Portuguese Republic and Kingdom of Spain v Council of the European Communities. (Agriculture) [1992] EUECJ C-63/90 (13 October 1992)

Judgment 1 By applications lodged at the Court Registry on 14 and 16 March 1990 respectively, the Portuguese Republic and the Kingdom of Spain brought actions under the first paragraph of Article 173 of the EEC Treaty for the annulment of Council Regulation (EEC) No 4054/89 of 19 December 1989 allocating for 1990 Community catch quotas in Greenland waters (OJ 1989 L 389, p. 65). That regulation followed the Agreement on fisheries signed between the Community, on the one hand, and the Government of Denmark and the Home Government of Greenland, on the other (OJ 1985 L 29, p. 9), and the Protocol laying down the conditions relating to fishing provided for in that agreement (OJ 1989 L 389, p. 83), namely the Community catch quotas in Greenland waters from 1 January 1990 to 31 December 1994. 2 The Council adopted the contested regulation on the basis of Article 11 of Council Regulation (EEC) No 170/83 of 25 January 1983 establishing a Community system for the conservation and management of fishery resources (OJ 1983 L 24, p. 1). That system provides, inter alia, for conservation measures which, under Article 2, may involve among other things the restriction of fishing effort, in particular by limits on catches. 3 According to Article 3 of Regulation No 170/83, where, in the case of one species or a group of related species, it becomes necessary to limit the catch, the total allowable catch ("TAC") for each stock or group of stocks, the shares available to the Community as well as, where applicable, the total catch allocated to third countries and the specific conditions for taking those catches, are to be fixed each year. The shares available to the Community are to be increased by the total of Community catches outside the waters under the jurisdiction or sovereignty of the Member States. 4 Article 4(1) of Regulation No 170/83 provides that "the volume of catches available to the Community referred to in Article 3 shall be distributed between the Member States in a manner which assures each Member State relative stability of fishing activities for each of the stocks considered". Article 4(2) provides that the Council, acting in accordance with the procedure laid down in Article 43 of the Treaty and on the basis of a report to be submitted by the Commission before 31 December 1991 on the fisheries situation in the Community, the economic and social development of the coastal areas and the state of the stocks and their likely evolution, is to make such adjustments as may prove necessary to the distribution of resources among Member States. 5 Finally, Article 11 of Regulation No 170/83 provides that the choice of conservation measures, the determination of TACs and of the volume of the catches available to the Community and the distribution amongst Member States of that volume are to be decided by the Council acting by a qualified majority on a proposal from the Commission. The regulations determining the TACs for the species of fish which must be conserved and distributing the volume of catches available to the Community among the Member States have been adopted each year, on that basis, since 1983. 6 By Council Regulation (EEC) No 172/83 of 25 January 1983 fixing for certain fish stocks and groups of fish stocks occurring in the Community' s fishing zone, total allowable catches for 1982, the share of these catches available to the Community, the allocation of that share between the Member States and the conditions under which the total allowable catches may be fished (OJ 1983 L 24, p. 30), the Council allocated the stocks available in Community waters in accordance with the three criteria indicated in the preamble to that regulation: traditional fishing activities, the specific needs of areas particularly dependent on fishing and its dependent industries and the loss of fishing potential in the waters of third countries. 7 The same criteria were used for the distribution of the resources available outside Community waters under agreements with non-member countries contained in various Council regulations, such as Council Regulation (EEC) No 173/83 of 25 January 1983 amending Regulation (EEC) No 370/82 concerning the management and control of certain catch quotas for 1982 for vessels flying the flag of a Member State and fishing in the Regulatory Area defined in the NAFO Convention (OJ 1983 L 24, p. 68), No 174/83 allocating among Member States catch quotas available in 1982 to the Community under the Agreement on fisheries between the Community and Canada (OJ 1983 L 24, p. 70), No 175/83 allocating certain catch quotas between Member States for vessels fishing in the Norwegian Economic Zone and the fishery zone around Jan Mayen (OJ 1983 L 24, p. 72), and Nos 176/83 and 177/83 allocating catch quotas between Member States for vessels fishing in Swedish waters (OJ 1983 L 24, p. 75) and in Faroese waters (OJ 1983 L 24, p. 77). 8 The percentage allocations, determined on the basis of fishing activity in the reference period from 1973 to 1978 and converted into quantitative allocations, have not changed since 1983 and have been used for all allocations since that time. The accession of the Portuguese Republic and the Kingdom of Spain to the Community on 1 January 1986 did not bring about any change in the distribution formula, the two new Member States being excluded from it. 9 Reference is made to the Report for the Hearing for a fuller account of the applicable Community legislation, 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. 10 In support of their applications, the applicants put forward a series of pleas in law which may be grouped under three headings, namely infringement of essential procedural requirements, breach of the principle of stability of fishing activities and breach of general principles of Community law. Infringement of essential procedural requirements 11 The Portuguese Republic claims in the first place that the contested regulation was adopted in breach of the procedure provided for in Article 43 of the Treaty, to which, moreover, it makes no reference. It maintains that the requirement of legal certainty cannot be satisfied either by the reference to the EEC Treaty as a whole or by the reference to Regulation (EEC) No 170/83. 12 Furthermore, it submits that the contested regulation was adopted in breach of Article 190 of the Treaty, in that it does not indicate the factual and legal reasons which prompted the Council to allocate the available catches among certain Member States whilst excluding others, like the applicants, which had nevertheless expressed their interest in that regard. 13 Finally, the Portuguese Republic maintains that the contested regulation was adopted before the ° albeit provisional ° entry into force of the abovementioned protocol laying down the conditions relating to fishing in the waters of Greenland. It states that that protocol was not formally approved on behalf of the Community until the adoption of Council Regulation (EEC) No 2647/90 of 16 July 1990 on the conclusion of the Second Protocol, cited above (OJ 1990 L 252, p. 1), and that the provisional application of that protocol was decided on by agreement between the contracting parties by an exchange of letters dated 21 December 1989. 14 As regards the legal basis of the contested regulation, it should be noted that it is expressly stated to be Article 11 of Regulation No 170/83, which, referring inter alia to Article 4(1) of the same regulation, empowers the Council, acting by a qualified majority on a proposal from the Commission, to determine the distribution between Member States of the volume of catches available to the Community. Since Regulation No 170/83 is itself based on Article 43 of the Treaty, Article 11 thereof constitutes an appropriate and sufficient legal basis for the adoption of the contested regulation. As the Court held in its judgment in Case 46/86 Romkes v Officier van Justitie [1987] ECR 2681, paragraph 16, the Council cannot be required to draw up all the details of the regulations concerning the common agricultural policy according to the procedure laid down in Article 43 of the Treaty; on the contrary, it is sufficient for the purposes of that provision that the basic elements of the matter to be dealt with have been adopted in accordance with the procedure laid down by that provision; the provisions implementing the basic regulations may be adopted by the Council according to a different procedure, as envisaged by the said Article 11. 15 This plea must therefore be rejected. 16 As regards the alleged absence, in the statement of the reasons on which the contested regulation is based, of any details concerning the factual and legal reasons which prompted the Council to include certain Member States in the distribution and to exclude, in particular, the applicants, it must be borne in mind that the Court has consistently held that the statement of reasons required by Article 190 of the Treaty must be appropriate to the nature of the measure in question. It must show clearly and unequivocally the reasoning of the Community authority which adopted the measure so as to inform the persons concerned of the justification for the measure adopted and to enable the Court to exercise its powers of review. It is also apparent from the case-law that the statement of reasons on which a measure is based is not required to specify the various matters of fact and law dealt with in the measure, provided that the measure falls within the general scheme of the body of measures of which it forms part (see, in particular, the judgment in Case 250/84 Eridania v Cassa Conguaglio Zucchero [1986] ECR 117, paragraphs 37 and 38). 17 The fifth recital in the preamble to the contested regulation refers expressly to the essential criterion for any distribution of fishery resources, namely that each Member State must be assured of stability concerning the fishing activities concerned, as stated in Article 4 of Regulation No 170/83. It must also be borne in mind that the contested regulation is one of a whole series, some of which post-date accession, applying the same basic criterion. It must therefore be concluded that it satisfies the requirements of Article 190 of the Treaty concerning the statement of reasons, as set out above. 18 The second plea in law must therefore be rejected. 19 Finally, the plea in law based on the fact that the contested regulation was adopted before the entry into force ° albeit on a provisional basis ° of the second protocol on the available fishery resources in the waters of Greenland must also be rejected. It need merely be observed that, in any event, that regulation, by virtue of Article 3 thereof, entered into force on 1 January 1990, that is to say the same day as the said protocol entered into force pursuant to Council Decision 89/650/EEC of 19 December 1989 on the conclusion of the Agreement in the form of an exchange of letters concerning the provisional application of the protocol (OJ 1989 L 389, p. 80). 20 It follows from the foregoing that the pleas concerning the infringement of essential procedural requirements must be rejected in their entirety. The plea alleging breach of the principle of stability of fishing activities 21 The applicants maintain that, by adopting the contested regulation, which excludes them from the distribution, the Council applied in an excessively inflexible, and therefore incorrect, manner the principle of stability of fishing activities embodied in Article 4(1) of Regulation No 170/83, in that it took no account of their legitimate claims for access to the fishery resources available outside the Community, allocated to the Community as a whole. 22 In support of their contention, the applicants essentially put forward three arguments. 23 In the first place, they state that the second protocol to the agreement with Greenland offered to the Community, by comparison with the first protocol of 1985, a considerable increase in fishing possibilities, including in particular 7,500 additional tonnes of cod. That increase should have prompted the Council to include the applicants in the distribution, whilst at the same time preserving the interests of the Member States already included. 24 In the second place, the applicants consider that the review arrangements referred to in Article 4(2) of Regulation No 170/83 do not constitute the only way of adjusting the distribution formula, decided on in 1983, to reflect new circumstances. The Council itself recognized, in a statement recorded in the minutes when Regulation No 170/83 was adopted, that, even before formal review of the distribution system, it would be necessary, when assessing the relative stability of the quotas to be allocated to the Member States, to take account of the various circumstances which might significantly affect the general situation which gave rise to the initial allocation. The accession of two new Member States constitutes a substantial change in that situation, as the initial pattern of distribution was designed for ten Member States and thus no longer reflects the present composition of the Community. Moreover, the lack of provisions on that subject in the Act of Accession means that the principle of relative stability of fishing activities must be applied having regard to the new composition of the Community. 25 According to the Kingdom of Spain, finally, the fishing possibilities established in the 1985 protocol have been systematically under-exploited by the Member States to which they were allocated. Therefore, even in the absence of additional quotas, the principle of relative stability of fishing activities would not have been infringed if fishing possibilities had been granted to other Member States, since the Member States which were the exclusive beneficiaries of that principle had never entirely exhausted their quotas. 26 Before the above arguments are considered, it should be borne in mind that, in its judgment in Romkes, cited above, the Court has already given its views on the compatibility with the requirement of relative stability of fishing activities laid down in Regulation No 170/83 of the quota distribution made after the initial allocation in 1983. In paragraph 17 of that judgment, the Court thus stated that the requirement of relative stability must be understood as meaning that in that distribution each Member State is to retain a fixed percentage. It made clear in that regard that, in specifying that provisions effecting the adjustments that it may prove necessary to make to the distribution of the resources among Member States are to be enacted by the Council in accordance with the procedure laid down in Article 43 of the Treaty, Article 4(2) of that regulation shows that the distribution formula originally laid down under Article 4(1), on the basis of Article 11, is to continue to apply until an amending regulation is adopted in accordance with the procedure followed for Regulation No 170/83. 27 The applicants contend, however, that that decision presupposes a restriction of fishing effort relating to available catches at a particular time and that it cannot be relied on where, as in the present case, there is an increase in fishing possibilities. 28 The first point to note is that, according to Article 2(2) of Regulation No 170/83, the measures restricting catches concern species or groups of species; secondly, according to Article 4(1) of the same regulation, relative stability must be assured, for each Member State, "for each of the stocks considered", that is to say for fish of a particular species located within a specified geographical area. However, it is common ground that it is impossible to evaluate the precise volume of such stocks, which may fluctuate upwards or downwards from one year to the next as a result, essentially, of the biological evolution of species. That is why the Court made it clear in Romkes, cited above, that relative stability of fishing activities must be understood as meaning maintenance of a fixed percentage for each Member State and not, therefore, the guarantee of a fixed quantity of fish. 29 In those circumstances, the principle of relative stability of fishing activities cannot be interpreted as placing the Council under an obligation to effect a fresh distribution whenever an increase of a particular stock is established, where that stock was already covered by the initial allocation. Moreover, as the Advocate General has rightly pointed out, the fisheries agreement with Greenland contains a number of provisions which are justified only by the uncertain nature of the quantity forecasts for particular stocks. 30 The first argument put forward must therefore be rejected. 31 As regards the argument concerning the accession of the Portuguese Republic and the Kingdom of Spain to the Community on 1 January 1986, it must be stated that the objective fact of accession cannot in itself produce legal effects, since the conditions of accession are set out in the Act of Accession. 32 In the present case, Article 2 of the relevant Act of Accession provides that, from the date of accession, the provisions of the original Treaties and the acts adopted by the institutions of the Communities before accession are to be binding on the new Member States and are to apply in those States under the conditions laid down in those Treaties and in the Act of Accession itself. 33 It is undisputed that, with respect to fisheries and, in particular, external resources, the Act of Accession (Article 167 in the case of Spain and Article 354 in the case of Portugal) provides for a system of integration whereby the Community merely takes over the management of fisheries agreements previously concluded with non-member countries by the new Member States, and provisionally maintains, in their case, the rights and obligations resulting therefrom, pending the adoption by the Council of appropriate decisions concerning the continuation of fishing activities under those agreements. 34 In those circumstances, pursuant to Article 2 of the Act of Accession, the existing Community rules must be applied, in particular the principle of relative stability as laid down by Regulation No 170/83, which moreover has not been amended in any way, with the exception of a technical adjustment to the number of votes in the decision-making procedure referred to in Article 14(2) (Annex I, point XV, of the Act of Accession), and as interpreted by the Court. 35 The second argument must therefore be rejected. 36 It must be made clear, however, that whilst the Act of Accession did not affect, as it might have done, the existing situation regarding the distribution of external fishery resources, the fact nevertheless remains that, since accession, the Portuguese Republic and the Kingdom of Spain have been in the same position as those Member States that did not benefit from the initial allocation. 37 It follows that, on the one hand, those two Member States are entitled to participate in the allocation of any new fishing possibilities that become available under agreements with non-member countries concluded after accession which have as their subject-matter fishery resources yet to be distributed, and, on the other hand, that if and when the system is reviewed, under Article 4(2) of Regulation No 170/83, those Member States may put forward their claims on the same footing as all the other Member States. 38 As regards, finally, the Kingdom of Spain' s argument concerning the under-exploitation of quotas, it should be noted that, in reality, as the Council has moreover pointed out, without being convincingly contradicted, the fishing possibilities attributed to the Community under an agreement with a non-member country are based on forecasts concerning the state and development of stocks, which may prove incorrect and may not reflect the quantities actually capable of being caught. In those circumstances, the mere fact that the quantities caught fall short of the quantities forecast cannot create an obligation to carry out a new distribution for the following year. Furthermore, the Kingdom of Spain has produced no evidence of intentional under-exploitation, by the Member States entitled to them, of the fishery quotas allocated to them under the contested regulation. 39 Since the third argument likewise cannot be upheld, the plea as to breach of the principle of relative stability of fishing activities must be rejected in its entirety. The pleas in law concerning breach of general principles of Community law 40 The applicants maintain that, by adopting the contested regulation without including them in the distribution formula, the Council infringed the principle of non-discrimination embodied in Article 7 of the Treaty. According to the Portuguese Government, the Council also infringed the principles of proportionality, equity and Community solidarity. 41 The breach of the principle of non-discrimination derives essentially, according to the Portuguese Government, from the fact that from 1973 to 1977, that is to say approximately during the reference period on the basis of which the formula for distribution between the Member States was arrived at in 1983, the Portuguese fleet caught, in Greenland waters, on average the same quantity of cod as that caught by the Federal Republic of Germany and almost thirteen times more than the quantity caught by the United Kingdom. 42 The Spanish Government claims, on the one hand, that although the new Member States forfeited to the Community, following accession, the power to negotiate fisheries agreements with non-member countries, they are still excluded from the fishing possibilities obtained by the Community through its own negotiation of such agreements with non-member countries; on the other hand, the other Member States benefited from fisheries agreements concluded by Spain with non-member countries before accession, whereas Spain is excluded from the quotas obtained by the Community under agreements which it had itself concluded during the same period. 43 It must be observed that the applicants' situation is not comparable with that of the other Member States included in the distribution, if account is taken of the provisions of the Act of Accession, as indicated above, regarding the integration of the new Member States in the common fisheries policy, and more particularly regarding the external fishery resources already available and distributed at the time of accession. 44 In so far as the Act of Accession did not change the existing situation as regards the distribution of external resources, the existing Community rules continue to be applicable. Accordingly, the new Member States cannot rely on circumstances antedating accession, in particular their fishing activities during the reference period, in support of their contention that the provisions in question should not be applied. Since their accession, they have been in the same position as the Member States excluded from the distributions under the principle of relative stability of fishing activities, which was reflected, as far as the agreements concluded before accession are concerned, in the distribution effected in 1983. This conclusion cannot be undermined by the fact that, as a result of their accession, the new Member States no longer have the power to conclude independent agreements, which places them in a situation identical to that of all the other Member States, or by the fact that they did not receive anything in return for the external resources which they brought into the Community. 45 The plea as to breach of the principle of non-discrimination must therefore be rejected. 46 According to the Portuguese Government, the refusal to allocate fishing quotas to new Member States with long-standing and well-established traditions of fishing in the waters of Greenland is disproportionate in relation to the objective pursued, namely the relative stability of fishing activities, since the interests of the Portuguese fleet in that area are thereby totally sacrificed. 47 That plea cannot be upheld. Contrary to the applicant' s claim, suffice it to note that the distribution formula, established before accession, was not amended by the Act of Accession itself because that formula is necessary and appropriate in order to guarantee the relative stability of the fishing activities of the Member States included in the distribution, as regards the stocks already allocated at the time of accession. Any broadening of the distribution formula would in fact undermine that stability, even where there were upward fluctuations in fishing possibilities, since such fluctuations, in the medium term, merely offset downward fluctuations, and fluctuations of both kinds are likely to occur as a result of the biological evolution of species. 48 The Portuguese Government also alleges infringement of the principle of equity which, while not entirely co-extensive with the principles of non-discrimination and proportionality, requires the interests involved to be weighed fairly. That principle does not replace the applicable Community rules but justifies a sufficiently flexible interpretation of them. It is for the Community judicature to give embodiment to the general requirement of fairness by adopting a flexible interpretation of the stability sought. 49 It must be borne in mind in that regard that, in its judgment in Romkes, cited above, the Court has already interpreted the requirement of relative stability as meaning the maintenance of a fixed percentage for each Member State. The Portuguese Government refers to its accession to the Community, claiming that it is appropriate, indeed necessary, to change that interpretation in the light of that event. However, it must also be borne in mind that the accession of new Member States to the Community is carried out by means of acts which have the status of primary law and can change pre-existing situations in any area of Community law whatsoever, the maintenance in force of existing Community rules being the course generally followed. In the present case, as stated earlier, the Act of Accession of the Kingdom of Spain and the Portuguese Republic dealt with the matter of external fishery resources in such a way as to leave the distribution system in question unchanged. In those circumstances, the applicants' accession cannot constitute a factor capable of bringing about a change in the case-law cited. 50 This plea must therefore be rejected. 51 Finally, the Portuguese Government claims that the Council infringed the principle of "Community solidarity", a principle which is to be inferred from Article 5(2) of the Treaty, as regards in particular the attitude of the Member States within the Council at the time of the adoption of the contested regulation. 52 This plea in law must be rejected. It is important to note that Article 5 of the Treaty lays down the principle of sincere cooperation in relations between the Member States and the Community institutions. That principle not only requires the Member States to take all the measures necessary to guarantee the application and effectiveness of Community law but also imposes on the Member States and the Community institutions mutual duties of sincere cooperation (see the order in Case C-2/88 Imm. Zwartveld and Others [1990] ECR I-3365 , paragraph 17). 53 The adoption of a legislative measure by the Council cannot constitute either a breach of the obligation imposed on the Member States to guarantee the application and effectiveness of Community law, the defence by each Member State of its interests within the Council manifestly not falling within the scope of that obligation, or a breach of the duty of sincere cooperation attaching to the Council as an institution. 54 The last plea must, therefore, also be rejected. 55 It is apparent from all the foregoing considerations that the applications must be dismissed in their entirety. Costs 56 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Portuguese Republic and the Kingdom of Spain have been unsuccessful, they must both be ordered to pay the costs. Pursuant to Article 69(4), the Commission and the intervening Member States must be ordered to bear their own costs. On those grounds, THE COURT hereby: 1. Dismisses the applications; 2. Orders the Portuguese Republic and the Kingdom of Spain to pay the costs, with the exception of those of the Commission, the Federal Republic of Germany and the United Kingdom, which are ordered to bear their own costs. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII