SAFA Srl v Amministrazione delle finanze dello Stato. (Agriculture) [1991] EUECJ C-359/89 (21 March 1991)

Judgment 1 By order of 6 April 1989, which was received at the Court on 27 November 1989, the Tribunale Civile di Genova (Italy) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions concerning the interpretation and validity of Article 16 of Council Regulation No 136/66/EEC of 22 September 1966 on the establishment of a common organization of the market in oils and fats (Official Journal, English Special Edition 1965-1966, p. 221), as amended by Council Regulation No 1562/78/EEC of 29 June 1978 (Official Journal L 185, p. 1). 2 Those questions were raised in connection with proceedings between SAFA Srl and the Amministrazione delle Finanze dello Stato (State Finance Administration) concerning import levies amounting to LIT 55 million paid by SAFA on the importation in 1979 and 1980 of untreated olive oil from Greece. 3 In December 1981 SAFA instituted proceedings against the Italian Ministry of Finance in order to recover that amount, which in its view had been wrongly demanded of it, and with a view to obtaining LIT 500 million by way of compensation for the damage resulting from the undue payments. 4 Having regard to the plaintiff' s submissions regarding the application and validity of the Community rules concerning the importation of untreated olive oil from non-member countries, the national court decided to stay the proceedings and to refer the following questions to the Court: "1. Was it permissible under Article 16 of Council Regulation No 1562/78 for the size of the levy on imports of extra-virgin olive oil from Greece in 1979 and 1980 to be consistently determined by means of a tendering procedure? 2. Does Article 16 of Council Regulation No 1562/78, which permits the levy on imports of untreated olive oil to be fixed by means of a tendering procedure, infringe the fundamental rights conferred on traders in that sector by the Treaty establishing the European Economic Community, particularly if consistently applied in 1979 and 1980 to imports from Greece?" 5 Reference is made to the Report for the Hearing for a more detailed account of the facts of the case, the relevant Community provisions, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. 6 It should be noted that Regulation No 1562/78 (amending Regulation No 136/66), to which the questions relate, concerns imports of olive oil from non-member countries in general. However, during the period in question imports of olive oil obtained entirely in Greece and transported directly from that country to the Community were governed by Council Regulation No 2749/78/EEC of 23 November 1978 on trade in oils and fats between the Community and Greece (Official Journal L 331, p. 1). The Court therefore considers it appropriate to rule on both regulations, whilst leaving it to the national court to decide which should be applied for the purpose of determining the dispute in the main proceedings. First question 7 According to Article 16(1) of Regulation No 136/66, as amended, the import levy in question is fixed by tendering procedure where the real trend on the world market in untreated olive oil cannot be determined from the offers on that market, except where the imports involve quantities which have no effect on the market situation. By virtue of Article 16(3) the levy to be charged in the latter case is the latest minimum levy before importation. 8 It follows from the very wording of Article 16(1) that the Commission may have recourse to the tendering procedure envisaged by that provision for as long as it remains impossible, even for a number of years, to determine the real trend on the world market in olive oil on the basis of the offers on that market. 9 As is apparent from the written and oral evidence presented to the Court, there was during the period in question no world price for untreated olive oil from which the real trend on the market could be determined, since the volume of exports by producing countries was very limited and there existed in those countries either export monopolies for the benefit of a State body or concerted action by a restricted number of traders on the market in question. 10 The provisions of Article 5(1) of Regulation No 2749/78 are similar to those of the aforesaid Article 16(1), except that recourse by the Commission to the tendering procedure is made subject to an examination of the Greek market rather than the world market. 11 During the period in question the Greek market, on which traders were few and acted in concert, was also characterized by a lack of prices for untreated olive oil. 12 In reply to the first question it must therefore be stated that Article 16(1) of Council Regulation No 136/66 of 22 September 1966 on the establishment of a common organization of the market in oils and fats, as amended by Council Regulation No 1562/78 of 29 June 1978, and Article 5(1) of Council Regulation No 2749/78 of 23 November 1978 on trade in oils and fats between the Community and Greece authorized the Commission to have recourse continually throughout the years 1979 and 1980 to the tendering procedure for fixing the import levy on untreated olive oil. The second question 13 By this question the national court seeks in substance to ascertain whether, in the event of an affirmative reply to the first question, the abovementioned provisions are not contrary to the fundamental rights conferred on traders by the EEC Treaty. 14 It is apparent from the order for reference and from the explanations given by SAFA at the hearing that there is said to be an infringement, first, of the right to carry on economic activities freely and, secondly, of the principle of equal treatment of traders. Infringement of the right to carry on economic activities freely 15 According to the plaintiff in the main proceedings, Article 16(1) is invalid inasmuch as it confers upon the Commission excessive discretion liable to interfere with its right to carry on its economic activities freely. 16 In this connection reference should be made to the case-law of the Court (see in particular the judgment in Joined Cases 279, 280, 285 and 286/84 Rau v Commission [1987] ECR 1069, at paragraph 14), in which the Court held that, since the Commission alone is in a position constantly to keep a close watch on agricultural market trends and to act quickly when necessary, the Council may confer on it wide powers of discretion and action in this sphere. When it does so, the limits of those powers must be determined in the light of the essential general aims of the market organization. 17 The ninth recital in the preamble to Regulation No 136/66 states that, in order to stabilize the Community market at the desired level, notably by ensuring that fluctuations in world market prices do not affect prices within the Community, provision should be made for charging an import levy corresponding to the difference between the threshold price derived from the market target price and prices ruling on the world market. 18 The system of import levies on products coming from Greece provided for by Council Regulation No 162/66/EEC of 27 October 1966 on trade in oils and fats between the Community and Greece (Official Journal, English Special Edition 1965-1966, p. 247) and subsequently in Regulation No 2749/78, repealing the previous regulation, pursues the same general objective of stability on the Community market. 19 According to the second recital in the preambles to Council Regulation No 601/76/EEC of 15 March 1976 laying down special measures in particular for the determination of the offers of olive oil on the world market (Official Journal 1976 L 72, p. 1) and Council Regulation No 602/76/EEC of 15 March 1976 laying down special measures in particular for the determination of the offers of olive oil on the Greek market (Official Journal 1976 L 72, p. 3), it was also in pursuance of that objective that provision was made by those regulations for fixing the levy by a tendering procedure, arrangements which it was considered necessary to retain in Regulations Nos 1562/78 and 2749/78. 20 Under Article 16(1) of Regulation No 136/66, as amended, and Article 5(1) of Regulation No 2749/78, the import levy may be fixed by tender only when offers made respectively on the world market and the Greek market for untreated olive oil do not enable the real price trend on the market to be determined. 21 Moreover, according to Article 3 of Council Regulation No 2751/78/EEC of 23 November 1978 laying down general rules for fixing the import levy on olive oil by tender (Official Journal 1978 L 331, p. 6), a minimum levy is fixed on the basis of an examination of, on the one hand, the world market or the Greek market as appropriate, and, on the other, the Community market, and also an examination of the gross levy rates indicated by tenderers. 22 It follows from the foregoing that the discretion conferred by the Council on the Commission, exercised in accordance with the principles established by the Council, is necessary to achieve the objective of stability on the Community market in untreated olive oil when the structure of the world market or, where appropriate, the Greek market does not enable a market price to be determined. The restrictions which this places on the right of traders to carry on their economic activities freely cannot be regarded as disproportionate interference impinging upon the very substance of the right (see inter alia the judgment in Case 265/87 Schraeder [1989] ECR 2237 ). Infringement of the principle of equal treatment 23 It should be borne in mind that, according to the consistent case-law of the Court (see inter alia the judgment in Joined Cases 201 and 202/85 Klensch [1986] ECR 3477 , paragraph 9), the prohibition of discrimination laid down in Article 40(3) of the Treaty is merely a specific enunciation of general principle of equality, which is one of the fundamental principles of Community law. That principle requires that similar situations shall not be treated differently unless differentiation is objectively justified. 24 Whilst it is true that the system of fixing levies by tender leads to the result that importers pay different levies, the Community rules in question do not thereby infringe the principle of equal treatment. 25 In view of the structure of the market, traders may obtain untreated olive oil at different prices and consequently propose different levies having regard to the profitability of the transaction. It follows that traders whose levies are higher or equal to the minimum levy fixed by the Commission may derive the same profit from imports subject to levies of different amounts. 26 In reply therefore it must be held that consideration of the second question has not disclosed any factor of such a nature as to affect the validity of Article 16(1) of Regulation No 136/66 of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats, as amended by Council Regulation No 1562/78 of 29 June 1978, or of Article 5(1) of Council Regulation No 2749/78 of 23 November 1978, on trade in oils and fats between the Community and Greece. Costs 27 The costs incurred by the Council and 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 proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds THE COURT (Third Chamber), in reply to the questions put to it by the Tribunale Civile di Genova by order of 6 April 1989, hereby rules: (1) Under Article 16(1) of Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats, as amended by Council Regulation No 1562/78/EEC of 29 June 1978, and Article 5(1) of Council Regulation No 2749/78/EEC of 23 November 1978 on trade in oils and fats between the Community and Greece, the Commission was entitled to use continually throughout the years 1979 and 1980 the tendering procedure to fix the import levy on extra-virgin olive oil; (2) Consideration of the second question has disclosed no factor of such a kind as to affect the validity of Articles 16(1) of Regulation No 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organization of the market in oils and fats, as amended by Council Regulation No 1562/78/EEC of 29 June 1978, or Article 5(1) of Council Regulation No 2749/78/EEC of 23 November 1978 on trade in oils and fats between the Community and Greece. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII