Commission of the European Communities v Italian Republic (322/82)

I —Facts

The preamble to Regulation No 23 of the Council of 4 April 1962 on the progressive establishment of a common organization of the market in fruit and vegetables (Official Journal, English Special Edition 1959-62, p. 97), states that, within the context of the objectives to be attained, one of the steps to be taken for the gradual introduction of a common organization of the market is the adoption of common quality standards to be gradually applied to fruit and vegetables entering into intra-Community trade and to the same products offered for sale on the home market of the producer Member State.Article 2 (1) of Regulation No 23 provides for the establishment of common standards covering quality, sizing and packaging for each product or group of products. According to Article 2 (2) the products to which such quality standards apply are to be accepted for trade between Member States only if they conform to those quality standards. They are to be accepted for import from third countries only if they conform to the said quality standards or to standards that are at least equivalent.Article 3 (1) of Regulation No 23 provided for the gradual application of the quality standards to fruit and vegetables offered for sale on the home market of the producer Member State.In application of that provision, the Council adopted, on 25 October 1966, Regulation No 158/66/EEC of 25 October 1966 on applying common quality standards to fruit and vegetables marketed within the Community (Official Journal 1966, No 192, p. 3282).Article 5 (1) of that regulation provided for a check to be made by sampling at all marketing stages and during transport, by the authorities appointed for that purpose by each Member State, the names which were to be communicated to the other Member States and to the Commission. The check was to be made preferably prior to dispatch from the production areas at the time of the packaging or loading of the goods.The detailed rules for the application of Article 5 of Regulation No 158/66/EEC were adopted, under the “Management Committee procedure”, by Regulation (EEC) No 2638/69 of the Commission of 24 December 1969 laying down additional provisions on quality control of fruit and vegetables marketed within the Community (Official Journal, English Special Edition 1969 (II), p. 611).In particular Annex I to that regulation fixed the geographical regions which were to be regarded as forwarding areas. More specifically, as regards Italy, it listed five forwarding areas.In Regulation (EEC) No 1035/72 of the Council of 18 May 1972 on the common organization of the market in fruit and vegetables (Official Journal, English Special Edition 1972 (II), p. 437) the Council codified the different provisions concerning the sector in question.In particular Articles 2 to 7 of Regulation No 1035/72 repeated earlier provisions concerning common quality standards and Article 8 thereof reproduced Article 5 (1) of Regulation No 158/66/EEC concerning checks carried out by sampling.Regulation No 2638/69, which was maintained in force by the combined effect of Article 8 (2) and Article 41 (2) of Regulation No 1035/72 and Annex IV to that regulation, was amended by Commission Regulation (EEC) No 2150/80 of 18 July 1980 (Official Journal, L 210, p. 5). In particular, Article 5 of Regulation No 2638/69 was replaced by a new provision, the first paragraph of which provides that:“Each Member State shall furnish the Commission with a monthly summary of the inspections carried out the previous month, showing in particular:The origin of the goods inspected;The destination of such goods;The marketing stage at which inspection was carried out, indicating the number of consignments inspected;The number of cases of failure to comply with the rules in force.”On 15 January 1980, the Commission had already drawn the attention of the Government of the Italian Republic to thè fact that compliance with quality standards was important for the proper management of the market in fruit and vegetables and had requested the government to communicate to it, before 31 January, the measures adopted in Italy to ensure strict control of the quality of fruit and vegetables marketed or withdrawn from the market, and the results of inspections carried out by the national authorities.On 28 May, and subsequently on 28 July 1980, the Commission sent reminders to the Italian Government, since there had been no response to its letter of 15 January.By letter of 20 July 1981, the Commission reminded the Italian Government of its obligations concerning quality standards in the fruit and vegetable market, deriving in particular from Regulation No 2150/80. The Commission stated that by not furnishing the statements required under that regulation, the Italian Republic had failed to fulfil its obligations under Article 5 (1) of Regulation No 2638/69, as amended by Regulation No 2150/80.The Commission regarded the Italian Government's failure to act as confirmation of the information in its possession, according to which quality controls for fruit and vegetables marketed within the territory of the Italian Republic were not carried out satisfactorily. As a -result, the Italian Government, in the Commission's view, was in default as regards its obligations under Article 8 (1) of Regulation No 1035/72.In accordance with the provisions of Article 169 of the EEC Treaty, the Commission requested the Italian Government to submit its observations within two months.No response was made to that communication either, and the Commission on 24 March 1982 adopted and on 31 March notified to the Government of the Italian Republic the reasoned opinion provided for in Article 169 of the Treaty.The Commission declared in that opinion that, by not effecting quality controls of fruit and vegetables marketed within Italian territory, the Italian Republic had failed to fulfil its obligations under Article 8 (1) of Regulation No 1035/72 and that, by not providing the monthly statements relating to the inspections carried out during the previous month, it had failed to fulfil its obligations under Article 5(1) of Regulation No 2639/69, as amended by Regulation No 2150/80.The Italian Republic was requested to adopt the measures needed to comply with that reasoned opinion within two months from its notification.

II —Written procedure

Since no action was taken in response to the reasoned opinion, the Commission, by application lodged on 17 December 1982, in pursuance of Article 169 (2) of the Treaty, brought an action before the Court in respect of the Italian Republic's alleged failure to fulfil its obligations in respect of the control of quality standards of fruit and vegetables.The written procedure followed the normal course; the Commission decided not to lodge a reply.Upon 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.However, it requested the Commission and the Italian Government to reply in writing to certain questions; the parties complied with that request within the prescribed period.

III —Conclusions of the parties

The Commission claims that the Court should:(a) declare that the Italian Republic,— By not effecting quality controls of fruit and vegetables marketed within Italian territory, has failed to fulfil its obligations under Article 8 (1) of Regulation No 1035/72 of the Council of 18 May 1972;— By not providing monthly statements relating to the inspections carried out during the previous month, has failed to fulfil its obligations under Article 5 (1) Regulation (EEC) No 2638/69 of the Commission of 24 December 1969, as amended by Commission Regulation (EEC) No 2150/80 of 18 July 1980;(b) Order the Italian Republic to pay the costs.The Government of the Italian Republic has not presented any formal conclusions.

IV —Submissions and arguments of the parties in the course of the written procedure

The Commission notes that, under Article 189 of the EEC Treaty, the Italian Republic is required to give effect to Article 8 (1) of Regulation No 1035/72, by implementing the quality controls of fruit and vegetables introduced by Regulation No 2638/69 and, as from 1 January 1981, to comply with Article 5 (1) of that regulation, as amended by Regulation No 2150/80, by furnishing the Commission with the information provided for therein.It is quite clear, the Commission alleges, that the Italian Republic has not complied with that last provision. Moreover, the failure to provide statements on the inspections carried out supports the conclusion that the Italian Republic has no information to communicate. That conclusion confirms the information passed to the Commission by trade circles and is, in its turn, confirmed by the lack of response to the letter sent in pursuance of Article 169 of the Treaty and to the reasoned opinion.The Italian Republic's failure to fulfil its obligations is therefore patent.According to the Government of the Italian Republic, it is clear from the Commission's letter of 15 January 1980 that the application of the Community rules concerning the quality control of fruit and vegetables has raised and continues to raise serious problems.(a) The Italian Republic has for a very long time had a system of quality control of fruit and vegetables intended for export to other countries introduced in particular by Decree Law No 1272 of 23 June 1927 (Gazzetta Ufficiale [Italian Official Gazette] No 181 of 6. 8. 1927) and by the implementing regulation approved by Royal Decree No 2213 of 20 December 1937 (Gazzetta Ufficiale No 8 of 12. 5. 1938).As regards fruit and vegetables marketed within the national territory itself, the inspections and sanctions provided for by the legislation in force are intended to maintain standards of hygiene and protect the public health and also to prevent fraudulent dealing in foodstuffs.(b) The Community provisions, in particular Article 8 (1) of Regulation No 1035/72, established and organized for the market in fruit and vegetables an extremely detailed system of inspections to be carried out at all marketing stages and during transport. The organization of such a system was made even more difficult by the division of Italian territory into five forwarding areas.For some time the competent national authorities have studied possible measures for the organization of an effective system for the quality control of fruit and vegetables marketed within Italian territory. The two bodies designated to that effect, the AIMA (Azienda di Stato per gli Interventi nel Mercato Agricolo [State Organization for Interventions in the Agricultural Market] and the ICE (Istituto Nazionale per il Commercio Estero) [National Institution for Foreign Trade], maintain permanent contact with the Italian Ministry of Agriculture and Forestry in order to specify the measures to be adopted. Such measures represent a considerable burden both in organizational and financial terms. Moreover such measures must be coordinated with the regions which, under Italian law, have certain powers concerning the system applicable to the wholesale and retail trade in foodstuffs.Those difficulties have hitherto prevented the setting up of an effective system of quality control within the national territory. They would be considerably lessened if, as the Italian Government has repeatedly requested, the number of forwarding areas into which the national territory is divided were reduced.(c) The Government of the Italian Republic is well aware that, according to the case-law of the Court, those serious difficulties are not regarded as valid justification for the failures to fulfil its obligations against which the Commission's action is directed. The failures in question were not however deliberate or intended to deprive the quality standards of practical effect within the national territory. There was merely a delay resulting from the problems of organization and financing which the setting up of an effective system of control entails.It states that every effort will be made to accelerate the steps being taken so that, within a reasonable period, the prescribed system of control will apply also within Italian national territory.

V —Written replies of the parties to the questions put by the Court

The parties replied to the three questions put to them by the Court essentially as follows :(a) The Commission considered that the quality controls for fruit and vegetables exported from Italian territory satisfy the requirements laid down, for exports to other Member States, in Regulations Nos 1035/72 and 2638/69 and, for exports to nonmember countries, in Regulation (EEC) No 486/70 of the Commission of 17 March 1970 laying down initial rules on the quality control of fruit and vegetables exported to third countries (Official Journal 1970, L 61, p. 11). For its part, the Government of the Italian Republic provided information as to the detailed rules and conditions of those controls, which it similarly considers satisfy the requirements of the Community provisions. That system cannot however be extended to products marketed within Italian territory because of the quantities involved (the quantity of fruit and vegetables intended for domestic consumption is vastly greater than that of fruit and vegetables' intended for export) and for structural reasons (inspections of exports are, in general, carried out at specific centres — stations, ports, airports and other premises — whilst on the other hand, inspections of products marketed within the national territory must be carried out at all marketing stages and during transport, preferably prior to dispatch from the production areas when the goods are being packed or loaded).(b) As regards the fixing within Italian territory of five geographical zones regarded as forwarding areas, the Commission maintains that the system in question, which is applicable to the Member States which have the largest areas and which produce particularly larger quantities of fruit and vegetables meets the need to facilitate the task of national inspection authorities. A system whereby the consignor notifies the inspection authority in advance of larger consignments enables the inspections to be organized in a more flexible manner from the outset. Since such notification might impose a heavy burden on the inspection authority, the Commission sought to exempt large consignments intended for markets close to the place of production from the obligation of notification. The division of the Member States with the largest areas into zones serves to define, simply and in accordance with existing trade patterns, the concept of a destination close to the place of production. Moreover, that division has no effect on the number of inspections to be carried out and does not, itself, require a multiplication or a decentralization of the inspection authorities. It should be noted that Regulation No 2638/69 and the division into areas provided for therein were adopted following the unanimous opinion of the Management Committee and therefore with the agreement of the representative of the Italian Republic.The Government of the Italian Republic considers that there were already real difficulties in effecting quality controls of fruit and vegetables marketed within Italian territory but that those difficulties have been increased by the division of the territory into five forwarding areas. As a result the system must be organized so as to enable inspections to be carried out even on products which merely leave one forwarding area for another. Moreover, the products may be subjected to three quality controls with the performance of obligations and the completion of formalities which that entails. It is therefore necessary to organize numerous peripheral administrative structures which must be efficient yet sufficiently flexible not to obstuct the movement of goods and with the necessary administrative staff and inspectors. The Italian Government has never failed to emphasize to the various Community authorities that the application of quality controls is rendered more difficult by the division of the national territory into five forwarding areas. It has repeatedly requested that an alteration be made in that division so that the Italian territory may be regarded as a single forwarding area or, at least, so that the territory may be divided into only two forwarding areas: continental Italy and the main islands, (Sicily and Sardinia).(c) In the Commission's view the procedural steps which the Italian Republic must take in order to implement in Italy the quality controls provided for by the Community rules involve the adoption of a legal measure sufficient, for the purposes of national law, to empower one or more bodies, already in existence, to effect quality controls' of fruit and vegetables intended for the national market or to set up a new body if necessary. As regards practical steps the Italian Republic must supply itself with physical means (staff, technical equipment and infrastructures) sufficient to enable it to carry out the prescribed inspections by sampling, having regard to the fact that, in order to safeguard the unity of the common market, it is necessary to ensure a certain balance between the number of inspections of products intended for export and the number of inspections of products intended for the national market.The Government of the Italian Republic confirms that action is being taken to set up the type of organization necessary for the implementation of the controls in Italy. It would be easier to deal with the serious problem which that represents if the appropriate authorities took into consideration the Italian requests that the forwarding areas be abolished or reduced and that an appropriate financial contribution be made to the costs of the organization and the operation of the system.

VI —Oral procedure

At the sitting on 29 June 1983 the Commission, represented by G. Campogrande, and the Government of the Italian Republic, represented by Y. Braguglia, presented oral argument and their replies to the questions put by the Court.The Advocate General delivered her opinion at the sitting on 4 October 1983.

Costs