Société CAM SA v Commission of the European Communities (100/74)

Contents

In Case 100/74Société C.A.M., SA, a limited liability company having its registered office in Paris, assisted and represented by Edouard Brisac, Advocate at the Cour de Paris, with an address for service in Luxembourg at the Chambers of Mr Margue, 20 rue Philippe II,vEUROPEAN ECONOMIC COMMUNITY appearing through the Commission, represented by its Legal Adviser, J. Bourgeois, acting as Agent, assisted by Richard Wainwright, Legal Adviser to the Commission, with an address for service in Luxembourg at the Office of Pierre Lamoureux, Legal Adviser to the Commission, 4 boulevard Royal,THE COURTcomposed of: R. Lecourt, President, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, Lord Mackenzie Stuart and A. O'Keeffe, Judges,Advocate-General: J.-P. WarnerRegistrar: A. Van Houttegives the following

Judgment

The facts and the arguments of the parties put forward during the written procedure may be summarized as follows:

I —Facts and procedure

1.Article 16 of Regulation No 120/67/EEC of the Council of 13 June 1967 on the common organization of the market in cereals (OJ of 19. 6. 1967, p. 2276) governs the fixing and the payment of export refunds on certain of these products, including barley.The refund to which the exporter is entitled is that applicable on the day of exportation, but Article 16 (4) makes provision for the possibility of advance fixing of the refund, that is to say of opting for the refund applicable on the day on which the application for an export licence is lodged.A refund thus fixed in advance is however liable to certain modifications because Article 16 (4) of Regulation No 120/67 of the Council (as amended by Regulation No 2429/72 of the Council) provides that for certain products — including barley ‘the export refund applicable on the day on which the application for the licence is lodged, adjusted on the basis of the threshold price valid in the month of exportation shall be applied’.In fact, according to the wording of Regulation No 120/67 threshold prices (in the same way as target prices and intervention prices) although fixed in principle for a complete marketing year (Article 5 (6)) are, in accordance with Article 6 the subject of monthly increases justifiable, according to a recital in the preamble to the regulation, by the necessity to take account, among other things of storage costs and interest charges. An increase in the threshold price therefore means a corresponding increase in the refund.Having regard to the difficulties in the agricultural sector caused, during the summer of 1974, in particular by the increase in costs of production aggravating the effects of inflation on agriculture, the Council by Regulation No 2496/74 (OJ L 268 of 3. 10. 1974) 'by way of derogation from the principle of the annual fixing of prices made an increase of 5 % in the common prices of numerous agricultural products and especially of the target price and the single intervention price of barley with effect from 7 October 1974.As the threshold price is the target price landed at Rotterdam, that exceptional increase in target prices resulted in a corresponding increase in threshold prices which in its turn affected the amount of the refund. Thus to the monthly increase in refunds provided for in Article 16 (4) of Regulation No 120/67 there was added, as from 7 October 1974, an exceptional increase due to the raising of agricultural prices consequent upon Regulation No 2496/74. Article 4 of that regulation provides that the detailed rule for its application, any transitional measures and the alterations to be made to prices as ‘a result of this regulation’, shall be adopted by the Commission.On that basis the Commission adopted the regulation at issue, which provides that exports of cereals in respect of which the advance-fixing certificate is dated prior to 7 October 1974, shall not benefit from the exceptional increase in the threshold price because it is reasonable to believe — having regard to the duration of validity of certificates (in the present case until 16 October) — that the exporters concerned had already covered themselves by purchasing before the increase laid down by the Council on 2 October 1974.CAM. had on 19 July 1964 obtained an export licence for 10000 metric tons of barley, valid until 16 October 1974 with advance fixing of the refund at nil. Between the 7 and 16 October it exported the remainder, that is, 3978 metric tons and complains of having been refused in respect of these tonnages the increase in the refund consequent upon the exceptional increase in agricultural prices decided upon by the Council. In its opinion, the provision of the Council on which this refusal is based and which concerns it directly and individually is illegal and must be annulled. Its application, which was registered at the Court Registry on 19 December 1974 and which is directed against the European Economic Community acting through the Council and the Commission is for the annulment 'of the Community measure entitled ‘Regulation No 2546/74 of the Commission’.By an application on a procedural issue, registered on 11 February 1975, the Council raised an objection of inadmissibility based on the fact that the measure in dispute did not originate from it and asked the Court to come to a decision in accordance with Article 91 of the Rules of Procedure on that objection without, in so far as the Council was concerned, going into the substance of the case.By order of 12 May 1975^note the Court declared the application to be inadmissible to the extent to which it was directed against the Council. The written procedure followed the normal course as regards the application directed against the Commission.The Court, on hearing the report of the Judge-Rapporteur and the views of the Advocate-General, decided to dispense with any preparatory inquiry.

II —Conclusions of the parties

The applicant claims that the Court should:a) declare its application for the annulment of the Community measure entitled ‘Regulation (EEC) No 2546/74 of the Commission of 4 October 1974’ to be admissible and well founded;b) annul the said measure in its entirety, or, in the alternative, annul it at least to the extent to which it decided that, as regards the products coming under Regulation No 120/67, the export refunds which were the subject of advance fixing and in respect of which the application was lodged prior to 7 October 1974, should not be adjusted in relation to that part of the increase in the threshold price which resulted from the increase in agricultural prices on 7 October 1974;c) order the European Economic Community appearing through the Council of the European Community and the Commission of the European Community to pay all costs.The Commission contends that the Court should:— reject the application as inadmissible or in any case as unfounded;— order the applicant to pay the costs.

III —Submissions and arguments of the parties

1.The applicant considers its application to be admissible because Regulation No 2546/74 of the Commission does not amount to a provision having general application within the meaning of the second paragraph of Article 189 of the Treaty, but constitutes a group of individual decisions in the form of a regulation, directly and individually concerning a limited number of addressees, including the applicant. It relies in this respect upon the judgments of the Court in Joined Cases 16 and 17/62 (Judgment of 14 December 1962, Confederation nationale des producteurs de fruits et legumes, [1962] ECR 471), and Joined Cases 41 to 44/70 (Judgment of 13 May 1971, International Fruit Company, Rec. 1971, p. 411), which stressed the distinction between decisions ‘in the form of a regulation’ within the meaning of the second paragraph of Article 173 and regulations properly so called on the basis of the limited number of persons or undertakings liable to be affected by the contested measure and the fact that this number was known at the time of the adoption of the contested measure.

2.Moving to an examination of the substance of the case, the applicant claims that the contested measure infringed, on the one hand, Regulation No 120/67 of the Council and, on the other, the principle of the protection of legitimate expectation. The Commission could not of its own authority decide that certain provisions of a Council regulation, in the present case, Article 16 (4) of Regulation No 120/67, should not be applied. It is true that paragraph (6) of the same Article 16 provides that the Commission is to lay down detailed rules for the application of that article, but this conferment of authority does not authorize it to decide upon the non-application of that article to export refunds which were the subject of advance fixing before 7 October 1974.On the other hand, through the delivery of an export licence the applicant has a vested right in the application of Article 16 (4). By deciding that the refund to be returned to him would not be adjusted in accordance with the increase in threshold prices consequent upon Regulation No 2496/74, the Commission has infringed this right.Even if it were to be admitted that the applicant had not, stricto sensu a vested right to the application of Article 16 (4) of Regulation No 120/67 there would still be on the part of the Commission a violation of the principle of protection of the legitimate expectation of the applicant that the regulation of the Council would be applied.

3.In its statement of defence the Commission disputes the admissibility of the application. It considers, in the first place, that Regulation No 2546/74 constitutes a measure having a legislative function and that, in any case, the applicant is not individually concerned, within the meaning of the second paragraph of Article 173, by that measure.Regulation No 2546/74 is one of a series of measures, all entering into force on 7 October 1974 with a view to bringing into operation the decision to increase agricultural prices by 5 %, which was laid down by Regulation No 2496/74 of the Council. Taking into account the fact that detailed legislation would be necessary to put that decision into effect and to lay down the detailed rules within the framework of the various organizations of the market, the Council by Article 4 of Regulation No 2496/74 empowered the Commission to adopt detailed rules in accordance with what is known as the ‘management Committee procedure’. It was in application of this delegating provision that Regulation No 2518/74 ‘on the measures to be taken following the all-round increase with effect from 7 October 1974 of agricultural prices’ (OJ L 270 of 5. 10. 1974, p. 1) as well as the contested regulation were adopted. Regulation No 2546/74 thus partook of the general nature of Regulations Nos 2496/74 and 2518/74 with which it forms an indissoluble whole.The applicant, further, is not individually concerned either by Regulation No 2546/74 which concerns not only holders of licences for which refunds have been fixed in advance but also holders of import licences for which levies have been fixed in advance.The Court of Justice furthermore specified in its judgment of 16 April 1970 (Case 64/69, Compagnie française commentate et financière v Commission, [1970] ECR 221) that where a measure has the character of a regulation that character is not called in issue by virtue of the fact that the number and even the identity of the persons to whom it applies at a given moment may be determined more or less precisely, provided that it is clear that this application depends on an objective legal or factual situation defined by the measure with reference to its purpose.On the other hand although the retroactivity of a contested measure has been regarded by the Court as a necessary condition for its individual nature, it is not however a sufficient condition in that respect (Judgments of 1 July 1965 in Joined Cases 106 and 107/63, Toepfer [1965] ECR 405; Judgment of 23 November 1971 in Case 62/70, Bock, Rec. 1971, p. 897 and Judgment of 13 May 1971 in Joined Cases 41 to 44/70, International Fruit Company, Rec. 1971, p. 411).

4.As regards the substance of the case the Commission emphasizes in the first place that the decision to increase agricultural prices was not only exceptional but also unforeseeable at the time when the applicant obtained the licences for which the disputed refunds had been fixed in advance. Examining next the economic justification for the contested regulation, the Commission mentions that the adjustment of the refunds and levies to the increase in the threshold price, a consequence of the exceptional rise in agricultural prices, had unjustified consequences for importers and exporters with advance fixing settled prior to that increase. For importers it resulted in an unforeseeable extra charge. For exporters an extra increase in the refund would have amounted to an undue benefit. The last time refunds were fixed was in the month of July when an alteration in threshold prices was not foreseeable.As advance fixing must allow traders to enter into contracts for the duration of the validity of the licences, it was reasonable to take the view that the products to be exported under a licence granted before 7 October involving advance fixing would already have been the subject of purchases on the Community market at prices not yet affected by the Council's decision.Further, in view of the special circumstances of the market at the time the licence was granted, on 19 July (world price higher than the Community price) the applicant had already benefited from the advance fixing of the refund at ‘nil’, exempting it from the levy on exports which was to be introduced later.The submission based on the alleged lack of powers of the Commission must be rejected because its powers are founded not on Article 16 of Regulation No 120/67 of the Council, but on Article 4 of Regulation No 2496/74 of the Council amending agricultural prices. The applicant has on the other hand no vested right on which to rely. At the time of the issue of the licence, on 19 July 1974, Article 16 (4) of Regulation No 120/67 of the Council did not give a guarantee to increase the refund, but held out a mere prospect, in relation furthermore to the annual threshold price for the marketing season 1974/1975 and the monthly increases provided for by that very provision, but not in relation to a higher threshold price consequent upon an exceptional and unforeseen rise in agricultural prices.Even assuming that the system of advance fixing would guarantee an adjustment in respect of any change in the threshold price in relation to what it was at the time of the issue of the licence, it would still be necessary for the increase to apply to the threshold price taken into account to adjust the refunds refunds fixed in advance. In the present case the Community, by Regulation No 2546/74 of the Commission decided precisely that the increase should not affect these threshold prices. Lastly the mere prospect of an adjustment, if there was indeed such a prospect, never became a vested right since Regulation No 2546/74, excluding the adjustment, took effect on the same day as the Council Regulation amending agricultural prices, that is to say on 7 October 1974.As to the protection of legitimate expectation, the Commission refers to the judgment of the Court of 5 June 1973 (Case 81/72, Commission v Council [1973] ECR 575) from which it appears that such protection takes effect only on the double condition that the institution has previously entered into an undertaking by a measure specifying one of its lines of future action and that later, without valid justification, it fails to take such action. In the present case the Council did not in Article 16 of Regulation No 120/67, in any way lay down a line of future conduct for the adjustment of refunds fixed in advance to the increases in agricultural prices during the marketing year. Further, it was fully justified, in the opinion of the Commission, in not adjusting the refunds fixed in advance prior to 7 October 1974.

5.In its statement in reply the applicant maintains that Regulation No 2546/74 was applicable only to a fixed number of addressees perfectly known or identifiable and cannot consequently be regarded as a measure having a legislative function. It is moreover factually untrue that this regulation is closely linked to Regulations Nos 2496/74 of the Council and 2518/74 of the Commission and forms an indissoluble whole with them. According to the very wording of the recitals in the preamble to Regulation No 2546/74 its provisions had the sole purpose of preventing the adjustment of the levies on imports and refunds on exports related to the increase in threshold prices of 7 October 1974 from having the effect ‘of increasing such levies and refunds’ in a manner for which there is no economic justification. The applicant considers that the provisions of Regulation No 2546/74 concern it individually since it was the holder of an export licence, valid until 16 October 1974, for which the refund had been fixed in advance, and in respect of which on 7 October it still had 3978 tons to export. It is therefore admissible for it to ask for the annulment, if not of the whole of Regulation No 2546/74, then at least of its provisions concerning export refunds which were the subject of advance fixing.As to the powers of the Commission to decide on the non-adjustment of refunds, the Commission cannot rely, as it does, on Regulation Nos 2496/74 of the Council. This regulation did not become applicable according to the wording of Article 5 until 7 October 1974, whilst the disputed regulation of the Commission dates from 4 October 1974.In addition the contested regulation of the Commission does not come at all within the scope of Article 4 of Regulation No 2496/74 of the Council, as its provisions constitute neither ‘Detailed rules for the application of Articles 1 and 2’ of Regulation No 2496/74, nor ‘transitional measures’ nor alterations to be made as a result of Regulation No 2496/74 ‘to other prices and amounts fixed within the context of the common agricultural policy’.As regards the ‘vested rights’ of the applicant, the latter considers that the categorical wording of Article 16 (4) of Regulation No 120/67 guaranteed it the adjustment of the refund in relation to the threshold price in force during the month of export. Article 16 in this respect makes no distinction dependent upon the cause of price modifications.Lastly, the applicant is of the opinion that as regards the protection of legitimate expectation it was entitled to count upon the application of Regulation No 120/67 during the whole period of validity of the export licence which had been issued to it on 19 July 1974, since the said regulation amounted to a categorical promise of modification of export refunds in relation to variations of the threshold price which might occur during the period of validity of the export licences.

6.In its rejoinder the Commission admits that, logically, the contested regulation is not indispensable to the application of Regulations Nos 2496/74 of the Council and 2518/74 of the Commission. From the point of view of their economic objectives however, the three regulations must be regarded as a whole. The Commission relies on the judgment of the Court of 16 April 1970 (Case 64/69, Compagnie française commerciale et financière v Commission, [1970] ECR 227) in which the Court held that a transitional provision could be an integral part of the former and of the new provisions which it is designed to reconcile and consequently can partake of their general nature.

7.On the substance of the case the Commission mentions as to its powers that Regulation No 2496/74 of the Council, on which it bases its powers, although applicable as from 7 October, entered into force on the day of its publication in the Official Journal, that is on 3 October 1974. The contested Regulation No 2546/74 which was adopted on 4 October, entered into force on the day on which Regulation No 2496/74 became applicable, that is on 7 October. Further and in the alternative, the Commission claims that it had the power to adopt implementing provisions even before the entry into force of the regulation of the Council which conferred power upon it, having regard to the coincidence of the dates of implementation and the urgency of the situation. Regulation No 2546/74 certainly comes under the provisions of Article 4 of Regulation No 2496/74 of the Council, because that article was deliberately drafted widely, having regard to the unusual and exceptional nature of an alteration in prices during a marketing year, which was liable to lead to unforeseeable consequences.As regards the protection of vested rights, the Commission does not accept the argument that the applicant had the guarantee of an increase in the amount of refunds following the adjustment of prices. The Commission did not make any distinction between the causes of modification of the threshold price. On the contrary it considered that the increase in prices of 7 October would lead to an alteration in the threshold price of a different character from that mentioned in Article 16 (4) of Regulation No 120/67.As to the protection of legitimate expectation the Commission considers that neither of the two conditions necessary to support this submission — the definition of a course of future conduct and departure from this without valid justification — is fulfilled.The economic justification of Regulation No 2546/74 is based on a general evaluation of the situation and not on the special circumstances of the situation of the applicant.The Advocate-General delivered his opinion at the hearing on 28 October 1975.

Law

1The application, which was lodged at the Court Registry on 19 December 1974, is for the annulment of Regulation No 2546/74 of the Commission of 4 October 1974 concerning certain measures to be taken, following the raising with effect from 7 October 1974 of the threshold prices for cereals and rice, as regards licences for those products where the import levy or export refund is fixed in advance (OJ L 271 of 5. 10. 1974, p. 77).

2This regulation consists of two articles of which the first provides that: ‘Where an import levy or an export refund on a product coming under Regulation No 120/67/EEC or under Regulation No 359/67/EEC has been fixed in advance and the day on which the licence was applied or, as defined in Article 6 of Regulation (EEC) No 1373/70 is a day prior to 7 October 1974, such levy or refund shall not be adjusted as regards that part of the increase in the threshold price which results from the increase in agricultural prices taking effect on 7 October 1974’.

Admissibility

3According to the Commission, the contested measure being a regulation, the application must, since it comes from a private person, be rejected as inadmissible as Article 173 of the Treaty does not entitle natural or legal persons other than the Member States, the Council or the Commission to seek the annulment of such measures.

4The applicant disputes that this measure has the character of a regulation and maintains that it is a decision which although in the form of a regulation is of direct and individual concern to it.

5It is consequently necessary to decide upon the character and the scope of the contested measure in relation to the requirements of Article 173 in respect of the admissibility of applications for annulment.

6Under Article 16 (4) of Regulation No 120/67/EEC of the Council of 13 June 1967 on the common organization of the market in cereals (OJ of 19. 6. 1967, p. 2269) as amended by Article 6 (3) of Regulation No 2429/72 of the Council of 21 November 1972 (OJ L 264 of 23. 11. 1972) the exporters of certain cereals are authorized to request advance fixing of the refunds to which Article 16 (1) entitles them.

7Under this same provision the refunds thus fixed in advance at the amount in force on the day of the application, are nevertheless subject to monthly adjustments in accordance with the threshold price in force during the month of exportation.

8The threshold prices, laid down in relation to the target prices which are, under Article 2 of Regulation No 120/67 fixed for a complete marketing year, are, in their turn, under Article 6 of that regulation, subject to monthly alterations justified, according to the eighth recital in the preamble to the same regulation, by the necessity to take account, among other things, of storage costs and interest charges for storing cereals in the Community and of the need to ensure that the disposal of stocks conforms to market requirements.

9Thus these monthly alterations in the threshold price have repercussions on the amount of the refunds even in cases where these are fixed in advance.

10During the year 1974, to take account of the effects of general inflation on agriculture, the Council by Regulation No 2496/74 of 2 October 1974 (OJ L 268 of 3. 10. 1974) by derogation from the rule concerning the fixing of target prices and intervention prices for a complete marketing year, decided upon a single and exceptional increase of approximately 5 % in those prices during the marketing year as concerns certain products including cereals. This took effect on 7 October 1974.

11As from the same date that increase affected the threshold prices and consequently the amount of the refunds.

12The Commission however, entrusted by Article 4 of Regulation No 2496/74 with adopting the detailed rules for the application of the regulation ‘where appropriate by derogation from the rules for fixing contained in the regulations concerned’, decided in the contested regulation that this increase in the threshold prices should not be followed by a corresponding increase in export refunds for exports which were the subject of advance fixing where the application was lodged prior to 7 October 1974.

13According to the third recital in the preamble to the contested regulation that exclusion is justified on the ground that because of the abolition, especially since 26 July 1974 as concerns the cereals exported by the applicant, of any refund, the duration of validity of the licences involving advance fixing of the refund and not yet used by 7 October was to expire shortly so that it might therefore be assumed that the products to be exported ‘under such licences have already been sold on the Community market at prices determined by the common price level obtaining before 7 October 1974’.

14The contested measure, by denying to a class of traders the benefit of an increase in the amount of refunds for specific exports which was on the contrary granted to those whose applications for advance fixing were made at a later date, directly concerns the said traders.

15On the other hand it applies to a fixed and known number of cereal exporters as well as, in respect of each of them, to the amount of the transactions for which advance fixing had been requested.

16This is all the more so because, as refunds were abolished as from 26 July, the category of traders affected is reduced to those who, having had advance fixing before 26 July 1974, still had current export licences on 7 October.

17It appears from the abovementioned recital that the distinction drawn in respect of them is based on the presumption that they were already previously covered in respect of exports not yet effected on 7 October at prices not yet affected by the increase which was to take effect on that date.

18By adopting these distinguishing criteria the contested measure affects a fixed number of traders identified by reason of the individual course of action which they pursued or are regarded as having pursued during a particular period.

19Such a measure, even if it is one of a number of provisions having a legislative function, individually concerns the persons to whom it applies in that it affects their legal position because of a factual situation which differentiates them from all other persons and distinguishes them individually just as in the case of the person addressed.

20The application is admissible.

The substance of the case

21The applicant claims first that the Commission had no power to adopt on 4 October 1974 an implementing measure in respect of Regulation No 2496/74 of 2 October 1974, whilst that regulation, according to Article 5, was not to become applicable until 7 October.

22Regulation No 2496/74 of the Council, although it provided that the measures which it lays down were only to be applicable from 7 October, provides however that it was to enter into force on the date of its publication in the Official Journal, that is on 3 October 1974.

23From the date of entry into force the Commission w, as entitled under powers conferred on it by Article 4 of the regulation, to lay down implementing measures provided that they did not vary the intended date of application.

24Such is not the case as the contested measure provides that it should enter into force on 7 October 1974.

25This submission must be rejected.

26The applicant claims in the second place that the Commission, by adopting the contested measure, exceeded the limits of the powers which the Council had conferred upon it by Article 4 of Regulation No 2496/74.

27Article 4 of Regulation No 2496/74 by conferring on the Commission under Article 155 of the Treaty the powers necessary for the implementation of the rules which it lays down, provides that that institution may at the same time as it adopts detailed rules for the application of the regulation, make alterations to the prices and amounts fixed within the context of the common agricultural policy and that it may do so ‘where appropriate by derogation from the rules for fixing contained in the regulations concerned to the extent and for the durations strictly necessary to take into account this regulation’.

28That provision expressly confers on the Commission power to modify the rules for fixing the amounts payable as refunds, so that in deciding that the traders who had advance fixing arranged before a certain date would be excluded from the benefit of the supplementary refund, the Commission did not exceed its powers.

29This submission must also be dismissed.

30The applicant lastly claims that the contested provision infringes the vested rights which it possesses under Article 16 of Regulation No 120/67 according to which ‘the export refund applicable on the day on which the application for the licence is lodged, [is] adjusted on the basis of the threshold price valid in the month of exportation’ or at least the legitimate expectation which it was entitled to have in the continuance of these rules for the future.

31Even if the applicant was entitled to rely upon vested rights or a legitimate expectation in the continuation of increases in the amount of the refund, laid down by Article 16 of Regulation No 120/67 as it applied at the time of the request for advance fixing, it cannot take advantage of such a right or such a prospect as regards that part of the refund which corresponds to increases in the threshold price which are entirely divorced from the objective of Article 16, which were unforeseeable at the time when the amount was fixed in advance and which it is therefore clear could not have been taken into account among the reasons which in July 1974 led the applicant to request advance fixing.

32This submission must also be dismissed.

33The application must be dismissed.

Costs

34Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

35The applicant has failed in its submissions.

Operative part

On those grounds,THE COURThereby: Dismisses the application as unfounded;Orders the applicant to pay the costs.

Delivered in open court in Luxembourg on 18 november 1975