Commission of the European Communities v Federal Republic of Germany (C-217/88)

Contents

Judgment of the Court10 July 1990^noteIn Case C-217/88,Commission of the European Communities, represented by Peter Karpenstein, Legal Adviser to the Commission, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, Wagner Centre, Kirchberg,vFederal Republic of Germany, represented by Martin Seidel, Ministerialrat at the Federal Ministry of the Economy, acting as Agent, assisted by Jochim Sedemund, Rechtsanwalt, Cologne, with an address for service in Luxembourg at the Embassy of the Federal Republic of Germany, 20-22 avenue Émile-Reuter,THE COURTcomposed of: O. Due, President, C. N. Kakouris, F. A. Schockweiler and M. Zuleeg (Presidents of Chamber), G. F. Mancini, T. F. O'Higgins, J. C. Moitinho de Almeida, F. Grévisse and M. Díez de Velasco, Judges,Advocate General: F. G. JacobsRegistrar: D. Louterman, Principal Administratorhaving regard to the Report for the Hearing,after hearing the oral arguments submitted by the parties at the hearing on 21 March 1990, at which the Federal Republic of Germany was represented by Dietmar Knopp, Rechtsanwalt, acting as Agent,after hearing the Opinion of the Advocate General delivered at the sitting on 15 May 1990,gives the following

Judgment

1By an application lodged at the Court Registry on 2 August 1988, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that through its continuing refusal to enforce measures of compulsory distillation of table wine by applying national coercive measures in the event of opposition by the persons concerned, the Federal Republic of Germany had failed to fulfil its obligations under Article 5 of the EEC Treaty and Article 79(1) of Council Regulation (EEC) No 822/87 of 16 March 1987 on the common organization of the market in wine (Official Journal 1987 L 84, p. 1).

2Under Article 41(1) of Council Regulation (EEC) No 337/79 of 5 February 1979 on the common organization of the market in wine (Official Journal 1979 L 54, p. 1), as amended, in particular, by Council Regulation (EEC) No 2144/82 of 27 July 1982 (Official Journal 1982 L 227, p. 1) and by Council Regulation (EEC) No 1208/84 of 27 April 1984 (Official Journal 1984 L 115, p. 77) (hereinafter referred to as ‘Regulation No 337/79’), compulsory distillation of table wine is to be decided upon ‘whenever, in respect of a wine-growing year, the data in the forward estimate show, for table wines, that the availabilities recorded at the beginning of the wine-growing year exceed by more than five months the normal utilization for that year’. Under Article 6(1) of Regulation No 337/79, producers subject to the obligation to deliver table wines for distillation must comply with that obligation in order to be entitled to benefit from the various intervention measures provided for under Title I of Regulation No 337/79. Furthermore, the first sentence of Article 64(1) of Regulation No 337/79 provides that ‘Member States shall take all necessary measures to ensure compliance with Community provisions in the wine sector’. That provision is repeated in the first sentence of Article 79(1) of Regulation No 822/87, cited above, which inter alia consolidates all amendments to Regulation No 337/79 made prior to 16 March 1987.

3Pursuant to Regulation (EEC) No 148/85 of 18 January 1985 opening the distillation operation provided for in Article 41 of Regulation No 337/79 for the 1984/85 wine-growing year (Official Journal 1985 L 16, p. 32), the Commission ordered the distillation of 12000000 hi of table wine, of which 68322 hi were to be distilled by producers established in the Federal Republic of Germany.

4Following the entry into force of Regulation No 148/85, the German authorities issued 614 notices informing the producers concerned of the quantities of table wine which they were required to distil. Appeals were brought in respect of 506 of those notices on the ground that the Community provisions relating to compulsory distillation resulted in discrimination between producers.

5Under German law, an appeal brought against an administrative decision has, in principle, a suspensory effect. In certain circumstances, however, the administrative authorities may order the immediate enforcement of the decision against which the appeal was brought. They may then use coercive measures to ensure enforcement of the decision in question. The persons concerned may, however, appeal to the courts against the decision ordering immediate enforcement of an administrative decision. In that case, the courts may again suspend the implementation of the administrative decision.

6The German authorities decided not to order the immediate enforcement of the 506 notices against which appeals had been brought. As a result of that decision, only 9140 hl were in fact distilled, out of the total of 68322 hi of table wine which ought to have been distilled by producers established in the Federal Republic of Germany.

7Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

Admissibility

8The Commission's application relates not only to the decision taken by the Federal Republic of Germany not to order the immediate enforcement of the notices imposing compulsory distillation during the 1984/85 wine-growing year and not to use the coercive measures provided for under German law against those producers who had refused to deliver table wine for compulsory distillation but also to the intention expressed by the Federal Republic of Germany in its reply to the reasoned opinion to adopt the same line of conduct if producers established in the Federal Republic of Germany were in future to be required to deliver table wine for distillation.

9The Federal Republic of Germany considers the application admissible only in so far as it relates to its conduct in the 1984/85 wine-growing year.

10According to the established case-law of the Court (see, in particular, the judgment in Case 298/86 Commission v Belgium [1988] ECR 4343, paragraph 10), an application brought under Article 169 of the EEC Treaty can be based only on the arguments and submissions already set forth in the reasoned opinion.

11It would appear from the reasoned opinion issued on 18 January 1988 that the only breach of the Treaty of which the Commission accused the Federal Republic of Germany at that time was the conduct adopted by the latter during the 1984/85 wine-growing year. Consequently, the application cannot relate to the question whether the Federal Republic of Germany failed to fulfil its obligations under Article 5 of the EEC Treaty and the first sentence of Article 79(1) of Regulation No 822/87 by announcing its intention to adopt the same line of conduct in future as it did during the 1984/85 wine-growing year.

12The application is therefore admissible only in so far as it seeks a declaration that, by its decision not to order the immediate enforcement of the distillation notices during the 1984/85 wine-growing year and not to use the coercive measures provided for under German law against those producers who had refused to deliver table wine for compulsory distillation, the Federal Republic of Germany has failed to fulfil its obligations under Article 5 of the EEC Treaty and Anicie 64(1) of Regulation No 337/79.

Substance

13The Federal Republic of Germany submits first of all that Community law does not require Member States to adopt national coercive measures in order to ensure implementation of measures of compulsory distillation.

14It should be noted in this connection that, although Article 64(1) of Regulation No 337/79 does not expressly require Member States to adopt national coercive measures, such an obligation clearly arises from the duty which that provision imposes on Member States to take ‘all necessary measures to ensure compliance with Community provisions in the wine sector’, whether such measures are already provided for under national law or are still to be incorporated into it.

15The Federal Republic of Germany first of all objects that Article 64(1) of Regulation No 337/79 does not constitute a sufficiently clear and precise legal basis for the adoption of national coercive measures.

16That argument cannot be accepted. By requiring Member States to take ‘all necessary measures to ensure compliance with Community provisions in the wine sector’, Article 64(1) of Regulation No 337/79 thereby requires those Member States to adopt as part of their national law all legislative, regulatory or individual measures necessary for the effective implementation of compulsory distillation.

17The Federal Republic of Germany also objects that coercive measures under national law are ruled out by the fact that Article 6(1) of Regulation No 337/79 provides for a specific Community sanction in the event of failure to comply with the obligation to distil.

18This argument must also be rejected. Producers subject to the obligations referred to in Article 39 and, in some cases, Articles 40 and 41, that is to say to measures of compulsory distillation, are entitled, under Article 6(1) of Regulation No 337/79, to benefit from the intervention measures provided for in Title I, provided that they have complied with the abovementioned obligations during a reference period to be determined. Thus, that provision does not constitute a sanction, but merely sets out a condition for eligibility to certain intervention measures provided for by that Title in Regulation No 337/79.

19Even if Article 6(1) of Regulation No 337/79 did introduce a specific sanction, as the Federal Republic of Germany claims, it cannot be assumed that the Community legislature, by adopting that provision, intended to exclude the application of national coercive measures in order to ensure the implementation of compulsory distillation.

20The arguments on which the Federal Republic of Germany relies in this regard must therefore be rejected.

21Secondly, the Federal Republic of Germany claims that, by virtue of Article 64(2) of Regulation No 337/79, under which ‘the Council, acting by a qualified majority on a proposal from the Commission, shall adopt measures to ensure uniform application of Community provisions in the wine sector, particularly as regards control’, it is for the Council, rather than for the Member States, to take the measures necessary to ensure the effective implementation of measures of compulsory distillation.

22That argument cannot be accepted. It must be noted first of all that there is nothing in paragraphs 1 and 2 of Article 64 to indicate that the adoption by the Council of the measures referred to in Article 64(2) represents a pre-condition for the implementation by Member States of the obligation imposed on them by Article 64(1).

23Furthermore, the objectives of those two provisions are different. Article 64(2) is intended to standardize conditions for the application of Community provisions in the wine sector, whereas Article 64(1) is designed to ensure immediate compliance with those provisions by requiring Member States to take all necessary measures to that end. That objective could not be attained and the duty imposed on Member States would be deprived of its substance if the fulfilment of that duty were to be subordinated to the prior condition that the aim of Article 64(2) should have been achieved.

24Thirdly, the Federal Republic of Germany contends that it is for Member States to determine what are the most appropriate measures for ensuring compliance with Community provisions and that in the present case there were serious objections under German law to the adoption of a decision ordering the immediate enforcement of the distillation notices.

25That argument must also be rejected. The objective of the measures of compulsory distillation can be attained only if they are carried out within a certain period which, in the present case, was fixed by Article 10 of Commission Regulation (EEC) No 147/85 of 18 January 1985 laying down for the 1984/85 wine year detailed implementing rules for the distillation referred to in Article 41 of Regulation No 337/79 (Official Journal 1985 L 16, p. 25), as amended by Commission Regulation (EEC) No 953/85 of 10 April 1985 (Official Journal 1985 L 102, p. 19). The onus is therefore on the Member States, under Article 64(1), to ensure that the producers in question carry out distillation within the period laid down, by taking all measures necessary to that end. Since producers established in the Federal Republic of Germany, by seeking legal redress provided for under German law, obtained a suspension of the enforcement of the compulsory distillation notices, the onus was on the German authorities to put an end to that suspension by ordering the immediate enforcement of the notices.

26The Federal Republic of Germany contends in this regard that the conditions laid down by German law for the adoption of such a decision were not satisfied. Even if this view is assumed to be correct, it cannot justify the failure by the Federal Republic of Germany to comply with an obligation which it has under Community law. According to well-established case-law of the Court, a Member State may not plead provisions, practices or circumstances existing in its internal legal system in order to justify a failure to comply with its obligations under Community law (see, in particular, the judgment in Case C-74/89 Commission v Belgium [1990] ECR I-491).

27Fourthly, the Federal Republic of Germany contends that a decision ordering the immediate implementation of the notices would not have been appropriate in the present case since such a decision would probably have been the subject of an appeal before the German courts and those courts would in all likelihood have suspended the application of that decision in view of the existence of serious doubts about the validity of the Community legislation concerning compulsory distillation.

28Those arguments are unfounded. In the first place, the Federal Republic of Germany cannot rely on the possible or probable attitude of the German courts in order to justify its own failure. Secondly, the procedure for preliminary references under Article 177 of the EEC Treaty enabled those courts, if necessary at the suggestion of the German administrative authorities which were parties to the proceedings, to refer questions to the Court of Justice on the validity of the Community legislation relating to compulsory distillation.

29The Federal Republic of Germany contends fifthly that the decision to order the immediate enforcement of the distillation notices would have involved expenses out of all proportion to the quantity of wine to be distilled and to the effect that distillation would have had on the level of prices.

30That argument cannot be accepted. It is clear from Article 41(1) and (7) of Regulation No 337/79, as well as from Article 4 of Regulation No 147/85, that the Community legislature itself intended to determine exhaustively the conditions under which producers of table wine are to be exempted from the obligation to distil, in order that the application of the measures of compulsory distillation should not involve administrative expenses out of all proportion to the expected quantitative results. However, it is not disputed that in the present case those conditions were not satisfied by producers established in the Federal Republic of Germany.

31The Federal Republic of Germany contends sixthly that a decision ordering the immediate enforcement of the compulsory distillation notices would have served no purpose because when those notices were sent the quantities of table wine available from German producers were limited and it was difficult to envisage the purchasing of wine from producers established in other Member States.

32That argument may be accepted only if it can be shown that, at the date fixed by Article 7(1) of Regulation No 147/85 for the issue of the notices, the implementation, under the relevant Community provisions, of the measures of compulsory distillation by producers established in the Federal Republic of Germany was absolutely impossible. It is clear in this regard from Article 10(2) and (4) of Regulation No 147/85 that, subject to the completion of certain inspection formalities, the obligation to deliver table wine for distillation may be performed by inter alios a producer established in a Member State other than that of the producer subject to the obligation. Although the German Government has contended that the implementation of measures of compulsory distillation according to that procedure would have given rise to practical difficulties, it has totally failed to demonstrate that such implementation was absolutely impossible.

33It ought to be added that when a Member State in implementing a Commission regulation encounters unforeseeable difficulties which make it absolutely impossible to carry out the obligations imposed by that regulation, it must submit those problems to the Commission and suggest to it appropriate solutions. In such a case, the Commission and the Member State are obliged, by virtue of the reciprocal duties of genuine cooperation imposed on them in particular by Article 5 of the EEC Treaty, to work together in good faith in order to overcome those difficulties while complying in full with the provisions of the Treaty. In the present case, apart from the fact that the difficulties pleaded were not such as to make implementation absolutely impossible, the Federal Republic of Germany has failed to propose to the Commission any appropriate solution to the difficulties encountered, but has unilaterally decided not to continue with implementation of the measures of compulsory distillation. Such conduct constitutes a breach of the duty of cooperation mentioned above.

34It must therefore be held that by deciding not to order the immediate enforcement of compulsory distillation notices during the 1984/85 wine year and by refraining from using the coercive measures provided for under German law against producers who had refused to deliver table wine for compulsory distillation, the Federal Republic of Germany has failed to fulfil its obligations under Article 5 of the EEC Treaty and Article 64(1) of Regulation No 337/79.

Costs

35Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the applicant has failed in its submissions, it must be ordered to pay the costs.

Operative part

On those grounds,THE COURThereby rules as follows:

(1).By deciding not to order the immediate enforcement of compulsory distillation notices during the 1984/85 wine year and by refraining from the use of the coercive measures provided for under German law against producers who had refused to deliver table wine for compulsory distillation, the Federal Republic of Germany has failed to fulfil its obligations under Article 5 of the EEC Treaty and Article 64(1) of Council Regulation (EEC) No 337/79 of 5 February 1979 on the common organization of the market in wine.

(2).The remainder of the application is dismissed.

(3).The Federal Republic of Germany is ordered to pay the costs.

Delivered in open court in Luxembourg on 10 July 1990.