Commission of the European Communities v Hellenic Republic. (Agriculture) [1991] EUECJ C-110/89 (30 May 1991)

Judgment 1 By application lodged at the Court Registry on 6 April 1989, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by restricting and prohibiting exports of maize by private persons during the autumn of 1985 while at the same time permitting the Central Office for the Management of National Products (hereinafter referred to as "KIDEP") to export maize, the Hellenic Republic had failed to fulfil its obligations under Community law, in particular under Regulation (EEC) No 2727/75 of the Council of 29 October 1975, as amended, on the common organization of the market in grain (Official Journal 1975 L 281, p. 1) - of which Article 34 of the EEC Treaty forms an integral part - and the relevant implementing regulations. 2 According to the Commission, to which complaints were initially made by various traders, the Greek authorities prohibited or restricted exports of maize during the period from 1 September 1985 to 31 December 1985. KIDEP alone was able to export maize without restriction during that period. 3 The Commission formed the view that the resultant restrictions on exports infringed the provisions of Regulation No 2727/75 and Article 34 of the EEC Treaty. It accordingly instituted proceedings against the Hellenic Republic for failure to fulfil its obligations. 4 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the pleas in law and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. 5 Two observations have to be made at the outset. 6 In the first place, the oral claims made by the Commission at the hearing, seeking a declaration that the defendant has failed to comply with its duty of cooperation under Article 5 of the Treaty, cannot be examined by the Court. Those are new claims vis-à-vis the subject-matter of the proceedings as defined, in accordance with Article 38(1) of the Rules of Procedure, in the document instituting the proceedings. Furthermore, in so far as they are based on a complaint which was not mentioned in the reasoned opinion, those claims do not satisfy the requirements of the procedure for a declaration of failure to fulfil obligations. 7 Secondly, the claims in the application do not relate to national provisions governing the procedure applicable to exports of maize but solely to the conditions under which the Greek authorities actually prohibited or restricted exports. 8 The provisions of Decision No E4/10110/1.40 of 4 December 1980 and Decision No B3.1871 of 12 December 1980 of the Minister of Commerce, which make exports, including exports of maize, subject to the endorsement by a bank of an "export declaration and invoice" form, are for that reason not covered by the application, and the Court is not required in the context of the present application to rule on their compatibility with Community law. 9 In order to determine whether the application, with its subject-matter thus restricted, is well founded, it is necessary to consider whether the circumstances alleged by the Commission exist and, in so far as those circumstances may be established, to examine whether they are compatible with the provisions of Article 34 of the Treaty and Regulation No 2727/75. The existence of restrictions on maize exports imposed on traders other than KIDEP 10 For the purpose of substantiating the allegations made against the Hellenic Republic, the Commission, which bears the burden of proof, first of all refers to a telex of 2 September 1985 from the Bank of Greece to merchant banks requiring, for exports of maize, prior endorsement by the export control department of the Bank of Greece. The Hellenic Republic argues that the procedure established thereby was intended solely to enable a better statistical track to be kept of relevant exports and was in no way intended to restrict such exports. It should be pointed out that, notwithstanding the Court' s request for additional details, the defendant failed to provide any information on the conditions of application of that procedure during the period in question. In addition, the exact reasons which led the Greek authorities to apply for statistical purposes a procedure which imposed such restrictions on traders are nowhere referred to in the defendant' s pleadings and replies. 11 Secondly, the Commission produces two letters of 12 December 1985 and 14 January 1986 in which an export company, Cargill, complained to the Bank of Greece about the refusal by a department of that bank to authorize it to export maize at the end of 1985. No reply was ever received to those two letters. The Hellenic Republic limits itself to denying that those letters have any probative value without, however, disputing the precise facts referred to therein. 12 Thirdly, it would appear from consistent information contained in documents which the Commission has placed on the file that a trading company, Kadinopoulos, received an endorsement issued by the Bank of Greece for the period in question and was subsequently subjected to pressure by the Secretary of State for Commerce, who took the view that his instructions concerning the prohibition of maize exports had been misunderstood by the authorities of the Bank of Greece. The effect of that episode was to prevent or, at least, to delay maize exports for which an endorsement had originally been accorded. Questioned on this matter by the Court, the Hellenic Republic was unable to adduce any evidence to invalidate the reports of that episode contained in numerous press articles. 13 These factors together constitute consistent evidence of the existence, if not of a complete ban, at least of a range of restrictions on maize exports. In order to substantiate its rejection of that evidence, it was for the Hellenic Republic - as indeed it was requested to do by the Commission and the Court - to set out, inter alia, the precise conditions under which applications for export endorsements submitted to the Bank of Greece were processed during the period in question. The defendant failed to supply that information, stating merely that it was not available in the absence of a centralized system for dealing with applications at the central office of the Bank of Greece. Such a reason is even less plausible in view of the fact that the above telex of 2 September 1985 expressly stated that endorsement applications should be examined by the central authorities of the Bank of Greece. 14 So far as maize exports by KIDEP are concerned, these were able to be carried out in the normal manner, as evidenced in particular by a telex of 7 November 1985 from that body requesting private traders to send to it offers of tender for the immediate export of 30 000 tonnes of maize. 15 It must be pointed out that this difference in treatment between private traders and KIDEP occurred during a period in which, as the Court has already ruled in its judgment in Case C-32/89 (Greece v Commission [1991] ECR I-1321, at paragraph 15 et seq.), the Greek authorities, in disregard for the provisions of Community law, were directing interventions by that body on the market in cereals. 16 In those circumstances, it must be accepted that the Commission has proved that the Greek authorities, through a variety of measures, frustrated or restricted maize exports by traders other than KIDEP. Breach of the provisions of Article 34 of the Treaty and Regulation No 2727/75 17 The abovementioned restrictions on exports established by the Court must be regarded as having been applied indiscriminately to exports of maize within the Community and to those destined for non-member countries. 18 In the case of intra-Community trade, it should be noted that, as is made clear by Article 21 of Regulation No 2727/75, the provisions of the Treaty concerning free movement of goods within the Community, and Article 34 of the Treaty in particular, apply to the cereals sector. It follows that, in this sector, quantitative restrictions on exports, as well as all measures having equivalent effect, are prohibited between Member States. 19 Cereal exports to non-member countries are governed by the provisions of Title II of Regulation No 2727/75. It follows from those provisions that it is only in the special context of protective measures provided for by Article 20 of that regulation and the implementing Regulation (EEC) No 2748/75 of the Council of 29 October 1975 laying down conditions for applying protective measures in the market in cereals (Official Journal 1975 L 281, p. 85) that a Member State may take protective measures designed to suspend exports. Subject to this latter proviso, which does not apply to the present case, Member States may not impose restrictions on exports of cereals to non-member countries. 20 None of the restrictive measures referred to by the Commission in its application can therefore be justified by the rules applicable to them, irrespective of the destination of the exports in question. 21 It ought finally to be noted that the common organizations of the markets are based on the concept of an open market to which every producer has free access under genuinely competitive conditions and the functioning of which is regulated solely by the instruments provided for in those organizations. In particular, in sectors covered by a common organization of the market, and a fortiori when that organization is based, as in the present case, on a common price system, Member States can no longer take action through unilateral measures affecting the machinery of price-formation as established under the common organization (judgment in Case C-35/88 Commission v Greece [1990] ECR I-3125, paragraph 29). 22 Any intervention by a Member State designed to impose restrictions, for the benefit of one single body, on exports effected by other traders is therefore incompatible with the principle of the common organization of the markets. 23 It follows from the foregoing that the restrictions on maize exports imposed by the Hellenic Republic under the conditions described above constitute a breach of the provisions of Article 34 of the Treaty and Regulation No 2727/75. 24 It must therefore be held that, by obstructing and restricting exports of maize by traders other than KIDEP by way of various measures during the period from 1 September 1985 to 31 December 1985, the Hellenic Republic has failed to fulfil its obligations under Article 34 of the Treaty and Regulation (EEC) No 2727/75 of the Council of 29 October 1975. Costs 25 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Hellenic Republic has failed in its submissions, it must be ordered to pay the costs. On those grounds, THE COURT hereby: 1. Declares that, by obstructing and restricting exports of maize by traders other than KIDEP by way of various measures during the period from 1 September 1985 to 31 December 1985, the Hellenic Republic has failed to fulfil its obligations under Article 34 of the Treaty and Regulation (EEC) No 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals; 2. Orders the Hellenic Republic to pay the costs. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII