JUDGMENT OF THE COURT (Sixth Chamber)

11 February 1999 (1)

(Competence of the Council to impose restrictions on the import of agriculturalproducts originating in the overseas countries and territories)

In Case C-390/95 P,

Antillean Rice Mills NV, a company incorporated under the law of the NetherlandsAntilles, established in Bonaire, Netherlands Antilles,

European Rice Brokers AVV, a company incorporated under the law of Aruba,established in Oranjestad, Aruba,

and

Guyana Investments AVV, a company incorporated under the law of Aruba,established in Oranjestad, Aruba,

represented by P. Glazener, of the Amsterdam Bar, W. Knibbeler, of theRotterdam Bar, and J. Pel, of the Amsterdam Bar, with an address for service inLuxembourg at the Chambers of M. Loesch, 11 Rue Goethe,

appellants,

APPEAL against the judgment of the Court of First Instance of the EuropeanCommunities (Fourth Chamber, Extended Composition) of 14 September 1995 in

Joined Cases T-480/93 and T-483/93 Antillean Rice Mills and Others v Commission[1995] ECR II-2305, seeking to have that judgment set aside,

the other parties to the proceedings being:

Commission of the European Communities, represented by E. Lasnet and T. vanRijn, Legal Advisers, acting as Agents, with an address for service in Luxembourgat the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre,Kirchberg,

defendant at first instance,

supported by

Council of the European Union, represented by J. Huber and G. Houttuin, of itsLegal Service, acting as Agents, with an address for service in Luxembourg at theoffice of A. Morbilli, Manager of the Legal Directorate of the EuropeanInvestment Bank, 100 Boulevard Konrad Adenauer,

Italian Republic, represented by D. Del Gaizo, Avvocato dello Stato, with anaddress for service in Luxembourg at the Italian Embassy, 5 Rue Marie-Adélaïde,

French Republic,

interveners at first instance,

and

Trading & Shipping Co. Ter Beek BV, a company incorporated under Netherlandslaw, established in Amsterdam,

Alesie Curaçao NV, a company incorporated under the law of the NetherlandsAntilles, established in Willemstad, Curaçao, Netherlands Antilles,

applicants at first instance,

THE COURT (Sixth Chamber),

composed of: P.J.G. Kapteyn, President of the Chamber, G.F. Mancini, J.L. Murray(Rapporteur), H. Ragnemalm and K.M. Ioannou, Judges,

Advocate General: S. Alber,

Registrar: H. von Holstein, Deputy Registrar,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 5 March 1998, atwhich Antillean Rice Mills NV, European Rice Brokers AVV and GuyanaInvestments AVV were represented by P. Glazener, W. Knibbeler and J. Pel, theCommission by E. Lasnet and T. van Rijn, the Council by J. Huber andG. Houttuin, the French Republic by C. Chavance, Foreign Affairs Adviser in theLegal Department of the Ministry of Foreign Affairs, acting as Agent, and theItalian Republic by D. Del Gaizo,

after hearing the Opinion of the Advocate General at the sitting on 28 April 1998,

gives the following

Judgment

1.

    By application lodged at the Court Registry on 13 December 1995, Antillean RiceMills NV, European Rice Brokers AVV and Guyana Investments AVV(hereinafter 'the appellants‘) brought an appeal pursuant to Article 49 of the ECStatute of the Court of Justice against the judgment of 14 September 1995 inJoined Cases T-480/93 and T-483/93 Antillean Rice Mills and Others v Commission[1995] ECR II-2305 (hereinafter 'the contested judgment‘), in which the Court ofFirst Instance annulled Article 1(1) of Commission Decision 93/127/EEC of 25February 1993 introducing safeguard measures in respect of rice originating in theNetherlands Antilles (OJ 1993 L 50, p. 27, hereinafter 'the contested decision‘)and dismissed the remainder of their applications.

2.

    As regards the legal background to the applications before it, the Court of FirstInstance found:

'1    The Netherlands Antilles form part of the overseas countries and territories(”OCTs”) associated with the European Economic Community. Theassociation of the OCTs with the Community is governed by Part Four ofthe EEC Treaty and by Council Decision 91/482/EEC of 25 July 1991 (OJ1991 L 263, p. 1, ”the OCT Decision”), which was adopted pursuant to thesecond paragraph of Article 136 of the Treaty.

2    Article 133(1) of the Treaty provides that customs duties on imports intothe Member States of goods originating in the OCTs are to be completelyabolished in conformity with the progressive abolition of customs dutiesbetween Member States in accordance with the provisions of the Treaty.Article 101(1) of the OCT Decision provides that products originating in theOCTs are to be imported into the Community free of customs duties and

charges having equivalent effect. Article 101(2) stipulates, further, thatproducts not originating in the OCTs but which are in free circulation in anOCT and are reexported as such to the Community are to be accepted forimport into the Community free of customs duties and taxes having anequivalent effect providing that they have paid, in the OCT concerned,customs duties or taxes having equivalent effect of a level equal to, orhigher than, the customs duties applicable in the Community on import ofthose same products originating in third countries eligible for the most-favoured-nation clause, that they have not been the subject of an exemptionfrom, or a refund of, in whole or in part, customs duties or taxes having anequivalent effect, and that they are accompanied by an export certificate.

3    The first indent of Article 108(1) of the OCT Decision refers to Annex IIto that decision for the definition of the concept of originating products andthe methods of administrative cooperation relating thereto.

4    Under Article 1 of that Annex II, a product is to be considered asoriginating in an OCT, in the Community or in an African, Caribbean orPacific (”ACP”) State if it has been either wholly obtained or sufficientlyworked or processed there.

5    Under Article 2(1)(b) of Annex II, ”vegetable products harvested” in anOCTs, the Community or an ACP State are deemed to be wholly obtainedthere.

6    According to Article 3(1) of Annex II, non-originating materials areconsidered to be sufficiently worked or processed when the productobtained is classified in a tariff heading which is different from those inwhich all the non-originating materials used in its manufacture are classified.

7    Finally, Article 6(2) of Annex II provides that when products whollyobtained in the Community or in the ACP States undergo working orprocessing in the OCTs, they are to be considered to have been whollyobtained in the OCTs.

8    Since 1967, there has been a common organisation of the market in rice,currently governed by Council Regulation (EEC) No 1418/76 of 21 June1976 on the common organisation of the market in rice (OJ 1976 L 166,p. 1), which includes intervention prices for paddy rice, export refunds andimport levies. Those levies vary according to the country of origin. Asregards the ACP States, a reduced levy rate is charged up to a tariff quotaof 125 000 tonnes of husked rice and 20 000 tonnes of broken rice.

9    In addition, Council Regulation (EEC) No 3878/87 of 18 December 1987on the production aid for certain varieties of rice (OJ 1987 L 365, p. 3)encourages the cultivation of Indica rice by Community producers. Council

Regulation (EEC) No 3763/91 of 16 December 1991 introducing specificmeasures in respect of certain agricultural products for the French overseasdepartments (OJ 1991 L 356, p. 1) was adopted with the aim of promotingthe cultivation of rice in French Guiana and supporting the disposal andmarketing of that rice in Guadeloupe and Martinique, all three beingFrench overseas departments. In that regard, it must be borne in mind that,under Article 227(2) of the Treaty, the rules relating to the free movementof goods and to the common agricultural policy, with the exception ofArticle 40(4) are applicable to the French overseas departments which — forthose purposes — form an integral part of the Community.‘

3.

    According to the contested judgment, on 25 February 1993, following complaintsby the French and Italian Governments, the Commission, by the contested decision,imposed a minimum price for imports into the Community of rice originating in theNetherlands Antilles. On 14 January 1993 the Minister for Finance of theNetherlands Antilles fixed a minimum export price which corresponded to therelative minimum price imposed by the Commission in the contested decision.

4.

    By Decision 93/211/EEC of 13 April 1993 amending Decision 93/127 (OJ 1993L 90, p. 36), however, the Commission reduced the minimum price per tonne ofrice to take account of the improvement in market conditions. Both decisions werebased on Article 109 of the OCT Decision, which was taken pursuant to the secondparagraph of Article 136 of the Treaty. Finally, by Decision 93/356/EEC of 16 June1993 (OJ 1993 L 147, p. 28), the Commission repealed the safeguard measures.

5.

    The appellants are three undertakings which engage in activities in the NetherlandsAntilles in the sector of processing and marketing of rice, processing there brownrice from Surinam and Guyana. Since processing in the Netherlands Antillesconfers Antillean origin on the rice, it could be imported into the Community freeof duty in accordance with Article 101(1) of the OCT Decision.

6.

    Since the appellants considered that they had suffered serious damage as a resultof the safeguard measures adopted by the Commission, they brought proceedingsfor the annulment of those measures and compensation for the damage theyclaimed to have suffered.

7.

    The appellants relied on six pleas in law before the Court of First Instance. Thefirst plea alleged that Article 109 of the OCT Decision, on which the contesteddecision was based, was unlawful on the ground that it gave the Commission powerto take safeguard measures under conditions not provided for by the EC Treaty.The second plea was that there had been an infringement of Article 109(1) of theOCT Decision, in that the Commission introduced safeguard measures when theconditions for their introduction were not met. The appellants' third plea allegedthat Article 109(2) of the OCT Decision had been infringed in that the safeguardmeasures introduced went beyond what was necessary to dispose of the alleged

threat of disturbance or deterioration in a sector of the Community's activity or ina region of the Community. Their fourth plea alleged an infringement of Articles132(1) and 133(1) of the Treaty and Article 101(1) of the OCT Decision in thatmaking exemption from customs duties on imports depend on the observance ofminimum prices constituted a 'conditional‘ charge having equivalent effect. Thefifth plea was that Article 131 of the Treaty had been infringed in that theCommission had not or not sufficiently taken account of the aims of the associationof the OCTs. The appellants' sixth plea was that there had been a breach of theprinciple that Community measures must be drawn up with care, and aninfringement of Article 190 of the Treaty in that the Commission had not or notsufficiently examined the situation in the market or stated reasons for the safeguardmeasures adopted.

The contested judgment

8.

    In paragraphs 63 to 78 of the contested judgment the Court of First Instance firstaddressed the question of admissibility raised by the Commission and held that aCommission decision taken pursuant to Article 109 of the OCT Decision, addressedto the Member States and imposing, as a safeguard measure, a minimum importprice for a product originating in one of those territories, is of direct concern,within the meaning of the second paragraph of Article 173 of the EEC Treaty, toundertakings exporting that product from that territory, because it leaves theMember States no discretion as to the imposition or level of the minimum price atissue. Despite being legislative by nature, such a decision is also of individualconcern, within the meaning of that provision, to undertakings whose identity wasknown to the Commission because of contacts established before the safeguardmeasure was adopted and which had consignments of goods affected by thatdecision in transit at the time when it was adopted.

9.

    The Court of First Instance then found, in paragraph 95, that on the basis of thesecond paragraph of Article 136 of the Treaty the Council was entitled, with a viewto reconciling the principles of the association of the OCTs with the Communityand those of the common agricultural policy, to insert into Article 109 of the OCTDecision a safeguard clause authorising inter alia restrictions on the freedom toimport agricultural products originating in the OCTs if such imports give rise toserious disturbances in a sector of the economy of the Community or one or moreof its Member States, or jeopardise their external financial stability, or if difficultiesarise which may result in a deterioration in a sector of the Community's activity orin a region of the Community. In making that choice, which limits onlyexceptionally, partially and temporarily the freedom to import products from theOCTs into the Community, the Council did not exceed its discretion under thesecond paragraph of Article 136 of the Treaty.

10.

    In paragraphs 119 to 135 the Court of First Instance held that Article 109(1) of theOCT Decision gives the Commission a broad discretion, not merely as regards the

existence of the conditions justifying the adoption of a safeguard measure but alsoas to whether a safeguard measure should be adopted or not, so that whenexercising its power of review the Community judicature must confine itself toconsidering whether the exercise of that discretion contains a manifest error orconstitutes a misuse of powers or whether the Commission clearly exceeded thebounds of its discretion. That was not the case with the adoption of the contesteddecision and Decision 93/211. In view of the fall it had found in the price of ricein the Community and the simultaneous increase in imports from that overseasterritory, the Commission was entitled to consider that difficulties had arisen whichmight cause a deterioration in the sector of rice production in the Community andjeopardise the application of the Poseidom programme to promote the marketingin Guadeloupe and Martinique of rice produced in French Guiana, and theconditions for the adoption of safeguard measures were consequently satisfied.

11.

    The Court of First Instance then found, in paragraphs 140 to 143, that thesafeguard measures against imports of products originating in the OCTs authorisedby Article 109 of the OCT Decision may be aimed solely at remedying difficultiesencountered in a sector of the economy of the Community or at preventing suchdifficulties from arising, and, in accordance with Article 109(2), must be strictlynecessary. Article 1(1) of the contested decision, by which the Commissionintroduced as a safeguard measure a minimum import price for rice originating inthe Netherlands Antilles, therefore had to be annulled, since the level at which thatprice was set was such that that rice was more expensive on the Community marketnot only than Community rice but also than rice from non-member countries,including the ACP States, contrary to the order of preference which products fromthe associated countries and territories should benefit from and to the principle ofproportionality expressed by Article 109(2).

12.

    In paragraphs 149 to 153 of the contested judgment the Court of First Instance, onthe other hand, acknowledged the validity of Decision 93/211 which, with respectto the same safeguard measure, lowered the minimum price to a level such that therice in question was placed in an unfavourable competitive position in relation onlyto the Community rice which the measure was intended to protect.

13.

    In paragraph 157 the Court of First Instance rejected the argument that there wasa 'conditional‘ charge having equivalent effect, holding that a levy charged on theimport of a product originating in an OCT at a price lower than the minimum pricefixed in the context of a safeguard measure introduced under Article 109 of theOCT Decision cannot be regarded as a charge having equivalent effect andprohibited by Article 101 of that decision, as the origin of the obligation to paysuch a levy lies not in the crossing of the frontier of the Community but in thefailure to observe the minimum price.

14.

    The Court of First Instance then found, in paragraphs 189 to 194, that theintroduction pursuant to Article 109 of the OCT Decision of safeguard measures

against imports of products originating in an OCT constitutes a legislative measureinvolving choices of economic policy, so that an illegality on that occasion may giverise to liability on the part of the Community only if it may be characterised as asufficiently serious breach of a superior rule of law for the protection of individuals.The unlawful act of the Commission in adopting, by the contested decision, asafeguard measure the terms of which were not necessary to protect the interestsof the Community, as required by Article 109(2), constituted a breach of such arule, in this case the principle of proportionality. That breach did not, however,cause the Community to incur liability, since it could not be regarded as sufficientlyserious, in view of the fact that the Commission made use in good faith of dataprovided by the national authorities of the Netherlands Antilles which proved tobe incorrect, without the appellants having drawn its attention to the mistake, ofwhich they were aware.

15.

    In paragraph 200 the Court of First Instance further stated that even if such abreach had been capable of giving rise to Community liability, for a right tocompensation to arise there would have had to be damage going beyond what itis acknowledged that an individual must accept without being able to obtaincompensation from public funds, even if he has been the victim of an illegality.

16.

    Consequently, the Court of First Instance annulled Article 1(1) of the contesteddecision on the ground that it went beyond what was strictly necessary to remedythe difficulties for Community rice production caused by imports of rice from theAntilles and therefore infringed Article 109(2) of the OCT Decision, and dismissedthe remainder of the applications.

The plea of inadmissibility of the application to the Court of First Instance

17.

    The Italian Government submits that the contested judgment should be set asidein so far as it rejected the plea of inadmissibility raised by the Commission, whichargued that the appellants were not individually concerned. It submits that theCourt of First Instance misapplied the principles defined in Case 11/82 Piraiki-Patraiki v Commission [1985] ECR 207 for identifying the persons who areindividually concerned by legislative acts.

18.

    The appellants, however, doubt whether the Italian Government can raise such aplea. They consider that as the Italian Government was only an intervener insupport of the Commission's position, it cannot rely before the Court of Justice ona plea of inadmissibility which is not put forward by the Commission itself in thecontext of an appeal.

19.

    It must therefore be examined, first, whether the Italian Government's pleaconcerning the inadmissibility of the application to the Court of First Instance isadmissible before the Court of Justice, and then, if appropriate, whether it is wellfounded.

20.

    As regards the admissibility before this Court of the plea raised by the ItalianGovernment, it must be borne in mind that under Article 49(2) of the EC Statuteof the Court of Justice an appeal may be brought by any party which has beenunsuccessful, in whole or in part, in its submissions before the Court of FirstInstance. It follows that interveners before the Court of First Instance are regardedas parties before that court. Article 115(1) of the Rules of Procedure of the Courtof Justice, under which 'any party to the proceedings before the Court of FirstInstance may lodge a response within two months after service on him of notice ofthe appeal‘, therefore applies to them, so that they are dispensed from having tomake a fresh application to intervene before the Court of Justice under Articles 93and 123 of the Rules of Procedure (Case C-244/91 P Pincherle v Commission [1993]ECR I-6965, paragraph 16).

21.

    It follows that, as regards the pleas they may raise, there is no distinction betweenthe parties who are entitled to lodge a response, since they are subject in the sameway to the requirements of Articles 115 and 116 of the Rules of Procedure.

22.

    Consequently, an intervener who has the right to submit a response under Article115 of the Rules of Procedure must, in the absence of any express limitation, beable to raise pleas relating to any point of law on which the contested judgment isbased.

23.

    A Member State which has lodged a response in accordance with Article 115 of theRules of Procedure may therefore in any event plead before the Court of Justicethat the application was inadmissible, despite the fact that the party it supportedbefore the Court of First Instance has not raised such a plea in its response to theappeal and raised it only in its submissions at first instance.

24.

    Accordingly, the plea raised by the Italian Government is admissible.

25.

    As to the substance of the plea of inadmissibility, it must be noted that the Courtdeduced from Article 130(3) of the Act concerning the conditions of accession ofthe Hellenic Republic and the adjustments to the Treaties (OJ 1979 L 291, p. 17)that when adopting safeguard measures the Commission must, in so far as thecircumstances of the case permit, inquire into the negative effects which its decisionmight have on the economy of that Member State as well as on the undertakingsconcerned, and concluded therefrom that those undertakings were to be consideredas individually concerned by that decision (see Piraiki-Patraiki, paragraphs 28 and31).

26.

    As the Court of First Instance rightly observed in paragraphs 68 and 70 of thecontested judgment, the reasoning in Piraiki-Patraiki is also applicable in thepresent case, since the terms of Article 109(2) of the OCT Decision aresubstantially the same as those of Article 130(3) of the Act concerning theconditions of accession of the Hellenic Republic and the adjustments to the

Treaties and the purpose of those provisions is similar, namely to define the levelat which the Community may adopt safeguard measures.

27.

    Although that judgment concerned a decision which, unlike the OCT Decisionwhich is addressed to all the Member States, was addressed to a single MemberState, the Italian Government's argument that paragraph 32 of the judgment inCase C-209/94 P Buralux and Others v Council [1996] ECR I-615 rules out theapplication in the present case of the Court's reasoning in Piraiki-Patraiki cannotbe accepted.

28.

    The judicial protection which an individual enjoys under the fourth paragraph ofArticle 173 of the Treaty cannot depend on whether the contested decision isaddressed to one Member State or to several, but must be established on the basisof the specific situation of that individual compared to all other persons concerned.Unlike the Buralux case, which concerned only persons envisaged generally, thepresent case concerns clearly identifiable persons. The Court of First Instance wastherefore entitled to consider, in paragraph 77 of the contested judgment, that whatmatters for identifying the persons individually concerned by a decision introducinga safeguard measure is the protection enjoyed under Community law by the countryor territory, and by the undertakings concerned, against which the safeguardmeasure is adopted.

29.

    As to the Italian Government's argument that the Court of First Instance erred inholding in paragraph 75 of the contested judgment that the evidence available tothe Commission before the adoption of the contested decisions was specific andprecise, given that at least two of the appellants had cargoes of rice in transit to theCommunity at the time when the first decision was adopted, that argument is basedon questions of fact which are not amenable to review by this Court. The Courtof First Instance has exclusive jurisdiction to find the facts, save where a substantiveinaccuracy in its findings is attributable to the documents submitted to it, and toappraise those facts. That appraisal thus does not, save where the clear sense ofthe evidence has been distorted, constitute a point of law which is subject, as such,to review by the Court of Justice (Case C-30/96 P Abello and Others v Commission[1998] ECR I-377, paragraph 49).

30.

    It follows from the above that the plea raised by the Italian Government that theapplication to the Court of First Instance was inadmissible must be rejected.

Substance of the appeal

31.

    The appellants rely essentially on six pleas in law. They submit to begin with thatthe Court of First Instance erred in law in deciding that under the secondparagraph of Article 136 of the Treaty the Council was entitled to insert into theOCT Decision a safeguard clause authorising restrictions on the freedom to importagricultural products originating in the OCTs. It also erred in law in deciding that

the Commission was entitled to conclude that there were difficulties which mightcause a deterioration in the production of Indica rice in the Community. Theappellants submit, next, that the minimum price fixed by the second decision wentbeyond what was strictly necessary. Moreover, the Court of First Instance waswrong, in their opinion, in concluding that the stricter rules on liability relating tolegislative acts applied in the present case. In addition, it failed to considerwhether there had been a serious breach of Community law, and in assessing thecontested decisions wrongly attached decisive importance to a measure of theNetherlands Antilles Government. Finally, they submit that it attached exaggeratedimportance to the foreseeable nature of the damage.

The first plea

32.

    The appellants criticise the Court of First Instance, first, for finding that theCouncil was entitled under the second paragraph of Article 136 of the Treaty toinsert into the OCT Decision a safeguard clause allowing restrictions to be imposedon the freedom to import agricultural products originating in the OCTs.

33.

    This plea is divided into two parts. In the first part, the appellants submit that theCourt of First Instance's conclusion is based on an incorrect approach to the originof Article 109 of the OCT Decision. In their view, the Court was wrong in statingin paragraph 94 of the contested judgment that that article had strengthened thesystem of association of the OCTs with the European Economic Community bygiving agricultural products originating in the OCTs free access to the Communityfor the first time.

34.

    On this point, it must be stated that the Court of First Instance rightly consideredin paragraph 94 of the contested judgment that a general safeguard clause alreadyexisted in the past and could be applied for the first time to agricultural productsfrom the OCTs, formerly subject to special rules, once they had been placed on thesame footing as all other products. It was therefore right in considering that Article109 of the contested decision is a general safeguard clause, applicable for the firsttime to agricultural products originating in the OCTs.

35.

    In the second part of their first plea, the appellants submit that the contestedjudgment is based on an incorrect assessment of the powers conferred by thesecond paragraph of Article 136 of the Treaty. In support of this argument, theyassert, first, that the principles referred to in that provision concern only thosereferred to in Part Four of the Treaty, which does not cover all the principles in theTreaty, and, second, that the system of trade between the Member States and theOCTs cannot simply be equated with the existing arrangements with non-membercountries not part of the Community; it must in any event be more favourable thanthose arrangements. The appellants further submit that the Council is not entitledto take implementing decisions under the second paragraph of Article 136 which

derogate from the free movement of goods between the Community and the OCTsin the interests of the common agricultural policy, and that safeguard measures maybe adopted only under the conditions set out in Article 134 of the Treaty. Theyalso submit that it follows from Part Four of the Treaty and the protocolscontaining exceptions to the system of association of the OCTs that an exceptionto the free movement of goods between the Community and the OCTs requires aprovision in the Treaty itself. Finally, a general safeguard clause is not compatiblewith Articles 132(1) and 133(1) of the Treaty.

36.

    Here it must be borne in mind first that, as the Court has already held, associationof the OCTs with the Community is to be achieved by a dynamic and progressiveprocess which may necessitate the adoption of a number of measures in order toattain all the objectives mentioned in Article 132 of the Treaty, having regard tothe experience acquired through the Council's previous decisions (Case C-310/95Road Air v Inspecteur der Invoerrechten en Accijnzen [1997] ECR I-2229, paragraph40). It follows that although the OCTs are countries and territories which havespecial links with the Community, they do not, however, form part of theCommunity, and free movement of goods between the OCTs and the Communitydoes not exist unrestrictedly at this stage, in accordance with Article 132 of theTreaty.

37.

    It must be pointed out, next, that the second paragraph of Article 136 authorisesthe Council to adopt decisions concerning the association on the basis of theprinciples set out in the Treaty. It follows that when the Council adopts OCTdecisions under that article, it must take account not only of the principles in PartFour of the Treaty but also of the other principles of Community law, includingthose relating to the common agricultural policy.

38.

    That conclusion is, moreover, consistent with Article 3(r) and Article 131 of theTreaty, which provide that the Community is to promote the economic and socialdevelopment of the OCTs, but without that promotion implying an obligation togive them privileged treatment.

39.

    Consequently, the Court of First Instance was entitled to conclude that a safeguardclause and its application to agricultural products originating in the OCTs are notexcluded in the context of the second paragraph of Article 136 of the Treaty.

40.

    Moreover, since a safeguard clause does not in any way breach the principles ofPart Four of the Treaty by its mere existence, the appellants' argument that sucha safeguard clause requires an amendment to the Treaty is unfounded.

41.

    The argument that safeguard measures may be taken only under the conditions setout in Article 134 of the Treaty must also be rejected. While the Court has heldthat that provision is intended to apply from the entry into force of the Treaty untilthe creation of a common customs area (Road Air, paragraph 36), Article 134 andthe second paragraph of Article 136 pursue different aims, and the interpretation

of the latter provision by the Court of First Instance therefore does not call intoquestion the scope of the former provision.

42.

    The argument based on Article 132(1) of the Treaty cannot be accepted either. As is apparent from its first sentence, that provision confines itself to fixing theobjectives of the association of the OCTs by stating that trade with the OCTs is tobe placed on the same footing as trade between the Member States (Road Air,paragraph 40).

43.

    With respect, finally, to the argument based on Article 133(1) of the Treaty, itsuffices to reply that the abolition of customs duties on entry into the Communityof products originating in the OCTs, which is the purpose of that provision, doesnot exclude the possibility of adopting, on the basis of the second paragraph ofArticle 136 of the Treaty, a safeguard clause which limits imports onlyexceptionally, partially and temporarily.

44.

    It follows that the appellants' first plea must be rejected.

The second plea

45.

    In their second plea the appellants submit that the Court of First Instance erredin law in holding that the Commission was entitled to conclude that there weredifficulties liable to cause a deterioration in Indica rice production in theCommunity. They submit that, for the Commission to be able to conclude that theconditions for the application of Article 109(1) of the OCT Decision are met, acausal link must be established between imports of Antillean rice and the fall in theprice of Community paddy rice, and that in the present case the Court of FirstInstance was wrong to accept that there was such a link.

46.

    In support of this complaint, the appellants submit that the Court of FirstInstance's statement, in paragraph 128 of the contested judgment, that the data onthe price of Community paddy rice and on imports of Antillean semi-milled riceallowed the Commission to conclude that the conditions for the implementation ofsafeguard measures were satisfied is incomprehensible in the light of the extensivedata they supplied in this respect. They submit that the statement of the Court ofFirst Instance in paragraph 131 of the contested judgment that the Commissionrightly found that there was a considerable price difference, as regards Communityrice, between September 1992 and January 1993 is also unfounded. Finally, theycontend that the argument in paragraph 132 of the contested judgment concerningthe Poseidom programme and the marketing of rice in Guadeloupe and Martiniquecannot as such justify the safeguard measures adopted, as less radical measureswould have sufficed.

47.

    On this point, it must be pointed out to begin with that, contrary to the appellants'submission, Article 109(1) of the OCT Decision does not necessarily require acausal link to be established in the second hypothesis referred to in that article,namely if difficulties arise which may result in a deterioration in a sector of theCommunity's activity or in a region of the Community. Admittedly, in the firsthypothesis referred to in that article, namely if the application of the OCT Decisioncauses serious disturbances in a sector of the economy of the Community or oneor more of its Member States or jeopardises their external financial stability, theexistence of a causal link must be established because the purpose of the safeguardmeasures must be to iron out or reduce the difficulties which have arisen in thesector concerned. In the second hypothesis, on the other hand, it is not arequirement that the difficulties which justify the imposition of a safeguard measureresult from the application of the OCT Decision.

48.

    Next, it must be borne in mind that the Commission has been given a widediscretion in the application of Article 109 of the OCT Decision. In cases involvingsuch a discretion, the Court of First Instance must restrict itself to consideringwhether the exercise of that discretion contains a manifest error or constitutes amisuse of power or whether the Commission clearly exceeded the bounds of itsdiscretion (Piraiki-Patraiki, paragraph 40).

49.

    In this respect, it follows from paragraphs 124 to 127 of the contested judgmentthat the Court of First Instance duly considered whether the Commission had madea manifest error of assessment in its examination of the relationship between theimports of Antillean semi-milled rice and the fall in the price of Community rice,and concluded in paragraph 128 that a relationship of concomitance had beenestablished between the imports and the fall in the price of Community rice. TheCourt of First Instance was thus right in considering that the conditions for theapplication of Article 109(1) of the OCT Decision were satisfied.

50.

    The second plea must therefore be rejected.

The third plea

51.

    In third place, the appellants criticise the Court of First Instance for holding, inparagraph 151 of the contested judgment, that the minimum price fixed by Decision93/211 did not exceed the limits of what was strictly necessary within the meaningof Article 109(2) of the OCT Decision. They submit that it was not necessary toplace rice from the Netherlands Antilles in an unfavourable competitive positionin relation to Community rice, which limited their export possibilities to the 8 400tonnes referred to by the Court of First Instance in paragraph 150 of the contestedjudgment and forced them to store 16 000 tonnes of rice which could not be sold.

52.

    First, as regards the principle of proportionality, it must be pointed out that, inorder to determine whether a provision of Community law is in conformity with

that principle, it must be ascertained whether the means which the provisionapplies are suitable for attaining the objective pursued and do not go beyond whatis necessary in order to do so.

53.

    Next, it must be noted that the objective of Decision 93/211, as appears from thethird recital in its preamble, is to fix a threshold price for imports of Antillean ricewhich least disturbs the functioning of the association of the OCTs with theCommunity, while remedying the difficulties which have appeared in theCommunity market.

54.

    In that context, first, it cannot be maintained, as the appellants claim, that such asafeguard measure could not place rice from the Netherlands Antilles in anunfavourable competitive position in relation to Community rice. It follows fromthe very essence of a safeguard measure that some imported products will besubjected to rules which are unfavourable in comparison with Community products.

55.

    Second, the findings of fact made by the Court of First Instance with respect to thedetermination of rice prices cannot be examined on appeal. In those circumstancesand having regard to the considerations set out above, the plea cannot be upheld.

The fourth plea

56.

    The appellants submit in their fourth plea that, in paragraphs 180 to 186 of thecontested judgment, the Court of First Instance misdirected itself on the seriousnessof the fault required for the non-contractual liability of the Community to beincurred. They submit, principally, that decisions cannot be of a legislative naturefor the purposes of Article 215 of the EC Treaty as interpreted by the Court ofJustice, and, in the alternative, that even if the contested decisions were of such anature, that is of no importance with respect to them in that they are individuallyconcerned. In the further alternative, they submit that, in any event, more rigorouscriteria of liability should not be resorted to on the ground that decisions arecontested by victims who are individually concerned by them.

57.

    It must be noted, first, that it is settled case-law that in a legislative contextinvolving the exercise of a wide discretion, the Community cannot incur liabilityunless the institution concerned has manifestly and gravely disregarded the limitson the exercise of its powers (see, to that effect, Joined Cases 83/76, 94/76, 4/77,15/77 and 40/77 HNL and Others v Council and Commission [1978] ECR 1209,paragraphs 4 and 6, and Case C-152/88 Sofrimport v Commission [1990] ECRI-2477, paragraph 25).

58.

    Second, as is clear from paragraphs 177 and 180 of the contested judgment, theCourt of First Instance proceeded on the basis that the Commission enjoyed a widediscretion in the field of economic policy, which means that the stricter criterion of

liability must be applied, namely the requirement of a sufficiently serious breachof a superior rule of law for the protection of the individual.

59.

    It follows that the Court of First Instance correctly applied the stricter criterion ofliability.

60.

    The fact that the contested measure is in the form of a decision, and hence inprinciple capable of being the subject of an action for annulment, is not sufficientto preclude its being legislative in character. In the context of an action fordamages, that character depends on the nature of the measure in question, not itsform (see, to that effect, the Sofrimport judgment).

61.

    Consequently, the appellants' principal argument is unfounded.

62.

    As to the appellants' alternative arguments, it must be stated that the fact that theyare individually concerned has no effect on the character of the measure in thecontext of an action for damages, since that action is an independent remedy (seeSofrimport).

63.

    The fourth plea is therefore unfounded.

The fifth plea

64.

    The appellants' fifth plea concerns, first, the alleged failure of the Court of FirstInstance to consider whether there had been a sufficiently serious breach ofCommunity law, and, second, the importance attached by that Court to a measureof the Netherlands Antilles Government. The plea thus falls into two parts.

65.

    First, the appellants submit that grave and manifest disregard by the Commissionof the limits on the exercise of its powers and sufficiently serious breach of asuperior rule of law are alternative, not cumulative, criteria of liability, whereas inparagraph 194 of the contested judgment the Court of First Instance wronglyomitted to consider those two points. They submit that if the Commission was inbreach of Community law, that was necessarily a sufficiently serious breach in thesense contemplated in the special conditions under Article 215 of the Treaty, andthe Court of First Instance therefore could not confine itself, as it did, to findingthat the Commission had not gravely and manifestly disregarded the limits of itspowers.

66.

    Second, the appellants submit that, contrary to what the Court of First Instanceheld in paragraph 194 of the contested judgment, the existence of the measuretaken by the Minister for Finance of the Netherlands Antilles cannot release theCommission from its obligation to ensure that the principle of proportionality iscomplied with, since failure to comply with that principle entails manifest and gravedisregard of the limits of its powers.

67.

    As regards the first part of this plea, contrary to the appellants' argument, a breachof Community law by an institution in a field in which it enjoys a wide discretionis not in itself sufficient for the non-contractual liability of the Community to beincurred, under the second paragraph of Article 215 of the Treaty, in respect ofdamage suffered by individuals (see, to that effect, HNL and Others, paragraphs 4and 6). Such an approach would render meaningless the criterion for establishingnon-contractual liability and have the effect in the present case of disregarding theautonomous nature of the two remedies available to individuals in the event of aninfringement of Community law.

68.

    Moreover, this Court has consistently held that grave and manifest disregard by theCommission of the limits of its powers and sufficiently serious breach of a superiorrule of law must, in the context of an action for damages, be regarded ascumulative criteria (see, to that effect, Case 20/88 Roquette Frères v Commission[1989] ECR 1553, paragraph 23).

69.

    As regards the second part of this plea, although the Commission made an errorof assessment in a complex economic situation by referring in good faith, in thecontested decision, to the price fixed by the competent authorities of theNetherlands Antilles, it does not appear, as the Court of First Instance rightly heldin paragraph 194 of the contested judgment, that it manifestly and gravelydisregarded the limits of its powers.

70.

    The fifth plea is accordingly unfounded.

The sixth plea

71.

    The appellants submit in their sixth plea that the Court of First Instancemisinterpreted Community law by holding in paragraph 207 of the contestedjudgment that, notwithstanding the damage they suffered as a result of the firstdecision, the Community could not in any event incur liability, because that damagewas foreseeable.

72.

    It must be pointed out that, as appears clearly from paragraph 207 itself, the Courtof First Instance addressed the question of foreseeability of the damage only as asubsidiary point in support of the conclusion it had already reached, and that sucha point therefore plays no decisive part in its reasoning.

73.

    The Court of First Instance found, in paragraphs 204 and 205 of the contestedjudgment, that it had not been shown that the damage alleged by the appellantswas caused by the contested decision, and, in paragraph 206, that it was not evenapparent that the appellants had suffered harmful effects on their economicinterests, in view of the improvement of market conditions.

74.

    Since the appellants have not put forward any plea challenging the principalreasoning in paragraphs 204 to 206 of the contested judgment, there is no need toconsider the plea in which they challenge the subsidiary reasoning in paragraph 207of that judgment.

75.

    It follows from all the foregoing that the appeal brought by the appellants must bedismissed.

Costs

76.

    Under Article 69(2) of the Rules of Procedure, which apply to the appealprocedure by virtue of Article 118, the unsuccessful party is to be ordered to paythe costs, if they are applied for in the successful party's pleadings. Under the firstsubparagraph of Article 69(4), Member States which intervene in the proceedingsare to bear their own costs. Since the appellants have been unsuccessful and theCommission has applied for costs, they must be ordered to pay the costs. TheFrench Republic and the Italian Republic must bear their own costs.

On those grounds,

THE COURT (Sixth Chamber),

hereby:

1.    Dismisses the appeal;

2.    Orders Antillean Rice Mills NV, European Rice Brokers AVV and GuyanaInvestments AVV to pay the costs;

3.    Orders the French Republic and the Italian Republic to bear their owncosts.

KapteynMancini Murray Ragnemalm Ioannou

Delivered in open court in Luxembourg on 11 February 1999.

R. Grass

P.J.G. Kapteyn

Registrar

President of the Sixth Chamber

1: Language of the case: Dutch.