case C-64/88 Commission v France, the Commission suggested that the Court should impose a daily penalty payment on the French Republic from delivery of the present judgment until the day on which the breach of obligations is brought to an end. In light of the particular features of the breach that has been established, the Court considers that it should examine in addition whether imposition of a lump sum could constitute an appropriate measure. The possibility of imposing both a penalty payment and a lump sum Arguments of the parties and submissions made to the Court76 When invited to give their views on whether, in proceedings brought under Article 228(2) EC, the Court may, where it finds that the Member State concerned has not complied with the Court’s judgment, impose both a lump sum and a penalty payment on it, the Commission and the Danish, Netherlands, Finnish and United Kingdom Governments answered in the affirmative. 77 Their reasoning is based, essentially, on the fact that those two measures are complementary, in that each of them respectively seeks to achieve a deterrent effect. A combination of those measures should be regarded as one and the same means of achieving the objective laid down by Article 228 EC, that is to say not only to induce the Member State concerned to comply with the initial judgment but also, from a wider viewpoint, to reduce the possibility of similar infringements being committed again. 78 The French, Belgian, Czech, German, Greek, Spanish, Irish, Italian, Cypriot, Hungarian, Austrian, Polish and Portuguese Governments have put forward a contrary view. 79 They rely on the wording of Article 228(2) EC and on the use of the conjunction ‘or’, to which they accord a disjunctive sense, and on the objective of this provision. The provision is not punitive in nature, since Article 228(2) EC does not seek to punish the defaulting Member State, but only to induce it to comply with a judgment establishing a breach of obligations. It is not possible to distinguish several periods of a breach of obligations; only its entire duration is to be taken into consideration. The imposition of more than one financial penalty is contrary to the principle prohibiting the same conduct from being punished twice. Furthermore, in the absence of Commission guidelines concerning the applicable criteria for calculating a lump sum, imposition of such a sum by the Court would conflict with the principles of legal certainty and transparency. It would also compromise equal treatment between Member States, since such a measure was not envisaged in the judgments in Case C-387/97 Commission v Greece [2000] ECR I-5047 and Case C-278/01 Commission v Spain [2003] ECR I‑14141. 80 The procedure laid down in Article 228(2) EC has the objective of inducing a defaulting Member State to comply with a judgment establishing a breach of obligations and thereby of ensuring that Community law is in fact applied. The measures provided for by that provision, namely a lump sum and a penalty payment, are both intended to achieve this objective. 81 Application of each of those measures depends on their respective ability to meet the objective pursued according to the circumstances of the case. While the imposition of a penalty payment seems particularly suited to inducing a Member State to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist, the imposition of a lump sum is based more on assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period since the judgment which initially established it. 82 That being so, recourse to both types of penalty provided for in Article 228(2) EC is not precluded, in particular where the breach of obligations both has continued for a long period and is inclined to persist. 83 This interpretation cannot be countered by reference to the use in Article 228(2) EC of the conjunction ‘or’ to link the financial penalties capable of being imposed. As the Commission and the Danish, Netherlands, Finnish and United Kingdom Governments have submitted, that conjunction may, linguistically, have an alternative or a cumulative sense and must therefore be read in the context in which it is used. In light of the objective pursued by Article 228 EC, the conjunction ‘or’ in Article 228(2) EC must be understood as being used in a cumulative sense. 84 The objection raised, in particular by the German, Greek, Hungarian, Austrian and Polish Governments, that imposition of both a penalty payment and a lump sum, taking into consideration the same period of breach twice, would infringe the principle non bis in idem must also be rejected. Since each penalty has its own function, it is to be determined in such a way as to fulfil that function. It follows that, where the Court imposes a penalty payment and a lump sum simultaneously, the duration of the breach is taken into consideration as one of a number of criteria, in order to determine the appropriate level of coercion and deterrence. 85 The argument, relied on by the Belgian Government in particular, that, in the absence of guidelines adopted by the Commission for calculating a lump sum, imposition of a lump sum would conflict with the principles of legal certainty and transparency cannot be upheld either. While such guidelines do help to ensure that the Commission acts in a manner which is transparent, foreseeable and consistent with legal certainty (see, in relation to the guidelines concerning calculation of penalty payments, Case C-387/97 Commission v Greece, cited above, paragraph 87), the fact remains that exercise of the power conferred on the Court by Article 228(2) EC is not subject to the condition that the Commission adopts such rules, which, in any event, cannot bind the Court (Case C-387/97 Commission v Greece, paragraph 89, and Case C-278/01 Commission v Spain, cited above, paragraph 41). 86 As to the objection, raised by the French Government, that imposition of both a penalty payment and a lump sum in the present case would compromise equal treatment since it was not envisaged in the judgments in Case C-387/97 Commission v Greece and Case C-278/01 Commission v Spain, it is for the Court, in each case, to assess in light of its circumstances the financial penalties to be imposed. Accordingly, the fact that both measures were not imposed in the cases decided previously cannot in itself constitute an obstacle to the imposition of both in a subsequent case, if, having regard to the nature, seriousness and persistence of the breach of obligations established, that appears appropriate. The Court’s discretion as to the financial penalties that can be imposed87 The Commission and the Czech, Hungarian and Finnish Governments have answered in the affirmative the question whether the Court may, where appropriate, depart from the Commission’s suggestions and impose a lump sum on a Member State although the Commission did not suggest this. In their submission, the Court has a discretion in the matter, which extends to determining the penalty considered to be the most appropriate, irrespective of the Commission’s suggestions in this regard. 88 The French, Belgian, Danish, German, Greek, Spanish, Irish, Italian, Netherlands, Austrian, Polish and Portuguese Governments take an opposing view. They put forward substantive and procedural arguments. With regard to substance, they submit that exercise by the Court of such a discretion would infringe the principles of legal certainty, predictability, transparency and equal treatment. The German Government adds that the Court in any event lacks the political legitimacy necessary to exercise such a power in a field where assessments of political expediency play a considerable role. At the procedural level, the aforementioned governments stress that so extensive a power is incompatible with the general principle of civil procedure common to all the Member States that courts cannot go beyond the parties’ claims, and dwell upon the need for an interpartes procedure enabling the Member State concerned to exercise its rights of defence. 89 With regard to the arguments derived from the principles of legal certainty, predictability, transparency and equal treatment, reference should be made to the findings made in paragraphs 85 and 86 of this judgment. 90 So far as concerns the German Government’s argument as to the Court’s lack of political legitimacy to impose a financial penalty not suggested by the Commission, the various stages involved in the procedure laid down in Article 228(2) EC should be distinguished. Once the Commission has exercised its discretion as to the initiation of infringement proceedings (see, inter alia, in relation to Article 226 EC, the judgment in Case C-74/02 Commission v Germany [2003] ECR I‑9877, paragraph 17, and the judgment of 21 October 2004 in Case C-477/03 Commission v Germany, not published in the ECR, paragraph 11), the question of whether or not the Member State concerned has complied with a previous judgment of the Court is subjected to a judicial procedure in which political considerations are irrelevant. It is in performance of its judicial function that the Court assesses the extent to which the situation prevailing in the Member State in question complies with the initial judgment and, where appropriate, assesses the seriousness of a persisting breach of obligations. It follows that, as the Advocate General has observed in point 24 of his Opinion of 18 November 2004, the appropriateness of imposing a financial penalty and the choice of the penalty most suited to the circumstances of the case can be appraised only in the light of the findings made by the Court in the judgment to be delivered under Article 228(2) EC and therefore fall outside the political sphere. 91 The argument that, in departing from or going beyond the Commission’s suggestions, the Court infringes a general principle of procedural law which prohibits courts from going beyond the parties’ claims is not well founded either. The procedure provided for in Article 228(2) EC is a special judicial procedure, peculiar to Community law, which cannot be equated with a civil procedure. The order imposing a penalty payment and/or a lump sum is not intended to compensate for damage caused by the Member State concerned, but to place it under economic pressure which induces it to put an end to the breach established. The financial penalties imposed must therefore be decided upon according to the degree of persuasion needed in order for the Member State in question to alter its conduct. 92 As regards the rights of defence that the Member State concerned must be able to exercise, which have been dwelt upon by the French, Belgian, Netherlands, Austrian and Finnish Governments, the procedure laid down in Article 228(2) EC must, as the Advocate General has observed in point 11 of his Opinion of 18 November 2004, be regarded as a special judicial procedure for the enforcement of judgments, in other words as a method of enforcement. It is in this context, therefore, that the procedural guarantees which must be available to the Member State in question are to be assessed. 93 It follows that, once it has been found in interpartes proceedings that a breach of Community law persists, the rights of defence which are to be accorded to the defaulting Member State so far as concerns the financial penalties envisaged must take account of the objective pursued, namely securing and guaranteeing that the law is again complied with. 94 In the present case, so far as concerns the truth with regard to the conduct liable to give rise to the imposition of financial penalties, the French Republic had the opportunity to defend itself throughout a pre-litigation procedure which lasted nearly nine years and gave rise to two reasoned opinions, and, in the present proceedings, in the course of the written procedure and at the hearing of 3 March 2004. That examination of the facts led the Court to find that a breach by the French Republic of its obligations persisted (see paragraph 74 of the present judgment). 95 The Commission which, in the two reasoned opinions, had drawn the risk of financial penalties to the attention of the French Republic (see paragraphs 15 and 18 of the present judgment), indicated to the Court the criteria (see paragraph 98 of the present judgment) capable of being taken into consideration when determining the financial penalties intended to exert sufficient economic pressure on the French Republic to prompt it to put an end to its breach of obligations as rapidly as possible, and the respective weightings to be given to those criteria. The French Republic set out its views on the criteria in the written procedure and at the hearing on 3 March 2004. 96 By order of 16 June 2004, the Court requested the parties to give their views on whether, where the Court finds that a Member State has not taken the necessary measures to comply with a previous judgment and the Commission has requested the Court to impose a penalty payment on that State, the Court may impose on the Member State a lump sum or, as the case may be, a lump sum and a penalty payment. The parties stated their views at the hearing on 5 October 2004. 97 It follows that the French Republic has been able to make its submissions on all the matters of law and of fact necessary for establishing that the breach of obligations alleged against it has persisted and for deciding upon the seriousness of the breach and the measures which may be adopted in order to bring it to an end. On the basis of those matters, which have been the subject of inter partes proceedings, it is for the Court to determine, according to the degree of persuasion and deterrence which appears to it to be required, the financial penalties appropriate for making sure that the judgment in Case C-64/88 Commission v France is complied with as rapidly as possible and preventing similar infringements of Community law from recurring. The financial penalties appropriate in the present case Imposition of a penalty payment98 On the basis of the method of calculation which it has set out in its communication 97/C 63/02 of 28 February 1997 on the method of calculating the penalty payments provided for pursuant to Article [228] of the EC Treaty (OJ 1997 C 63, p. 2), the Commission suggested that the Court should impose on the French Republic a penalty payment of EUR 316 500 for each day of delay by way of penalty for non-compliance with the judgment in Case C-64/88 Commission v France, from the date of delivery of the judgment in the present case until the day on which the judgment in Case C-64/88 Commission v France has been complied with. 99 The Commission considers that an order imposing a penalty payment is the most appropriate instrument for putting an end as soon as possible to the infringement which has been established and that, in the present case, a penalty payment of EUR 316 500 for each day of delay fits the seriousness and duration of the infringement, due regard being had to the need to make the penalty effective. That sum is calculated by multiplying a uniform basic amount of EUR 500 by a coefficient of 10 (on a scale of 1 to 20) for the seriousness of the infringement, by a coefficient of 3 (on a scale of 1 to 3) for the duration of the infringement and by a coefficient of 21.1 (based on the gross domestic product of the Member State in question and the weighting of votes in the Council of the European Union), which is deemed to reflect the ability to pay of the Member State concerned. 100 The French Government submits that there is no reason to impose a penalty payment because it has brought the breach of obligations to an end and, in the alternative, that the amount of the penalty payment requested is disproportionate. 101 It points out that, so far as the seriousness of the infringement is concerned, in Case C-387/97 Commission v Greece the Commission suggested a coefficient of 6, although the breach of obligations compromised public health and no measure had been taken with a view to complying with the previous judgment, two factors which are absent here. Accordingly, the coefficient of 10 suggested by the Commission in the present case is not acceptable. 102 The French Government also maintains that the measures required to comply with the judgment in Case C-64/88 Commission v France were unable to produce immediate effects. Given the inevitable time-lag between the adoption of the measures and their impact becoming perceptible, the Court cannot take into account the whole of the period passing between delivery of the first judgment and that of the forthcoming judgment. 103 As to those submissions, while it is clear that a penalty payment is likely to encourage the defaulting Member State to put an end as soon as possible to the breach that has been established (Case C-278/01 Commission v Spain, paragraph 42), it should be remembered that the Commission’s suggestions cannot bind the Court and are only a useful point of reference (Case C-387/97 Commission v Greece, paragraph 89). In exercising its discretion, it is for the Court to set the penalty payment so that it is appropriate to the circumstances and proportionate both to the breach that has been established and to the ability to pay of the Member State concerned (see, to this effect, Case C-387/97 Commission v Greece, paragraph 90, and Case C-278/01 Commission v Spain, paragraph 41). 104 In that light, and as the Commission has suggested in its communication of 28 February 1997, the basic criteria which must be taken into account in order to ensure that penalty payments have coercive force and Community law is applied uniformly and effectively are, in principle, the duration of the infringement, its degree of seriousness and the ability of the Member State to pay. In applying those criteria, regard should be had in particular to the effects of failure to comply on private and public interests and to the urgency of getting the Member State concerned to fulfil its obligations (Case C-387/97 Commission v Greece, paragraph 92). 105 As regards the seriousness of the infringement and, in particular, the effects of failure to comply on private and public interests, it is to be remembered that one of the key elements of the common fisheries policy consists in rational and responsible exploitation of aquatic resources on a sustainable basis, in appropriate economic and social conditions. In this context, the protection of juvenile fish proves decisive for reestablishing stocks. Failure to comply with the technical measures of conservation prescribed by the common policy, in particular the requirements regarding the minimum size of fish, therefore constitutes a serious threat to the maintenance of certain species and certain fishing grounds and jeopardises pursuit of the fundamental objective of the common fisheries policy. 106 Since the administrative measures adopted by the French authorities have not been implemented in an effective manner, they cannot reduce the seriousness of the breach established. 107 Having regard to those factors, the coefficient of 10 (on a scale of 1 to 20) is therefore an appropriate reflection of the degree of seriousness of the infringement. 108 As regards the duration of the infringement, suffice it to state that it is considerable, even if the starting date be that on which the Treaty on European Union entered into force and not the date on which the judgment in Case C-64/88 Commission v France was delivered (see, to this effect, Case C-387/97 Commission v Greece, paragraph 98). Accordingly, the coefficient of 3 (on a scale of 1 to 3) suggested by the Commission appears appropriate. 109 The Commission’s suggestion of multiplying a basic amount by a coefficient of 21.1 based on the gross domestic product of the French Republic and on the number of votes which it has in the Council is an appropriate way of reflecting that Member State’s ability to pay, while keeping the variation between Member States within a reasonable range (see Case C-387/97 Commission v Greece, paragraph 88, and Case C-278/01 Commission v Spain, paragraph 59). 110 Multiplying the basic amount of EUR 500 by the coefficients of 21.1 (for ability to pay), 10 (for the seriousness of the infringement) and 3 (for the duration of the infringement) gives a sum of EUR 316 500 per day. 111 As regards the frequency of the penalty payment, account should, however, be taken of the fact that the French authorities have adopted administrative measures which could serve as a framework for implementation of the measures required to comply with the judgment in Case C-64/88 Commission v France. Nevertheless, it is not possible for the necessary adjustments to previous practices to be instantaneous or their impact to be perceived immediately. It follows that any finding that the infringement has come to an end could be made only after a period allowing an overall assessment to be made of the results obtained. 112 Having regard to those considerations, the penalty payment must be imposed not on a daily basis, but on a half-yearly basis. 113 In light of all of the foregoing, the French Republic should be ordered to pay to the Commission, into the account ‘European Community own resources’, a penalty payment of 182.5 x EUR 316 500, that is to say of EUR 57 761 250, for each period of six months from delivery of the present judgment at the end of which the judgment in Case C-64/88 Commission v France has not yet been fully complied with. Imposition of a lump sum114 In a situation such as that which is the subject of the present judgment, in light of the fact that the breach of obligations has persisted for a long period since the judgment which initially established it and of the public and private interests at issue, it is essential to order payment of a lump sum (see paragraph 81 of the present judgment). 115 The specific circumstances of the case are fairly assessed by setting the amount of the lump sum which the French Republic will have to pay at EUR 20 000 000. 116 The French Republic should therefore be ordered to pay to the Commission, into the account ‘European Community own resources’, a lump sum of EUR 20 000 000. Costs117 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the French Republic has been unsuccessful, the latter must be ordered to pay the costs. On those grounds, the Court (Grand Chamber) hereby:1. Declares that:– by failing to carry out controls of fishing activities in accordance with the requirements laid down by the Community provisions, and– by failing to ensure that action is taken in respect of infringements of the rules governing fishing activities in accordance with the requirements laid down by the Community provisions,the French Republic has not implemented all the necessary measures to comply with the judgment of 11 June 1991 in Case C-64/88 Commission v France and has accordingly failed to fulfil its obligations under Article 228 EC;2. Orders the French Republic to pay to the Commission of the European Communities, into the account ‘European Community own resources’, a penalty payment of EUR 57 761 250 for each period of six months from delivery of the present judgment at the end of which the judgment in Case C-64/88 Commission v France has not yet been fully complied with;3. Orders the French Republic to pay to the Commission of the European Communities, into the account ‘European Community own resources’, a lump sum of EUR 20 000 000;4. Orders the French Republic to pay the costs.[Signatures]* Language of the case: French. | 3f0a3-7ebeb46-4f0f | EN |
A MEMBER STATE IS NOT ENTITLED TO REFUSE TO RECOGNISE A DRIVING LICENCE ISSUED BY ANOTHER MEMBER STATE ON THE GROUND THAT, ACCORDING TO THE INFORMATION AVAILABLE TO THE FIRST MEMBER STATE, THE HOLDER HAD NOT, WHEN THE LICENCE WAS ISSUED, TAKEN UP NORMAL RESIDENCE IN THE MEMBER STATE WHICH ISSUED THE LICENCE | Criminal proceedingsagainstFelix Kapper(Reference for a preliminary ruling from the Amtsgericht Frankenthal)(Directive 91/439/EEC – Mutual recognition of driving licences – Residence requirement – Article 8(4) – Effects of withdrawal or cancellation of a previous driving licence – Recognition of a new driving licence issued by another Member State)Summary of the Judgment1. Freedom of movement for persons – Freedom of establishment – Driving licences – Directive 91/439 – Mutual recognition of driving licences – Driving licence issued without the residence requirement being complied with – Exclusive competence of the State which issues a licence to adopt appropriate measures (Council Directive 91/439, Arts 1(2), 7(1)(b) and 9)2. Freedom of movement for persons – Freedom of establishment – Driving licences – Directive 91/439 – Mutual recognition of driving licences – Refusal of a Member State to recognise the validity of a driving licence issued by another Member State(Council Directive 91/439, Arts 1(2) and 8(4)) 1. The principle of mutual recognition of driving licences introduced by Directive 91/439 means that when a host Member State is carrying out a traffic check within its territory, it is precluded from refusing to recognise a driving licence issued by another Member State to the driver of a vehicle on the ground that, according to the information available to the first Member State, the holder of the licence in question had, at the date of its issue, established his normal residence in that Member State and not in the issuing Member State. Given that Directive 91/439 confers exclusive competence on the Member State which issues a licence to ensure that driving licences are issued in compliance with the residence requirement set out in Articles 7(1)(b) and 9 of that directive, it is for that Member State alone to take appropriate measures in relation to driving licences held by persons who are subsequently shown to have failed to satisfy that requirement. Where a host Member State has good reason to doubt the validity of one or more licences issued by another Member State, it must so inform the latter under the rules relating to mutual assistance and the exchange of information contained in Article 12(3) of that directive. (see paras 47-48, operative part 1)2. The provisions of Articles 1(2) and 8(4) of Directive 91/439 on driving licences, taken together, must be interpreted as meaning that they preclude a Member State from refusing to recognise the validity of a driving licence issued by another Member State on the ground that its holder has, in the first Member State, been subject to a measure withdrawing or cancelling the driving licence issued by that Member State, where a temporary ban on obtaining a new licence, with which that measure is coupled, has expired before the date of issue of the licence issued by the other Member State. (see para. 78, operative part 2)JUDGMENT OF THE COURT (Fifth Chamber)29 April 2004(1)THE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: – Mr Kapper, by W. Säftel, Rechtsanwalt, – the German Government, by W.-D. Plessing and M. Lumma, acting as Agents, – the Netherlands Government, by H.G. Sevenster, acting as Agent, – the Commission of the European Communities, by M. Wolfcarius, G. Braun and H.M.H. Speyart, acting as Agents, after hearing the oral observations of Mr Kapper, represented by W. Säftel, the Italian Republic, represented by A. Cingolo, avvocato dello Stato, and the Commission, represented by G. Braun, at the hearing on 8 May 2003, after hearing the Opinion of the Advocate General at the sitting on 16 October 2003,gives the followingLegal backgroundOn those grounds,THE COURT (Fifth Chamber),The provisions of Articles 1(2), 7(1)(b) and 9 of Council Directive 91/439/EEC of 29 July 1991 on driving licences, as amended by Council Directive 97/26/EC of 2 June 1997, taken together, must be interpreted as meaning that they preclude a Member State from refusing to recognise a driving licence issued by another Member State on the ground that, according to the information available to the first Member State, the holder of the licence had, on the date on which it was issued, taken up normal residence in that Member State and not in the Member State in which the licence was issued. The provisions of Articles 1(2) and 8(4) of Directive 91/439, taken together, must be interpreted as meaning that they preclude a Member State from refusing to recognise the validity of a driving licence issued by another Member State on the ground that its holder has, in the first Member State, been subject to a measure withdrawing or cancelling the driving licence issued by that Member State, where a temporary ban on obtaining a new licence, with which that measure is coupled, has expired before the date of issue of the licence issued by the other Member State. TimmermansRosasvon BahrR. GrassV. SkourisRegistrarPresident 1 – Language of the case: German. Language of the case: German. | 5cc68-ee3d139-4485 | EN |
THE REFUSAL BY AN UNDERTAKING IN A DOMINANT POSITION TO GRANT A LICENCE FOR A COPYRIGHT ONLY CONSTITUTES AN ABUSE OF A DOMINANT POSITION IN CERTAIN CIRCUMSTANCES | IMS Health GmbH & Co. OHGvNDC Health GmbH & Co. KG(Reference for a preliminary ruling from the Landgericht Frankfurt am Main)(Competition – Article 82 EC – Abuse of a dominant position – Brick structure used to supply regional sales data for pharmaceutical products in a Member State – Copyright – Refusal to grant a licence)Summary of the Judgment1. Competition – Community rules – Application by national courts – Assessment of an agreement or practice which has been examined by the Commission or has already been the subject of a Commission decision – Conditions(Arts 81 EC and 82 EC)2. Competition – Dominant position – Abuse – Refusal of an undertaking in a dominant position to allow another undertaking access to a product or service that is necessary for its business – Assessment of whether the product or service at issue is indispensable – Criteria – Licence to use a brick structure for supplying regional sales data for pharmaceutical products(Art. 82 EC)3. Competition – Dominant position – Copyright – Rights over a brick structure used to supply regional sales data for pharmaceutical products – Refusal to grant a licence to another undertaking – Abuse – Conditions1. Where the national courts give a ruling on agreements or practices which may subsequently be the subject of a decision by the Commission, they must avoid taking decisions which conflict with those taken or envisaged by the Commission in the implementation of Articles 81 and 82 EC. (see para. 19)2. In the assessment of the abusive character of a dominant position, in order to determine whether a product or service is indispensable for enabling an undertaking to carry on business in a particular market, it must be determined whether there are products or services which constitute alternative solutions, even if they are less advantageous, and whether there are technical, legal or economic obstacles capable of making it impossible or at least unreasonably difficult for any undertaking seeking to operate in the market to create, possibly in cooperation with other operators, alternative products or services. In order to accept the existence of economic obstacles, it must be established, at the very least, that the creation of those products or services is not economically viable for production on a scale comparable to that of the undertaking which controls the existing product or service. It follows that, for the purposes of examining whether the refusal by an undertaking in a dominant position to grant a licence for a brick structure protected by an intellectual property right which it owns is abusive, the degree of participation by users in the development of that structure and the outlay, particularly in terms of cost, on the part of potential users in order to purchase studies on regional sales of pharmaceutical products presented on the basis of an alternative structure are factors which must be taken into consideration in order to determine whether the protected structure is indispensable to the marketing of studies of that kind. (see paras 28, 30, operative part 1)3. The refusal by an undertaking which holds a dominant position and owns an intellectual property right in a brick structure indispensable to the presentation of regional sales data on pharmaceutical products in a Member State to grant a licence to use that structure to another undertaking, which also wishes to provide such data in the same Member State, constitutes an abuse of a dominant position within the meaning of Article 82 EC where the following conditions are fulfilled: - the undertaking which requested the licence intends to offer, on the market for the supply of the data in question, new products or services not offered by the owner of the intellectual property right and for which there is a potential consumer demand; - the refusal is not justified by objective considerations;- the refusal is such as to reserve to the owner of the intellectual property right the market for the supply of data on sales of pharmaceutical products in the Member State concerned by eliminating all competition on that market. (see para. 52, operative part 2)JUDGMENT OF THE COURT (Fifth Chamber)29 April 2004(1)andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: – IMS Health GmbH & Co. OHG, by S. Barthelmess and H.-C. Salger, Rechtsanwälte, and J. Temple Lang, Solicitor, – NDC Health GmbH & Co. KG, by G. Janke and T. Lübbig, Rechtsanwälte, – the Commission of the European Communities, by A. Whelan and S. Rating, acting as Agents, after hearing the oral observations of IMS Health GmbH & Co. OHG, represented by S. Barthelmess, H.-C. Salger, C. Feddersen and G. Jung-Weiser, Rechtsanwälte, and by J. Temple-Lang, of NDC Health GmbH & Co. KG, represented by G. Janke and T. Lübbig, and the Commission, represented by A. Whelan and S. Rating, at the hearing on 6 March 2003, after hearing the Opinion of the Advocate General at the sitting on 2 October 2003,gives the followingFactual backgroundIs Article 82 EC to be interpreted as meaning that there is abusive conduct by an undertaking with a dominant position on the market where it refuses to grant a licence agreement for the use of a databank protected by copyright to an undertaking which seeks access to the same geographical and product market if the participants on the other side of the market, that is to say potential clients, reject any product which does not make use of the databank protected by copyright because their set-up relies on products manufactured on the basis of that databank? Is the extent to which an undertaking with a dominant position on the market has involved persons from the other side of the market in the development of the databank protected by copyright relevant to the question of abusive conduct by that undertaking? Is the material outlay (in particular with regard to costs) in which clients who have hitherto been supplied with the product of the undertaking having a dominant market position would be involved if they were in future to go over to purchasing the product of a competing undertaking which does not make use of the databank protected by copyright relevant to the question of abusive conduct by an undertaking with a dominant position on the market?’ the undertaking which requested the licence intends to offer, on the market for the supply of the data in question, new products or services not offered by the owner of the intellectual property right and for which there is a potential consumer demand; the refusal is not justified by objective considerations;the refusal is such as to reserve to the owner of the intellectual property right the market for the supply of data on sales of pharmaceutical products in the Member State concerned by eliminating all competition on that market. On those grounds,THE COURT (Fifth Chamber),For the purposes of examining whether the refusal by an undertaking in a dominant position to grant a licence for a brick structure protected by an intellectual property right which it owns is abusive, the degree of participation by users in the development of that structure and the outlay, particularly in terms of cost, on the part of potential users in order to purchase studies on regional sales of pharmaceutical products presented on the basis of an alternative structure are factors which must be taken into consideration in order to determine whether the protected structure is indispensable to the marketing of studies of that kind. The refusal by an undertaking which holds a dominant position and owns an intellectual property right in a brick structure indispensable to the presentation of regional sales data on pharmaceutical products in a Member State to grant a licence to use that structure to another undertaking which also wishes to provide such data in the same Member State, constitutes an abuse of a dominant position within the meaning of Article 82 EC where the following conditions are fulfilled: the undertaking which requested the licence intends to offer, on the market for the supply of the data in question, new products or services not offered by the owner of the intellectual property right and for which there is a potential consumer demand;JannTimmermansvon BahrR. GrassV. SkourisRegistrarPresident 1 – Language of the case: German. Language of the case: German. | 4ad30-1ed23c0-4d6d | EN |
THE COURT OF JUSTICE HAS CONFIRMED ITS CASE-LAW RELATING TO THE CIRCUMSTANCES IN WHICH AN INDIVIDUAL MAY SEEK THE ANNULMENT OF A COMMUNITY REGULATION | Commission of the European CommunitiesvJégo-Quéré & Cie SA(Appeal – Admissibility of an action for annulment of a regulation brought by a legal person)Summary of the Judgment1. European Communities – Judicial review of the legality of acts of the institutions – Measures of general application – Need for natural or legal persons to have recourse to a plea of illegality or a reference for a preliminary ruling on validity – Obligation for national courts to apply national procedural rules in a way that enables the legality of Community acts of general application to be challenged – Availability of an action for annulment before the Community Court in the event of an insurmountable obstacle at the level of national procedural rules – Excluded(Arts 10 EC, 230, fourth para, EC, 234 EC and 241 EC)2. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Interpretation contra legem of the requirement of being individually concerned – Not permissible(Art. 230, fourth para, EC)3. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Regulation establishing measures for the recovery of the stock of hake and associated conditions for the control of activities of fishing vessels – Absence of any particular legal status for an operator with regard to the adoption of that regulation – Inadmissible(Art. 230, fourth para, EC; Commission Regulation No 1162/2001)1. By Articles 230 EC and Article 241 EC, on the one hand, and by Article 234 EC, on the other, the Treaty has established a complete system of legal remedies and procedures designed to ensure review of the legality of acts of the institutions, and has entrusted such review to the Community Courts. Under that system, where natural or legal persons cannot, by reason of the conditions for admissibility laid down in the fourth paragraph of Article 230 EC, directly challenge Community measures of general application, they are able, depending on the case, either indirectly to plead the invalidity of such acts before the Community Courts under Article 241 EC or to do so before the national courts and ask them, since they have no jurisdiction themselves to declare those measures invalid, to make a reference to the Court of Justice for a preliminary ruling on validity. Thus it is for the Member States to establish a system of legal remedies and procedures which ensure respect for the right to effective judicial protection. In that context, in accordance with the principle of sincere cooperation laid down in Article 10 EC, national courts are required, so far as possible, to interpret and apply national procedural rules governing the exercise of rights of action in a way that enables natural and legal persons to challenge before the courts the legality of any decision or other national measure relative to the application to them of a Community act of general application, by pleading the invalidity of such an act. However, it is not appropriate for an action for annulment before the Community Court to be available to an individual who contests the validity of a measure of general application, such as a regulation, which does not distinguish him individually in the same way as an addressee, even if it could be shown, following an examination by that Court of the particular national procedural rules, that those rules do not allow the individual to bring proceedings to contest the validity of the Community measure at issue. Such an interpretation would require the Community Court, in each individual case, to examine and interpret national procedural law. That would go beyond its jurisdiction when reviewing the legality of Community measures. Accordingly, an action for annulment before the Community Court should not on any view be available, even where it is apparent that the national procedural rules do not allow the individual to contest the validity of the Community measure at issue unless he has first contravened it. In that regard, the fact that a regulation applies directly, without intervention by the national authorities, does not mean that a party who is directly concerned by it can only contest the validity of that regulation if he has first contravened it. It is possible for domestic law to permit an individual directly concerned by a general legislative measure of national law which cannot be directly contested before the courts to seek from the national authorities under that legislation a measure which may itself be contested before the national courts, so that the individual may challenge the legislation indirectly. It is likewise possible that under national law an operator directly concerned by a regulation may seek from the national authorities a measure under that regulation which may be contested before the national court, enabling the operator to challenge the regulation indirectly. (see paras 30-35)2. Although the condition that a natural or legal person can bring an action challenging a regulation only if he is concerned both directly and individually must be interpreted in the light of the principle of effective judicial protection by taking account of the various circumstances that may distinguish an applicant individually, such an interpretation cannot have the effect of setting aside the condition in question, expressly laid down in the Treaty. The Community Courts would otherwise go beyond the jurisdiction conferred by the Treaty. That applies to the interpretation of the condition in question to the effect that a natural or legal person is to be regarded as individually concerned by a Community measure of general application that concerns him directly if the measure in question affects his legal position, in a manner which is both definite and immediate, by restricting his rights or by imposing obligations on him. Such an interpretation has the effect of removing all meaning from the requirement of individual concern set out in the fourth paragraph of Article 230 EC. (see paras 36-38)3. In the absence of a provision of Community law requiring the Commission, when adopting a given regulation, to follow a procedure under which an operator is entitled to claim rights that might be available to it, including the right to be heard, that operator is not given any particular legal status with regard to the adoption of that regulation. The fact that the operator was the only one to propose, before the regulation was adopted, a particular solution for the achievement of the objective pursued by that regulation does not make it individually concerned for the purposes of the fourth paragraph of Article 230 EC (see paras 47-48)JUDGMENT OF THE COURT (Sixth Chamber)1 April 2004(1)applicant,THE COURT (Sixth Chamber),,after hearing the Opinion of the Advocate General at the sitting on 10 July 2003,gives the followingLegal framework… it should be recalled that, apart from an action for annulment, there exist two other procedural routes by which an individual may be able to bring a case before the Community judicature - which alone has jurisdiction for this purpose - in order to obtain a ruling that a Community measure is unlawful, namely proceedings before a national court giving rise to a reference to the Court of Justice for a preliminary ruling under Article 234 EC and an action based on the non-contractual liability of the Community, as provided for in Article 235 EC and the second paragraph of Article 288 EC. However, as regards proceedings before a national court giving rise to a reference to the Court of Justice for a preliminary ruling under Article 234 EC, it should be noted that, in a case such as the present, there are no acts of implementation capable of forming the basis of an action before national courts. The fact that an individual affected by a Community measure may be able to bring its validity before the national courts by violating the rules it lays down and then asserting their illegality in subsequent judicial proceedings brought against him does not constitute an adequate means of judicial protection. Individuals cannot be required to breach the law in order to gain access to justice (see [paragraph] 43 of the Opinion of Advocate General Jacobs in Case C-50/00 P Unión de Pequeños Agricultores v Council [2002] ECR I-6677). The procedural route of an action for damages based on the non-contractual liability of the Community does not, in a case such as the present, provide a solution that satisfactorily protects the interests of the individual affected. Such an action cannot result in the removal from the Community legal order of a measure which is nevertheless necessarily held to be illegal. Given that it presupposes that damage has been directly occasioned by the application of the measure in issue, such an action is subject to criteria of admissibility and substance which are different from those governing actions for annulment, and does not therefore place the Community judicature in a position whereby it can carry out the comprehensive judicial review which it is its task to perform. In particular, where a measure of general application, such as the provisions contested in the present case, is challenged in the context of such an action, the review carried out by the Community judicature does not cover all the factors which may affect the legality of that measure, being limited instead to the censuring of sufficiently serious infringements of rules of law intended to confer rights on individuals (see Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291, paragraphs 41 to 43; Case T-155/99 Dieckmann & Hansen v Commission [2001] ECR II-3143, paragraphs 42 and 43; see also, as regards an insufficiently serious infringement, Joined Cases C‑104/89 and C-37/90 Mulder and Others v Council and Commission [1992] ECR I-3061, paragraphs 18 and 19, and, for a case in which the rule invoked was not intended to confer rights on individuals, paragraph 43 of the judgment in Case T-196/99 Area Cova and Others v Council and Commission [2001] ECR II‑3597). On the basis of the foregoing, the inevitable conclusion must be that the procedures provided for in, on the one hand, Article 234 EC and, on the other hand, Article 235 EC and the second paragraph of Article 288 EC can no longer be regarded, in the light of Articles 6 and 13 of the ECHR and of Article 47 of the Charter of Fundamental Rights, as guaranteeing persons the right to an effective remedy enabling them to contest the legality of Community measures of general application which directly affect their legal situation. It is true that such a circumstance cannot constitute authority for changing the system of remedies and procedures established by the Treaty, which is designed to give the Community judicature the power to review the legality of acts of the institutions. In no case can such a circumstance allow an action for annulment brought by a natural or legal person which does not satisfy the conditions laid down by the fourth paragraph of Article 230 EC to be declared admissible (see the order of the President of the Court of Justice of 12 October 2000 in Case C-300/00 P(R) Federación de Cofradías de Pescadores and Others v Council [2000] ECR I‑8797, paragraph 37). However, as Advocate General Jacobs stated in [paragraph] 59 of his Opinion in Unión de Pequeños Agricultores v Council (cited in paragraph 45 above), there is no compelling reason to read into the notion of individual concern, within the meaning of the fourth paragraph of Article 230 EC, a requirement that an individual applicant seeking to challenge a general measure must be differentiated from all others affected by it in the same way as an addressee. In those circumstances, and having regard to the fact that the EC Treaty established a complete system of legal remedies and procedures designed to permit the Community judicature to review the legality of measures adopted by the institutions (paragraph 23 of the judgment in Les Verts v Parliament, cited in paragraph 41 above), the strict interpretation, applied until now, of the notion of a person individually concerned according to the fourth paragraph of Article 230 EC, must be reconsidered. In the light of the foregoing, and in order to ensure effective judicial protection for individuals, a natural or legal person is to be regarded as individually concerned by a Community measure of general application that concerns him directly if the measure in question affects his legal position, in a manner which is both definite and immediate, by restricting his rights or by imposing obligations on him. The number and position of other persons who are likewise affected by the measure, or who may be so, are of no relevance in that regard. In the present case, obligations are indeed imposed on Jégo-Quéré by the contested provisions. The applicant, whose vessels are covered by the scope of the regulation, carries on fishing operations in one of the areas in which, by virtue of the contested provisions, such operations are subjected to detailed obligations governing the mesh size of the nets to be used. It follows that the contested provisions are of individual concern to the applicant. Since those provisions are also of direct concern to the applicant (see paragraph 26 above), the objection of inadmissibility raised by the Commission must be dismissed and an order made for the action to proceed.’ set aside the contested judgment;declare the action for annulment of Regulation No 1162/2001 to be inadmissible or, alternatively, refer the case back to the Court of First Instance; order Jégo-Quéré to pay the costs, including those incurred in the Court of First Instance. declare the appeal to be inadmissible as it was brought out of time; declare the appeal to be unfounded and uphold the contested judgment;set aside the contested judgment in so far as it holds that Jégo‑Quéré was not individually concerned for the purpose of the fourth paragraph of Article 230 EC; adjudicate on the case itself in accordance with Jégo-Quéré’s observations submitted to the Court of First Instance, and, in particular, – declare the action brought before the Court of First Instance to be admissible; declare the action brought before the Court of First Instance to be admissible; – annul Articles 3(d) and 5 of Regluation No 1162/2001; annul Articles 3(d) and 5 of Regluation No 1162/2001;examine the following witnesses: – Mr John Farnell, Director ‘Conservation Policy’ of the Commission’s Fisheries Directorate‑General; Mr John Farnell, Director ‘Conservation Policy’ of the Commission’s Fisheries Directorate‑General; – Mr Victor Badiola, manager of the Organisation of Fish Producers of Ondárroa; Mr Victor Badiola, manager of the Organisation of Fish Producers of Ondárroa;order the Commission to pay the costs of these proceedings and those incurred before the Court of First Instance. On those grounds,THE COURT (Sixth Chamber)Sets aside the judgment of the Court of First Instance of 3 May 2002 in Jégo-Quéré v Commission; Declares the application for annulment by Jégo-Quéré & Cie SA of Articles 3(d) and 5 of Commission Regulation (EC) No 1162/2001 of 14 June 2001 establishing measures for the recovery of the stock of hake in ICES sub-areas III, IV, V, VI and VII and ICES divisions VIII a, b, d, e and associated conditions for the control of activities of fishing vessels to be inadmissible; Orders Jégo-Quéré & Cie SA to pay the costs of both sets of proceedings.GulmannCunha RodriguesPuissochetSchintgenMackenR. GrassV. SkourisRegistrarPresident of the Sixth Chamber 1 – Language of the case: French. Language of the case: French. | a918e-6e892c2-428d | EN |
A MEMBER STATE IS ENTITLED TO CORRECT INDIVIDUAL REFERENCE QUANTITIES AND TO RECALCULATE THE ADDITIONAL LEVIES PAYABLE, AFTER THE FINAL DATE FOR PAYMENT FOR THE MILK MARKETING YEAR | Cooperativa Lattepiù arl and OthersvAzienda di Stato per gli interventi nel mercato agricolo (AIMA) and Others(Reference for a preliminary ruling by the Tribunale amministrativo regionale del Lazio)(Agriculture – Common organisation of the markets – Milk and milk products – Additional levy on milk – Regulations (EEC) Nos 3950/92 and 536/93 – Reference quantities – Ex post correction – Notification of producers)Summary of the Judgment1. Member States – Obligations – Implementation of Community law –Application of the procedural and substantive rules of national law – Conditions(EC Treaty, Art. 5 (now Art. 10 EC))2. Agriculture – Common agricultural policy – Objectives – Rational development of milk production and ensuring of a fair income for producers – Introduction of an additional levy on milk – Whether lawful(Council Regulation No 3950/92, Art. 10; Commission Regulation No 536/93, Arts 3 and 4)3. Agriculture – Common organisation of the markets – Milk and milk products – Additional levy on milk – Regulations Nos 3950/92 and 536/93 – Reference quantities – Ex post correction and recalculation of levies after the final date for payment of those levies – Whether permissible – Breach of the principle of the protection of legitimate expectations – None(Council Regulation No 3950/92, Arts 1, 4, 6 and 7; Commission Regulation No 536/93, Arts 3 and 4)1. According to the general principles on which the Community is based and which govern relations between it and the Member States, it is for the latter, under Article 5 of the Treaty (now Article 10 EC), to ensure that Community rules are implemented within their territories. In so far as Community law, including its general principles, does not include common rules to that effect then, when the national authorities implement Community rules, they are to act in accordance with the procedural and substantive rules of their own national law. Nevertheless, when adopting measures to implement Community legislation, national authorities must exercise their discretion in compliance with the general rules of Community law, which include the principles of proportionality, legal certainty and the protection of legitimate expectations. (see paras 56-57)2. The purpose of the system of the additional levy on milk is to re-establish, by limiting milk production, the balance between supply and demand in the milk market, which is characterised by structural surpluses. This measure, therefore, is within the ambit of the objectives of rational development of milk production and, by contributing to a stabilisation of the income of the agricultural community affected, that of ensuring a fair standard of living for that community. It follows that the additional levy is not to be regarded as a penalty analogous to those provided for under Articles 3 and 4 of Regulation No 536/93 laying down detailed rules on the application of the additional levy on milk and milk products. The additional levy on milk amounts to a restriction arising from market policy rules or structural policy. Indeed, as Article 10 of Regulation No 3950/92 establishing an additional levy in the milk and milk products sector clearly shows, the additional levy is to be considered to be intervention to stabilise agricultural markets and is to be used to finance expenditure in the milk sector. It follows that, apart from its obvious aim of requiring milk producers to observe the reference quantities allocated to them, the additional levy has an economic objective too, in that it is intended to bring to the Community the funds necessary for disposal of milk produced by producers in excess of their quotas. (see paras 73-75)3. On a proper construction of Articles 1, 4, 6 and 7 of Regulation No 3950/92 establishing an additional levy in the milk and milk products sector and of Articles 3 and 4 of Regulation No 536/93 laying down detailed rules on the application of the additional levy on milk and milk products, it is not contrary to those provisions for a Member State, after checks have been carried out, to correct the individual reference quantities allocated to each producer and, after the unused reference quantities have been reallocated, to recalculate in consequence the additional levies payable, after the final date for payment of those levies for the milk marketing year concerned. First, in so far as the individual reference quantity which may be claimed by a producer corresponds to the quantity of milk marketed by that producer during the reference year, that producer, who is as a rule aware of how much milk he has produced, can have no legitimate expectation that an inaccurate reference quantity will be continued. Second, no legitimate expectation can be entertained as to the continuation of a situation which is plainly unlawful in the light of Community law, namely, the failure to apply the arrangements for the additional levy on milk. Indeed, milk producers in the Member States cannot legitimately expect, 11 years after the system was introduced, to be able to go on producing milk without limit. (see paras 82-83, 85, operative part)JUDGMENT OF THE COURT (Sixth Chamber)25 March 2004(1)THE COURT (Sixth Chamber),,after considering the written observations submitted on behalf of: – Azienda Agricola Marcello Balestreri e Maura Lena, by W. Viscardini Donà and M. Paolin, avvocati, – Azienda Agricola Giuseppe Cantarello, by A. Zanichelli, L. Manzi and A. Manzi, avvocati, – the Italian Government, by I.M. Braguglia, acting as Agent, assisted by O. Fiumara and G. Aiello (C-231/00), O. Fiumara (C-303/00) and G. Aiello (C-451/00), avvocati dello Stato, – the Greek Government, by G. Kanellopoulos and C. Tsiavou, acting as Agents, – the Council of the European Union, by J. Carbery and F.P. Ruggeri Laderchi, acting as Agents, – the Commission of the European Communities, by M. Niejahr and L. Visaggio, acting as Agents, after hearing the oral observations of Cooperativa Lattepiù arl, represented by A. Tonachella, avvocato; of Azienda Agricola Marcello Balestreri e Maura Lena, represented by W. Viscardini Donà; of Azienda Agricola Giuseppe Cantarello, represented by A. Zanichelli; of the Italian Government, represented by O. Fiumara; of the Greek Government, represented by G. Kanellopoulos; of the Council, represented by F.P. Ruggeri Laderchi; and of the Commission, represented by C. Cattabriga, acting as Agent, at the hearing on 12 December 2002, after hearing the Opinion of the Advocate General at the sitting on 8 May 2003,gives the followingThe relevant provisionsthe need to facilitate structural developments and adjustments,overriding administrative needs.’at the premises of the purchasers, the statements referred to in Article 3(1), the credibility of stock accounts and supplies as referred to in paragraph 1(c) and (d) with regard to the commercial documents and other documents proving now the collected milk and milk equivalent have been used; at the premises of the producers with a reference quantity for direct sales, the credibility of the declaration referred to in Article 4(1) and the stock accounts referred to in paragraph 1(f). May the provisions contained in Articles 1 and 4 of … Regulation … No 3950/92 … and in Articles 3 and 4 of … Regulation … No 536/93 … be interpreted as meaning that it is possible, in cases of administrative or judicial challenge, to derogate from the time-limits prescribed for the allocation of quotas and the operation of adjustments and levies? If not, are the provisions contained in Articles 1 and 4 of … Regulation … No 3950/92 … and in Articles 3 and 4 of … Regulation … No 536/93 …valid in the light of Article 33 EC (formerly Article 39 of the Treaty) in so far as they do not provide that derogations may be made from the periods prescribed by those provisions for the allocation of individual reference quantities and for the operation of adjustments and levies in cases of administrative or judicial challenge to those provisions?’ Do the provisions contained in Articles 1, 4, 6 and 7 of … Regulation … No 3950/92 … and in Articles 3 and 4 of … Regulation … No 536/93 … permit derogation from the time-limits for the allocation of quotas, and thus for adjustments and levies, where it is found, when ascertaining whether or not the contracts for the lease or sale of those quotas are lawful, that those originally allocated to the transferor were determined incorrectly, for reasons for which the authorities are not responsible? Are the abovementioned provisions of Community law valid, in the light of Article 33 EC (formerly Article 39 of the Treaty), in so far as they do not provide, in the case of subsequent verification of the individual reference quantities leased or sold, that the quota may be allocated retroactively, correcting the quantities incorrectly stated in the bulletins for reasons for which the administration is not responsible?’ May the provisions contained in Articles 1 and 4 of … Regulation … No 3950/92 … and in Articles 3 and 4 of … Regulation … No 536/93 … be interpreted as meaning that it is possible, in the case of Community law proceedings and the subsequent compliance of the Member State in question, to derogate from the time-limits prescribed for the allocation of quotas and the operation of adjustments and levies? If not, are those provisions of Community law valid, in the light of Article 33 EC (formerly Article 39 of the Treaty), in so far as they do not provide for derogation from the periods prescribed for allocation and adjustments in the abovementioned case of Community law proceedings?’ On those grounds, THE COURT (Sixth Chamber),SkourisGulmann Puissochet MackenColnericR. GrassV. SkourisRegistrarPresident 1 – Language of the case: Italian. Language of the case: Italian. | ac562-0c479f4-4aa0 | EN |
THE COMMUNITY COURTS HAVE JURISDICTION TO HEAR AN ACTION FOR DAMAGES BROUGHT AGAINST THE OMBUDSMAN | European OmbudsmanvFrank Lamberts(Appeal – Inadmissibility – Non-contractual liability – European Ombudman’s manner of dealing with a complaint concerning an internal competition for establishment)Summary of the Judgment1. Actions for damages – Subject-matter – Application for compensation for damage caused as a result of the alleged mishandling by the European Ombudsman of a complaint – Admissibility – Competence of the Community judicature compatible with the Parliament’s powers of review – Failure to call in question the Ombudsman’s independence(Arts 195 EC, 235 EC and 288 EC, second para.; Statute of the European Ombudsman, Arts 3(7) and (8) and 8)2. Actions for damages – Autonomy as against actions for annulment and for failure to act – Need to assess the lawfulness of the conduct of the Community institution or body causing the damage in order to establish liability – Action seeking compensation for loss resulting from the alleged mishandling by the European Ombudsman of a complaint – Assessment of the lawfulness of the Ombudsman’s conduct in the performance of his duties(Arts 235 EC and 288 EC, second para.)3. Appeals – Pleas in law – Mere repetition of the pleas and arguments raised submitted to the Court of First Instance – Error of law relied on not identified – Inadmissible(Art. 225 EC; Statute of the Court of Justice, Art. 58, first para.; Rules of Procedure of the Court of Justice, Art. 112( 1)( c))4. European Ombudsman – General obligation to inform complainants of the judicial remedies available and the time-limits for availing themselves thereof – No such obligation(Statute of the European Ombudsman, Art. 2(5))5. European Ombudsman – Solution according with the specific interest of the citizen concerned to be sought – Duty to cooperate with the institution concerned – Ombudsman’s discretion – Decision concluding that it was not possible to find a solution satisfactory to the complainant – Wrongful conduct – No wrongful conduct(Statute of the European Ombudsman, Art. 3(5))1. Although the Ombudsman enjoys very wide discretion as regards the merits of complaints which he receives and the way in which he deals with them, and in so doing he is under no obligation as to the result to be achieved, so that review by the Community judicature must be limited, it is possible that in very exceptional circumstances a citizen may be able to demonstrate that the Ombudsman has committed a sufficiently serious breach of Community law in the performance of his duties likely to cause damage to the citizen concerned. Therefore, an action for damages founded on the Community’s non‑contractual liability as a result of the alleged mishandling by the Ombudsman of a complaint is in principle admissible. Judicial review of the activities of the Ombudsman is not precluded by the review powers available to the Parliament in regard of him. First, the obligation on the Ombudsman to report to the Parliament cannot be analysed as review by the Parliament of the proper performance by the Ombudsman of his duties in dealing with citizens’ complaints. Secondly, the procedure for dismissal of the Ombudsman relates to an appraisal of his overall activity and not to review by the Parliament of the performance by the Ombudsman of his tasks when dealing with a citizen’s complaint. In any event, the Parliament’s powers with regard to the Ombudsman are not akin to judicial review. Consequently, judicial review of the Ombudsman’s activity does not duplicate review by the Parliament. Furthermore, it does not appear that the possibility that, under certain circumstances, the Community may incur liability owing to conduct on the part of the Ombudsman in the performance of his duties which is contrary to Community law is of such a nature as to call in question the Ombudsman’s independence. (see paras 43-48, 52)2. The action to establish liability is an autonomous form of action, with a particular purpose to fulfil within the system of legal remedies and subject to conditions of use dictated by its specific purpose. Although actions for annulment and for failure to act seek a declaration that a legally binding measure is unlawful or that such a measure has not been taken, an action to establish liability seeks compensation for damage resulting from a measure or from unlawful conduct, attributable to a Community institution or body. In this respect, one of the preconditions of the right to reparation being the existence of a sufficiently serious breach of a rule of law conferring rights on individuals, it is necessary, with regard to the non‑contractual liability of the Community, to assess the conduct causing the damage in order to establish the liability of a Community institution or body. In fact, if a Community court were unable to assess the legality of the conduct of a Community institution or body, the procedure provided for in Article 235 EC would be rendered ineffective. Consequently, in the context specifically of an action founded on the non‑contractual liability of the Community and seeking reparation for loss allegedly caused by the manner in which the Ombudsman dealt with a complaint, it is appropriate to assess the lawfulness of the Ombudsman’s conduct in the performance of his duties. (see paras 59-62)3. Where an appellant challenges the interpretation or application of Community law by the Court of First Instance, the points of law examined at first instance may be discussed again in the course of an appeal. Indeed, if an appellant could not thus base his appeal on pleas in law and arguments already relied on before the Court of First Instance, an appeal would be deprived of part of its purpose. However, it follows from Article 225 EC, the first paragraph of Article 58 of the Statute of the Court of Justice and Article 112(1), first subparagraph, (c) of its Rules of Procedure that an appeal must indicate precisely the contested elements of the judgment which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal. Where an appeal merely reproduces the pleas in law and arguments previously submitted to the Court of First Instance, without even including an argument specifically identifying the error of law allegedly vitiating the judgment under appeal, it fails to satisfy that requirement. In reality, such an appeal amounts to no more than a request for re-examination of the application submitted to the Court of First Instance, which falls outside the jurisdiction of the Court of Justice (see paras 75-77)4. The provisions governing the performance of the Ombudsman’s duties, and more specifically Article 2(5) of Decision 94/262 on the regulations and general conditions governing the performance of the Ombudsman’s duties, do not impose on the Ombudsman any obligation to inform the complainant of the other legal remedies afforded to him and of the time‑limits to be observed with regard to rights of action before the courts. Nor, a fortiori, is it incumbent on him to advise the complainant to pursue any particular legal remedy. Whilst it may be in the interests of the proper fulfilment of the tasks conferred on him by the Treaty for the Ombudsman, if appropriate, to inform the citizen concerned of the actions to be brought in order to serve his interests in the best way possible, Article 2(5) of Decision 94/262 cannot be interpreted as founding a right in favour of the complainant to be referred to the Court of First Instance in order to bring before it an action for annulment against the decision of the institution which is the subject of the complaint. (see paras 80-81)5. As regards the search for a friendly solution to the dispute between the person who has referred a complaint to him and a Community institution, in accordance with Article 3(5) of Decision 94/262 on the regulations and general conditions governing the performance of the Ombudsman’s duties, the Ombudsman is solely required to cooperate with the institution concerned in order to seek a solution such as to eliminate the instance of maladministration and satisfy the complainant. In that regard he enjoys very wide discretion. In particular, he must assess whether the search for a solution satisfying the complainant may be contemplated, since there are situations in which the search for such a solution is not possible, as is envisaged in Article 6(3) of the provisions implementing those regulations, in which case the Ombudsman is to close the case with a reasoned decision. In any event, the Ombudsman cannot be criticised for not correctly performing the mission entrusted to him on the sole ground that he concluded that it was not possible to find a solution satisfactory to the complainant. It follows that the Ombudsman is able, without being guilty of wrongful conduct, to conclude in the decision closing a specific inquiry that there is no prospect of a friendly solution acceptable to the complainant. (see para. 82)JUDGMENT OF THE COURT (Full Court)23 March 2004(1)appellant,applicant at first instance and appellant on a cross-appeal,THE COURT (Full Court),,after hearing the Opinion of the Advocate General at the sitting on 3 July 2003,gives the followingLegal frameworkset aside the judgment appealed against inasmuch as it declares the action for damages admissible;declare that action inadmissible.dismiss the appeal;set aside the judgment appealed against with regard to the substance of the claim brought at first instance and accordingly:principally: – order the Ombudsman to pay him an amount of EUR 2 468 787 by way of damages in respect of material and financial damage and an amount of EUR 124 000 by way of damages in respect of non‑material damage, together with interest to be determined by the Court until full payment, order the Ombudsman to pay him an amount of EUR 2 468 787 by way of damages in respect of material and financial damage and an amount of EUR 124 000 by way of damages in respect of non‑material damage, together with interest to be determined by the Court until full payment, – order the Ombudsman to pay the costs of the proceedings, order the Ombudsman to pay the costs of the proceedings,in the alternative: – order the Ombudsman to pay him an amount of EUR 1 234 394 by way of damages in respect of material and financial damage and an amount of EUR 124 000 by way of damages in respect of non‑material damage, together with interest to be determined by the Court until full payment, order the Ombudsman to pay him an amount of EUR 1 234 394 by way of damages in respect of material and financial damage and an amount of EUR 124 000 by way of damages in respect of non‑material damage, together with interest to be determined by the Court until full payment, – order the Ombudsman to pay the costs of the proceedings. order the Ombudsman to pay the costs of the proceedings.On those grounds,THE COURTDismisses the appeal and cross-appeal;Orders the parties to bear their own costs.SkourisJannTimmermansGulmannCunha RodriguesRosasPuissochetSchintgenMackenColnericvon BahrRegistrarPresidentR. GrassV. Skouris 1 – Language of the case: French. Language of the case: French. | fa93e-b4b0d8a-4c36 | EN |
A WORKER MUST BE ABLE TO TAKE HER ANNUAL LEAVE DURING A PERIOD OTHER THAN HER MATERNITY LEAVE EVEN IF THE LATTER COINCIDES WITH THE GENERAL PERIOD OF ANNUAL LEAVE FIXED FOR THE ENTIRE WORKFORCE BY A COLLECTIVE AGREEMENT | María Paz Merino GómezvContinental Industrias del Caucho SA(Reference for a preliminary ruling from the Juzgado de lo Social nº 33 de Madrid)(Social policy – Equal treatment for men and women – Maternity leave – Worker whose period of maternity leave coincides with the period of annual leave for all staff agreed in a collective agreement on annual leave) Summary of the Judgment1. Social policy – Protection of safety and health of workers – Directive 93/104 concerning certain aspects of the organisation of working time – Entitlement to annual leave – Pregnant workers and workers who have recently given birth or are breastfeeding – Directive 92/85 – Equal treatment of male and female workers – Directive 76/207 – Maternity leave coinciding with period for annual leave fixed by a collective agreement for the entire workforce – Worker’s entitlement to take annual leave outside the period of maternity leave (Council Directives 76/207, Art. 5(1), 92/85, Art. 11(2)(a), and 93/104, Art. 7(1))2. Social policy – Protection of safety and health of workers – Pregnant workers and workers who have recently given birth or are breastfeeding – Directive 92/85 – Maternity leave coinciding with period for annual leave fixed, by a collective agreement, for the entire workforce – Worker’s entitlement to a longer period of annual leave, provided for by national law, than the minimum laid down by Directive 93/104(Council Directives 92/85, Art. 11(2)(a), and 93/104)1. Article 7(1) of Directive 93/104 concerning certain aspects of the organisation of working time, Article 11(2)(a) of Directive 92/85 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding and Article 5(1) of Directive 76/207 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions are to be interpreted as meaning that a worker must be able to take her annual leave during a period other than the period of her maternity leave, including in a case in which the period of maternity leave coincides with the general period of annual leave fixed, by a collective agreement, for the entire workforce. (see para. 41, operative part 1)2. As regards the preservation of rights connected with the employment contract, Article 11(2)(a) of Directive 92/85 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding is to be interpreted as also applying to the entitlement of a worker, whose period of maternity leave coincides with the general period of annual leave fixed, by a collective agreement, for the entire workforce, to a longer period of annual leave, provided for by national law, than the minimum laid down by Directive 93/104 concerning certain aspects of the organisation of working time. (see para. 45, operative part 2)JUDGMENT OF THE COURT (Sixth Chamber)18 March 2004(1)andTHE COURT (Sixth Chamber),,after considering the written observations submitted on behalf of: – Ms Merino Gómez, by G.J. Gonzalez Gil, abogada, – the Spanish Government, by R. Silva de Lapuerta, acting as Agent, – the Italian Government, by I.M. Braguglia, acting as Agent, and by G. Fiengo, avvocato dello Stato, – the Commission of the European Communities, by N. Yerrel and I. Martínez del Peral, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 3 April 2003,gives the followingLegal background the rights connected with the employment contract of workers within the meaning of Article 2, other than those referred to in point (b) below; maintenance of a payment to, and/or entitlement to an adequate allowance for, workers within the meaning of Article 2;any provisions contrary to the principle of equal treatment which are included in collective agreements, individual contracts of employment, internal rules of undertakings or in rules governing the independent occupations and professions shall be, or may be declared, null and void or may be amended; Where collective agreements between an employer and workers’ representatives fix the timing of leave for the entire workforce, and where the dates concerned coincide with those of a worker’s maternity leave, do Article 7(1) of Directive 93/104, Article 11(2)(a) of Directive 92/85 and Article 5(1) of Directive 76/207 guarantee that worker’s entitlement to take annual leave during a period other than the one agreed, which does not coincide with her period of maternity leave? If the first question is answered in the affirmative, what is the substantive scope of the entitlement to annual leave? Does it cover exclusively the four weeks’ leave referred to in Article 7(1) of Directive 93/104, or does it extend to the 30 calendar days laid down by national legislation in Article 38(1) of the Workers’ Statute?’ On those grounds, THE COURT (Sixth Chamber),Article 7(1) of Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time, of Article 11(2)(a) of Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding (tenth individual Directive within the meaning of Article 16(1) of Directive 89/391/EEC) and of Article 5(1) of Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions are to be interpreted as meaning that a worker must be able to take her annual leave during a period other than the period of her maternity leave, including in a case in which the period of maternity leave coincides with the general period of annual leave fixed, by a collective agreement, for the entire workforce. Article 11(2)(a) of Directive 92/85 is to be interpreted as also applying to the entitlement of a worker in circumstances such as those of the case before the referring court to a longer period of annual leave, provided for by national law, than the minimum laid down by Directive 93/104. Cunha RodriguesPuissochet Schintgen MackenColnericR. GrassV. SkourisRegistrarPresident 1 – Language of the case: Spanish. Language of the case: Spanish. | 3e883-c291b75-40b9 | EN |
ADVOCATE GENERAL STIX-HACKL TAKES THE VIEW THAT A GERMAN BAN ON THE OPERATION OF A LASERDROME IN WHICH KILLING IS SIMULATED DOES NOT INFRINGE COMMUNITY LAW | Omega Spielhallen- und Automatenaufstellungs-GmbHvOberbürgermeisterin der Bundesstadt Bonn(Reference for a preliminary ruling from the Bundesverwaltungsgericht)(Freedom to provide services – Free movement of goods – Restrictions – Public policy – Human dignity – Protection of fundamental values laid down by the national constitution – ‘Playing at killing’)Summary of the Judgment1. Freedom to provide services – Restrictions – Justification on grounds of public policy – Need for and proportionality of the measures – Existence of different systems of protection in other Member States – Not relevant(Arts 46 EC and 49 EC)2. Freedom to provide services – Restrictions – National legislation prohibiting the commercial exploitation of games simulating acts of homicide – Justification – Protection of public policy – Respect for human dignity as a general principle of law1. Whilst measures which restrict the freedom to provide services may be justified on public policy grounds only if they are necessary for the protection of the interests which they are intended to guarantee and only in so far as those objectives cannot be attained by less restrictive measures, it is not indispensable in that respect for the restrictive measure issued by the authorities of a Member State to correspond to a conception shared by all Member States as regards the precise way in which the fundamental right or legitimate interest in question is to be protected. Thus the need for, and proportionality of, the provisions adopted are not excluded merely because one Member State has chosen a system of protection different from that adopted by another State. (see paras 36-38)2. Community law does not preclude an economic activity consisting of the commercial exploitation of games simulating acts of homicide from being made subject to a national prohibition measure adopted on grounds of protecting public policy by reason of the fact that that activity is an affront to human dignity. That measure cannot be regarded as one imposing an unjustified restriction on the freedom to provide services. In the first place, the protection of fundamental rights, it being stated that the Community legal order undeniably strives to ensure respect for human dignity as a general principle of law, constitutes a legitimate interest capable in principle of justifying a restriction on the obligations imposed by Community law, even by virtue of a fundamental freedom guaranteed by the Treaty such as the freedom to provide services. Secondly, the measure in question corresponds to the level of protection of human dignity which the national constitution intended to ensure in the territory of the Member State concerned and does not go beyond what is necessary to achieve the objective pursued. (see paras 34-35, 39-41, operative part)JUDGMENT OF THE COURT (First Chamber)14 October 2004(1) (Freedom to provide services – Free movement of goods – Restrictions – Public policy – Human dignity – Protection of fundamental values laid down in the national constitution – ‘Playing at killing’)THE COURT (First Chamber),,after hearing the Opinion of the Advocate General at the sitting on 18 March 2004,gives the followingFacts, main proceedings and question referred 1 – Language of the case: German. Language of the case: German. | e909e-8dc8ef1-4d4c | EN |
GERMAN LEGISLATION APPLYING TO CIVIL SERVANTS AND GOVERNING THE REIMBURSEMENT OF EXPENDITURE IN RESPECT OF A HEALTH CURE IS, IN PART, CONTRARY TO THE FREEDOM TO PROVIDE SERVICES | Ludwig LeichtlevBundesanstalt für Arbeit(Reference for a preliminary ruling from the Verwaltungsgericht Sigmaringen)(Freedom to provide services – Sickness insurance scheme for civil servants – Health cure taken in another Member State – Expenditure on board, lodging, travel, visitors’ tax and a final medical report – Conditions for reimbursement – Prior declaration of eligibility for assistance – Criteria – Justification)Summary of the JudgmentFreedom to provide services – Restrictions – National legislation relating to the reimbursement of expenditure in connection with a health cure taken in another Member State – Requirement to obtain prior recognition of eligibility – Granted only if the treatment is absolutely necessary owing to the greatly increased prospects of success in the other Member State – Not permissible – Grant precluded if the cure is commenced before the conclusion of the court proceedings brought against the decision of refusal – Not permissible – Grant conditional upon the health spa concerned being listed in the Register of Health Spas – Whether permissible – Conditions(Arts 49 EC and 50 EC)Articles 49 EC and 50 EC are to be interpreted as meaning that they preclude rules of a Member State under which reimbursement of expenditure incurred on board, lodging, travel, visitors’ tax and the making of a final medical report in connection with a health cure taken in another Member State is conditional on obtaining prior recognition of eligibility, which is given only where it is established, in a report drawn up by a medical officer or a medical consultant, that the proposed cure is absolutely necessary owing to the greatly increased prospects of success in that other Member State. Those provisions preclude also the application of national rules under which the reimbursement of such expenditure is precluded where the person concerned has not awaited the conclusion of the court proceedings brought against the decision refusing to recognise that expenditure as eligible for assistance before commencing the cure in question. Articles 49 EC and 50 EC are, on the other hand, to be interpreted as meaning that they do not in principle preclude rules of a Member State under which reimbursement of such expenditure, whether the health cure is taken in that Member State or in another Member State, is made only where the health spa concerned is listed in the Register of Health Spas. However, it is for the national court to ensure that any conditions to which the registration of a health spa in such a register may be subject are objective and do not have the effect of making the provision of services between Member States more difficult than the provision of services purely within the Member State concerned. (see paras 51, 59, operative part 1-3)JUDGMENT OF THE COURT (Fifth Chamber)18 March 2004(1)andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: – the Spanish Government, by L. Fraguas Gadea, acting as Agent, – the United Kingdom Government, by P. Ormond, acting as Agent, and S. Moore, Barrister, – the Commission of the European Communities, by H. Michard and C. Schmidt, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 10 July 2003,gives the followingNational legislationthe expenditure provided for in Paragraph 6(1)(1) to (3),expenditure incurred on board and lodging for a maximum of 23 calendar days, including days of travel, up to an amount of DEM 30 per day; … the expenditure provided for in Paragraph 6(1)(9),expenditure incurred in respect of visitors’ tax …,expenditure incurred in connection with the final medical report.according to a report drawn up by a medical officer or a medical consultant, the health cure is necessary to restore or maintain fitness for work following serious illness or, in the case of considerable chronic pain, balneotherapy or climotherapy treatment is absolutely necessary and cannot be replaced by other forms of treatment offering the same prospects of success, in particular by treatment at the official’s place of residence or posting within the meaning of the Bundesumzugskostengesetz (German Federal Law on Removal Costs); the authority responsible for determining the amount of the assistance has first recognised such eligibility. That recognition shall be valid only where treatment is commenced within four months of notification of the decision; …it is established in a report drawn up by a medical officer or medical consultant that the health cure is absolutely necessary outside the Federal Republic of Germany on account of the greatly increased prospects of success, and the health spa is listed in the Register of Health Spas, andthe other requirements laid down in Paragraph 8 are met.Are Articles 49 EC and 50 EC to be interpreted as precluding rules of national law (in this case Paragraph 13(3) of the BhV) under which the costs of a health cure taken in another Member State are reimbursable only where it is absolutely essential that the cure be taken outside the Federal Republic of Germany because it thus offers greatly increased prospects of success, where that is established in a report drawn up by a medical officer or a medical consultant and where the spa concerned is listed in the Register of Spas? Are Articles 49 EC and 50 EC to be interpreted as precluding rules of national law (in this case point 3 in the first sentence of Paragraph 13(3) of the BhV, read in conjunction with Paragraph 8(3)(2) thereof) under which advance recognition of a health cure is precluded where the person concerned does not await the conclusion of the application procedure or of any subsequent court proceedings before commencing the cure and where the only matter in dispute is whether those rules are correct not to recognise a health cure taken in another Member State of the European Union as eligible for assistance?’ Articles 49 EC and 50 EC are to be interpreted as meaning that they preclude rules of a Member State, such as those at issue in the main proceedings, under which reimbursement of expenditure incurred on board, lodging, travel, visitors’ tax and the making of a final medical report in connection with a health cure taken in another Member State is conditional on obtaining prior recognition of eligibility, which is given only where it is established, in a report drawn up by a medical officer or a medical consultant, that the proposed cure is absolutely necessary owing to the greatly increased prospects of success in that other Member State. Articles 49 EC and 50 EC are to be interpreted as meaning that they do not in principle preclude rules of a Member State, such as those at issue in the main proceedings, under which reimbursement of expenditure incurred on board, lodging, travel, visitors’ tax and the making of a final medical report in connection with a health cure, whether taken in that Member State or in another Member State, is made only where the health spa concerned is listed in the Register of Health Spas. However, it is for the national court to ensure that any conditions to which the registration of a health spa in such a register may be subject are objective and do not have the effect of making the provision of services between Member States more difficult than the provision of services purely within the Member State concerned. On those grounds, THE COURT (Fifth Chamber),Articles 49 EC and 50 EC are to be interpreted as meaning that they preclude rules of a Member State, such as those at issue in the main proceedings, under which reimbursement of expenditure incurred on board, lodging, travel, visitors’ tax and the making of a final medical report in connection with a health cure taken in another Member State is conditional on obtaining prior recognition of eligibility, which is given only provided it is established, in a report drawn up by a medical officer or a medical consultant, that the proposed cure is absolutely necessary owing to the greatly increased prospects of success in that other Member State. TimmermansLa Pergola von BahrR. GrassV. SkourisRegistrarPresident 1 – Language of the case: German. Language of the case: German. | 4b562-37fe24a-4522 | EN |
AOK Bundesverband and Others v Ichthyol-Gesellschaft Cordes, Hermani & Co. and Others | AOK Bundesverband and OthersvIchthyol-Gesellschaft Cordes, Hermani & Co. and Others(References for a preliminary ruling from the Oberlandesgericht Düsseldorf and the Bundesgerichtshof)(Competition – Undertakings – Sickness funds – Agreements, decisions and concerted practices – Interpretation of Articles 81 EC, 82 EC and 86 EC – Decisions of groups of sickness funds determining maximum amounts paid in respect of medicinal products)Summary of the JudgmentCompetition – Community rules – Undertaking – Concept – Group of sickness funds determining maximum amounts paid in respect of medicinal products – Not included – Conditions(Art. 81 EC)The concept of an undertaking in Community competition law does not cover bodies entrusted with the management of statutory health insurance and old-age insurance schemes which pursue an exclusively social objective and do not engage in economic activity. That is so in the case of sickness funds which, even if the legislature has granted them some latitude in setting the contribution rate, in order to promote sound management, are compelled by law to offer to their members essentially identical obligatory benefits which do not depend on the amount of the contributions. Since the sickness funds therefore have no possibility of influence over those benefits, and are joined together in a type of community founded on the basis of solidarity which enables an equalisation of costs and risks between them, they are not in competition with one another or with private institutions as regards grant of the obligatory statutory benefits in respect of treatment or medicinal products which constitute their main function. When groups of those sickness funds determine, pursuant to an obligation imposed upon them by the legislature, fixed maximum amounts corresponding to the upper limit of the price of medicinal products whose cost is borne by sickness funds, they do not act as undertakings or associations of undertakings within the meaning of Article 81 EC, inasmuch as they do not pursue a specific interest separable from the exclusively social objective of the funds, but perform an obligation which is integrally connected with the activity of the funds within the framework of the statutory health insurance scheme. (see paras 47, 52-54, 56-57, 63-65, operative part)JUDGMENT OF THE COURT16 March 2004(1)andTHE COURT,,after considering the written observations submitted on behalf of: – the AOK Bundesverband, the Bundesverband der Betriebskrankenkassen (BKK), the Bundesverband der Innungskrankenkassen, the Bundesverband der landwirtschaftlichen Krankenkassen, the Verband der Angestelltenkrankenkassen eV, the Verband der Arbeiter-Ersatzkassen, the Bundesknappschaft and the See-Krankenkasse, by C. Quack, Rechtsanwalt (C-264/01 and C-306/01), and A. von Winterfeld, Rechtsanwalt (C-354/01 and C-355/01), – Ichthyol-Gesellschaft Cordes, Hermani & Co. and Mundipharma GmbH, by U. Doepner, Rechtsanwalt, – Gödecke GmbH and Intersan, Institut für pharmazeutische und klinische Forschung GmbH, by U. Reese, Rechtsanwalt, – the Commission of the European Communities, by W. Wils and S. Rating, acting as Agents, after hearing the oral observations of the AOK Bundesverband, the Bundesverband der Betriebskrankenkassen (BKK), the Bundesverband der Innungskrankenkassen, the Bundesverband der landwirtschaftlichen Krankenkassen, the Verband der Angestelltenkrankenkassen eV, the Verband der Arbeiter-Ersatzkassen, the Bundesknappschaft and the See-Krankenkasse, represented by C. Quack (C-264/01 and C-306/01) and A. von Winterfeld (C-354/01 and C-355/01); Ichthyol-Gesellschaft Cordes, Hermani & Co. and Mundipharma GmbH, represented by U. Doepner; Gödecke GmbH and Intersan, Institut für pharmazeutische und klinische Forschung GmbH, represented by U. Reese; the German Government, represented by W.-D. Plessing, acting as Agent; and the Commission, represented by S. Rating, at the hearing on 14 January 2003, after hearing the Opinion of the Advocate General at the sitting on 22 May 2003,gives the followingFactual and legal contextIs Article 81(1) EC to be interpreted as meaning that the leading associations of statutory sickness funds of a Member State are to be regarded as associations of undertakings or, where a leading association is also a direct provider of statutory sickness insurance, as undertakings within the meaning of Article 81(1) EC when they jointly determine the applicable level of uniform fixed amounts for medicinal products in the Member State, where such amounts constitute the highest price at which the statutory sickness funds, who are required to provide benefits in kind to insured persons, will purchase and pay for medicinal products and thereby limit their liability to insured persons? If the answer to the first question is in the affirmative: (a) are determinations of fixed amounts as described in question 1 above to be regarded as agreements (or decisions) of the leading associations of statutory sickness funds which restrict competition, in particular within the meaning of Article 81(1)(a) EC, and are prohibited by Article 81(1) EC? are determinations of fixed amounts as described in question 1 above to be regarded as agreements (or decisions) of the leading associations of statutory sickness funds which restrict competition, in particular within the meaning of Article 81(1)(a) EC, and are prohibited by Article 81(1) EC? (b) is question 2(a) to be answered in the affirmative at least where the object of the regulation concerning fixed amounts is, inter alia, to exploit all reserves of medicinal product manufacturers in terms of economy as regards sale price, and the application of the regulation concerning fixed amounts in the Member State so far has had the effect that, of the finished medicinal product packages offered on the market that fall within the regulation concerning fixed amounts, approximately 93% do not now exceed the amount fixed for them? is question 2(a) to be answered in the affirmative at least where the object of the regulation concerning fixed amounts is, inter alia, to exploit all reserves of medicinal product manufacturers in terms of economy as regards sale price, and the application of the regulation concerning fixed amounts in the Member State so far has had the effect that, of the finished medicinal product packages offered on the market that fall within the regulation concerning fixed amounts, approximately 93% do not now exceed the amount fixed for them? If the answer to either or both of the questions in question 2 above is in the affirmative:If the answer to question 3 is also in the affirmative: (a) what conditions must be set forth and proved by the leading associations of statutory sickness funds so that they may be exempted under Article 86(2) EC, first sentence, in relation to determinations of fixed amounts or what conditions must be set forth and proved by the leading associations of statutory sickness funds so that they may be exempted under Article 86(2) EC, first sentence, in relation to determinations of fixed amounts or (b) is the grant of an exemption under Article 86(2) EC, first sentence, precluded in any case by Article 86(2) EC, second sentence, owing to the effects the system of fixed amounts has on trade?’ is the grant of an exemption under Article 86(2) EC, first sentence, precluded in any case by Article 86(2) EC, second sentence, owing to the effects the system of fixed amounts has on trade?’ Are Articles 81 and 82 EC to be interpreted as precluding national rules under which national leading associations of statutory sickness insurance determine binding maximum amounts for all statutory sickness funds and compensatory sickness funds up to which the funds bear the costs of medicines, where the legislature defines the criteria by which the maximum amounts are to be calculated, providing in particular that the fixed amounts must ensure comprehensive and quality-assured treatment of insured persons as well as an adequate range of therapeutic alternatives, and the determination is subject to comprehensive review by the courts, which may be initiated by both insured persons and affected medicinal product manufacturers? If question 1 is answered in the affirmative:If question 1 is answered in the affirmative and question 2 in the negative:Are groups of sickness funds, such as the fund associations in question in the main proceedings, to be regarded as undertakings or associations of undertakings within the meaning of Article 81 EC when they determine fixed maximum amounts corresponding to the upper limit of the price of medicinal products whose cost is borne by sickness funds? If the first question is answered in the affirmative, do those groups infringe Article 81 EC when they adopt decisions intended to determine the amounts? If the second question is answered in the affirmative, does the derogation provided for in Article 86(2) EC apply to those decisions? If the Treaty competition rules are infringed, is there a right against such groups to an injunction remedying the situation and to compensation for the loss suffered? On those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues Rosas PuissochetSchintgen Macken Colnericvon BahrR. GrassV. SkourisRegistrarPresident 1 – Language of the case: German. Language of the case: German. | 6138b-b1e2f15-470c | EN |
FIRST ADVOCATE GENERAL TIZZANO DELIVERS HIS OPINION ON THE COMPATIBILITY OF THE PROHIBITION ON TELEVISED ADVERTISING OF ALCOHOLIC BEVERAGES WITH COMMUNITY LAW | Commission of the European CommunitiesvFrench Republic(Failure of a Member State to fulfil obligations – Article 59 of the EC Treaty (now, after amendment, Article 49 EC) – Television broadcasting – Advertising – National measure prohibiting television advertising for alcoholic beverages marketed in that State, in the case of indirect television advertising resulting from the appearance on screen of hoardings visible during the retransmission of certain sporting events – ‘Loi Evin’) Summary of the JudgmentFreedom to provide services – Restrictions – Prohibition on the advertising of alcoholic beverages during the television broadcast of sporting events – Justified on the grounds of public health(EC Treaty, Arts 56(1) and 59 (now, after amendment, Arts 46(1) EC and 49 EC))By making television broadcasting in a Member State by French television channels of sporting events taking place in other Member States conditional on the prior removal of advertising for alcoholic beverages, the Member State concerned has not failed to fulfil its obligations under Article 59 of the EC Treaty (now, after amendment, Article 49 EC). It is true that such rules on television advertising constitute a restriction on freedom to provide services within the meaning of Article 59 of the Treaty. They entail a restriction on freedom to provide advertising services in so far as the owners of the advertising hoardings must refuse, as a preventive measure, any advertising for alcoholic beverages if the sporting event is likely to be retransmitted in the Member State concerned. They also impede the provision of broadcasting services for television programmes, since broadcasters in that Member State must refuse all retransmission of sporting events in which hoardings bearing advertising for alcoholic beverages marketed in that State may be visible, and the organisers of sporting events taking place abroad cannot sell the retransmission rights to those broadcasters if the transmission of the television programmes of such events is likely to contain indirect television advertising for those alcoholic beverages. However, such rules on television advertising pursue an objective relating to the protection of public health within the meaning of Article 56(1) of the Treaty (now, after amendment, Article 46(1) EC) since the measures restricting the advertising of alcoholic beverages in order to combat alcohol abuse reflect public health concerns. Furthermore, such rules are appropriate to ensure that aim and they do not go beyond what is necessary to achieve such an objective. They limit the situations in which hoardings advertising alcoholic beverages may be seen on television and are therefore likely to restrict the broadcasting of such advertising, thus reducing the occasions on which television viewers might be encouraged to consume alcoholic beverages. (see paras 26, 30-31)JUDGMENT OF THE COURT (Grand Chamber)13 July 2004(1)(Failure by a Member State to fulfil its obligations – Article 59 of the EC Treaty (now, after amendment, Article 49 EC) – Television broadcasting – Advertising – National measure prohibiting television advertising for alcoholic beverages marketed in that State, in the case of indirect television advertising resulting from the appearance on screen of hoardings visible during the retransmission of certain sporting events – ‘Loi Evin’) applicant,intervener,defendant,THE COURT (Grand Chamber),,after hearing the Opinion of the Advocate General at the sitting on 11 March 2004,gives the followingLegal backgroundOn those grounds,THE COURT (Grand Chamber)Dismisses the action;Orders the Commission of the European Communities to pay the costs;Orders the United Kingdom of Great Britain and Northern Ireland to bear its own costs.SkourisJannRosasGulmannPuissochetCunha RodriguesSchintgenvon BahrSilva de LapuertaR. GrassV. SkourisRegistrarPresident 1 – Language of the case: French. Language of the case: French. | c9008-4819a41-4811 | EN |
FRENCH LEGISLATION TAXING UNREALISED INCREASES IN VALUE SIMPLY BECAUSE THE TAXPAYER HAS MOVED TO ANOTHER MEMBER STATE INFRINGES THE FREEDOM OF ESTABLISHMENT | Hughes de Lasteyrie du SaillantvMinistère de l’Économie, des Finances et de l’Industrie(Reference for a preliminary ruling from the Conseil d’État (France))(Freedom of establishment – Article 52 of the EC Treaty (now, after amendment, Article 43 EC) – Tax legislation – Transfer of tax residence to another Member State – Methods of taxing increased value of securities)Summary of the JudgmentFreedom of movement for persons – Freedom of establishment – Tax legislation – Taxation of unrealised capital gains where tax residence transferred to another Member State – Not permissible – Justification – None(EC Treaty, Art. 52 (now, after amendment, Art. 43 EC))The principle of freedom of establishment laid down by Article 52 of the Treaty (now, after amendment, Article 43 EC) must be interpreted as precluding a Member State from establishing, in order to prevent a risk of tax avoidance, a mechanism for taxing latent, i.e. not yet realised, increases in value of company shares, where a taxpayer transfers his tax residence outside that State. A taxpayer wishing to transfer his tax residence in exercise of the right guaranteed to him by that provision is subjected to disadvantageous treatment in comparison with a person who maintains his residence in that State where he becomes liable, simply by reason of such a transfer, to tax on income which has not yet been realised and which he therefore does not have, whereas, if he remained in that State, increases in value would become taxable only when, and to the extent that, they were actually realised. That difference in treatment cannot be justified by the aim of preventing tax avoidance, since tax avoidance or evasion cannot be inferred generally from the fact that the tax residence of a physical person has been transferred to another Member State. (see paras 38, 46, 50-51, 58, 69, operative part)JUDGMENT OF THE COURT (Fifth Chamber)11 March 2004(1)(Freedom of establishment – Article 52 of the EC Treaty (now, after amendment, Article 43 EC) – Tax legislation – Transfer of residence for tax purposes to another Member State – Methods of taxing increased value of securities)andTHE COURT (Fifth Chamber),,after considering the written observations submitted on behalf of: – Mr de Lasteyrie du Saillant, by E. Ginter, avocat, – the French Government, by G. de Bergues, F. Alabrune and P. Boussaroque, acting as Agents, – the Danish Government, by J. Bering Liisberg, acting as Agent, – the German Government, by W.-D. Plessing and M. Lumma, acting as Agents, – the Netherlands Government, by H.G. Sevenster, acting as Agent, – the Portuguese Government, by L. Fernandes and A. Seiça Neves, acting as Agents, – the Commission of the European Communities, by R. Lyal and C. Giolito, acting as Agents, after hearing the oral observations of Mr de Lasteyrie du Saillant, represented by E. Ginter and B. Michaud, avocat, the French Government, represented by P. Boussaroque and J.-L. Gautier, acting as Agents, the Netherlands Government, represented by S. Terstal, acting as Agent, and the Commission, represented by R. Lyal and C. Giolito, at the hearing on 13 February 2003, having heard the Opinion of the Advocate General at the hearing on 13 March 2003,gives the followingLegal background On those grounds,THE COURT (Fifth Chamber),TimmermansLa Pergola von Bahr R. GrassV. SkourisRegistrarPresident 1 – Language of the case: French. Language of the case: French. | 5e8a9-47d2c4d-4744 | EN |
THE FRENCH PROCEDURE FOR PRIOR AUTHORISATION FOR THE MARKETING OF FOODSTUFFS FOR HUMAN CONSUMPTION ENRICHED WITH NUTRIENTS, MANUFACTURED AND MARKETED IN THE MEMBER STATES, HINDERS THE FREE MOVEMENT OF GOODS. | «(Failure of a Member State to fulfil obligations – Articles 30 and 36 of the EC Treaty (now, after amendment, Articles 28 EC and 30 EC) – National legislation exhaustively listing the nutrients which may be added to foodstuffs – Measures having equivalent effect – Justification – Public health – Consumer protection – Proportionality)» Summary of the Judgment 1.. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation making the addition of nutrients to foodstuffs subject to authorisation – Not permissible in the absence of a simplified procedure (EC Treaty, Art. 30 (now, after amendment, Art. 28 EC)) Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation making the addition of nutrients to foodstuffs subject to authorisation – Not permissible in the absence of a simplified procedure 2.. Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation hindering the marketing of foodstuffs enriched with nutrients – Not permissible – Justification – Protection of public health – Not justified without establishing a real risk (EC Treaty, Arts 30 and 36 (now, after amendment, Arts 28 EC and 30 EC)) Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislation hindering the marketing of foodstuffs enriched with nutrients – Not permissible – Justification – Protection of public health – Not justified without establishing a real risk JUDGMENT OF THE COURT (Sixth Chamber)5 February 2004 (1) ((Failure of a Member State to fulfil obligations – Articles 30 and 36 of the EC Treaty (now, after amendment, Articles 28 EC and 30 EC) – National legislation exhaustively listing the nutrients which may be added to foodstuffs – Measure having equivalent effect – Justification – Public health – Consumer protection – Proportionality))applicant, vdefendant, THE COURT (Sixth Chamber),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 26 June 2001, gives the followingLegal backgroundOn those grounds, THE COURT (Sixth Chamber)SkourisGulmann Cunha Rodrigues SchintgenMacken R. Grass V. Skouris RegistrarPresident 1 – Language of the case: French. Language of the case: French. | b23f6-8235876-4f47 | EN |
THE COURT SETS ASIDE THE DECISION OF THE COURT OF FIRST INSTANCE AND THE DECISIONS OF THE COMMISSION AND THE COUNCIL REFUSING MR MATTILA ACCESS TO CERTAIN DOCUMENTS | «(Appeal – Access to documents – Decisions 93/731/EC and 94/90/ECSC, EC, Euratom – Exception relating to the protection of the public interest in the field of international relations – Partial access)» Summary of the Judgment 1.. Actions for annulment – Jurisdiction of the Community judicature – Unlimited jurisdiction – Issue of directions to an institution – Not permissible (Art. 230 EC) Actions for annulment – Jurisdiction of the Community judicature – Unlimited jurisdiction – Issue of directions to an institution – Not permissible 2.. Appeals – Pleas in law – Mere repetition of the pleas and arguments submitted to the Court of First Instance – Inadmissible – Challenge to the interpretation or the application of Community law by the Court of First Instance – Inadmissible (Art. 225 EC; Statute of the Court of Justice, Art. 58, first para.; Rules of Procedure of the Court, Art. 112(1)(c)) Appeals – Pleas in law – Mere repetition of the pleas and arguments submitted to the Court of First Instance – Inadmissible – Challenge to the interpretation or the application of Community law by the Court of First Instance – Inadmissible 3.. Council – Commission – Public right of access to documents from those institutions – Decisions 93/731 and 94/90 – Exceptions to the principle of access to documents – Refusal to grant access to a document made without prior consideration of partial access to information not covered by the exceptions – Unlawful – Curing a defect in the statement of reasons during the proceedings before the Court – Not permissible (Council Decision 93/731; Commission Decision 94/90) Council – Commission – Public right of access to documents from those institutions – Decisions 93/731 and 94/90 – Exceptions to the principle of access to documents – Refusal to grant access to a document made without prior consideration of partial access to information not covered by the exceptions – Unlawful – Curing a defect in the statement of reasons during the proceedings before the Court – Not permissible JUDGMENT OF THE COURT (Sixth Chamber)22 January 2004 (1) ((Appeal – Access to documents – Decisions 93/731/EC and 94/90/ECSC, EC, Euratom – Exception relating to the protection of the public interest in the field of international relations – Partial access))appellant, defendants at first instance, THE COURT (Sixth Chamber),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 10 July 2003,gives the followingLegal backgroundOn those grounds, THE COURT (Sixth Chamber),GulmannCunha Rodrigues Puissochet SchintgenMacken R. Grass V. Skouris RegistrarPresident 1 – Language of the case: English. Language of the case: English. | 29ace-e7108c8-4219 | EN |
AN ADMINISTRATIVE BODY MAY BE REQUIRED TO RE-EXAMINE DECISIONS GIVEN BY IT WHICH HAVE BECOME FINAL WHERE IT BECOMES APPARENT FROM SUBSEQUENT JUDGMENTS OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES THAT THOSE DECISIONS WERE BASED ON A MISINTERPRETATION OF COMMUNITY LAW | «(Poultrymeat – Export refunds – Failure to refer a question for a preliminary ruling – Final administrative decision – Effect of a preliminary ruling given by the Court after that decision – Legal certainty – Primacy of Community law – Principle of cooperation – Article 10 EC)» Summary of the Judgment Member States – Obligations – Obligation of cooperation – Obligation on an administrative body to review a final administrative decision in order to take account of the interpretation of the relevant provision given in the meantime by the Court – Conditions (Arts 10 EC and 234(3) EC)Member States – Obligations – Obligation of cooperation – Obligation on an administrative body to review a final administrative decision in order to take account of the interpretation of the relevant provision given in the meantime by the Court – Conditions JUDGMENT OF THE COURT13 January 2004 (1) ((Poultrymeat – Export refunds – Failure to refer a question for a preliminary ruling – Final administrative decision – Effect of a preliminary ruling given by the Court after that decision – Legal certainty – Primacy of Community law – Principle of cooperation – Article 10 EC))andTHE COURT,,after considering the written observations submitted on behalf of: ─ Kühne & Heitz NV, by A.J. Braakman, advocaat, ─ Productschap voor Pluimvee en Eieren, by C.M. den Hoed, Assistant Secretary General, ─ the Netherlands Government, by H.G. Sevenster, acting as Agent, ─ the French Government, by G. de Bergues and C. Vasak, acting as Agents, ─ the Commission of the European Communities, by T. van Rijn, acting as Agent, ─ the EFTA Surveillance Authority, by B. Eiríksdóttir, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of Kühne & Heitz NV, represented by A.J. Braakman, of the Netherlands Government, represented by H.G. Sevenster and J.G.M. van Bakel, acting as Agent, of the French Government, represented by R. Abraham and C. Isidoro, acting as Agents, of the Commission, represented by T. van Rijn, and of the EFTA Surveillance Authority, represented by B. Eiríksdóttir, at the hearing on 9 October 2002, after hearing the Opinion of the Advocate General at the sitting on 17 June 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisJann Timmermans GulmannCunha Rodrigues La Pergola PuissochetSchintgen Macken Colnericvon Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: Dutch. Language of the case: Dutch. | ced86-80c8968-4928 | EN |
NATIONAL LEGISLATION WHICH, IN FAILING TO RECOGNISE TRANSSEXUALS’ NEW SEXUAL IDENTITY, DENIES THEM THE RIGHT TO MARRY, IS CONTRARY TO COMMUNITY LAW IF ITS EFFECT IS TO DEPRIVE THEM OF ANY ENTITLEMENT TO A SURVIVOR’S PENSION | «(Article 141 EC – Directive 75/117/EEC – Equal treatment for men and women – Transsexual partner not entitled to a survivor's pension payable solely to a surviving spouse – Discrimination on grounds of sex)» Summary of the Judgment Social policy – Men and women – Equal pay – National law preventing transsexuals who have undergone surgical gender reassignment from marrying – Not permissible – Right of their partners to nominate them as the beneficiary of a survivor's pension – To be determined by the national court(Art. 141 EC)Social policy – Men and women – Equal pay – National law preventing transsexuals who have undergone surgical gender reassignment from marrying – Not permissible – Right of their partners to nominate them as the beneficiary of a survivor's pension – To be determined by the national courtJUDGMENT OF THE COURT7 January 2004 (1) ((Article 141 EC – Directive 75/117/EEC – Equal treatment for men and women – Transsexual partner not entitled to a survivor's pension payable solely to a surviving spouse – Discrimination on grounds of sex))andTHE COURT,,after considering the written observations submitted on behalf of: ─ K.B., by C. Hockney and L. Cox QC, and by T. Eicke, Barrister, ─ the United Kingdom Government, by J.E. Collins, acting as Agent, and N. Paines QC, ─ the Commission of the European Communities, by N. Yerrel, acting as Agent, having regard to the Report for the Hearing,after hearing the oral observations of K. B., represented by L. Cox and T. Eicke, of the United Kingdom Government, represented by J.E. Collins and N. Paines QC, and of the Commission, represented by J. Sack and L. Flynn, acting as Agents, at the hearing on 23 April 2002, after hearing the Opinion of the Advocate General at the sitting on 10 June 2003,gives the followingLegal backgroundOn those grounds, THE COURT,SkourisTimmermans Cunha Rodrigues RosasEdward Puissochet MackenColneric von Bahr R. Grass V. Skouris RegistrarPresident 1 – Language of the case: English. Language of the case: English. | 80cf8-1aadd24-4175 | EN |
THE COURT OF JUSTICE UPHOLDS IN SUBSTANCE THE JUDGMENT DELIVERED BY THE COURT OF FIRST INSTANCE IN 2000 CONCERNING THE CEMENT CARTEL | «(Appeal – Competition – Cement market – Article 85(1) of the EC Treaty (now Article 81(1) EC) – Jurisdiction of the Court of First Instance – Rights of the defence – Access to the file – Single and continuous infringement – Liability for an infringement – Evidence of participation in the general agreement and measures of implementation – Fine – Determination of the amount)» Summary of the Judgment 1.. Appeals – Pleas in law – Incorrect assessment of the facts – Inadmissible – Review by the Court of Justice of assessment of the evidence – Excluded unless the sense of the evidence has been distorted (Art. 225 EC; EC Statute of the Court of Justice, Art. 51) Appeals – Pleas in law – Incorrect assessment of the facts – Inadmissible – Review by the Court of Justice of assessment of the evidence – Excluded unless the sense of the evidence has been distorted 2.. Appeals – Pleas in law – Plea alleging distortion of evidence – Plea reproducing verbatim the arguments put forward before the Court of First Instance – Inadmissible(Art. 225 EC; EC Statute of the Court of Justice, Art. 51; Rules of Procedure of the Court of Justice, Art. 112(1)(c))Appeals – Pleas in law – Plea alleging distortion of evidence – Plea reproducing verbatim the arguments put forward before the Court of First Instance – Inadmissible 3.. Competition – Community rules – Infringements – Liability – Criterion known as the economic continuity of the undertaking – Liability of a newly-formed company for an infringement by another company which has not ceased to exist – Admissible in view of the links between the capital of the two companies(EC Treaty, Art. 85(1) (now Art. 81(1) EC))Competition – Community rules – Infringements – Liability – Criterion known as the economic continuity of the undertaking – Liability of a newly-formed company for an infringement by another company which has not ceased to exist – Admissible in view of the links between the capital of the two companies 4.. Competition – Administrative procedure – Observance of the rights of the defence – Request for information addressed to an undertaking – Right to refuse to provide an answer which might involve an admission of infringement – Request addressed to an association of undertakings – Right to refuse to testify against its members – None(Council Regulation No 17, Art. 11)Competition – Administrative procedure – Observance of the rights of the defence – Request for information addressed to an undertaking – Right to refuse to provide an answer which might involve an admission of infringement – Request addressed to an association of undertakings – Right to refuse to testify against its members – None 5.. Competition – Administrative procedure – Statement of objections – Provisional nature – Dropping of objections which prove to be unfounded – Obligation for the Commission to inform those concerned by means of a supplementary statement of objections – None(Council Regulation No 17, Art. 19; Commission Regulation No 99/63, Art. 2)Competition – Administrative procedure – Statement of objections – Provisional nature – Dropping of objections which prove to be unfounded – Obligation for the Commission to inform those concerned by means of a supplementary statement of objections – None 6.. Competition – Administrative procedure – Inapplicability of Article 6 of the European Convention on Human Rights – Observance by the Commission of procedural guarantees – Adversarial principle – Scope – Limits – Right of the undertaking to question the authors of the incriminating documents – NoneCompetition – Administrative procedure – Inapplicability of Article 6 of the European Convention on Human Rights – Observance by the Commission of procedural guarantees – Adversarial principle – Scope – Limits – Right of the undertaking to question the authors of the incriminating documents – None 7.. Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Scope – Refusal to communicate a document – Consequences – Need at the level of the burden of proof borne by the undertaking concerned to draw a distinction between incriminating documents and exculpatory documents Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Scope – Refusal to communicate a document – Consequences – Need at the level of the burden of proof borne by the undertaking concerned to draw a distinction between incriminating documents and exculpatory documents 8.. Competition – Agreements, decisions and concerted practices – Participation by an undertaking in an anti-competitive initiative – Tacit approval by an undertaking without publicly distancing itself or reporting to the competent authorities sufficient to render it liable (EC Treaty, Art. 85(1) (now Art. 81(1) EC))Competition – Agreements, decisions and concerted practices – Participation by an undertaking in an anti-competitive initiative – Tacit approval by an undertaking without publicly distancing itself or reporting to the competent authorities sufficient to render it liable 9.. Competition – Fines – Amount – Determination – Criteria – Gravity and duration of the infringement – Infringement by a number of undertakings – Relative gravity of the participation of each of them(Council Regulation No 17, Art. 15(2))Competition – Fines – Amount – Determination – Criteria – Gravity and duration of the infringement – Infringement by a number of undertakings – Relative gravity of the participation of each of them 10.. Competition – Administrative procedure – Breach of the rights of the defence – Lack of proper access to the file – Access ensured during the judicial procedure – Remedy – NoneCompetition – Administrative procedure – Breach of the rights of the defence – Lack of proper access to the file – Access ensured during the judicial procedure – Remedy – None 11.. Appeals – Pleas in law – Plea challenging the assessment by the Court of First Instance of the existence of a breach of the rights of the defence during a procedure in application of the competition rules – Admissible (Art. 225 EC; EC Statute of the Court of Justice, Art. 51)Appeals – Pleas in law – Plea challenging the assessment by the Court of First Instance of the existence of a breach of the rights of the defence during a procedure in application of the competition rules – Admissible 12.. Competition – Administrative procedure – Observance of the rights of the defence – Access to the file – Determination by the Commission alone of the documents of use to the defence – Not permissible – Exclusion from the case-file of the documents with no objective connection to the allegations in the statement of objections – PermissibleCompetition – Administrative procedure – Observance of the rights of the defence – Access to the file – Determination by the Commission alone of the documents of use to the defence – Not permissible – Exclusion from the case-file of the documents with no objective connection to the allegations in the statement of objections – Permissible 13.. Competition – Agreements, decisions and concerted practices – Prohibition – Infringements – Agreements and concerted practices capable of being approached as constituting a single infringement – Imputation of liability to an undertaking owing to its participation in the infringement considered as a whole notwithstanding its limited role – Permissible (EC Treaty, Art. 85(1) (now Art. 81(1) EC))Competition – Agreements, decisions and concerted practices – Prohibition – Infringements – Agreements and concerted practices capable of being approached as constituting a single infringement – Imputation of liability to an undertaking owing to its participation in the infringement considered as a whole notwithstanding its limited role – Permissible 14.. Competition – Administrative procedure – Commission decision finding an infringement adopted after the decision of a national competition authority concerning the same undertaking – No identity between the infringements giving rise to the two decisions – Breach of the principle ne bis in idem – None Competition – Administrative procedure – Commission decision finding an infringement adopted after the decision of a national competition authority concerning the same undertaking – No identity between the infringements giving rise to the two decisions – Breach of the principle ne bis in idem – None 15.. Appeal – Pleas in law – Insufficient reasoning – Recourse by the Court of First Instance to implicit reasoning – Permissible – Conditions(Art. 225 EC; EC Statute of the Court of Justice, Art. 51)Appeal – Pleas in law – Insufficient reasoning – Recourse by the Court of First Instance to implicit reasoning – Permissible – ConditionsJUDGMENT OF THE COURT (Fifth Chamber) 7 January 2004 (1) ((Appeal – Competition – Cement market – Article 85(1) of the EC Treaty (now Article 81(1) EC) – Jurisdiction of the Court of First Instance – Rights of the defence – Access to the file – Single and continuous infringement – Liability for an infringement – Evidence of participation in the general agreement and measures of implementation – Fine – Determination of the amount))appellants, THE COURT (Fifth Chamber),,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 11 February 2003, gives the followingI ─ FactsOn those grounds, THE COURT (Fifth Chamber),JannEdward La Pergola R. Grass V. Skouris RegistrarPresident 1 – Languages of the case: Danish,English,Frenchand Italian. Languages of the case: Danish,English,Frenchand Italian. | 3651d-4656d65-40f2 | EN |
THE COURT OF JUSTICE CONFIRMS THE JUDGMENT OF THE COURT OF FIRST INSTANCE CONCERNING AN ALLEGED AGREEMENT BETWEEN BAYER AND ITS SPANISH AND FRENCH WHOLESALERS SEEKING TO PREVENT PARALLEL IMPORTS OF THE MEDICINAL PRODUCT ADALAT INTO THE UNITED KINGDOM | «(Appeals – Competition – Parallel imports – Article 85(1) of the EC Treaty (now Article 81(1) EC) – Meaning of agreement between undertakings – Proof of the existence of an agreement – Market in pharmaceutical products)» Summary of the Judgment 1.. Appeals – Pleas in law – Erroneous assessment of the facts – Inadmissible – Dismissed (Art. 225 EC; Statute of the Court of Justice, Art. 58) Appeals – Pleas in law – Erroneous assessment of the facts – Inadmissible – Dismissed 2.. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Burden of proving the infringement on the Commission (EC Treaty, Art. 85(1) (now Art. 81(1) EC)) Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Burden of proving the infringement on the Commission 3.. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Agreement designed to hinder parallel imports – Agreement may exist without a system of subsequent monitoring and penalties (EC Treaty, Art. 85(1) (now Art. 81(1) EC)) Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Agreement designed to hinder parallel imports – Agreement may exist without a system of subsequent monitoring and penalties 4.. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Meaning – Unilateral conduct – Not included – Conclusion by tacit acceptance – Need for an invitation to fulfil anti-competitive goals jointly (EC Treaty, Art. 85(1) (now Art. 81(1) EC)) Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Meaning – Unilateral conduct – Not included – Conclusion by tacit acceptance – Need for an invitation to fulfil anti-competitive goals jointly 5.. Competition – Agreements, decisions and concerted practices – Unilateral conduct restricting competition within the context of continuous business relations – No prohibited agreement (EC Treaty, Art. 85(1) (now Art. 81(1) EC)) Competition – Agreements, decisions and concerted practices – Unilateral conduct restricting competition within the context of continuous business relations – No prohibited agreement JUDGMENT OF THE COURT6 January 2004 (1) ((Appeals – Competition – Parallel imports – Article 85(1) of the EC Treaty (now Article 81(1) EC) – Meaning of agreement between undertakings – Proof of the existence of an agreement – Market in pharmaceutical products))appellant, interveners at the appeal stage, intervener at first instance, THE COURT,,having regard to the Report for the Hearing,after hearing the Opinion of the Advocate General at the sitting on 22 May 2003, gives the followingBackground to the disputeOn those grounds, THE COURTSkourisJann Timmermans Cunha RodriguesEdward La Pergola PuissochetSchintgen Macken Colnericvon Bahr R. Grass V. Skouris Registrar President 1 – Language of the case: German. Language of the case: German. | 4e061-22b9989-4c44 | EN |
THE COURT OF JUSTICE CONFIRMS THE COMMISSION'S DECISION ON THE INCOMPATIBILITY WITH THE COMMON MARKET OF AID BENEFITING THE ITALIAN BANKING SECTOR | Italian RepublicvCommission of the European Communities(Action for annulment – State aid – Decision 2002/581/EC – Tax advantages granted to banks – Statement of reasons for a decision – Categorisation as State aid – Conditions – Compatibility with the common market – Conditions – Important project of common European interest – Development of certain economic activities)Summary of the Judgment1. Actions for annulment – Pleas in law – Lack of or inadequate statement of reasons – Plea distinct from that relating to substantive legality (Arts 230 EC and 253 EC)2. State aid – Definition – Fiscal measures granting tax exemptions or tax reductions or allowing deferral of payment in respect of certain restructuring operations in the banking sector – Included (Art. 87(1) EC)3. State aid – Examination by the Commission – Examination of an aid scheme taken as a whole – Lawfulness – Consequence 4. State aid – Definition – Selective nature of the measure – Tax measure benefiting only undertakings in the banking sector carrying out certain transactions – Included 5. State aid – Effect on trade between Member States – Impairment of competition – Criteria for assessment 6. State aid – Prohibited – Exceptions – Aid contributing to the execution of an important project of common interest – Aid concerning the development of a sector of economic activity – Discretion of the Commission – Judicial review – Limits (Art. 87(3)(b) and (c) EC)1. In an action for annulment, the question whether the reasons given for a measure are correct goes to the substantive legality of that measure. It follows that a challenge to the validity of those reasons cannot be examined when the point under consideration is whether or not the obligation laid down under Article 253 EC has been complied with. (see paras 26, 55)2. The definition of aid is more general than that of a subsidy, because it includes not only positive benefits, such as subsidies themselves, but also measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which thus, without being subsidies in the strict sense of the word, are similar in character and have the same effect. It follows that a measure by which the public authorities grant to certain undertakings a tax exemption which, although not involving a transfer of State resources, places the persons to whom the tax exemption applies in a more favourable financial situation than other taxpayers constitutes State aid within the meaning of Article 87(1) EC. Similarly, a measure which grants to certain undertakings a tax reduction or a deferral of liability to tax that would otherwise be payable may constitute State aid. That is the case, in the context of a tax rule which applies to banking restructuring operations, of measures which comprise either a tax reduction in the form of the application of tax at a reduced rate, or the substitution of a fixed-rate levy for the taxes that would otherwise be payable, or an exemption from tax where a gain arises on the return of ancillary property by a bank to a banking foundation which had previously transferred those assets to it, or in the case of the transfer by a bank of its shareholdings in the central bank of the Member State to the banking foundation which had previously transferred those shareholdings to it, particularly where the shareholding was originally acquired for no consideration and is transferred to the foundation for value or is revalued. That finding is not called into question, as regards the measures providing for the fiscal neutrality of transactions involving the return of property, by the argument that payment of the tax that would otherwise be due is deferred only until such time as that property may be disposed of. It is not only the deferral of payment of a tax liability that may constitute State aid, but also, in particular, a return of property, such as that covered by the present case, which transfers ownership of such an asset from one legal person to another, so that for the bank which returns the asset to a banking foundation, which is a separate legal person, the exemption is permanent. (see paras 77-82)3. In the case of an aid scheme, the Commission may, in order to assess whether that scheme comprises aid elements, confine itself to examining the general characteristics of the scheme in question without being required to examine each particular case in which it applies. Accordingly, where it is not disputed that the tax provision under consideration operates to the benefit of certain undertakings, the fact that, in some circumstances, it may also benefit entities which are not undertakings does not call into question that finding, which is sufficient for Article 87(1) EC to apply to an aid scheme. (see paras 91-92)4. Article 87(1) EC prohibits aid which ‘[favours] certain undertakings or the production of certain goods’, that is to say aid which is selective. Aid may be selective for the purposes of that provision even if it concerns a whole economic sector. That is the case with fiscal measures which comprise either a reduction or a exemption from tax, or which allow liability to tax to be deferred, and which apply solely to the banking sector and, within the banking sector, apply only for the benefit of undertakings carrying out certain operations. As they do not apply to all economic operators, and which are, in fact, an exception to the general tax scheme, they cannot be considered as general measures of fiscal or economic policy. Such tax measures must therefore be prohibited under Article 87(1) EC, since they do not represent an adaptation of the general system to meet particular characteristics of banking undertakings but were conceived as a means of improving the competitiveness of certain undertakings at a given time in the development of the sector. (see paras 94-101)5. Article 87(1) EC prohibits aid which affects trade between Member States and which distorts or threatens to distort competition. In assessing those two conditions, the Commission is required, not to establish that such aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition. It is in short the case that aid is incompatible with the common market where it has or is liable to have an impact on intra-Community trade and distorts or is liable to distort competition in that field. In particular, when aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, those undertakings must be regarded as affected by that aid. In that regard, the fact that an economic sector has been the subject of liberalisation at Community level will suffice to indicate the real or potential effect of the aid on competition and its effect on trade between Member States. Furthermore, it is not necessary that the beneficiary undertaking should itself participate in the intra-Community trade. Where a Member State grants aid to an undertaking, internal activity may be maintained or increased as a result, so that the opportunities for undertakings established in other Member States to penetrate the market in that Member State are reduced as a result. Furthermore, the strengthening of an undertaking which has not previously participated in intra-Community trade may place it in a position which enables it to penetrate the market of another Member State. Therefore, tax benefits must be prohibited which strengthen the position of the beneficiary undertakings in relation to undertakings which are active in intra-Community trade, particularly in the context of a significant liberalisation process at Community level in the financial services sector which has intensified the competition which may already have resulted from the freedom of movement of capital provided for under the Treaty. (see paras 110-111, 114-119)6. In applying Article 87(3) EC, the Commission enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context. The Community judicature, in reviewing whether that freedom was lawfully exercised, cannot substitute its own assessment for that of the competent authority but must restrict itself to examining whether the authority’s assessment is vitiated by a manifest error or misuse of powers. In failing to apply the classification of ‘project of common European interest’ within the meaning of Article 87(3) EC to certain measures which are essentially aimed at improving the competitiveness of operators established in a Member State in order to strengthen their position on the internal market, the Commission does not commit a manifest error of assessment. It cannot properly be criticised on the ground that those measures are part of the completion of a privatisation process, since a privatisation process undertaken by a Member State cannot, of itself, be considered as constituting a project of common European interest. Nor does it commit a manifest error of assessment in holding that measures, the principal effect of which is to improve the competitiveness of the beneficiaries in a sector where international competition is strong, and are in fact intended to strengthen the position of the beneficiaries of the aid with regard to competitors which do not benefit from it, do not satisfy the condition that the aid is not adversely to affect trading conditions to an extent contrary to the common interest, which must be satisfied by aid to facilitate the development of certain activities within the meaning of Article 87(3)(c) EC. (see paras 135, 138-140, 142, 144, 147-149)JUDGMENT OF THE COURT (Second Chamber)15 December 2005 (*) In Case C-66/02,ACTION for annulment under Article 230 EC, brought on 21 February 2002,Italian Republic, represented initially by U. Leanza, and subsequently by I.M. Braguglia, acting as Agents, and by M. Fiorilli, avvocato dello Stato, with an address for service in Luxembourg, applicant,Commission of the European Communities, represented by V. Di Bucci and R. Lyal, acting as Agents, with an address for service in Luxembourg, defendant,THE COURT (Second Chamber),composed of C.W.A. Timmermans, President of the Chamber, C. Gulmann (Rapporteur), R. Schintgen, G. Arestis and J. Klučka, Judges, Advocate General: C. Stix-Hackl,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 3 February 2005,after hearing the Opinion of the Advocate General at the sitting on 8 September 2005,gives the followingJudgment1 By its application, the Italian Republic seeks the annulment of Commission Decision 2002/581/EC of 11 December 2001 on the tax measures for banks and banking foundations implemented by Italy (OJ 2002 L 184, p. 27) (‘the contested decision’). National legal framework2 In Italy, a reform of the banking system was undertaken by Law No 218 of 30 July 1990 on the capital restructuring and consolidation of credit institutions governed by public law (GURI No 182 of 6 August 1990, p. 8) (‘Law No 218/90’). 3 That law enabled credit institutions governed by public law to be converted into companies limited by shares. For that purpose, a public bank was authorised to transfer the banking institution to a company limited by shares, with the result that the transferor, called in practice a ‘banking foundation’ (a ‘banking foundation’), which owned the shares became legally distinct from the transferee company (a ‘banking company’), which was the sole owner of the banking activity. The banking foundation administered the shareholding in the banking company and used the income arising from it for social purposes. 4 On the transfer of banking undertakings, non-profit-making assets, that is to say those which were not directly used in the production process, were also transferred to the banking companies. Those assets increased their capital. The effect was that, where the operating results of banks were the same, the banking companies were less profitable than the banks which competed with them. 5 The shareholdings of credit institutions governed by public law in the Banca d’Italia were also transferred to the banking companies. They could not be placed in the banking foundations, as the latter were not among the institutions eligible to hold such shares. 6 Article 2 of Law No 489 of 26 November 1993 extending inter alia the period laid down by Article 7(6) of Law No 218/90 (GURI No 284 of 3 December 1993, p. 4) (‘Law No 489/93’) made the conversion of public banking institutions into companies limited by shares compulsory by no later than 30 June 1994. 7 Law No 461 of 23 December 1998 delegating powers to the government to revise the civil and tax provisions applicable to the entities referred to in Article 11(1) of Legislative Decree No 356 of 20 November 1990 as well as the tax provisions applicable to restructuring operations in the banking sector (GURI No 4 of 7 January 1999) (‘Law No 461/98’) delegated power to the Italian Government to undertake further reform of the provisions applicable to the banking sector, in particular as regards restructuring. 8 Article 2(1)(m) of Law No 461/98 allowed the banking foundations which had implemented the statutory modifications provided for by that reform to hold shares in the Banca d’Italia for the first time. 9 Legislative Decree No 153 of 17 May 1999 on the civil and tax rules applicable to the organisations covered by Article 11(1) of Legislative Decree No 356 of 20 November 1990 and the tax provisions applicable to restructuring operations in the banking sector in accordance with Article 1 of Law No 461 of 23 December 1998 (GURI No 125 of 31 May 1999, p. 4) (‘Decree No 153/99’) gave effect to the delegation under Law No 461/98 by introducing the following tax advantages: – a reduction to 12.5% in the rate of income tax (IRPEG) for banks which merge or engage in similar restructuring for five years after the operation, provided that the profits are paid into a special reserve which may not be distributed for three years; the profits paid into the special reserve may not exceed 1.2% of the difference between the sum of the credits and debits of the post‑merger bank and the sum of the credits and debits of the largest pre-merger bank (Articles 22(1) and 23(1)); – tax neutrality for transactions in which property and assets in ancillary activities transferred to banking companies pursuant to Law No 218/90 are returned to the transferring institution (Article 16(3)); – the imposition of a fixed-rate levy in place of the taxes otherwise payable in connection with the operations referred to in the two preceding indents (Articles 24(1) and 16(5)); – fiscal neutrality in relation to the local tax on capital gains on immovable property in connection with those operations (Articles 24(1) and 16(5)); – exemption from tax for the transfer to banking foundations by the banking companies of their shareholdings in the Banca d’Italia (Article 27(2)). The contested decision10 Following a parliamentary question, the Commission of the European Communities, by letter of 24 March 1999 sent in the context of its powers in relation to State aid, requested the Italian authorities to supply information in order to assess the scope and effects of Law No 461/98. 11 By letters of 24 June and 2 July 1999, the Italian authorities provided information to the Commission on that law and on Decree No 153/99. 12 By letter of 23 March 2000, the Commission advised the Italian authorities that it was of the view that Law No 461/98 and Decree No 153/99 might contain elements of aid and requested them to halt any measures implementing them. On 12 April 2000, the Italian authorities replied to the Commission that they had suspended the implementation of the measures and on 14 June 2000 they provided it with further information. 13 The maximum theoretical amount of the tax advantages obtained by virtue of the reduction in income tax to 12.5% granted under Articles 22(1) and 23(1) of Decree No 153/99 was put by the Italian authorities at ITL 5 358 000 million (EUR 2 767 million) in respect of 76 transactions carried out during 1998, 1999 and 2000. 14 By letter of 25 October 2000, the Commission informed the Italian Government that it had decided to initiate the procedure laid down under Article 88(2) EC. That decision was published in the Official Journal of the European Communities (OJ 2001 C 44, p. 2). 15 At the close of the procedure, the Commission found that the Italian Republic had unlawfully implemented Law No 461/98 and Decree No 153/99, in breach of Article 88(3) EC. It took the view that, except for the exemption from tax in respect of certain transfers of shareholdings in the Banca d’Italia under Article 27(2) of Decree No 153/99, the tax measures implemented constituted a State aid scheme that was incompatible with the common market. The measures conferred an advantage on the banks inasmuch as they enabled them to increase their own size and benefit from economies of scale at a lower cost. 16 The Commission accordingly adopted the contested decision, in which it held that Law No 461/98 and Decree No 153/99 also introduced tax advantages for banking foundations, but that those advantages were not dealt with in that decision. 17 The contested decision is worded as follows: ‘Article 1Without prejudice to Article 2, the State aid scheme which Italy has granted under [Law No 461/98] and [Decree No 153/99], and in particular on the basis of Articles 16(3) and (5), 22(1), 23(1), 24(1) and 27(2) of [Decree No 153/99], is incompatible with the common market. Article 2The advantages provided for in Article 27(2) of [Decree No 153/99] do not constitute State aid in so far as the joint operation of assigning the shares in the capital of the Banca d’Italia to the bank and transferring them to the foundation has no impact on the bank’s balance sheet. Article 3Italy shall withdraw the scheme referred to in Article 1. Article 41. Italy shall take all necessary measures to recover from the beneficiaries the aid granted under the scheme referred to in Article 1 and unlawfully made available to the beneficiaries. 2. Recovery shall be effected without delay and in accordance with the procedures of national law provided that they allow the immediate and effective implementation of the Decision. The aid to be recovered shall include interest from the date on which it was at the disposal of the beneficiaries until the date of its recovery. Interest shall be calculated on the basis of the reference rate used for calculating the grant equivalent of regional aid. …’ Forms of order sought18 The Italian Republic claims that the Court should: – annul the contested decision in that the conditions for holding that the tax measures accompanying the reform of the Italian banking system may be categorised as ‘State aid’ are not satisfied; – order the Commission to pay the costs.19 The Commission contends that the Court should: – dismiss the action;– order the applicant to pay the costs. The other proceedings pending before the Community Courts 20 By applications lodged at the Registry of the Court of First Instance of the European Communities on 21 February 2002 and 11 April 2002, the Associazione bancaria italiana (ABI) (Case T-36/02), the Banca Sanpaolo IMI SpA (Case T-37/02), the Banca Intesa Banca Commerciale italiana SpA (Case T-39/02), the Banca di Roma SpA (Case T-40/02), the Mediocredito Centrale SpA (Case T-41/02), the Banca Monte dei Paschi di Siena SpA (Case T‑42/02), and the Compagnia di San Paolo Srl (Case T-121/02) also brought actions against the Commission for annulment of the contested decision in the present case. The Commission has raised an objection of inadmissibility before the Court of First Instance, based on a lack of any individual interest on the applicants’ part, as it claims that the aid in question is not individual aid but forms part of an aid scheme. By orders of 9 July 2003, the Court of First Instance stayed the seven proceedings pending the delivery by the Court of Justice of its judgment in the present case. Appeals were brought by the applicants against the orders staying proceedings in Cases T-36/02, T-37/02, T-39/02, T-40/02, T‑41/02 and T-42/02. By order of the Court of Justice of 26 November 2003 in Joined Cases C-366/03 P to C-368/03 P, C-390/03 P, C-391/03 P and C-394/03 P ABI and Others v Commission [2003], not published in the ECR, the appeals were rejected as being manifestly inadmissible. 21 By order of 11 February 2004, received at the Court on 23 March 2004 (Case C-148/04 Unicredito Italiano), the Commissione tributaria provinciale di Genova (Provincial Tax Court of Genoa, Italy) made a reference to the Court for a preliminary ruling on the validity of the contested decision and on the interpretation of Article 87 EC et seq., Article 14 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (OJ 1999 L 83, p. 1), and the general principles of Community law. The Court will give its ruling in that case by way of a separate judgment to be delivered of even date with this judgment. The action22 The Italian Republic raises five pleas in law, alleging infringement of Article 253 EC, of the principle of the right to a fair hearing, of Article 87(1) EC, of Article 87(3)(b) EC and of Article 87(3)(c) EC. The plea alleging infringement of Article 253 EC Arguments of the parties23 The Italian Republic contends that the Commission infringed the obligation to state reasons laid down under Article 253 EC. 24 The plea is divided into three parts: – the contested decision is affected by a lack of reasoning as regards the assessment of the promotion of competition in the banking sector; – it considers, but fails to distinguish between, the arguments put forward by the Italian Government on the question whether the tax measures at issue fall to be categorised as State aid within the meaning of Article 87(1) EC and on the separate question whether a declaration of compatibility in terms of Article 87(3) EC might fall to be made; – it adopts reasoning which is inadequate, incorrect and contradictory in order to hold that the tax measures at issue cannot be considered to be compatible with the EC Treaty pursuant to Article 87(3) EC. 25 The Commission disputes the applicant’s claims. It argues that the contested decision satisfies the conditions laid down under case-law as regards the obligation to state reasons. Findings of the Court26 It is settled case-law that the obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. The statement of reasons required by Article 253 EC must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of review. That requirement must be appraised by reference to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see, inter alia, Case C-310/99 Italy v Commission [2002] ECR I-2289, paragraph 48). – The first part of the plea27 In the first part of its plea, the Italian Republic alleges a lack of adequate reasoning in the contested decision as regards the assessment of the promotion of competition in the banking sector. 28 That general claim is followed by arguments which essentially do no more than describe the development of the rules governing the Italian banking sector, without providing detailed information as to the substance of the ground of challenge. 29 The detailed description of the history of the applicable rules gives particular emphasis to Law No 218/90. 30 That law is described as having instigated a fundamental change to the Italian banking system, of which the main feature at the time was a substantial public sector, by prescribing the legal instruments which allow public banks to be converted into companies limited by shares. 31 For its part, Law No 461/98 is described as being the final stage in the process of reform of the Italian credit system. 32 It had become necessary, above all, so that the presence of the public sector in the banking field could be eliminated or, at the very least, be permanently reduced, and so that the process of privatising and restructuring the Italian banking system instigated by Law No 218/90 could be finally completed. 33 It aimed in particular to: – encourage operations intended to increase the size of banks or banking groups;– allow for the return to banking foundations, under fiscally neutral arrangements, of non-profit-making assets belonging to the banking companies which had been transferred to them pursuant to Law No 218/90. 34 The requirement to complete the privatisation process went hand in hand with a plan to implement fiscal reforms intended generally to reduce the tax burden on productive activities. 35 As framed, and having regard to the whole of the parties’ written pleadings, the first part of the plea is to be understood as comprising a complaint based on a failure to set out in the contested decision the grounds on which the Commission categorised Law No 461/98 and Decree No 153/99 as State aid when they did no more than carry forward the provisions of Law No 218/90 which, for its part, had not been challenged by the Commission under the rules relating to State aid. 36 It should be noted in that regard that in recitals 16, 30 and 32 in the contested decision the Commission: – summarised the description given by the Italian Government in the proceedings of the development of the rules governing the Italian banking sector; – noted the Italian Government’s claim that Law No 218/90 and Decree No 153/99 should be seen as part of the same process aimed at modernising the Italian banking sector; – noted the objective pursued by the Member State concerned of consolidating and restructuring that sector.37 It must be noted that in recitals 51 to 54 in the contested decision the Commission sets out the reasons why it took the view that the fact that Law No 218/90 was not objected to under the rules relating to State aid has no bearing on its categorisation of Law No 461/98 and Decree No 153/99 under the same rules. 38 It points out, first of all, with regard to the fact that it did not challenge Law No 218/90, that that law was not notified to it by the Italian Government. It adds that it considered only certain aspects of the law in connection with individual cases and that the justification accepted in relation to those aspects does not apply to the measures at issue in the present case. 39 The Commission also notes that by the end of 1992 the public banks had, with very few exceptions, been converted into public limited companies and that such conversion was made compulsory by Law No 489/93. 40 Furthermore, the fact that it did not at the time object to the other measures, which are perhaps more similar to those implemented by Decree No 153/99, does not mean that it should give favourable consideration to the latter. Thus, a tax exemption on the transfer of assets from a banking foundation to a banking company does not necessarily have to be assessed in the same way as an exemption for a similar transfer from the banking company back to the foundation. The transfer of assets to the banking company could have had the effect of facilitating the conversion of public banks into public limited companies, while the return of those assets to the foundations, possibly revalued, on a tax‑exempt basis, has the object and effect of improving the profitability indicators of the bank. 41 The Commission lastly maintains that Law No 218/90 remains an ad hoc measure capable of being justified in principle by the specific circumstances in which it was adopted. However, the measures at issue in the present case could at no stage be considered to be compatible with the common market. 42 It thus appears that, contrary to what the Italian Republic contends, the Commission provided reasons in the contested decision in reply to the arguments that had been put to it. 43 Irrespective of the question of whether they are correct, those reasons were sufficient to enable the persons concerned to ascertain the reasons in the contested decision relating to those arguments and to enable the Court to exercise its power of review. 44 The first part of the plea must accordingly be rejected. – The second part of the plea45 In the second part of its plea, the Italian Republic complains that the Commission did not set out its reasons separately as regards the categorisation of the tax measures at issue under Article 87(1) EC and the separate question whether a declaration of compatibility in terms of Article 87(3) EC might fall to be made. 46 It must be pointed out in that regard that compliance with the obligation to state reasons must be assessed with regard principally to the substance of those reasons rather than to their form. 47 In any event, it is sufficient to hold that in the present case that the Commission considered, in recitals 32 to 43 in the contested decision, the categorisation of the tax measures at issue in the light of Article 87(1) EC and, separately, in recitals 45 to 48 in the decision, the question of the possible application of Article 87(3) EC. 48 In those circumstances, the second part of the plea must be rejected. – The third part of the plea49 In the third part of its plea, the Italian Republic complains that the Commission’s reasoning in the contested decision is inadequate, incorrect and contradictory as regards the application of Article 87(3)(b) and (c) EC. 50 It should be pointed out in that regard that, in recitals 45 to 48 in the contested decision, the Commission sets out the reasoning which led it to conclude that the tax measures at issue cannot be declared to be compatible with the Treaty pursuant to those provisions. 51 It states in particular that the strengthening of the Italian banking system cannot be considered to be a ‘project of common European interest’ for the purposes of Article 87(3)(b) EC, since the principal beneficiaries are the economic operators of one Member State and not the Community as a whole and that the promotion of a concrete, precise and well-defined project is not involved. 52 As regards the compatibility of the tax measures at issue with Article 87(3)(c) EC, as the ‘development of certain economic activities’, the Commission states that in its view the conditions for applying the Community guidelines set out in its information notice 1999/C 288/02 on Community guidelines on State aid for rescuing and restructuring firms in difficulty (OJ 1999 C 288, p. 2) are not satisfied. The scheme is not limited to small and medium‑sized enterprises. The aid was not notified individually to the Commission and no restructuring plan was submitted. The banks that benefit from the aid are not normally in difficulty and the aid is not intended to restore their long-term viability. The guidelines require that measures must be taken to mitigate as far as possible any adverse effects of the aid on competitors. In the present case, the aid is intended instead to strengthen the position of the beneficiaries in relation to competitors which do not benefit from the measures. The benefits cannot be categorised as investment aid or aid to expenditure that can otherwise be considered to be compatible. No other feature of the scheme allows it to be held to be compatible on other grounds under Article 87(3)(c) EC. Moreover, the requirement under that provision that the aid ‘[should] not adversely affect trading conditions to an extent contrary to the common interest’ is not satisfied. Unlike previous measures stemming, in particular, from Law No 218/90, which might have made it easier for public banks to adopt the status of public limited companies, thereby placing them on a more level playing field in competitive terms with other banking institutions, the measures at issue essentially have the effect of improving the competitiveness of the beneficiaries in a sector where international competition is strong. 53 It must be recognised that, irrespective of the question whether it is correct, the reasoning thus put forward by the Commission was sufficient to enable the persons concerned to ascertain the reasons in the contested decision in relation to the matter under consideration and to enable the Court to exercise its power of review. 54 As to the remainder, the Italian Republic’s complaint as to the incorrect and contradictory nature of the reasoning contains, in fact, a challenge to its validity, as well as a claim that there is inadequate reasoning in relation to a change to a position previously adopted by the Commission. The Italian Government argues, in particular, that the Commission’s observation in the contested decision that the principal beneficiaries of the scheme in question will be the economic operators of one Member State, and not the Community, ‘appears completely simplistic and groundless’. It goes on to assert that the Commission’s observation that the scheme in question does not involve the promotion of a concrete, precise and well-defined project is ‘wholly without foundation and contradictory’. Lastly, as regards the compatibility of aid intended to assist the development of certain activities, it submits that the Commission’s reasoning is ‘contradictory’ and is ‘wholly inconsistent’ with the findings made by it in other cases and from which it departed very significantly in the present case. 55 As was pointed out in paragraph 26 of this judgment, the question whether the reasons given for a measure are correct goes to the substantive legality of that measure. It follows that a challenge to the validity of those reasons cannot be examined when the point under consideration is whether or not the obligation laid down under Article 253 EC has been complied with. 56 In addition, as regards the reasons for the Commission’s adoption of a different position than it adopted in previous cases, recitals 51 to 54 in the contested decision set out the factors on which the Commission based its finding that the present case differed from those under comparison and, accordingly, justify that position. 57 In those circumstances, the third part of the plea must also be rejected. 58 It follows from the above that the plea alleging infringement of Article 253 EC must be rejected in its entirety. The plea alleging infringement of the principle of the right to a fair hearing 59 The Italian Republic claims that it was only in the contested decision that the Commission set out specific objections to the fiscal measures at issue which involved indirect taxes. It failed to give the Italian Government and the beneficiaries a prior opportunity of providing their comments. In so doing, the Commission infringed the principle of the right to a fair hearing. 60 The Commission considers that that argument constitutes a new plea which is inadmissible by virtue of Article 42(2) of the Rules of Procedure as having been put forward for the first time at the stage of the reply. 61 Article 42(2) of the Rules of Procedure provides that no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or fact which have come to light in the course of the procedure. 62 In its application, the Italian Republic raises no plea in law alleging an infringement of the right to a fair hearing committed in the course of the procedure leading to the contested decision. 63 It was only at the stage of the reply that it invoked such a plea, without basing it on matters of law or fact which have come to light in the course of the procedure. 64 The plea in question is therefore a new plea which must, as such, be declared to be inadmissible. The plea alleging infringement of Article 87(1) EC65 The Italian Republic maintains that the Commission has infringed Article 87(1) EC by categorising the tax measures at issue as State aid. 66 The plea is divided into six parts. 67 In the first part, the applicant argues that the contested decision is founded on a false premiss as regards the reduction to 12.5% for income tax on banks which merge or engage in similar restructuring. That reduction applies, not to the overall income of the bank which merges or engages in similar restructuring, but only on the part of the income which is paid into a special reserve. In addition, the tax reduction cannot exceed the overall limit of 1.2% of the aggregate amount referred to in Articles 22(1) and 23(1) of Decree No 153/99. Lastly, the Commission failed to have regard to the condition that the special reserve could not be distributed to shareholders for three years. 68 In the other five parts of the plea, the Italian Republic contends that the measures at issue: – give rise to no transfer of State resources and to no renunciation on its part of any specific tax revenue; – do not constitute State aid, because they also benefit entities such as holding companies which are not undertakings for the purposes of Article 87(1) EC; – are not, as the Commission claims, selective in nature, but, on the contrary, of a general character, as the requirements they contain are neither discriminatory nor discretionary in their application; – do not affect trade between Member States or, at the most, affect it only in part, in which case only a partial recovery of the aid should have been ordered; – do not distort competition. 69 With more particular regard to the measures contained in Article 16(3) of Decree No 153/99 which provide for the fiscal neutrality of transactions involving the return of ancillary property and assets, those measures did not give rise to an economic advantage consisting in an exemption from tax for the company making the return, but merely to a transfer of the charge to tax from that company to the beneficiary and to an extension in the period for payment of the tax on the return of the property until its subsequent disposal. 70 The Commission argues that it was only at the stage of the reply that the Italian Republic put forward the argument that, inasmuch as Article 16(3) of Decree No 153/99 provides for the fiscal neutrality of the return of ancillary property and assets, it also benefits entities that are not undertakings for the purposes of Article 87(1) EC. That argument constitutes a new plea, which is inadmissible by virtue of Article 42(2) of the Rules of Procedure. 71 In the same way, it was only at the stage of the reply that the applicant put forward the argument that aid may affect trade between Member States only in part and therefore be only partially repayable. It considers that the request for a reduction in the amount to be recovered constitutes a new claim which alters the subject-matter of the proceedings in breach of Article 19 of the EC Statute of the Court of Justice (now Article 21 of the Statute of the Court of Justice) and Article 38 of the Rules of Procedure. 72 As to the remainder, the Commission considers that the plea alleging infringement of Article 87(1) EC is without foundation. – The first part, alleging a false premiss as regards the reduction in income tax73 Contrary to what the Italian Republic maintains, the Commission did not refer to a reduction in the rate of tax on the overall income of the bank. In recital 5 in the contested decision, it described the reduction in question by reference to profits placed in a special reserve, that being a condition for entitlement to the reduction. In any event, were a reduction applicable to the bank’s overall income to have been taken into consideration, it would have had an impact on the contested decision as regards the analysis of the extent of the aid but not as to its existence. 74 Furthermore, in the same recital in the contested decision, the Commission expressly referred to the overall limit of 1.2% and the requirement that there should be no distribution for three years invoked by the Italian Republic and laid down under Decree No 153/99. 75 The first part of the plea must therefore be rejected. – The second part, relating to the question whether the measures at issue are funded by the State or through State resources 76 Article 87(1) EC applies to ‘aid granted by a Member State or through State resources in any form whatsoever’. 77 According to settled case-law, the definition of aid is more general than that of a subsidy, because it includes not only positive benefits, such as subsidies themselves, but also measures which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which thus, without being subsidies in the strict sense of the word, are similar in character and have the same effect (see, inter alia, Case C-143/99 Adria-Wien Pipeline and Wietersdorfer & Peggauer Zementwerke [2001] ECR I-8365, paragraph 38, and Case C‑501/00 Spain v Commission [2004] ECR I-6717, paragraph 90 and the case-law cited there). 78 It follows that a measure by which the public authorities grant to certain undertakings a tax exemption which, although not involving a transfer of State resources, places the persons to whom the tax exemption applies in a more favourable financial situation than other taxpayers constitutes State aid within the meaning of Article 87(1) EC (see Case C-387/92 Banco Exterior de España [1994] ECR I-877, paragraph 14). Similarly, a measure which grants to certain undertakings a tax reduction or a deferral of liability to tax that would otherwise be payable may constitute State aid. 79 In the present case, the measures at issue comprise: – a reduction in the rate of income tax; – exemptions from tax granted under provisions which ensure the fiscal neutrality of the transactions concerned, that is to say that for fiscal purposes the presence of conditions that would give rise to a charge to tax are disregarded, as payment of the tax is deferred until such time as a subsequent transaction of the same kind may take place; – the imposition of a fixed-rate levy in place of the taxes that would otherwise be payable in connection either with a merger or similar restructuring or with a return of ancillary property and assets; – an exemption from tax on the transfer by the banking companies to the banking foundations of their shareholdings in the Banca d’Italia. 80 They thus comprise either a tax reduction in the form of the application of tax at a reduced rate, or the substitution of a fixed-rate levy for the taxes that would otherwise be payable, or an exemption from tax where a gain arises on the return of ancillary property or, as is mentioned at the end of recital 39 in the contested decision, where a banking company which transfers to a banking foundation its shareholding in the Banca d’Italia makes a profit on the transaction, particularly where the shareholding was originally acquired for no consideration and is transferred to the foundation for value or is revalued. 81 In those circumstances, the tax benefits in question are granted through State resources for the purposes of Article 87(1) EC. 82 That finding is not called into question, as regards the measures providing for the fiscal neutrality of transactions involving the return of property, by the argument that payment of the tax that would otherwise be due is deferred only until such time as that property may be disposed of. It is not only the deferral of payment of a tax liability that may constitute State aid, but also, in particular, a return of property, such as that covered by the present case, which transfers ownership of such an asset from one legal person to another, so that for the bank which returns the asset to a banking foundation, which is a separate legal person, the exemption is permanent. 83 The second part of the plea must therefore be rejected. – The third part, relating to the identity of the parties benefiting from the measure providing for the fiscal neutrality of transactions involving the return of ancillary property and assets 84 The Italian Republic argued in its reply that the argument that the measure providing for the fiscal neutrality of transactions involving the return of ancillary property and assets also benefits entities which are not undertakings for the purposes of Article 87(1) EC. 85 It must be pointed out that Article 42(2) of the Rules of Procedure provides that no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure. 86 However, it must also be pointed out that a plea which may be regarded as amplifying a plea made previously, whether directly or by implication, in the original application must be considered admissible (Case 306/81 Verros v Parliament [1983] ECR 1755, paragraph 9, and Case C-301/97 Netherlands v Council [2001] ECR I-8853, paragraph 169). 87 In its application, the Italian Republic raised the plea already considered above alleging infringement of Article 87(1) EC and argued that the Commission had failed to have regard to a number of the requirements set out in that provision. 88 The claim in the reply that the measures also benefit entities which are not undertakings constitutes an amplification of the original plea. It relates to one of the cumulative conditions to which the application of Article 87(1) EC is made subject. The argument in question is implicitly contained in the plea raised. 89 The Commission’s objection as to inadmissibility must accordingly be rejected. 90 In substance, the measures at issue form part of an aid scheme. 91 In the case of an aid scheme, the Commission may confine itself to examining the general characteristics of the scheme in question without being required to examine each particular case in which it applies (see, inter alia, Joined Cases C-15/98 and C-105/99 Italy and Sardegna Lines v Commission [2000] ECR I-8855, paragraph 51, and Case C-278/00 Greece v Commission [2004] ECR I-3997, paragraph 24) in order to establish whether the scheme involves elements of aid. 92 In the present case, it is not disputed that the tax provision under consideration operates to the benefit of banking undertakings. The fact that, in some circumstances, it may also benefit entities which are not undertakings does not call into question that finding, which is sufficient for Article 87(1) EC to apply to an aid scheme. 93 The third part of the plea must therefore be rejected. – The fourth part, relating to the selective nature of the measures at issue94 Article 87(1) EC prohibits aid which ‘[favours] certain undertakings or the production of certain goods’, that is to say aid which is selective. 95 Aid may be selective for the purposes of that provision even if it concerns a whole economic sector (see, inter alia, Case C-75/97 Belgium v Commission [1999] ECR I-3671, paragraph 33). 96 In the present case, the tax measures at issue apply to the banking sector. They do not benefit undertakings in other economic sectors. In that regard, it must be observed that in its application the Italian Republic itself pointed out that the operations to which the measures apply may also involve other companies, such as finance companies, service companies and insurance companies but that, ‘in any event, the benefits provided for extend only to banks which are a party to the operations’. 97 In addition, within the banking sector, the measures at issue benefit only the undertakings carrying out the operations covered by the measures. 98 Without it being necessary also to determine whether, as the Commission maintains in recital 33 in the contested decision, the tax reduction applying to mergers or similar restructuring operations is of greater benefit to large undertakings participating in them, it must therefore be held that the measures at issue are selective in relation to other economic sectors and within the banking sector itself. 99 As they do not apply to all economic operators, they cannot be considered as general measures of fiscal or economic policy. 100 They are, in fact, an exception to the general tax scheme. The undertakings which benefit from them are entitled to tax advantages to which they would have no right under the normal rules of application of that scheme and to which undertakings in other sectors carrying out similar operations or undertakings in the banking sector not carrying out operations such as those to which the rules apply have no right. 101 The measures at issue are not justified by the nature and the general scheme of the tax system in question (see, by way of analogy, Case 173/73 Italy v Commission [1974] ECR 709, paragraph 33). They do not represent an adaptation of the general system to meet particular characteristics of banking undertakings. It is clear from the documents before the Court that they were explicitly put forward by the national authorities as a means of improving the competitiveness of certain undertakings at a given time in the development of the sector. 102 The fourth part of the plea must therefore be rejected. The fifth and sixth parts, relating to the question whether there is an effect on trade between Member States and distortion of competition 103 In the application, the Italian Republic denied that the requirement that there be no effect on trade between Member States was infringed. In its reply, it criticised the Commission for failing to investigate whether, if they did not fully affect trade between Member States, the measures at issue affected it only in part. Had such a finding been made, that would have been reflected in the extent to which the aid was recoverable, by virtue of the principle of proportionality. 104 The Commission is of the view that that argument represents a new claim which alters the subject-matter of the dispute. It is therefore inadmissible pursuant to Article 21 of the Statute of the Court of Justice and Article 38 of the Rules of Procedure. 105 It must be pointed out in that regard that those provisions do not allow new claims which were not contained in the application to be put forward. 106 The argument which is alleged to be inadmissible is put forward in support of the claim for annulment of the contested decision, which is contained in the application. It is not linked to any variation of that claim, nor does it add to it in any way. 107 Accordingly, it cannot be considered to be a new claim. 108 The argument in fact amplifies a plea raised in the original application, so that it cannot be considered as a new plea for the purposes of Article 42 of the Rules of Procedure (see Verros v Parliament, paragraph 9, and Netherlands v Council, paragraph 169). 109 Accordingly, a plea of inadmissibility cannot be put forward against it. 110 As regards the substance, Article 87(1) EC prohibits aid which affects trade between Member States and which distorts or threatens to distort competition. 111 In assessing those two conditions, the Commission is required, not to establish that such aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition (Case C-372/97 Italy v Commission [2004] ECR I-3679, paragraph 44). 112 In that context, the concept of an ‘effect’ on trade between Member States, which must be understood as requiring that there be an impact on such trade, or at least that there be the possibility of such an impact, means that an interpretation which renders the recovery of the whole of the aid subject to a criterion that trade should be ‘fully’ affected, in contrast to a ‘partial’ effect on it, where only a proportion of the aid would be recoverable by virtue of the principle of proportionality, is unfounded. 113 With respect to the last-mentioned point, it should, moreover, be noted that the withdrawal of unlawful aid by recovery is the logical consequence of the finding that it is unlawful and that such recovery for the purpose of re-establishing the situation which previously existed cannot, in principle, be regarded as disproportionate to the objectives of the Treaty provisions on State aid (see Case C-372/97 Italy v Commission, paragraph 103 and the case‑law cited there). 114 It is in short the case that aid is incompatible with the common market where it has or is liable to have an impact on intra-Community trade and distorts or is liable to distort competition in that field. 115 In particular, when aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, those undertakings must be regarded as affected by that aid (see, inter alia, Case 730/79 Philip Morris v Commission [1980] ECR 2671, paragraph 11; Case C-53/00 Ferring [2001] ECR I-9067, paragraph 21; and Case C-372/97 Italy v Commission, paragraph 52). 116 In that regard, the fact that an economic sector has been the subject of liberalisation at Community level will suffice to indicate the real or potential effect of the aid on competition and its effect on trade between Member States (see Case C-409/00 Spain v Commission [2003] ECR I‑1487, paragraph 75). 117 Furthermore, it is not necessary that the beneficiary undertaking should itself participate in the intra-Community trade. Where a Member State grants aid to an undertaking, internal activity may be maintained or increased as a result, so that the opportunities for undertakings established in other Member States to penetrate the market in that Member State are reduced as a result (see, to that effect, inter alia Case C-310/99 Italy v Commission, paragraph 84). Furthermore, the strengthening of an undertaking which has not previously participated in intra-Community trade may place it in a position which enables it to penetrate the market of another Member State. 118 In the present case, it must be held that the tax benefits provided by the measures at issue in cases of merger, the return of certain property and assets and in certain cases involving the transfer of shareholdings in the Banca d’Italia (see paragraph 80 of this judgment) strengthen the position of the beneficiary undertakings in relation to undertakings which are active in intra-Community trade. 119 It must also be noted that the financial services sector has been the subject of a significant liberalisation process at Community level, which has intensified the competition which may already have resulted from the freedom of movement of capital provided for under the Treaty. 120 It is clear from the documents before the Court that, at the time when they were adopted, the measures at issue were presented in the explanatory notes to the draft law which formed the basis of Law No 461/98 as a means of ensuring that the fact that the Italian banking system was significantly less well developed than its European competitors did not mean that the attainment of monetary union would result in the erosion of the Italian system to the benefit of the strongest European banks. 121 The competitive benefit conferred by the measures at issue on operators established in Italy is such as to make the penetration of the Italian market by operators from other Member States more difficult and indeed to facilitate the penetration of other markets by operators established in Italy. 122 The fact, invoked by the Italian Republic, that the aid scheme is also available in Italy to branches of banks from other Member States does not preclude such effects arising. 123 It must accordingly be held that the aid in question is liable to affect trade between Member States and to distort competition. 124 The fifth and sixth parts of the plea must therefore be rejected. 125 It follows from the above that the plea alleging infringement of Article 87(1) EC must be rejected in its entirety. The pleas alleging infringement of Article 87(3)(b) and (c) EC 126 The Italian Republic argues, as regards its two pleas based on Article 87(3) EC, that the failure to give prior notification of the aid scheme did not entitle the Commission to conclude that that scheme could not be declared to be compatible with the common market under that provision of the Treaty. 127 The applicant contends, in the first place, that the Commission infringed Article 87(3)(b) EC by refusing to declare the aid to be compatible with the common market as being ‘aid to promote the execution of an important project of common European interest’ for the purposes of that provision. It argues that the objective of Law No 461/98 and Decree No 153/99 was to complete the privatisation of Italian banking institutions in encouraging a withdrawal or a reduction of public capital and capital which did not belong to private investors in Italian banking institutions. The result of that action was not to distort competition, but, on the contrary, to reduce the imbalances which existed before the introduction of the scheme in question between banks that were truly private and those which were only so in name and not in terms of their controlling capital. 128 The Italian Republic argues that the full and permanent privatisation of Italian banking institutions may constitute a ‘project of common European interest’, forming part in turn of the Community project of the attainment of the euro zone and of the internal market. In the light of Article 295 EC, the privatisation project could be carried through only by the Member States, each acting in its own sphere. Privatisation strengthens competition on an important financial market such as the Italian market, which benefits the Community as a whole. 129 The Italian Republic considers, in the second place, that the Commission infringed Article 87(3)(c) EC by failing to declare the measures at issue to be compatible with the common market as being ‘aid to facilitate the development of certain economic activities’, in the present case, banking activity. 130 It complains that the Commission considered the question of the application of Article 87(3)(c) EC only in the light of its information notice 1999/C 288/02 on Community guidelines on State aid for rescuing and restructuring firms in difficulty and its information notice 96/C 213/04 on Community guidelines on State aid for small and medium-sized enterprises (OJ 1996 C 213, p. 4), which the contested decision implicitly adopts. It states that it has never maintained that the aid scheme could be considered as providing aid to firms in difficulty or small and medium-sized enterprises. According to the applicant, the assessment of the compatibility of the aid should be made directly on the basis of Article 87(3)(c) EC, as the scheme under consideration does not correspond to either of the ‘codified’ situations covered by the two Commission information notices. 131 The Italian Republic criticises the Commission for departing very significantly from the position it adopted in its Decision 1999/288/EC of 29 July 1998 giving conditional approval to the aid granted by Italy to Banco di Napoli (OJ 1999 L 116, p. 36) and its Decision 2000/600/EC of 10 November 1999 conditionally approving the aid granted by Italy to the public banks Banco di Sicilia and Sicilcassa (OJ 2000 L 256, p. 21). 132 Those decisions related to aid which was similar in many respects to that granted by the measures at issue, in particular as they were based in part on Law No 218/90. That aid was never notified. The Commission, while imposing certain conditions, ultimately declared it to be compatible with the common market pursuant to Article 87(3)(c) EC. 133 The reduction in the rate of income tax provided for under Articles 22 and 23 of Decree No 153/99 is consistent with the similar, if not more favourable, fiscal measure laid down in Article 7(3) of Law No 218/90. The latter provision granted to credit institutions resulting from mergers and those which were the recipients of transfers, where those transfers gave rise to issues of concentration, the right to deduct for five years payments made to a special reserve, subject to a specific maximum limit. The Commission did not adopt the same position with regard to that earlier measure. 134 The Commission submits that the two pleas are without foundation. 135 The first point to note is that, in applying Article 87(3) EC, the Commission enjoys a wide discretion, the exercise of which involves assessments of an economic and social nature which must be made within a Community context. The Court, in reviewing whether that freedom was lawfully exercised, cannot substitute its own assessment for that of the competent authority but must restrict itself to examining whether the authority’s assessment is vitiated by a manifest error or misuse of powers (see Case C-456/00 France v Commission [2002] ECR I-11949, paragraph 41 and the case-law cited there). 136 In addition, it must be stated at the outset that in the contested decision, contrary to what the applicant contends, the Commission did not infer in any way from the absence of prior notification of the aid scheme that it could not be declared to be compatible with the common market pursuant to Article 87(3) EC. – The concept of aid ‘to promote the execution of an important project of common European interest’137 Article 87(3)(b) EC allows the Commission to declare aid to promote the execution of an important project of European interest to be compatible with the common market. 138 In recital 45 in the contested decision, the Commission stated that the measures at issue are intended to strengthen the Italian banking system by benefiting mostly the economic operators of one Member State and not the Community as a whole. 139 It is sufficient to hold in that regard that, as is shown by consideration of the plea based on Article 87(1) EC and, in particular, the explanatory notes to the draft law on which Law No 461/98 is based, that the measures at issue are essentially aimed at improving the competitiveness of operators established in Italy in order to strengthen their position on the internal market. 140 Accordingly, in failing to apply the classification of ‘project of common European interest’, the Commission did not commit a manifest error of assessment. 141 The Italian Republic cannot validly argue that the measures at issue form part of a full and permanent privatisation process which might constitute a project of common European interest. 142 First, the tax benefits do not have the necessary connection with a privatisation process. Secondly, and most importantly, a privatisation process undertaken by a Member State cannot, of itself, be considered as constituting a project of common European interest. 143 It follows that the plea alleging infringement of Article 87(3)(b) EC must be rejected. – The concept of ‘aid to facilitate the development of certain economic activities’144 Article 87(3)(c) EC allows the Commission to declare aid to facilitate the development of certain economic activities to be compatible with the common market. 145 Contrary to what the applicant contends, the Commission did not consider the application of that provision only in the light of its information notices 1999/C 288/02 and 96/C 213/04. 146 In recital 47 in the contested decision, after analysing the measures at issue in the light of the criteria set out in its two information notices, it states that no feature of the aid scheme under consideration allows it to be held to be compatible on other grounds for the purposes of Article 87(3)(c) EC. 147 In addition, it states that in its view the criterion laid down under that provision that the aid is not adversely to affect trading conditions to an extent contrary to the common interest is not satisfied. 148 In stating, as regards the last-mentioned point, that the principal effect of the measures at issue is to improve the competitiveness of the beneficiaries in a sector where international competition is strong, and having previously noted that it was in fact intended to strengthen the position of the beneficiaries of the aid with regard to competitors which do not benefit from it, the Commission implicitly rejected the possibility that the objective of the aid scheme under consideration might be the ‘development’ of banking activity in general. 149 Taking into consideration the reasons set out in the examination of the previous pleas as regards the nature of the measures at issue, it must be held that the Commission’s analysis is not based on a manifest error of assessment. 150 The Italian Republic cannot validly argue that the Commission departed from the position adopted in relation to the measures contained in Law No 218/90 and, in particular, the position adopted in its Decisions 1999/288 and 2000/600. 151 It is not in dispute that the measures contained in Law No 218/90 were never notified to the Commission. Accordingly, as regards the Italian Republic’s claim that a measure laid down under Article 7(3) of Law No 218/90 was closely connected with the reduction in income tax provided for by Articles 22 and 23 of Decree No 153/99, it is sufficient to hold that the measure referred to was not investigated by the Commission. Furthermore, even if the two successive measures represent a common thread, the fact that the Commission took no steps in relation to the first of them is of no relevance, as the scheme at issue in the present case, viewed independently from its predecessor, favours certain undertakings (see, to that effect, Case 57/86 Greece v Commission [1988] ECR 2855, paragraph 10). 152 As regards Decisions 1999/288 and 2000/600, it should be observed that they relate to aid in respect of which the beneficiaries were individual banks and concern different measures from those at issue in the present case, namely increases in share capital, advances made by the Banca d’Italia, the injection of a Treasury contribution to a bank and tax benefits for measures primarily involving the transfer of undertakings, branches of undertakings and assets. 153 Accordingly, the plea alleging infringement of Article 87(3)(c) EC must be rejected. 154 In the event, none of the pleas for annulment raised by the Italian Republic is well founded. 155 The application must therefore be dismissed. Costs156 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Italian Republic has been unsuccessful and the Commission has applied for costs, the Italian Republic must be ordered to pay the costs. On those grounds, the Court (Second Chamber) hereby:1. Dismisses the action;2. Orders the Italian Republic to pay the costs.[Signatures]* Language of the case: Italian. | 18983-85556f0-4375 | EN |
ADVOCATE GENERAL JACOBS CONSIDERS THAT THE REFUSAL TO GRANT A PENSION TO A MALE-TO-FEMALE TRANSSEXUAL AT THE SAME AGE AS A WOMAN IS CONTRARY TO COMMUNITY LAW | Sarah Margaret RichardsvSecretary of State for Work and Pensions(Reference for a preliminary ruling from the Social Security Commissioner)(Equal treatment for men and women in matters of social security – Directive 79/7/EEC – Refusal to award a retirement pension at the age of 60 to a transsexual who has undergone male-to-female gender reassignment surgery) Summary of the Judgment1. Social policy – Equal treatment for men and women in matters of social security –Directive 79/7 (Council Directive 79/7, Art. 4(1))2. Preliminary rulings – Interpretation – Effect of interpretative judgments ratione temporis(Art. 234 EC)1. Article 4(1) of Directive 79/7 on the progressive implementation of the principle of equal treatment for men and women in matters of social security is to be interpreted as precluding legislation which denies a person who, in accordance with the conditions laid down by national law, has undergone male-to-female gender reassignment entitlement to a retirement pension on the ground that she has not reached the age of 65, when she would have been entitled to such a pension at the age of 60 had she been held to be a woman as a matter of national law. The scope of Directive 79/7 cannot thus be confined simply to discrimination based on the fact that a person is of one or other sex. In view of its purpose and the nature of the rights which it seeks to safeguard, the scope of that directive is also such as to apply to discrimination arising from the gender reassignment of the person concerned. (see paras 24, 38, operative part 1)2. It is only exceptionally that, in application of a general principle of legal certainty which is inherent in the Community legal order, the Court may decide to restrict the right to rely upon a provision it has interpreted with a view to calling in question legal relations established in good faith. Moreover, the financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effects of the ruling. (see paras 40-41)JUDGMENT OF THE COURT (First Chamber)27 April 2006 (*) In Case C-423/04,REFERENCE for a preliminary ruling under Article 234 EC from the Social Security Commissioner (United Kingdom) made by decision of 14 September 2004, received at the Court on 4 October 2004, in the proceedings Secretary of State for Work and Pensions,THE COURT (First Chamber),composed of P. Jann, President of the Chamber, K. Schiemann, N. Colneric, J.N. Cunha Rodrigues (Rapporteur) and E. Juhász, Judges, Advocate General: F.G. Jacobs,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 20 October 2005,after considering the observations submitted on behalf of:– Ms Richards, by J. Sawyer and T. Eicke, Barristers,– the United Kingdom Government, by R. Caudwell, acting as Agent, and T. Ward, Barrister,– the Commission of the European Communities, by D. Martin and N. Yerrell, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 15 December 2005,gives the followingJudgment1 The reference for a preliminary ruling concerns the interpretation of Articles 4 and 7 of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (OJ 1979 L 6, p. 24). 2 This reference was made in the course of proceedings between Ms Richards, a transsexual who has undergone a gender reassignment operation, and the Secretary of State for Work and Pensions (‘the Secretary of State’) regarding the latter’s refusal to award her a retirement pension as from her 60th birthday. Legal context Community law3 Article 4(1) of Directive 79/7 provides: ‘The principle of equal treatment means that there shall be no discrimination whatsoever on ground of sex either directly, or indirectly by reference in particular to marital or family status, in particular as concerns: – the scope of the schemes and the conditions of access thereto,– the obligation to contribute and the calculation of contributions,– the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefits.’ 4 Article 7(1) of Directive 79/7 provides that the directive is to be without prejudice to the right of Member States to exclude from its scope: ‘(a) the determination of pensionable age for the purposes of granting old-age and retirement pensions and the possible consequences thereof for other benefits; …’ National legislation5 Section 29(1) and (3) of the Births and Deaths Registration Act 1953 prohibits any alteration to the Register of Births, except in cases of clerical or factual error. 6 Section 44 of the Social Security Contributions and Benefits Act 1992 provides that a person is to be entitled to a Category A retirement pension (the ‘normal’ retirement pension) if he is over pensionable age and satisfies various conditions regarding contributions. 7 According to paragraph 1 of Part I of Schedule 4 to the Pensions Act 1995, a man attains pensionable age at 65 and a woman born before 6 April 1950 attains pensionable age at 60. 8 On 1 July 2004, the Gender Recognition Act 2004 (hereinafter ‘the 2004 Act’), which came into force on 4 April 2005, was adopted. 9 That Act permits persons who have already undergone gender reassignment or who intend to undergo gender reassignment surgery to apply for a gender recognition certificate, on the basis of which near-complete recognition of their change of gender can be obtained. 10 Under section 2(1) of the 2004 Act, a gender recognition certificate must be issued if the applicant fulfils, inter alia, the following conditions: ‘(a) [the applicant] has or has had gender dysphoria,(b) [the applicant] has lived in the acquired gender throughout the period of two years ending with the date on which the application is made, 11 Section 9(1) of the 2004 Act provides that: ‘Where a full gender recognition certificate is issued to a person, the person’s gender becomes for all purposes the acquired gender (so that, if the acquired gender is the male gender, the person’s sex becomes that of a man, and if it is the female gender, the person’s sex becomes that of a woman).’ 12 Under section 9(2) of the 2004 Act, the gender recognition certificate does not affect things done, or events occurring, before the certificate is issued. 13 As regards retirement benefits, paragraph 7(3) of Part 2 of Schedule 5 to the 2004 Act provides: ‘… if (immediately before the certificate is issued) the person –(a) is a man who has attained the age at which a woman of the same age attains pensionable age, but(b) has not attained the age of 65,the person is to be treated … as attaining pensionable age when it is issued.’ The main proceedings and the questions referred for a preliminary ruling 14 Ms Richards was born on 28 February 1942 and her birth certificate registered her gender as male. Having been diagnosed as suffering from gender dysphoria, she underwent gender reassignment surgery on 3 May 2001. 15 On 14 February 2002 she applied to the Secretary of State for Work and Pensions for a retirement pension to be paid as from 28 February 2002, the date on which she turned 60, the age at which, under national law, a woman born before 6 April 1950 is eligible to receive a retirement pension. 16 By decision of 12 March 2002, that application was refused on the ground that ‘the claim was made more than 4 months before the claimant reaches age 65’, which is the retirement age for men in the United Kingdom. 17 As the appeal which Ms Richards brought before the Social Security Appeal Tribunal was dismissed, she appealed to the Social Security Commissioner, claiming that, following the ruling in Case C-117/01 K.B. [2004] ECR I-541, the refusal to pay her a retirement pension as from the age of 60 was a breach of Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, as well as discrimination contrary to Article 4 of Directive 79/7. 18 In that appeal, the Secretary of State for Work and Pensions submitted that the claim by the appellant in the main proceedings did not fall within the scope of Directive 79/7. According to him, Community law provides only for a measure of coordination for old-age benefits but does not confer a right to receive such benefits. Moreover, Ms Richards had not been discriminated against having regard to those who constitute the correct comparator, namely men who have not undergone gender reassignment surgery. 19 In order to be able to dispose of the case, the Social Security Commissioner decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Does Directive 79/7 prohibit the refusal of a retirement pension to a male-to-female transsexual until she reaches the age of 65 and who would have been entitled to such a pension at the age of 60 had she been held to be a woman as a matter of national law? (2) If so, from what date should the Court’s ruling on Question 1 have effect?’ The first question20 By its first question, the national court is essentially asking whether Article 4(1) of Directive 79/7 precludes legislation which denies a person who has undergone male-to-female gender reassignment entitlement to a retirement pension on the ground that she has not reached the age of 65, when she would have been entitled to such a pension at the age of 60 had she been held to be a woman as a matter of national law. 21 First of all, it should be noted that it is for the Member States to determine the conditions under which legal recognition is given to the change of gender of a person (see to that effect K.B., paragraph 35). 22 In order to answer the first question, it is necessary to state at the outset that Directive 79/7 is the embodiment in the field of social security of the principle of equal treatment of men and women which is one of the fundamental principles of Community law. 23 Moreover, in accordance with settled case-law, the right not to be discriminated against on grounds of sex is one of the fundamental human rights the observance of which the Court has a duty to ensure (see Case 149/77 Defrenne [1978] ECR 1365, paragraphs 26 and 27, and Case C-13/94 P. v S. [1996] ECR I-2143, paragraph 19). 24 The scope of Directive 79/7 cannot thus be confined simply to discrimination based on the fact that a person is of one or other sex. In view of its purpose and the nature of the rights which it seeks to safeguard, the scope of that directive is also such as to apply to discrimination arising from the gender reassignment of the person concerned (see, as regards Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (OJ 1976 L 39, p. 40), P. v S., paragraph 20). 25 The United Kingdom Government submits that the facts which gave rise to the dispute in the main proceedings stem from the choice made by the national legislature to prescribe differential pensionable ages for men and women. As such a right was expressly granted to the Member States under Article 7(1)(a) of Directive 79/7, they are permitted to derogate from the principle of equal treatment for men and women in the field of retirement pensions. It is irrelevant that, as in the main proceedings, the distinction made by the pension scheme on the basis of gender affects the rights of transsexuals. 26 That line of argument cannot be accepted. 27 Ms Richards argues that she was precluded from obtaining a retirement pension on reaching the age of 60, the age at which women who were born before 6 April 1950 are entitled to such a pension in the United Kingdom. 28 The unequal treatment at issue in the main proceedings is based on Ms Richards’ inability to have the new gender which she acquired following surgery recognised with a view to the application of the Pensions Act 1995. 29 Unlike women whose gender is not the result of gender reassignment surgery and who may receive a retirement pension at the age of 60, Ms Richards is not able to fulfil one of the conditions of eligibility for that pension, in this case that relating to retirement age. 30 As it arises from her gender reassignment, the unequal treatment to which Ms Richards was subject must be regarded as discrimination which is precluded by Article 4(1) of Directive 79/7. 31 The Court has already found that national legislation which precludes a transsexual, in the absence of recognition of his new gender, from fulfilling a requirement which must be met in order to be entitled to a right protected by Community law must be regarded as being, in principle, incompatible with the requirements of Community law (see K.B., paragraphs 30 to 34). 32 The United Kingdom Government submits that no Community right has been breached by the decision of 12 March 2002 refusing to award Ms Richards a pension, as entitlement to a retirement pension derives only from national law. 33 In that regard, it is enough to remember that, according to settled case-law, Community law does not affect the power of the Member States to organise their social security systems, and that in the absence of harmonisation at Community level it is therefore for the legislation of each Member State to determine, first, the conditions governing the right or duty to be insured with a social security scheme and, second, the conditions for entitlement to benefits. Nevertheless, the Member States must comply with Community law when exercising that power (Case C-157/99 Smits and Peerbooms [2001] ECR I-5473, paragraphs 44 to 46, and Case C-92/02 Kristiansen [2003] ECR I-14597, paragraph 31). 34 Furthermore, discrimination contrary to Article 4(1) of Directive 79/7 falls within the scope of the derogation provided for by Article 7(1)(a) of that directive only if it is necessary in order to achieve the objectives which the directive is intended to pursue by allowing Member States to retain a different pensionable age for men and for women (Case C-9/91 Equal Opportunities Commission [1992] ECR I-4297, paragraph 13). 35 Although the preamble to Directive 79/7 does not state the reasons for the derogations which it lays down, it can be inferred from the nature of the exceptions contained in Article 7(1) of the directive that the Community legislature intended to allow Member States to maintain temporarily the advantages accorded to women with respect to retirement in order to enable them progressively to adapt their pension systems in this respect without disrupting the complex financial equilibrium of those systems, the importance of which could not be ignored. Those advantages include the possibility for female workers of qualifying for a pension earlier than male workers, as envisaged by Article 7(1)(a) of the same directive (Equal Opportunities Commission, paragraph 15). 36 According to settled case-law, the exception to the prohibition of discrimination on grounds of sex provided for in Article 7(1)(a) of Directive 79/7 must be interpreted strictly (see Case 152/84 Marshall [1986] ECR 723, paragraph 36; Case 262/84 Beets-Proper [1986] ECR 773, paragraph 38; and Case C-328/91 Thomas and Others [1993] ECR I-1247, paragraph 8). 37 Consequently, that provision must be interpreted as relating only to the determination of different pensionable ages for men and for women. However, the action in the main proceedings does not concern such a measure. 38 It is clear from the foregoing that Article 4(1) of Directive 79/7 must be interpreted as precluding legislation which denies a person who, in accordance with the conditions laid down by national law, has undergone male-to-female gender reassignment entitlement to a retirement pension on the ground that she has not reached the age of 65, when she would have been entitled to such a pension at the age of 60 had she been held to be a woman as a matter of national law. The second question39 By its second question the national court asks whether, if the Court finds that Directive 79/7 precludes the national legislation at issue in the main proceedings, the temporal effects of such a judgment must be limited. 40 It is only exceptionally that, in application of a general principle of legal certainty which is inherent in the Community legal order, the Court may decide to restrict the right to rely upon a provision it has interpreted with a view to calling in question legal relations established in good faith (Case 24/86 Blaizot [1988] ECR 379, paragraph 28, and Case C‑104/98 Buchner and Others [2000] ECR I-3625, paragraph 39). 41 Moreover, it is settled case-law that the financial consequences which might ensue for a Member State from a preliminary ruling do not in themselves justify limiting the temporal effects of the ruling (Case C‑184/99 Grzelczyk [2001] ECR I-6193, paragraph 52, and Case C‑209/03 Bidar [2005] ECR I-2119, paragraph 68). 42 The Court has taken that step only in quite specific circumstances, where there was a risk of serious economic repercussions owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force and where it appeared that individuals and national authorities had been led to adopt practices which did not comply with Community legislation by reason of objective, significant uncertainty regarding the implications of Community provisions, to which the conduct of other Member States or the Commission of the European Communities may even have contributed (Bidar, paragraph 69). 43 In this case, the entry into force of the 2004 Act on 4 April 2005 is liable to lead to the disappearance of disputes such as that which gave rise to the case in main proceedings. Furthermore, in both the written observations which it submitted to the Court and at the hearing, the United Kingdom Government did not maintain the claim which it had submitted in the action in the main proceedings seeking a limitation as to the temporal effect of the judgment. 44 Consequently, the answer to the second question must be that there is no need to limit the temporal effect of this judgment. Costs45 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (First Chamber) hereby rules:1. Article 4(1) of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security is to be interpreted as precluding legislation which denies a person who, in accordance with the conditions laid down by national law, has undergone male-to-female gender reassignment entitlement to a retirement pension on the ground that she has not reached the age of 65, when she would have been entitled to such a pension at the age of 60 had she been held to be a woman as a matter of national law.2. There is no need to limit the temporal effects of this judgment.[Signatures]* Language of the case: English. | 2a7a4-16a1d69-4d76 | EN |
THE COURT OF FIRST INSTANCE ANNULS THE COMMISSION'S DECISION APPROVING THE UK MEASURES ON TELEVISION COVERAGE OF EVENTS OF MAJOR IMPORTANCE FOR THE UK PUBLIC | Infront WM AGvCommission of the European Communities(Television broadcasting – Directive 89/552/EEC – Directive 97/36/EC – Article 3a – Events of major importance for society – Admissibility – Infringement of essential procedural requirements)Judgment of the Court of First Instance (Fourth Chamber, Extended Composition), 15 December 2005 Summary of the Judgment1. Actions for annulment – Actionable measures – Meaning – Measures producing binding legal effects – Commission letter informing a Member State of the compatibility with Community law, and of the subsequent publication, of State measures adopted under Article 3a of Directive 89/552 – Included as an actionable measure (Art. 230 EC; Council Directive 89/552, Art. 3a)2. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Whether directly concerned – Criteria – Commission decision establishing compatibility with Community law, and envisaging publication, of measures adopted by a Member State under Article 3a of Directive 89/552 – Holder of television broadcasting rights for the designated events directly concerned (Art. 230, fourth para., EC; Council Directive 89/552, Art. 3a)3. Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Commission decision establishing compatibility with Community law, and envisaging publication, of the measures adopted by a Member State under Article 3a of Directive 89/552 – Action by the holder of television broadcasting rights for the designated events – Admissibility 1. Any measure, the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action for annulment under Article 230 EC. The form in which such acts or decisions are cast is, in principle, immaterial as regards the question whether they are open to challenge by an action for annulment. In order to ascertain whether or not a measure which has been challenged produces such effects it is necessary to look to its substance. In this context, a letter from the Commission informing a Member State of its position as regards the compatibility with Community law, and the subsequent publication in the Official Journal, of measures, aimed at regulating the exercise of exclusive broadcasting rights of events of major importance for society, notified by that Member State to the Commission, in accordance with Article 3a of Directive 89/552, on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities, as amended by Directive 97/36/EC, constitutes a measure which may be challenged. That letter produces legal effects for the Member States in so far as it envisages the publication in the Official Journal of the national measures in question, which publication can only occur after the Commission has established the national measures’ compatibility with Community law, and which has the effect of triggering the mechanism for mutual recognition by other Member States as laid down by Article 3a(3) of that directive. (see paras 87, 89, 92, 95, 103, 111)2. In order to be of direct concern to an individual within the meaning of the fourth paragraph of Article 230 EC the contested Community measure must directly affect the applicant’s legal situation and its implementation must be purely automatic and result from Community rules alone without the application of other intermediate rules. This is the case for the holder of the designated broadcasting rights, as regards the Commission decision establishing compatibility with Community Law, and envisaging the subsequent publication in the Official Journal, of those measures, aimed at regulating the exercise of exclusive broadcasting rights of events of major importance for society, notified by the Member States in accordance with Article 3a of Directive 89/552, on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities, as amended by Directive 97/36/EC. That decision enables the mechanism of mutual recognition to operate effectively, by triggering the obligation for the other Member States to comply with their obligations under that directive, in particular ensuring that a television broadcaster, under their jurisdiction, and having bought the rights at issue does not circumvent those measures. (see paras 130, 138-139, 142, 150)3. Persons other than those to whom a decision is addressed may claim to be individually concerned, within the meaning of the fourth paragraph of Article 230 EC, only if that decision affects them by virtue of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person to whom the decision is addressed. The holder of the broadcasting rights for an event included in the list of those designated by the national measures and having acquired those rights prior to the adoption of those measures and, a fortiori, prior to their approval by the Commission, must be considered as individually concerned by the Commission decision – establishing compatibility with Community Law, and providing for the subsequent publication in the Official Journal, of those measures, aimed at regulating the exercise of exclusive broadcasting rights of events of major importance for society, notified by the Member States in accordance with Article 3a of Directive 89/552, on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities, as amended by Directive 97/36/EC – since those measures impede its ability freely to dispose of its rights by restricting their transfer exclusively to a broadcaster established in another Member State and wishing to broadcast that event in the former State. (see paras 142, 159, 165, 168)JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition)15 December 2005 (*) In Case T-33/01,Infront WM AG, formerly KirchMedia WM AG, established in Zug (Switzerland), represented initially by C. Lenz, A. Bardong, lawyers, and E. Batchelor, Solicitor, and subsequently by C. Lenz, E. Batchelor, R. Denton, Solicitor, F. Carlin, Barrister, and M. Clough QC, with an address for service in Luxembourg, applicant,Commission of the European Communities, represented by K. Banks and M. Huttunen, acting as Agents, and by J. Flynn QC, with an address for service in Luxembourg, defendant,supported byFrench Republic, represented by G. de Bergues, acting as Agent, with an address for service in Luxembourg, United Kingdom of Great Britain and Northern Ireland, represented initially by J. Collins and subsequently by R. Caudwell, acting as Agents, and finally by M. Berthell, acting as Agent, and by K. Parker QC, with an address for service in Luxembourg, European Parliament, represented by C. Pennera and M. Moore, acting as Agents, with an address for service in Luxembourg, Council of the European Union, represented by A. Lopes Sabino and M. Bishop, acting as Agents, interveners,APPLICATION for annulment of the alleged decision of the Commission adopted under Article 3a of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23), as amended by Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 (OJ 1997 L 202, p. 60), THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Fourth Chamber, Extended Composition), composed of H. Legal, President, P. Lindh, P. Mengozzi, I. Wiszniewska-Białecka and V. Vadapalas, Judges,Registrar: J. Plingers, Administrator,having regard to the written procedure and further to the hearing on 7 July 2005,gives the followingJudgment Legal context1 Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (OJ 1989 L 298, p. 23) was adopted on the basis of Article 57(2) of the EEC Treaty (now, after amendment, Article 47(2) EC) and Article 66 of the EEC Treaty (now Article 55 EC). That directive was amended by Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 (OJ 1997 L 202, p. 60). 2 Directive 89/552 as amended provides the legal framework for television broadcasting in the common market. Its primary objective is to facilitate the free movement of television broadcasts within the European Community by laying down minimum rules with which the Member States are required to ensure that television broadcasters under their jurisdiction comply. 3 Recitals 18 to 21 in the preamble to Directive 97/36 read as follows:‘(18) … it is essential that Member States should be able to take measures to protect the right to information and to ensure wide access by the public to television coverage of national or non-national events of major importance for society, such as the Olympic games, the football World Cup and the European football championship; … to this end Member States retain the right to take measures compatible with Community law aimed at regulating the exercise by broadcasters under their jurisdiction of exclusive broadcasting rights to such events; (19) … it is necessary to make arrangements within a Community framework, in order to avoid potential legal uncertainty and market distortions and to reconcile free circulation of television services with the need to prevent the possibility of circumvention of national measures protecting a legitimate general interest; (20) ... in particular, it is appropriate to lay down in this Directive provisions concerning the exercise by broadcasters of exclusive broadcasting rights that they may have purchased to events considered to be of major importance for society in a Member State other than that having jurisdiction over the broadcasters, and ... in order to avoid speculative rights purchased with a view to circumvention of national measures, it is necessary to apply these provisions to contracts entered into after the publication of this Directive and concerning events which take place after the date of implementation, and ... when contracts that predate the publication of this Directive are renewed, they are considered to be new contracts; (21) ... events of major importance for society should, for the purposes of this Directive, meet certain criteria, that is to say be outstanding events which are of interest to the general public in the European Union or in a given Member State or in an important component part of a given Member State and are organised in advance by an event organiser who is legally entitled to sell the rights pertaining to that event’. 4 Article 1 of Directive 89/552 as amended (‘the directive’) provides:‘(a) “television broadcasting” means the initial transmission by wire or over the air, including that by satellite, in unencoded or encoded form, of television programmes intended for reception by the public. It includes the communication of programmes between undertakings with a view to their being relayed to the public. It does not include communication services providing items of information or other messages on individual demand such as telecopying, electronic data banks and other similar services; (b) “broadcaster” means the natural or legal person who has editorial responsibility for the composition of schedules of television programmes within the meaning of (a) and who transmits them or has them transmitted by third parties.’ 5 Article 3a of the directive provides:‘1. Each Member State may take measures in accordance with Community law to ensure that broadcasters under its jurisdiction do not broadcast on an exclusive basis events which are regarded by that Member State as being of major importance for society in such a way as to deprive a substantial proportion of the public in that Member State of the possibility of following such events via live coverage or deferred coverage on free television. If it does so, the Member State concerned shall draw up a list of designated events, national or non-national, which it considers to be of major importance for society. It shall do so in a clear and transparent manner in due and effective time. In so doing the Member State concerned shall also determine whether these events should be available via whole or partial live coverage, or where necessary or appropriate for objective reasons in the public interest, whole or partial deferred coverage. 2. Member States shall immediately notify to the Commission any measures taken or to be taken pursuant to paragraph 1. Within a period of three months from the notification, the Commission shall verify that such measures are compatible with Community law and communicate them to the other Member States. It shall seek the opinion of the Committee established pursuant to Article 23a. It shall forthwith publish the measures taken in the [Official Journal] and at least once a year the consolidated list of the measures taken by Member States. 3. Member States shall ensure, by appropriate means, within the framework of their legislation that broadcasters under their jurisdiction do not exercise the exclusive rights purchased by those broadcasters following the date of publication of this Directive in such a way that a substantial proportion of the public in another Member State is deprived of the possibility of following events which are designated by that other Member State in accordance with the preceding paragraphs via whole or partial live coverage or, where necessary or appropriate for objective reasons in the public interest, whole or partial deferred coverage on free television as determined by that other Member State in accordance with paragraph 1.’ 6 Under Article 23a(1) of the directive:‘A contact committee shall be set up under the aegis of the Commission. It shall be composed of representatives of the competent authorities of the Member States. It shall be chaired by a representative of the Commission and meet either on his initiative or at the request of the delegation of a Member State.’ Facts7 Kirch Media GmbH & Co. KGaA, formerly known as TaurusFilm GmbH & Co., and KirchMedia WM AG, now Infront WM AG, are involved in the acquisition, management and marketing of television broadcasting rights for sporting events and typically purchase such rights from the organiser of the sporting event concerned. They sell the rights acquired in this way to broadcasters. 8 On 10 September 1996, TaurusFilm GmbH & Co. and its co-licensee Sporis Holding AG signed a contract with the Fédération internationale de football association (‘FIFA’) for the worldwide (excluding the USA) exclusive broadcasting rights to the final-stage matches (‘the finals’) of the 2002 and 2006 FIFA World Cup. By an agreement between FIFA and TaurusFilm GmbH & Co. entered into on 26 May 1998 which replaced the preceding contract, the latter acquired the exclusive broadcasting rights to those matches in the countries of Europe including Russia, the former soviet socialist republics and Turkey for a minimum sum of CHF 1.4 billion. 9 On 14 October 1998, Kirch Media GmbH & Co. KGaA assigned its rights to broadcast the 2002 FIFA World Cup (excluding the rights to broadcast in Germany) to its Swiss affiliate FWC Medien AG, now KirchMedia WM AG. The broadcasting rights for the 2006 FIFA World Cup were subsequently also assigned to KirchMedia WM AG. 10 As required by Article 3a(2) of the directive, the United Kingdom notified the Commission on 25 September 1998 of the measures taken pursuant to Article 3a(1). Those measures included the list of events of major importance for society designated by that Member State. 11 On 2 November 1998, the Commission communicated those measures to the other Member States as required by Article 3a(2) of the directive and it received the observations of the contact committee established pursuant to Article 23a(1) of that directive (‘the Contact Committee’) at a meeting on 20 November 1998. 12 By letter of 23 December 1998, the Commission informed the United Kingdom that there were doubts as to the scope of the measures notified which prevented it from assessing whether those measures were compatible with Community law. 13 The United Kingdom notified a new version of those measures to the Commission by letter of 5 May 2000. 14 By letter of 14 July 2000, addressed to the Commission, the applicant submitted that the list drawn up by the United Kingdom could not be approved because it was incompatible with both Article 3a of the directive and other provisions of Community law. It alleged inter alia in that letter that the list in question was not drawn up pursuant to a clear and transparent procedure, that it included events which were not of major importance for United Kingdom society and that the national and Community consultation procedures were marred by serious deficiencies, and it criticised the retroactive nature of the relevant legislation. 15 By letter of 28 July 2000, the Director-General of the Directorate-General (DG) for Education and Culture sent a letter to the United Kingdom, in which he stated as follows: ‘By letter dated 5 May 2000, received by the European Commission on 11 May 2000, the UK Permanent Representation to the European Union notified [to] the Commission a set of national measures concerning the television coverage of events of national interest in the UK. These measures include: sections 97, 98, 101, 103, 104 and 105 of Part IV of the Broadcasting Act [1996]; [paragraphs 1, 3 and 9 of Regulation 3 in] the Schedule to the Television Broadcasting Regulations 2000; the relevant provisions of the [Independent Television Commission] Code on Sports and other Listed Events published pursuant to section 104 of the Broadcasting Act 1996; the criteria for determining sporting and other events of national interest announced by the Secretary of State [for Culture, Media and Sport] (25 November 1997) and the Secretary of State’s announcement to Parliament of the outcome of the review of sporting and other events of national interest made pursuant to section 97(3) of the Broadcasting Act 1996 (25 June 1998). As required under Article 3a(2) of [the directive], the Commission communicated the [notified] measures to the other Member States and sought the opinion of the [Contact Committee]. I have the honour to inform you that pursuant to the examination of the conformity of the measures taken with the directive and on the basis of the facts available in relation to the audiovisual landscape in the United Kingdom, the European Commission does not intend to object to the measures notified by your authorities. As required by Article 3a(2) of the directive, the Commission will proceed with the publication of the notified measures in the [Official Journal].’ 16 By letter of 7 November 2000, the applicant informed the Commission that it was aware of the Commission’s imminent approval of the list of events of major importance for society designated by the United Kingdom and complained in particular of the infringement of its property rights caused by the adoption by that State of those measures under Article 3a(1) of the directive. 17 Pursuant to Article 3a(2) of the directive, the Commission published on 18 November 2000 (OJ 2000 C 328, p. 2) the measures taken by the United Kingdom pursuant to Article 3a(1) of the directive and notified to the Commission in accordance with the procedure laid down in Article 3a(2). 18 Those measures include extracts from Part IV of the Broadcasting Act 1996 (‘the 1996 Act’), extracts from Regulation 3 annexed to the Television Broadcasting Regulations 2000 (‘the TBR 2000’), extracts from the Independent Television Commission Code on Sports and other Listed Events, as amended in January 2000 (‘the ITC Code’), to which are appended a list of the events of major importance for society designated by the United Kingdom and a list of services meeting the qualifying conditions set out in the TBR 2000, together with the written replies of the United Kingdom Secretary of State for Culture, Media and Sport to two parliamentary questions of 25 November 1997 and 25 June 1998 concerning the revision of the list of sporting events set out in Part IV of the 1996 Act. Included in that list are the FIFA World Cup finals. 19 On 7 December 2000, the applicant wrote to the Commission, stating inter alia as follows:‘… I would appreciate if you could … confirm that the Commission has completed the verification process under Article 3a [of the directive] in connection with the list drawn up by the United Kingdom and [the 1996 Act], and … inform us of the outcome of this process, including any relevant Commission measures. In addition, we would appreciate having access to all relevant documentation.’ 20 The applicant repeated its request to the Commission by letter of 22 December 2000.21 By letter of 22 January 2001, the Commission replied to the applicant as follows:‘In legal terms, pursuant to Article 3a(2) of the directive, the publication of measures is the consequence of a (positive) verification procedure performed by the Commission. Your assumption is therefore correct that the verification procedure by the Commission has been completed and that the UK list has been accepted as compatible with the Directive.’ 22 The Commission annexed to that letter the opinion of the Contact Committee of 6 June 2000. Procedure 23 On 12 February 2001, Kirch Media GmbH & Co. KGaA and KirchMedia WM AG brought the present action.24 By letter of 5 April 2001, the Council sought leave to intervene in support of the forms of order sought by the Commission. 25 By separate document lodged at the Registry of the Court on 11 June 2001, the Commission brought an application for a decision on admissibility under Article 114 of the Rules of Procedure of the Court. On 26 July 2001, the applicants lodged their observations on that plea of inadmissibility, to which they attached, as Annex 6, excised versions of the agreements entered into with FIFA relating to the assignment of broadcasting rights to the 2002 and 2006 FIFA World Cup finals (see paragraph 8 above). 26 By letters of 14 and 20 June 2001 respectively, the United Kingdom and the Kingdom of Denmark sought leave to intervene in support of the forms of order sought by the Commission. By letters of 25 June 2001, the French Republic, the Communauté française de Belgique (the French Community of Belgium) and the Parliament also sought leave to intervene in support of the forms of order sought by the Commission. 27 By letter of 2 August 2001, the applicants submitted a request for confidential treatment in respect of the applicants for leave to intervene, in the event of the applications for leave to intervene being granted, of certain parts of Annex 6 to their observations on the plea of inadmissibility. 28 In their observations lodged at the Registry of the Court on 31 August 2001, the applicants requested the Court to reject the application by the Communauté française de Belgique for leave to intervene and to order it to pay the costs arising out of its application. The main parties did not object to the other applications for leave to intervene. 29 By letter of 7 November 2001, the Commission sought leave to submit observations on the fact that, in Annex 6 to their observations on the plea of inadmissibility, the applicants had supplied excised versions of the agreements entered into with FIFA and, by letter of 12 April 2002, the Commission requested production of complete copies of those agreements. By letter of 4 July 2002, the Court requested the applicants to submit observations on the disclosure to the Commission of complete copies of the licence agreements entered into with FIFA. 30 By order of the Court of 11 March 2002, the decision on the application for a decision on admissibility made by the Commission was joined to the substance of the case and costs were reserved. 31 On 13 May 2002, the Court received complete copies of the agreements entered into with FIFA on 10 September 1996 and 26 May 1998. 32 By letter of 29 November 2002, the applicants requested, pursuant to Article 64(4) of the Rules of Procedure, that the Commission be asked to lodge documents. By letter of 20 January 2003, the Commission requested the removal of Annex 17 to the application from the file before the Court. By letter of 26 March 2003, the applicants made observations in that regard. 33 By letter of 11 February 2003, the Registry of the Court informed the parties that a ruling on the request for the removal of that item from the file before the Court would be given subsequently. 34 By letter of 26 March 2003, Kirch Media GmbH & Co. KGaA applied to discontinue its application. By order of 24 June 2003, the President of the Fifth Chamber of the Court ordered that that be done. 35 By order of 9 July 2003, the Court granted the Kingdom of Denmark, the French Republic, the United Kingdom, the Parliament and the Council leave to intervene in support of the forms of order sought by the defendant. By contrast, the Communauté française de Belgique was refused leave to intervene. The parties granted leave to intervene lodged statements in intervention, with the exception of the Kingdom of Denmark and the Council. The applicant lodged observations on those statements in intervention. 36 By letter of 19 August 2003, the Registry of the Court invited the applicant to produce non-confidential versions of its pleadings.37 By letter of 19 September 2003, the applicant applied for certain parts of the defence to be treated as confidential.38 By order of 4 December 2003, the President of the Fifth Chamber of the Court ordered that a non-confidential copy of every procedural document served on the parties be served on the interveners and invited the interveners to lodge their observations in that regard. The interveners lodged no observations within the period allowed to them for that purpose, except for the United Kingdom, which did not raise any objections on that issue. 39 By decision of 13 September 2004 on the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Fourth Chamber, to which this case was accordingly allocated by decision of 21 October 2004. 40 Pursuant to Article 14 of the Rules of Procedure and acting on a proposal from the Fourth Chamber, the Court decided, after the parties had been heard in accordance with Article 51 of those rules, to refer the case to a Chamber with an extended composition. 41 By letter lodged at the Registry of the Court on 1 July 2005, the Kingdom of Denmark informed the Court that it was withdrawing its intervention. As the applicant, the defendant and the United Kingdom did not object to the Kingdom of Denmark’s withdrawal and the other interveners made no observations, the President of the Fourth Chamber, Extended Composition, by order of 31 August 2005, ordered that the Kingdom of Denmark’s intervention be withdrawn and that each party bear its own costs in relation to that intervention. 42 Upon hearing the report of the Judge-Rapporteur, the Court (Fourth Chamber, Extended Composition) decided to open the oral procedure and, by way of measures of organisation of procedure as provided for in Article 64(3)(c) and (d) of the Rules of Procedure of the Court, requested the main parties and the United Kingdom to lodge certain documents and sent questions in writing to the applicant and the Commission, requesting that they reply to those questions prior to the hearing. The applicant, the defendant and the United Kingdom complied with those requests within the time-limit laid down. 43 With the exception of the French Republic, the parties submitted oral argument and answered the questions put by the Court at the hearing on 7 July 2005. 44 By letter of 22 August 2005, lodged at the Registry of the Court on 23 August 2005, the applicant requested that a document, which was enclosed with that letter and which the United Kingdom had only disclosed to it after the hearing, be added to the file. Forms of order sought45 The applicant claims that the Court should: – annul, in whole or in part, the Commission’s decision under Article 3(a) of the directive that the measures notified by the United Kingdom were compatible with Community law (‘the contested decision’); – declare that Article 3(a) of the directive is inapplicable and could not serve as a legal basis for the adoption of the contested decision; – order the Commission to pay the costs;– order the French Republic, the United Kingdom and the Parliament to bear their own costs including those incurred by reason of their interventions. 46 The Commission contends that the Court should:– dismiss the action as inadmissible;– in the alternative, dismiss the action as unfounded;– order the applicant to pay the costs.47 The Parliament, in support of the Commission, submits that the Court should:– in the alternative, dismiss the action as unfounded.48 The United Kingdom, in support of the Commission, contends that the Court should dismiss the action.49 The French Republic, in support of the Commission, contends that the Court should:– dismiss the action; LawA – The request for measures of organisation of procedure50 In its pleadings the applicant asks that the Commission be requested to produce various documents concerning the procedure for verifying that the measures adopted by the United Kingdom are compatible with Community law. 51 By way of measures of organisation of procedure pursuant to Article 64(3)(c) and (d) of the Rules of Procedure of the Court of First Instance, the Court requested the Commission and the United Kingdom to disclose those documents. At the hearing the applicant stated in reply to a question from the Court that it was satisfied with the response to its application for documents to be disclosed. 52 In those circumstances, the Court finds that there is no need to make a ruling in that regard. B – The application to withdraw a document53 By letter of 20 January 2003, the Commission requested the Court to remove from the proceedings a document produced by the applicant in Annex 17 to its application on the ground that it was a document drafted by its staff for the purposes of discussion within the Contact Committee which was confidential. The applicant objected to that removal. 54 The Commission’s request seeks the removal from the proceedings of the document entitled ‘Discussion paper for the Contact Committee on Art. 3(a) [of the directive]’ with the reference number DOC CC TVSF (2000) 6. It should however be noted that the Commission has not expressly claimed that it is an internal document. 55 Furthermore, when questioned by the Court at the hearing on the confidential nature of that document, the Commission stated that the Contact Committee, the addressee of that document, no longer considered it to be confidential and that it could be assumed that it would therefore be disseminated widely. 56 In those circumstances, notwithstanding the fact that at the hearing the Commission sought to confirm its application for the removal of that document from the case‑file, it cannot be considered that that document was or in any event remains an internal confidential document of the institution. 57 Consequently, the Commission’s application for the removal of the document in question from the case‑file must be rejected. C – Admissibility1. Admissibility of the applicant’s first claim58 The Commission claims that the application is inadmissible because, first, it did not adopt any measure on the basis of Article 3a(2) (of the directive) capable of being challenged, second, the contested measure is of neither direct nor individual concern to the applicant and, third, as the applicant failed to communicate with its application copies of the contracts entered into with FIFA on 10 September 1996 and 26 May 1998, it was not able to prepare its defence. 59 In relation to that third plea of inadmissibility, it should be noted that during the proceedings before the Court the applicant did produce copies of the contracts in question (see paragraphs 25 and 31 above), which were disclosed to the Commission. When questioned on that point at the hearing the Commission, in reply to a request from the Court, withdrew the third plea of inadmissibility. 60 Furthermore, in its defence and following the applicant’s disclosure of the contracts entered into with FIFA on 10 September 1996 and 26 May 1998, the Commission submitted that those contracts considerably limited the applicant’s ability to exploit its rights by awarding exclusive sub-licences to television broadcasters. It considered that, given the content of certain clauses of those contracts, it is not clear that the loss which the applicant claims to have suffered results from the contested measure. 61 It should be noted that the Commission drew no conclusion from its contentions regarding the admissibility of the present action. In any event, in so far as the Commission sought by those allegations to challenge the applicant’s interest in the annulment of the contested measure, it should be noted that it has not submitted that the content of the contracts in question deprived the applicant of such an interest and that that fact is by no means apparent from the file having regard, moreover, to the applicant’s reply to the Court’s written questions concerning in particular the extent of the contractual restrictions on the exercise of the applicant’s broadcasting rights in respect of FIFA World Cup matches. 62 In the light of the foregoing, only the first and second grounds of inadmissibility advanced by the Commission need be examined.a) The legal nature of the contested decision Arguments of the parties63 The Commission submits that, unlike Article 2a(2) of the directive, Article 3a(2) makes no mention of a ‘decision’ which it must adopt. The French Republic states in that regard that Article 3a does not confer decision-making power on the Commission. Its role is to carry out a preliminary check of the compatibility with Community law of the national measures notified. 64 If the national measures notified do not appear to infringe Community law, the Commission informs the Member State concerned that it does not intend to object to those measures and proceeds to publish them in the Official Journal so that the other Member States may comply with their obligations under Article 3a(3) of the directive. The defendant and the French Republic state that, if those measures infringe Community law and assuming that the Member State does not introduce the necessary amendments, the Commission is obliged to initiate infringement proceedings pursuant to Article 226 EC. 65 The preliminary finding that there has been no infringement of Community law is therefore a decision not immediately to initiate infringement proceedings against the Member State concerned. Private parties are not entitled to contest a refusal by the Commission to initiate infringement proceedings under Article 226 EC, since the Commission’s adoption of a position on that question is not an act producing definitive legal effects (order of the Court of First Instance of 13 November 1995 in Case T-126/95 Dumez v Commission [1995] ECR II-2863, paragraph 37). 66 The French Republic states in that regard that according to Article 226 EC the rights and duties of Member States may be determined and their conduct appraised only by a judgment of the Court of Justice (Case C-393/98 Gomes Valente [2001] ECR I-1327). The position adopted by the Commission concerning the compatibility with Community law of a list of events of major importance for society does not therefore alter the legal situation of the Member State concerned. Moreover, the legally binding nature of the list in question, published in the Official Journal, does not flow from the Commission’s letter to the United Kingdom of 28 July 2000 informing it that those measures are compatible with Community law but from national law alone. The Commission states in that regard that if there were a decision in the present case it would be that letter of 28 July 2000. 67 Whatever the Commission’s position in relation to the national measures notified, it does not affect their implementation in the notifying Member State. The Commission has no power to declare the legislation of a Member State incompatible with Community law. 68 The Commission further points out that in its letter of 28 July 2000 to the United Kingdom it stated that, ‘on the basis of the facts available’, it did not intend to oppose the measures notified and that that finding did not constitute a decision. It points out in that regard that where it must be legally bound its decision must be adopted by the College of Commissioners and must be reasoned. Its letter of 28 July 2000 is therefore comparable to a comfort letter (Joined Cases 253/78 and 1/79 to 3/79 Giry and Guerlain and Others [1980] ECR 2327, and Case T-3/93 Air France v Commission [1994] ECR II-121, paragraph 50). 69 As for the obligation upon it to publish the approved national measures in the Official Journal, the Commission considers that it in no way alters the nature of its letter of 28 July 2000. The only purpose of such publication is to inform the other Member States so that they can comply with their obligation under Article 3a(3) of the directive. It points out however that it is not its provisional approval of the notified measures which triggers the Member States’ obligation to comply with the obligations on them under that article but rather that article itself, which refers to ‘events which are designated by that other Member State in accordance with the preceding paragraphs’ and not to ‘events included in a list published by the Commission’. Therefore, both the notification of the measures in question to the other Member States and the publication of those measures in the Official Journal are administrative measures which in no way imply the exercise of any decision-making power whatsoever on the part of the Commission. 70 In that respect, concerning the reference in Article 3a(3) to the ‘preceding paragraphs’ and not to ‘paragraph 1’, it seems that the applicant’s approach is to treat the obligation imposed on the Member States as subordinate to the description of the measures referred to in Article 3a(1) of the directive and to their notification and approval by the Commission pursuant to Article 3a(2) of that directive. However, the only requirement is that the Member State has complied with its obligations of designation and notification of the measures pursuant to Article 3a(1) and (2) of the directive, which is compatible with the apparent intention of the legislature to implement a system of mutual recognition of the measures adopted by the Member States whilst conferring on the Commission the role of arbitrator. The applicant’s interpretation therefore confers binding force on a mere finding by the Commission, which does not give rise to legal effects for the other Member States. The obligation of mutual recognition arising from Article 3a(3) of the directive is not subject to the Commission’s assessment of the compatibility with Community law of the measures notified. 71 Moreover, the other Member States cannot, as a matter of Community law, be obliged to apply another Member State’s measures which are incompatible with Community law, notwithstanding the position adopted by the Commission with regard to those measures. The Commission refers in that context to its letter to the United Kingdom of 23 December 1998, in which it cast doubt on the compatibility with Community law of the measures initially notified. It also points out that the national measures in question were published in the C series of the Official Journal and not the L series. 72 The Commission, supported by the Parliament, submits lastly that the applicant does not deny that the measures in question could have been challenged before the United Kingdom courts. The national court in the case which gave rise to the judgment of the House of Lords of 25 July 2001 in R v ITC ex parte TV Danmark 1 Ltd [2001] UKHL 42, cited by the applicant, merely stated that it would make no finding on the question of the balance between the interests of the organisers of sporting events and television broadcasters in maintaining a free market, on the one hand, and the interest of the citizen in being able to watch major sporting events on the other. It did not, however, hold that it would not reassess the legality of the measures adopted under Article 3a of the directive. If an action had been brought before the United Kingdom courts and a reference for a preliminary ruling had been made to the Court of Justice under Article 234 EC, no parallel could have been drawn by the applicant with the case which led to the judgment in Case C-188/92 TWD Textilwerke Deggendorf [1994] ECR I-833. In the present case, the applicant is time-barred from bringing an action before the United Kingdom courts. If the Court of First Instance were to declare admissible the present action brought against an alleged Commission decision it would sanction an abuse of procedure such as that condemned by the Court in TWD Textilwerke Deggendorf, cited above. 73 According to the Commission, it is not open to the Court of First Instance to review the validity of the United Kingdom measures or to interpret them. Moreover, it would be particularly difficult for a court other than one in the United Kingdom to interpret those measures, which include the ITC Code on Sports and other Listed Events, given their lack of clarity. 74 The Parliament states that it was open to the applicant to defend its rights by way of a reference for a preliminary ruling from the High Court in London to the Court of Justice (Case C-491/01 British American Tobacco (Investments) and Imperial Tobacco [2002] ECR I-11453, paragraphs 32 to 41). 75 Furthermore, the Parliament adds that an analogy may also be drawn between the present case and the circumstances which gave rise to the judgment in Joined Cases T-74/00, T 76/00, T 83/00, T-84/00, T-85/00, T-132/00, T-137/00 and T‑141/00 Artegodan and Others v Commission [2002] ECR II-4945, paragraph 142, confirmed on appeal, which states that, in the absence of an express transfer of competence to the Commission, the matter in question remains within the residual competence of the Member States. It refers in that context to Article 7 EC, which provides that each institution is to act within the limits of the powers conferred on it by the Treaty. There is nothing in either Directive 89/552 or Directive 97/36 to suggest that the Member States have, by implication, deprived themselves of their competence. In particular, Article 3a of the directive does not expressly confer any competence on the Commission, as is confirmed by the absence of any comitology procedure. Furthermore, the duties of the Contact Committee do not amount to implementing powers under the third indent of Article 202 EC. In addition, neither the general structure, nor the essential purpose and wording of Article 3a of the directive, nor the intention of the legislature have the aim of conferring a specific decision‑making power on the Commission. 76 In conclusion, the Commission considers that, in the light of the above, its assessment of the compatibility of the disputed measures does not constitute a challengeable act. In maintaining that the Commission should not have communicated the notified measures to the other Member States or published them in the Official Journal, the applicant is in fact challenging the validity of Article 3a(2) of the directive. 77 The applicant challenges the Commission’s argument and submits, essentially, that the Commission’s decision approving the measures notified produces legal effects both in the United Kingdom and in the other Member States. 78 The contested act is an act which produces binding legal effects, inasmuch as it is the outcome of the exercise, upon the conclusion of an internal procedure laid down by law, of a power provided for by law which is intended to produce legal effects of such a nature as to affect adversely the interests of the applicant by modifying its legal position (Case 182/80 Gauff v Commission [1982] ECR 799, paragraph 18). 79 It refers, first, to the wording of Article 3a(2) of the directive which provides that the Commission is required to adopt a binding act after verifying the compatibility of the notified measures with Community law. 80 Second, it is clear from the purpose and objective of Article 3a(2) of the directive that that provision is intended to produce legal effects. The applicant refers in that context to recitals 18 and 19 to Directive 97/36 and notes that the drawing up of the national lists, in which Member States may be inclined to specify a large number of events, allows those States to favour television broadcasters established in their territory. 81 Third, the procedure for the application of Article 3a(2) of Directive 89/552 makes it clear that it leads to the adoption of a binding decision. The applicant refers in that regard to the time-limits and course of that procedure. 82 Furthermore, the applicant submits that neither the wording nor the purpose of Article 3a of the directive nor the relevant recitals to Directive 97/36 support the Commission’s position that the act it adopted is comparable to a refusal to institute infringement proceedings under Article 226 EC. The present procedure requires the Commission to act as arbiter and to adopt a definitive decision on the legality of the notified measures. Such a decision cannot be withdrawn without affecting the legal position of the United Kingdom and of all individuals who have derived rights from the Commission’s approval of those measures and their mutual recognition. The applicant adds that the Commission’s argument deprives the procedure laid down by Article 3a of the directive of any practical effect. 83 The applicant also argues that the contested act produces legal effects in the other Member States, as the latter are required to enforce the United Kingdom measures against television broadcasters within their jurisdiction under Article 3a(3) of the directive. Accordingly, without a Commission decision approving the notified measures, the latter would produce no legal effects in other Member States. Any other interpretation would deprive the procedure laid down by Article 3a(2) of any practical effect and would be contrary to the purpose of Article 3a of the directive, which is to reconcile the free movement of television services with the need to prevent the possible circumvention of national measures designed to protect a legitimate general interest. 84 The applicant submits lastly that it is clear from the file that mutual recognition is affected by the Commission’s review of the compatibility with Community law of the measures notified and does not arise automatically from their notification. Findings of the Court85 In its application, the applicant seeks annulment of the Commission decision finding, first, that the measures notified by the United Kingdom are compatible with Community law and providing, second, that those measures must be communicated to the other Member States so that the television broadcasters under their jurisdiction comply with them. It states in that respect that the only document available to the public is the Commission’s publication of the measures adopted by the United Kingdom in the Official Journal of 18 November 2000 pursuant to Article 3a(2) of the directive. 86 In an annex to its plea of inadmissibility, the Commission however disclosed a letter from the Director-General of the Education and Culture DG dated 28 July 2000, informing the United Kingdom that pursuant to the examination of the conformity of the measures notified on 5 May 2000 and on the basis of the facts available in relation to the audiovisual landscape in the United Kingdom, the Commission did not intend to object to those and would publish them in the Official Journal (see paragraph 15 above). The Commission stated in that respect that if there were a decision in the present case, quod non, it would be that letter (see paragraph 66 above). 87 In those circumstances, it must be found that the letter of 28 July 2000 is, in substance, the contested measure in the present case, since it is the sole document expressly informing the United Kingdom of the Commission’s position with regard to the compatibility with Community law of the measures it notified and of the forthcoming publication of those measures in the Official Journal. At the hearing, the applicant stated in answer to a question from the Court that its action in fact sought the annulment of that letter from the Commission to the United Kingdom. 88 It is therefore necessary to consider whether the Commission’s letter of 28 July 2000 to the United Kingdom (‘the contested letter’) is an act susceptible to challenge. 89 According to settled case-law, any measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position is an act or decision which may be the subject of an action for annulment under Article 230 EC. The form in which such acts or decisions are cast is, in principle, immaterial as regards the question whether they are open to challenge by an action for annulment (Case 60/81 IBM v Commission [1981] ECR 2639, paragraph 9, and Case T-241/97 Stork Amsterdam v Commission [2000] ECR II-309, paragraph 49). In order to ascertain whether or not a measure which has been challenged produces such effects it is necessary to look to its substance (Case C-147/96 Netherlands v Commission [2000] ECR I‑4723, paragraphs 25 to 27). 90 In order to determine, in the light of the abovementioned principles, the legal nature of the contested letter and whether it produces legal effects, it is necessary to examine it in the context of the rules regarding events of major importance for society laid down by Article 3a of the directive. 91 It should be noted in that regard that the directive seeks to facilitate the free movement of television broadcasts within the Community whilst taking account of the specificities, particularly cultural and sociological, of audiovisual programmes. 92 As for the specific system of audiovisual rights for events of major importance for society established by Article 3a of the directive, recital 18 to Directive 97/36 states that it is essential that Member States should be able to take measures to protect the right to information and to ensure wide access by the public to television coverage of national or non-national events of major importance for society. In that context, it is provided that Member States retain the right to take measures compatible with Community law to regulate the exercise by television broadcasters under their jurisdiction of the exclusive broadcasting rights to such events. For the purposes of their mutual recognition by the other Member States under Article 3a(3) of the directive, the measures adopted or to be adopted by a Member State must be notified to the Commission. 93 Article 3a(2) of the directive provides, in that regard, that within a period of three months from the notification, the Commission is to verify that such measures taken by States are compatible with Community law. In doing so it is to consult the Contact Committee which is to give an opinion. 94 In the present case, since the contested letter in substance informs the United Kingdom of the Commission’s approval of the measures it notified to it and of their subsequent publication in the Official Journal, that letter closes the verification procedure which the Commission is required to carry out under that article. The publication in the Official Journal of those measures approved by the Commission informs the other Member States of their existence, as the Commission itself notes in its pleadings (see paragraph 69 above), and, therefore, enables them to comply with their obligations under Article 3a(3) of the directive pursuant to the mechanism for mutual recognition of those measures instituted by that article. 95 The contested letter therefore produces legal effects for the Member States in so far as it envisages the publication in the Official Journal of the national measures in question, since the effect of that publication is to trigger the mechanism for mutual recognition laid down by Article 3a(3) of the directive. 96 First, that analysis follows from the wording of Article 3a(3) of the directive, which provides for the mutual recognition of the measures adopted by the Member States so as to ensure free access by the public to the events designated ‘in accordance with the preceding paragraphs’, that is, in particular, those for which the national measures notified were considered by the Commission to be compatible with Community law and published in the Official Journal in accordance with Article 3a(2). 97 Furthermore, the course of the verification procedure as described in Article 3a(2) of the directive and the thoroughness of that verification prevent it from being considered as a ‘preliminary’ verification at the end of which an ‘opinion’ is given. First, the Commission is required to carry out that verification within a strict time-limit of three months from the notification of the measures by the Member State concerned and must, to that end, consult the Contact Committee which issues its own opinion, in accordance with the requirements of Article 3a(2) of the directive. Second, the Commission admitted at the hearing that it had to carry out a detailed assessment of the compatibility of those measures with Community law, since the Commission must inter alia be satisfied that the provisions of the directive and the rules on the freedom to provide services and competition law have been complied with. 98 Second, given the general scheme of the rules on events of major importance for society laid down by Article 3a of the directive, the Commission’s allegation that it is neither the approval of those measures nor their publication in the Official Journal which triggers the obligation on the other Member States to comply with their duties under Article 3a(3) of the directive cannot be correct. 99 That is because, in the first place, the review procedure which the Commission is required to carry out under Article 3a(2) of the directive seeks to ensure the compatibility of those measures with Community law (recital 18 to Directive 97/36). 100 In that connection, regarding the course of the procedure for the verification of the measures notified by the United Kingdom, the Commission stated in its letter of 23 December 1998 (see paragraph 12 above) inter alia as follows: ‘I enclose herewith the preliminary result of the examination by Commission services of the notified measures. … [T]he Commission concludes that, pending clarification of a number of important issues on which further information and comments from your authorities are needed, it is not in a position to formally start the evaluation of conformity with Community law of the measures for which the UK is seeking mutual recognition by other Member States.’ 101 The wording of that letter from the Commission confirms the interpretation of Article 3a(2) and (3) of the directive set out in paragraphs 98 and 99 above, according to which the mutual recognition of the national measures notified is subject to the verification of their compatibility with Community law. 102 Moreover, the verification of the compatibility with Community law of the measures notified, which the Commission is required to carry out, would have no practical effect if their mutual recognition by the other Member States was not dependent upon the approval of those measures. Even if the mechanism of mutual recognition were to apply to national measures considered by the Commission to be incompatible with Community law, the risk of legal uncertainty and market distortion would not be avoided, whereas such risks are proscribed by recital 19 to Directive 97/36. Mutual recognition of national measures incompatible with Community law would equally not serve to ensure reconciliation of the free movement of television services with the need to prevent the possibility of circumventing national measures protecting a legitimate public interest, as recital 19 to that directive also provides. 103 In the second place, the fact that the publication of the national measures in the Official Journal, which informs the other Member States of those measures so that they can comply with the obligations imposed by Article 3a(3), can only occur after the Commission has, following its verification, established their compatibility with Community law is further corroborated by various documents in the file. 104 Firstly, the course of the procedure for verifying the measures notified by the United Kingdom supports that interpretation. The United Kingdom notified measures to the Commission for the first time on 25 September 1998 and, as stated above, by letter of 23 December 1998 the Commission informed that Member State that certain aspects of those measures raised problems of compatibility with Community law. By letter of 5 May 2000, the United Kingdom notified an amended version of those measures. Only those latter measures, held by the Commission to be compatible with Community law, were published in the Official Journal, after the Commission informed the United Kingdom by means of the contested letter that they were compatible with Community law. 105 In its letter of 22 January 2001, the Commission further replied to the applicant that ‘in legal terms, pursuant to Article 3a(2) of the directive, the publication of measures is the consequence of a (positive) verification procedure performed by the Commission’ (see paragraph 21 above). 106 Secondly, the Commission’s position in that regard is shown by several documents annexed to the file of which it is the author. Thus on the page of its internet site devoted to Article 3a of the directive, produced by the applicant as an annex to its observations on the plea of inadmissibility, the Commission states that ‘a positive decision on the measures [as to their compatibility with Community law] is ratified by their publication in the Official Journal’. The Commission’s position is also apparent from its working document CCTVSF (97) 9/3, produced at the Court’s request, which states that ‘this need of legal certainty requires that the compatibility with Community law of the relevant measures be assessed under a fast‑track procedure and – if positively evaluated – be published in the Official Journal’, that ‘it follows that only specific national measures falling within the scope of Article [3a(1)] … will be subject to the procedure of notification to the Commission and to the subsequent assessment and eventual publication’ or again that ‘in the event of a positive outcome of the evaluation process it will have the relevant measures published in the Official Journal’. 107 It is clear from all of the foregoing that under Article 3a(2) of the directive the Commission has the power to make a decision and that the contested letter produces definitive legal effects, notwithstanding the fact that Article 3a of Directive 89/552 does not expressly refer to the adoption by the Commission of a ‘decision’. 108 The argument of the Commission and the French Republic that the contested letter is a decision not to initiate infringement proceedings forthwith against the Member State concerned must therefore be rejected. In any event, even if the Commission were to find that the measures notified were incompatible with Community law and the notifying Member State does not remedy that incompatibility, it suffices for the Commission not to publish those measures in the Official Journal for them not to take effect under the mechanism of mutual recognition established by Article 3a(3) of the directive. 109 The argument that the applicant was able to challenge the measures in question before the United Kingdom courts cannot succeed because the review which the Court of First Instance is being invited to carry out in the present case concerns solely the legality of the Commission’s finding that those measures are compatible with Community law for the purposes of implementing the mechanism of mutual recognition of events of major importance established by Article 3a(3) of the directive. The reference in that context to the judgment of the House of Lords in R v ITC ex parte TV Danmark 1 Ltd [2001] UKHL 42 (cited above) is irrelevant, since the action in that case was brought by a Danish broadcaster subject to United Kingdom law, against the decision of the relevant authorities of that Member State refusing to allow it exclusive broadcasting rights to five qualifying matches for the FIFA World Cup which appear on the list of events of major importance for society nominated by the Kingdom of Denmark. The purpose of that action was therefore to challenge the application by the United Kingdom, under the principle of mutual recognition, of the Danish measures and not, as in the present case, the Commission’s decision establishing their compatibility with Community law. 110 Lastly, the defendant’s argument that the fact that it is not legally bound is confirmed by the nature of the wording used in the contested letter, by the failure by the College of Commissioners to adopt a reasoned decision and by the choice to publish the measures notified which are found to be compatible with Community law in the C series, ‘Information and Notices’, and not in the L series, ‘Legislation’, of the Official Journal must also be rejected. It suffices to note that, according to settled case-law, the form in which acts or decisions are cast is, in principle, immaterial as regards the question whether they are open to challenge by way of an action for annulment, and it is necessary to look to their substance in order to ascertain whether they are actionable measures for the purposes of Article 230 EC (see paragraph 89 above). 111 It follows from all the foregoing considerations of law and of fact that the contested letter produces binding legal effects and therefore constitutes a decision within the meaning of Article 249 EC. Accordingly, since the contested letter is an act susceptible to challenge for the purposes of Article 230 EC, the present plea of inadmissibility must be rejected. b) The applicant’s standing112 The fourth paragraph of Article 230 EC provides that any natural or legal person may institute proceedings against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to him. 113 In the present case, since the Commission claims that the action is inadmissible by reason of the applicant’s lack of standing, it is necessary to determine whether the applicant is directly and individually concerned by the contested letter. Whether the applicant is directly concerned– Arguments of the parties114 The Commission, supported by the French Republic, refers to Case C-386/96 P Dreyfus v Commission [1998] ECR I-2309 and Case T 69/99 DSTV v Commission [2000] ECR II-4039, paragraph 24. 115 It submits that in this case the applicant’s legal situation is not affected, since both the directive and the United Kingdom legislation concern solely the rights and obligations of television broadcasters and they may broadcast live an event which appears on the list only in certain circumstances. The applicant suffers only the indirect economic consequences of those constraints, which are linked to the risk that broadcasters may refuse to pay as high a price as that which the applicant had hoped to obtain in selling sub-licences to broadcast FIFA World Cup matches. 116 The Commission also states that only some of the provisions of the Broadcasting Act 1996, read in conjunction with the ITC Code on Sports and other Listed Events, have directly affected the applicant. The French Republic observes that the effects felt by the applicant do not result from the contested letter, but from the legislation in force in the United Kingdom, which includes the list of events of major importance for society. Although the applicant’s economic situation was clear as soon as the 1996 Act came into force, as the list of events had already been drawn up and included the FIFA World Cup finals, it never challenged the United Kingdom legislation or the list of events of major importance for society drawn up by the United Kingdom. 117 In adopting the contested measures, the United Kingdom authorities were exercising full legislative discretion. Article 3a(1) confers on Member States the right to adopt the provisions relating to events of major importance for society. As regards the verification that the provisions notified are compatible with Community law, the Commission and the Parliament submit that that is comparable to the procedure laid down in Article 2a(2) of the directive, in relation to which the Court of First Instance has held that an applicant may not be directly affected by the measure adopted by the Commission on that basis (DSTV v Commission, paragraphs 26 and 27). 118 The Commission points out that it carried out its assessment as to the compatibility with Community law of the measures notified by the United Kingdom in the present case after the adoption of those measures, and that solely those measures directly affected the economic interests of the applicant. 119 The Commission disputes the applicant’s contention that the publication in the Official Journal of the measures notified by the United Kingdom had the consequence of imposing obligations on the other Member States. In any event, that circumstance does not mean that the applicant is directly concerned by the contested act. The other Member States are required to ensure that broadcasters in their jurisdiction respect the United Kingdom’s list of events of major importance for society, but they do this by application of their domestic rules. The implementation of the Commission’s decision as to the compatibility of the measure notified is therefore not ‘purely automatic’ and does not result from Community rules alone. 120 The Commission also observes that even if its preliminary verification of the measures notified were to cause other Member States to ensure that broadcasters in their jurisdiction respected the list of events of major importance for society, that would have no effect in the present case. It is inconceivable that the applicant would sub-licence its television rights for the United Kingdom to a television broadcaster not established in the United Kingdom, as those rights are granted on a national basis. At the national level, the income of television broadcasters is generated from advertising directed at the national audience, national licence fees or national subscription fees for pay television. As their interest is in providing programmes to a national audience, only those broadcasters reaching a high proportion of the national population are prepared to pay very large amounts for the broadcasting rights held by the applicant. Therefore, since potential sub-licensees of such rights for the United Kingdom are entities under the jurisdiction of the United Kingdom authorities, only the national measures directly affect the applicant. 121 The Commission notes in that context that in the United Kingdom the television broadcasting market is one of the most competitive in Europe and that 25% of broadcasters operating in the sector are licensed in the United Kingdom. 122 In those circumstances, even if it is accepted that publication of the measures in the Official Journal obliges the other Member States to comply with their obligation under Article 3a(3) of the directive, that fact is irrelevant for the purposes of the present case. 123 The Commission concludes therefore that verification and publication in the Official Journal of the measures notified by the United Kingdom do not directly concern the applicant. 124 The applicant challenges all the Commission’s arguments.125 It submits, essentially, that its legal position is directly affected, since the United Kingdom measures approved by the contested letter affect the terms on which it may resell the rights to broadcast the FIFA World Cup live in the United Kingdom. It refers in that regard to sections 99 and 101 of the 1996 Act. 126 As to the effects in the other Member States, the applicant alleges that the consequence of the contested letter is that those Member States are required to ensure that their television broadcasters respect the measures in question. The obligations placed in that respect on broadcasters under the jurisdiction of the other Member States are automatic and result from Community rules alone without the application of other intermediate rules. Those States are not required to ensure that the broadcasters under their jurisdiction comply with the measures adopted by the United Kingdom as long as the Commission has not adopted the decision finding that the measures notified are compatible with Community law. Article 3a(3) of the directive was thus transposed into national law by the majority of the Member States and applies automatically to all notified national measures which have been approved and published by the Commission. 127 According to the applicant it is precluded from granting an exclusive license of its rights to a television broadcaster based in another Member State, and the Commission cannot validly allege in those circumstances that the contested letter produces legal effects only with regard to television broadcasters. 128 The applicant also argues that, contrary to what the Commission contends, the judgment in DSTV v Commission (paragraph 27) regarding Article 2a(2) of the directive is not applicable in these proceedings since the measures were notified to the Commission in accordance with Article 3a(2) of the directive prior to their entry into force. Thus it cannot be found that the measures notified by the United Kingdom existed independently of the Commission’s decision, since their existence depended on the outcome of the verification which that institution was required to carry out. 129 Lastly, the applicant challenges the Commission’s argument that it is implausible that a television broadcaster not based in the United Kingdom would wish to acquire rights to broadcast the FIFA World Cup finals live in the United Kingdom. – Findings of the Court130 It has consistently been held that, in order to be of direct concern to an individual within the meaning of the fourth paragraph of Article 230 EC the contested Community measure must directly affect the applicant’s legal situation and its implementation must be purely automatic and result from Community rules alone without the application of other intermediate rules (see Dreyfus v Commission, paragraph 43 and the case-law there cited). 131 In the present case, in order to determine in the light of that case-law whether the applicant is directly concerned by the contested letter it is necessary to examine the two cases envisaged by the applicant, namely that in which the rights to broadcast the matches of the FIFA World Cup finals which it holds for 2002 and 2006 are sold for retransmission in the United Kingdom to a television broadcaster under the jurisdiction of the United Kingdom, and that in which those rights are sold to a television broadcaster established in another Member State. 132 As regards the first case, the applicant alleges that the measures notified ‘fundamentally undermine the market for [its] products amongst its UK-based customers’. To comply with the legislation in force in the United Kingdom the applicant could no longer grant an exclusive licence to a broadcaster established in the United Kingdom. 133 However, where the television broadcaster in question is established in the United Kingdom, it should be noted that, strictly speaking, it is the measures adopted by the United Kingdom which are directly applicable, since the Commission’s approval of those measures for the purposes of their mutual recognition has no bearing on their applicability in that Member State. 134 Furthermore, it should be noted that pursuant to Article 3a(2) of the directive, the Member States are to notify to the Commission any measures taken or to be taken. However, in the present case, the measures adopted by the United Kingdom entered into force prior to their notification to the Commission on 5 May 2000, as that institution confirmed at the hearing, and were therefore already capable of producing legal effects in that State at the time of their notification. 135 By the contested letter the Commission could not in those circumstances grant the United Kingdom prior authorisation to adopt those measures. Furthermore, the Commission did not authorise the retrospective maintenance of those measures for the purposes of their application to the United Kingdom (see, to that effect, Case 62/70 Bock v Commission [1971] ECR 897) but enabled that Member State to profit from the recognition of those measures by the other Member States. 136 In that respect, the applicant’s argument that the United Kingdom first notified measures to the Commission by letter of 25 September 1998 is irrelevant as the latter considered, by letter of 23 December 1998, that they raised problems of compatibility with Community law and did not publish them in the Official Journal. In addition to the fact that some of the measures initially notified came into force upon their notification, it remains the case that all of the measures declared compatible with Community law by the Commission by means of the contested letter were, in any event, in force in the United Kingdom at the time of that notification. 137 Consequently, once the applicant assigns its broadcasting rights for the FIFA World Cup finals to a television broadcaster established in the United Kingdom for the purposes of broadcasting those matches in that State, the measures adopted by the United Kingdom authorities exist in law independently of the contested letter (see, to that effect, DSTV v Commission, paragraph 25). In so far as the measures notified are applicable to the television broadcasters established in the United Kingdom under the national law in force in that Member State and not by virtue of the Commission’s decision, the applicant is not directly concerned by the contested letter within the meaning of the fourth paragraph of Article 230 EC and may not therefore bring an action for annulment of that measure. 138 As regards the second case, in which the applicant assigns its broadcasting rights for the FIFA World Cup finals to a television broadcaster established in a Member State other than the United Kingdom for the purposes of broadcasting those matches in the latter State, it must be held that that other Member State will be required under Article 3a(3) of the directive to satisfy itself that that broadcaster does not circumvent the measures approved by the Commission and published in the Official Journal. 139 It should be noted in that regard that the obligation imposed on the other Member States is to ensure by appropriate means, within the framework of their legislation, that broadcasters under their jurisdiction do not exercise the exclusive rights purchased by those broadcasters following the date of publication of the directive in such a way that a substantial proportion of the public in another Member State is deprived of the possibility of following, in the manner determined by that other Member State in accordance with Article 3a(1), events which are designated by that other Member State in accordance with Article 3a(1) and (2). 140 The Member States to which a directive is addressed are thus required to adopt, within the framework of their national legal orders, all the measures necessary to ensure that the directive is fully effective, in accordance with the objective that it pursues and, in that context, to implement inter alia Article 3a(3). 141 In the context of that control exercised by their authorities under the mechanism of mutual recognition, the other Member States must ensure that the measures notified by the United Kingdom are not circumvented by television broadcasters subject to their jurisdiction wishing to broadcast an event designated by that Member State. 142 However, as previously stated (see paragraph 94 above), only the Commission’s decision finding that the measures notified by the United Kingdom are compatible with Community law and providing for the subsequent publication of those measures in the Official Journal enables the mechanism of mutual recognition to operate effectively, by triggering the obligation for the other Member States to comply with their obligations under Article 3a(3) of the directive. 143 It follows that, in this case, the contested letter validates ex nunc the measures adopted by the United Kingdom for the sole purposes of their mutual recognition by the other Member States. 144 As regards the Commission’s citation in that context of the judgment in DSTV v Commission, it should be noted that the second paragraph of Article 2a(2) of the directive, at issue in the case giving rise to that judgment, requires a posteriori verification of the compatibility with Community law of the measures adopted by a Member State in order to prevent the broadcast on its territory of programmes from other Member States and not verification of compatibility with Community law giving rise to the mutual recognition of national measures. 145 Moreover, unlike the specific provision at issue in the case giving rise to the judgment in Artegodan and Others v Commission, cited by the Parliament, Article 3a(2) of the directive confers on the Commission power to make decisions ensuring the effectiveness of the mechanism of mutual recognition and does not seek merely to establish a consultative procedure. 146 Furthermore, since the mutual recognition of the measures adopted by the United Kingdom is subject to their approval by the Commission and their subsequent publication in the Official Journal, it is clear that the contested letter does not leave the national authorities any discretion, once that publication has occurred, as to the performance of their obligations. Although the detailed rules for the control which the national authorities are required to exercise under the mechanism of mutual recognition are determined by each Member State in the framework of its legislation implementing Article 3a(3) of the directive, those authorities must ensure that broadcasters under their jurisdiction comply with the conditions for broadcasting the events in question as defined by the Member State in its measures approved and published in the Official Journal by the Commission. 147 Lastly, as regards the Commission’s argument that only broadcasters established in the United Kingdom would be interested in purchasing from the applicant the rights to broadcast the FIFA World Cup finals in order to broadcast them in the United Kingdom, it should be noted that such an assumption deprives Article 3a(3) of the directive of all practical effect. According to recitals 18 and 19 to Directive 97/36, the purpose of that article is to ensure wide access by the public to television coverage of events considered to be of major importance for society by the Member States and, on the basis of the principle of mutual recognition, to require the Member States to ensure that broadcasters under their jurisdiction respect the list of events established by another Member State so as not to deprive a substantial proportion of the public in that State of the possibility of following the events designated by that State. 148 The facts of the case which gave rise to the judgment of the House of Lords in R v ITC ex parte TV Danmark 1 Ltd [2001] UKHL 42 (cited above), although relating to events designated by the Kingdom of Denmark, also confirm the existence of situations implementing the mechanism of mutual recognition established by Article 3a(3) of the directive. Furthermore, the 2001 Third Report from the Commission to the Council, the European Parliament and the Economic and Social Committee on the Application of [the directive] (COM(2001) 9 final) states that in three cases, television broadcasters under the jurisdiction of the United Kingdom have broadcast events listed by the Kingdom of Denmark in a way that prevented a substantial part of the Danish population from seeing those events. 149 In those circumstances, notwithstanding the Commission’s unsupported allegations as to the specificity of the television broadcasting market in the United Kingdom (see paragraph 121 above), it cannot be assumed that the rights to broadcast the FIFA World Cup finals in that State will be acquired by broadcasters established in that State. 150 It follows that the applicant is directly concerned by the contested letter in so far as it enables the implementation of the mechanism of mutual recognition by the other Member States of the measures notified by the United Kingdom, and that the plea of inadmissibility raised by the Commission must be rejected. Whether the applicant is individually concerned 151 The Commission challenges the applicant’s argument that it is individually concerned because it belongs to a ‘closed group’ of undertakings which were holders, even prior to the entry into force of Article 3a of the directive, of exclusive broadcasting rights for events of major importance for society designated by the United Kingdom. 152 According to the Commission, that criterion of holding exclusive rights is irrelevant, as all other organisations and undertakings holding rights to broadcast any of the events listed by the United Kingdom would have to be taken into account. Those other holders of television rights may have been more radically affected by the list than was the applicant. 153 Furthermore, unlike the holders of the television rights to events of major importance for society listed by the United Kingdom, the undertakings and organisations which may have entered into licensing agreements with one of those holders may be numerous and are impossible for the Commission to identify. It cannot therefore be accepted that the applicant forms part of a closed group of undertakings. 154 In addition, neither the applicant nor the holders of television rights in relation to events of major importance for society listed by the United Kingdom can be individually concerned by a Commission measure solely on the ground that it affects their economic activity (see, to that effect, the order in Case T-113/99 Galileo and GalileoInternational v Council [2000] ECR II-4141). The economic activities of the applicant were affected by the measures notified and, indirectly, by the acceptance of those measures by the Commission. There is, however, no question of any impact on its legal situation. 155 The applicant also maintains that an undertaking which has written on several occasions to the Commission to inform it of that undertaking’s concerns as to the United Kingdom’s application of Article 3a(1) of the directive is individually concerned. According to the Commission, only the applicant’s letter of 14 July 2000 can be taken into account in that context, as its other letters were written after the Commission had adopted its position in relation to the compatibility with Community law of the measures notified. In any event, none of those letters can be characterised as a complaint, as their purpose was not to ask the Commission to take action against the Member State concerned, but merely to influence it in its consideration of the compatibility with Community law of the measures notified. The sending of those letters to the Commission therefore cannot suffice to distinguish an undertaking individually. 156 The French Republic refers, inter alia, to Case 25/62 Plaumann v Commission [1963] ECR 95 and Case C‑50/00 P Unión de Pequeños Agricultores v Council [2002] ECR I‑6677 and points out that the general scope, and hence the legislative nature, of a measure are not called into question by the fact that it is possible to determine the number or even the identity of the persons to whom it applies at a given moment with a greater or lesser degree of precision, as long as it is established that it is applied by virtue of an objective legal or factual situation defined by the measure in relation to the objective of the latter (order in Case T‑183/94 Cantina cooperativa fra produttori vitivinicoli di Torre di Mosto and Others v Commission [1995] ECR II‑1941, paragraph 48). Although the applicant is the holder of the broadcasting rights for the 2002 and 2006 FIFA World Cup finals, that is not sufficient to distinguish it individually, for the purposes of the fourth paragraph of Article 230 EC, from all other economic operators which might acquire or hold broadcasting rights in relation to the sporting events included in that list. 157 The applicant replies in essence that it is individually concerned given, first, that it belongs to a ‘closed group’ of undertakings which acquired broadcasting rights for an event on the United Kingdom list prior to the proposal for the adoption of Article 3a of the directive and prior to the entry into force of the measures notified by the United Kingdom to the Commission. It is specifically affected within that group in a manner different from the other rights holders. It is also individually concerned by reason of its participation in the Commission’s procedure to verify the compatibility with Community law of the measures notified. It alleges in that regard inter alia that the United Kingdom failed to comply with its obligation to draw up its list of events of major importance for society in a clear and transparent manner, as required by Article 3a(1) of the directive. 158 As regards first the attributes peculiar to it, the applicant submits that it acquired rights to broadcast an event on the list drawn up by the United Kingdom prior to its entry into force and prior even to the proposal for the adoption of Article 3a of the directive. 159 According to well-established case-law, persons other than those to whom a decision is addressed may claim to be individually concerned only if that decision affects them by virtue of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person to whom the decision is addressed (Plaumann v Commission, p. 107; Case C-309/89 Codorníu v Council [1994] ECR I-1853, paragraph 20; Case T-435/93 ASPEC and Others v Commission [1995] ECR II-1281, paragraph 62). 160 In this case it should be noted that the applicant holds exclusive rights to broadcast the 2002 and 2006 FIFA World Cup finals, which are included in the list of events of major importance for society adopted by the United Kingdom and approved by the Commission in the contested letter. 161 Television broadcasters under the jurisdiction of the Member States other than the United Kingdom must therefore necessarily deal with the applicant in its capacity as broker of the broadcasting rights to that event, for the purposes of obtaining licences to broadcast that event. 162 Whilst the measures adopted by the United Kingdom under Article 3a(1) of the directive and approved by the contested letter, in accordance with Article 3a(2), impose restrictions on television broadcasters as to the exclusive broadcasting of the events of major importance which appear on that list, with the exception of those which had already acquired rights prior to the entry into force of the measures in question, those restrictions are linked to the circumstances, considered generally and in the abstract, in which those broadcasters obtain those exclusive rights from those who hold them. 163 Sections 98 and 101 in Part IV of the Broadcasting Act 1996, as amended by the Television Broadcasting Regulations 2000, provide as follows: ‘98(1) For the purposes of this Part, television programme services and EEA [European Economic Area] satellite services shall be divided into two categories as follows: (a) those television programme services and EEA satellite services which for the time being satisfy the qualifying conditions, and (b) all other television programme services and EEA satellite services. (2) In this section “the qualifying conditions”, in relation to a service, means the conditions: (a) that the service is provided without any consideration being required for reception of the service, and (b) that the service is received by at least 95% of the population of the United Kingdom.101(1) A television programme provider providing a service falling within either of the categories set out in subsection (1) of section 98 (“the first service”) for reception in the United Kingdom or in any area of the United Kingdom shall not, without the previous consent of the Commission, include in that service live coverage of the whole or any part of a listed event unless: (a) another person, who is providing a service falling within the other category set out in that subsection (“the second service”) has acquired the right to include in the second service live coverage of the whole of the event or of that part of the event, and (b) the area for which the second service is provided consists of or includes the whole, or substantially the whole, of the area for which the first service is provided. …(4) Subsection (1) shall not have effect where the television programme provider providing the first section is exercising rights acquired before the commencement of this section.’ 164 In that context, as regards the consent which must be obtained from the ITC referred to in section 101 of the 1996 Act as amended, and cited above, it is clear from all of the measures approved by the Commission, and more particularly from the ITC Code on Sports and other Listed Events, that the factors on which the ITC’s consent depends are essentially that the sale of broadcasting rights has been the subject of a public announcement and that the broadcasters have had a genuine opportunity to acquire those rights on terms which were fair and reasonable. In that respect, the ITC may in particular verify that the offer for sale was communicated openly and simultaneously to the two categories of broadcasters defined in section 98 of the 1996 Act, that the price sought is fair, reasonable and non-discriminatory as between the two categories of broadcasters and that the broadcasters are given a reasonable time, thereby giving them a genuine opportunity to acquire those rights. 165 Thus, although the applicant in its capacity as broker of the rights to broadcast the 2002 and 2006 FIFA World Cup finals is not expressly covered by those provisions, they impede its ability freely to dispose of its rights by restricting their transfer exclusively to a broadcaster established in a Member State other than the United Kingdom which wishes to broadcast that event in the latter State. 166 Furthermore, although the legal validity of the contracts which the applicant entered into with FIFA are not affected by the contested letter, since the performance of those contracts could in no way be prevented by that letter within the meaning of the case-law to that effect (Case 11/82 Piraiki-Patraiki and Others v Commission [1985] ECR 207 and Case C-152/88 Sofrimport v Commission [1990] ECR I-2477), the applicant acquired exclusively the rights in question before the entry into force of Article 3a of the directive and, a fortiori, before the adoption of the contested letter. 167 In those circumstances, it must be held that the contested letter concerns the applicant by reason of a characteristic peculiar to it, namely its capacity as the exclusive holder of the broadcasting rights for one of the events designated by the United Kingdom. 168 It follows that the applicant, as the holder of the broadcasting rights for an event included in the list of measures notified by the United Kingdom and having acquired those rights prior to the adoption of the measures applicable in the United Kingdom and, a fortiori, prior to their approval by the Commission, must be considered, for the purposes of assessing the admissibility of the present action, to be individually concerned by the contested letter. 169 The plea of inadmissibility raised by the Commission must therefore be rejected.2. The admissibility of the applicant’s second plea170 Included in the form of order which the applicant asks the Court to make is a declaration that Article 3(a) of the directive is inapplicable and cannot serve as a legal basis for the adoption of the contested letter. 171 It suffices in this regard to note that in proceedings before the Community judicature there is no remedy whereby the Court can adopt a position by means of a general declaration or statement of principle (see, to that effect, Case T-62/99 Sodima v Commission [2001] ECR II-655, paragraph 28, and the order of 7 June 2004 in Case T-338/02 Segi and Others v Council [2004] ECR II-0000, paragraph 48; see also, by analogy, Case T-76/03 Meister v OHIM [2004] ECR II-0000, paragraph 38). 172 That plea is therefore inadmissible. D – Substance173 In support of its action, the applicant relies on four pleas in law alleging, first, infringement of general principles of Community law, second, infringement of Article 3a(2) of the directive, third, inapplicability of Article 3a(3) of that directive and fourth, infringement of essential procedural requirements. 174 It is appropriate, first of all, to examine the fourth plea alleging infringement of essential procedural requirements.175 By that plea, the applicant claims, inter alia, that the author of the contested letter, namely the Director-General of the Education and Culture DG, lacked the necessary competence. It alleges in that connection that the contested letter was not adopted in conformity with the Commission’s rules on collegiate procedure, delegation and enforcement of decisions. 176 To counter that argument the Commission in its pleadings and in response to a question from the Court merely submitted that the contested letter was not a decision within the meaning of Article 249 EC and that it was not therefore required to comply with the relevant rules of procedure. 177 Thus, the Commission admitted in reply to a written question from the Court and at the hearing that the College of Commissioners had not been consulted and that the Director-General who signed the contested letter had received no specific power from the College. 178 In those circumstances, the contested letter, which, as has been held in the course of the assessment of admissibility, constitutes a decision within the meaning of Article 249 EC, is vitiated by lack of powers and must, on that ground and without there being any need to consider the other argument in support of that plea and the other three pleas in law in support of the action, be annulled. 179 In that context, the Court finds that there is no need to grant the request made by the applicant in its letter of 22 August 2005 (see paragraph 44 above), which is not pertinent to the resolution of the dispute (see, to that effect, Case T-311/00 British American Tobacco (Investments) v Commission [2002] ECR II-2781, paragraph 50). Costs180 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the other party’s pleadings. Under the first subparagraph of Article 87(4), the Member States and institutions which have intervened in the proceedings are to bear their own costs. 181 The French Republic, the United Kingdom, the Parliament and the Council shall bear their own costs. The French Republic, the United Kingdom and the Parliament shall also bear the costs of the applicant arising from their interventions, in accordance with the latter’s pleadings to that effect. 182 Since the Commission has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the applicant, with the exception of the costs of the applicant arising from the interventions of the French Republic, the United Kingdom and the Parliament. On those grounds,THE COURT OF FIRST INSTANCE (Fourth Chamber, Extended Composition)hereby:1. Annuls the decision of the Commission contained in its letter of 28 July 2000 to the United Kingdom of Great Britain and Northern Ireland;2. Dismisses the remainder of the action;3. Orders the French Republic, the United Kingdom of Great Britain and Northern Ireland and the Parliament to bear the applicant’s costs arising from their interventions; 4. Orders the Commission to bear its own costs and those of the applicant, apart from those referred to at 3, above;5. Orders the interveners to bear their own costs.Legal Lindh MengozziWiszniewska-Białecka VadapalasDelivered in open court in Luxembourg on 15 December 2005.E. Coulon H. LegalRegistrar PresidentTable of contentsLegal contextFactsProcedureForms of order soughtLawA – The request for measures of organisation of procedureB – The application to withdraw a documentC – Admissibility1. Admissibility of the applicant’s first claima) The legal nature of the contested decisionArguments of the partiesFindings of the Courtb) The applicant’s standingWhether the applicant is directly concerned– Arguments of the parties– Findings of the CourtWhether the applicant is individually concerned2. The admissibility of the applicant’s second pleaD – SubstanceCosts** Language of the case: English. | 0a216-9780d05-49e8 | EN |
THE COURT OF FIRST INSTANCE UPHOLDS THE PROHIBITION OF GENERAL ELECTRIC'S ACQUISITION OF HONEYWELL | Honeywell International, Inc.vCommission of the European Communities(Action for annulment – Competition – Commission decision declaring a concentration to be incompatible with the common market – Regulation (EEC) No 4064/89 – Ineffectiveness of a partial challenge to the decision – Aeronautical markets – Action that cannot lead to annulment of the decision)Judgment of the Court of First Instance (Second Chamber, Extended Composition), 14 December 2005 Summary of the Judgment1. Actions for annulment – Subject-matter – Merger control decision – Decision based on several pillars of reasoning, each of which is sufficient to justify its operative part – Applicant raising only pleas relating to an error or other illegality affecting just one of those pillars – Action not founded(Council Regulation No 4064/89, Art. 2(3))2. Procedure – Application initiating proceedings – Formal requirements – Identification of the subject-matter of the dispute – Brief summary of the pleas in law on which the application is based – Analogous requirements with regard to grounds in support of a plea – Grounds not set out in the application – General reference to documents annexed to the application – Inadmissibility – Admissibility of a reference to documents submitted to the same court in another case – Case-by-case assessment – Essential condition – Parties, in particular the applicants, must be the same in both cases(Statute of the Court of Justice, Art. 21; Rules of Procedure of the Court of First Instance, Arts 43(1) and 44(1))3. Procedure – Joinder of two cases lodged by different applicants – No effect on the scope of the application lodged separately by each of them(Rules of Procedure of the Court of First Instance, Art. 50)4. Competition – Concentrations – Assessment of compatibility with the common market – No creation or strengthening of a dominant position impeding competition – Plurality of relevant markets – Condition not satisfied in respect of one of them – Prohibition 5. Competition – Concentrations – Administrative procedure – No obligation on the Commission to indicate, after service of the statement of objections and before adoption of the final decision, its current thinking as to possible resolution of the problems previously identified6. Actions for annulment – Pleas in law – Concept – Elements of an application for annulment appearing in a summary of the decision – Inclusion – Condition – The validity of the findings in the contested decision must be clearly and unambiguously challenged1. Where some of the grounds given in a decision are, by themselves, sufficient to justify that decision in law, errors which might invalidate other grounds of the decision do not have any effect on its operative part. Moreover, where the operative part of a Commission decision is based on several pillars of reasoning, each of which would in itself be sufficient to justify that operative part, that decision should, in principle, be annulled only if each of those pillars is vitiated by an illegality. In such a case, an error or other illegality which affects only one of the pillars of reasoning cannot be sufficient to justify annulment of the decision at issue because it could not have had a decisive effect on the operative part adopted by the Commission. Where a pillar of reasoning that is sufficient to justify the operative part of a measure is not called into question by an applicant in his action for annulment, that pillar of reasoning, and thus the measure founded on it, must be held to be lawful and established with regard to him. That rule applies in particular in the context of merger control decisions. Accordingly, a prohibition decision should not be annulled on the ground that the applicant has shown that the analysis adopted in relation to one or more markets is vitiated by one or more errors, if it is nevertheless apparent from the prohibition decision that the notified merger satisfied the criteria justifying a prohibition set out in Article 2(3) of Regulation No 4064/89 in relation to one or more other markets. In particular, if the grounds concerning those other markets are not challenged in the application, they must be held, for the purposes of the action in question, to be well founded with the result that the action is to be considered unfounded in its entirety. (see paras 48-50, 96)2. It follows from Article 21 of the Statute of the Court of Justice and Article 44(1) of the Rules of Procedure of the Court of First Instance, that any plea which is not adequately articulated in the application initiating the proceedings must be held inadmissible. In the case of an absolute bar to proceeding, such inadmissibility may be raised by the Court of its own motion if need be. The summary of an applicant’s pleas in law must be sufficiently clear and precise to enable the defendant to prepare its defence and to enable the Court to give judgment in the action without the need to seek further information. Similar requirements apply where a submission is made in support of a plea in law. Moreover, in order to ensure legal certainty and the proper administration of justice, for an action to be admissible, the basic legal and factual particulars on which the action is based must be indicated coherently and intelligibly in the application itself, even if only in summary form. Whilst the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed to it, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential submissions in law which, in accordance with the abovementioned provisions, must appear in the application. It is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function. Despite those requirements, in some cases the Community judicature has allowed pleas in law to be raised by means of a reference to another case and has refused to do so in others without however indicating, at least explicitly, a decisive criterion for the exercise of that choice, it depending on the specific features of each particular case. However, the requirement that the parties, and in particular the applicant, be identical in both cases is an essential condition for the admissibility of pleas purportedly raised by means of a reference to pleadings in another case. To accept the admissibility of pleas in law not set out expressly in the application on the ground that they were raised by a third party before the same court and in another case to which the application refers, would be to allow the mandatory requirements of Article 44(1) of the Rules of Procedure to be circumvented. (see paras 54-59, 61, 64, 67)3. It is clear from Article 50 of the Rules of Procedure that an order for joinder does not affect the independence and autonomy of the cases which it covers, since they may always subsequently be disjoined. Thus, the fact of joining two cases brought by different applicants cannot alter the scope of the application lodged separately by each of them; otherwise there would be a risk of impairing the independence and autonomy of their separate actions. To accept the contrary would mean that a procedural decision of the President falling entirely within his discretion could extend the scope of an application, and thus be decisive for the outcome of those proceedings before the Court, thereby introducing an arbitrary element into those proceedings. (see paras 70-72, 75)4. It follows from Article 2(3) of Regulation No 4064/89 that, in relation to concentrations, if a transaction notified to it creates or strengthens a dominant position, on just one market, as a result of which effective competition would be significantly impeded in the common market, the Commission must, in principle, prohibit it, even if the transaction does not give rise to any other impediment to competition. Where the Commission examines several markets in turn and finds that a dominant position will be created or strengthened on several of them with the result that effective competition will be significantly impeded, it must be concluded, unless otherwise expressly indicated in the decision, that the Commission considers that the situation on each of those markets as a result of the concentration would, of itself, justify the prohibition of the notified transaction. (see para. 79)5. In matters relating to merger control the Commission cannot be required, over and above the obligation to set out its objections in a statement of objections and to supplement that statement if it should then decide to adopt new objections, to indicate, after service of the statement of objections and before adoption of the final decision, its current thinking as to the possible means of resolving the problems it has identified. (see para. 99)6. Whilst matters set out in an application for annulment under the heading ‘Summary of the decision’ are not, prima facie, intended to constitute independent pleas in law capable of resulting in the annulment of the contested decision, but rather to describe the measure which is being challenged, it is not possible to rule out, a priori, that this part of the application may contain a statement setting out one or more pleas of annulment. Nevertheless, it is only where it emerges clearly and unambiguously from a passage contained under that heading that, in addition to providing a description, the passage is challenging the validity of the findings made in the contested decision, that the passage can be regarded as a plea in law, notwithstanding the structure of the application and its position in the general scheme of that document. (see para. 106)JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)14 December 2005 (*) In Case T-209/01,Honeywell International Inc., established in Morristown, New Jersey (United States), represented by K. Lasok QC and F. Depoortere, lawyer, applicant,Commission of the European Communities, represented by R. Lyal, P. Hellström and F. Siredey-Garnier, acting as Agents, with an address for service in Luxembourg, defendant,supported byRolls-Royce plc, established in London (United Kingdom), represented by A. Renshaw, Solicitor, andRockwell Collins, Inc., established in Cedar Rapids, Iowa (United States), represented by T. Soames, J. Davies, A. Ryan, Solicitors, and P. Camesasca, lawyer, interveners,APPLICATION for the annulment of Commission Decision 2004/134/EC of 3 July 2001 declaring a concentration to be incompatible with the common market and the EEA Agreement (Case No COMP/M.2220 – General Electric/Honeywell) (OJ 2004 L 48, p. 1), THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Second Chamber, Extended Composition), composed of J. Pirrung, President, V. Tiili, A.W.H. Meij, M. Vilaras and N.J. Forwood, Judges,Registrar: H. Jung,having regard to the written procedure and further to the hearing on 25 May 2004,gives the followingJudgment Legal context 1 Article 2(2) and (3) of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (OJ 1990 L 395, p. 1, corrected version in OJ 1990 L 257, p. 13), as last amended by Council Regulation (EC) No 1310/97 of 30 June 1997 (OJ 1997 L 180, p. 1) (hereinafter, as corrected and amended, ‘Regulation No 4064/89’), provides as follows: ‘2. A concentration which does not create or strengthen a dominant position as a result of which effective competition would be significantly impeded in the common market or in a substantial part of it shall be declared compatible with the common market. 3. A concentration which creates or strengthens a dominant position as a result of which effective competition would be significantly impeded in the common market or in a substantial part of it shall be declared incompatible with the common market.’ Background to the dispute2 Honeywell International Inc. (hereinafter ‘the applicant’) is an undertaking active in the following fields: aeronautical products and services, automotive products, electronic materials, speciality chemicals, performance polymers, transportation and power systems as well as home and building controls and industrial controls. 3 General Electric Company (hereinafter ‘GE’) is a diversified industrial undertaking active in the following fields: aircraft engines, domestic appliances, information services, power systems, lighting, industrial systems, medical systems, plastics, broadcasting, financial services and transportation systems. 4 On 22 October 2000, GE and the applicant entered into an agreement under which GE would acquire the applicant’s entire share capital (hereinafter ‘the merger’), the applicant becoming a wholly-owned subsidiary of GE. 5 On 5 February 2001, the Commission formally received notification of the merger pursuant to Article 4 of Regulation No 4064/89.6 On 1 March 2001, taking the view that the merger fell within the scope of Regulation No 4064/89, the Commission decided to initiate proceedings under Article 6(1)(c) of that Regulation and under Article 57 of the Agreement on the European Economic Area (EEA) (hereinafter ‘the decision to initiate proceedings’). 7 On 15 March 2001, GE and the applicant jointly submitted to the Commission their observations on the decision to initiate proceedings. 8 On 8 May 2001, the Commission sent a statement of objections to GE, to which GE replied on 24 May 2001.9 On 29 and 30 May 2001, GE and the applicant took part in an oral hearing before the Commission.10 On 14 and 28 June 2001, GE and the applicant proposed two sets of commitments designed to render the merger acceptable to the Commission. 11 On 3 July 2001, the Commission adopted Decision 2004/134/EC (Case No COMP/M.2220 – General Electric/Honeywell) (OJ 2004 L 48, p. 1) declaring the merger incompatible with the common market and the EEA Agreement (hereinafter ‘the contested decision’). The contested decision12 The operative part of the contested decision states as follows: ‘Article 1The concentration by which General Electric Company acquires control of the undertaking Honeywell International Inc. is declared incompatible with the common market and with the EEA Agreement. Article 2This Decision is addressed to:General Electric Company....’13 The grounds of the contested decision may be summarised as follows.14 According to the Commission, GE was itself already in a dominant position on the market for jet engines for large commercial aircraft (hereinafter also referred to as ‘large commercial jet aircraft engines’) and on the market for jet engines for large regional aircraft (hereinafter also referred to as ‘large regional jet aircraft engines’). Its strong market position, combined with its financial strength and vertical integration into aircraft leasing, were among the factors that led to the finding of GE’s dominance on these markets. The investigation also showed that the applicant is the leading supplier of avionics and non-avionics products, as well as of engines for corporate jet aircraft and of engine starters, the latter being a key component in the manufacturing of engines. 15 The combination of the two companies’ activities would have resulted in the creation of dominant positions on the markets for the supply of avionics products, non-avionics products and corporate jet aircraft engines, and in the strengthening of GE’s existing dominant position in large commercial jet aircraft engines and large regional jet aircraft engines. The combination of various factors would have led to this creation or strengthening of a dominant position: horizontal overlap in some markets as well as the extension of GE’s financial strength and its vertical integration into the applicant’s activities and, lastly, the bundling of their respective complementary products. 16 According to the Commission, such integration would enable the merged entity to reinforce the market power of the two companies with regard to their respective products. This would have the effect of foreclosing competitors, thereby eliminating competition in those markets, ultimately with an adverse effect on product quality, service and prices to consumers. Procedure17 By application lodged at the Registry of the Court of First Instance on 12 September 2001, the applicant brought the present action. On the same day, GE also brought an action against the contested decision (Case T-210/01). 18 By documents lodged at the Registry of the Court on 11, 15 and 16 January 2002 respectively, Rolls-Royce Plc, Rockwell Collins Inc. (hereinafter ‘Rockwell’) and Thales SA sought leave to intervene in the present case in support of the Commission. 19 The applicant requested that certain information in its written submissions and in those of the Commission be kept confidential from the interveners. 20 By order of 26 June 2002, the President of the First Chamber of the Court of First Instance granted Rolls-Royce and Rockwell leave to intervene. By the same order he granted the confidential treatment requested by the applicant, subject to observations by the interveners. In accordance with Article 116(6) of the Rules of Procedure of the Court of First Instance, Thales was granted leave to intervene during the oral procedure on the basis of the report for the hearing. 21 Upon a change in composition of the Chambers of the Court pursuant to the Court’s decision of 13 September 2004 (OJ 2004 C 251, p. 12), the Judge-Rapporteur was transferred to the Second Chamber, to which the present case was then allocated. 22 Following an objection by Rolls-Royce regarding the confidentiality of an annex to the application, namely ‘the Nalebuff report’, an informal meeting took place on 15 October 2002 with the President of the Second Chamber of the Court, by way of measures of organisation of procedure, following which the applicant lodged a new, non-confidential version of that document. When asked whether it intended to pursue its objections in light of that new version, Rolls-Royce did not respond within the period prescribed. 23 Its request for confidential treatment of its statement in intervention having been rejected on the ground that such treatment is not provided for by the Rules of Procedure, Rolls-Royce lodged a non-confidential version of that document and Rockwell lodged its own statement in intervention. The applicant and the Commission lodged their observations on those interventions within the period prescribed. 24 Pursuant to Article 14 of the Rules of Procedure and on the proposal of the Second Chamber, the Court of First Instance, having heard the parties in accordance with Article 51 of those rules, assigned the case to a chamber sitting in extended composition. 25 In its application the applicant requested that the present case be joined with Case T-210/01. The President of the Second Chamber (Extended Composition) referred that decision to the chamber in accordance with Article 50 of the Rules of Procedure. 26 Upon hearing the Report of the Judge-Rapporteur, the Court decided to open the oral procedure and put questions to the parties by way of measures of organisation of procedure under Article 64 of the Rules of Procedure. It also asked the Commission to produce certain documents before the hearing. The parties complied with those requests. 27 By letter lodged at the Registry of the Court on 2 February 2004, Thales stated that it wished to withdraw its intervention. By order of 23 March 2004, after hearing the other parties, the President of the Second Chamber (Extended Composition) of the Court took formal note of that withdrawal. 28 The parties presented oral argument and their answers to the questions of the Court at the hearing on 25 May 2004. At the end of the hearing, the oral procedure was closed. 29 By letter of 3 June 2004, the applicant lodged at the Court Registry a further document together with observations on the relevance of that document and requested that they be placed on the file of the present case. By order of 8 July 2004, the Court decided to reopen the oral procedure in accordance with Article 62 of the Rules of Procedure so as to enable the parties to submit their observations on that request. 30 After hearing the parties, the Court adopted a measure of organisation of procedure under Article 64 of the Rules of Procedure by which it placed on the file the document and observations lodged by the applicant on 4 June 2004. The observations of the Commission and of the interveners regarding the relevance of those items were also placed on the file. 31 The oral procedure was then closed once more on 23 November 2004. Forms of order sought 32 The applicant claims that the Court should:– join the present case with Case T-210/01 General Electric v Commission; – order such measures of inquiry as appear necessary; – annul the contested decision;– take such other or further steps as justice may require; – order the Commission and the interveners to pay the costs.33 The Commission, supported by Rolls-Royce and Rockwell, contends that the Court should:– dismiss the application;– order Honeywell to pay the costs. Law1. The scope of the action and the subject-matter of the dispute Arguments of the parties34 The Commission, supported by Rolls-Royce, submits that the applicant’s reference, in its application, to GE’s arguments in Case T‑210/01 is contrary to Article 44(1)(c) of the Rules of Procedure, according to which the application must contain a summary of the pleas in law. Such a reference is all the more unacceptable in that the applicant had knowledge of only a draft of GE’s application and not of the final version. The action should therefore be declared inadmissible as regards issues not specifically addressed in the application. 35 The Commission submits that, in the light of the pleas expressly raised by the applicant in its application, which essentially concern the part of the contested decision dealing with bundling, the applicant has disregarded the substantive and most important part of the decision, which deals with the issues of horizontal overlap and vertical integration. The contested decision is based on elements of fact and law which, together, show that the combination of GE’s financial strength and vertical integration in regard to purchasing, financing and leasing of aircraft and the applicant’s positions of strength on various aeronautical product markets leads to the creation and strengthening of dominant positions. 36 In its defence, the Commission stated that ‘the reasoning of the decision is based on a combination of elements of fact and law which, taken together (and only when taken together), led the Commission to prohibit the planned merger’. However, in its rejoinder and at the hearing, the Commission explained that each of the separate elements of reasoning adopted in the contested decision sufficed to justify the prohibition of the merger, and described the statement in its defence as ‘ill-considered’ in so far as it could be interpreted as indicating the contrary. Thus, even if all the submissions advanced by the applicant, in particular those regarding bundling, were well founded, the contested decision should not be annulled since the remaining grounds would be sufficient to establish the correctness of the Commission’s finding that the merger was incompatible with the common market. 37 Rolls-Royce stresses that the applicant has failed to submit any arguments challenging the majority of the grounds on which the merger was prohibited, in particular the strengthening of GE’s dominant positions on the markets for large commercial jet aircraft engines or large regional jet aircraft engines and the creation of a dominant position for corporate jet aircraft engines and small marine gas turbines. In particular, as regards the three separate factors which point to the strengthening of GE’s dominant position on the large commercial jet aircraft engines market, the applicant has not seriously contested the finding that foreclosure will result from the vertical integration in regard to the applicant’s starter engines. Consequently, the application is not pertinent and is devoid of purpose. 38 Rockwell observes that the applicant has not addressed the issues of horizontal overlaps or vertical integration in its application, the parts of the application allegedly addressing those issues, under the heading ‘Summary of the Decision’, consisting of nothing more than a description of the contested decision. 39 In reply to those objections, the applicant makes three points.40 First, it observes that in its application it stated that it was adopting all the arguments advanced by GE in Case T-210/01 that were additional to its own. It submits that such a reference to the pleadings lodged in another connected case is permitted by the case-law and has the effect of incorporating those pleadings into its application. In its reply, it refers to the judgment of the Court in Case T-82/89 Marcato v Commission [1990] ECR II-735, paragraphs 22 to 24). At the hearing it referred to a ‘summary’ of the pertinent case-law in the Opinion of Advocate General Alber in Case C-263/98 Belgium v Commission [2001] ECR I-6063, at p. 6064, citing a single judgment of the Court of First Instance, Case T-37/91 ICI v Commission [1995] ECR II‑1901, paragraph 43 et seq., in which the Court of First Instance had accepted a reference to the application in Case T-36/91, which involved the same parties, who were represented by the same lawyers. 41 Moreover, the Commission and Rolls-Royce do not allege that their ability to defend themselves has been impaired by that reference and that Rockwell was perfectly able to understand and reply to all the arguments submitted. 42 The applicant also recalls its request that Cases T-209/01 and T-210/01 be joined, and it submits that, even if its application contains the lacunae alleged by the Commission, the joinder of the two cases would remedy them. At the hearing, it relied in particular on the judgment of the Court of Justice in Joined Cases 26/79 and 86/79 Forges de Thy‑Marcinelle et Monceau v Commission [1980] ECR 1083 as support for its argument concerning the legal effects of joinder. 43 Secondly, the applicant claims that the grounds of the contested decision that it has challenged in detail in the application, namely those relating to bundling, constitute the cornerstone of the contested decision, so that if the Court were to find that its objections were well founded, that would inevitably lead to the annulment of the contested decision. It observes that, in the defence, the Commission itself stated that the contested decision is based on a combination of elements which, taken together, justify its conclusion as to the incompatibility of the notified transaction with the common market. The contested decision would therefore have to be annulled if it were established that the central plank of its reasoning relating to conglomerate effects is vitiated by errors. 44 At the hearing the applicant added that the Commission’s approach during the administrative procedure led the notifying parties to believe that their transaction would be approved if a way could be found to dispel the Commission’s reservations relating to future bundling. That is why the applicant has concentrated, in the proceedings before the Court, principally on that aspect of the case. 45 Thirdly, the applicant observes that, in any event, in the course of its description of the contested decision, the questions of horizontal overlaps and vertical integration were touched upon under the heading ‘Summary of the Decision’. Under that heading, the applicant describes and comments on the contested decision and explains that, with regard to the relevant markets, the contested decision is based on several or all of the following elements: (i) horizontal overlaps and vertical anti-competitive effects; (ii) the financial strength of GE and vertical integration of the applicant with GE’s subsidiaries, GE Capital Aviation Services (‘GECAS’) and GE Capital Corporate Aviation Group (‘GECCAG’), within the merged entity; and (iii) bundling by the merged entity. The applicant submits that the analysis in the contested decision of the markets on which the horizontal overlaps are relevant either lacks credibility or is insufficiently reasoned with regard to each product. The contested decision is therefore essentially based on the two other elements. According to the applicant, the second element is so implausible that it is not necessary to examine it further. Thus, the third element, namely the question of bundling, is decisive. Moreover, the material part of the divestment regarded as necessary by the Commission concerned that aspect of the contested decision. 46 The applicant emphasises that the defects it has identified in the contested decision are sufficiently serious for the decision to be annulled in its entirety. As the Commission accepts, only the combination of elements of fact and of law taken together justifies the prohibition of the concentration. In reply to Rolls-Royce, the applicant adds that the question of engine starters, which was in fact resolved by the commitments, is insufficient to justify the contested decision. 47 For all those reasons, the applicant submits that the objections raised by the Commission and the interveners, alleging that the reference to GE’s application is inadmissible and that the pleas put forward in the applicant’s own application in the present case are inoperative, are contrary to the principle of good administration of justice and have no sound basis. Findings of the Court Introduction48 The Court points out, firstly, that where some of the grounds given in a decision are, by themselves, sufficient to justify that decision in law, errors which might invalidate other grounds of the decision do not have any effect on its operative part (see, to that effect, the judgment in Joined Cases C-302/99 P and C‑308/99 Commission and France v TF1 [2001] ECR I‑5603, paragraphs 26 to 29). 49 Moreover, where the operative part of a Commission decision is based on several pillars of reasoning, each of which would in itself be sufficient to justify that operative part, that decision should, in principle, be annulled only if each of those pillars is vitiated by an illegality. In such a case, an error or other illegality which affects only one of the pillars of reasoning cannot be sufficient to justify annulment of the decision at issue because it could not have had a decisive effect on the operative part adopted by the Commission (see, by analogy, Case T-126/99 Graphischer Maschinenbau v Commission [2002] ECR II‑2427, paragraphs 49 to 51, and the case-law cited). That rule applies in particular in the context of merger control decisions (see, to that effect, Case T-310/01 Schneider Electric v Commission [2002] ECR II‑4071, paragraphs 404 to 420, and paragraphs 80 and 81 below). 50 It should also be noted in this regard that where a pillar of reasoning that is sufficient to justify the operative part of a measure is not called into question by an applicant in his action for annulment, that pillar of reasoning, and thus the measure founded on it, must be held to be lawful and established with regard to him (see, to that effect and by analogy, Case C-310/97 P Commission v AssiDomän Kraft Products and Others [1999] ECR I‑5363, paragraphs 57 to 63). 51 In the light of those considerations, it is necessary to examine whether in the present case the pleas submitted by the applicant would, if well founded, be sufficient to invalidate the operative part of the contested decision and could therefore support an action that might be capable of resulting in the annulment of that decision. If pleas properly raised are not capable, even when taken together, of justifying the annulment of the contested decision, they are inoperative and consequently the entire action is unfounded (see, to that effect, Case T‑121/95 EFMA v Council [1997] ECR II‑2391, paragraphs 115 to 122). 52 In that context, it is first necessary to determine the actual scope of the present action by examining whether some of the pleas which the applicant claims to have submitted are in fact inadmissible. The reference to the pleas raised in Case T-210/0153 Without formally raising a plea of inadmissibility, the Commission has argued that some specific aspects of the action are inadmissible. In any event, the Court observes that it is settled case-law that the conditions for the admissibility of an action concern an absolute bar to proceeding with the action which the Court may and must consider of its own motion should such an issue arise (orders of 15 September 1998 in Case T‑100/94 Michailidis and Others v Commission [1998] ECR II‑3115, paragraph 49, and of 25 October 2001 in Case T-354/00 Métropole Télévision – M 6 v Commission [2001] ECR II-3177, paragraph 27; see also, to that effect, the order of 5 July 2001 in Case C-341/00 P Conseil national des professions de l’automobile and Others v Commission [2001] ECR I‑5263, paragraph 32). 54 According to Article 21 of the Statute of the Court of Justice and Article 44(1) of the Rules of Procedure of the Court of First Instance, the application must set out, inter alia, ‘the subject-matter of the proceedings’ and ‘a summary of the pleas on which the application is based’. Moreover, under Article 48(2) of those rules, ‘no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or of fact which come to light in the course of the procedure’. It follows from those provisions that any plea which is not adequately articulated in the application initiating the proceedings must be held inadmissible. The case-law expressly confirms that, in the case of an absolute bar to proceeding, such inadmissibility may be raised by the Court of its own motion if need be (Case T-231/99 Joynson v Commission [2002] ECR II‑2085, paragraph 154). 55 It is also apparent from that case-law that the summary of an applicant’s pleas in law must be sufficiently clear and precise to enable the defendant to prepare its defence and to enable the Court to give judgment in the action without the need to seek further information (Case T-145/98 ADT Projekt v Commission [2000] ECR II‑387, paragraph 66, and Case T-157/01 Danske Busvognmænd v Commission [2004] ECR II-0000, paragraph 45). Similar requirements apply where a submission is made in support of a plea in law (Case T-352/94 Mo Och Domsjö v Commission [1998] ECR II‑1989, paragraph 333). 56 Moreover, in order to ensure legal certainty and the proper administration of justice, it is established case-law that, for an action to be admissible, the basic legal and factual particulars on which the action is based must be indicated coherently and intelligibly in the application itself, even if only in summary form (see Case C-178/00 Italy v Commission [2003] ECR I‑303, paragraph 6; Case T‑195/95 Guérin automobiles v Commission [1997] ECR II‑679, paragraphs 20 and 21; ADT Projekt v Commission, paragraph 55 above, paragraph 66; order in Case T-110/98 RJB Mining v Commission [2000] ECR II‑2971, paragraph 23, and the cases cited; Case T-195/00 Travelex Global and Financial Services and Interpayment Services v Commission [2003] ECR II‑1677, paragraph 26; and Danske Busvognmænd v Commission, paragraph 55 above, paragraph 45; see also, to that effect, Joined Cases 19/60, 21/60, 2/61 and 3/61 Fives Lille Cail and Others v High Authority [1961] ECR 281, 294, and Case C-330/88 Grifoni v EAEC [1991] ECR I‑1045, paragraphs 17 and 18). 57 Whilst the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed to it, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential submissions in law which, in accordance with the abovementioned provisions, must appear in the application (order in Case T‑154/98 Asia Motor France and Others v Commission [1999] ECR II‑1703, paragraph 49). Moreover, it is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (Joynson v Commission, paragraph 54 above, paragraph 154; Case T-84/96 Cipeke v Commission [1997] ECR II‑2081, paragraph 34; Joined Cases T-305/94 to T‑307/94, T-313/94 to T‑316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T‑335/94 Limburgse Vinyl Maatschappij and Others v Commission [1999] ECR II‑931, paragraph 39, not having been set aside in that regard by the Court of Justice on appeal in Joined Cases C-238/99 P, C-244/99 P, C-245/99 P, C‑247/99 P, C-250/99 P to C‑252/99 P and C-254/99 P Limburgse Vinyl Maatschappij v Commission [2002] ECR I-8375). 58 However, the applicant cites several judgments in which the Community judicature has permitted a reference to written pleadings submitted to the same court in other cases (see paragraph 40 above). The applicant submits that a reference to written pleadings submitted to the same court in another case should not be held inadmissible. 59 The cases relied on by the applicant in paragraph 40 above to justify such a reference do not, however, lead the Court in the present case to disapply the abovementioned rule that the applicant must set out in the application itself a summary of the pleas on which it relies. The Court of First Instance observed in ICI v Commission, paragraph 40 above (paragraph 45), that the case-law of the Court of Justice takes into account the specific features of each particular case, and cited in support of that assertion the judgments in Case 9/55 Société de Charbonnages de Beeringen and Others v High Authority [1954-1956] ECR 311; Joined Cases 19/63 and 65/63 Prakash v Commission [1965] ECR 533; Case 111/63 Lemmerz-Werke v High Authority [1965] ECR 677; Case 4/69 Lütticke v Commission [1971] ECR 325, paragraph 2; and Forges de Thy‑Marcinelle et Monceau v Commission, paragraph 42 above (paragraph 4). 60 In this regard, the Court points out, first of all, that to allow such a reference to an application lodged in another case would in principle be incompatible with the cases cited in paragraphs 55 to 57 above, which require that the application itself contain a summary of the pleas in law submitted, so that the Court is able, where appropriate, to give judgment on the action without having to seek further information. 61 Even if in some cases the Community judicature has allowed pleas in law to be raised by means of a reference to another case (Forges de Thy-Marcinelle et Monceau v Commission, paragraph 42 supra, and Marcato v Commission, paragraph 40 above), it has refused to do so in others (see Charbonnages de Beeringen and Others v High Authority, paragraph 59 above, and Prakash v Commission, paragraph 59 above) without however indicating at least explicitly, a decisive criterion for the exercise of that choice. 62 It must be pointed out that in all the cases giving rise to the judgments relied on by the applicant or cited in paragraph 45 of ICI v Commission, paragraph 40 above, in which the Community judicature accepted that pleas not expressly set out in the application could be regarded as validly raised by virtue of such a reference, the applicant had referred to its own written pleadings in another case. 63 In the present case, as observed above, the applicant’s reference in its application relates to the application lodged on the same day by another applicant, GE. 64 To accept the admissibility of pleas in law not set out expressly in the application on the ground that they were raised by a third party in another case, to which reference is made in that application, would be to allow the mandatory requirements of Article 44(1) of the Rules of Procedure, noted in paragraph 54 above, to be circumvented. 65 Moreover, in Case T-210/01 GE is represented by different lawyers from those representing the applicant in the present case. Furthermore, GE’s application is not annexed to the applicant’s application in the present case. These factors can only lend further support to the conclusion reached in the previous paragraph, inasmuch as they confirm the separate and independent nature of the present action in comparison with that registered under Case T-210/01. 66 It must also be recalled that each party is solely responsible for the content of the pleadings which it lodges, a principle laid down notably in Article 43(1) of the Rules of Procedure (see, that effect, the judgment in ICI v Commission, paragraph 40 above, paragraph 46). Although the applicant asserts that it had knowledge of the provisional version of GE’s application, it does not claim to have known, at the time of lodging its own application, what was the precise content of GE’s definitive application to which it referred. Contrary to the requirements of the proper administration of justice, the reference to GE’s application did not therefore permit the Court to identify with sufficient precision the pleas raised before it when the application was lodged in the present case. 67 Having regard to the foregoing, and without it being necessary in the present case to determine under what conditions an applicant may raise pleas by means of a reference to its own pleadings in another case, the Court finds that the requirement that the parties, and in particular the applicant, be identical in both cases is an essential condition for the admissibility of pleas purportedly raised by means of a reference to pleadings in another case. 68 It follows from the foregoing that the applicant’s reference to the application lodged by GE in Case T-210/01 does not have the effect of incorporating the pleas raised by GE in that case into the application lodged by the applicant in the present case. The application for joinder69 In support of its application for joinder of the present case with Case T-210/01, the applicant submits that even if the reference in its application to that of GE is not sufficient to render admissible the pleas that it wished to raise in relation to aspects of the case other than bundling, such joinder would remedy any deficiencies rendering its own application inadmissible. At the hearing the applicant relied on the judgment in Forges de Thy-Marcinelle et Monceau v Commission, paragraph 42 above (paragraph 4), and a line of cases which it claims goes back to the beginning of the Community judicature’s case-law. 70 As regards the consequences of a joinder of Cases T-209/01 and T-210/01, the Court observes that according to Article 50 of the Rules of Procedure: ‘The President may, at any time, after hearing the parties and the Advocate General, order that two or more cases concerning the same subject-matter shall, on account of the connection between them, be joined for the purposes of the written or oral procedure or of the final judgment. The cases may subsequently be disjoined. The President may refer these matters to the Court of First Instance.’ 71 As the Court of Justice held in Joined Cases C-280/99 P to C-282/99 P Moccia Irme and Others v Commission [2001] ECR I‑4717, paragraph 66, it is clear from that provision that an order for joinder does not affect the independence and autonomy of the cases which it covers, since they may always subsequently be disjoined. Thus, in that judgment, the Court of Justice held that two applicants were not entitled to rely before the Court of Justice on pleas which they had not raised at first instance, even though in the proceedings before the Court of First Instance their cases had been joined with other cases in which those pleas had actually been raised by other applicants (paragraphs 61 to 68 of the judgment). 72 It must also be pointed out that joinder is a measure which the President or the Court of First Instance may order under Article 50 of the Rules of Procedure, but that, since that decision falls within their discretion as to the most appropriate manner of organising the proceedings, neither of them is obliged to do so even if the parties apply for joinder. Consequently, if the applicant’s contention were to be accepted, that would mean that a procedural decision of the President falling entirely within his discretion could extend the scope of an application, and thus be decisive for the outcome of those proceedings before the Court, thereby introducing an arbitrary element into those proceedings. 73 As regards the judgment in Charbonnages de Beeringen and Others v High Authority, paragraph 59 above, it must be pointed out that the Court of Justice, in stating that a general reference to what is stated in another case does not suffice to make the application admissible, still less where the reference has been made without a contemporaneous request for joinder, did not hold that the application would have been admissible if an application for joinder had been made at the proper time. On the contrary, it merely held that in the case before it the absence of a request that the Court consider the two cases together was a further factor confirming the inadequacy of the general reference in the application to an action brought by a third person. 74 Moreover, inasmuch as the Court of Justice held in Forges de Thy‑Marcinelle et Monceau v Commission, paragraph 42 above, that ‘the admissibility of the second action covers any admissibility of the first’, it must be observed that in that case the applications in question had been lodged by the same person, whereas in the present case the applicant is seeking to rely on pleas raised by a third person. 75 Thus, there being no need in the present case to rule on any effects that joinder may have on two actions brought by the same applicant, it suffices to hold that the fact of joining two cases brought by different applicants cannot alter the scope of the application lodged separately by each of them; otherwise there would be a risk of impairing the independence and autonomy of their separate actions (see, by analogy, Moccia Irme and Others v Commission, paragraph 71 above, paragraph 66). 76 In the present case, therefore, only the pleas in law other than those claimed to have been raised solely by means of the general reference to GE’s application may be taken into consideration. 77 In these circumstances, there is no reason to join the present case with Case T‑210/01. The applicant’s request to that effect in its application is therefore rejected. The effectiveness of the pleas raised in the present case 78 The applicant’s second argument in this context is that the grounds relating to bundling are the key element of the contested decision, without which that decision cannot be upheld. 79 The Court observes that it follows from Article 2(3) of Regulation No 4064/89 that, in relation to concentrations, if a notified transaction creates or strengthens a dominant position, on just one market, as a result of which effective competition would be significantly impeded in the common market, the Commission must, in principle, prohibit it, even if the transaction does not give rise to any other impediment to competition. Where the Commission examines several markets in turn and finds that a dominant position will be created or strengthened on several of them with the result that effective competition will be significantly impeded, it must be concluded, unless otherwise expressly indicated in the decision, that the Commission considers that the situation on each of those markets as a result of the concentration would, of itself, justify the prohibition of the notified transaction. 80 The Court points out in that regard that in Schneider Electric v Commission, paragraph 49 above (paragraphs 404 to 420), it held that the errors found in that case concerning the analysis of the various national markets could not of themselves suffice to call in question the objections raised by the Commission in regard to the various French sectoral markets. Thus, the analysis underlying the Commission’s decision which resulted in the prohibition of the merger in question could not be held to be inadequate in regard to the latter markets solely because errors had been found in respect of other markets. 81 Similarly, where the Commission finds that a dominant position will be created or strengthened on a single market for various separate and independent reasons, it must be held in principle, and absent any indication to the contrary in the relevant grounds of the decision adopted by the Commission, that each of the reasons put forward would, of itself, have caused the Commission to make that finding. That is all the more so where it is apparent from the terms of that element of reasoning that it is in itself sufficient to establish that the conditions of competition on the relevant market would undergo a qualitative or substantial change. 82 In the present case, the Commission explained in recital 567 of the contested decision that it had to be concluded that ‘the proposed merger would lead to the creation or strengthening of a dominant position on the markets for large commercial jet aircraft engines, large regional jet aircraft engines, corporate jet aircraft engines, avionics and non-avionics products, as well as small marine gas turbine[s], as a result of which effective competition in the common market would be significantly impeded’. 83 As the Commission observes in its defence, it did not create in the contested decision a hierarchy between the competition problems found on each of the markets which it examined and then listed in its conclusion set out in paragraph 82 above. It must therefore be inferred from the contested decision that each separate limb of the reasoning in it and, above all, the analysis in it of each of the markets listed in that paragraph in fact constitutes an independent pillar of the contested decision. 84 That conclusion is confirmed by a detailed examination of the various limbs of the Commission’s reasoning. 85 The Court notes in that regard that the elements of reasoning relating to the horizontal overlaps resulting from the notified transaction on the market for large regional jet aircraft engines, the market for corporate jet aircraft engines and the market for small marine gas turbines are not of such a nature as to reinforce each other, in view of the lack of economic links between those markets. In particular, the creation of a dominant position on the market for small marine gas turbines cannot affect or be affected by the creation or strengthening of dominant positions on the various markets for jet engines and other aerospace components, since in both cases the products concerned fall within distinct business sectors. 86 Furthermore, in recitals 428 to 431, under the heading ‘(a) Horizontal Overlap on Existing Platforms’, the Commission described the immediate effects of the merger on the market for large regional jet aircraft engines as a result of that overlap. The description refers to the influence of GE Capital and GECAS, a factor strengthening the pre-existing dominant position of GE on the relevant market, which is used by the Commission to reject the argument of the parties to the merger that the monopoly created by the merger is a purely static phenomenon. However, the Commission did not rely, in that context, on its argument relating to bundling. That argument was raised, so far as concerns the market for large regional jet aircraft engines, only under the heading ‘(b) Effects on Future Platform Competitions’, which contains a separate analysis dealing with the medium and long-term effects of the merger on that market. It follows from the foregoing that the Commission found, in the contested decision, that the horizontal overlap on the market for large regional jet aircraft engines as a result of the merger would immediately have strengthened GE’s pre-existing dominant position, irrespective of any other factor which might strengthen that position still further in the future. 87 As regards the market for small marine gas turbines, the Commission described the horizontal overlap under a separate heading, in recitals 476 and 477 of the contested decision, before examining, in separate sections, ‘foreclosure’ through the vertical integration of the applicant with GE and ‘foreclosure’ through vertical integration of small marine gas turbines, on one hand, and the applicant’s electronics and controls, on the other. The Commission stated in recital 476 of the decision that the merger would create an entity with a share of between 65% and 80% of the relevant market, which would be four to five times larger than its closest competitor. In recital 477 it concluded that the merged entity would be by far the largest player in the small marine gas turbines market and states why competition from other current and potential players on that market would not be effective. It therefore follows from the structure and wording of this part of the contested decision that, according to the Commission, the effects of the merger described in the first section dealing with the horizontal overlap in the turbines sector sufficed to create the dominant position on that market, irrespective of other factors which would serve to foreclose the market and thereby strengthen that position still further. 88 In any event, in the present case, the applicant has not disputed the Commission’s argument relating to foreclosure of competitors from the small marine gas turbines market as a result of the vertical integration of GE’s manufacture of those products and the applicant’s manufacture of controls and other components used in those turbines, nor has it disputed the argument relating to foreclosure of competitors from the small marine gas turbines market as a result of the vertical integration of the applicant and GE on account of the latter’s financial strength (see recitals 478 to 484 of the contested decision and paragraphs 113 and 114 below). 89 As regards the foreclosure of competitors through the vertical integration of the manufacture of large commercial jet aircraft engines and that of the applicant’s engine starters, the Commission stated expressly in recital 419 of the contested decision that, quite apart from the effects of product package offers, the proposed merger would strengthen GE’s dominant position on the market for large commercial jet aircraft engines as a result of the vertical foreclosure of the competing engine manufacturers. 90 The applicant drew attention in its reply to the Commission’s assertion in paragraph 51 of its defence that ‘[m]oreover, and above all, the reasoning of the decision [was] based on a combination of elements of fact and law which, taken together (and only when taken together), [had] led the Commission to prohibit the planned merger’. According to the applicant, it follows from that statement that the contested decision can escape annulment only if all the main elements on which it is based are well founded, and in particular the analysis of bundling which it calls into question in detail in its application. 91 The Commission claimed, however, in paragraph 18 of its rejoinder, and repeated at the hearing, that each of the separate pillars adopted in the contested decision sufficed to justify the prohibition of the planned merger. At the hearing, it described its own statement, cited in the previous paragraph, as ‘ill-considered’ and explained that the statement was made in the context of an analysis replying to the applicant’s arguments that the decision is based ‘largely’ on two theories, namely, first, the alleged financial strength of GE and its vertical integration in financial services, aircraft purchasing, leasing and aftermarket activities, and, secondly, the future practice of bundling. 92 The Commission’s explanation must be accepted.93 When paragraphs 48 to 51 of the defence are read as a whole it is apparent that the Commission sought to challenge the applicant’s argument that those two ‘theories’ alone were the real foundation of the contested decision, to the exclusion of the other anti-competitive aspects of the notified transaction that were analysed in that decision. 94 Moreover, as the Commission correctly observed at the hearing, it is for the Court of First Instance to review the legality of the decision itself, taking into account the arguments advanced in that decision and not in the light of what has been asserted with regard to it in the defence. It is true that the Commission expressed itself ambiguously in its defence and that its statement was capable of being interpreted as meaning that it disavowed the proposition that each element of its analysis sufficed to found the contested decision. However, since it has explained in its rejoinder and at the hearing that this was not its position, the contested decision should not be interpreted in that way, that is to say, in a manner contrary to its wording, structure and general scheme (see paragraphs 79 to 85 above). 95 At the hearing the applicant also maintained that the Court ought to confine itself to examining whether the competitive situation as found by the Commission differed from that which in fact would result from the merger. If there are significant differences in that regard, the contested decision should be annulled. By that line of argument, the applicant contends, in substance, that it is for the Commission to decide whether a concentration should be prohibited following a judgment by which the Court of First Instance rejects its analysis in relation to certain markets. Accordingly, it is not open to the Court of First Instance to uphold a decision prohibiting a concentration by substituting its own overall conclusion for that of the Commission. 96 However, as the Court has pointed out in paragraph 79 above, the Commission must prohibit a concentration that satisfies the criteria in Article 2(3) of Regulation No 4064/89. Accordingly, a prohibition decision should not be annulled on the ground that the applicant has shown that the analysis adopted in relation to one or more markets is vitiated by one or more errors, if it is nevertheless apparent from the prohibition decision that the notified merger satisfied those criteria in relation to one or more other markets (see paragraphs 48 to 50 and 79 to 81 above). In particular, if the grounds concerning those other markets are not challenged in the application, they must be held, for the purposes of the action in question, to be well founded. By drawing conclusions in this manner from the substantive scope of an application, the Court of First Instance is not substituting its assessments for those of the Commission, since it is the – unchallenged – assessments of the Commission itself which form the basis for the decision. 97 In the context of the line of argument set out in paragraph 78 above, the applicant also observed at the hearing that the Commission gave the impression, particularly during the administrative procedure, that the risk of bundling after the merger was the decisive aspect of the case. That impression allegedly distorted the entire administrative procedure and deprived the parties to the merger of the opportunity to propose commitments capable of resolving the other problems. That is also the reason why the applicant focused its application on the conglomerate effects allegedly resulting from the merger. 98 That argument, advanced by the applicant for the first time at the hearing, constitutes a new plea in law. As that plea relates to the approach allegedly adopted by the Commission during the administrative procedure, it is obvious that the applicant was in a position to raise it in the application initiating these proceedings. Consequently, it is inadmissible under Article 48(2) of the Rules of Procedure. 99 In any event, in its statement of objections of 8 May 2001 the Commission clearly set out the objections concerning all the anti-competitive consequences of the merger, in particular those in respect of the horizontal and vertical effects resulting from it that were subsequently included in the contested decision (see, in particular, paragraphs 118 to 122, 124 to 126, 459 to 471, 473, 474, 578 to 586 and 612 to 633 of the statement of objections). It must be held that in matters relating to merger control the Commission cannot be required, over and above the obligation to set out its objections in a statement of objections and to supplement that statement if it should then decide to adopt new objections, to indicate, after service of the statement of objections and before adoption of the final decision, its current thinking as to the possible means of resolving the problems it has identified (see, to that effect, Case 53/69 Sandoz v Commission [1972] ECR 845, paragraph 14; Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C-219/00 P Aalborg Portland and Others v Commission [2004] ECR I‑123, paragraphs 192 and 193; Case T-87/96 Assicurazioni Generali and Unicredito v Commission [1999] ECR II‑203). 100 Moreover, since the applicant has not even alleged that it received, from authorised and reliable sources within the Commission, precise, unconditional and consistent assurances that the Commission was not pursuing certain objections, the principle of the protection of legitimate expectations can have no application in the present case (see, to that effect, Case T-203/97 Forvass v Commission [1999] ECR-SC I‑A‑129 and II‑705, paragraph 70, and the cases cited, and Case T‑290/97 MehibasDordtselaan v Commission [2000] ECR II‑15, paragraph 59). 101 Finally, the Court notes, as regards the market for large regional jet aircraft engines, to the extent that it may be relevant, that the Commission found in recital 20 of the contested decision that those aircraft were of particular importance in the Community context since they constituted 14% of the overall European fleet in 1992 and 33% in 1998. It observed in recital 431 of the contested decision that the significance of that market, on which the merged entity would have a monopoly as a result of the merger, would have the effect of making airlines more and more dependent on that entity. 102 Having regard to the foregoing, the Court must reject the applicant’s argument that the objections raised by it on the merits concerning the conglomerate effects – essentially bundling – suffice to justify the annulment of the contested decision. 103 It must be held that the horizontal and vertical anti-competitive effects of the merger set out in the contested decision are not subsidiary grounds in the general scheme of the contested decision and are sufficient to support the prohibition of the notified transaction. 104 Consequently, the application can result in the annulment of the contested decision only if the pleas expressly raised in the application itself call into question the Commission’s conclusion in respect of each of the independent aspects examined in the contested decision, and in particular the horizontal and vertical anti-competitive effects found by that decision. The scope of the application 105 Lastly, it is necessary to examine the applicant’s argument that in its application, under the heading ‘Summary of the decision’, it put forward submissions relating to the horizontal and vertical anti-competitive effects of the merger identified in the contested decision. It is necessary to consider whether those observations of the applicant may be characterised as pleas in law. 106 The Court points out first, in that regard, that matters set out in an application for annulment under the heading ‘Summary of the decision’ are not, prima facie, intended to constitute independent pleas in law capable of resulting in the annulment of the contested decision, but rather to describe the measure which is being challenged. However, it is not possible to rule out, a priori, that this part of the application may contain a statement setting out one or more pleas of annulment. Nevertheless, it is only where it emerges clearly and unambiguously from a passage contained under that heading that, in addition to providing a description, the passage is challenging the validity of the findings made in the contested decision, that the passage can be regarded as a plea in law, notwithstanding the structure of the application and its position in the general scheme of that document. 107 In the following section the Court examines in turn the statements made in the application under the heading ‘Summary of the Decision’ with regard to each of the main pillars on which the contested decision is based. – Horizontal overlap on the market for large regional jet aircraft engines 108 In this context, the applicant merely makes the following assertion at paragraph 30 of its application:‘… the Commission concedes that the increase in market share resulting from the merger is “rather small” and would take place against the backdrop of GE’s alleged pre-existing dominance. Hence, the assertions that the combination of GE and Honeywell would prevent customers “from enjoying the benefits of price competition” (which appears to be contradicted by the finding that GE is already dominant in the market) and would give them “a unique incumbency advantage for ... future platforms” are of little or no weight’. 109 It follows from those statements that the applicant considers that the grounds of the contested decision relating to that market describe a change in the competitive environment that is of little significance. However, the essential elements of fact and of law on which the application is founded in that regard do not emerge coherently and comprehensibly, even in summary, from the passage cited in the previous paragraph. The applicant merely underlines the relative insignificance of the horizontal anti-competitive effects found by the Commission concerning the horizontal effects on the market for large regional jet aircraft engines, without explaining what, in its view, are the legal consequences of that line of argument. 110 In particular, it is not possible to deduce from that passage whether the applicant’s position is that the ‘alleged’ pre-existing dominant position of GE on that market is not strengthened in any way by the merger transaction, or whether it would be strengthened to an insignificant extent that would be ‘de minimis’ or, lastly, whether the strengthening of that dominant position would not result in effective competition being impeded significantly in the common market or in a substantial part of it. In those circumstances, it is not for the Court to supplement that part of the application by itself choosing how the exceedingly vague criticisms formulated by the applicant are to be characterised in law. 111 Consequently, the passage in paragraph 30 of the application under the heading ‘Summary of the Decision’ is not sufficiently clear and precise to constitute the statement of a plea in law within the meaning of Article 44(1) of the Rules of Procedure and of the case-law interpreting that provision (see, in particular, paragraph 55 above). 112 Consequently, whatever may be the situation with regard to the other markets examined in the contested decision, the Court finds that the Commission’s analysis regarding the horizontal overlap on the market for large regional jet aircraft engines has not been called into question in the application and must, therefore, be deemed to be well founded for the purposes of the present proceedings. – Horizontal overlap on the market for small marine gas turbines 113 In this context, the applicant merely stated as follows in paragraph 39 of its application:‘In relation to small marine gas turbines, the Commission concluded that the merger would lead to the creation of a dominant position because: (i) the merged entity would have somewhere between 65% and 80% of the market; (ii) Honeywell’s leading position would be strengthened by its combination with GE’s financial strength and vertical integration; and (iii) GE would obtain a significant influence over competitors through Honeywell’s business in supplying key components to competitors.’ 114 It must be held that this passage does no more than describe the findings made in the contested decision with regard to that market and does not contain anything that could be interpreted as a plea in law in accordance with the requirements of Article 44(1) of the Rules of Procedure. Consequently, once again, whatever the situation may be with regard to the other markets examined in the contested decision, the Court finds that the Commission’s analysis regarding the horizontal overlap on the market for small marine gas turbines has not been called into question in the application and must, therefore, be deemed to be well founded for the purposes of the present proceedings – Vertical integration of engine-starter manufacture115 As regards the vertical integration of the applicant’s engine-starter production activities with those of GE’s activities in the manufacture of large commercial jet aircraft engines, the applicant, in paragraph 29 of its application, merely sets out the relevant grounds of the contested decision: ‘In relation to the market for large commercial jet aircraft engines, the Commission found that GE was already dominant in that market, in which Honeywell has no presence. The Commission concluded that the merger would strengthen GE’s dominant position because … (iii) the merged entity would have the incentive and the ability to foreclose competition from other manufacturers of engines because Honeywell is a leading supplier of engine starters.’ 116 It must be found, once again, that this description does not contain anything that could be interpreted as a plea in law in accordance with the requirements of Article 44(1) of the Rules of Procedure. Consequently, the Commission’s analysis regarding the strengthening of GE’s dominant position on the market for large commercial jet aircraft engines as a result of the applicant’s position in the manufacture of engine starters must also be deemed to be well founded for the purposes of the present proceedings. 117 Consequently, whatever may be the situation with regard to the other markets examined in the contested decision, the Court finds that the Commission’s analysis regarding the vertical integration of engine-starter manufacture has not been called into question in the application and must, therefore, be deemed to be well founded for the purposes of the present proceedings. – Conglomerate effects as a result of the vertical integration118 Lastly, as regards the conglomerate effects resulting from the vertical integration of the applicant with GE’s subsidiaries, GECAS, GECCAG and GE Capital, the applicant deals on the merits only with the aspect relating to the possibility of cross-subsidisation as a result of the financial strength of GE Capital. As to the possibility for GE to influence the choices made by customers in order to provide GE’s engines and the applicant’s avionics and non-avionics products, the applicant, after briefly describing the Commission’s argument to that effect, asserts in paragraph 43 of its application: ‘This theory is so implausible that it will not be given any further analysis in this application.’ Since the applicant does not submit any arguments challenging the correctness of the grounds of the contested decision relating to the influence which GECAS and GECCAG might exercise as purchasers of aircraft, they must be deemed to be well founded for the purposes of the present proceedings. – Horizontal overlap on the market for corporate jet aircraft engines119 In paragraphs 31 to 37 of the application, the applicant made detailed submissions challenging, in particular, the definition of the relevant market and the fact that the Commission relied on figures relating to market shares. Notwithstanding the fact that this line of argument is included under the heading ‘Summary of the Decision’, it must be held that the elements of fact and of law submitted in that regard in its application are sufficient to constitute a plea in law which, if it proved to be well founded, could invalidate the Commission’s analysis in the contested decision with regard to the creation of a dominant position on that market, in particular by virtue of the horizontal anti-competitive effects resulting from the merger. Conclusion120 The applicant has not contested a number of the independent pillars constituting the basis of the prohibition of the merger transaction. In particular, it has not contested the finding that, as a result of the horizontal overlaps between the activities of the two undertakings, GE’s pre-existing dominant position on the market for large regional jet aircraft engines would be strengthened and a dominant position would be created on the market for small marine gas turbines. It has also not called into question the finding that GE’s pre-existing dominant position on the market for large commercial jet aircraft engines would be strengthened as a result of the vertical integration of the applicant’s manufacture of engine starters and the manufacture of those engines. 121 Consequently, the grounds of the contested decision which have not been challenged must be regarded as well founded for the purposes of the present proceedings. In view of the linked but autonomous nature of the elements of the reasoning in question – each of which could in principle therefore justify by itself the prohibition of the merger – the Commission would have had to prohibit the merger if it had included in the contested decision only the findings of the anti-competitive effects that are not contested in the present case. In particular, it does not appear from either the statement of objections or the contested decision that the Commission’s contention that the notified transaction was incompatible with the common market was based exclusively, or even essentially, on its analysis of bundling. 122 In consequence, the pleas raised by the applicant that have been held to be admissible and which, assuming them to be well founded, would affect the grounds of the contested decision dealing with bundling, cross-subsidies and the horizontal effects on the market for corporate jet aircraft, are inoperative because they could not result in the annulment of the contested decision in the context of the present proceedings. 123 It follows that, even if all the pleas in law and arguments submitted by the applicant in the present case were well founded, they could not be sufficient to result in the annulment of the contested decision in the context of the present proceedings. 2. Infringement of procedural rights124 The applicant has put forward a plea alleging infringement of the rights of the defence. It submits, in essence, that by introducing for the first time in the contested decision the concepts of cross-subsidisation between the various activities of the new entity and of predatory pricing, the Commission infringed its rights of defence. 125 The Commission replies, in essence, that those two aspects of the case were raised, briefly, in the statement of objections of 8 May 2001 and that in any event they cannot be characterised as independent objections. 126 The alleged infringement of the rights of the defence in this case relates exclusively to the aspects of the contested decision which the applicant has challenged in other respects in its other pleas in law, namely bundling and cross-subsidisation. Even if the present plea were well founded, it could therefore undermine only the pillars of the Commission’s reasoning against which those other pleas are also directed. The present plea cannot therefore have any effect on the other pillars constituting the foundation of the contested decision. 127 Thus the present plea is ineffective in the same way, and for the same reasons, as the other pleas submitted by the applicant.128 In any event, it must be found in the present case that the two aspects in question were touched on briefly in the statement of objections and are closely linked to other elements which are the subject of a detailed account in that statement. They cannot therefore be considered to be independent objections. In those circumstances, the applicant was in a position to defend itself effectively with regard to those arguments. 129 In the circumstances, since the applicant has not contested all the pillars of reasoning, each of which constitutes a sufficient legal and factual basis for the contested decision, its action cannot result in the annulment of the contested decision in the context of the present proceedings, even if all the pleas validly submitted by the applicant were to be well founded. 130 Consequently, the application is dismissed. Costs131 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the applicant has been unsuccessful and the defendant and the interveners, Rolls-Royce and Rockwell, have applied for costs, the applicant must be ordered to bear its own costs and to pay those of the defendant and of the interveners. On those grounds,THE COURT OF FIRST INSTANCE (Second Chamber, Extended Composition)hereby:1. Dismisses the application;2. Orders the applicant to bear its own costs and to pay those incurred by the Commission and by the interveners.Pirrung Tiili Meij Vilaras Forwood Delivered in open court in Luxembourg on 14 December 2005.E. Coulon J. Pirrung Registrar PresidentTable of contentsLegal contextBackground to the disputeThe contested decisionProcedureForms of order soughtLaw1. The scope of the action and the subject-matter of the disputeArguments of the partiesFindings of the CourtIntroductionThe reference to the pleas raised in Case T-210/01The application for joinderThe effectiveness of the pleas raised in the present caseThe scope of the application– Horizontal overlap on the market for large regional jet aircraft engines– Horizontal overlap on the market for small marine gas turbines– Vertical integration of engine-starter manufacture– Conglomerate effects as a result of the vertical integration– Horizontal overlap on the market for corporate jet aircraft enginesConclusion2. Infringement of procedural rightsCosts* Language of the case: English. | c48c9-2e12afc-4d1a | EN |
THE COMMUNITY CAN BE CALLED UPON TO COMPENSATE FOR DAMAGE CAUSED BY ITS INSTITUTIONS EVEN IN THE ABSENCE OF UNLAWFUL CONDUCT ON THEIR PART | Fabbrica italiana accumulatori motocarri Montecchio SpA (FIAMM) and Fabbrica italiana accumulatori motocarri Montecchio Technologies, Inc. (FIAMM Technologies)vCouncil of the European Union and Commission of the European Communities(Non-contractual liability of the Community – Incompatibility of the Community regime governing the import of bananas with the rules of the World Trade Organisation (WTO) – Imposition by the United States of America of retaliatory measures in the form of increased customs duty levied on imports from the Community, pursuant to a WTO authorisation – Decision of the WTO Dispute Settlement Body – Legal effects – Community liability in the absence of unlawful conduct of its institutions – Causal link – Unusual and special damage) Judgment of the Court of First Instance (Grand Chamber), 14 December 2005 Summary of the Judgment1. Non-contractual liability – Conditions – Sufficiently serious breach of a rule intended to confer rights on individuals – Institution having no discretion – Sufficiency of the mere infringement of Community law (Art. 288, second para., EC)2. Actions for damages – World Trade Organisation – Not possible to rely on the WTO agreements in order to challenge the legality of a Community measure – Exceptions – Community measure designed to ensure implementation of a WTO obligation or referring to it expressly and specifically – Community regime governing the import of bananas – Regime found by the WTO Dispute Settlement Body to be incompatible with WTO rules – Judicial review of the legality of the regime in the light of WTO rules – Precluded (Art. 288, second para., EC; Council Regulations Nos 404/93 and 1637/98; Commission Regulation No 2362/98)3. Non-contractual liability – Conditions – No unlawful conduct of the Community institutions – Actual damage, causal link and unusual and special damage – Conditions cumulative 4. Non-contractual liability – Conditions – Retention of a Community regime governing the import of bananas that was incompatible with the WTO agreements – Damage resulting from the imposition of a retaliatory measure by the United States authorities – Causal link 5. Non-contractual liability – Conditions – No unlawful conduct of the Community institutions – Damage resulting from the incompatibility of the Community regime governing the import of bananas with the WTO agreements – Unusual damage – None – Community liability – Precluded 1. In order for the Community to incur non-contractual liability under the second paragraph of Article 288 EC for unlawful conduct of its institutions a number of conditions must be satisfied: the institutions’ conduct must be unlawful, actual damage must have been suffered and there must be a causal link between the conduct and the damage pleaded. If any one of those conditions is not satisfied, the action must be dismissed in its entirety and it is unnecessary to consider the other conditions. With regard to the first of those conditions, the unlawful conduct alleged against a Community institution must consist of a sufficiently serious breach of a rule of law intended to confer rights on individuals. The decisive test for finding that that requirement is fulfilled is whether the Community institution concerned manifestly and gravely disregarded the limits on its powers. Where an institution has only a considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach. (see paras 85-89)2. The World Trade Organisation (WTO) agreements are not in principle, given their nature and structure, among the rules in the light of which the Community courts review the legality of action by the Community institutions. Consequently, the Community cannot in principle incur non-contractual liability by reason of any infringement of the WTO rules by those institutions. It is only where the Community intends to implement a particular obligation assumed in the context of the WTO or where the Community measure refers expressly to specific provisions of the WTO agreements that the Community courts can review the legality of the conduct of the Community institutions in the light of the WTO rules. However, notwithstanding the existence of the decision of the WTO Dispute Settlement Body finding that the regime governing the import of bananas into the Community, as established by Regulation No 404/93 on the common organisation of the market in bananas and subsequently amended by Regulations Nos 1637/98 and 2362/98, was incompatible with WTO rules, neither of those exceptions is applicable so as to allow the Community courts to review the legality of the Community legislation in question in the light of WTO rules. Neither expiry of the period of time set by the WTO for the Community to bring the measure declared incompatible into conformity with WTO rules nor authorisation given by the WTO to the member harmed to adopt, vis-à-vis the Community, measures granting compensation and suspending trade concessions has any bearing in this regard. (see paras 110, 113-115, 125)3. When damage is caused by conduct of a Community institution not shown to be unlawful, the Community can incur non-contractual liability if the conditions as to sustaining actual damage, to the causal link between that damage and the conduct of the Community institution and to the unusual and special nature of the damage in question are all met. (see para. 160)4. The principles common to the laws of the Member States to which the second paragraph of Article 288 EC refers cannot be relied upon to found an obligation on the Community to make good every harmful consequence, even a remote one, of conduct of its institutions. The condition under that provision relating to a causal link requires there to be a sufficiently direct causal nexus between the conduct of the Community institutions and the damage. A direct link of that kind exists between the retention in force by the Council and the Commission of a banana import regime incompatible with the World Trade Organisation (WTO) agreements and the damage suffered by economic operators by reason of imposition by the United States of America of increased customs duty on their products. The unilateral decision by the United States to impose the increased duty is not such as to break the causal link. The conduct of the institutions in question necessarily led to adoption of the retaliatory measure by the United States authorities in compliance with the WTO dispute settlement system accepted by the Community, so that their conduct must be regarded as the immediate cause of the damage suffered. (see paras 177-178, 183-185, 191)5. In the case of damage which economic operators may sustain as a result of the activities of the Community institutions, damage is, first, unusual when it exceeds the limits of the economic risks inherent in operating in the sector concerned and, second, special when it affects a particular circle of economic operators in a disproportionate manner by comparison with other operators. It has not been established that economic operators, whose activities consist in selling batteries on the United States market, suffered, as a result of the incompatibility with the World Trade Organisation (WTO) agreements of the Community regime governing the import of bananas that led the United States authorities to withdraw tariff concessions in relation to the Community, damage in excess of the limits of the risks inherent in their export operations. The possibility of tariff concessions being suspended as provided for by the WTO agreements is among the vicissitudes inherent in the current system of international trade. Accordingly, the risk of this vicissitude has to be borne by every operator who decides to sell his products on the market of one of the WTO members. It follows that, since the damage suffered by the abovementioned operators cannot be classified as unusual, their claim for compensation founded on the rules governing non-contractual Community liability in the absence of unlawful conduct must be dismissed. (see paras 202-203, 205, 211, 213)JUDGMENT OF THE COURT OF FIRST INSTANCE (Grand Chamber)14 December 2005 (*) In Case T-69/00,Fabbrica italiana accumulatori motocarri Montecchio SpA (FIAMM), established in Montecchio Maggiore (Italy), Fabbrica italiana accumulatori motocarri Montecchio Technologies, Inc. (FIAMM Technologies), established in East Haven, Delaware (United States), represented by I. Van Bael, A. Cevese and F. Di Gianni, lawyers, with an address for service in Luxembourg,applicants,Council of the European Union, represented by G. Maganza, J. Huber, F. Ruggeri Laderchi and S. Marquardt, acting as Agents, andCommission of the European Communities, represented initially by P. Kuijper, L. Gussetti, V. Di Bucci, C. Brown and E. Righini, and subsequently by P. Kuijper, L. Gussetti, V. Di Bucci and E. Righini, acting as Agents, with an address for service in Luxembourg, defendants,supported byKingdom of Spain, represented initially by R. Silva de Lapuerta, and subsequently by E. Braquehais Conesa, acting as Agents, with an address for service in Luxembourg, intervener,APPLICATION for compensation in respect of the damage allegedly caused by the levying by the United States of America of increased customs duty on imports of the applicants’ stationary batteries, as authorised by the Dispute Settlement Body of the World Trade Organisation (WTO), following a finding that the Community regime governing the import of bananas was incompatible with the agreements and understandings annexed to the Agreement establishing the WTO, THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Grand Chamber), composed of B. Vesterdorf, President, P. Lindh, J. Azizi, J. Pirrung, H. Legal, R. García-Valdecasas, V. Tiili, J.D. Cooke, A.W.H. Meij, M. Vilaras and N.J. Forwood, Judges, Registrar: H. Jung,having regard to the written procedure and further to the hearings on 11 March 2003 and 26 May 2004,gives the followingJudgment Legal context1 On 15 April 1994 the Community signed the Final Act concluding the Uruguay Round multilateral trade negotiations, the Agreement establishing the World Trade Organisation (WTO) and all the agreements and understandings in Annexes 1 to 4 to the Agreement establishing the WTO (‘the WTO agreements’). 2 Following signature of those instruments, the Council adopted Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1). 3 As is apparent from the preamble to the Agreement establishing the WTO, the contracting parties intended to enter into ‘reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations’. 4 Article II(2) of the Agreement establishing the WTO provides:‘The agreements and associated legal instruments included in Annexes 1, 2 and 3 … are integral parts of this Agreement, binding on all Members.’ 5 Article XVI of the Agreement establishing the WTO, headed ‘Miscellaneous Provisions’, provides in paragraph 4:‘Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.’ 6 The Understanding on Rules and Procedures Governing the Settlement of Disputes (‘the DSU’), which is set out in Annex II to the Agreement establishing the WTO, specifies, in the final sentence of paragraph 2 of Article 3, which is headed ‘General Provisions’: ‘Recommendations and rulings of the [Dispute Settlement Body] cannot add to or diminish the rights and obligations provided in the covered agreements.’ 7 Article 3(7) of the DSU states:‘Before bringing a case, a Member shall exercise its judgement as to whether action under these procedures would be fruitful. The aim of the dispute settlement mechanism is to secure a positive solution to a dispute. A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred. In the absence of a mutually agreed solution, the first objective of the dispute settlement mechanism is usually to secure the withdrawal of the measures concerned if these are found to be inconsistent with the provisions of any of the covered agreements. The provision of compensation should be resorted to only if the immediate withdrawal of the measure is impracticable and as a temporary measure pending the withdrawal of the measure which is inconsistent with a covered agreement. The last resort which [the DSU] provides to the Member invoking the dispute settlement procedures is the possibility of suspending the application of concessions or other obligations under the covered agreements on a discriminatory basis vis-à-vis the other Member, subject to authorisation by the [Dispute Settlement Body] of such measures.’ 8 Article 7 of the DSU provides that panels are to make such findings as will assist the Dispute Settlement Body (‘the DSB’) in making recommendations or in giving rulings on the matters submitted to that body. Under Article 12(7) of the DSU, where the parties to the dispute do not manage to develop a mutually satisfactory solution, the panel is to submit its findings in the form of a written report to the DSB. 9 Article 17 of the DSU provides for establishment by the DSB of a standing Appellate Body responsible for hearing appeals from panel cases. 10 As provided in Article 19 of the DSU, where a panel or the Appellate Body concludes that a measure is inconsistent with a WTO agreement, it is to recommend that the Member concerned bring the measure into conformity with that agreement. In addition to its recommendations, the panel or Appellate Body may suggest ways in which the Member concerned could implement the recommendations. 11 According to Article 21(1) of the DSU, under the heading ‘Surveillance of Implementation of Recommendations and Rulings’, prompt compliance with recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members. 12 By virtue of Article 21(3) of the DSU, a Member unable to comply immediately with the DSB’s recommendations and rulings is to be allowed a reasonable period of time, determined, if necessary, through binding arbitration. 13 Where there is disagreement as to the existence, or consistency with a WTO agreement, of measures taken to comply with the DSB’s recommendations and rulings, Article 21(5) of the DSU states that such dispute is to be decided through recourse to the dispute settlement procedures laid down by the DSU, including wherever possible resort to the original panel. 14 Under Article 21(6) of the DSU, the DSB keeps under surveillance the implementation of adopted recommendations or rulings and, unless the DSB decides otherwise, the issue of implementation of the recommendations or rulings is placed on the agenda of the DSB meeting after six months following the date of establishment of the reasonable period of time pursuant to Article 21(3) and remains on the DSB’s agenda until the issue is resolved. 15 Article 22 of the DSU, headed ‘Compensation and the Suspension of Concessions’, provides:‘1. Compensation and the suspension of concessions or other obligations are temporary measures available in the event that the recommendations and rulings are not implemented within a reasonable period of time. However, neither compensation nor the suspension of concessions or other obligations is preferred to full implementation of a recommendation to bring a measure into conformity with the covered agreements. Compensation is voluntary and, if granted, shall be consistent with the covered agreements. 2. If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance therewith or otherwise comply with the recommendations and rulings within the reasonable period of time determined pursuant to paragraph 3 of Article 21, such Member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation. If no satisfactory compensation has been agreed within 20 days after the date of expiry of the reasonable period of time, any party having invoked the dispute settlement procedures may request authorisation from the DSB to suspend the application to the Member concerned of concessions or other obligations under the covered agreements. 3. In considering what concessions or other obligations to suspend, the complaining party shall apply the following principles and procedures: (a) the general principle is that the complaining party should first seek to suspend concessions or other obligations with respect to the same sector(s) as that in which the panel or Appellate Body has found a violation or other nullification or impairment; (b) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to the same sector(s), it may seek to suspend concessions or other obligations in other sectors under the same agreement; (c) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to other sectors under the same agreement, and that the circumstances are serious enough, it may seek to suspend concessions or other obligations under another covered agreement; ...4. The level of the suspension of concessions or other obligations authorised by the DSB shall be equivalent to the level of the nullification or impairment. …6. When the situation described in paragraph 2 occurs, the DSB, upon request, shall grant authorisation to suspend concessions or other obligations within 30 days of the expiry of the reasonable period of time unless the DSB decides by consensus to reject the request. However, if the Member concerned objects to the level of suspension proposed, or claims that the principles and procedures set forth in paragraph 3 have not been followed where a complaining party has requested authorisation to suspend concessions or other obligations … , the matter shall be referred to arbitration. Such arbitration shall be carried out by the original panel, if members are available, or by an arbitrator appointed by the Director-General and shall be completed within 60 days after the date of expiry of the reasonable period of time. Concessions or other obligations shall not be suspended during the course of the arbitration. 7. The arbitrator acting pursuant to paragraph 6 shall not examine the nature of the concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the level of nullification or impairment. … The parties shall accept the arbitrator’s decision as final and the parties concerned shall not seek a second arbitration. The DSB shall be informed promptly of the decision of the arbitrator and shall, upon request, grant authorisation to suspend concessions or other obligations where the request is consistent with the decision of the arbitrator, unless the DSB decides by consensus to reject the request. 8. The suspension of concessions or other obligations shall be temporary and shall only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Member that must implement recommendations or rulings provides a solution to the nullification or impairment of benefits, or a mutually satisfactory solution is reached. In accordance with [Article 21(6) of the DSU], the DSB shall continue to keep under surveillance the implementation of adopted recommendations or rulings, including those cases where compensation has been provided or concessions or other obligations have been suspended but the recommendations to bring a measure into conformity with the covered agreements have not been implemented. ...’ Facts16 On 13 February 1993 the Council adopted Regulation (EEC) No 404/93 on the common organisation of the market in bananas (OJ 1993 L 47, p. 1) (‘the COM for bananas’). The regime governing trade with third countries that was laid down by Title IV of the regulation contained preferential provisions for bananas originating in certain African, Caribbean and Pacific (ACP) States which were cosignatories of the Fourth ACP-EEC Convention signed at Lomé on 15 December 1989 (OJ 1991 L 229, p. 3). 17 Following complaints lodged in February 1996 with the DSB by several WTO members, including Ecuador and the United States of America, on 22 May 1997 the panel constituted in accordance with the DSU presented its reports concluding that the import regime under the COM for bananas was incompatible with the obligations entered into by the Community under the WTO agreements. The reports drawn up by the panel also recommended that the DSB request the Community to bring that regime into conformity with its obligations under the WTO agreements. 18 Following an appeal by the Community, on 9 September 1997 the Appellate Body essentially upheld the panel’s conclusions, and recommended that the DSB request the Community to bring the Community provisions at issue into conformity with the WTO agreements. 19 On 25 September 1997 the reports of the panel and the Appellate Body were adopted by the DSB.20 On 16 October 1997 the Community informed the DSB, in accordance with Article 21(3) of the DSU, that it would fully respect its international obligations. 21 On 17 November 1997, the complainant States requested, pursuant to Article 21(3)(c) of the DSU, that the reasonable period within which the Community was to comply with its obligations be fixed by binding arbitration. 22 By award published on 7 January 1998, the arbitrator specified for that purpose the period from 25 September 1997 to 1 January 1999. 23 By adopting Regulation (EC) No 1637/98 of 20 July 1998 amending Regulation No 404/93 (OJ 1998 L 210, p. 28), the Council amended the regime governing trade in bananas with third countries. 24 The preamble to Regulation No 1637/98 states:‘(1) … a number of changes are required in the provisions on trade with third countries contained in Title IV of Regulation … No 404/93; (2) … the Community’s international commitments under the [WTO] and to the other signatories of the Fourth ACP-EC Convention should be met, whilst achieving at the same time the purposes of the [COM for bananas]; (9) … operation of this Regulation should be reviewed at the end of an adequate trial period;…’25 On 28 October 1998 the Commission adopted Regulation (EC) No 2362/98 laying down detailed rules for the implementation of Regulation No 404/93 regarding imports of bananas into the Community (OJ 1998 L 293, p. 32). This regulation contains the body of provisions necessary for implementation of the new regime governing trade in bananas with third countries, including the transitional measures justified by the imminence of the entry into force of its implementing rules. 26 Since the United States of America took the view that the Community had set up a banana import regime that was designed to preserve the unlawful elements of the previous regime, in breach of the WTO agreements and the DSB’s decision of 25 September 1997, it published on 10 November 1998 in the Federal Register a provisional list of products originating in Member States of the Community on whose import it proposed to charge increased customs duty by way of retaliation. 27 On 21 December 1998 the United States of America announced that it intended to apply from 1 February 1999, or at the latest 3 March 1999, customs duty at the rate of 100% on imports of Community products appearing on a list drawn up by the United States authorities. 28 On 14 January 1999 the United States of America requested the DSB, pursuant to Article 22(2) of the DSU, to authorise suspension of the application to the Community and its Member States of tariff concessions and related obligations under the General Agreement on Tariffs and Trade (GATT) 1994 and the General Agreement on Trade in Services (GATS), in respect of trade amounting to USD 520 million. 29 At a meeting of the DSB which took place from 25 January to 1 February 1999, the Community contested that amount, on the ground that it did not correspond to the level of nullification or impairment suffered by the United States of America and maintained that the principles and procedures laid down by Article 22(3) of the DSU had not been observed. 30 On 29 January 1999 the DSB decided, at the request of the Community, to refer this matter for arbitration by the original panel, on the basis of Article 22(6) of the DSU, and deferred a decision on the United States of America’s request for authorisation pending determination of the permitted amount of duty to be levied by way of retaliatory measure. 31 On 3 March 1999 the United States authorities introduced a requirement for Community exporters of products appearing on a new list drawn up by them to provide a bank guarantee for 100% of the value of the imports covered. 32 By decision of 9 April 1999 the arbitrators, first, found that several provisions of the new import regime under the COM for bananas were contrary to provisions of the WTO agreements and set the level of nullification or impairment suffered by the United States of America at USD 191.4 million per year, and second, held that the suspension by that country of the application to the Community and its Member States of tariff concessions and related obligations under the GATT 1994 covering trade in a maximum amount of USD 191.4 million per year would be consistent with Article 22(4) of the DSU. 33 On 7 April 1999 the United States of America requested pursuant to Article 22(7) of the DSU that the DSB authorise it to levy customs duty on imports up to that amount. 34 By press release of 9 April 1999, the United States Trade Representative (‘the Trade Representative’) announced the list of products whose import was subject to 100% customs duty. The products listed, originating in Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden or the United Kingdom, included ‘lead-acid storage batteries other than of a kind used for starting piston engines or as the primary source of power for electric vehicles’. It was stated that the Trade Representative would publish the determination imposing the 100% duty in the Federal Register and intended to make imposition of the duty effective as from 3 March 1999. 35 That decision, published on 19 April 1999 in the Federal Register (Volume 64, No 74, pp. 19209 to 19211), was adopted on the basis of section 301 of the 1974 Trade Act, which provides that the Trade Representative is to take the measures authorised if he finds a breach of the rights of the United States of America under a trade agreement. 36 It is apparent from the section of that decision concerning the ‘effective date’ that the Trade Representative ‘determined that, effective April 19, 1999, a 100% ad valorem rate of duty [would] be applied to the articles that are entered, or withdrawn from warehouse, for consumption on or after March 3, 1999’. 37 A panel constituted following a request made by Ecuador on 18 December 1998 under Article 21(5) of the DSU also concluded, on 6 April 1999, that the new Community regime governing the import of bananas was incompatible with the WTO agreements. The panel’s report was approved by the DSB on 6 May 1999. 38 On 19 April 1999 the DSB authorised the United States of America to levy customs duties in respect of trade amounting to up to USD 191.4 million per year on imports originating in the Community. 39 On 25 May 1999 the Community contested before the WTO bodies the United States retaliatory measures in respect of the period from 3 March to 19 April 1999, in particular on the ground that they took effect on 3 March 1999. 40 Since the panel to which the matter was referred by the Community found that the entry into force of the United States increased duty on 3 March 1999 was contrary to the DSU, it deferred the date on which that measure took effect to 19 April 1999. 41 In negotiations with all the interested parties, the Community proposed amendments to the new COM for bananas. Those amendments were enacted in Council Regulation (EC) No 216/2001 of 29 January 2001 amending Regulation No 404/93 (OJ 2001 L 31, p. 2). 42 The preamble to Regulation No 216/2001 states:‘(1) There have been numerous close contacts with supplier countries and other interested parties to settle the disputes arising from the import regime established by Regulation … No 404/93 and to take account of the conclusions of the [panel] set up under the dispute settlement system of the [WTO]. (2) Analysis of all the options presented by the Commission suggests that establishment in the medium term of an import system founded on the application of a customs duty at an appropriate rate and application of a preferential tariff to imports from ACP countries provides the best guarantees, firstly of achieving the objectives of the common organisation of the market as regards Community production and consumer demand, secondly of complying with the rules on international trade, and thirdly of preventing further disputes. (3) However, such a system must be introduced upon completion of negotiations with the Community’s partners in accordance with WTO procedures, in particular Article XXVIII of the [GATT]. The result of these negotiations must be submitted for approval to the Council which must also, in accordance with the provisions of the Treaty, establish the applicable level of the Common Customs Tariffs. (4) Until the entry into force of that regime, the Community should be supplied under several tariff quotas open to imports from all origins and managed in line with the recommendations made by the [DSB]. (5) In view of the contractual obligations towards the ACP countries and the need to guarantee them proper conditions of competition, application to imports of bananas originating in those countries of a tariff preference of EUR 300 per tonne would allow the trade flows in question to be maintained. This will entail in particular the application to such imports of zero duty under the … tariff quotas. (6) The Commission should be authorised to open negotiations with supplier countries having a substantial interest in supplying the Community market to endeavour to achieve a negotiated allocation of the first two tariff quotas. …’ 43 On 11 April 2001 the United States of America and the Community concluded a memorandum of understanding identifying ‘the means by which the long-standing dispute over the EC’s banana import regime can be resolved’. That memorandum provided that the Community undertook to ‘introduce a tariff-only regime for imports of bananas no later than 1 January 2006’. The memorandum defined the measures which the Community undertook to take during the interim period expiring on 1 January 2006. In return, the United States of America undertook to suspend provisionally the imposition of the increased customs duty which they were authorised to levy on Community imports. The United States of America stated, however, by a communication to the DSB of 26 June 2001, that that memorandum of understanding ‘[did] not in itself constitute a mutually agreed solution pursuant to Article 3(6) of the DSU [and that], in view of the steps yet to be taken by all parties, it would also be premature to take this item off the DSB agenda’. 44 By Regulation (EC) No 896/2001 of 7 May 2001 laying down detailed rules for applying Regulation No 404/93 as regards the arrangements for importing bananas into the Community (OJ 2001 L 126, p. 6), the Commission set out the detailed rules for applying the new Community regime for importing bananas that had been introduced by Regulation No 216/2001. 45 The United States of America suspended application of the increased customs duty with effect from 30 June 2001. From 1 July 2001 its import duty on stationary batteries originating in the Community was reduced to its initial rate of 3.5%. 46 Statistics produced by the Commission at the Court’s request show that the total c.i.f. (cost, insurance, freight) value of imports into the United States of lead-acid storage batteries originating in the Community amounted to USD 33 748 879 in 1998, USD 21 825 385 in 1999, USD 15 938 040 in 2000 and, finally, USD 15 617 997 in 2001. 47 The business activities of Fabbrica italiana accumulatori motocarri Montecchio SpA (FIAMM) and Fabbrica italiana accumulatori motocarri Montecchio Technologies, Inc. (FIAMM Technologies) relate inter alia to stationary batteries used mainly in the telecommunications field which were among the products subject to the increased customs duty from 19 April 1999 to 30 June 2001. Procedure 48 By application lodged at the Registry of the Court of First Instance on 23 March 2000, the applicants brought the present action claiming compensation for the damage alleged to result from the increased duty. 49 By order of the President of the Fourth Chamber of 11 September 2000, the Kingdom of Spain was granted leave to intervene in support of the forms of order sought by the defendants. 50 Following a request made by the Commission pursuant to the second subparagraph of Article 51(1) of the Rules of Procedure of the Court of First Instance, the case was referred to a chamber in extended composition, composed of five Judges, by decision of the Court of 4 July 2002. 51 The case was reassigned to the First Chamber, Extended Composition, on 7 October 2002, pursuant to the decision of the Court of First Instance of 4 July 2002 on the composition of chambers and the assignment of cases to them. 52 When the Judge-Rapporteur initially designated could no longer act as a result of ceasing to hold office, the President of the Court appointed a new Judge-Rapporteur, by decision of 13 December 2002. 53 By order of the President of the First Chamber, Extended Composition, of 3 February 2003, the present case and the connected cases T-151/00 and T-301/00 were joined, after the parties had been heard, for the purposes of the oral procedure, in accordance with Article 50 of the Rules of Procedure. 54 The parties presented oral argument and answered questions put by the Court at the hearing of the First Chamber, Extended Composition, which took place on 11 March 2003. 55 By decision of 23 March 2004, the Court reopened the oral procedure in the present case.56 On 1 April 2004 the Court, after hearing the parties, decided to refer Cases T‑69/00, T-151/00 and T-301/00 which had been joined and Cases T-320/00, T‑383/00 and T-135/01, which were connected, to the Grand Chamber of the Court. 57 By order of 19 May 2004, the President of the Grand Chamber, after hearing the parties, joined the six cases for the purposes of the oral procedure. 58 By way of measures of organisation of procedure, the Court requested the parties to reply in writing prior to the hearing to a series of questions. The parties duly adduced the information required. 59 The parties presented oral argument and answered questions put by the Court at the hearing of the Grand Chamber which took place on 26 May 2004. Forms of order sought60 In their application, the applicants claim that the Court should:– order the defendants to pay them damages amounting to EUR 10 760 798.35 (ITL 20 835 811 027.16) or such other sum as the Court considers reasonable, subject to updating in the course of the proceedings, together with interest at the Italian statutory rate from the time of actual payment by the applicants to the United States customs authorities of the 96.5% duty increase, until final settlement, and default interest at the rate of 8% in the event of delay, after delivery of the judgment, in payment of the sums awarded; – order the defendants to pay the costs.61 The applicants stated in the course of the proceedings, when asked to update the amount of the alleged damage, that they had sustained a loss of EUR 12 139 521 solely by reason of payment of the increased customs duty. 62 The defendants, supported by the Kingdom of Spain, contend that the Court should:– dismiss the action as inadmissible or as unfounded;– order the applicants to pay the costs. Admissibility63 The defendants do not raise a formal objection of inadmissibility under Article 114 of the Rules of Procedure, but state that the action is inadmissible because (i) the application does not comply with the requirements of Article 44(1)(c) of the Rules of Procedure and (ii) the Court lacks jurisdiction. Failure of the application to comply with the requirements of Article 44(1)(c) of the Rules of Procedure Arguments of the parties64 The defendants contend that, contrary to the requirements laid down by Article 44(1)(c) of the Rules of Procedure, the application does not specify clearly the measure of the institutions giving rise to non-contractual Community liability or set out clearly the conduct, be it a positive act or an omission, of which the defendant institutions are accused. 65 The applicants submit, on the other hand, that they have defined sufficiently precisely the conduct of which they accuse the defendants, namely the failure to adopt, within the period laid down by the DSB, provisions appropriately amending Regulation No 404/93, in breach of the obligations entered into by the Community under the WTO agreements. 66 The applicants state that it is a matter purely of terminology whether the Community infringed WTO rules deliberately, through the adoption of the contested Community provisions, or by omission, because of the failure to bring those provisions into conformity with the WTO agreements. Findings of the Court67 Under the first paragraph of Article 21 of the Statute of the Court of Justice, applicable to the procedure before the Court of First Instance by virtue of the first paragraph of Article 53 of that Statute, and under Article 44(1)(c) of the Rules of Procedure of the Court, all applications must indicate the subject-matter of the dispute and contain a summary of the pleas in law on which the application is based. That statement must be sufficiently clear and precise to enable the defendant to prepare his defence and the Court to rule on the application, if necessary, without any further information. In order to guarantee legal certainty and sound administration of justice it is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself. 68 In order to satisfy those requirements, an application seeking, as in the present case, compensation for damage allegedly caused by Community institutions must set out the evidence from which can be identified both the conduct of which the applicant accuses those institutions and the reasons for which the applicant considers that there is a causal link between that conduct and the damage he claims to have suffered (Case T-113/96 Dubois et Fils v Council and Commission [1998] ECR II‑125, paragraphs 29 and 30). 69 As is apparent from their arguments, the applicants contend that they have suffered damage because the defendant institutions did not amend the Community regime governing the import of bananas so as to bring it into conformity with the obligations entered into by the Community under the WTO agreements within the time-limit laid down by the DSB. 70 Contrary to the submissions made by the defendants, the application thus contains the evidence enabling the conduct of which the applicants accuse the defendants and which they consider to be the cause of the damage to them to be identified. 71 It is, moreover, apparent from the arguments set out by the defendants on the merits of the action that they have been fully able to prepare their defence on the conditions under which the Community incurs non-contractual liability. It follows that the Court is in a position to rule on the action fully informed of the file contents and in compliance with the audi alteram partem rule. 72 The ground of challenge put forward by the defendants alleging that the application does not comply with the requirements of Article 44(1)(c) of the Rules of Procedure will therefore be rejected. Jurisdiction of the Court73 The Commission submits that the increased customs duty applied to the products imported by the applicants into the United States is a result of a decision of the United States Government and not of an act of a Community institution. 74 In addition, the wording of Article 288 EC requires there to be a direct link between the act in issue and the sphere of Community activity. The Court of First Instance’s jurisdiction cannot be dependent solely on the applicants’ formal allegation that the damage to them stems from acts adopted by the Community institutions. 75 When the applicants assert that the United States Government would never have increased the import duty at issue if it had not been authorised to do so by the DSB following the finding that the Community legislation was incompatible with WTO rules, they do not demonstrate that such a decision is directly attributable to the Community institutions. Their assertion shows, on the contrary, that the act whose effects the applicants complain of is an act adopted by the United States of America in the exercise of its discretion. In those circumstances, the Court cannot declare that it has jurisdiction to hear and determine the present action (Joined Cases 89/86 and 91/86 Étoile commerciale and CNTA v Commission [1987] ECR 3005, paragraphs 18 to 20). 76 The applicants submit that it cannot reasonably be denied that a causal link exists between the damage sustained by them and the conduct of the defendant institutions. There is no doubt that the United States Government would not have increased the import duty on the applicants’ products had it not been authorised so to do by the DSB following the Community’s breach of WTO rules. The origin of the damage suffered lies in the fact that the reaction of the United States of America resulted from the Community’s breach of the WTO agreements. 77 Article 235 EC, in conjunction with the second paragraph of Article 288 EC, confers jurisdiction upon the Community courts to hear actions seeking compensation for damage caused by the Community institutions or by their servants in the performance of their duties. 78 In the present case, the applicants claim compensation for the damage allegedly suffered by them by reason of the increase in the import duty imposed on their products by the authorities of the United States of America, in accordance with the authorisation granted by the DSB following the finding that the Community regime governing the import of bananas was incompatible with the WTO agreements. 79 The action is grounded on the Community’s non-contractual liability which the applicants claim is incurred because the cause of their loss lies in the enactment by the Council and the Commission of legislation which was found by the DSB to be incompatible with the WTO agreements. 80 The Court therefore has jurisdiction to hear, under Article 235 EC and the second paragraph of Article 288 EC, the present claim for compensation which, in contrast to the situation obtaining in Étoile commerciale and CNTA v Commission, cited in paragraph 75 above, on which the Commission relies, is not directed exclusively at a decision of a national body as the basis for liability. 81 It is true that, according to settled case-law, in order for the Community to incur liability the damage alleged must be attributable to the conduct of the Community institutions. However, this involves a substantive condition, which must be investigated when reviewing whether a sufficiently direct causal link exists between the damage alleged and the institutions’ conduct and which does not enable the Court to deny jurisdiction, once it is alleged that the damage is attributable to the conduct of the Community institutions. 82 The line of argument developed by the Commission concerning the Court’s lack of jurisdiction will therefore be rejected, but without prejudice to the assessment of the causal link between the conduct of the Council and the Commission and the alleged damage, which will be made when examining whether the conditions for non-contractual liability are fulfilled. 83 Accordingly, the action will be declared admissible. Substance84 The applicants’ claim for compensation is founded principally on the rules governing non-contractual liability of the Community for the unlawful conduct of its institutions. The applicants also seek the application by analogy of the rules governing non-contractual liability that are applicable to the Member States where the Court of Justice finds under Article 226 EC that they have infringed their Community obligations. Finally, the applicants rely on the rules governing the non-contractual liability that the Community may incur even in the absence of unlawful conduct of its institutions. Liability of the Community for unlawful conduct of its institutions85 It is settled case-law that in order for the Community to incur non-contractual liability under the second paragraph of Article 288 EC for unlawful conduct of its institutions a number of conditions must be satisfied: the institutions’ conduct must be unlawful, actual damage must have been suffered and there must be a causal link between the conduct and the damage pleaded (Case 26/81 Oleifici Mediterranei v EEC [1982] ECR 3057, paragraph 16, Case T‑175/94 InternationalProcurement Services v Commission [1996] ECR II‑729, paragraph 44, Case T-336/94 Efisol v Commission [1996] ECR II‑1343, paragraph 30, and Case T-267/94 Oleifici Italiani v Commission [1997] ECR II‑1239, paragraph 20). 86 If any one of those conditions is not satisfied, the action must be dismissed in its entirety and it is unnecessary to consider the other conditions (Case C-146/91 KYDEP v Council and Commission [1994] ECR I-4199, paragraphs 19 and 81, and Case T-170/00 Förde-Reederei v Council and Commission [2002] ECR II‑515, paragraph 37). 87 The unlawful conduct alleged against a Community institution must consist of a sufficiently serious breach of a rule of law intended to confer rights on individuals (Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I‑5291, paragraph 42). 88 The decisive test for finding that that requirement is fulfilled is whether the Community institution concerned manifestly and gravely disregarded the limits on its powers. 89 Where an institution has only a considerably reduced, or even no, discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach (Joined Cases T-198/95, T-171/96, T-230/97, T‑174/98 and T-225/99 Comafricaand Dole Fresh Fruit Europe v Commission [2001] ECR II‑1975, paragraph 134, and Joined Cases T-64/01 and T-65/01 Afrikanische Frucht-Compagnie and Internationale Fruchtimport Gesellschaft Weichert v Council and Commission [2004] ECR II-521, paragraph 71). 90 It is in the light of those observations that the applicants’ claim for compensation will be examined.– The unlawful conduct of which the defendant institutions are accused 91 The applicants complain that the Council and the Commission did not, within the period of 15 months set by the DSB, bring the Community regime governing the import of bananas into conformity with the commitments entered into by the Community under the WTO agreements. The applicants state that the increased duty imposed by the United States, which is causing them serious damage, is the direct consequence of the retention in force of that regime, which the DSB has found to be incompatible with the WTO agreements. 92 In the applicants’ submission, the retention in force of that regime is contrary to certain fundamental principles of Community law, including the principle pactasunt servanda. Under this first head, the Community has failed to fulfil its obligations as a WTO member, regard being had to the binding nature of the WTO agreements and of the DSU. 93 The defendants have also infringed the principles of the protection of legitimate expectations and of legal certainty. Every citizen must be able to enjoy the legal certainty that he will not have to bear the consequences of unlawful conduct by the Community authorities. The applicants claim that they had a legitimate expectation, not that the tariff concessions negotiated with the United States of America in the form of the original import duty at the rate of 3.5% would continue to apply, but that those concessions would not be altered because of the Community institutions’ unlawful conduct. However, the Community did not bring its legislation into line with WTO rules even though it had assured its trading partners of its intention to comply with the DSB’s rulings and had obtained an exceptional extension of the period granted for that purpose. 94 The defendant institutions also infringed the applicants’ right to property and pursuit of an economic activity, which is protected by the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR), signed in Rome on 4 November 1950. In the present case, the applicants were compelled to pay prohibitive customs duty on their imports of batteries into the United States and to relocate their production facilities. 95 Finally, the Council and the Commission infringed the principle of proper administration by not bringing the Community legislation at issue into conformity with WTO rules and underestimating the effect that adoption of the United States retaliatory measures was capable of having on the activity of persons under their administration. 96 The defendant institutions state in response that the Community has always intended to comply with all its international obligations, including those resulting from the Lomé Conventions and the WTO agreements. 97 Since negotiation and the grant of compensation are a form of dispute settlement, the applicants could not have entertained any legitimate expectation that the banana import regime would be amended, instead of compensation being negotiated. Nor can an entitlement to compensation from the Community be founded on the existence of an established right to retention of a trade concession by a non-member State, in the absence of any obligation on the Community to act with a view to obtaining a given level of tariff concessions. 98 The alleged restrictions on the right to property are in no way comparable to expropriation and do not fall outside the normal risks of any commercial activity. 99 Finally, no infringement of the principle of proper administration has been committed. The Commission negotiated with all the WTO members concerned in order to find a solution acceptable to everybody and sought to obtain the agreement of the United States of America to compensation in the form of access to the Community market for certain United States products, so as to avoid a unilateral withdrawal of concessions. – The legal nature of the rules of law allegedly infringed by the defendants 100 The applicants observe that all the principles infringed by the defendants are superior in rank and are designed to protect individuals. Before the United States increased the import duty, the WTO regime directly granted the applicants the right to import their products into the United States paying the original import duty at the reduced rate of 3.5%. Even if the WTO agreements are not to be regarded as directly applicable, such effect must be accorded to the DSB decision that found against the Community, which meets all the conditions laid down for that purpose by Community case-law. 101 The defendants counter that the WTO agreements create rights only in favour of the contracting parties, to the exclusion of individuals. The same is true of DSB decisions, which merely interpret WTO rules. 102 The WTO agreements are designed to regulate and manage international trade relations between subjects of international law only. Tariff concessions agreed to by WTO members allow access to a national market without, however, guaranteeing such access or a specified price level on that market, or directly conferring on businesses the right to a given tariff treatment or a right enforceable against the Community institutions. 103 The Community, which is tolerating the suspensions of the United States concessions temporarily, during the period needed for finding a solution to the banana dispute, is therefore complying fully with WTO rules, of which the increase in the United States import duty on batteries is merely an application. 104 Since the WTO agreements cannot be relied upon by the applicants, nor can it be pleaded that the principle pacta sunt servanda has been infringed or that a legitimate expectation that those agreements would be complied with has been thwarted. – The seriousness of the alleged breaches105 The applicants contend that the breaches committed by the defendants are sufficiently serious to be able to give rise to non-contractual Community liability. The degree of clarity and precision of the infringed rules of law should be noted, as should the lack of discretion allowed to the defendant institutions for bringing the incompatible Community legislation into conformity with the WTO agreements, given the precise detail supplied in this regard by the DSB’s recommendations and rulings. Furthermore, the Community has persisted in its breach of WTO law and, therefore, Community law, even after expiry of the 15-month period which it was granted by the arbitrator to comply with WTO rules. 106 The defendants contend that they did not exceed the limits of their discretion in particular because the situations to be resolved were complex and application and interpretation of the provisions at issue were difficult. It cannot be complained that the defendants failed to take the necessary measures, since Regulations No 1637/98 and No 2362/98, the subject of a fresh procedure initiated by the United States of America, establish a Community import regime different from the original regime. 107 The role played by the suspension of concessions, which is provided for by Article 22 of the DSU and constitutes the best solution after full implementation of the DSB’s recommendations, should be noted in this regard. Article 3(7) of the DSU, which favours selection of a mutually agreed solution, has the effect of conferring a wide discretion on the competent authorities of WTO members enabling them to break free, even if only temporarily, from their obligations arising from the WTO agreements. – The preliminary question as to whether the WTO rules may be relied upon108 Before examining the legality of the conduct of the Community institutions, it is necessary to decide whether the WTO agreements give rise, for persons subject to Community law, to the right to rely on those agreements when contesting the validity of Community legislation if the DSB has declared that both that legislation and the subsequent legislation adopted by the Community in order to comply with the WTO rules in question are incompatible with those rules. 109 The applicants rely in this connection on the principle pacta sunt servanda, which is one of the rules of law with which the Community institutions must comply when carrying out their functions, being a fundamental principle of all legal orders and particularly of the international legal order (Case C-162/96 Racke [1998] ECR I‑3655, paragraph 49). 110 However, the principle pacta sunt servanda cannot be asserted against the defendants in the present case since, in accordance with settled case-law, the WTO agreements are not in principle, given their nature and structure, among the rules in the light of which the Community courts review the legality of action by the Community institutions (judgment in Case C-149/96 Portugal v Council [1999] ECR I-8395, paragraph 47; order in Case C-307/99 OGTFruchthandelsgesellschaft [2001] ECR I-3159, paragraph 24; and judgments in Joined Cases C-27/00 and C-122/00 Omega Air and Others [2002] ECR I-2569, paragraph 93, Case C-76/00 P Petrotub and Republica v Council [2003] ECR I‑79, paragraph 53, and Case C-93/02 P Biret International v Council [2003] ECR I‑10497, paragraph 52). 111 First, the Agreement establishing the WTO is founded on reciprocal and mutually advantageous arrangements which distinguish it from those agreements concluded between the Community and non-member States that introduce a certain asymmetry of obligations. It is common ground that some of the most important commercial partners of the Community do not include the WTO agreements among the rules by reference to which their courts review the legality of their rules of domestic law. To review the legality of actions of the Community institutions in the light of those rules could therefore lead to an unequal application of the WTO rules depriving the legislative or executive organs of the Community of the scope for manoeuvre enjoyed by their counterparts in the Community’s trading partners (Portugal v Council, cited in paragraph 110 above, paragraphs 42 to 46). 112 Second, to require the courts to refrain from applying rules of internal law which are incompatible with the WTO agreements would have the consequence of depriving the legislative or executive organs of the contracting parties of the possibility afforded by Article 22 of the DSU of entering into negotiated arrangements, even on a temporary basis, in order to arrive at mutually acceptable compensation (Portugal v Council, cited in paragraph 110 above, paragraphs 39 and 40). 113 It follows that in principle the Community cannot incur non-contractual liability by reason of any infringement of the WTO rules by the defendant institutions (Case T-18/99 Cordis v Commission [2001] ECR II‑913, paragraph 51, Case T‑30/99 Bocchi Food Trade International v Commission [2001] ECR II‑943, paragraph 56, and Case T-52/99 T. Port v Commission [2001] ECR II‑981, paragraph 51). 114 It is only where the Community intends to implement a particular obligation assumed in the context of the WTO or where the Community measure refers expressly to specific provisions of the WTO agreements that the Court can review the legality of the conduct of the defendant institutions in the light of the WTO rules (see, as regards the GATT 1947, Case 70/87 Fediol v Commission [1989] ECR 1781, paragraphs 19 to 22, and Case C-69/89 Nakajima v Council [1991] ECR I‑2069, paragraph 31, and, as regards the WTO agreements, Portugal v Council, cited in paragraph 110 above, paragraph 49, and Biret International v Council, cited in paragraph 110 above, paragraph 53). 115 However, notwithstanding the existence of a decision of the DSB finding the measures taken by a member to be incompatible with WTO rules, neither of those exceptions is applicable in this instance. – The exception based on an intention to implement a specific obligation assumed within the WTO116 In undertaking, after the adoption of the DSB decision of 25 September 1997, to comply with the WTO rules, the Community did not intend to assume a specific obligation in the context of the WTO capable of justifying an exception to the principle that WTO rules cannot be relied upon before the Community courts and of allowing the latter to review the legality of the conduct of the Community institutions by reference to those rules. 117 It is true that, compared with the GATT 1947, the DSU has strengthened the dispute settlement mechanism, in particular in respect of the adoption of panel reports. 118 Thus, Article 3(7) of the DSU makes it clear that the first objective of the dispute settlement mechanism is usually the withdrawal of measures which have been found to be incompatible with the WTO agreements. Similarly, Article 22(1) of the DSU favours full implementation of a recommendation to bring a measure into conformity with the WTO agreements. 119 Furthermore, as provided in Article 17(14) of the DSU, an Appellate Body report adopted, as in the present case, by the DSB is to be unconditionally accepted by the parties to the dispute. Finally, Article 22(7) states that the parties are to accept as final the arbitrator’s decision determining the level of the suspension of concessions. 120 None the less, the DSU in any event accords considerable importance to negotiation between WTO members which are parties to a dispute (Portugal v Council, cited in paragraph 110 above, paragraphs 36 to 40). 121 The DSU thus allows the WTO member involved several methods of implementing a recommendation or ruling of the DSB finding a measure incompatible with WTO rules. 122 Where immediate withdrawal of the incompatible measure is impracticable, the DSU envisages, in Article 3(7), that the member harmed may be granted compensation or may be authorised to suspend the application of concessions or other obligations on an interim basis pending the withdrawal of the incompatible measure (see Portugal v Council, cited in paragraph 110 above, paragraph 37). 123 Under Article 22(2) of the DSU, if the impugned WTO member fails to comply with its obligation to implement the recommendations and rulings of the DSB within the period of time that it has been set, it is, if so requested and no later than the expiry of that period, to enter into negotiations with the complaining party with a view to arriving at mutually acceptable compensation. 124 If no satisfactory compensation has been agreed within 20 days after the expiry of the reasonable period of time provided for in Article 21(3) of the DSU for complying with WTO rules, the complaining party may request authorisation from the DSB to suspend the application to that member of concessions or other obligations under the WTO agreements. 125 Even on expiry of the period of time set for bringing the measure declared incompatible into conformity with WTO rules and after authorisation and adoption of measures granting compensation or suspending concessions under Article 22(6) of the DSU, considerable importance is still accorded to negotiation between the parties to the dispute. 126 Article 22(8) of the DSU thus makes it clear that the suspension of concessions or other obligations is temporary in nature and states that the suspension is only to be applied ‘until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Member that must implement recommendations or rulings provides a solution to the nullification or impairment of benefits, or a mutually satisfactory solution is reached’. 127 Article 22(8) further provides that, in accordance with Article 21(6), the DSB is to continue to keep the implementation of adopted recommendations or rulings under surveillance. 128 In the event of disagreement as to the compatibility with a WTO agreement of measures taken to comply with the DSB’s recommendations and rulings, Article 21(5) of the DSU provides that the dispute is to be decided ‘through recourse to these dispute settlement procedures’, which include pursuit by the parties of a negotiated solution. 129 Neither the expiry of the period set by the DSB for the Community to bring its banana import regime into conformity with the DSB’s decision of 25 September 1997 nor the decision of 9 April 1999, by which the DSB arbitrators expressly found that the new mechanism for banana imports established by Regulations No 1637/98 and No 2362/98 was incompatible with WTO rules, resulted in exhaustion of the methods for settling disputes made available by the DSU. 130 To that extent, review by the Community courts of the legality of the conduct of the defendant institutions by reference to WTO rules could have the effect of weakening the position of the Community negotiators in the search for a mutually acceptable solution to the dispute that is consistent with WTO rules. 131 In those circumstances, to require courts to refrain from applying the rules of internal law which are incompatible with the WTO agreements would have the consequence of depriving the legislative or executive organs of the contracting parties of the possibility afforded in particular by Article 22 of the DSU of entering into a negotiated arrangement even on a temporary basis (Portugal v Council, cited in paragraph 110 above, paragraph 40). 132 The applicants are therefore wrong in inferring from Articles 21 and 22 of the DSU an obligation on the WTO member to comply, within a specified period, with the recommendations and rulings of the WTO bodies and in contending that DSB rulings are enforceable unless the contracting parties unanimously oppose this. 133 Moreover, in again amending, by Regulation No 216/2001, the banana import regime, the Council sought to reconcile various divergent objectives. The preamble to Regulation No 216/2001 thus states, in the first recital, that there were numerous close contacts in order, in particular, ‘to take account of the conclusions of the [panel]’ and, in the second recital, that the new import system envisaged provides the best guarantees both ‘of achieving the objectives of the [COM for bananas] as regards Community production and consumer demand’ and ‘of complying with the rules on international trade’. 134 It was, ultimately, in return for the Community’s undertaking to establish a tariff-only regime for imports of bananas before 1 January 2006 that the United States of America agreed, as set out in the memorandum of understanding concluded on 11 April 2001, to suspend provisionally the imposition of the increased customs duty. 135 Such an outcome could have been jeopardised by intervention of the Community courts in reviewing the legality by reference to WTO rules of the conduct of the defendant institutions in the present case with a view to awarding compensation for the loss sustained by the applicants. 136 The Court notes in this regard that, as the United States of America has expressly stated, the memorandum of understanding of 11 April 2001 does not in itself constitute a mutually agreed solution for the purposes of Article 3(6) of the DSU and that the question of implementation by the Community of the DSB’s recommendations and rulings was still included on 12 July 2001, that is to say after the present action had been brought, on the agenda of the meeting of the DSB. 137 It follows that the defendant institutions did not intend, by amending the Community regime at issue governing the import of bananas, to implement specific obligations arising from the WTO rules and in the light of which the DSB had found that regime to be incompatible with those rules. 138 Besides, as is apparent from the preamble to Regulation No 1637/98, the Council intended in the present instance to reconcile the Community’s international commitments both under the WTO and to the other signatories of the Fourth Lomé Convention, by utilising the various methods of dispute settlement defined by the DSU, whilst also safeguarding the objectives of the COM for bananas. 139 That intention is confirmed by Article 20(e) of Regulation No 404/93, as amended by Regulation No 1637/98. In so far as Article 20(e) states that the provisions which the Commission is empowered to adopt for the purposes of application of Title IV of Regulation No 404/93, which relates to trade in bananas with third countries, include measures needed to ensure respect for obligations stemming from agreements concluded by the Community under Article 300 EC, it encompasses all the contractual obligations entered into, without giving greater weight to the obligations assumed by the Community under the WTO agreements. 140 Furthermore, in the ninth recital in the preamble to Regulation No 1637/98 the Community legislature expressly reserved the possibility of reviewing the operation of that regulation at the end of an adequate trial period. – The exception based on express reference to specific provisions of the WTO agreements141 The COM for bananas, as established by Regulation No 404/93 and subsequently amended, cannot be regarded as referring expressly to specific provisions of the WTO agreements (see, to this effect, OGT Fruchthandelsgesellschaft, cited in paragraph 110 above, paragraph 28). 142 In particular, the preambles to the various regulations amending the banana import regime do not show that the Community legislature referred to specific provisions of the WTO agreements when it purported to bring the regime into conformity with those agreements. 143 Thus, Regulation No 2362/98 contains no express reference to specific provisions of the WTO agreements (Cordis v Commission, cited in paragraph 113 above, paragraph 59, BocchiFood Trade International v Commission, cited in paragraph 113 above, paragraph 64, and T. Port v Commission, cited in paragraph 113 above, paragraph 59). 144 Accordingly, notwithstanding a finding of incompatibility made by the DSB, the WTO rules do not in the present case, whether because of particular obligations which the Community intended to implement or because of an express reference to specific provisions, amount to rules of law by reference to which the legality of the institutions’ conduct may be assessed. 145 It follows from the above reasoning that the applicants are not entitled to argue, for the purposes of their claim for compensation, that the conduct of which the Council and the Commission are accused is contrary to WTO rules. 146 The complaints advanced by the applicants based on breach of the principles of the protection of legitimate expectations and of legal certainty, on infringement of the right to property and to pursuit of an economic activity and, finally, on failure to observe the principle of proper administration all rest on the premiss that the conduct of which the defendant institutions are accused is contrary to WTO rules. 147 Inasmuch as those rules are not among the rules by reference to which the Community courts review the legality of the Community institutions’ conduct, these complaints will therefore be rejected. 148 It follows that the defendant institutions’ conduct cannot be regarded as unlawful and there is no need to consider the applicants’ arguments relating to the legal nature of the provisions and principles claimed to be infringed and to the alleged gravity of their infringement. 149 Since it has not been proved that the conduct of which the defendant institutions are accused was unlawful, one of the three cumulative conditions of non-contractual liability of the Community for unlawful conduct is not met. 150 In those circumstances, the applicants’ claim for compensation grounded on this liability regime will be dismissed and it is not necessary, in this context, to consider whether the other two conditions, relating to the reality of the damage and to the existence of a causal link between the conduct and the damage, are met (Case C-257/98 P Lucaccioni v Commission [1999] ECR I‑5251, paragraph 14, and Case T-220/96 EVO v Council and Commission [2002] ECR II‑2265, paragraph 39). Application by analogy of the rules governing non-contractual liability of the Member States151 The applicants essentially contend that the arbitrators’ decision of 9 April 1999 authorising the retaliatory measures against Community exports is comparable to a judgment of the Court of Justice declaring, on the basis of Article 226 EC, that a Member State has failed to fulfil its Community obligations. The Community courts will therefore be led to find that the applicants are entitled to compensation for the damage resulting from the defendants’ unlawful conduct (Joined Cases C‑6/90 and C-9/90 Francovich and Others [1991] ECR I‑5357, and Joined Cases C-46/93 and C-48/93 Brasserie du pêcheur andFactortame [1996] ECR I‑1029). 152 The defendant institutions submit that the Court of Justice’s case-law relating to the Member States’ non-contractual liability for breach of their Community obligations is inapplicable in this instance. 153 The Court need only state that, even assuming that DSB recommendations and rulings may be treated like judgments of the Court of Justice, the applicants’ claim for compensation is founded on the application by analogy to the Community of a liability regime based on the premiss of unlawful conduct by the defendant institutions. 154 Since the conduct of which the parties concerned are accused in the present case has not been shown to be unlawful, such a claim can only be dismissed as unfounded. Liability of the Community in the absence of unlawful conduct of its institutions The principle of non-contractual liability of the Community in the absence of unlawful conduct of its institutions– Arguments of the parties155 In the applicants’ submission, even if the defendants could lawfully have disregarded the DSB’s rulings, the conditions which Community case-law imposes for the incurring of non-contractual liability by the Community for damage caused by its institutions even in the absence of unlawful action by them are in any event met, namely that actual damage has been suffered, that a causal link exists between that damage and the conduct of the Community institutions and that the damage is unusual and special in nature (judgment in Case T‑184/95 Dorsch Consult v Council and Commission [1998] ECR II-667, paragraph 59, upheld on appeal in Case C‑237/98 P Dorsch Consult v Council and Commission [2000] ECR I-4549). 156 The defendants counter that the principle under which the Community may incur non-contractual liability in the absence of unlawful conduct by its institutions cannot be considered a general principle common to the laws of the Member States within the meaning of the second paragraph of Article 288 EC. In any event, such a principle has not yet been laid down by Community case-law and the applicants do not satisfy the strict conditions of this liability regime that are imposed by the national legal systems which have recognised it. – Findings of the Court157 Where, as in the present case, it has not been established that conduct attributed to the Community institutions is unlawful, that does not mean that undertakings which, as a category of economic operators, are required to bear a disproportionate part of the burden resulting from a restriction of access to export markets can in no circumstances obtain compensation by virtue of the Community’s non-contractual liability (see, to this effect, Case 81/86 De Boer Buizen v Council and Commission [1987] ECR 3677, paragraph 17). 158 The second paragraph of Article 288 EC bases the obligation which it imposes on the Community to make good any damage caused by its institutions on the ‘general principles common to the laws of the Member States’ and therefore does not restrict the ambit of those principles solely to the rules governing non-contractual Community liability for unlawful conduct of those institutions. 159 National laws on non-contractual liability allow individuals, albeit to varying degrees, in specific fields and in accordance with differing rules, to obtain compensation in legal proceedings for certain kinds of damage, even in the absence of unlawful action by the perpetrator of the damage. 160 When damage is caused by conduct of the Community institution not shown to be unlawful, the Community can incur non-contractual liability if the conditions as to sustaining actual damage, to the causal link between that damage and the conduct of the Community institution and to the unusual and special nature of the damage in question are all met (Case C-237/98 P Dorsch Consult v Council and Commission, cited in paragraph 155 above, paragraph 19). 161 It is necessary therefore to examine whether those three conditions are met here. The existence of actual and certain damage162 The applicants submit that the damage to them is comprised by, first, the 96.5% increase in the import duty levied by the United States authorities on the applicants’ imports of batteries into the United States and, second, the costs incurred in respect of the setting up and the relocation of production units for those products which they were compelled to undertake in response to that trade retaliation measure. To this must be added losses of turnover resulting from the reconversion of the production units in question. 163 In the course of the proceedings, the applicants stated that by expediting the establishment of a battery production unit in the United States and by converting a site in another non-member State into a factory for the manufacture of batteries, they had been able to reduce to a minimum the adverse impact of the increased customs duty and to save their share of the United States market. The applicants therefore did not lose sale volumes but suffered only pecuniary loss. 164 The defendants counter by stating that the sales contracts between the applicants and their United States customers provide for variation of the price of their products and that it has not been shown that the persons concerned entered into negotiations to that end. By agreeing to clauses limiting increases to their prices, the applicants were themselves responsible for the financial disadvantages allegedly resulting from the increased customs duty. The defendants add that the applicants’ distribution agreement, under which the prices agreed with the purchaser are based on the fob (free-on-board) clause, places the risk of variation of the customs duty on imports exclusively with the purchaser. The amount of United States import duty is naturally added, together with the amounts for transport and insurance, to the fob price initially agreed. 165 Also, the applicants have not shown that they were unable to export their batteries to other countries and thereby avoid any loss of profit. Finally, far from giving rise to a loss, their relocation measures result, on the contrary, in access to more profitable high-technology production. 166 It is apparent from their arguments that in essence the defendant institutions merely deny that the applicants have suffered economic loss that is not the result of their own decisions. 167 It follows that the Council and the Commission do not fundamentally dispute that the applicants have suffered actual and certain damage following the introduction of the United States increased customs duty on imports of batteries originating in the Community. 168 In particular, the very fact that the defendants accept that the distribution contract concluded by the applicants has the effect of placing the risk of variation of the customs duty on imports exclusively with the purchaser means that they cannot deny that the applicants must, at the very least, have necessarily suffered commercial damage by reason of the incontestable rise in the price of their products caused, on the United States market, by the sudden increase of the United States ad valorem import duty to 100%. 169 Moreover, the statistics adduced by the Commission bear out the applicants’ contentions, since they unquestionably show an appreciable reduction in the total value of imports into the United States of lead-acid storage batteries originating in the Community. 170 To that extent, the Court finds that the condition requiring the applicants to have sustained actual and certain damage is satisfied. The causal link between the damage suffered and the conduct of the defendant institutions 171 The applicants submit that it is enough for the damage suffered to result sufficiently directly from the Community institutions’ conduct and that an absolutely immediate causal link is not required. In the present case, the increase in United States customs duty in fact results from the retention of a Community regime governing the import of bananas that is incompatible with WTO rules. 172 The United States authorities’ intention to adopt retaliatory measures and the list of the products concerned were perfectly well known. It does not matter that any Community business might be affected and that the United States of America had the right to designate the sectors in question or to react with other options provided for or allowed by WTO rules. 173 The defendants deny that there is any causal link between the damage alleged and their conduct. The increased customs duty is the consequence not of their action but of a unilateral act of the United States of America, which resulted in the delimitation of the circle of Community businesses affected. The United States authorities could have chosen products other than batteries and they also exempted from their increased customs duty products originating in certain Member States of the Community. The level of the tariff increase was likewise set by the United States Government acting with entire freedom. 174 The Community cannot therefore be responsible for imposition of a disproportionate burden on the businesses concerned. Besides, the applicants’ observations relating to the discrimination of which they claim to be victim show that there is no causal link between the defendants’ conduct and the damage alleged. 175 Withdrawal of concessions by a WTO member is neither automatic nor obligatory. The procedure laid down in Article 22(1) and (2) of the DSU thus envisages the negotiation of compensation in the form of concessions as to market access where DSB recommendations or rulings are not implemented within a reasonable period of time. 176 Nor does any, even indirect, relationship exist between the COM for bananas and the applicants’ decisions to pay the increased customs duty. No Community measure imposed upon them the obligation to export to the United States or to continue to export in the new circumstances or precluded the possibility of renegotiating the import price or of exporting their products elsewhere. 177 The principles common to the laws of the Member States to which the second paragraph of Article 288 EC refers cannot be relied upon to found an obligation on the Community to make good every harmful consequence, even a remote one, of conduct of its institutions (see, by analogy, the judgments in Joined Cases 64/76, 113/76, 167/78, 239/78, 27/79, 28/79 and 45/79 Dumortier and Others v Council [1979] ECR 3091, paragraph 21, and Joined Cases C-363/88 and C‑364/88 Finsider and Others v Commission [1992] ECR I‑359, paragraph 25, and the order in Case T-201/99 Royal Olympic Cruises andOthers v Council and Commission [2000] ECR II‑4005, paragraph 26). 178 The condition under the second paragraph of Article 288 EC relating to a causal link requires there to be a sufficiently direct causal nexus between the conduct of the Community institutions and the damage (Dumortier and Others v Council, cited in paragraph 177 above, paragraph 21, and judgment in Case T-178/98 Fresh Marine v Commission [2000] ECR II‑3331, paragraph 118, upheld on appeal in Case C-472/00 P Commission v Fresh Marine [2003] ECR I‑7541). 179 It is admittedly true that the United States of America was, at its request, simply authorised by the DSB, and not obliged, to withdraw concessions by way of an increase in its duty on imports of products originating in the Community. Even after obtaining that authorisation, the United States Government still had the option of seeking to settle the dispute between it and the Community without adopting retaliatory measures against the latter. 180 It was also by making a choice in the exercise of its discretion that the United States authorities decided to make batteries subject to their retaliatory measure, from which they themselves exempted batteries originating in certain Member States of the Community, and to set the rate of the increase in import duty imposed on the products concerned at 96.5%. 181 It is none the less the case that, were it not for the existence of the Community regime at issue governing the import of bananas and the finding by the DSB of its incompatibility with WTO rules, the United States of America would not have been able to seek or obtain from the DSB authorisation to suspend its tariff concessions on products originating in the Community in an amount up to the level of nullification or impairment resulting from retention of the Community regime at issue. 182 It was on the basis of the amount of damage suffered by the United States economy as a result of the Community regime governing the import of bananas held to be incompatible with WTO rules that the DSB determined the amount of trade up to which the United States authorities were authorised to suspend their tariff concessions in relation to the Community. 183 In those circumstances, the withdrawal of concessions in relation to the Community which took the form of the increased customs duties on imports is to be regarded as a consequence resulting objectively, in accordance with the normal and foreseeable operation of the WTO dispute settlement system accepted by the Community, from the retention in force by the defendant institutions of a banana import regime incompatible with the WTO agreements. 184 The unilateral decision by the United States of America to impose increased customs duty on imports of batteries originating in the Community is not therefore such as to break the causal link that exists between the damage which the imposition of that increased duty caused to the applicants and the defendants’ retention of the banana import regime at issue. 185 The conduct of the defendant institutions necessarily led to adoption of the retaliatory measure by the United States authorities in compliance with the procedures established by the DSU and accepted by the Community, so that their conduct must be regarded as the immediate cause of the damage suffered by the applicants following imposition of the United States increased customs duty. 186 Even before the DSB, on 19 April 1999, authorised the United States of America to levy its increased import duties, the defendant institutions were not unaware that the retaliatory measures by the United States of America were imminent. 187 On 10 November 1998 the United States of America had published the provisional list of products originating in the Community on which it proposed to charge increased import duties, and on 21 December 1998 it confirmed that the duty was soon to apply at a rate of 100%. 188 From 3 March 1999, the date on which the requirement for Community exporters to provide a bank guarantee for 100% of the value of the imports covered was introduced, the defendants could no longer have been unaware of the firm intention of the United States of America to impose the increased customs duties. There could be no remaining doubt after the Trade Representative’s press release of 9 April 1999 announcing the list of products subject to the increased duties. 189 The objections derived by the defendants from the lack of any relationship between the banana import regime at issue and the decision which they impute to the applicants to pay the increased customs duty, from the alleged lack of an obligation on them to continue selling their batteries on the United States market and from the supposed possibility of renegotiating the price of their products or exporting them to other markets are irrelevant as regards the causal link. 190 Such considerations, which concern only the measures which the applicants could have been prompted to adopt in order to avoid payment of the increased customs duty and reduce their commercial loss, cannot call into question the existence of the sufficiently direct causal link which has been found between the defendants’ conduct and the damage suffered by the applicants following imposition of the increased duty. 191 It must therefore be accepted that the requisite direct causal link exists between the conduct of the defendant institutions with regard to banana imports into the Community and the damage suffered by the applicants by reason of imposition by the United States of the increased import duty. The unusual and special nature of the damage suffered192 The applicants submit that the damage suffered is unusual and special as a result of the twofold discrimination brought about by the defendant institutions’ conduct. 193 First, the increased customs duty is imposed on the very specific circle of economic operators appearing on the special list drawn up by the United States authorities. 194 The applicants have been discriminated against vis-à-vis the other undertakings penalised by the retaliatory measures since they bear, by themselves, nearly 6% of the total sum of USD 191.4 million specified in the decision of the United States Government imposing the retaliatory measures. 195 The applicants consider themselves to have been discriminated against in any event not only vis-à-vis undertakings producing industrial batteries but also in relation to all Community undertakings since every one of them could potentially have been subjected to sanctions. 196 Second, the applicants state that the hazard to which a business is exposed when it is required suddenly to pay prohibitive duty on its exports as a result of a trade dispute that has arisen in a sector other than its field of activity cannot be regarded as a normal risk for an undertaking. 197 The applicants add that the interest in retention of certain rules of the COM for bananas cannot properly be classified as a Community objective of fundamental public interest whose importance would justify adverse consequences for certain businesses. It is not dismantling the COM for bananas that is at issue, but bringing it into line with the legal order of the WTO. 198 The defendant institutions reply that the conditions relating to unusual and special damage are not met in the present case. First, the applicants’ position on the United States market could have been altered at any moment as a result of unilateral acts of the Member States or pursuant to agreements between the Community and the United States of America. Second, the circle of economic operators affected by the United States measures is not so limited that the damage to them can be considered unusual and special. 199 An individual would suffer unusual and special damage only if he were particularly harmed or harmed in a different way and much more seriously than all other economic operators (Case 59/83 Biovilac v EEC [1984] ECR 4057, paragraph 28). The increase in United States duty, on the other hand, has affected to the same extent all exporters of batteries originating in the Community that were being imported into the United States. 200 While the Court of Justice has referred to a degree of responsibility resulting from disproportionate losses required to be borne by certain operators following legally adopted measures (De Boer Buizen v Council and Commission, cited in paragraph 157 above, paragraph 17), that, however, unlike the present case, concerned a measure which limited trade and was adopted by the Community. The undertakings in question could have obtained compensation only if they had suffered a disproportionate economic loss compared with other distributors of the same products. 201 The increase in United States import duty which occurred after five months’ notice is not an event that is capable of being classified as unusual, not only because the WTO agreements and, even, from 1947, the GATT provide the possibility of altering duty pursuant to Article XXVIII of the GATT but also because various instruments to protect trade operate in an equivalent manner by means of increasing duty. 202 In the case of damage which economic operators may sustain as a result of the activities of the Community institutions, damage is, first, unusual when it exceeds the limits of the economic risks inherent in operating in the sector concerned and, second, special when it affects a particular circle of economic operators in a disproportionate manner by comparison with other operators (see Case T-184/95 Dorsch Consult v Council and Commission, cited in paragraph 155 above, paragraph 80, and Afrikanische Frucht-Compagnie and Internationale Fruchtimport Gesellschaft Weichert v Council and Commission, cited in paragraph 89 above, paragraph 151). 203 It has not been established in the present case that the applicants suffered, as a result of the incompatibility of the Community regime governing the import of bananas with the WTO agreements, damage in excess of the limits of the risks inherent in their export operations. 204 It is true that, as stated in its preamble, the Agreement establishing the WTO is intended to establish an integrated multilateral trading system that incorporates the results of past trade liberalisation efforts. 205 Nevertheless, the possibility, which has come about in the present case, of tariff concessions being suspended as provided for by the WTO agreements is among the vicissitudes inherent in the current system of international trade. Accordingly, the risk of this vicissitude has to be borne by every operator who decides to sell his products on the market of one of the WTO members. 206 As the applicants have themselves noted, the arbitrators’ decision of 9 April 1999 emphasised that the temporary nature attributed to the suspension of concessions by Article 22(1) of the DSU indicates that suspension is intended to induce the WTO member proceeded against to comply with the recommendations and rulings of the DSB. 207 In addition, it is clear from Article 22(3)(b) and (c) of the DSU, an international instrument which was publicised appropriately so as to ensure that Community operators were aware of it, that the complaining member of the WTO may seek to suspend concessions or other obligations in sectors other than that in which the panel or Appellate Body has found a violation by the member concerned, whether under the same agreement or another WTO agreement. 208 The applicants are therefore wrong in contending that the possibility of retaliatory measures being implemented by a non-member State as a result of a dispute which has arisen in a sector quite different from theirs cannot be considered to be a normal risk. 209 It follows that the risks to which the marketing by the applicants of their batteries on the United States market could thereby be exposed are not to be regarded as beyond the normal hazards of international trade as currently organised. 210 Indeed, the applicants themselves observed in their pleadings that the tariff concessions which had been negotiated with the United States of America in the form of the original import duty at the reduced rate of 3.5% were not immutable. 211 Therefore, in the circumstances of the present case, the damage suffered by the applicants cannot be classified as unusual.212 Such a finding is sufficient to preclude any entitlement to compensation on this basis. It is thus unnecessary for the Court to rule on the condition requiring special damage. 213 Accordingly, the applicants’ claim for compensation founded on the rules governing non-contractual Community liability in the absence of unlawful conduct will be dismissed. 214 It follows from all the foregoing reasoning that the action must be dismissed in its entirety as unfounded. Costs215 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 216 Since the applicants have been unsuccessful, they will be ordered to bear, in addition to their own costs, the costs incurred by the Council and the Commission, in accordance with the applications made to that effect by both defendant institutions. 217 Under the first subparagraph of Article 87(4) of the Rules of Procedure, Member States which have intervened in the proceedings are to bear their own costs. 218 The Kingdom of Spain will therefore bear its own costs.On those grounds,THE COURT OF FIRST INSTANCE (Grand Chamber)hereby:1. Dismisses the action;2. Orders the applicants to bear, in addition to their own costs, the costs incurred by the Council and the Commission;3. Orders the Kingdom of Spain to bear its own costs.Vesterdorf Lindh Azizi Pirrung Legal García-Valdecasas Tiili Cooke MeijVilaras ForwoodDelivered in open court in Luxembourg on 14 December 2005. Registrar PresidentE. Coulon B. VesterdorfTable of contentsLegal contextFactsProcedureForms of order soughtAdmissibilityFailure of the application to comply with the requirements of Article 44(1)(c) of the Rules of ProcedureArguments of the partiesFindings of the CourtJurisdiction of the CourtSubstanceLiability of the Community for unlawful conduct of its institutions– The unlawful conduct of which the defendant institutions are accused– The legal nature of the rules of law allegedly infringed by the defendants– The seriousness of the alleged breaches– The preliminary question as to whether the WTO rules may be relied upon– The exception based on an intention to implement a specific obligation assumed within the WTO– The exception based on express reference to specific provisions of the WTO agreementsApplication by analogy of the rules governing non-contractual liability of the Member StatesLiability of the Community in the absence of unlawful conduct of its institutionsThe principle of non-contractual liability of the Community in the absence of unlawful conduct of its institutions– Arguments of the parties– Findings of the CourtThe existence of actual and certain damageThe causal link between the damage suffered and the conduct of the defendant institutionsThe unusual and special nature of the damage sufferedCosts* Language of the case: Italian. | 56f94-b2d3e00-422c | EN |
A GROUP RELIEF SCHEME WHICH DOES NOT ALLOW A PARENT COMPANY TO DEDUCT THE LOSSES INCURRED BY ITS SUBSIDIARIES ESTABLISHED ABROAD FROM ITS TAXABLE PROFITS IS, IN PRINCIPLE, COMPATIBLE WITH COMMUNITY LAW | Marks & Spencer plcvDavid Halsey (Her Majesty's Inspector of Taxes)(Reference for a preliminary ruling from the High Court of Justice of England and Wales, Chancery Division)(Articles 43 EC and 48 EC – Corporation tax – Groups of companies – Tax relief – Profits of parent companies – Deduction of losses incurred by a resident subsidiary– Allowed – Deduction of losses incurred in another Member State by a non-resident subsidiary – Not included)Summary of the JudgmentFreedom of movement for persons – Freedom of establishment – Tax provisions – Corporation tax – Tax relief – National provisions preventing the deduction by a parent company of the losses incurred in another Member State by a subsidiary established in that State – Lawfulness – Limits (Arts 43 EC and 48 EC)As Community law now stands, Articles 43 EC and 48 EC do not preclude provisions of a Member State which generally prevent a resident parent company from deducting from its taxable profits losses incurred in another Member State by a subsidiary established in that Member State although they allow it to deduct losses incurred by a resident subsidiary. However, it is contrary to Articles 43 EC and 48 EC to prevent the resident parent company from doing so where the non-resident subsidiary has exhausted the possibilities available in its State of residence of having the losses taken into account for the accounting period concerned by the claim for relief and also for previous accounting periods and where there are no possibilities for those losses to be taken into account in its State of residence for future periods either by the subsidiary itself or by a third party, in particular where the subsidiary has been sold to that third party. (see para. 59, operative part)JUDGMENT OF THE COURT (Grand Chamber)13 December 2005 (*) (Articles 43 EC and 48 EC – Corporation tax– Groups of companies – Tax relief – Profits of parent companies – Deduction of losses incurred by a resident subsidiary– Allowed – Deduction of losses incurred in another Member State by a non-resident subsidiary – Not included)In Case C-446/03,REFERENCE for a preliminary ruling under Article 234 EC from the High Court of Justice of England and Wales, Chancery Division (United Kingdom), made by decision of 16 July 2003, received at the Court on 22 October 2003, in the proceedings David Halsey (Her Majesty’s Inspector of Taxes), THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann, C.W.A. Timmermans and A. Rosas, Presidents of Chambers, C. Gulmann (Rapporteur), A. La Pergola, J.‑P. Puissochet, R. Schintgen, N. Colneric, J. Klučka, U. Lõhmus, E. Levits and A. Ó Caoimh, Judges, Advocate General: M. Poiares Maduro,Registrar: K. Sztranc, Administrator,having regard to the written procedure and further to the hearing on 1 February 2005,after considering the observations submitted on behalf of:– Marks & Spencer plc, by G. Aaronson QC and P. Farmer, Barrister,– the United Kingdom Government, by M. Bethell, acting as Agent, with R. Plender QC and D. Ewart, Barrister,– the German Government, by W.-D. Plessing and A. Tiemann, acting as Agents,– the Greek Government, by K. Boskovits and V. Kyriazopoulos, and also by I. Pouli and S. Trekli, acting as Agents,– the French Government, by G. de Bergues and C. Jurgensen-Mercier, acting as Agents,– Ireland, by D.J. O’Hagan, acting as Agent, with E. Fitzsimons SC and G. Clohessy, BL,– the Netherlands Government, by H.G. Sevenster, S. Terstal and J. van Bakel, acting as Agents,– the Finnish Government, by A. Guimaraes-Purokoski, acting as Agent,– the Swedish Government, by A. Kruse, acting as Agent,– the Commission of the European Communities, by R. Lyal, acting as Agent,after hearing the Opinion of the Advocate General at the sitting on 7 April 2005,gives the followingJudgment1 This reference for a preliminary ruling concerns the interpretation of Articles 43 EC and 48 EC. 2 The request was submitted in proceedings between Marks & Spencer plc (‘Marks & Spencer’) and the United Kingdom tax authority concerning the latter’s rejection of a claim for tax relief by Marks & Spencer, which sought to deduct from its taxable profits in the United Kingdom losses incurred by its subsidiaries established in Belgium, Germany and France. National legal context3 The provisions of national law applicable in the main proceedings are to be found in the Income and Corporation Taxes Act 1988 (‘the ICTA’). They are set out below on the basis of the information provided in the decision for reference. Liability to corporation tax 4 Under sections 6(1) and 11(1) of the ICTA, corporation tax is charged on the profits of companies which are resident in the United Kingdom or which conduct trading activities in the United Kingdom through a branch or agency. 5 Under section 8(1) of the ICTA, resident companies are charged to corporation tax in respect of their worldwide profits. Under section 11(1), non-resident companies are charged to corporation tax only in respect of the profits attributable to their United Kingdom branches or agencies. 6 Under taxation conventions between the United Kingdom and, in particular, Belgium, Germany and France, the foreign subsidiaries of resident companies, as non-resident companies, fall within the scope of United Kingdom corporation tax in respect of their trading activities only if those activities are conducted in the United Kingdom through a permanent establishment within the meaning of those Conventions. 7 A tax credit system of relieving double taxation is provided for in the United Kingdom. 8 That system has, in particular, the following two aspects. 9 First, a company established in the United Kingdom which conducts trading activities in another Member State through a branch in that State is taxed in the United Kingdom on the profits of that subsidiary and deducts from the tax payable the tax paid in the other Member State, or is allowed to deduct that tax when calculating branch profits or losses in the United Kingdom. The branch trading profits are calculated on United Kingdom tax principles. If a trading loss arose that loss could be set against the profits of the company established in the United Kingdom. Any unrelieved loss may be carried forward to subsequent periods. The fact that the loss may also be relieved in the other Member State against the branch’s future profits does not affect the relief against United Kingdom profits. 10 Second, a company established in the United Kingdom which conducts trading activities in another Member State through a subsidiary established in that State is taxed in the United Kingdom on the dividends paid by that subsidiary and credit is given for the tax paid in the other Member State on the profits out of which the dividend is paid and for any withholding tax. Where controlled foreign company legislation is not applicable, the parent company is not taxed on its non-resident subsidiary’s profits and it cannot set the subsidiary’s losses against its own profits. 11 Under section 208 of the ICTA, dividends received by a parent company established in the United Kingdom from a subsidiary also established in that Member State are not taxed, unlike those paid by a subsidiary established in another Member State. Group relief for losses 12 In the United Kingdom, group relief allows the resident companies in a group to offset their profits and losses among themselves. 13 Section 402 of the ICTA provides: ‘(1) Subject to and in accordance with this Chapter and section 492(8), relief for trading losses and other amounts eligible for relief from corporation tax may, in the cases set out in subsections (2) and (3) below, be surrendered by a surrendering company (“the surrendering company”) and, on the making of a claim by another company (“the claimant company”) may be allowed to the claimant company by way of relief from corporation tax called group relief. (2) Group relief shall be available in a case where the surrendering company and the claimant company are both members of the same group …” 14 Section 403 of the ICTA provides that: ‘(1) If in an accounting period (“the surrender period”) the surrendering company has – (a) trading losses … the amount may, subject to the provisions of this Chapter, be set off for the purposes of corporation tax against the total profits of the claimant company for its corresponding accounting period.’ 15 As regards the accounting periods ending before 1 April 2000, section 413(5) of the ICTA states: ‘References in this Chapter to a company apply only to bodies corporate resident in the United Kingdom …’16 Following a change in the law consequent upon the judgment of the Court of 16 July 1998 in Case C-264/96 ICI [1998] ECR I-4695, group relief has since 2000 been applicable to profits and losses within the scope of United Kingdom tax law. 17 As a consequence of that change in the law: – losses made by a United Kingdom branch of a non-resident company may be surrendered to another group company for offset against its United Kingdom taxable profits; – losses made by a group company established in the United Kingdom may be surrendered to the branch for offset against its profits in the United Kingdom. Main proceedings and questions referred for a preliminary ruling18 Marks & Spencer is a company incorporated and registered in England and Wales. It is the parent company of a number of companies established in the United Kingdom and in other States. It is one of the leading United Kingdom retailers of clothing, food, homeware and financial services. 19 From 1975 Marks & Spencer began to move into other States, with the opening of a store in France. By the end of the 1990s it had sales outlets in more than 36 countries, with a network of subsidiaries and a system of franchises. 20 A trend towards increasing losses became evident in the mid-1990s. 21 In March 2001 Marks & Spencer announced its intention to divest itself of its Continental European activity. By 31 December 2001 the French subsidiary had been sold to third parties, while the other subsidiaries, including those established in Belgium and Germany, had ceased trading. 22 In the United Kingdom, Marks & Spencer claimed group tax relief pursuant to paragraph 6 of Schedule 17A to the ICTA in respect of losses incurred by its subsidiaries in Belgium, Germany and France for the four accounting periods ended 31 March 1998, 31 March 1999, 31 March 2000 and 31 March 2001. It is clear from the file before the Court that both parties to the main proceedings agree that the losses must be computed on a United Kingdom tax basis. At the tax authority’s request, Marks & Spencer therefore recomputed the losses on that basis. 23 Each of the subsidiaries had operated in the Member State in which it had its registered office. The subsidiaries had no permanent establishment in the United Kingdom and had never traded there. 24 The claims for relief were rejected on the ground that group relief could only be granted for losses recorded in the United Kingdom. 25 Marks & Spencer appealed against that refusal before the Special Commissioners of Income Tax, which dismissed the appeal. 26 Marks & Spencer appealed against that decision before the High Court of Justice of England and Wales, Chancery Division, which decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling: ‘1) In circumstances where:– Provisions of a Member State, such as the United Kingdom provisions on group relief, prevent a parent company which is resident for tax purposes in that State from reducing its taxable profits in that State by setting off losses incurred in other Member States by subsidiary companies which are resident for tax purposes in those States, where such set off would be possible if the losses were incurred by subsidiary companies resident in the State of the parent company; – The Member State of the parent company:– subjects a company resident within its territory to corporation tax on its total profits, including the profits of branches in other Member States, with arrangements for the availability of double taxation relief for those taxes incurred in another Member State and under which branch losses are taken account of in those taxable profits; – does not subject the undistributed profits of subsidiaries resident in other Member States to corporation tax;– subjects the parent company to corporation tax on any distributions to it by way of dividend by the subsidiaries resident in other Member States while not subjecting the parent company to corporation tax on distributions by way of dividend by subsidiary companies resident in the State of the parent; – grants double taxation relief to the parent company by way of a credit in respect of withholding tax on dividends and foreign taxes paid on the profits in respect of which dividends are paid by subsidiary companies resident in other Member States; is there a restriction under Article 43 EC, in conjunction with Article 48 EC? If so, is it justified under Community law?2) (a) What difference, if any, does it make to the answer to Question 1 that, depending on the law of the Member State of the subsidiary, it is or may be possible in certain circumstances to obtain relief for some or all of the losses incurred by the subsidiary against taxable profits in the State of the subsidiary? (b) If it does make a difference, what significance, if any, is to be attached to the fact that:– a subsidiary resident in another Member State has now ceased trading and, although there is provision for loss relief subject to certain conditions in that State, there is no evidence that in the circumstances such relief was obtained; – a subsidiary resident in another Member State has been sold to a third party and, although there is provision under the law of that State for the losses to be used under certain conditions by a third party purchaser, it is uncertain whether they were so used in the circumstances of the case; – the arrangements under which the Member State of the parent company takes account of the losses of UK resident companies apply regardless of whether the losses are also relieved in another Member State? (c) Would it make any difference if there were evidence that relief had been obtained for the losses in the Member State in which the subsidiary was resident and, if so, would it matter that the relief was obtained subsequently by an unrelated group of companies to which the subsidiary was sold?’ Question 1 27 By its first question, the High Court seeks essentially to ascertain whether Articles 43 EC and 48 EC preclude provisions of a Member State which prevent a resident parent company from deducting from its taxable profits losses incurred in another Member State by a subsidiary established in that Member State although they allow it to deduct losses incurred by a resident subsidiary. 28 In other words, the question is whether such provisions constitute a restriction on freedom of establishment, contrary to Articles 43 EC and 48 EC. 29 In that regard, it must be borne in mind that, according to settled case-law, although direct taxation falls within their competence, Member States must none the less exercise that competence consistently with Community law (see, in particular, Joined Cases C-397/98 and C-410/98 Metallgesellschaft and Others [2001] ECR I-1727, paragraph 37 and the case-law cited). 30 Freedom of establishment, which Article 43 EC grants to Community nationals and which includes the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, under the conditions laid down for its own nationals by the law of the Member State where such establishment is effected, entails, in accordance with Article 48 EC, for companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the European Community, the right to exercise their activity in the Member State concerned through a subsidiary, a branch or an agency (see, in particular, Case C-307/97 Saint Gobain ZN [1999] ECR I-6161, paragraph 35). 31 Even though, according to their wording, the provisions concerning freedom of establishment are directed to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation (see, in particular, ICI, cited above, paragraph 21). 32 Group relief such as that at issue in the main proceedings constitutes a tax advantage for the companies concerned. By speeding up the relief of the losses of the loss-making companies by allowing them to be set off immediately against the profits of other group companies, such relief confers a cash advantage on the group. 33 The exclusion of such an advantage in respect of the losses incurred by a subsidiary established in another Member State which does not conduct any trading activities in the parent company’s Member State is of such a kind as to hinder the exercise by that parent company of its freedom of establishment by deterring it from setting up subsidiaries in other Member States. 34 It thus constitutes a restriction on freedom of establishment within the meaning of Articles 43 EC and 48 EC, in that it applies different treatment for tax purposes to losses incurred by a resident subsidiary and losses incurred by a non-resident subsidiary. 35 Such a restriction is permissible only if it pursues a legitimate objective compatible with the Treaty and is justified by imperative reasons in the public interest. It is further necessary, in such a case, that its application be appropriate to ensuring the attainment of the objective thus pursued and not go beyond what is necessary to attain it (see, to that effect, Case C-250/95 Futura Participations and Singer [1997] ECR I-2471, paragraph 26, and Case C-9/02 De Lasteyrie du Saillant [2004] ECR I-2409, paragraph 49). 36 The United Kingdom and the other Member States which submitted observations in the present proceedings claim that, from the aspect of a group relief system such as that at issue in the main proceedings, resident subsidiaries and non-resident subsidiaries are not in comparable tax situations. In accordance with the principle of territoriality applicable both in international law and in Community law, the Member State in which the parent company is established has no tax jurisdiction over non-resident subsidiaries. As regards the latter, tax competence belongs in principle, in accordance with the usual allocation of competence in such matters, to the States on whose territory they are established and carry out commercial activities. 37 In that regard, it must be noted that, in tax law, the taxpayers’ residence may constitute a factor that might justify national rules involving different treatment for resident and non-resident taxpayers. However, residence is not always a proper factor for distinction. In effect, acceptance of the proposition that the Member State in which a company seeks to establish itself may freely apply to it a different treatment solely by reason of the fact that its registered office is situated in another Member State would deprive Article 43 EC of all meaning (see Case 270/83 Commission v France [1986] ECR 273, paragraph 18). 38 In each specific situation, it is necessary to consider whether the fact that a tax advantage is available solely to resident taxpayers is based on relevant objective elements apt to justify the difference in treatment. 39 In a situation such as that in the proceedings before the national court, it must be accepted that by taxing resident companies on their worldwide profits and non-resident companies solely on the profits from their activities in that State, the parent company’s Member State is acting in accordance with the principle of territoriality enshrined in international tax law and recognised by Community law (see, in particular, Futura Participations and Singer, paragraph 22). 40 However, the fact that it does not tax the profits of the non-resident subsidiaries of a parent company established on its territory does not in itself justify restricting group relief to losses incurred by resident companies. 41 In order to ascertain whether such a restriction is justified, it is necessary to consider what the consequences would be if an advantage such as that at issue in the main proceedings were to be extended unconditionally. 42 On that point, the United Kingdom and the other Member States which submitted observations put forward three factors to justify the restriction. 43 First, in tax matters profits and losses are two sides of the same coin and must be treated symmetrically in the same tax system in order to protect a balanced allocation of the power to impose taxes between the different Member States concerned. Second, if the losses were taken into consideration in the parent company’s Member State they might well be taken into account twice. Third, and last, if the losses were not taken into account in the Member State in which the subsidiary is established there would be a risk of tax avoidance. 44 As regards the first justification, it must be borne in mind that the reduction in tax revenue cannot be regarded as an overriding reason in the public interest which may be relied on to justify a measure which is in principle contrary to a fundamental freedom (see, in particular, Case C-319/02 Manninen [2004] ECR I‑7477, paragraph 49 and the case-law cited). 45 None the less, as the United Kingdom rightly observes, the preservation of the allocation of the power to impose taxes between Member States might make it necessary to apply to the economic activities of companies established in one of those States only the tax rules of that State in respect of both profits and losses. 46 In effect, to give companies the option to have their losses taken into account in the Member State in which they are established or in another Member State would significantly jeopardise a balanced allocation of the power to impose taxes between Member States, as the taxable basis would be increased in the first State and reduced in the second to the extent of the losses transferred. 47 As regards the second justification, relating to the danger that losses would be used twice, it must be accepted that Member States must be able to prevent that from occurring. 48 Such a danger does in fact exist if group relief is extended to the losses of non-resident subsidiaries. It is avoided by a rule which precludes relief in respect of those losses. 49 As regards, last, the third justification, relating to the risk of tax avoidance, it must be accepted that the possibility of transferring the losses incurred by a non-resident company to a resident company entails the risk that within a group of companies losses will be transferred to companies established in the Member States which apply the highest rates of taxation and in which the tax value of the losses is therefore the highest. 50 To exclude group relief for losses incurred by non-resident subsidiaries prevents such practices, which may be inspired by the realisation that the rates of taxation applied in the various Member States vary significantly. 51 In the light of those three justifications, taken together, it must be observed that restrictive provisions such as those at issue in the main proceedings pursue legitimate objectives which are compatible with the Treaty and constitute overriding reasons in the public interest and that they are apt to ensure the attainment of those objectives. 52 That analysis is not affected by the indications, set out in the second part of the first question, relating to the arrangements applicable in the United Kingdom: – to the profits and losses of a foreign subsidiary of a company established in that Member State;– to the dividends distributed to a company established in that State by a subsidiary established in another Member State.53 None the less, the Court must ascertain whether the restrictive measure goes beyond what is necessary to attain the objectives pursued. 54 Marks & Spencer and the Commission contended that measures less restrictive than a general exclusion from group relief might be envisaged. By way of example, they referred to the possibility of making relief conditional upon the foreign subsidiary’s having taken full advantage of the possibilities available in its Member State of residence of having the losses taken into account. They also referred to the possibility that group relief might be made conditional on the subsequent profits of the non-resident subsidiary being incorporated in the taxable profits of the company which benefited from group relief up to an amount equal to the losses previously set off. 55 In that regard, the Court considers that the restrictive measure at issue in the main proceedings goes beyond what is necessary to attain the essential part of the objectives pursued where: – the non-resident subsidiary has exhausted the possibilities available in its State of residence of having the losses taken into account for the accounting period concerned by the claim for relief and also for previous accounting periods, if necessary by transferring those losses to a third party or by offsetting the losses against the profits made by the subsidiary in previous periods, and – there is no possibility for the foreign subsidiary’s losses to be taken into account in its State of residence for future periods either by the subsidiary itself or by a third party, in particular where the subsidiary has been sold to that third party. 56 Where, in one Member State, the resident parent company demonstrates to the tax authorities that those conditions are fulfilled, it is contrary to Articles 43 EC and 48 EC to preclude the possibility for the parent company to deduct from its taxable profits in that Member State the losses incurred by its non-resident subsidiary. 57 It is also important, in that context, to make clear that Member States are free to adopt or to maintain in force rules having the specific purpose of precluding from a tax benefit wholly artificial arrangements whose purpose is to circumvent or escape national tax law (see, to that effect, ICI, paragraph 26, and De Lasteyrie du Saillant, paragraph 50). 58 Furthermore, in so far as it may be possible to identify other, less restrictive measures, such measures in any event require harmonisation rules adopted by the Community legislature. 59 Accordingly, the answer to the first question must be that, as Community law now stands, Articles 43 EC and 48 EC do not preclude provisions of a Member State which generally prevent a resident parent company from deducting from its taxable profits losses incurred in another Member State by a subsidiary established in that Member State although they allow it to deduct losses incurred by a resident subsidiary. However, it is contrary to Articles 43 EC and 48 EC to prevent the resident parent company from doing so where the non-resident subsidiary has exhausted the possibilities available in its State of residence of having the losses taken into account for the accounting period concerned by the claim for relief and also for previous accounting periods and where there are no possibilities for those losses to be taken into account in its State of residence for future periods either by the subsidiary itself or by a third party, in particular where the subsidiary has been sold to that third party. Question 2 60 In the light of the answer to the first question, there is no need to answer the second question. Costs61 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) hereby rules:As Community law now stands, Articles 43 EC and 48 EC do not preclude provisions of a Member State which generally prevent a resident parent company from deducting from its taxable profits losses incurred in another Member State by a subsidiary established in that Member State although they allow it to deduct losses incurred by a resident subsidiary. However, it is contrary to Articles 43 EC and 48 EC to prevent the resident parent company from doing so where the non-resident subsidiary has exhausted the possibilities available in its State of residence of having the losses taken into account for the accounting period concerned by the claim for relief and also for previous accounting periods and where there are no possibilities for those losses to be taken into account in its State of residence for future periods either by the subsidiary itself or by a third party, in particular where the subsidiary has been sold to that third party.[Signatures]* Language of the case: English. | f18ad-826a0ba-4e4c | EN |
GENERAL REFUSAL IN GERMANY TO REGISTER A MERGER BETWEEN COMPANIES IN THE COMMERCIAL REGISTER WHERE ONE IS ESTABLISHED IN ANOTHER MEMBER STATE IS CONTRARY TO COMMUNITY LAW | SEVIC Systems AG(Reference for a preliminary ruling from the Landgericht Koblenz)(Freedom of establishment – Articles 43 EC and 48 EC – Cross-border mergers – Refusal of registration in the national commercial register – Compatibility)Summary of the Judgment1. Freedom of movement for persons – Freedom of establishment – Provisions of the Treaty – Scope – Cross-border mergers – Included (Art. 43 EC)2. Freedom of movement for persons – Freedom of establishment – National provision preventing registration of cross-border mergers in the national commercial register – Restriction on the freedom of establishment – Justification – Conditions (Arts 43 EC and 48 EC)1. The right of establishment covers all measures which permit or even merely facilitate access to another Member State and the pursuit of an economic activity in that State by allowing the persons concerned to participate in the economic life of the country effectively and under the same conditions as national operators. Cross-border merger operations, like other company transformation operations, respond to the needs for cooperation and consolidation between companies established in different Member States. They constitute particular methods of exercise of the freedom of establishment, important for the proper functioning of the internal market, and are therefore amongst those economic activities in respect of which Member States are required to comply with the freedom of establishment laid down by Article 43 EC. (see paras 18-19)2. Articles 43 EC and 48 EC preclude registration in the national commercial register of the merger by dissolution without liquidation of one company and transfer of the whole of its assets to another company from being refused in general in a Member State where one of the two companies is established in another Member State, whereas such registration is possible, on compliance with certain conditions, where the two companies participating in the merger are both established in the territory of the first Member State. Such a difference in treatment can be permitted only if it pursues a legitimate objective compatible with the Treaty and is justified by imperative reasons in the public interest, such as protection of the interests of creditors, minority shareholders and employees, and the preservation of the effectiveness of fiscal supervision and the fairness of commercial transactions. Furthermore, application of such a difference in treatment must be appropriate for ensuring the attainment of the objectives pursued and not go beyond what is necessary to attain them. (see paras 23, 28, 31, operative part)JUDGMENT OF THE COURT (Grand Chamber)13 December 2005 (*) In Case C-411/03,REFERENCE for a preliminary ruling under Article 234 EC from the Landgericht Koblenz (Germany), made by decision of 16 September 2003, received by the Court on 2 October 2003, in the proceedings: SEVIC Systems AG, THE COURT (Grand Chamber),composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas and K. Schiemann, Presidents of Chambers, C. Gulmann (Rapporteur), J.N. Cunha Rodrigues, R. Silva de Lapuerta, K. Lenaerts, P. Kūris, E. Juhász, G. Arestis and A. Borg Barthet, Judges, Advocate General: A. Tizzano,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 10 May 2005,after considering the observations submitted on behalf of:– SEVIC Systems AG, by C. Beul, Rechtsanwalt,– the German Government, by M. Lumma and A. Dittrich, acting as Agents,– the Netherlands Government, by H.G. Sevenster and N.A.J. Bel, acting as Agents,– the Commission of the European Communities, by C. Schmidt and G. Braun, acting as Agents,after hearing the Opinion of the Advocate General at the hearing on 7 July 2005,gives the followingJudgment1 The reference for a preliminary ruling concerns the interpretation of Articles 43 EC and 48 EC. 2 The reference is made in the context of an action brought by SEVIC Systems AG (‘SEVIC’), a company established in Neuwied (Germany), against a decision of the Amtsgericht Neuwied rejecting its application for registration in the national commercial register of the merger between itself and Security Vision Concept SA (‘Security Vision’), a company established in Luxembourg, on the ground that the German law on company transformations provides only for mergers between companies established in Germany. Legal context3 Paragraph 1 of the German Law on transforming companies (Umwandlungsgesetz), of 28 October 1994 (BGBl. 1994 I, p. 3210), as amended in 1995 and subsequently (‘the UmwG’), headed ‘Types of transformation, statutory restrictions’, provides: ‘(1) Legal entities established in Germany may be transformed 1. by merger; 2. by demerger … ;3. by transfer of assets; 4. by change of legal form. (2) Apart from the cases governed by this law, transformation within the meaning of subparagraph (1) is possible only if express provision is made for it by another federal law, or by a law of a Land. (3) Derogations from the provisions of this law are possible only if expressly authorised. Supplementary provisions appearing in contracts, memoranda and articles of association or statements of intention are permitted, save where this law makes exhaustive provision.’ 4 Paragraph 2 of the UmwG, headed ‘Types of merger’, provides: ‘Legal entities may merge by dissolution without liquidation 1. by way of absorption through the transfer of all the assets of one or more legal entities (the absorbed entities) to another existing legal entity (the absorbing entity) or 2. ... by the allocation of shares … in the absorbing entity or the new entity to the shareholders … of the absorbed entity.’5 The other provisions of the UmwG specifically concerning merger by absorption make the merger contract subject to certain conditions (Paragraphs 4 to 6), and require the drawing up of a merger report (Paragraph 8), verification of the merger by experts (Paragraph 9 et seq.), and notification of the merger (Paragraph 16 et seq.) prior to its registration in the commercial register of the place of establishment of the absorbing entity (Paragraph 19). Paragraph 20 et seq. of the UmwG enumerates the effects of registration in that register. Protective provisions in favour of third parties concerned by the merger, particularly creditors, complete the general provisions concerning merger by absorption. The dispute in the main proceedings and the question referred for a preliminary ruling6 The merger contract concluded in 2002 between SEVIC and Security Vision provided for the dissolution without liquidation of the latter company and the transfer of the whole of its assets to SEVIC, without any change in the latter’s company name. 7 The Amtsgericht Neuwied rejected the application for registration of the merger in the commercial register, arguing that Paragraph 1(1)(1) of the UmwG provides only for mergers between legal entities established in Germany. 8 SEVIC brought an action against that rejection decision before the Landgericht Koblenz. 9 For the Landgericht Koblenz, the question whether registration of the merger between the abovementioned companies in the commercial register can be refused on the basis of Paragraph 1(1)(1) of the UmwG depends on the interpretation of Articles 43 EC and 48 EC in the context of mergers between companies established in Germany and companies established in other Member States (‘cross-border mergers’). 10 In those circumstances, taking the view that resolution of the dispute before it depended on the interpretation of those EC Treaty provisions, the Landgericht Koblenz decided to stay the proceedings and refer the following question to the Court of Justice for a preliminary ruling: ‘Are Articles 43 and 48 EC to be interpreted as meaning that it is contrary to freedom of establishment for companies if a foreign European company is refused registration of its proposed merger with a German company in the German register of companies under Paragraphs 16 et seq. of the Umwandlungsgesetz (Law on transformations), on the ground that Paragraph 1(1)(1) of that law provides only for transformation of legal entities established in Germany?’ The question referred for a preliminary ruling Preliminary observations11 SEVIC has applied for registration in the commercial register, in accordance with the UmwG, of the merger with Security Vision, the relevant contract providing for the absorption of the latter company and its dissolution without liquidation. 12 That application was rejected by the Amtsgericht Neuwied on the ground that, in Paragraph 1(1)(1), the UmwG provides that only legal entities established in national territory may be the subject of transformation by merger (‘internal mergers’) and that, therefore, that law does not apply to transformations resulting from cross-border mergers. 13 In Germany, there are no general rules, analogous to those laid down by that law, which apply to cross-border mergers. 14 There is therefore a difference in treatment in Germany between internal and cross-border mergers. 15 In those circumstances, the question referred by the national court should be understood as asking essentially whether Articles 43 EC and 48 EC preclude registration in the national commercial register of the merger by dissolution without liquidation of one company and transfer of the whole of its assets to another company from being refused in general in a Member State where one of the two companies is established in another Member State, whereas such registration is possible, on compliance with certain conditions, where the two companies participating in the merger are both established in the territory of the first Member State. Applicability of Articles 43 EC and 48 EC16 Contrary to the arguments of the German and Netherlands Governments, Articles 43 EC and 48 EC apply to a merger situation such as that at issue in the main proceedings. 17 In accordance with the second paragraph of Article 43 EC, read in conjunction with Article 48 EC, the freedom of establishment for companies referred to in that latter article includes in particular the formation and management of those companies under the conditions defined by the legislation of the State of establishment for its own companies. 18 As the Advocate General points out in point 30 of his Opinion, the right of establishment covers all measures which permit or even merely facilitate access to another Member State and the pursuit of an economic activity in that State by allowing the persons concerned to participate in the economic life of the country effectively and under the same conditions as national operators. 19 Cross-border merger operations, like other company transformation operations, respond to the needs for cooperation and consolidation between companies established in different Member States. They constitute particular methods of exercise of the freedom of establishment, important for the proper functioning of the internal market, and are therefore amongst those economic activities in respect of which Member States are required to comply with the freedom of establishment laid down by Article 43 EC. The existence of a restriction on the freedom of establishment20 In this regard, it is sufficient to note that in German law, unlike what exists for internal mergers, there is no provision for registration in the commercial register of cross-border mergers, and that, therefore, applications for the registration of such mergers are generally refused. 21 As the Advocate General has pointed out in point 47 of his Opinion, a merger such as that at issue in the main proceedings constitutes an effective means of transforming companies in that it makes it possible, within the framework of a single operation, to pursue a particular activity in new forms and without intrerruption, thereby reducing the complications, times and costs associated with other forms of company consolidation such as those which entail, for example, the dissolution of a company with liquidation of assets and the subsequent formation of a new company with the transfer of assets to the latter. 22 In so far as, under national rules, recourse to such a means of company transformation is not possible where one of the companies is established in a Member State other than the Federal Republic of Germany, German law establishes a difference in treatment between companies according to the internal or cross-border nature of the merger, which is likely to deter the exercise of the freedom of establishment laid down by the Treaty. 23 Such a difference in treatment constitutes a restriction within the meaning of Articles 43 EC and 48 EC, which is contrary to the right of establishment and can be permitted only if it pursues a legitimate objective compatible with the Treaty and is justified by imperative reasons in the public interest. It is further necessary, in such a case, that its application must be appropriate to ensuring the attainment of the objective thus pursued and must not go beyond what is necessary to attain it (see Case C-436/00 X and Y [2002] ECR I-10829, paragraph 49; Case C-9/02 De Lasteyrie du Saillant [2004] ECR I-2409, paragraph 49). Possible justification for the restriction24 The German and Netherlands Governments argue that internal mergers are subject to conditions more particularly designed to protect the interests of creditors, minority shareholders and employees, and to preserve the effectiveness of fiscal supervision and the fairness of commercial transactions. They submit in that respect that specific problems arise in relation to cross-border mergers and that the solution to those problems presupposes the existence of specific rules designed to protect those interests in the context of a cross-border merger that involves the application of several national legal systems in a single legal operation. Such rules, they submit, presuppose a harmonisation of the legislation at the Community level. 25 In that context, the Netherlands Government points out that the Commission of the European Communities submitted to the Community legislature on 18 November 2003 the Proposal for a Directive of the European Parliament and of the Council on cross-border mergers of companies with share capital (COM(2003) 703 final), the first and second recitals of which state: ‘(1) The need for cooperation and consolidation between companies from different Member States and the difficulties encountered, at the legislative and administrative levels, by cross-border mergers of companies in the Community make it necessary, with a view to the completion and functioning of the single market, to lay down Community provisions to facilitate the carrying-out of cross-border mergers … (2)– … The above-mentioned objectives cannot be sufficiently attained by the Member States in so far they involve laying down rules with common features applicable at transnational level; owing to the scale and impact of the proposed action, they can therefore best be achieved at Community level …’ 26 It should be noted in that respect that, whilst Community harmonisation rules are useful for facilitating cross-border mergers, the existence of such harmonisation rules cannot be made a precondition for the implementation of the freedom of establishment laid down by Articles 43 EC and 48 EC (see, to that effect, Case C‑204/90 Bachmann [1992] ECR I‑249, paragraph 11). 27 It should nevertheless also be noted that whilst, by reason of the adoption of the Third Council Directive 78/855/EEC of 9 October 1978 based on Article 54 (3) (g) of the Treaty concerning mergers of public limited liability companies (OJ 1978 L 295, p. 36), harmonised rules exist in the Member States concerning internal mergers, cross-border mergers pose specific problems. 28 In that respect, it is not possible to exclude the possibility that imperative reasons in the public interest such as protection of the interests of creditors, minority shareholders and employees (see Case C-208/00 Überseering [2002] ECR I-9919, paragraph 92), and the preservation of the effectiveness of fiscal supervision and the fairness of commercial transactions (see Case C-167/01 Inspire Art [2003] ECR I‑10155, paragraph 132), may, in certain circumstances and under certain conditions, justify a measure restricting the freedom of establishment. 29 But such a restrictive measure would also have to be appropriate for ensuring the attainment of the objectives pursued and not go beyond what is necessary to attain them. 30 To refuse generally, in a Member State, to register in the commercial register a merger between a company established in that State and one established in another Member State has the result of preventing the realisation of cross-border mergers even if the interests mentioned in paragraph 28 of this judgment are not threatened. In any event, such a rule goes beyond what is necessary to protect those interests. 31 In those circumstances, the answer to the question referred must be that Articles 43 EC and 48 EC preclude registration in the national commercial register of the merger by dissolution without liquidation of one company and transfer of the whole of its assets to another company from being refused in general in a Member State where one of the two companies is established in another Member State, whereas such registration is possible, on compliance with certain conditions, where the two companies participating in the merger are both established in the territory of the first Member State. Costs32 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) hereby rules:Articles 43 EC and 48 EC preclude registration in the national commercial register of the merger by dissolution without liquidation of one company and transfer of the whole of its assets to another company from being refused in general in a Member State where one of the two companies is established in another Member State, whereas such registration is possible, on compliance with certain conditions, where the two companies participating in the merger are both established in the territory of the first Member State.[Signatures]* Language of the case: German. | eeaf1-29e0b67-433b | EN |
THE COURT OF JUSTICE CONFIRMS THAT ON-CALL DUTY IS CLASSIFIED AS WORKING TIME | Abdelkader Dellas and OthersvPremier ministre and Ministre des Affaires sociales, du Travail et de la Solidarité(Reference for a preliminary ruling from the Conseil d’État (France))(Social policy – Protection of the safety and health of workers – Directive 93/104/EC – Concept of ‘working time’ – Scope – National legislation providing for a ceiling more favourable to workers, in particular as regards maximum weekly working time – Determination of working time in certain social establishments – On-call duty where the worker is required to be present at the workplace – Periods of inactivity on the part of the worker in the context of such duty – National system of calculation of hours of presence differentiated according to the intensity of the activity) Summary of the Judgment1. Social policy – Protection of the health and safety of workers – Directive 93/104 concerning certain aspects of the organisation of working time – Working time – Definition – Workers in certain social and medico-social establishments – National legislation providing for a system of equivalence with a weighting mechanism for periods of inactivity – Not permissible (Council Directive 93/104)2. Social policy – Protection of the health and safety of workers – Directive 93/104 concerning certain aspects of the organisation of working time – More favourable national provisions – Thresholds or ceilings to be applied for ascertaining whether the directive is complied with(Council Directive 93/104, Art. 15)1. Directive 93/104 concerning certain aspects of the organisation of working time must be interpreted as precluding legislation of a Member State which, with respect to on-call duty performed by workers in certain social and medico-social establishments during which they are required to be physically present at their workplace, lays down, for the purpose of calculating the actual working time, a system of equivalence in which a weighting mechanism is applied with flat-rate coefficients to take account of periods of inactivity during on-call duty, where compliance with all the minimum requirements laid down by that directive in order to protect effectively the safety and health of workers is not ensured. The classification as working time within the meaning of Directive 93/104 of a period during which the employee is present at his workplace cannot depend on the intensity of his work but follows solely from his obligation to be at his employer’s disposal. (see paras 58, 63, operative part)2. Article 15 of Directive 93/104 concerning certain aspects of the organisation of working time expressly allows the application or introduction of national provisions more favourable to the protection of the safety and health of workers. Where national law fixes a ceiling more favourable to workers, in particular for maximum weekly working time, the relevant thresholds or ceilings for ascertaining whether the protective rules laid down by that directive are complied with are exclusively those set out in the directive. (see paras 51, 63, operative part)JUDGMENT OF THE COURT (Second Chamber)1 December 2005 (*) (Social policy – Protection of the safety and health of workers – Directive 93/104/CE – Concept of ‘working time’ – Scope – National legislation providing for a ceiling more favourable to workers, in particular as regards maximum weekly working time – Determination of working time in certain social establishments – On-call duty where the worker is required to be present at the workplace – Periods of inactivity on the part of the worker in the context of such duty – National system of calculation of hours of presence differentiated according to the intensity of the activity) In Case C-14/04,REFERENCE for a preliminary ruling under Article 234 EC from the Conseil d’État (France), made by decision of 3 December 2003, received at the Court on 15 January 2004, in the proceedings Abdelkader Dellas,Confédération générale du travail,Fédération nationale des syndicats des services de santé et des services sociaux CFDT,Fédération nationale de l’action sociale Force ouvrièrePremier ministre, Ministre des Affaires sociales, du Travail et de la Solidarité, in the presence of:Union des fédérations et syndicats nationaux d’employeurs sans but lucratif du secteur sanitaire, social et médico-social,THE COURT (Second Chamber),composed of C.W.A. Timmermans, President of the Chamber, R. Schintgen (Rapporteur), R. Silva de Lapuerta, P. Kūris and G. Arestis, Judges, Advocate General: D. Ruiz-Jarabo Colomer,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 12 May 2005,after considering the observations submitted on behalf of:– Mr Dellas, by A. Monod, avocat,– Fédération nationale des syndicats des services de santé et des services sociaux CFDT, by H. Masse-Dessen and G. Thouvenin, avocats, – Union des fédérations et syndicats nationaux d’employeurs sans but lucratif du secteur sanitaire, social et médico-social, by J. Barthelemy, avocat, – the French Government, by G. de Bergues, C. Bergeot-Nunes and A. de Maulmont, acting as Agents,– the Belgian Government, by A. Goldman, acting as Agent,– the German Government, by W.-D. Plessing, acting as Agent,– the Netherlands Government, by H.G. Sevenster, J. van Bakel and D.J.M. de Grave, acting as Agents,– the Commission of the European Communities, by G. Rozet and N. Yerrell, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 12 July 2005,gives the followingJudgment1 This reference for a preliminary ruling concerns the interpretation of Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time (OJ 1993 L 307, p. 18). 2 The reference was made in proceedings brought by Mr Dellas and Confédération générale du travail, Fédération nationale des syndicats des services de santé et des services sociaux CFDT and Fédération nationale de l’action sociale Force ouvrière seeking the annulment, for misuse of powers, of Decree No 2001‑1384 of 31 December 2001 applying Article L. 212‑4 of the Code du travail (Labour Code) and introducing a period equivalent to statutory working time in social and medico-social establishments run by private persons on a non-profit-making basis (JORF, 3 January 2002, p. 149). Legal context Community legislation3 Directive 93/104 was adopted on the basis of Article 118a of the EC Treaty (Articles 117 to 120 of the EC Treaty were replaced by Articles 136 EC to 143 EC). 4 As stated in Article 1, ‘Purpose and scope’, Directive 93/104 lays down minimum safety and health requirements for the organisation of working time and applies to all sectors of activity, both public and private, with the exception of air, rail, road, sea, inland waterway and lake transport, sea fishing, other work at sea and the activities of doctors in training. 5 Article 2 of Directive 93/104, ‘Definitions’, provides: ‘For the purposes of this Directive, the following definitions shall apply:1. working time shall mean any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice; 2. rest period shall mean any period which is not working time; 3. night time shall mean any period of not less than seven hours, as defined by national law, and which must include in any case the period between midnight and 5 a.m.; 4. night worker shall mean: (a) on the one hand, any worker, who, during night time, works at least three hours of his daily working time as a normal course; and (b) on the other hand, any worker who is likely during night time to work a certain proportion of his annual working time, as defined at the choice of the Member State concerned: (i) by national legislation, following consultation with the two sides of industry; or(ii) by collective agreements or agreements concluded between the two sides of industry at national or regional level;5. shift work shall mean any method of organising work in shifts whereby workers succeed each other at the same work stations according to a certain pattern, including a rotating pattern, and which may be continuous or discontinuous, entailing the need for workers to work at different times over a given period of days or weeks; 6. shift worker shall mean any worker whose work schedule is part of shift work.’ 6 Section II of the directive lays down the measures which the Member States are required to take to ensure that every worker is entitled inter alia to minimum daily and weekly rest periods and breaks, and also regulates the maximum weekly working time. 7 As regards daily rest, Article 3 of Directive 93/104 reads as follows: ‘Member States shall take the measures necessary to ensure that every worker is entitled to a minimum daily rest period of 11 consecutive hours per 24-hour period.’ 8 Article 4 of the directive, ‘Breaks’, provides: ‘Member States shall take the measures necessary to ensure that, where the working day is longer than six hours, every worker is entitled to a rest break, the details of which, including duration and the terms on which it is granted, shall be laid down in collective agreements or agreements between the two sides of industry or, failing that, by national legislation.’ 9 The weekly rest period is the subject of Article 5 of the directive, which reads: ‘Member States shall take the measures necessary to ensure that, per each seven-day period, every worker is entitled to a minimum uninterrupted rest period of 24 hours plus the 11 hours’ daily rest referred to in Article 3. The minimum rest period referred to in the first subparagraph shall in principle include Sunday.If objective, technical or work organisation conditions so justify, a minimum rest period of 24 hours may be applied.’10 With respect to the maximum weekly working time, Article 6 of Directive 93/104 provides: ‘Member States shall take the measures necessary to ensure that, in keeping with the need to protect the safety and health of workers: 1. the period of weekly working time is limited by means of laws, regulations or administrative provisions or by collective agreements or agreements between the two sides of industry; 2. the average working time for each seven-day period, including overtime, does not exceed 48 hours.’11 Articles 8 to 13, which form Section III of the directive, set out the measures which the Member States are required to take concerning night work, shift work and patterns of work. 12 With respect more particularly to the length of night work, Article 8 of Directive 93/104 provides: ‘Member States shall take the measures necessary to ensure that:1. normal hours of work for night workers do not exceed an average of eight hours in any 24-hour period;2. night workers whose work involves special hazards or heavy physical or mental strain do not work more than eight hours in any period of 24 hours during which they perform night work. For the purposes of the aforementioned, work involving special hazards or heavy physical or mental strain shall be defined by national legislation and/or practice or by collective agreements or agreements concluded between the two sides of industry, taking account of the specific effects and hazards of night work.’ 13 Article 15 of Directive 93/104 provides: ‘This Directive shall not affect Member States’ right to apply or introduce laws, regulations or administrative provisions more favourable to the protection of the safety and health of workers or to facilitate or permit the application of collective agreements or agreements concluded between the two sides of industry which are more favourable to the protection of the safety and health of workers.’ 14 Under Article 16 of the directive: ‘Member States may lay down:1. for the application of Article 5 (weekly rest period), a reference period not exceeding 14 days;2. for the application of Article 6 (maximum weekly working time), a reference period not exceeding four months.The periods of paid annual leave, granted in accordance with Article 7, and the periods of sick leave shall not be included or shall be neutral in the calculation of the average; 3. for the application of Article 8 (length of night work), a reference period defined after consultation of the two sides of industry or by collective agreements or agreements concluded between the two sides of industry at national or regional level. If the minimum weekly rest period of 24 hours required by Article 5 falls within that reference period, it shall not be included in the calculation of the average.’ 15 Directive 93/104 sets out a number of derogations from several of its basic rules, taking account of the particular features of certain activities and subject to certain conditions being satisfied. Article 17 states: ‘1. With due regard for the general principles of the protection of the safety and health of workers, Member States may derogate from Article 3, 4, 5, 6, 8 or 16 when, on account of the specific characteristics of the activity concerned, the duration of the working time is not measured and/or predetermined or can be determined by the workers themselves, and particularly in the case of: (a) managing executives or other persons with autonomous decision-taking powers;(b) family workers; or(c) workers officiating at religious ceremonies in churches and religious communities.2. Derogations may be adopted by means of laws, regulations or administrative provisions or by means of collective agreements or agreements between the two sides of industry provided that the workers concerned are afforded equivalent periods of compensatory rest or that, in exceptional cases in which it is not possible, for objective reasons, to grant such equivalent periods of compensatory rest, the workers concerned are afforded appropriate protection: 2.1. from Articles 3, 4, 5, 8 and 16:…(c) in the case of activities involving the need for continuity of service or production, particularly:(i) services relating to the reception, treatment and/or care provided by hospitals or similar establishments, residential institutions and prisons; 3. Derogations may be made from Articles 3, 4, 5, 8 and 16 by means of collective agreements or agreements concluded between the two sides of industry at national or regional level or, in conformity with the rules laid down by them, by means of collective agreements or agreements concluded between the two sides of industry at a lower level. The derogations provided for in the first and second subparagraphs shall be allowed on condition that equivalent compensating rest periods are granted to the workers concerned or, in exceptional cases where it is not possible for objective reasons to grant such periods, the workers concerned are afforded appropriate protection. 4. The option to derogate from point 2 of Article 16, provided in paragraph 2, points 2.1. and 2.2. and in paragraph 3 of this Article, may not result in the establishment of a reference period exceeding six months. However, Member States shall have the option, subject to compliance with the general principles relating to the protection of the safety and health of workers, of allowing, for objective or technical reasons or reasons concerning the organisation of work, collective agreements or agreements concluded between the two sides of industry to set reference periods in no event exceeding 12 months. …’16 Article 18 of Directive 93/104 reads as follows: ‘1. (a) Member States shall adopt the laws, regulations and administrative provisions necessary to comply with this Directive by 23 November 1996, or shall ensure by that date that the two sides of industry establish the necessary measures by agreement, with Member States being obliged to take any necessary steps to enable them to guarantee at all times that the provisions laid down by this Directive are fulfilled. (b) (i) However, a Member State shall have the option not to apply Article 6, while respecting the general principles of the protection of the safety and health of workers, and provided it takes the necessary measures to ensure that: – no employer requires a worker to work more than 48 hours over a seven-day period, calculated as an average for the reference period referred to in point 2 of Article 16, unless he has first obtained the worker’s agreement to perform such work, – no worker is subjected to any detriment by his employer because he is not willing to give his agreement to perform such work,– the employer keeps up-to-date records of all workers who carry out such work,– the records are placed at the disposal of the competent authorities, which may, for reasons connected with the safety and/or health of workers, prohibit or restrict the possibility of exceeding the maximum weekly working hours, – the employer provides the competent authorities at their request with information on cases in which agreement has been given by workers to perform work exceeding 48 hours over a period of seven days, calculated as an average for the reference period referred to in point 2 of Article 16. National legislation17 In France the statutory duration of the working time of employees is governed by the Code du travail, the material version of which for the main proceedings is that resulting from Loi n° 2000‑37 relative à la réduction négociée du temps de travail (Law No 2000‑37 on negotiated reduction of working time) of 19 January 2000 (JORF, 20 January 2000, p. 975). The first paragraph of Article L. 212‑1 of that code provides: ‘In the establishments or occupations mentioned in Article L. 200‑1 and in craft and cooperative establishments and their dependencies the statutory duration of the actual working time of employees is fixed at 35 hours a week.’ 18 The second paragraph of that article states: ‘In those establishments and occupations the actual daily working time per employee may not exceed 10 hours, except for derogations under conditions laid down by decree.’ 19 The first and second paragraphs of Article L. 212‑2 of the Code du travail provide: ‘Decrees made in the Council of Ministers shall determine the conditions of application of Article L. 212‑1 for all sectors of activity or professions or for a particular sector or profession. The decrees shall fix in particular the organisation and distribution of working time, rest periods, conditions of recourse to stand-by duty, permanent or temporary derogations applicable in certain cases and to certain posts, rules for recovery of lost hours of work, and measures for monitoring these various provisions. These decrees shall be made and revised after consulting the employers’ and employees’ organisations concerned and, if appropriate, in the light of the results of negotiations between those organisations.’ 20 Under the first and second paragraphs of Article L. 212‑4 of the code: ‘Actual working time is the time during which the employee is at the employer’s disposal and must comply with his instructions without being able to attend freely to his personal affairs. The time necessary for meal breaks and the time used for breaks are regarded as actual working time where the criteria defined in the first paragraph are satisfied. Even if they are not recognised as working time, they may be the subject of remuneration under a collective agreement or a contract.’ 21 The fifth paragraph of Article L. 212‑4 of the code reads as follows: ‘A period equivalent to the statutory working time may be introduced in occupations and for specific posts involving periods of inactivity, either by decree made after the conclusion of a collective or sectoral agreement or by decree in the Conseil d’État. Those periods shall be remunerated in accordance with practice or with collective agreements.’ 22 Under the first paragraph of Article L. 212‑4bis of the code: ‘A period of stand-by duty means a period during which the employee, without being at the permanent and immediate disposal of the employer, is obliged to stay at home or nearby so as to be in a position to intervene to perform work for the undertaking, the duration of that intervention being regarded as actual working time …’. 23 The second paragraph of Article L. 212‑7 of the code states: ‘Weekly working time calculated over any period of 12 consecutive weeks may not exceed 44 hours … During a single week, working time may not exceed 48 hours.’ 24 The first paragraph of Article L. 220‑1 of the Code du travail provides: ‘Every employee shall enjoy a daily rest period of at least 11 consecutive hours.’25 The first paragraph of Article L. 221-4 of the code provides: ‘The minimum duration of weekly rest must be 24 consecutive hours, to which are added the consecutive hours of daily rest provided for in Article L. 220‑1.’ 26 Articles 1 to 3 of Decree No 2001‑1384 read as follows: ‘Article 1The provisions of this decree apply:(a) to establishments run by private persons on a non-profit-making basis and providing accommodation, listed in paragraphs 1, 2, 4, 5 and 8 of Article L. 312‑1 of the Code de l’action sociale et des familles (Code of Social Action and Families); (b) to full-time posts of teaching staff, nurses, nursing auxiliaries or staff of the same level of qualifications replacing them, the holders of which posts carry out night duty on call in a room provided within the establishment. Article 2For calculating the statutory working time in the establishments and for the posts referred to in Article 1 of this decree, each period of night duty on call in a room provided is counted as three hours of actual work for the first nine hours and half an hour for each hour in excess of nine hours. Article 3The period of presence on call in a room provided extends from the time when the residents retire until the time when they rise as fixed by the rosters, but may not exceed 12 hours.’ 27 According to the Conseil d’État, the legal basis of Decree No 2001‑1384 is the last paragraph of Article L. 212‑4 of the Code du travail, in which the legislature intended to lay down special rules on jurisdiction and procedure for establishing systems of equivalence to statutory working time, thus displacing the general rules laid down in Article L. 212‑2 of that code. The main proceedings and the questions referred for a preliminary ruling28 According to the case-file transmitted to the Court by the national court, Mr Dellas, a special needs teacher in residential establishments for handicapped young people and adults, was dismissed by his employer as a result of disagreements between them relating in particular to the definition of actual work and the remuneration due for hours of night work on call in a ‘watch’ room by teachers in medico-social establishments and departments for maladjusted and handicapped persons. 29 In early 2002 Mr Dellas and the trade union organisations Confédération générale du travail, Fédération nationale des syndicats des services de santé et des services sociaux CFDT, and Fédération nationale de l’action sociale Force ouvrière brought proceedings in the Conseil d’État for the annulment, for misuse of powers, of Decree No 2001‑1384. 30 The Conseil d’État decided to join those proceedings, and gave Union des fédérations et syndicats nationaux d’employeurs sans but lucrative du secteur sanitaire leave to intervene in support of the defendants in the main proceedings, the Premier ministre (Prime Minister) and the Ministre des Affaires sociales, du Travail et de la Solidarité (Minister for Social Affairs, Labour and Solidarity). 31 In support of their applications, the applicants in the main proceedings put forward various pleas in law to challenge the lawfulness of Decree No 2001‑1384. They submit in particular that the system of equivalence to statutory working time introduced by that decree is incompatible with the aims of Directive 93/104 and with that directive’s provisions on the definition of working time and the determination of breaks, maximum weekly working time and maximum daily length of night work. 32 According to the order for reference, the system of equivalence, which establishes a 3 to 1 ratio for the first nine hours followed by a 2 to 1 ratio for subsequent hours between the hours of presence and the working hours actually counted, and applies to the employees covered by the decree solely in respect of night duty during which the staff are not continually called on to work, is intended to create a special method of calculating actual work within the meaning of Article L. 212‑4 of the Code du travail for the purpose inter alia of assessing the rules on remuneration and overtime, to take account of the intermittent nature of the activity which includes periods of non-activity during the hours in question. 33 According to the Conseil d’État, this system of equivalence to statutory working time is not in principle incompatible with Directive 93/104, as interpreted by the Court, in so far as – unlike the situations at issue in Case C‑303/98 Simap [2000] ECR I‑7963 and Case C‑151/02 Jaeger [2003] ECR I‑8389 – it does not have the effect of treating as rest periods the periods of inactivity during on-call duty when workers have to be present at their workplace, nor of preventing the hours which are calculated in a special way under the system of equivalence from being regarded in their entirety as actual working time in order to assess compliance by employers with their obligations concerning rest periods and breaks. 34 Nevertheless, it says, the system of equivalence established by the French legislation provides that periods of night duty in a ‘watch’ room are the object of a special method of calculating actual work intended to take account of the lower intensity of work during those periods, within a legal framework with stricter rules than those laid down by Community law, in particular with respect to maximum weekly working time, which is 44 hours on average over 12 consecutive weeks under the Code du travail as opposed to 48 hours over 4 consecutive months under Directive 93/104. 35 Since it considered that, in those circumstances, the outcome of the disputes before it depended on the interpretation of Community law, the Conseil d’État decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling: ‘1. In the light of the purpose of Directive 93/104 … , namely to lay down minimum safety and health requirements for the organisation of working time, as stated in Article 1(1), must the definition of working time in the directive be considered to apply exclusively to the Community thresholds established by the directive or must it be considered to have general scope, applying also to the thresholds laid down in national legal systems, in particular with a view to transposing the directive, even where those thresholds may, as in France, in the interests of protection of employees, have been set at a level affording greater protection than the thresholds in the directive? 2. To what extent could a strictly proportional system of equivalence, which consists in taking into account the total number of hours of presence but applying a weighting mechanism to them which reflects the lower intensity of work done during periods of inactivity, be regarded as compatible with the objectives of Directive 93/104 …?’ The questions referred for a preliminary ruling36 By its two questions, which should be examined together, the national court asks essentially whether Directive 93/104 must be interpreted as precluding legislation of a Member State which, with respect to periods of on-call duty performed by workers in certain social and medico-social establishments where they are required to be physically present at the actual place of work, provides, for calculating actual working time, a system of equivalence such as that at issue in the main proceedings, if national law lays down, inter alia for maximum weekly working time, a ceiling that is more favourable to workers than that prescribed by the directive. 37 Both the decision making the reference and the majority of the observations submitted to the Court refer to the effect which such a system of equivalence may have not only on the working hours of the employees concerned but also on their level of pay. 38 However, as regards the latter aspect, it must be pointed out at the outset that, as follows from both the purpose and the actual wording of its provisions, Directive 93/104 does not apply to the remuneration of workers. 39 Moreover, that interpretation now follows unambiguously from Article 137(6) EC, which states that the minimum requirements the Council of the European Union may adopt by means of directives, intended in particular, as in the case in the main proceedings, to ensure protection of the health and safety of workers, cannot apply to pay. 40 As regards the effect of a system of equivalence such as that at issue in the main proceedings on the working time and rest periods of the workers concerned, on the other hand, it is apparent from Article 118a of the Treaty, which is the legal basis for Directive 93/104, from the first, fourth, seventh and eighth recitals in the preamble to that directive, from the Community Charter of the Fundamental Social Rights of Workers, adopted at the meeting of the European Council held at Strasbourg on 9 December 1989, point 8 and the first subparagraph of point 19 of which are referred to in the fourth recital in the preamble to the directive, and also from the actual wording of Article 1(1) of the directive that the latter’s purpose is to lay down minimum requirements intended to improve the living and working conditions of workers through approximation of national legislation concerning, in particular, the duration of working time (see Case C‑173/99 BECTU [2001] ECR I‑4881, paragraph 37; Jaeger, paragraphs 45 and 47; and Joined Cases C‑397/01 to C‑403/01 Pfeiffer and Others [2004] ECR I‑8835, paragraph 91). 41 According to those provisions, this harmonisation at Community level in relation to the organisation of working time is intended to guarantee better protection of the safety and health of workers by ensuring that they are entitled to minimum rest periods – particularly daily and weekly – and adequate breaks and by providing for a ceiling of 48 hours on the average duration of the working week, a maximum limit which is expressly stated to include overtime (see Simap, paragraph 49, BECTU, paragraph 38, Jaeger, paragraph 46, Pfeiffer and Others, paragraph 92, and Case C‑313/02 Wippel [2004] ECR I‑9483, paragraph 47). 42 With regard more specifically to the concept of ‘working time’ within the meaning of Directive 93/104, it has already been held that the directive defines that concept as any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practices, and that that concept is placed in opposition to rest periods, the two being mutually exclusive (Simap, paragraph 47, and Jaeger, paragraph 48). 43 The conclusion must be in this context, first, that Directive 93/104 does not provide for any intermediate category between working time and rest periods and, second, that the intensity of the work done by the employee and his output are not among the characteristic elements of the concept of ‘working time’ within the meaning of that directive. 44 The Court has also held that the concepts of ‘working time’ and ‘rest period’ within the meaning of Directive 93/104 may not be interpreted in accordance with the requirements of the various legislations of the Member States but constitute concepts of Community law which must be defined in accordance with objective characteristics by reference to the scheme and purpose of that directive, intended to improve workers’ living and working conditions. Only such an autonomous interpretation is capable of securing full effectiveness for that directive and uniform application of those concepts in all the Member States (see Jaeger, paragraph 58). 45 The Court concluded that the Member States cannot unilaterally determine the scope of those concepts and of the other provisions of Directive 93/104 by imposing any condition or restriction on the right granted to workers by that directive to have working periods and corresponding rest periods duly taken into account. Any other interpretation would frustrate the effectiveness of the directive and disregard its objective of guaranteeing effective protection of the safety and health of workers by means of minimum requirements (see Jaeger, paragraphs 59, 70 and 82, and Pfeiffer and Others, paragraph 99). 46 In the first place, it is settled case-law that on-call duty performed by a worker where he is required to be physically present on the employer’s premises must be regarded in its entirety as working time within the meaning of Directive 93/104, regardless of the work actually done by the person concerned during that on-call duty (see Simap, paragraph 52; Jaeger, paragraphs 71, 75 and 103; Pfeiffer and Others, paragraph 93; and the order in Case C‑241/99 CIG [2001] ECR I‑5139, paragraph 34). 47 The fact that on-call duty includes some periods of inactivity is thus completely irrelevant in this connection. 48 According to that case-law, although periods of professional inactivity are inherent in on-call duty performed by workers where they are required to be physically present on the employer’s premises, given that, unlike during normal working hours, the need for urgent interventions during such duty cannot be planned in advance and the activity actually performed depends on the circumstances, the decisive factor in considering that the characteristic features of the concept of ‘working time’ within the meaning of Directive 93/104 are present in the case of such on-call duty performed by a worker at his actual workplace is that he is required to be physically present at the place determined by the employer and to be available to the employer in order to be able to provide the appropriate services immediately in case of need. Those obligations must therefore be regarded as coming within the ambit of the performance of that worker’s duties (see Simap, paragraph 48, and Jaeger, paragraphs 49 and 63). 49 In the second place, the Court has already repeatedly held that, in view of both the wording of Directive 93/104 and its purpose and scheme, the various requirements it lays down concerning maximum working time and minimum rest periods constitute rules of Community social law of particular importance from which every worker must benefit as a minimum requirement necessary to ensure protection of his safety and health (see BECTU, paragraphs 43 and 47, Pfeiffer and Others, paragraph 100, and Wippel, paragraph 47). 50 As regards the case at issue in the main proceedings, it follows from paragraphs 40 to 49 above that compliance with all the thresholds and ceilings provided for by Directive 93/104 with the aim of protecting effectively the safety and health of workers must be ensured by the Member States, and that to that end the periods of on-call duty performed by a worker such as Mr Dellas at the workplace itself must be taken into account in their entirety in the calculation of the maximum daily and weekly working time permitted by Community law – which includes overtime – irrespective of the fact that, during those periods, the person concerned is not continuously carrying on any professional activity (see Pfeiffer and Others, paragraphs 93 and 95). 51 It is true that Article 15 of Directive 93/104 expressly allows the application or introduction of national provisions more favourable to the protection of the safety and health of workers. 52 Where a Member State makes use of that option, as the French Republic has done, since the national legislation lays down maximum weekly working time of 44 hours over 12 consecutive weeks, whereas the directive imposes a limit of 48 hours over 4 consecutive months, compliance with the rules laid down by that directive must be ascertained by reference solely to the limits fixed by the directive, to the exclusion of the national provisions that provide greater protection for workers. 53 However, independently of the application of such national provisions, it is necessary for the effectiveness of the rights conferred on workers by Directive 93/104 to be ensured in full, which necessarily implies an obligation on the Member States to guarantee that each of the minimum requirements laid down by the directive is observed. 54 It must be concluded in this connection, as the French Government itself acknowledged at the hearing in response to a question put by the Court, that the method of calculation of on-call duty in the system of equivalence at issue in the main proceedings is such as to impose on the worker concerned an overall working time which can amount to or even exceed 60 hours a week. 55 Consequently, such a national system manifestly exceeds the maximum weekly working time which is fixed at 48 hours under Article 6(2) of that directive. 56 That assessment is not called into question either by the French Government’s assertion that the system of equivalence in force in that Member State, which indeed consists in the application of a system of weighting designed to take account of the occurrence of periods of inactivity during on-call duty, nevertheless computes all the hours of presence of workers for the determination of their daily and weekly rest entitlement, or by the national court’s finding that the national legislation which is the subject of the appeals it is hearing differs from the legislation at issue in the Simap and Jaeger cases in that it does not assimilate to rest periods the periods during which an employee present at his workplace to perform on-call duty is not actually called on to work. 57 It is common ground that, under national legislation such as that at issue in the main proceedings, the worker’s hours of presence in the employer’s establishment during on-call duty, which include periods of inactivity, are taken into account only partially, according to coefficients of a flat-rate kind, for the calculation of overtime and hence for the determination of maximum working time, whereas Community law requires those hours of presence to be counted in their entirety as working time. 58 Moreover, under such national legislation, it is only the hours of presence that are deemed to correspond to actual work that are included in the calculation of working time. However, as already stated in paragraph 43 above, the classification as working time within the meaning of Directive 93/104 of a period during which the employee is present at his workplace cannot depend on the intensity of his work but follows solely from his obligation to be at his employer’s disposal. 59 In any event, the mere fact that the hours of presence of employees at their workplace are taken into account in their entirety for implementing certain of the employees’ rights under Directive 93/104, in the present case their rights to daily and weekly rest periods, is not capable of ensuring full compliance with the obligations which that directive imposes on Member States, given that they are obliged to guarantee all those rights, in particular the fixing of the maximum weekly working time at 48 hours. 60 It should be added that national provisions such as those laid down by Decree No 2001‑1384 are not capable of falling within the possible derogations provided for by that directive. 61 First, Article 2 of Directive 93/104, which defines the principal terms used in the directive, including the concepts of working time and rest period, is not one of the provisions of the directive which may be the subject of a derogation. 62 Second, it is not even alleged in the present case that legislation such as that at issue in the main proceedings is capable of falling within one of the cases referred to in Articles 17(1) and (2) and 18(1)(b)(i) of Directive 93/104. 63 In the light of all the foregoing, the answer to the questions must be that Directive 93/104 must be interpreted: – as precluding legislation of a Member State which, with respect to on-call duty performed by workers in certain social and medico-social establishments during which they are required to be physically present at their workplace, lays down, for the purpose of calculating the actual working time, a system of equivalence such as that at issue in the main proceedings, where compliance with all the minimum requirements laid down by that directive in order to protect effectively the safety and health of workers is not ensured; – where national law fixes a ceiling more favourable to workers, in particular for maximum weekly working time, the relevant thresholds or ceilings for ascertaining whether the protective rules laid down by that directive are complied with are exclusively those set out in the directive. Costs64 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Second Chamber) hereby rules:Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time must be interpreted as precluding legislation of a Member State which, with respect to on-call duty performed by workers in certain social and medico-social establishments during which they are required to be physically present at their workplace, lays down, for the purpose of calculating the actual working time, a system of equivalence such as that at issue in the main proceedings, where compliance with all the minimum requirements laid down by that directive in order to protect effectively the safety and health of workers is not ensured.Where national law fixes a ceiling more favourable to workers, in particular for maximum weekly working time, the relevant thresholds or ceilings for ascertaining whether the protective rules laid down by that directive are complied with are exclusively those set out in the directive.[Signatures]* Language of the case: French. | 7aca5-ee083fb-4dff | EN |
THE COURT OF FIRST INSTANCE DISMISSES THE APPLICATIONS FOR ANNULMENT OR REDUCTION OF FINES IMPOSED BY THE COMMISSION ON MEMBERS OF A CARTEL IN THE ZINC PHOSPHATE MARKET | Britannia Alloys & Chemicals LtdvCommission of the European Communities(Competition – Article 81 EC – Cartel – Zinc phosphate market – Fine – Article 15(2) of Regulation No 17 – Relevant turnover – Action for annulment)Judgment of the Court of First Instance (Fifth Chamber), 29 November 2005 Summary of the JudgmentCompetition – Fines – Amount – Determination – Maximum amount – Calculation – Turnover for the business year immediately preceding the date on which the fine was imposed – Meaning – Turnover without significance – Use of the turnover for the immediately preceding business year – Lawfulness – Conditions – Infringement of the principle of equal treatment in regard to other undertakings which had committed infringements – None – Infringement of the principle of legal certainty – None(Council Regulation No 17, Art. 15(2))In fixing the upper limit of 10% of turnover achieved in the previous financial year for fines imposed in competition matters pursuant to Article 15(2) of Regulation No 17 the ‘preceding business year’ refers in principle to the last full business year of each of the undertakings concerned at the date of adoption of the contested decision. It is however clear, both from the objectives of the system of which that provision forms part, that the application of the 10% upper limit presupposes, first, that the Commission has at its disposal the turnover for the last business year preceding the date of adoption of the decision and, second, that those data represent a full year of normal economic activity over a period of 12 months. Thus, for example, if the business year had ended before the adoption of the decision but the annual accounts of the undertaking in question had not been drawn up or had not been disclosed to the Commission, the latter would have the right, indeed the obligation, to use the turnover achieved in an earlier business year in order to apply Article 15(2) of Regulation No 17. Similarly, if, as a result of a reorganisation or a change in accounting practices, an undertaking has, for the preceding business year, produced accounts which relate to a shorter period than 12 months, the Commission is entitled to rely on the turnover achieved in an earlier complete year in order to apply that provision. Equally, if an undertaking has not carried on any economic activity during the business year preceding the adoption of the decision, the turnover for that period gives no indication of its standing and therefore cannot serve as a basis for determining the upper limit mentioned above. In such a case, the Commission is obliged to fix the maximum limit of the fine by reference to the most recent turnover corresponding to a complete year in which economic activities, albeit on a reduced scale have been carried on, at least in situations where there is no indication that an undertaking has ceased its commercial activities or has diverted its turnover in order to avoid the imposition of a heavy fine. The Commission does not infringe the principle of equal treatment by proceeding in that way in regard to one of the undertakings which has participated in a cartel although it based itself, in regard to the other undertakings, which had not ceased their economic activities, on the turnover for the business year immediately preceding the date on which the fine was imposed, inasmuch as the two situations are different. Nor does the Commission infringe the principle of legal certainty, since it did not exercise an arbitrary power in choosing the business year of reference; it merely referred, in exceptional circumstances, as it is obliged to do, to the last full business year corresponding to a full year of normal economic activity. (see paras 37-40, 42, 49, 62, 74)JUDGMENT OF THE COURT OF FIRST INSTANCE (Fifth Chamber)29 November 2005 (*) In Case T-33/02,Britannia Alloys & Chemicals Ltd, established in Gravesend (United Kingdom), represented by S. Mobley, H. Bardell and M. Commons, Solicitors, applicant,Commission of the European Communities, represented by R. Wainwright and F. Castillo de la Torre, acting as Agents, with an address for service in Luxembourg, defendant,APPLICATION for partial annulment of Commission Decision 2003/437/EC relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-1/37.027 – Zinc phosphate) (OJ 2003 L 153, p. 1) and, in the alternative, for reduction of the amount of the fine imposed on the applicant, THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Fifth Chamber), composed of P. Lindh, President, R. García-Valdecasas and J.D. Cooke, Judges,Registrar: J. Plingers, Administrator,having regard to the written procedure and further to the hearing on 1 July 2004,gives the followingJudgment Facts1 Britannia Alloys and Chemicals Limited (‘the applicant’ or ‘Britannia’), a company incorporated under English law, is a subsidiary of M.I.M. Holdings Limited (‘MIM’), an Australian company. In October 1993, Pasminco Europe (ISC Alloys) Limited sold its zinc business to MIM, which transferred it to Britannia. That undertaking produced and sold zinc products, including zinc phosphate. In March 1997, Trident Alloys Limited (‘Trident’), an independent company formed by Britannia’s management, acquired Britannia’s zinc business for GBP 14 359 072. Britannia is still in existence as a subsidiary of MIM, but is a non-trading company and therefore has no turnover. 2 Although they may have slightly differing chemical formulae, zinc orthophosphates form a homogeneous chemical product, generically referred to as ‘zinc phosphate’. Zinc phosphate, which is derived from zinc oxide and phosphoric acid, is widely used as an anti-corrosion mineral pigment in the paint industry. It is marketed either as standard zinc phosphate or as modified (or activated) zinc phosphate. 3 In 2001, virtually all of the world zinc production was controlled by the following five European producers: Dr Hans Heubach GmbH & Co. KG (‘Heubach’), James M. Brown Limited (‘James Brown’), Société Nouvelle des Couleurs Zinciques SA (‘SNCZ’), Trident (formerly Britannia) and Union Pigments AS (formerly Waardals AS) (‘Union Pigments’). 4 On 13 and 14 May 1998, the Commission carried out simultaneous and unannounced investigations under Article 14(2) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962, p. 87), at the premises of Heubach, SNCZ and Trident. From 13 to 15 May 1998, acting at the request of the Commission under Article 8(3) of Protocol 23 to the Agreement on the European Economic Area (EEA), the Surveillance Authority of the European Free Trade Association (EFTA) carried out simultaneous and unannounced investigations at the premises of Union Pigments under Article 14(2) of Chapter II of Protocol 4 to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice. 5 On 11 December 2001, the Commission adopted Decision 2003/437/EC relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-1/37.027 – Zinc phosphate) (OJ 2003 L 153, p. 1). The decision which is the subject of the present judgment is the one notified to the undertakings concerned, and which is annexed to the application (hereinafter ‘the contested decision’). That decision differs in certain respects from the one published in the Official Journal of the European Union. 6 In the contested decision, the Commission states that a cartel, consisting of Britannia (Trident as from 15 March 1997), Heubach, James Brown, SNCZ and Union Pigments, existed between 24 March 1994 and 13 May 1998. The cartel was limited to standard zinc phosphate. The members of the cartel first adopted a market sharing agreement with sales quotas for the producers. Subsequently, they agreed on ‘bottom’ or ‘recommended’ prices at each meeting, which they generally followed. There was also a certain amount of customer allocation. 7 The operative part of the contested decision reads as follows:‘Article 1Britannia ..., Heubach ..., James ... Brown ..., [SNCZ], Trident ... and [Union Pigments] have infringed the provisions of Article 81(1) of the Treaty and Article 53(1) of the EEA Agreement by participating in continuing agreement and/or concerted practice in the zinc phosphate sector. The duration of the infringement was as follows:...(b) in the case of Britannia ...: from 24 March 1994 until 15 March 1997;Article 3For the infringement referred to in Article 1, the following fines are imposed:(a) Britannia ... EUR 3.37 million,(b) ... Heubach ...: EUR 3.78 million,(c) ... James ... Brown ...: EUR 940 000,(d) ... [SNCZ]: EUR 1.53 million,(e) ... Trident ...: EUR 1.98 million,(f) [Union Pigments] ...: EUR 350 000....’8 In calculating the fines, the Commission applied the method set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty (OJ 1998 C 9, p. 3, ‘the Guidelines’) and the Commission Notice of 18 July 1996 on the non-imposition or reduction of fines in cartel cases (OJ 1998 C 207, p. 4, ‘the Leniency Notice’). 9 The Commission found first that the appropriate basic amount of fine for the applicant was EUR 3.75 million (recital 313 to the contested decision). Next, it referred to the limit which, under Article 15(2) of Regulation No 17, the fine to be imposed on each of the undertakings concerned may not exceed. In fixing the upper limit of 10% of turnover achieved in the previous financial year laid down by that provision, the Commission, in the case of the applicant, ‘took into account its global turnover for the business year ending 30 June 1996, which is the last available figure reflecting an entire year of normal economic activity’ (recital 345, footnote 196). As that turnover was EUR 55.7 million (recital 50), the upper limit of the fine was set at about EUR 5.5 million. As the amount of the fine before application of the Leniency Notice was below that upper limit, the Commission did not reduce it on that basis. 10 Finally, the Commission granted the applicant a reduction of 10% under the Leniency Notice (recital 366). The final amount of the fine imposed on the applicant was thus EUR 3.37 million (recital 370). Procedure and forms of order sought by the parties11 By application lodged at the Registry of the Court of First Instance on 21 February 2002, the applicant brought the present action. 12 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Fifth Chamber) decided to open the oral procedure and, by way of measure of organisation of procedure, asked the Commission to reply in writing to a question concerning definition of the market and to provide the full version of Trident’s statement of 23 April 1999 concerning the cartel. The Commission complied within the time-limit set. 13 The parties presented oral argument and answered questions put to them by the Court at the hearing on 1 July 2004.14 The applicant claims that the Court of First Instance should:– annul Article 3 of the contested decision in so far as it applies to the applicant;– in the alternative, amend Article 3 of the contested decision so as to substantially reduce the fine imposed on the applicant;– order the Commission to pay the costs.15 The Commission contends that the Court of First Instance should:– dismiss the application;– order the applicant to pay the costs. Law16 The applicant puts forward a single plea. It comprises three parts, in which the applicant claims that, by using its turnover for the business year ending on 30 June 1996 when calculating the upper limit of 10% of turnover, the Commission infringed: – Article 15(2) of Regulation No 17 and the principle of proportionality;– the principle of equal treatment;– the principle of legal certainty. The first part of the plea: infringement of Article 15(2) of Regulation No 17 and breach of the principle of proportionality Arguments of the parties17 The applicant claims that the Commission infringed Article 15(2) of Regulation No 17 in that, when calculating the 10% maximum limit for turnover, it took account of its turnover in a business year other than that preceding the contested decision. 18 In the applicant’s submission, that provision gives the Commission two options in setting the fine to be imposed on an undertaking. The Commission can either impose a fine of between EUR 1 000 and EUR 1 million or a fine in excess of EUR 1 million, provided that the final amount of that fine does not exceed 10% of the undertaking’s turnover in its ‘preceding business year’, namely, the business year preceding the date of the decision imposing a fine. The applicant claims that the wording of Article 15(2) of Regulation No 17 states clearly and unambiguously that the Commission must refer to the preceding business year in determining the upper limit of 10% of turnover. The Commission has no discretion to use another business year in fixing that upper limit. The applicant adds that, where the turnover of the undertaking concerned does not exceed EUR 10 million, the Commission cannot impose a fine of more than EUR 1 million under the second part of Article 15(2), as such a fine would of necessity exceed the l0% limit. 19 The applicant maintains that in the present case the Commission was wrong to use its turnover for the business year ending 30 June 1996 for the purpose of calculating the upper limit of 10% of turnover applicable to its fine (recital 345 to the contested decision and footnote 196). As the contested decision was dated 11 December 2001, the preceding business year which ought to have been used in order to determine that limit, was that ending on 30 June 2001. The applicant maintains that as it was a non-trading company at that time its turnover was nil. It considers that the Commission was not entitled to impose a fine of more than EUR 1 million on the applicant under the second part of Article 15(2) of Regulation No 17. It should have applied the first part of that provision and imposed a fine of between EUR 1 000 and EUR 1 million. The applicant claims that the fact that its turnover for the preceding business year was nil does not alter the fact that the Commission must refer to that business year when determining the 10% upper limit. If the Commission had decided to impose a fine of EUR 1 million, it should have reduced that fine by the percentage it considered appropriate under the Leniency Notice, namely 10%, leading to a fine of EUR 900 000. 20 It is clear from the case-law that ‘preceding business year’ within the meaning of Article 15(2) of Regulation No 17 refers to the last full business year of the undertaking concerned (Joined Cases T-25/95, T-26/95, T-30/95 to T-32/95, T-34/95 to T-39/95, T-42/95 to T-46/95, T-48/95, T-50/95 to T-65/95, T-68/95 to T-71/95, T-87/95, T-88/95, T-103/95 and T-104/95 Cimenteries CBR and Others v Commission [2000] ECR II-49l, paragraph 5009). Since the Guidelines use the term ‘accounting year’ synonymously with ‘business year’ (paragraph 5(a)), the natural meaning of the term ‘last full business year’ used by the Court of First Instance in Cimenteries CBR and Others v Commission is the last full financial year for accounting purposes. 21 In its reply, the applicant disputes the Commission’s contention that the Court of First Instance should not restrict itself to a literal interpretation of Article 15(2) of Regulation No 17 but should also resort to historical and teleological methods of interpretation. It is settled case-law that the literal interpretation method should be used where the text of a provision is clear and unambiguous and clearly covers the situation in question (Case C-245/97 Germany v Commission [2000] ECR I-11261, paragraph 72, Case C-133/00 Bowden and Others [2001] ECR I-7031, paragraphs 38 to 44; Opinion of Advocate General Mayras in Case 67/79 Fellinger [1980] ECR 535, at 547). In the present case, according to the applicant, the Commission itself accepts that Article 15(2) of Regulation No 17 is clear when it states in its defence that ‘[l]ogically, the reference to the preceding business year would seem to refer to the year preceding the adoption of the decision imposing a fine’. 22 Moreover, a literal interpretation of Article 15(2) of Regulation No 17 conforms with the objectives pursued by the Community legislature. The reference in Article 15(2) to the preceding business year rather than, for example, to the turnover of the last year of the infringement shows that the legislature wished to gauge the likely impact on the undertaking and thus the proportionality of the fine in the light of the financial standing of the undertaking when the fine is imposed. According to the applicant, Article 15(2) of Regulation No 17 precisely targets cases such as this one, where the undertaking responsible for the infringement continues to exist but has considerably less economic power than it had at the time of the infringement and should therefore not be subject to an excessive and disproportionate fine. 23 The applicant criticises the Commission’s argument that its interpretation of Article 15(2) of Regulation No 17 is necessary in order to ensure appropriate deterrence. First, it disputes that that provision is based on the assumption that an undertaking’s turnover for the business year preceding a decision adequately reflects its turnover when the infringement was committed. The applicant considers that there are no grounds for asserting that the legislature made any such assumption and that the choice of the preceding business year rather than, for example, the turnover of the last year of the infringement shows that the aim is to gauge the likely impact on the undertaking and thus the proportionality of the fine in the light of the financial standing of the undertaking at the time the fine is imposed. Also, as regards the Commission’s argument that a fine of EUR 1 million is too low, the applicant states that such an amount was considered to have a sufficiently deterrent effect in its Decision 1999/271/EC of 9 December 1998 relating to a proceeding pursuant to Article 85 of the EC Treaty (IV/34.466 – Greek Ferries) (OJ 1999 L 109, p. 24, ‘the Greek Ferries decision’). Moreover, the applicant considers that the Commission’s argument concerning the risk of an undertaking diverting turnover in order to avoid the imposition of a higher fine is not relevant in the present case because it has not been suggested that the applicant acted in that way. The applicant submits that the Court should restrict its examination to the facts of this case as set out in the documents before it. 24 The applicant disputes the Commission’s contention that it interpreted Article 15(2) of Regulation No 17 in order to ensure its effectiveness in accordance with the case-law. It considers to be irrelevant the case-law cited by the Commission to the effect that, where it is necessary to impose a fine on an association of undertakings or on an undertaking acting on behalf of its members, the 10% limit should be calculated in relation to the total turnover of the members. The meaning attributed in that case-law to the term ‘turnover’ is relevant only in the context of those cases. 25 The Commission’s previous practice has been to respect the principle that setting the basic amount of the fine and applying the 10% upper limit are two separate stages in determining the fine and has not considered it necessary to apply that limit to the year which is the closest possible to that in which the undertaking committed the infringement, in circumstances where there is a significant difference between the undertaking’s turnover in the preceding business year and its size at the time of the infringement. Thus, in its Decision 2002/271/EC of 18 July 2001 relating to a proceeding under Article 81 EC and Article 53 of the EEA Agreement (Case COMP/E-1/36.490 – Graphite Electrodes) (OJ 2001 L 100, p. 1), the Commission set the basic amount of the fine by reference to the turnover of UCAR International, that is to say EUR 1 022 million, in 1998, the year before the infringement ended. Despite the fact that UCAR’s turnover in 2000, the year preceding the adoption of the decision, was EUR 181 million less than its turnover in 1998, the Commission applied the 10% limit to the 2000 turnover. 26 The applicant also claims that, by referring to a business year other than the preceding business year for the purposes of calculating the upper limit of 10% of turnover, the Commission failed to have regard to its financial standing when the contested decision was adopted and thus breached the principle of proportionality. That principle requires that any action taken by the Commission should not go beyond what is necessary to achieve a legitimate objective (Case 181/84 Man (Sugar) [1985] ECR 2889, paragraph 20). The Commission’s decision in the present case to apply the 10% limit to one of the applicant’s business years which bears no relation to its financial standing, measured by its level of turnover, at the time of the contested decision means that the fine imposed on the applicant does not reflect its economic power and is therefore not proportionate. The applicant points out that it had no turnover when the decision was adopted and that, in addition, the fine in question is substantially larger than its total current assets of approximately EUR 1.9 million, according to its audited annual accounts for the financial year ending on 30 June 2001. 27 As a preliminary point, the Commission states that the applicant was liable for the infringement in question and that when the contested decision was adopted it was still in existence. It was therefore necessary to impose a fine on the applicant (recitals 242 to 250 to the contested decision) (Case T-6/89 Enichem Anic v Commission [1991] ECR II-1623, paragraph 236). 28 The Commission accepts that, logically, the reference to the preceding business year in Article 15(2) of Regulation No 17 ‘would seem to refer to the year preceding the adoption of the decision imposing a fine’. However, it considers that, where the turnover for the preceding business year gives a totally distorted picture of the size of the undertaking concerned, it is allowed to take into account the turnover of a year before the preceding year. 29 The Commission disputes the applicant’s absolutely literal interpretation of Article 15(2) of Regulation No 17. It is clear from the case-law that, even if the wording of a provision seems to be clear, it is still necessary to refer to the spirit, general scheme, and context of the provision (Case 26/62 Van Gend en Loos [1963] ECR 1 and Case 6/72 Europemballage Corporation and Continental Can v Commission [1973] ECR 215). 30 In the present case, where the turnover was nil, the Commission considers that in order to assess the size and economic power of the undertaking it was entitled to take into account either the turnover of the group to which the undertaking belongs or the turnover of the last year of normal economic activity. Since the regulation refers to the ‘undertaking concerned’ the Commission has normally considered that the second option was the one to take. Both options may entail a certain deviation from the wording of Regulation No 17, but such deviations have been accepted in the past by the Community judicature and the second option is likely to be more favourable to the undertaking concerned. 31 The Commission then puts forward several arguments to justify its interpretation of Article 15(2) of Regulation No 17. In particular, it submits that its interpretation is necessary to ensure that the fine has the appropriate deterrent effect. When an undertaking continues to trade until the final decision is adopted, Regulation No 17 assumes, and so does the Commission, that the preceding business year will appropriately reflect the order of magnitude of the turnover of the undertaking at the time the infringement was committed. The applicant’s interpretation would nullify the objective of appropriate deterrence and, therefore, the possibility of imposing fines would be rendered totally ineffective. 32 Also, the Commission considers that its interpretation of Article 15(2) of Regulation No 17 is entirely in accordance with the case-law. First, the Community judicature has interpreted Regulation No 17 in such a way as to ensure its effectiveness. Second, the link between that provision and the assessment of the real size of the undertaking at the time of the infringement is confirmed by case-law (see for example Case C-298/98 P Finnboard v Commission [2000] ECR I-10157, paragraph 66; Case T-338/94 Finnboard v Commission [1998] ECR II-1617, paragraph 282; and Joined Cases T-39/92 and T-40/92 CB and Europay v Commission [1994] ECR II-49, paragraphs 136 and 137). Findings of the Court33 The Court notes at the outset that the applicant does not deny its participation in the cartel or infringement of Article 81 EC or challenge the Commission’s assessment of the gravity and duration of the infringement. It seeks only to have the fine cancelled or reduced on the ground that the Commission infringed Article 15(2) of Regulation No 17 by imposing on it a fine above the maximum threshold there laid down of 10% of the turnover achieved in the preceding business year. 34 Under Article 15(2) of Regulation No 17, the Commission may impose on undertakings ‘fines of from 1 000 to 1 000 000 units of account, or a sum in excess thereof but not exceeding 10% of the turnover in the preceding business year of each of the undertakings participating in the infringement ...’. 35 According to the case-law, the 10% limit laid down by Article 15(2) of Regulation No 17 seeks to prevent fines from being disproportionate in relation to the size of the undertaking and in particular it seeks to avoid the imposition of fines which it is foreseeable that the undertakings will not be able to pay. Since only the total turnover can effectively give an approximate indication of that size, the aforementioned percentage must be understood as referring to the total turnover (Case 100/80 to 103/80 Musique diffusion française and Others v Commission [1983] ECR 1825, paragraph 119). 36 The Court would also point out that the purpose of Article 15(2) of Regulation No 17 is to give the Commission the power to impose fines on undertakings to enable it to carry out the task of supervision conferred on it by Community law (Musique diffusion française and Others v Commission, cited in paragraph 35 above, paragraph 105, and Case T-224/00 Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission [2003] ECR II-2597, paragraph 105). That task includes the task of investigating and punishing individual infringements and also the duty to pursue a general policy designed to apply, in competition matters, the principles laid down by the Treaty and to guide the conduct of undertakings in the light of those principles. It follows that the Commission must ensure that the fines have a deterrent effect (see, to that effect, Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, paragraphs 105 and 106). 37 It is also clear from the case-law, and not denied by the parties, that pursuant to Article 15(2) Regulation No 17 the ‘preceding business year’ refers in principle to the last full business year of each of the undertakings concerned at the date of adoption of the contested decision (Cimenteries CBR and Others v Commission, cited in paragraph 20 above, paragraph 5009; Case C-291/98 P Sarrió v Commission [2000] ECR I-9991, paragraph 85). 38 It is however clear, both from the objectives of the system of which that provision forms part (see paragraphs 35 and 36 above) and from the case-law cited in paragraph 37 above, that the application of the 10% upper limit presupposes, first, that the Commission has at its disposal the turnover for the last business year preceding the date of adoption of the decision and, second, that those data represent a full year of normal economic activity over a period of 12 months. 39 Thus, for example, if the business year had ended before the adoption of the decision but the annual accounts of the undertaking in question had not been drawn up or had not been disclosed to the Commission, the latter would have the right, indeed the obligation, to use the turnover achieved in an earlier business year in order to apply Article 15(2) of Regulation No 17. Similarly, if, as a result of a reorganisation or a change in accounting practices, an undertaking has, for the preceding business year, produced accounts which relate to a shorter period than 12 months, the Commission is entitled to rely on the turnover achieved in an earlier complete year in order to apply that provision. 40 It is not, therefore, a simple question of choosing between a maximum fine of EUR 1 million and an upper limit fixed by reference only to the turnover for the business year preceding the adoption of the decision. 41 In the present case, as the contested decision is dated 11 December 2001, the preceding business year was the year from 1 July 2000 to 30 June 2001. However, the applicant had transferred its business in the zinc sector in 1997 and then ceased trading (see paragraph 1 above). More particularly, it carried on no business in the period from 1 July 2000 to 30 June 2001 and therefore had no turnover in that period. 42 Consequently, when the contested decision was adopted, the Commission did not have at its disposal a figure for the applicant’s turnover representing economic activity carried on by it during the preceding business year. The Court does not consider that situation to be fundamentally different from those mentioned in paragraph 39 above. If an undertaking has not carried on any economic activity during the preceding business year, the turnover for that period gives no indication of its standing, contrary to the requirements of the case-law (see paragraph 35 above) and therefore cannot serve as a basis for determining the upper limit provided for in Article 15(2) of Regulation No 17. 43 As regards the applicant’s argument that the purpose of that limit is to evaluate the probable impact of the fine on the undertaking, having regard to its size when the fine is imposed, and that the Commission breached the principle of proportionality (see paragraphs 22 and 26 above), it must be borne in mind that the aim of imposing that upper limit is to ensure that fines are not disproportionate to the size of the undertaking and, in particular, to avoid a situation in which the undertakings concerned are unable to pay the fines imposed (see paragraph 35 above). The application of the limit of 10% to achieve that aim presupposes that the undertaking concerned is engaged in a commercial activity on the date when the fine is imposed. However, in this case, a commercial decision was taken in 1997 that the applicant’s zinc business should be transferred to Trident, that the applicant should cease trading in the market in question and that the proceeds of the transfer should be distributed without any new commercial activity being embarked upon. As the applicant had realised the value of its commercial activity by means of that transfer, it did not plead inability to pay the fine on the ground that it had no current commercial activity (see paragraph 1 above). In those circumstances, the Court considers that it was not disproportionate to determine the upper limit of the fine by reference to the standing of the applicant before the transfer of its commercial operations. 44 The applicant’s argument to the effect that it is clear, according to its interpretation of Article 15(2) of Regulation No 17, that the Commission is still in a position to impose a fine of EUR 1 million, an amount which the latter moreover considered to have a sufficient deterrent effect, cannot be accepted. The mere fact that the Commission may have taken the view, in earlier decisions and, moreover, in circumstances different from those of this case, that a fine of EUR 1 million had a sufficient deterrent effect does not mean that it is obliged to make the same assessment in its subsequent decisions. In addition, the Guidelines indicate that possible fines for ‘very serious’ infringements may exceed EUR 20 million and the applicant does not deny that the infringement at issue in the present case is ‘very serious’. The Commission was therefore entitled to consider that a fine of EUR 1 million was not sufficient. 45 It follows that the Commission was not obliged, in setting the 10% limit provided for by Article 15(2) Regulation No 17, to refer to the applicant’s nil turnover for the business year ending on 30 June 2001. 46 It is next necessary to consider whether the Commission was entitled, as it did in the contested decision, to use the applicant’s turnover for the business year ending on 30 June 1996 and thus to disregard more recent business years. 47 In the contested decision, the Commission states that, in setting the 10% upper limit, it took into account the applicant’s global turnover for the business year ending on 30 June 1996, which was ‘the last available figure reflecting an entire year of normal economic activity’ (see paragraph 9 above). The applicant’s turnover for the business year ending on 30 June 1996 was EUR 55.7 million. It is clear from the documents before the Court, as was confirmed by the parties at the hearing, that the applicant carried on its normal activities until March 1997, at which time it transferred its zinc business to Trident (see paragraph 1 above). Moreover, it is apparent from the applicant’s accounts for the business year ending on 30 June 1997 that, following that transfer, the applicant carried on a lower level of commercial activity, purchasing zinc from a supplier under a pre-existing agreement and reselling it at cost price to Trident. Thus, the applicant’s turnover for the business year ending on 30 June 1997 was GBP 34.8 million. During the following year, it ceased that residual activity, so that, for the business year ending on 30 June 1998, it achieved a turnover of only GBP 7.3 million. It had no turnover in subsequent business years. 48 As stated in paragraph 38 above, in determining the upper limit provided for in Article 15(2) of Regulation No 17, the Commission must have at its disposal a turnover representing a full 12-month period of normal economic activity. 49 The Court would point out that, even in a year of normal business activity, the turnover of an undertaking may fall significantly, or indeed substantially, as compared with previous years, for various reasons, such as a difficult economic context, a crisis in the sector concerned, an accident or a strike. However, as long as an undertaking has in fact achieved a turnover during a complete year in which economic activities, albeit on a reduced scale, have been carried on, the Commission must take the undertaking as it stands when setting the upper limit provided for in Article 15(2) of Regulation No 17. Accordingly, at least in situations where there is no indication that an undertaking has ceased its commercial activities or has diverted its turnover in order to avoid the imposition of a heavy fine, the Court considers that the Commission is obliged to fix the maximum limit of the fine by reference to the most recent turnover corresponding to a complete year of economic activity. 50 In that connection, the Court considers that, in the applicant’s case, the business year ending on 30 June 1996 is the last ‘full’ business year within the meaning of the judgment in Cimenteries CBR and Others v Commission (cited in paragraph 20 above), paragraph 5009. The applicant carried on its normal activities for only nine months of the business year ending on 30 June 1997 until the transfer to Trident in March 1997. As from the end of March 1997, the applicant was in the process of running down its commercial activities. In so far as it continued to carry on business during the last quarter of 1997, it confined that business to the purchase of zinc under a pre-existing agreement and its resale at cost price. The applicant’s last-mentioned business cannot be regarded as a normal economic activity in that, as a result of its agreement for the transfer of its zinc business, the applicant acted as a conduit between the supplier and Trident. Those activities must therefore be regarded, as from March 1997, as forming part of financial arrangements for the transfer of the zinc business. 51 It follows that the business year ending on 30 June 1996 was the last full business year preceding the contested decision within the meaning of Article 15(2) of Regulation No 17 and that therefore the Commission did not infringe that provision by setting the upper limit by reference to that year. 52 As regards the applicant’s argument alleging breach of the principle of proportionality, it must be rejected for the reasons given in paragraph 43 above. The second part of the plea: breach of the principle of equal treatment53 The applicant submits two arguments in support of the second part of the plea, alleging infringement of the principle of equal treatment. 54 First, it argues that, by referring to a business year other than the preceding business year for the purposes of calculating the 10% upper limit, the Commission departed from its previous practice and thus infringed the general principle of equal treatment. According to the applicant, in the past the Commission has always used the preceding business year for the purposes of that calculation. In particular, where the undertaking involved had sold the relevant business to another entity during the period of the infringement, the Commission did not apply the upper limit to the turnover for a year in which the business involved was being carried on by the undertaking concerned but took into account that undertaking’s turnover in the business year preceding its decision (Commission Decision 86/398/EEC of 23 April 1986 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.149 – Polypropylene) (OJ 1986 L 230, p. 1) and Commission Decision 94/599/EC of 27 July 1994 relating to a proceeding pursuant to Article 85 of the EC Treaty (IV/31.865 – PVC) (OJ 1994 L 239, p. 14)). The applicant considers that the Commission correctly decided that it had no discretion to apply the upper limit of 10% of turnover in relation to any business year other than that preceding the contested decision. 55 The applicant states that in the Greek Ferries decision, cited in paragraph 23 above, where the turnover of Karageorgis, one of the undertakings concerned, was unavailable for the preceding business year, the Commission relied on the first part of Article 15(2) of Regulation No 17 and fined Karageorgis EUR 1 million. According to the applicant, its situation in the present case is very similar to that of Karageorgis, in that both companies had withdrawn from the market a very long time before the adoption of the Commission decision. 56 Second, the applicant submits that the Commission infringed the principle of equal treatment by not treating it in the same way as Union Pigments and SNCZ in setting the upper limit for the fine even though it was in the same situation as those undertakings. In determining the upper limit for the fines imposed on Union Pigments and SNCZ, the Commission used their turnover for the preceding business year and thus reduced their fines. However, in the applicant’s case, the Commission referred to an earlier business year and so did not reduce its fine. Although the financial standing of Union Pigments and SNCZ, measured by turnover, at the time of adoption of the contested decision was taken into account, it was not in the applicant’s case. 57 The Commission rejects the applicant’s arguments concerning the alleged breach of the principle of equal treatment.58 First, it states that there has been no departure from its earlier practice such as to infringe the principle of equal treatment. It admits that for the purpose of calculating the upper limit of 10% it has normally used the turnover of the undertaking concerned in the business year preceding the adoption of its decision. It states that, contrary to the applicant’s assertion, the Commission acted in that way not because it considered that it was not entitled to use another business year, but rather because it did not have to address the situation which arose in the present case, in which a cartel member had disposed of all its business whilst remaining legally in existence. The Commission points out in that regard that its previous practice cannot serve as a legal framework for the fines imposed in competition matters, since that framework is defined solely in Regulation No 17 (Case T-23/99 LR AF 1998 v Commission [2002] ECR II-1705, paragraph 234). 59 Second, the Commission considers that the applicant’s argument that it was treated differently from other undertakings in the same situation is unfounded. 60 It is settled case-law that the principle of equal treatment is infringed only where comparable situations are treated differently or different situations are treated in the same way, unless such difference in treatment is objectively justified (Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, cited in paragraph 36 above, paragraph 69, and Case T-311/94 BPB de Eendracht v Commission [1998] ECR II-1129, paragraph 309). 61 The applicant’s first argument, namely that the Commission departed from its earlier practice, is unfounded. Its situation is not comparable to that of the undertakings involved in the cases cited in paragraph 54 above because it achieved no turnover in the business year preceding the contested decision. Accordingly, it cannot insist on being treated in the same way as the undertakings in those earlier cases. 62 The applicant’s second argument, alleging discrimination as between itself, on the one hand, and, on the other, SNCZ and Union Pigments, must also be rejected. Having regard to the case-law cited in paragraph 60 above, the Court considers that the applicant is clearly in a situation different from that of SNCZ and Union Pigments. The latter, in contrast to the applicant, were still active in the zinc phosphate sector when the contested decision was adopted, so that their turnover during the preceding business year constituted a reliable indicator of their economic standing. As a nil turnover gives a false impression of the applicant’s standing, the Commission was entitled to refer to an earlier year and, accordingly, to treat the applicant differently from SNCZ and Union Pigments. 63 In addition, the applicant’s argument alleging breach of the principle of equal treatment overlooks the fact that, if the Commission had not used the turnover achieved in an earlier business year, there would have been clear and unjustified discrimination in favour of the applicant, above all as compared with Trident. If the Commission had confined itself to imposing on the applicant a fine of EUR 1 million for an infringement which had lasted for three years (from 24 March 1994 to 15 March 1997), that fine would have represented only one half of that imposed on Trident, which had purchased the applicant’s zinc business and had participated in the infringement as its ‘successor’ for a period of 14 months (from 15 March 1997 to 13 May 1998). 64 The second part of the sole plea in law must therefore be rejected The third part of the plea: breach of the principle of legal certainty65 The applicant claims that, by referring to a business year other than the financial year preceding the decision for the purposes of calculating the upper limit of 10% of turnover, the Commission infringed the principle of legal certainty. That principle requires that undertakings must be able to carry on business under conditions of predictability. Measures which have legal effects must be certain and their application foreseeable. That principle must be particularly strictly observed in relation to measures which have financial consequences, such as the imposition of fines (Case 326/85 Netherlands v Commission [1987] ECR 5091, paragraph 24). According to the applicant, the principle of legal certainty requires that Article 15(2) of Regulation No 17 be interpreted strictly so that the 10% limit is always applied to the business year immediately preceding the adoption of the decision imposing a fine. To allow the Commission a discretion arbitrarily to apply that limit to previous business years would mean that undertakings would no longer be able to predict the way in which penalties might be imposed on them. 66 The applicant adds that the Commission’s interpretation of Article 15(2) of Regulation No 17, to the effect that if the turnover of the undertaking concerned in the business year preceding the decision gives a totally distorted picture of the undertaking at the time of the infringement it may select a year which more or less reflects the undertaking’s economic strength at the time of the infringement, leads to an unacceptable level of legal uncertainty where an undertaking experiences a downturn in the business year preceding the decision. It could not determine whether the Commission would take into account the turnover of a year other than the preceding business year, and what year the Commission would consider acceptable. The only way to ensure legal certainty is to take the preceding business year as the reference year for determining the limit in accordance with Article 15(2) of Regulation No 17. 67 The applicant also considers that the fact that it allegedly did not raise that point in its reply to the statement of objections does not mean that it had predicted the Commission’s approach. It points out that it stated in its reply to the statement of objections that it could not be held liable for any fine and that the Commission should impose a fine in respect of the entire period of the infringement on its economic successor, Trident. The applicant always considered that if the Commission decided to impose a fine on it the maximum amount would be EUR 1 million, less any deduction for cooperation. Such a fine, for an undertaking with no turnover and minimal assets, like the applicant, could not be described as ‘symbolic’. The applicant did not give its views on the interpretation of Article 15(2) of Regulation No 17 in its reply to the statement of objections because it considered that the text of that provision was entirely clear and compelling. 68 The Commission considers that the third part of the plea should be rejected in its entirety. First, it disputes the applicant’s argument that Article 15(2) of Regulation No 17 should be interpreted narrowly. Second, it contends that the interpretation of Article 15(2) which it applied was predictable. 69 The principle of legal certainty requires that legal rules be clear and precise, and aims to ensure that situations and legal relationships governed by Community law remain foreseeable (Case C-63/93 Duff and Others [1996] ECR I-569, paragraph 20, and Case T-229/94 Deutsche Bahn v Commission [1997] ECR II-1689, paragraph 113). 70 It must be pointed out that the provisions governing the implementation of Article 81 EC, and in particular Regulation No 17 and the Guidelines, enable undertakings to foresee with certainty that a fine will be imposed in the event of infringement of the Community competition rules and that the amount of the fine will be determined on the basis of the gravity and duration of the infringement. 71 Article 15(2) of Regulation No 17 ensures that where the amount of the fine exceeds EUR 1 million, it will not exceed the upper limit of 10% of the turnover achieved by the undertaking concerned in the preceding business year. However, the interpretation and application of that provision depend on the circumstances of each case and, as indicated in paragraph 39 above, on the availability and completeness of the annual accounts recording the turnover concerned. 72 Furthermore, the consequences of applying Article 15(2) of Regulation No 17 must be such that the effectiveness of Regulation No 17 is ensured. 73 In this case, it was perfectly foreseeable that a fine would be imposed on the applicant because it had participated in an infringement which the case-law classifies as a ‘clear infringement ... of the Community competition rules’ (see, to that effect, Case T-148/89 Tréfilunion v Commission [1995] ECR II-1063, paragraph 109, and BPB de Eendracht v Commission, cited in paragraph 60 above, paragraphs 303 and 338). It was also foreseeable that that fine would be determined by reference to the gravity and duration of the infringement and that it would be adjusted to reflect the specific circumstances of the undertaking concerned, including its size, its economic capacity and any aggravating and attenuating circumstances. Conversely, the principle of legal certainty gave the applicant no guarantee that its cessation of commercial activities would result in its escaping a fine. 74 Contrary to the applicant’s contention, the Commission has no arbitrary power to apply the 10% upper limit to business years prior to the business year preceding the date of adoption of the decision. The Commission may use such an earlier business year only in exceptional circumstances. Moreover, as stated in paragraph 49 above, it does not, even in such cases, enjoy any great latitude regarding the choice of business year to use in fixing the upper limit of the fine. It is obliged to refer to the last full business year corresponding to a full year of normal economic activity. 75 In those circumstances, the third part of the sole plea, and therefore the entire plea, must be rejected.76 It follows from all the foregoing that the application must be dismissed in its entirety. Costs77 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission. On those grounds,THE COURT OF FIRST INSTANCE (Fifth Chamber)hereby:1. Dismisses the application;2. Orders the applicant to pay the costs.Lindh García-Valdecasas Cooke Delivered in open court in Luxembourg on 29 November 2005.E. Coulon P. LindhRegistrar President* Language of the case: English. | 973c2-0cb68e0-4a46 | EN |
IT IS PERMISSIBLE FOR AUSTRIA TO PROHIBIT THE SALE OF UNWRAPPED CHEWING-GUM FROM AUTOMATIC VENDING MACHINES | Georg SchwarzvBürgermeister der Landeshauptstadt Salzburg(Reference for a preliminary ruling from the Unabhängiger Verwaltungssenat Salzburg)(Free movement of goods – Quantitative restrictions – Measures having equivalent effect – National legislative provision prohibiting the sale of non-packaged confectionery from vending machines – Hygiene of foodstuffs)Opinion of Advocate General Geelhoed delivered on 28 June 2005 Judgment of the Court (First Chamber), 24 November 2005 Summary of the JudgmentFree movement of goods – Quantitative restrictions – Measures having equivalent effect – Hygiene of foodstuffs – Directive 93/43 – National legislation prohibiting the sale of non-packaged confectionery from vending machines – Justification – Protection of public health (Arts 28 EC and 30 EC; Council Directive 93/43, Art. 7)It is not contrary to Articles 28 EC, 30 EC and Article 7 of Directive 93/43 on the hygiene of foodstuffs for a provision of national law, adopted before the entry into force of that directive, to prohibit the offer for sale from vending machines of sugar confectionery or products made using sugar substitutes, without wrapping. Such a provision, even if constitutes in principle, a measure having equivalent effect to quantitative restrictions within the meaning of Article 28 EC, may be justified under Article 30 EC on the grounds of the protection of public health, if it constitutes an adequate and proportionate measure to attain the objective pursued. (see paras 29, 33, 36, 38, operative part)JUDGMENT OF THE COURT (First Chamber)24 November 2005(*) In Case C-366/04,REFERENCE for a preliminary ruling under Article 234 EC from the Unabhängiger Verwaltungssenat Salzburg (Austria), made by decision of 16 August 2004, received at the Court on 23 August 2004, in the proceedings Bürgermeister der Landeshauptstadt Salzburg,THE COURT (First Chamber),composed of P. Jann, President of the Chamber, J.N. Cunha Rodrigues, E. Juhász (Rapporteur), M. Ilešič and E. Levits, Judges,Advocate General: L.A. Geelhoed,Registrar: R. Grass,having regard to the written procedure,after considering the observations submitted on behalf of:– Mr Schwarz, by J. Dengg, M. Vavrousek and T. Hölber, Rechtsanwälte,– the Commission of the European Communities, by J.-P. Keppenne and B. Schima, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 28 June 2005,gives the followingJudgment1 The reference for a preliminary ruling concerns the interpretation of Articles 28 to 30 EC and Article 7 of Council Directive 93/43/EEC of 14 June 1993 on the hygiene of foodstuffs (OJ 1993 L 175, p. 1), (hereinafter ‘the Directive’). 2 This reference has been made in the course of proceedings between Mr Schwarz and the Bürgermeister der Landeshauptstadt Salzburg (Mayor of Salzburg), who brought administrative proceedings of a criminal nature against that individual for having marketed non-packaged confectionery from vending machines. Legal context Community legislation3 Article 28 EC prohibits quantitative restrictions on imports and all measures having equivalent effect between Member States.4 Under Article 30 EC, Article 28 EC is not to preclude prohibitions or restrictions on imports justified, inter alia, on grounds of the protection of health and life of humans or animals provided that such prohibitions or restrictions do not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States. 5 The first recital in the preamble to the Directive states that the free movement of foodstuffs is an essential pre-condition for the completion of the internal market. 6 The second recital in the preamble to the Directive states that the protection of human health is of paramount concern.7 In accordance with the fourth recital in the preamble to the Directive, the general rules of hygiene for foodstuffs must be harmonised in order to protect human health. 8 Article 1 of the Directive provides:‘1. This Directive lays down the general rules of hygiene for foodstuffs and the procedures for verification of compliance with these rules. 2. This Directive shall apply without prejudice to the provisions adopted in the context of more specific Community food hygiene rules. ...’ 9 Article 3(1) of the Directive provides:‘The preparation, processing, manufacturing, packaging, storing, transportation, distribution, handling and offering for sale or supply of foodstuffs shall be carried out in a hygienic way.’ 10 In accordance with Article 3(2) of the Directive, food business operators must identify any step in their activities which is critical to ensuring food safety and ensure that adequate safety procedures are identified, implemented, maintained and reviewed on the basis of the principles used to develop the system of HACCP (hazard analysis and critical control points), principles which are listed in that same paragraph. 11 Article 3(3) of the Directive provides:‘Food business operators shall comply with the rules of hygiene as listed in the Annex. …’12 Article 7(1) of the Directive provides:‘Subject to the Treaty, Member States may maintain, amend or introduce national hygiene provisions that are more specific than those laid down by this Directive, provided that such provisions: – are not less stringent than those given in the Annex,– do not constitute a restriction, hindrance or barrier to trade in foodstuffs produced in accordance with this Directive.’13 Chapter III of the Annex to the Directive lists the following requirements for, inter alia, movable and/or temporary premises and for vending machines: ‘1. Premises and vending machines shall be so sited, designed, constructed and kept clean and maintained in good repair and condition as to avoid the risk of contaminating foodstuffs and harbouring pests, so far as is reasonably practicable. 2. In particular and where necessary:…(b) surfaces in contact with food must be in a sound condition and be easy to clean and, where necessary, disinfect. This will require the use of smooth, washable, non-toxic materials unless food business operators can satisfy the competent authority that other materials used are appropriate; (d) adequate provision must be made for the cleaning of foodstuffs;...(h) foodstuffs must be so placed as to avoid, so far as is reasonably practicable, the risk of contamination.’14 Chapter IX of the same Annex, entitled ‘Provisions applicable to foodstuffs’ states in paragraph 3:‘All food which is handled, stored, packaged, displayed and transported shall be protected against any contamination likely to render the food unfit for human consumption, injurious to health or contaminated in such a way that it would be unreasonable to expect it to be consumed in that state. In particular, food must be so placed and/or protected as to minimise any risk of contamination. Adequate procedures must be in place to ensure pests are controlled.’ National legislation15 The provisions of the Directive have been transposed into Austrian law by the Regulation on the Hygiene of Foodstuffs (Lebensmittelhygieneverordnung) of 3 February 1998 (BGBl. II, 31/1998, in the version published in BGBl. II, 33/1999). In it the provisions of the Directive have been reproduced in virtually identical terms. 16 Paragraphs 1(1) and 1(2) of the Regulation on Hygiene in relation to Confectionery from Vending Machines (Verordnung über die Hygiene bei Zuckerwaren aus Automaten) of 10 February 1988 (BGBl. 127/1988) (hereinafter ‘the Confectionery Hygiene Regulation’), reads as follows: ‘(1) Confectionery vending machines for the purposes of this regulation are vending machines which, in return for money inserted through a slot, dispense sugar confectionery or similar products made using sugar substitutes from a sealed container via a delivery chute and collecting tray (basin). (2) Confectionery vending machines must be installed or mounted in such a way that they are not exposed to direct sunlight. The collecting tray (basin) must be weatherproof in order to prevent contamination.’ 17 Under Paragraph 2 of the Confectionery Hygiene Regulation:‘The marketing of sugar confectionery or similar products made using sugar substitutes without wrapping from vending machines is prohibited.’ The main proceedings and the question referred for a preliminary ruling18 Administrative penal orders were made against Mr Schwarz by the Mayor of Salzburg who charged him with marketing various types of non-packaged chewing gum from vending machines contrary to the requirements of Paragraph 2 of the Confectionery Hygiene Regulation. 19 Mr Schwarz has lodged an appeal against those orders with the Unabhängiger Verwaltungssenat Salzburg (Independent Administrative Chamber Salzburg) in which he claims that the Confectionery Hygiene Regulation, and in particular Paragraph 2 thereof, is incompatible with Community law and, in particular, with the provisions of the Directive. 20 As it considers that the case before it requires the interpretation of Community law, the Unabhängiger Verwaltungssenat Salzburg has decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling: ‘Do Articles 28 to 30 EC, read in conjunction with Article 7 of Directive 93/43 … preclude a national provision, adopted before the entry into force of that directive, under which it is prohibited to offer for sale sugar confectionary or products made using sugar substitutes, without wrapping, from vending machines?’ Concerning the question referred for a preliminary ruling Submissions made to the Court21 Mr Schwarz maintains that the requirement, under Paragraph 2 of the Confectionery Hygiene Regulation, that each chewing gum be individually wrapped, has the effect of preventing the free movement of foodstuffs and is inconsistent with Article 7 of the Directive. That national provision entails that the goods at issue, which are intended for the Austrian market, are specially packaged and therefore can no longer be marketed in the vending machines currently in use in Austria. The effect of this is that there is, in practice, a prohibition on the marketing of goods which are not Austrian as foreign manufacturers are hardly prepared to manufacture packaged goods solely for that market. 22 According to Mr Schwarz, such barrier to importation is not justified on the grounds set out in Article 30 EC, in particular, the protection of human health. He submits that if that protection justified the enactment of measures such as those referred to in Paragraph 2 of the Confectionery Hygiene Regulation, non-packaged chewing gum could not be sold in vending machines in Germany or Italy where outside conditions, particularly climatic ones, are comparable to those in Austria. Furthermore, the applicant in the main proceedings contends that, even if the goods were packaged, the consumer would still have to remove that packaging, usually with his bare hands, so that the risk of potential contamination by the delivery tray would still exist. 23 The Commission of the European Communities considers that a provision such as that in Paragraph 2 of the Confectionery Hygiene Regulation constitutes a measure having equivalent effect to a quantitative restriction on imports within the meaning of Article 28 EC. Paragraph 2 has the effect of making the importation into Austria of goods which are legally marketed in other Member States more expensive. 24 As it is not aware of the specific reasons which led the Austrian legislature to prohibit the sale of non-packaged confectionery from vending machines, the Commission is of the opinion that it is not in a position to take a definitive view on the existence of a potential risk to the health of humans and, consequently, on the justification for that national provision in the light of Article 30 EC. However, it maintains that the risk assessment cannot be based on purely hypothetical considerations and that the real risk to public health alleged must appear sufficiently established on the basis of recent scientific data available at the date of adoption of the restrictive measure. Answer of the Court25 It must be stated that Article 29 EC, to which the national court refers, is not relevant for the purpose of responding to the request for a preliminary ruling. The Court will therefore confine itself to the interpretation of Articles 28 EC and 30 EC as well as to that of the Directive. 26 The Directive does not regulate the requirement for foodstuffs dispensed by vending machines to be packaged. The national measures concerning that matter have not therefore been covered by harmonisation at Community level. 27 Such national measures must, therefore, be assessed against the yardstick of the EC Treaty provisions relating to the free movement of goods. 28 The prohibition of measures having equivalent effect to quantitative restrictions set out in Article 28 EC covers all measures which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (see, in particular, Case 8/74 Dassonville [1974] ECR 837, paragraph 5; Case 178/84 Commission v Germany (Beer purity) [1987] ECR 1227, paragraph 27; Case C‑192/01 Commission v Denmark [2003] ECR I-9693, paragraph 39; and Case C‑270/02 Commission v Italy [2004] ECR I-1559, paragraph 18). 29 It is established that Paragraph 2 of the Confectionery Hygiene Regulation requires chewing gum which is put up for sale in vending machines in Austria to be packaged, although it is apparent from the file submitted to the Court by the national court that those same goods can be marketed abroad, in particular in Germany, without packaging. It follows from this that importers wishing to put those goods up for sale in Austria have to package them, which makes their importation into that Member State more expensive. It is also apparent from the file that vending machines designed for non-packaged goods cannot be used for packaged goods. It follows from this that, in principle, the aforementioned national provision constitutes a measure having equivalent effect to quantitative restrictions within the meaning of Article 28 EC. 30 However, the Court has consistently held that a national rule which hinders the free movement of goods is not necessarily contrary to Community law if it may be justified by one of the public-interest grounds set out in Article 30 EC or by one of the overriding requirements laid down by the Court’s case-law where the national rules are applicable without distinction (see, to this effect, Case 120/78 Rewe-Zentral (Cassis de Dijon) [1979] ECR 649, paragraph 8, and Commission v Italy, cited above, paragraph 21). 31 Given that, according to the national court, the justification for Paragraph 2 of the Confectionery Hygiene Regulation is to be found primarily in the requirement for the protection of public health, which is expressly provided for in Article 30 EC, it is in the light of that provision of Community law that it is appropriate to examine whether the latter does not preclude a national rule such as Paragraph 2. 32 As regards the placing of foodstuffs on the market, the Court has held that it is for the Member States, in the absence of harmonisation, to decide on their intended level of protection of human health and life, always taking into account the requirements of the free movement of goods within the Community (see, to that effect, Case 174/82 Sandoz [1983] ECR 2445, paragraph 16; Joined Cases C-1/90 and C-176/90 Aragonesa de Publicidad Exterior et Publivía [1991] ECR I-4151, paragraph 16; Case C-271/92 LPO [1993] ECR I-2899, paragraph 10; Commission v Denmark, paragraph 42; and Case C-41/02 Commission v Netherlands [2004] ECR I-11375, paragraph 42). 33 However, the measures taken must be such as to attain one or more objectives referred to in Article 30 EC, in the present case the protection of public health, and they must be proportionate, namely, not go beyond what is necessary to attain the objective pursued (see, in particular, LPO, paragraph 12, and Case C-373/92 Commission v Belgium [1993] ECR I-3107, paragraph 8). 34 It is apparent from the order for reference that, according to the Österreichische Agentur für Gesundheit und Ernährungssicherheit GmbH (the Austrian Health and Food Safety Agency), the prohibition referred to in Paragraph 2 of the Confectionery Hygiene Regulation is justified on the grounds of the protection of public health, given that, in the past, non-packaged goods were impaired by moisture or insects, in particular ants, within vending machine containers. 35 The national court also maintains that that prohibition considerably increases the safety of the foodstuffs at issue. In this respect it states that consumers who buy non-packaged confectionery from vending machines must necessarily touch the goods and the delivery tray with their bare hands without having washed them beforehand. That court considers that contamination of the delivery tray by pathogenic germs and their transmission onto the goods removed by the customer is by no means merely theoretical. 36 Thus it must be stated that, for the reasons pertinently set out by the Österreichische Agentur für Gesundheit und Ernährungssicherheit GmbH and also by the national court, the prohibition laid down in Paragraph 2 of the Confectionery Hygiene Regulation constitutes an adequate and proportionate measure for the protection of public health. 37 Moreover, it must be noted that nothing in the file leads to the conclusion that the public health grounds relied on to justify Paragraph 2 of the Confectionery Hygiene Regulation have been diverted from their proper purpose and used in such a way as to create discrimination in respect of goods originating in other Member States or indirectly to protect certain national products (see, to this effect, Case 34/79 Henn and Darby [1979] ECR 3795, paragraph 21, and Aragonesa de Publicidad Exterior et Publivía, paragraph 20). 38 In view of all the foregoing considerations, the answer to the question referred for a preliminary ruling must be that it is not contrary to Article 28 EC, Article 30 EC and Article 7 of the Directive for a provision of national law, adopted before the entry into force of that directive, to prohibit the offer for sale from vending machines of sugar confectionery or products made using sugar substitutes, without wrapping. Costs39 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (First Chamber) hereby rules:It is not contrary to Articles 28 EC, 30 EC and Article 7 of Council Directive 93/43/EEC of 14 June 1993 on the hygiene of foodstuffs for a provision of national law, adopted before the entry into force of that directive, to prohibit the offer for sale from vending machines of sugar confectionery or products made using sugar substitutes, without wrapping.[Signatures]* Language of the case: German. | fcfd3-467a8e5-486b | EN |
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