109/80 · GlobalLawDB

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In Case 109/80REFERENCE to the Court under Article 177 of the EEC Treaty by the College van Beroep voor het Bedrijfsleven [administrative court of last instance in matters of trade and industry] (Netherlands) for a preliminary ruling in the action pending before that court betweenC. Toneman BV, Leidschendam,andMinister for Economic Affairs, The Hague,THE COURT (Third Chamber)composed of: J. Mertens de Wilmars, President, Lord Mackenzie Stuart and U. Everling, Judges,Advocate General: G. ReischlRegistrar: A. Van Houttegives the following

Judgment

Facts and Issues

The facts and the arguments advanced by the parties during the course of the written procedure may be summarized as follows :

I —Facts and written procedure.

On 31 May 1979 Toneman BV, the appellant in the main action, appealed to the College van Beroep voor het Bedrijfsleven against decisions of the competent authority in the Netherlands refusing to grant a Netherlands under- taking, Grotex, licences for the import of handkerchiefs from Czechoslovakia.In 1979 the import of handkerchiefs of woven fabric (Nimexe code (1978): 61.05-30; 99) from Czechoslovakia was subject in the Netherlands to a quota system. Under Council Decision 79/252/EEC of 21 December 1978 amending the unilateral import arrangements in respect of State-trading countries (Official Journal 1979, L 60, p. 1) a quantitative quota of 3393000 items was opened in the Benelux countries for the import of those products from Czechoslovakia of which a share of 2733000 items was allocated to the Netherlands. The competent Netherlands Minister decided to distribute that quota between the applicants for licences in proportion to their imports of handkerchiefs from Czechoslovakia during 1977.Since Grotex had not imported handkerchiefs from Czechoslovakia during the relevant period the competent Netherlands authority refused to grant it import licences.For products whose importation has not been liberalized there are two distinct sets of quota arrangements adopted by the Council under Article 113 of the EEC Treaty:(a) Regulation No 1023/70 of the Council of 25 May 1970 establishing a common procedure for administering quantitative quotas (Official Journal, English Special Edition 1970 (I), p. 303) contains provisions which apply to quantitative import and export quotas which the Community has fixed unilaterally or by agreement. It lays down the procedures by which those quotas are fixed and allocated by the Council and administered by the Member States. Article 4 of that regulation provides amongst other things that “not later than three weeks after each quota allocation the Member States shall make known, by official publication, the products which may be imported or exported and the procedure whereby import or export of such products is to be authorized”.(b) Council Decision 75/210 of 27 March 1975 on unilateral import arrangements in respect of State-trading countries (Official Journal 1975, L 99, p. 7), provides, in regard to the State-trading countries listed in the annex to that decision, which include Czechoslovakia, for the opening by Member States of the import quotas indicated in respect of each Member State and each country in question in a list appended to that decision. Decision 75/210 contains a number of rules concerning the procedures to be followed by Member States when amending their unilateral import arrangements in regard to the countries in question. The second paragraph of Article 1 of that decision also states that the decision providing for the opening of quotas by the Member States “shall not affect Member States' rules governing the opening and administration of quotas”. Under Article 8 of the decision the Council is to adopt each year any amendments which it appears necessary to make for the following year to those quotas. As regards 1979, the list of quotas was adopted by Decision 79/252/EEC.The appellant in the main action contends that the national measures imposing quotas promulgated by the Netherlands administration to implement Decision 79/252/EEC are null and void because during the three weeks after the date of its decision allocating the quota (21 December 1978) the administration failed to make known by official publication the products for which and the procedure by which imports were authorized. According to the appellant the duty to inform interested parties contained in Article 4 of Regulation No 1023/70 applies not only to the fixing of Community quotas but also to the fixing of so-called “national” quotas as the same considerations of legal certainty apply in both cases. Not having been informed in time of the criteria selected by the Government of the Netherlands for the allocation of the quota in 1979 the appellant in the main action entered into commitments which the refusal to grant a licence made it unable to honour thereby causing it considerable damage.Taking the view that the dispute raised problems concerning the interpretation of Community law, by order of 25 March 1980 the College van Beroep voor het Bedrijfsleven asked the Court of Justice to give a preliminary ruling on the following questions :1. Must Regulation (EEC) No 1023/70 of the Council be interpreted to mean that the provision concerning publication contained in Article 4 of the regulation applies to the import quotas to be opened by the Member States pursuant to Article 3 of the Council Decision of 21 December 1978 (79/252/EEC)?2. If the answer to Question 1 is in the affirmative, must it then be held that upon a true construction of Article 4 of Regulation No 1023/70 — on its own or taking account also of the date on which the publication as meant by Article 3 of the regulation took place — a scheme adopted by a Member State for the issue of import licences in regard to an import quota opened pursuant to Article 3 of the Council Decision of 21 December 1978 is not binding if the Member State concerned has disregarded the provision concerning publication in Article 4 of Regulation No 1023/70?”The order for reference was registered at the Court of Justice on 8 April 1980.In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Economic Community written observations were submitted by the Netherlands Government, represented for that purpose by I. Verkade, and by the Commission of the European Communities, represented for that purpose by J. H. J. Bourgeois, Legal Adviser, acting as Agent.On hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry.By order of 1 October 1980 made pursuant to Article 95 of the Rules of Procedure the Court assigned the case to the Third Chamber.

II —Written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

A —Observations of the Netherlands Government

According to the Netherlands Government there is a fundamental difference between national and Community quotas. In the first place that is because of the use of different legal instruments for the two types of arrangements, namely Regulation No 1023/70 (cited above) in the case of the arrangements for Community import quotas and the allocation thereof into national shares, and the decisions, for example Decisions 75/210 and 79/252 addressed to the Member States, in the case of the arrangements for national quotas which, in the absence of or pending Community import arrangements, continue to exist in the case of certain products from State-trading countries.In the second place the sphere of application of the two types of arrangements and the schemes which they set up are different. Regulations establish Community quotas unilaterally or by agreement and apportion them into national quotas whereas decisions empower and require Member States to establish national quotas which then, moreover, remain subject to the national rules on quotas.Furthermore, any amendment of the quotas is regulated in a different way: by Article 2 (2) of Regulation No 1023/70 where Community quotas are concerned, and by Articles 3 to 7 of Decision 75/210 where “national” quotas are concerned.In view of those differences the Netherlands Government is of the opinion that Regulation No 1023/70 and particularly Articles 3 and 4 thereof apply only to Community quotas to the exclusion of national quotas. If the case were otherwise two different procedures would be applicable to the amendment of those quotas. Furthermore, two different systems would at the same time govern Community publication of the national quotas: on the one hand Article 3 of Regulation No 1023/70 and, on the other, Article 5 (5) of Decision 75/210.The Netherlands Government accordingly believes that the provisions of Regulation No 1023/70 do not apply to the national import quotas referred to in Decision 79/252.The first question from the College van Beroep voor het Bedrijfsleven should therefore be answered in the negative, which removes any purpose from the second question.

B —Observations of the Commission

The Commission observes that the present state of the special arrangements applied to State-trading countries is mainly attributable to two factors. First of all foreign trade is the monopoly of the State and forms an integral part of the planned economy. Secondly both at the time when the Community was set up and on the accession of the new Member States, the situation regarding the liberalization of trade with respect to those countries varied considerably from one Member State to another.Since the solution of fixing Community quotas could be applied only gradually the Community thought it possible to maintain national quotas in being provided the Community procedures were observed.

First question

In order to reply to this question the Commission compares the arrangements set up by Decision 75/210 with those under Regulation No 1023/70. The first paragraph of Article 1 of Decision 75/210 provides that the Member States shall open for 1975 the import quotas shown in the annexes. The decisions subsequently adopted each year then fix the import quotas on each occasion for the relevant year and amend that paragraph of the article and the annexes. The second paragraph of Article 1 of that decision, however, remains unchanged and consequently applies to the quotas referred to by Decision 79/252. The second paragraph provides that the first paragraph “shall not affect Member States' rules governing the opening and administration of quotas”. Thus the Council clearly wished to leave it to the Member States to decide upon the details of opening and administration of the quotas. It follows that even if Regulation No 1023/70 were concerned with the quotas referred to in Decision 75/210 and in the following decisions — which, the Commission states, it is not — the second paragraph of Article 1 of Decision 75/210 would in any event exclude the application of Regulation No 1023/70 in so far as it governs the opening and administration of quotas.Since Regulation No 1023/70 applies to Community quotas “fixed for the Community as a whole”, either on a unilateral basis or pursuant to agreements with non-member countries, the Community character of those quotas must, notwithstanding the allocation of national shares, be taken into account as far as possible, whence the need to enact common rules, especially as regards the duty to effect certain publications (Article 4), the procedure for apportioning shares between exporters and importers (Article 5), and the periods of time provided for those operations.Decision 75/210 and the subsequent decisions, on the contrary, concern not the shares in Community quotas but the quotas which Member States open under their import arrangements whose application is in large part governed by rules in force in the various Member States. Together with that difference of form there is a substantive difference: whilst the importation of the products referred to in Regulation No 1023/70 is subject to quota restrictions imposed comprehensively for the whole Community, the products referred to in Decision 75/210 and in the subsequent decisions adopted each year may be subjected to quotas in one Member State, liberalized in another Member State and restricted quantitatively in a third. The Commission accordingly believes that the first question should be answered as follows:“Article 4 of Regulation (EEC) No 1023/70 does not apply to the import quotas to be opened by Member States in accordance with Article 3 of the Council Decision of 21 December 1978 (79/252/EEC)”.

Second question

Since in the Commission's opinion the answer to the first question is in the negative it only briefly sets out its views on the second question.The Commission believes that the question whether national rules are “not binding” as a consequence of a failure to observe the provisions of Article 4 of Regulation No 1023/70 should be resolved pursuant to national provisions with the qualification that in all cases the interests of individuals injured by the failure to observe that provision must be protected. If there has been a breach of the duty to effect publication, the existence of the unpublished rules may not be relied upon as against an importer unless it appears that he was informed of them in another way.

III —Oral procedure

The Commission of the European Communities, represented by its Agent, J. H. J. Bourgeois, presented oral argument at the sitting held on 15 January 1981.The Advocate General delivered his opinion at the sitting on 26 February 1981.

Decision

1By order dated 25 March 1980, which was received at the Court on 8 April 1980, the College van Beroep voor het Bedrijfsleven referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 4 of Regulation No 1023/70 of the Council of 25 May 1970 establishing a common procedure for administering quantitative quotas (Official Journal, English Special Edition 1970 (I), p. 303).

2Those questions have been raised in an action pending before that court between Handelsonderneming C. Toneman BV, the plaintiff in the main action, (hereinafter referred to as “Toneman”) and the Minister for Economic Affairs of the Netherlands concerning the refusal of the competent Netherlands authorities to grant an importer licences for the import of handkerchiefs from Czechoslovakia.

3In 1979 the importation of handkerchiefs into the Netherlands from Czechoslovakia, which already required the issue of import licences, became subject to a quota system. The quota in question had been adopted on the basis of Council Decision 79/252/EEC of 21 December 1978 amending the unilateral import arrangements in respect of State-trading countries (Official Journal 1979, L 60, p. 1). In Article 3 thereof that decision provided that Member States were to open import quotas and, in Annex IX thereto, that the quota for the import of handkerchiefs from Czechoslovakia into the Benelux countries was to be 3393000 items. According to the order making the reference for a preliminary ruling, the Netherlands Minister for Economic Affairs decided to distribute that part of the Benelux countries' quota allocated to the Netherlands on the basis of imports of handkerchiefs from Czechoslovakia during 1977. Since the importer concerned in this case had not imported handkerchiefs from Czechoslovakia during the reference period the import licences for 1979 for which the importer applied were refused.

4Toneman appealed to the College van Beroep voor het Bedrijfsleven against that refusal on the ground that the decision of 21 December 1978 on the opening of the quota in question, which entered into force on 1 January 1979, had not been published in the Official Journal of the European Communities until 12 March 1979, that the Netherlands authorities had never given any general notification of the imposition of the quotas in question, and that the traders concerned had not been informed of that measure in good time.

5The College van Beroep voor het Bedrijfsleven took the view that the outcome of the dispute depended on the interpretation of Community provisions on the imposition of quotas and referred to the Court of Justice for a preliminary ruling two questions on the interpretation of Article 4 of Regulation No 1023/70 of the Council and the effects of any failure to comply with that provision.

6The first of those questions is worded as follows :“Must Regulation No 1023/70 of the Council be interpreted to mean that the provision concerning publication contained in Article 4 of the regulation applies to the import quotas to be opened by the Member States pursuant to Article 3 of Council Decision 79/252 of 21 December 1978”?

7Article 4 of Regulation No 1023/70 provides that “not later than three weeks after each quota allocation the Member States shall make known, by official publication, the products which may be imported or exported and the procedure whereby import or export of such products is to be authorized”.

8The Commission and the Netherlands Government consider that that provision applies only to Community quotas and not to national quotas which in certain cases continue to exist, with the Community's permission, in regard to State-trading countries. The quota involved in this case is such a national quota.

9The answer to the question submitted by the national court should be sought both within the context of the Community provisions on the imposition of quotas and from the wording of those provisions.

10When a common commercial policy was introduced after the expiry of the transitional period, Regulation No 1023/70 of the Council laid down, in the case of products whose import was not liberalized, Community provisions on quantitative import quotas and in particular it specified the procedures by which those quotas are to be fixed and allocated by the Council and administered by the Member States. However, since it did not appear possible to establish a Community system in all cases, Council decisions allowed Member States to retain the right to maintain national quota arrangements in certain cases. That was so in particular in the case of Council Decision 75/210 of 27 March 1975 on unilateral import arrangements in respect of State-trading countries (Official Journal 1975, L 99, p. 7), as amended by Council Decision 79/252 of 21 December 1978, pursuant to which the quota in issue was imposed in the Netherlands. According to the recitals in the preamble to Decision 75/210, those arrangements are to apply pending the conclusion of trade agreements between the Community and the various State-trading countries covering inter alia the arrangements to be applied to imports into the Community from those countries and common import arrangements are to be gradually introduced.

11It is in keeping with the existence of two kinds of quota arrangements that by virtue of Article 1 thereof the provisions of Regulation No 1023/70 apply “to the administration of all quantitative import quotas ..., whether autonomous or conventional, established by the Community” and therefore, as is stated in the second recital in its preamble, to “Community quotas”, whereas the first paragraph of Article 1 of Decision 75/210, as amended by Article 3 of Decision 79/252, provides that the quotas involved in the case of measures taken pursuant to that provision are quotas which “the Member States shall open” and therefore national quotas.

12Furthermore, the second paragraph of Article 1 of Decision 75/210 states that “Member States' rules governing the opening and administration of quotas” are not to be affected. Accordingly, the rules and procedures which had to be observed by the Netherlands authorities when adopting the quota measure in issue, particularly those concerning any publication of the measure, were those stipulated by the applicable national law and not those laid down by Regulation No 1023/70 in the case of Community quotas.

13The answer to the first question put by the College van Beroep voor het Bedrijfsleven should therefore be that Article 4 of Regulation No 1023/70 of the Council does not apply to import quotas to be opened by Member States in regard to State-trading countries under Article 3 of Council Decision 79/252 of 21 December 1978.

14Since the second question put by the College van Beroep voor het Bedrijfsleven was put only in the event of the first question's being answered in the affirmative, that question no longer has any purpose.

Costs

15The costs incurred by the Government of the Kingdom of the Netherlands and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before that court, the decision on costs is a matter for that court.

Operative part

On those grounds,THE COURT (Third Chamber),in answer to the questions submitted to it by the College van Beroep voor het Bedrijfsleven (The Netherlands) by order of 25 March 1980 lodged at the Court on 8 April 1980, hereby rules: Article 4 of Regulation No 1023/70 of the Council of 25 May 1970 does not apply to import quotas to be opened by Member States in regard to State-trading countries under Article 3 of Council Decision 79/252/EEC of 21 December 1978.

Delivered in open court in Luxembourg on 25 March 1981.